EXHIBIT (3i)(e)
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
NEW SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
($1.00 PAR VALUE PER SHARE)
of
THE TJX COMPANIES, INC.
Pursuant to Section 151(g) of the
General Corporation Law of the
State of Delaware
We, Donald G. Campbell, Senior Vice President -
Finance, and Jay H. Meltzer, Secretary, of The TJX Companies,
Inc. (hereinafter called the "Corporation"), a corporation
organized and existing under and by virtue of the provisions
of the General Corporation Law of the State of Delaware,
DO HEREBY CERTIFY:
FIRST: The Second Restated Certificate of
Incorporation, as amended (the "Certificate of
Incorporation"), of the Corporation authorizes the issuance
of 5,000,000 shares of preferred stock, $1.00 par value per
share ("Preferred Stock"), in one or more series, and further
authorizes the Board of Directors of the Corporation to
provide by resolution for the issuance of shares of Preferred
Stock in one or more series not exceeding the aggregate
number of shares of Preferred Stock authorized by the
Certificate of Incorporation and to determine with respect to
each such series, the voting powers, if any (which voting
powers if granted may be full or limited), designations,
preferences, the relative, participating, optional and other
rights, and the qualifications, limitations and restrictions
appertaining thereto.
SECOND: A resolution providing for and in
connection with the issuance of the Preferred Stock was duly
adopted by the Finance Committee (the "Finance Committee") of
the Board of Directors pursuant to authority conferred on the
Finance Committee by the Board of Directors, and on the Board
of Directors (which fixed the voting rights with respect to
the shares designated herein) by the provisions of the
Certificate of Incorporation as aforesaid, which resolution
provides as follows:
RESOLVED: that the Board of Directors, pursuant to
authority vested in it by the provisions of the second
restated certificate of incorporation, as amended (the
"Certificate of Incorporation"), of The TJX Companies, Inc.
(the "Corporation"), hereby authorizes the issuance of a
series of cumulative convertible preferred stock
("Convertible Preferred Stock") of the Corporation and hereby
establishes the powers, designations, preferences, and the
relative, participating, optional and other rights, and the
qualifications, limitations and restrictions appertaining
thereto in addition to those set forth in such Certificate of
Incorporation (or otherwise provided by law) as follows (the
following, referred to hereinafter as "this resolution" or
"this Certificate of Designations", is to be filed as part of
a certificate of Designations under Section 151(g) of the
General Corporation Law of the State of Delaware):
1. General
(a) Designation and Number. The designation of
Convertible Preferred Stock created by this resolution shall
be New Series A Cumulative Convertible Preferred Stock, $1.00
par value per share, of the Corporation (hereinafter referred
to as the "New Series A Preferred Stock"), and the number of
shares of New Series A Preferred Stock which the Corporation
shall be authorized to issue shall be 250,000 shares.
(b) Priority. The Series A Preferred Stock shall
rank (i) prior to the Common Stock (as hereinafter defined),
(ii) prior to the Corporation's Permitted Junior Preferred
(as hereinafter defined) (iii) on a parity with the
Corporation's Series A Cumulative Convertible Preferred
Stock, $1.00 par value per share (the "Existing Series A
Preferred Stock") and (iv) prior to any other capital stock
of the Corporation (other than as permitted in the exception
to Section 1(c)(i) below) in each case as to dividends and
upon liquidation, dissolution or winding up.
(c) Restrictions. Except as permitted in Section
7(a) hereof, so long as any shares of New Series A Preferred
Stock remain outstanding, the Corporation shall not at any
time (any of the actions described below, the "Restricted
Actions"):
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(i) create, authorize or issue, or increase the
amount of shares authorized for issuance of, any class
or series of capital stock ranking prior to or on a
parity with the Series A Preferred Stock as to dividends
or upon liquidation, dissolution or winding up; except
that the Corporation may create, authorize and issue
preferred stock ranking on a parity with the New Series
A Preferred Stock as to dividends or upon liquidation,
dissolution or winding up, in one or more series or
classes, with such powers, designations, preferences,
and relative, participating, optional and other rights,
voting powers, if any, and qualifications, limitations
and restrictions appertaining thereto, and in such
number of shares, as the Board of Directors of the
Corporation may hereafter authorize in accordance with
the terms of the Certificate of Incorporation, but:
(x) the rights of such parity preferred stock
shall not restrict or prohibit the Corporation
from performing its obligations under this
Certificate of Designations;
(y) the rights of the holders of such parity
preferred stock shall be limited, with respect
to a distribution of assets upon liquidation,
dissolution or winding up, to (A) a fixed sum,
stated sum or percentage of a fixed or stated
sum plus any premium applicable to a
particular series all of which sums and
premiums do not in the aggregate exceed
$100,000,000 (aggregating all shares of such
parity preferred stock issued or authorized
for issuance and without regard to class or
series) (such amount applicable to any share
of parity preferred stock being herein
referred to as the "Stated Liquidation Value")
plus (B) an amount equal to accrued and unpaid
dividends thereon; and
(z) in no event shall such parity preferred stock
be created, authorized or issued unless the
rights of the holders thereof shall be
limited, with respect to dividends and
payments to be received by the holder thereof
upon redemption (whether optional or
mandatory), to a fixed sum or percentage of a
fixed sum or, in the case of dividends, a sum
determined by reference to a formula based on
a published index of interest rates, an
interest rate publicly announced by a
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financial institution or similar indicator of
interest rates, except that the terms of any
such parity preferred stock (which is
convertible into shares of Common Stock) may
provide for payments to be received by the
holder thereof in the event of a mandatory
redemption as a result of a change of control
of the Corporation based upon the market price
of the underlying Common Stock (to the same
extent provided for hereunder with respect to
the New Series A Preferred Stock in Section
4(c)(ii) hereof),
(such parity preferred stock, the "Parity Preferred
Stock"); (any such Parity Preferred Stock shall not be
considered to be New Series A Preferred Stock
hereunder); the term "Parity Preferred Stock" shall also
include the Existing Series A Preferred Stock so long as
any shares of such Existing Series A Preferred Stock are
outstanding;
(ii) create, authorize or issue, or increase the
authorized amount of shares for issuance of, any class
or series of capital stock ranking junior to the New
Series A Preferred Stock but prior to the Common Stock
(as defined in Section 1(d) hereof) as to dividends or
upon liquidation, dissolution or winding up, other than
the following capital stock, which shall rank junior to
the New Series A Preferred Stock but prior to the Common
Stock as to dividends or upon liquidation, dissolution
or winding up, but provided that
(A) such capital stock shall be limited with
respect to dividends, to a fixed sum or
percentage of a fixed sum or a sum determined
by reference to a formula based on a published
index of interest rates, an interest rate
publicly announced by a financial institution
or similar indicator of interest rates and,
with respect to a distribution of assets upon
liquidation, dissolution or winding up or with
respect to payments to be received by the
holder thereof upon redemption (whether
optional or mandatory), to a fixed sum or
percentage of a fixed sum, except that the
terms of any such junior preferred stock
(which is convertible into shares of Common
Stock) may provide for payments to be received
by the holder thereof in the event of a
mandatory redemption as a result of a change
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in control of the Corporation based upon the
market price of the underlying Common Stock
(to the same extent provided for hereunder
with respect to the New Series A Preferred
Stock in Section 4(c)(ii) hereof, (such
capital stock, the "Permitted Non-
Participating Junior Preferred"); or
(B) such capital stock (the "Permitted Rights Plan
Preferred Stock"), including the Corporation's
Series B Participating Preferred Stock, $1.00
par value per share (the "Permitted Series B
Preferred Stock"), is issued or issuable in
connection with a shareholder rights plan that
provides for the issuance of rights to the
holders of Common Stock to purchase or
receive, upon, redemption, exercise or
exchange, capital stock or debt securities (or
rights to acquire such capital stock or debt
securities) of the Corporation or of another
issuer or cash; provided that (x) such plan
does not discriminate in any way (other than
the notice to be provided to holders of New
Series A Preferred Stock as described below)
against any holder of New Series A Preferred
Stock as such (whether by language or
operation), including, without limitation,
restricting (1) the ability to convert into
Common Stock under the terms hereof and (2)
the ability to receive rights under such plan
with respect to Common Stock acquired by
conversion hereunder which rights are
generally available to holders of Common
Stock; (y) the Corporation shall notify the
holders of the New Series A Preferred Stock at
least five (5) Business Days prior to (I) the
date which under the terms of such plan causes
or triggers the rights issued thereunder to be
exercisable by any person and (II) the date on
which such rights (or the right to receive
such rights) terminate or expire, such notice
in the case of clause (I) to describe in
reasonable detail the terms of such rights and
the manner of operation of the plan upon the
occurrence of such triggering event; and (z)
such plan otherwise complies with this Section
1(c) in all respects and any capital stock of
the Corporation issued or issuable under or in
connection with such plan does not violate
clauses (i), (iii), (iv), (vi), (vii) or
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(viii) of this Section 1(c) (the Permitted
Rights Plan Preferred Stock, together with the
Permitted Non-Participating Junior Preferred,
are hereinafter collectively referred to as
the "Permitted Junior Preferred");
and any provision (other than this Section 1(c),
Section 7(a) and Section 8 hereof) in this resolution to
the contrary notwithstanding, there shall be no
restriction on the issuance, detachment, exercise,
exchange or redemption of rights, whether for stock or
cash or other securities of a combination thereof of the
Corporation or of another person, pursuant to the
Corporation's Shareholder Rights Plan dated April 26,
1988, as amended and as may be hereafter amended,
provided that such plan, either on the terms set forth
therein as of the date hereof or as so amended, complies
with the foregoing clause (B) (the "Shareholder Rights
Plan");
(iii) create, authorize or issue any class or
series of common stock other than the class of Common
Stock presently authorized for issuance under the
Certificate of Incorporation as in effect on April 14,
1992, subject to changes to the terms thereof hereafter
made to the Certificate of Incorporation; provided that
(A) there shall be no more than one class (and there
shall be no series) of Common Stock and (B) the
Corporation will not permit the par value or the
determined or stated value of any shares of the Common
Stock receivable upon the conversion of the shares of
New Series A Preferred Stock to exceed the amount
payable therefor upon such conversion and (C) the
Corporation will not take any action which results in
any adjustment of the current conversion price under
this Certificate of Designations if the total number of
shares of Common Stock then available for issuance upon
conversion of all shares of New Series A Preferred Stock
(and upon conversion of all other then outstanding
shares of the Corporation's capital stock convertible
into Common Stock) would be insufficient to satisfy all
such conversion rights at the then current conversion
prices (after any adjustments);
(iv) amend the Certificate of Incorporation or By-
laws of the Corporation, or in any other manner alter or
change the powers, rights, privileges or preferences of
the New Series A Preferred Stock, if such amendment or
action would adversely affect the powers, rights,
privileges or preferences of the holders of the New
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Series A Preferred Stock; except that the Corporation
may amend the Certificate of Incorporation to:
(x) create and authorize the Parity Preferred
Stock or any Permitted Junior Preferred; or
(y) increase the amount of shares of Common Stock
or Permitted Junior Preferred authorized for
issuance; or
(z) amend the terms of any Parity Preferred Stock,
Permitted Junior Preferred, or Common Stock in
a manner consistent with the above clauses
(i), (ii) and (iii);
(v) increase the number of shares of New Series A
Preferred Stock authorized for issuance;
(vi) create, authorize or issue any series or class
of stock or any other option, warrant, obligation or
right exercisable for, or any security convertible into,
any capital stock other than capital stock which is
permitted under clauses (i), (ii) or (iii) above;
(vii) amend this Certificate of Designations;
(viii) at any time issue any shares of New Series A
Preferred Stock other than pursuant to the exchange of
shares of Existing Series A Preferred Stock for New
Series A Preferred Stock (excluding the issuance of
share certificates upon transfers or exchanges of shares
by holders (other than the Company) or upon replacement
of lost, stolen, damaged or mutilated share
certificates); or
(ix) at any time issue any shares of Existing
Series A Preferred Stock.
(d) Certain Definitions. For purposes of this
Certificate of Designations, the following terms shall have
the meanings indicated:
(i) "Business Day" means any day other than a
Saturday, Sunday, or a day on which banking institutions
in the State of New York or The Commonwealth of
Massachusetts or The Commonwealth of Pennsylvania are
authorized or obligated by law or executive order to
close.
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(ii) "Change of Control Event" means the occurrence
of any of the following events:
(A) the Corporation is voluntarily liquidated or
is the subject of any voluntary dissolution or
winding-up (including without limitation a
merger in which the Corporation is not the
surviving corporation, but excluding a merger
of the Corporation into a subsidiary as a
result of which transaction (x) such
subsidiary is the surviving corporation, (y)
the Corporation's certificate of incorporation
is continued as the certificate of
incorporation of the surviving corporation
(with such immaterial changes as may be
necessary to effectuate the merger) and (z)
all of the shareholders of the Corporation
immediately prior to such transaction
constitute all of the shareholders of such
subsidiary immediately following such
transaction, each with the same shares (on the
same terms) of capital stock of the surviving
corporation as each had with the Corporation
(such excluded merger, a "Permitted Merger"));
(B) the Corporation proceeds to acquire its Common
Stock (or undertakes a corporate
reorganization or recapitalization or other
action) if the effect of such acquisition (or
other action) would be either (i) to reduce
substantially or to eliminate the primary
public market for the shares of the
Corporation's Common Stock or (ii) to remove
the Corporation from registration with the
Commission under the Securities Exchange Act
or (iii) to require the Corporation to make a
filing under Section 13(e) of the Securities
Exchange Act or (iv) to cause a delisting of
the Corporation's Common Stock from the New
York Stock Exchange; or
(C) the sale, lease, transfer or other disposition
through voluntary liquidation or other
voluntary action, of all or substantially all
of the consolidated assets of the Corporation
and its subsidiaries in a single transaction
or series of related transactions.
(iii) "Common Stock" means the Corporation's Common
Stock, as presently authorized by the Certificate of
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Incorporation and as such Common Stock may hereafter be
changed or for which such Common Stock may be exchanged
after giving effect to the terms of such change or
exchange (by way of reorganization, recapitalization,
merger, consolidation or otherwise).
(iv) "Control Adjustment Event" means the
occurrence of any of the following events:
(A) any person or group (within the meaning of
Section 13 (d)(3) of the Securities Exchange
Act, whether or not the Corporation has any
capital stock subject to such Section)
together with any affiliates and associates of
any such person or member of such group
(within the meaning of Rule 12b-2 under the
Securities Exchange Act, whether or not the
Corporation has any capital stock subject to
such Section), shall at any time beneficially
own (within the meaning of Rule 13d-3 under
the Securities Exchange Act, whether or not
the Corporation has any capital stock subject
to such Section) shares of Common Stock of the
Corporation which represents in excess of
either (A) fifty-one percent (51%) of the
total votes entitled to be cast by all
outstanding shares of the Common Stock of the
Corporation or (B) fifty-one percent (51%) of
all outstanding shares of the Common Stock of
the Corporation; or
(B) at any time, a majority of the members of the
Board of Directors of the Corporation are
persons other than persons each of whom was
both (i) nominated as a director for his or
her then current term by the Corporation's
Board of Directors and was recommended by the
Board to the Corporation's shareholders for
election as a member of the Board and (ii) a
member of the Board for at least one (1) year
prior to such term (except that a person
chosen by the Board as a successor to a
director who died in office, resigned from the
Board because of a disability, or retired,
shall be deemed to have satisfied this clause
(ii)); or
(C) the Corporation is involuntarily liquidated or
is the subject of any involuntary dissolution
or winding-up or any involuntary sale, lease
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or transfer or other involuntary disposition
of all or substantially all of the
consolidated assets of the Corporation and its
subsidiaries in a single transaction or series
of related transactions.
(v) "Convertible Debentures" means the 7 1/4%
Convertible Subordinated Debentures due 2010 of Zayre
Corp., the terms of which are set forth in the
Indenture, dated as of July 1, 1985 between Zayre Corp.
and The First National Bank of Chicago; as such
Debentures and Indenture are in effect on the date
hereof, as may be amended from time to time (other than
amendments affecting the conversion rate or rights or
antidilution adjustment rights of the holders thereof).
(vi) "full cumulative dividends" means as of any
date the amount of accumulated, accrued and unpaid
dividends payable on shares of New Series A Preferred
Stock as provided by Section 2 hereof, whether or not
earned or declared and whether or not there shall be
funds legally available for the payment thereof. For
purposes of Section 2(f) hereof, "full cumulative
dividends on Parity Preferred Stock" refers to full
cumulative dividends payable on shares of Parity
Preferred Stock instead of New Series A Preferred Stock
as provided by the terms thereof, provided that such
Parity Preferred Stock has been created, authorized and
issued in accordance with the terms of Section 7(a)
hereof. For purposes of Section 2(b) hereof, "full
cumulative dividends on Existing Series A Preferred
Stock" means as of any date the amount of accumulated,
accrued and unpaid dividends payable on shares of
Existing Series A Preferred Stock as provided under the
Certificate of Designations, Preferences and Rights of
the Series A Cumulative Convertible Preferred Stock
($1.00 par value per share) of the Company filed with
the Secretary of State of Delaware on April 14, 1992
(the "Existing Series A Certificate").
(vii) "Non-Dilutive Dividends" are Permitted
Common Dividends under clause (x) (B) of the definition
herein of "Permitted Common Dividends."
(viii) "Permitted Common Dividends" are any
dividends on or in respect of the Corporation's Common
Stock payable either:
(x) in cash:
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(A) out of the retained earnings of the
Corporation in excess of any Non-Dilutive Dividends
("Dilutive Dividends") or
(B) as regular quarterly dividends in an
aggregate amount per share with respect to any
fiscal year of the Corporation equal to the sum of
(i) $0.46 per share plus (ii) an amount which does
not exceed ten percent (10%) of the amount, if any,
that earnings per share of the Common Stock as
publicly reported from continuing operations of the
Corporation for the immediately preceding fiscal
year of the Corporation exceed $1.00 plus (iii) one
or more increases in any quarterly dividend rate or
rates, which in the aggregate do not exceed $0.0115
after the close of business on April 14, 1992;
(provided, that this clause (B) shall at no time
require any decrease in the then dividend rate; and
provided, further, that such per share amounts
under this clause (B) shall be subject to
appropriate adjustments for stock splits or stock
subdivisions and stock combinations): or
(y) in shares of the capital stock of the
Corporation and rights to acquire such stock so
long as the issuance of such capital stock is not
prohibited under Section 1(c) hereof;
so long as, in the case of clause (x) above, at the time
such dividend is declared and paid full cumulative
dividends with respect to the shares of New Series A
Preferred Stock through the most recent dividend payment
date shall have been paid in full in cash.
(ix) "Permitted Junior Dividends" means any
regularly scheduled dividends on the Permitted Junior
Preferred so long as at the time such dividends are
declared and paid (1) full cumulative dividends with
respect to the New Series A Preferred Stock through the
most recent dividend payment date shall have been paid
in full in cash and (2) all amounts to be paid upon the
redemption of any New Series A Preferred Stock, Parity
Preferred Stock or Permitted Junior Preferred which on
or prior to such time has been called for redemption (or
for which a redemption date has been scheduled as a
result of notice from any holder thereof) have been paid
in full in cash or declared and set aside for payment in
cash.
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(x) "Person" or "person" means an individual,
corporation, partnership, firm, association, joint
venture, trust, unincorporated organization, government,
governmental body, agency, political subdivision or
other entity.
(xi) "Rule 144" means (i) Rule 144 under the
Securities Act of 1933, as amended, as such rule is in
effect from time to time and (ii) any successor rule,
regulation or law, as in effect from time to time.
(xii) "Securities Exchange Act" means the
Securities Exchange Act of 1934, as from time to time
amended, and the rules, regulations and interpretations
thereunder.
(xiii) "Transfer Agent" means State Street Bank
and Trust Corporation, or any other national or state
bank or trust company having combined capital and
surplus of at least $100,000,000 and designated by the
Corporation as the transfer agent and/or registrar of
the New Series A Preferred Stock, or if no such
designation is made, the Corporation.
(xiv) The words "hereof", "herein" and "hereunder"
and other words of similar import refer to this
Certificate of Designations as a whole and not to any
particular Section or other subdivision.
(xv) References herein to the Certificate of
Incorporation include such Certificate as amended by
this Certificate of Designations.
2. Dividend Rights.
(a) General Dividend Obligations. The Corporation
shall pay, when and as declared by the Corporation's Board of
Directors, to the holders of the New Series A Preferred
Stock, out of the assets of the Corporation legally available
therefor, cash dividends at the times, in the amounts and
with such priorities as are provided for in this Section 2.
(b) Accrual of Dividends. Dividends on each share
of New Series A Preferred Stock shall accrue cumulatively on
a daily basis from and including the most recent Dividend
Payment Date (as defined in the Existing Series A
Certificate) through which full cumulative dividends on the
Existing Series A Preferred Stock have been paid (such date,
the "Carryover Dividend Accrual Date"; provided that, if
there is no such Dividend Payment Date (as defined in the
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Existing Series A Certificate) through which full cumulative
dividends on the Existing Series A Preferred Stock have been
so paid prior to the issuance of such share of New Series A
Preferred Stock, then the "Carryover Dividend Accrual Date"
shall be deemed to be April 15, 1992) to and including the
date on which the redemption or conversion of such share of
New Series A Preferred Stock shall have been effected,
whether or not such dividends shall have been declared and
whether or not there shall be (at the time such dividends
accrue or become payable or at any other time) profits,
surplus, capital or other funds of the Corporation legally
available for the payment of dividends and whether or not
there are other legal or contractual restrictions on the
declaration or payment of such dividends. The date on which
the Corporation shall initially issue any share of New Series
A Preferred Stock shall be deemed to be its "date of
issuance" regardless of the number of times transfer of such
share of New Series A Preferred Stock shall be made on the
stock records maintained by or for the Corporation and
regardless of the number of certificates which may be issued
to evidence such share of New Series A Preferred Stock
(whether by reason of transfer of such share of New Series A
Preferred Stock or for any other reason).
(c) Dividend Rates. Dividends shall accrue
cumulatively on each share of New Series A Preferred Stock
from the Carryover Dividend Accrual Date at a rate per annum
equal to $8.00 per share of New Series A Preferred Stock
calculated on the basis of the actual number of days elapsed
in a year.
(d) Payment Dates. Full cumulative dividends on
the New Series A Preferred Stock shall be payable quarterly,
on April 1, July 1, October 1 and January 1 in each year
(each, a "Dividend Payment Date"). The first Dividend
Payment Date shall be October 1, 1992. If any Dividend
Payment Date shall be on a day other than a Business Day,
then the Dividend Payment Date shall be on the next
succeeding Business Day. An amount equal to the full
cumulative dividends shall also be payable, in satisfaction
of such dividend obligation, upon liquidation as provided
under Section 3 hereof, upon redemption as provided under
Section 4 hereof, and upon conversion as provided under
Section 5 hereof.
(e) Amounts Payable. The amount of dividends
payable on New Series A Preferred Stock on each Dividend
Payment Date shall be the full cumulative dividends which are
unpaid through and including such Dividend Payment Date.
Dividends which are not paid for any reason whatsoever on a
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Dividend Payment Date shall cumulate until paid and shall be
payable on the next Dividend Payment Date on which payment
can lawfully be made (or upon liquidation, redemption or
conversion as provided herein). Holders of shares of
Preferred Stock called for redemption on a redemption date
falling between the close of business on a dividend payment
record date and the opening of business on the corresponding
Dividend Payment Date shall, in lieu of receiving such
dividend payment on the Dividend Payment Date fixed therefor,
receive an amount equal to such dividend payment (consisting
of all accumulated and unpaid dividends through and including
the redemption date) on the date fixed for redemption (unless
such holder converts such shares of Preferred Stock in
accordance with Sections 5 and 6 hereof). If a conversion of
shares of Preferred Stock occurs between a dividend payment
record date and the corresponding Dividend Payment Date, the
dividends payable on the conversion date under Section 5
hereof shall be calculated through and including such
conversion date. If, for whatever reason (i) any share of
New Series A Preferred Stock has not been converted into
Common Shares (as defined in Section 5 hereof) pursuant to
Section 5 hereof on a conversion date, or (ii) all payments
have not been made with respect to any share of New Series A
Preferred Stock as required by Section 3 on a distribution
date or all payments have not been made with respect to any
share of New Series A Preferred Stock as required by Section
4 on a redemption date (other than because of a failure by
the holder thereof to tender such shares for payment on such
date) then, notwithstanding any other provision hereof,
dividends shall continue to accumulate on such outstanding
shares until paid.
(f) Priority.
(i) So long as any shares of the New Series A
Preferred Stock are outstanding, no dividends, except as
described in the next succeeding sentence, shall be declared
or paid or set apart for payment on any class or series of
Parity Preferred Stock for any period unless full cumulative
dividends, if any, on all outstanding shares of the shares of
New Series A Preferred Stock have been or contemporaneously
are (x) declared and paid in full in cash or (y) declared and
a sum sufficient for the payment thereof in cash is set apart
for such payment on the shares of New Series A Preferred
Stock through the most recent Dividend Payment Date and so
long as any shares of Parity Preferred Stock are outstanding,
no dividends, except (1) as described in the next succeeding
sentence and (2) for distributions made to holders of New
Series A Preferred Stock from the escrow established under
Section 6(b) hereof as provided by such Section 6(b), shall
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be declared or paid or set apart for payment on any class or
series of New Series A Preferred Stock for any period unless
full cumulative dividends, if any, on all outstanding shares
of Parity Preferred Stock have been or contemporaneously are
(A) declared and paid in full in cash or (B) declared and a
sum sufficient for the payment thereof in cash is set apart
for such payment on the outstanding shares of Parity
Preferred Stock through the most recent applicable dividend
payment date for such Parity Preferred Stock. When dividends
are not paid in full or a sum sufficient for such payment is
not set apart, as aforesaid, upon the shares of the New
Series A Preferred Stock and upon any class or series of
Parity Preferred Stock, all dividends (other than
distributions made to holders of New Series A Preferred Stock
from the escrow established under Section 6(b) hereof as
provided by such Section 6(b) declared upon shares of the New
Series A Preferred Stock and all dividends declared upon such
Parity Preferred Stock shall be declared pro rata so that the
amounts of dividends per share declared on the New Series A
Preferred Stock (other than distributions made to holders of
Series A Preferred Stock from the escrow established under
Section 6(b) hereof as provided by such Section 6(b) and such
Parity Preferred Stock shall in all cases bear to each other
the same ratio that full cumulative dividends per share at
the time on the shares of New Series A Preferred Stock and on
such Parity Preferred Stock bear to each other. Holders of
shares of the New Series A Preferred Stock or of any other
class or series of stock ranking on a parity as to dividends
with the New Series A Preferred Stock shall not be entitled
to any dividend, whether payable in cash, property or stock,
in excess of full cumulative dividends on such shares. No
interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments in
respect of the New Series A Preferred Stock which may be in
arrears.
(ii) So long as any shares of the New Series A
Preferred Stock are outstanding, no shares of Parity
Preferred Stock shall be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or
made available for a sinking fund or otherwise for the
purchase or redemption of any shares of any such stock) by
the Corporation (excluding conversion of shares of Parity
Preferred Stock into shares of Common Stock or other
consideration, including common stock, provided that such
other consideration reflects only amounts previously set
aside or otherwise required to be paid to the holders of
shares of Parity Preferred Stock
15
(x) in order to provide such holders with the same
kind and amount of consideration which each such
holder would have received in the transaction
giving rise to such set aside or payment
requirement (a "Distribution Event") had such
holder's shares of Parity Preferred Stock been
converted into Common Stock immediately prior to
the record date of such Distribution Event, or
(y) as a result of adjustments to the conversion
price (or rate) of the Parity Preferred Stock
required under the terms of such Parity Preferred
Stock because of the occurrence of an event or
transaction (including a Distribution Event), or
(z) as a result of the occurrence of an event or
transaction which requires the Parity Preferred
Stock to be convertible solely into shares of
common stock)
unless the full cumulative dividends, if any, on all
outstanding shares of the New Series A Preferred Stock shall
have been paid in full in cash or set apart for payment in
cash through the most recent Dividend Payment Date.
So long as any shares of Parity Preferred Stock are
outstanding, no shares of New Series A Preferred Stock shall
be redeemed, purchased or otherwise acquired for any
consideration (or any moneys paid to or made available for
the purchase or redemption of any shares of any such stock)
by the Corporation (excluding conversion of shares of New
Series A Preferred Stock into shares of Common Stock or other
consideration, including common stock, provided that such
other consideration reflects only amounts previously set
aside or otherwise required to be paid to the holders of
shares of New Series A Preferred Stock
(x) in order to provide such holders with the same
kind and amount of consideration which each such
holder would have received in the transaction
giving rise to such set aside or payment
requirement (a "Distribution Event") had such
holder's shares of New Series A Preferred Stock
been converted into Common Stock immediately prior
to the record date of such Distribution Event, or
(y) as a result of adjustments to the conversion
price (or rate) of the New Series A Preferred Stock
required under the terms of such New Series A
Preferred Stock because of the occurrence of an
16
event or transaction (including a Distribution
Event), or
(z) as a result of the occurrence of an event or
transaction which requires the New Series A
Preferred Stock to be convertible solely into
shares of common stock)
unless full cumulative dividends, if any, on all outstanding
shares of Parity Preferred Stock shall have been paid in full
in cash or set apart for payment in cash through the most
recent applicable dividend payment date for such Parity
Preferred Stock.
(iii) So long as any shares of the New Series A
Preferred Stock are outstanding, (A) no dividends shall be
declared or paid or set apart for payment and no other
distribution shall be declared or made or set apart for
payment, in each case upon the Common Stock (other than
dividends paid in shares of Common Stock made to the holders
of Common Stock), Permitted Junior Preferred or any other
stock of the Corporation ranking junior to the New Series A
Preferred Stock as to dividends or upon liquidation,
dissolution or winding-up unless such dividends are Permitted
Common Dividends or Permitted Junior Dividends and (B) no
Common Stock, Permitted Junior Preferred or any other such
stock of the Corporation ranking junior to the New Series A
Preferred Stock as to dividends or upon liquidation,
dissolution or winding up shall be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be
paid to or made available for a sinking fund or otherwise for
the purchase or redemption of any shares of any such stock)
by the Corporation unless the full cumulative dividends, if
any, on all outstanding shares of the New Series A Preferred
Stock and any Parity Preferred Stock shall have been paid in
full in cash or set apart for payment in cash through the
most recent Dividend Payment Date and the most recent
dividend payment dates with respect to any Parity Preferred
Stock.
3. Liquidation Rights.
(a) Priority. In the event of any liquidation,
dissolution or winding up of the Corporation, whether
voluntary or involuntary (but not including a liquidation
which is a merger where the Corporation is the surviving
corporation and the capital stock of the Corporation has been
unchanged or a merger which is a Permitted Merger (as defined
in Section 1(d)(ii)(A) hereof)), before any payment or
distribution of the assets of the Corporation (whether from
17
capital or surplus) shall be made to or set apart for the
holders of Common Stock, Permitted Junior Preferred or any
other series or class or classes of stock of the Corporation
ranking junior to the New Series A Preferred Stock and the
Parity Preferred Stock upon liquidation, dissolution or
winding up, the holders of the shares of New Series A
Preferred Stock and the holders of any class or series of
Parity Preferred Stock entitled to a liquidation preference
in such transaction or event shall be entitled to receive
liquidation payments according to the following priorities
(unless such priorities are waived, as provided below in this
Section 3(a)):
First,
(i) if such liquidation, dissolution or winding up
occurs on or after April 1, 2001, the holders of the
shares of New Series A Preferred Stock shall receive
$100 per share and the holders of shares of such Parity
Preferred Stock shall receive the applicable Stated
Liquidation Value per share of such Parity Preferred
Stock then outstanding; and
(ii) if such liquidation, dissolution or winding up
occurs before April 1, 2001, (A) the holders of shares
of New Series A Preferred Stock shall receive an amount
equal to the Redemption Price that would have been
payable if the Corporation had elected to redeem such
holder's shares of New Series A Preferred Stock pursuant
to Section 4(a) hereof on the date of such liquidation,
dissolution or winding up, and if such liquidation,
dissolution or winding up occurs during the period prior
to April 1, 1995, an amount equal to the Redemption
Price that would be payable if the Corporation elected
to redeem such shares pursuant to Section 4(a) hereof
during the period for April 1, 1995 through March 31,
1996, except that in calculating such Redemption Price
under Section 4(a), the relevant amount (i.e., $104.80)
which is otherwise to be used under Section 4(a) shall
be increased by an additional $0.80 for each twelve
months (or fraction thereof) prior to April 1, 1995,
disregarding for such purposes any prohibitions or
restrictions or redemption contained in Section 4(a)
hereof and (B) the holders of shares of such Parity
Preferred Stock shall receive the applicable Stated
Liquidation Value per share of Parity Preferred Stock
then outstanding or a per share liquidation amount
(excluding accumulated and unpaid dividends) such as
that provided in this clause (ii) with respect to the
18
New Series A Preferred Stock; and then after all amounts
under this part First have been so paid,
Second,
(iii) The holders of shares of New Series A
Preferred Stock and the holders of shares of such Parity
Preferred Stock shall each receive an amount equal to
full cumulative unpaid dividends with respect to their
respective shares through and including the date of
final distribution to such holders, but such holders
shall not be entitled to any further payment.
No payment (in either of the First step or Second
step provided above), whether pursuant to Section 3(a)(i),
3(a)(ii) or 3(a)(iii) hereof, on account of any liquidation,
dissolution or winding up of the Corporation shall be made to
the holders of any class or series of such Parity Preferred
Stock or to the holders of New Series A Preferred Stock
unless there shall likewise be paid at the same time to the
holders of the New Series A Preferred Stock and the holders
of all classes or series of such Parity Preferred Stock like
proportionate amounts of the same payments (at the same
level, i.e., as the First step or the Second step above),
such proportionate amounts to be determined ratably in
proportion to the full amounts to which the holders of all
outstanding shares of New Series A Preferred Stock and the
holders of all outstanding shares of such Parity Preferred
Stock are respectively entitled (in either the First step or
the Second step, as the case may be) with respect to such
distribution. A holder of shares of New Series A Preferred
Stock may elect to waive receiving any payment under this
Section 3(a) with respect to a liquidation, dissolution or
winding up of the Corporation by giving written notice of
such waiver to the Corporation, provided that such notice is
given within ten days after notice is given to such holder
under Section 3(c) hereof.
(b) Junior Stock. After payment shall have been
made in full to the holders of New Series A Preferred Stock
and to the holders of such Parity Preferred Stock as provided
in this Section 3 hereof upon any liquidation, dissolution or
winding up of the Corporation, any other series or class or
classes of stock, ranking junior to the New Series A
Preferred Stock upon liquidation, dissolution or winding up
shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all
assets remaining to be paid or distributed upon such
liquidation, dissolution or winding up, and the holders of
19
New Series A Preferred Stock and the holders of such Parity
Preferred Stock shall not be entitled to share therein.
(c) Notice of Liquidation. Written notice of any
liquidation, dissolution or winding up of the Corporation,
stating the payment date or dates when and the place or
places where the amounts distributable in such circumstances
shall be payable, shall be given (not less than thirty (30)
days prior to any payment date stated therein), to the
holders of record of the New Series A Preferred Stock at
their respective addresses as the same shall appear on the
stock register of the Corporation.
4. Redemption.
(a) Optional Redemption. Subject to the other
provisions of this Section 4, the Corporation may at any time
on or after April 1, 1995, redeem, at the Corporation's
option and out of funds legally available therefor, any or
all shares of New Series A Preferred Stock during the twelve
month periods (the "Redemption Periods") and at the per share
redemption prices set forth below (each a "Redemption
Price"), plus an amount equal to full cumulative dividends
thereon through and including the date of redemption:
Twelve month period beginning Redemption Price per share
April 1, 1995 $104.80
April 1, 1996 $104.00
April 1, 1997 $103.20
April 1, 1998 $102.40
April 1, 1999 $101.60
April 1, 2000 $100.80
April 1, 2001 and thereafter $100.00
Upon surrender, in accordance with the notice provided under
Section 4(b) hereof, of the certificate for any shares of New
Series A Preferred Stock so redeemed (duly endorsed or
accompanied by appropriate instruments of transfer), each
holder of record of such shares shall be entitled to receive
in cash the Redemption Price, without interest, for each
share redeemed from such holder plus an amount in cash equal
to full cumulative dividends on such shares through and
including such date of redemption. If less than all the
outstanding shares of New Series A Preferred Stock are to be
redeemed, the shares to be redeemed shall be redeemed pro
rata from all holders of then outstanding shares of New
Series A Preferred Stock. In case fewer than all the shares
represented by any share certificate are redeemed, a new
certificate shall be issued representing the unredeemed
20
shares without cost to the holder thereof. The Corporation
shall not be permitted to redeem shares of New Series A
Preferred Stock under this Section 4(a) unless the
Corporation pursuant to such redemption, simultaneously
redeems either (x) at least 10,000 shares of New Series A
Preferred Stock or (y) all of the then outstanding shares of
New Series A Preferred Stock. Notwithstanding any provision
of this Section 4, the Corporation shall not redeem any
shares of New Series A Preferred Stock pursuant to Section
4(a) unless either (x) full cumulated dividends accrued as
of the then most recent Dividend Payment Date have been paid
in full or (y) all of the then outstanding shares of New
Series A Preferred Stock are simultaneously redeemed.
(b) Notice of Optional Redemption. The
Corporation will provide written notice of any redemption of
shares of New Series A Preferred Stock under Section 4(a)
hereof to holders of record of the New Series A Preferred
Stock not less than thirty (30) nor more than sixty (60) days
prior to the date fixed for such redemption. Each such
notice shall state, as appropriate, the following:
(i) the redemption date (which shall be a Business
Day);
(ii) the number of shares of New Series A Preferred
Stock to be redeemed and, if less than all the shares
held by any holder are to be redeemed the number of such
shares to be redeemed from each holder;
(iii) the Redemption Price;
(iv) the place or places where certificates for
such shares are to be surrendered for redemption; and
(v) the amount equal to full cumulative dividends
payable per share of New Series A Preferred Stock to be
redeemed to and including such redemption date, and that
dividends on shares of New Series A Preferred Stock to
be redeemed will cease to accrue on such redemption date
unless the Corporation shall default in payment of the
full redemption payment.
(c) Mandatory Redemption. Upon the occurrence of
any Change of Control Event, each holder of a share of New
Series A Preferred Stock shall have the right, at such
holder's option, to require the Corporation to redeem such
holder's shares of New Series A Preferred Stock in whole or
in part at a price (the "Mandatory Redemption Price") equal
to the greater of
21
(i) the sum of
(A) an amount equal to full cumulative dividends
thereon through and including such redemption payment
date, plus
(B) an amount equal to the Redemption Price that
would have been payable if the Corporation had elected
to redeem such holder's shares of New Series A Preferred
Stock pursuant to Section 4(a) hereof on the date such
holder gives notice to the Corporation under Section
4(d) hereof of such holder's exercise of its option to
require a redemption under this Section 4(c), and if
such notice is given by a holder under Section 4(d)
hereof during the period prior to April 1, 1995, an
amount equal to the Redemption Price that would be
payable if the Corporation elected to redeem such shares
pursuant to Section 4(a) hereof during the period from
April 1, 1995 through March 31, 1996, except that in
calculating such Redemption Price under Section 4(a),
the relevant amount (i.e., $104.80) which is otherwise
to be used under Section 4(a) shall be increased by an
additional $0.80 for each twelve months (or fraction
thereof) prior to April 1, 1995, disregarding for such
purposes any prohibitions or restrictions on redemption
contained in Section 4(a) hereof; or
(ii) the sum of
(A) the product of (x) the greater of (1) the
Market Price (as defined in Section 6(g) hereof) per
share of Common Stock on the date such holder gives
notice to the Corporation under Section 4(d) hereof of
such holder's exercise of its option to require a
redemption under this Section 4(c) or (2) the price per
share of Common Stock received by any other stockholder
of the Corporation in one or more series of related
transactions resulting in such Change of Control Event,
multiplied by (y) the number of Common Shares (as
defined in Section 6 hereof) then obtainable upon
conversion of such holder's shares of New Series A
Preferred Stock to be redeemed, plus
(B) any Distributions on Common Stock (together
with any earnings while escrowed) set aside pursuant to
Section 6(b) hereof in respect of the New Series A
Preferred Stock to be redeemed (to the extent such
escrowed amount has not been previously distributed to
the holder of such New Series A Preferred Stock).
22
Such option under this Section 4(c) shall be exercised by
written notice to the Corporation under Section 4(d) hereof
given at any time from and after the thirtieth (30th) day
before such Change of Control Event through the ninetieth
(90th) day after such Change of Control Event (or, if later,
through the ninetieth (90th) day after such holder receives
written notice from the Corporation of such Change of Control
Event). Promptly (and in any event within ten (10) days)
after the occurrence of any Change of Control Event, and not
more than forty-five (45) days before such Change of Control
Event, the Corporation shall give written notice to each
holder of a share of New Series A Preferred Stock notifying
each such holder of the occurrence of such Change of Control
Event and informing each such holder of its right to exercise
an option to require a redemption under this Section 4(c).
(d) Notice of Mandatory Redemption. In order to
exercise its rights to require a redemption under Section
4(c) hereof, a holder requiring such redemption shall send to
the Corporation a written notice demanding redemption under
Section 4(c) hereof and specifying the date of such
redemption (which shall not be less than five (5) days after
receipt of such notice by the Corporation, but in no event
earlier than such Change of Control Event, except that such
date may be the same date as a Change of Control Event
(whether or not a Business Day) if requested by the holder);
except that in the event that prior to the date fixed for
mandatory redemption by any holder of shares of New Series A
Preferred Stock pursuant to this Section 4(d) (the "Put"),
the Corporation gives notice of optional redemption to such
holder pursuant to Section 4(b) hereof (the "Call"), to the
extent that:
(i) the Call concerns a greater number of such
holder's shares of New Series A Preferred Stock than the
Put, the Corporation shall be entitled to exercise the
optional redemption for all such shares subject to such
Call; and
(ii) the Put concerns a greater number of shares of
such holder's shares of New Series A Preferred Stock
than the Call, the Corporation shall be entitled to
exercise the optional redemption for all shares which
are subject to the Call, and after such optional
redemption by the Corporation, the holder may continue
to exercise its rights pursuant to the Put.
(e) Redemption Funds. On the date of any
redemption being made pursuant to Section 4(a), the
23
Corporation may, without releasing the Corporation from any
of its obligations hereunder, deposit for the benefit of the
holders of shares of New Series A Preferred Stock to be
redeemed the funds necessary for such redemption with a bank
or trust company in the City of New York or in the City of
Boston, in either case having a capital and surplus of at
least $100,000,000; provided, (i) that such bank or trust
company shall then pay the full redemption amounts as
provided for hereunder to the holders of shares of New Series
A Preferred Stock and (ii) at least ten (10) days prior to
such redemption date, the Corporation shall give the holders
written notice containing the full particulars regarding the
location of the funds for the redemption payments and the use
of this Section 4(e). Any moneys so deposited by the
Corporation and unclaimed at the end of two years from the
date designated for such redemption shall revert to the
general funds of the Corporation. After such reversion, any
such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such
bank or trust company shall be relieved of all responsibility
in respect thereof and any holder of shares of New Series A
Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Redemption Price.
Notwithstanding the foregoing, however, to the extent that
the Corporation is required under the abandoned property laws
of any jurisdiction to escheat any redemption funds held in
trust for the benefit of any holder, the Corporation shall be
absolved of any further obligation or liability to such
holder to the full extent provided by any such laws. In the
event that moneys are deposited pursuant to this subsection
(e) in respect of shares of New Series A Preferred Stock that
are converted in accordance with the provisions of Section 5,
such moneys shall, upon such conversion, revert to the
general funds of the Corporation and, upon demand, such bank
or trust company shall pay over to the Corporation such
moneys and shall be relieved of all responsibility to the
holders of such converted shares in respect thereof. Any
interest accrued on funds deposited pursuant to this
subsection (e) shall be paid from time to time to the
Corporation for its own account.
(f) Failure to Redeem. In the event that on any
date for redemption pursuant to Section 4(c) hereof, the
Corporation, for whatever reason, is unable to, or does not,
pay in full the Mandatory Redemption Price or other amounts
due to any holder or holders of shares of New Series A
Preferred Stock, then (without releasing the Corporation from
its obligations under Section 4(c) hereof), the amount paid
by the Corporation to all holders of shares of New Series A
Preferred Stock pursuant to Section 4(c) hereof who send
24
written notices to the Corporation pursuant to Section 4(d)
hereof within thirty (30) days of each other, shall be
allocated among all such holders of shares of New Series A
Preferred Stock in proportion, as nearly as practicable, to
the respective number of shares of New Series A Preferred
Stock then held by each such holder; provided, that in the
event that the amount so allocable to any such holder would
exceed the amount to be received by such holder pursuant to
such holder's notice, then any such excess shall be allocated
to the other remaining holders of shares of New Series A
Preferred Stock requesting redemption; provided, further,
however, that in the event a holder of New Series A Preferred
Stock makes an election to adjust the then current conversion
price pursuant to Section 6(h)(y) hereof, the Corporation
shall have no obligation to pay the Mandatory Redemption
Price under Section 4(c) hereof with respect to such shares.
(g) Rights After Redemption. If notice of
redemption shall have been duly given under Section 4(b) or
Section 4(d), and if on or before the redemption date funds
necessary for the redemption of the shares of New Series A
Preferred Stock to be redeemed shall have been set aside
pursuant to Section 4(e) hereof, then notwithstanding that
any certificate representing any shares of New Series A
Preferred Stock so called for redemption shall not have been
surrendered, the dividends thereon shall cease to accrue from
and after the date of redemption and all rights with respect
to the shares of New Series A Preferred Stock so called for
redemption shall forthwith after such redemption date cease,
except only the right of the holder to receive the Redemption
Price plus an amount equal to full cumulative dividends
thereon through and including the date of redemption (or the
Mandatory Redemption Price, as the case may be). Any share
of New Series A Preferred Stock which has been redeemed under
Section 4(a) or 4(c) hereof, as to which all amounts payable
thereunder have been paid in full in cash (or set aside for
payment in cash pursuant to Section 4(e) hereof), shall be
retired and restored to the status of authorized but unissued
Preferred Stock of the Corporation (which Preferred Stock
remains subject to the restrictions set forth in Section 1(c)
hereof and which may not be reissued as New Series A
Preferred Stock).
(h) No Selective Repurchase Offers. Neither the
Corporation nor any of its subsidiaries shall repurchase any
outstanding shares of New Series A Preferred Stock unless the
Corporation either (i) offers to purchase all of the then
outstanding shares of New Series A Preferred Stock or (ii)
offers to purchase shares of New Series A Preferred Stock
from the holders in proportion to the respective number of
25
shares of New Series A Preferred Stock held by each holder
accepting such offer; provided, that this Section 4(h) shall
not apply to any shares of New Series A Preferred Stock which
are sold or transferred either in a public offering pursuant
to a registration statement under Section 6 of the Securities
Act of 1933, as amended or pursuant to Rule 144 (but only if
sold in "brokers' transactions" under Rule 144(g) as in
effect on April 14, 1992). In any such repurchase by the
Corporation, if all shares of such New Series A Preferred
Stock are not being repurchased, then the number of shares of
such New Series A Preferred Stock offered to be repurchased
shall be allocated among all shares of such New Series A
Preferred Stock held by holders which accept the
Corporation's repurchase offer so that such shares of New
Series A Preferred Stock are repurchased from such holders in
proportion to the respective number of such shares of New
Series A Preferred Stock held by each such holder which
accepts the Corporation's offer (or in such other proportion
as agreed by all such holders who accept the Corporation's
offer). Nothing in this Section 4(h) shall (i) obligate a
holder of shares of New Series A Preferred Stock to accept
the Corporation's repurchase offer or (ii) prevent the
Corporation from redeeming shares of New Series A Preferred
Stock in accordance with the terms of (and this Section 4(h)
shall not apply to) Sections 4(a) through 4(g) hereof.
5. Conversion.
(a) General. Each holder of a share of New Series
A Preferred Stock shall have the right, at the option of such
holder, at any time to convert, upon the terms and provisions
of this Section 5, one or more shares of New Series A
Preferred Stock into fully paid and nonassessable shares of
Common Stock of the Corporation or any capital stock or other
securities into which such Common Stock shall have been
changed or any capital stock or other securities resulting
from a reclassification thereof (such shares, the "Common
Shares"). Such conversion of shares of New Series A
Preferred Stock to Common Shares shall be made at a
conversion rate of one share of New Series A Preferred Stock
for a number of Common Shares equal to (x) $100 divided by
(y) the then current conversion price, as further described
below. Every share of New Series A Preferred Stock shall
continue to be convertible, in whole or in part, even though
the Corporation or a holder may have given notice of
redemption with respect to such share of New Series A
Preferred Stock or any part thereof pursuant to Section 4
hereof, so long as such share of New Series A Preferred Stock
and the holder's election to convert shall have been
delivered to the Corporation's transfer office pursuant to
26
Section 5(c) hereof five (5) Business Days prior to the date
fixed for such redemption. The Common Shares issuable upon
conversion of the shares of New Series A Preferred Stock,
when such Common Shares shall be issued in accordance with
the terms hereof, are hereby declared to be and shall be duly
authorized, validly issued, fully paid and nonassessable
Common Shares held by the holders thereof.
(b) Reference to "Conversion". For convenience,
the conversion pursuant to this Section 5 of all or a part of
the shares of New Series A Preferred Stock into Common Shares
is herein sometimes referred to as the "conversion" of the
shares of New Series A Preferred Stock.
(c) Surrender, Election and Payment. Each share
of New Series A Preferred Stock may be converted by the
holder thereof, in whole or in part, during normal business
hours on any Business Day by surrender of the share of New
Series A Preferred Stock, accompanied by written evidence of
the holder's election to convert the preferred share of New
Series A Preferred Stock or portion thereof, to the
Corporation at its office designated pursuant to Section 8
hereof (or, if such conversion is in connection with an
underwritten public offering of Common Shares, at the
location at which the underwriting agreement requires that
such Common Shares (or shares of New Series A Preferred
Stock) be delivered). Payment of the conversion price for
the Common Shares specified in such election shall be made by
applying an aggregate number of shares of New Series A
Preferred Stock equal to the number obtained by dividing (x)
the number of Common Shares specified in such election by (y)
the amount obtained by dividing (A) 100 by (B) the then
current conversion price. Such holder shall thereupon be
entitled to receive the number of Common Shares specified in
such election (plus cash in lieu of any fractional share as
provided in Section 5(j) hereof).
(d) Effective Date. Each conversion of a share of
New Series A Preferred Stock pursuant to Section 5(c) hereof
shall be deemed to have been effected immediately prior to
the close of business on the Business Day on which such share
of New Series A Preferred Stock shall have been surrendered
to the Corporation as provided in Section 5(c) hereof (except
that if such conversion is in connection with an underwritten
public offering of Common Shares, then such conversion shall
be deemed to have been effected upon such surrender), and
such conversion shall be at the current conversion price in
effect at such time. On each such day that the conversion of
a share of New Series A Preferred Stock is deemed effected,
the person or persons in whose name or names any certificate
27
or certificates for Common Shares are issuable upon such
conversion, as provided in Section 5(e) hereof, shall be
deemed to have become the holder or holders of record of such
Common Shares.
(e) Share Certificates. As promptly as
practicable after the conversion of a share of New Series A
Preferred Stock, in whole or in part, and in any event within
five (5) Business Days thereafter (unless such conversion is
in connection with an underwritten public offering of Common
Shares, in which event concurrently with such conversion),
the Corporation as its expense (including the payment by it
of any applicable issue, stamp or other taxes, other than any
income taxes) will cause to be issued in the name of and
delivered to the holder thereof or as such holder may direct,
a certificate or certificates for the number of Common Shares
to which such holder shall be entitled upon such conversion
on the effective date of such conversion plus cash in lieu of
any fractional shares as provided in Section 5(j) hereof.
(f) Retirement of Converted Shares. Any share of
New Series A Preferred Stock which has been converted under
Section 5 hereof shall be retired and restored to the status
of authorized but unissued Preferred Stock of the Corporation
(which Preferred Stock remains subject to the restrictions
set forth in Section 1(c) hereof and which may not be
reissued as New Series A Preferred Stock).
(g) Payment of Dividends. Within five (5)
Business Days after receipt of any share of New Series A
Preferred Stock and an election to convert all or a portion
of such share of New Series A Preferred Stock under Section
5(c) hereof, the Corporation will pay, out of funds legally
available therefor, to the holder of such share of New Series
A Preferred Stock in cash an amount equal to full cumulative
dividends accrued to the effective date of conversion of such
shares of New Series A Preferred Stock.
(h) Current Conversion Price. The term
"conversion price" shall mean initially, subject to
adjustment, the lesser of (i) $21.00 per Common Share or (ii)
an amount equal to the conversion price per Common Share (as
defined in the Existing Series A Certificate) of the Existing
Series A Preferred Stock pursuant to the terms of the
Existing Series A Certificate (as in effect on the close of
business on August 11, 1992) taking into account any and all
adjustments to such conversion price required to be made by
the terms of such Existing Series A Certificate. For
purposes of this Section 5(h), such initial conversion price
shall be deemed to have become effective at the close of
28
business on August 11, 1992 but shall be subject to
adjustment as set forth in Section 6 hereof. The term
"current conversion price" as used herein shall mean the
conversion price, as the same may be adjusted from time to
time as hereinafter provided, in effect at any given time.
In determining the current conversion price, the result shall
be expressed to the nearest $0.01, but any such lesser or
greater amount shall be carried forward and shall be
considered at the time of (and together with) the next
subsequent adjustment which, together with any adjustments to
be carried forward, shall amount to $0.01 per Common Share or
more and provided that to the extent that at the close of
business on August 11, 1992, there are any carried forward
adjustments under the Existing Series A Preferred Stock which
were required to be carried forward by the Corporation
pursuant to Section 5(h) of the Existing Series A
Certificate, adjustments in the same amount as such carried
forward adjustments shall be made to the conversion price
hereunder at the time of (and together with) the first
adjustment to the conversion price hereunder which, together
with such adjustments and any other adjustments to be carried
forward hereunder, shall amount to $0.01 per Common Share or
more.
(i) Reservation of Shares of Common Stock. The
Corporation shall at all times reserve and keep available out
of authorized but unissued the maximum number of shares of
Common Stock into which all shares of New Series A Preferred
Stock from time to time outstanding are convertible, but
shares of Common Stock held in the treasury of the
Corporation may, in its discretion, be delivered upon any
conversion of shares of New Series A Preferred Stock.
(j) Fractional Shares. No fractional shares of
Common Stock shall be issued upon conversion of New Series A
Preferred Stock, but, in lieu of any fraction of a Common
Share which would otherwise be issuable in respect of the
aggregate number of shares of New Series A Preferred Stock
surrendered by the holder thereof for conversion, the holder
shall have the right to receive an amount in cash equal to
the same fraction of the current Market Price (as defined
below) on the effective date of the conversion of such shares
of New Series A Preferred Stock.
6. Adjustment to Conversion Price.
The Conversion Price shall be adjusted, from time
to time, as follows:
29
(a) Adjustments for Stock Dividends,
Recapitalizations, Etc. In case the Corporation shall, after
August 11, 1992, (w) pay a stock dividend or make a
distribution (on or in respect of its Common Stock) in shares
of its Common Stock, (x) subdivide the outstanding shares of
its Common Stock, (y) combine the outstanding shares of its
Common Stock into a smaller number of shares, or (z) issue by
reclassification of shares of its Common Stock, any shares of
capital stock of the Corporation, then, in any such case, the
current conversion price in effect immediately prior to such
action shall be adjusted to a price such that if the holder
of a share of New Series A Preferred Stock were to convert
such share of New Series A Preferred Stock in full
immediately after such action, such holder would be entitled
to receive the number of shares of capital stock of the
Corporation which such holder would have owned immediately
following such action had such share of New Series A
Preferred Stock been converted immediately prior thereto
(with any record date requirement being deemed to have been
satisfied), and, in any such case, such conversion price
shall thereafter be subject to further adjustments under this
Section 6. An adjustment made pursuant to this subsection
(a) shall become effective retroactively immediately after
the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date
in the case of a subdivision, combination or
reclassification.
(b) Adjustments for Certain Other Distributions.
In case the Corporation shall, after April 15, 1992, fix a
record date for the making of a distribution to holders of
its Common Stock (including any such distribution made in
connection with a consolidation or merger in which the
Corporation is the continuing corporation) of
(i) assets (but not including Non-Dilutive
Dividends), including Dilutive Dividends,
(ii) evidences of indebtedness or other securities
(except for its Common Stock) of the Corporation or of
any entity other than the Corporation, or
(iii) subscription rights, options or warrants to
purchase any of the foregoing assets or securities,
whether or not such rights, options or warrants are
immediately exercisable
(all such distributions referred to in clauses (i), (ii) and
(iii) being hereinafter collectively referred to as
"Distributions on Common Stock"), the Corporation shall set
30
aside in an escrow reasonably acceptable to the holders of a
majority of the shares of New Series A Preferred Stock then
outstanding, and with respect to cash, suitably invested for
the benefit of the holders of shares of New Series A
Preferred Stock, the Distribution on Common Stock to which
they would have been entitled if they had converted all of
the shares of New Series A Preferred Stock held by them for
the Corporation's Common Stock immediately prior to the
record date for the purpose of determining stockholders
entitled to receive such Distribution on Common Stock (or
with respect to Distributions on Common Stock occurring
before August 12, 1992, the Distribution on Common Stock to
which they would have been entitled if shares of New Series A
Preferred Stock had been issued to them as of such date (and
as if this Certificate of Designations had been in effect as
of such date) and if they had converted such shares held by
them for the Corporation's Common Stock immediately prior to
such record date) and any such Distribution on Common Stock
(together with any earnings while escrowed) shall thereafter
be distributed (unless any of the subscription rights, option
or warrants referred to in clause (iii) above terminate or
expire in accordance with their terms prior to their
distribution out of such escrow) from time to time out of
such escrow to persons converting shares of New Series A
Preferred Stock (immediately upon conversion) and to any
holder of shares of New Series A Preferred Stock which are
being redeemed pursuant to Section 4 hereof (immediately upon
such redemption) to the extent such Distribution on Common
Stock relates to the portion of the shares of New Series A
Preferred Stock then being converted or redeemed, as the case
may be; provided, that in the event that full cumulative
dividends on all outstanding shares of the New Series A
Preferred Stock shall not have been paid in full in cash or
set aside for payment in cash through any Dividend Payment
Date occurring while any Distributions on Common Stock are
held in escrow pursuant to this Section 6(b), then the
Corporation shall promptly declare a mandatory dividend per
share of New Series A Preferred Stock, out of funds legally
available therefor, of such Distributions on Common Stock
held in escrow in respect of each share of New Series A
Preferred Stock. Written notice of any such dividend shall
be provided to each holder of New Series A Preferred Stock at
least 10 days prior to the payment thereof. Any holder of
New Series A Preferred Stock may waive the right to receive
such dividend by giving written notice of such waiver to the
Corporation prior to the payment thereof. Any holder who
does not elect to so waive the right to receive such dividend
shall (i) upon receipt thereof be deemed to waive any right
thereafter to receive upon conversion of such shares of New
Series A Preferred Stock such Distributions on Common Stock
31
distributed in such dividend and (ii) shall as a condition to
receipt of such dividend submit the certificate or
certificates representing such shares of New Series A
Preferred Stock to the Corporation for the imposition thereon
of a legend conspicuously noting the waiver pursuant to
clause (i) hereof of the right to receive such Distributions
on Common Stock upon conversion of such shares of New Series
A Preferred Stock. Any such mandatory dividend of such
Distribution on Common Stock shall not modify, affect or
restrict the rights of such holder to receive any dividends
or distributions under, or reduce the amount of dividends or
distributions payable pursuant to, Section 2 hereof.
(c) Adjustments for Issuances of Additional Stock.
Subject to the exceptions referred to in Section 6(e) hereof,
in case the Corporation shall at any time or from time to
time after August 11, 1992 issue any additional shares of the
Corporation's Common Stock ("Additional Common Stock"), for a
consideration per share either (I) less than the then current
Market Price per share of the Corporation's Common Stock
(determined as provided in Section 6(g) hereof), immediately
prior to the issuance of such Additional Common Stock (except
as provided in Section 6(g) hereof), or (II) without
consideration, then (in the case of either clause (I) or
(II)), and thereafter successively upon each such issuance,
the current conversion price shall forthwith be reduced to a
price equal to the price determined by multiplying such
current conversion price by a fraction, of which
(1) the numerator shall be (i) the number of
shares of the Corporation's Common Stock outstanding
immediately prior to such issuance of the Additional
Common Stock plus (ii) the number of shares of the
Corporation's Common Stock which the aggregate amount of
consideration, if any, received by the Corporation upon
such issuance of the Additional Common Stock would have
purchased at the then current Market Price per share of
the Corporation's Common Stock with respect to each
issuance, and
(2) the denominator shall be (i) the number of
shares of the Corporation's Common Stock outstanding
immediately prior to the issuance of the Additional
Common Stock plus (ii) the number of shares of such
issuance of Additional Common Stock;
provided, however, that such adjustment shall be made only if
such adjustment results in a current conversion price less
than the current conversion price in effect immediately prior
to the issuance of such Additional Common Stock. The
32
Corporation may, but shall not be required to, make any
adjustment of the current conversion price if the amount of
such adjustment shall be less than one percent (1%) of the
current conversion price immediately prior to such
adjustment, but any adjustment that would otherwise be
required then to be made which is not so made shall be
carried forward and shall be made at the time of (and
together with) the next subsequent adjustment which, together
with any adjustments so carried forward, shall amount to not
less than one percent (1%) of the current conversion price
immediately prior to such adjustment; provided that to the
extent that at the close of business on August 11, 1992,
there are any carried forward adjustments under the Existing
Series A Preferred Stock which were required to be carried
forward by the Corporation pursuant to Section 6(h) of the
Existing Series A Certificate, adjustments in the same amount
as such carried forward adjustments shall be made to the
conversion price hereunder at the time of (and together with
the first adjustment to the conversion price hereunder which,
together with such adjustments and any other adjustments to
be carried forward hereunder, shall amount to not less than
one percent (1%) of the current conversion price immediately
prior to such adjustments.
(d) Certain Rules in Applying the Adjustment for
Additional Stock Issuances. For purposes of any adjustment
as provided in Section 6(c) hereof, the following provisions
shall also be applicable:
(1) Cash Consideration. In case of the issuance
of Additional Common Stock for cash, the consideration
received by the Corporation therefor shall (subject to
the last sentence of Section 6(g) hereof) be deemed to
be the cash proceeds received by the Corporation for
such Additional Common Stock.
(2) Non-Cash Consideration. In case of the
issuance of Additional Common Stock for a consideration
other than cash, or a consideration a part of which
shall be other than cash, the amount of the
consideration other than cash so received or to be
received by the Corporation shall be deemed to be the
value of such consideration at the time of its receipt
by the Corporation as determined in good faith by the
Board of Directors (subject to the last sentence of
Section 6(a) hereof), except that where the non-cash
consideration consists of the cancellation, surrender or
exchange of outstanding obligations of the Corporation
(or where such obligations are otherwise converted into
shares of the Corporation's Common Stock), the value of
33
the non-cash consideration shall be deemed to be the
principal amount of the obligations cancelled,
surrendered, satisfied, exchanged or converted. If the
Corporation receives consideration, part or all of which
consists of publicly traded securities (i.e., in lieu of
cash), the value of such non-cash consideration shall be
the aggregate market value of such securities (based on
the latest reported sale price regular way) as of the
close of the day immediately preceding the date of their
receipt by the Corporation (subject to the last sentence
of Section 6(a) hereof).
(3) Options, Warrants, Convertibles, Etc. In case
of the issuance, whether by distribution or sale to
holders of its Common Stock (other than Distributions on
Common Stock) or to others, by the Corporation of (i)
any security (other than the shares of New Series A
Preferred Stock) that is convertible into Common Stock
or (ii) any rights, options or warrants to purchase the
Corporation's Common Stock (except as stated in Section
6(e) hereof), if inclusion thereof in calculating
adjustments under this Section 6 would result in a
current conversion price lower than if excluded, the
Corporation shall be deemed to have issued, for the
consideration described below, the number of shares of
the Corporation's Common Stock into which such
convertible security may be converted when first
convertible, or the number of shares of the
Corporation's Common Stock deliverable upon the exercise
of such rights, options or warrants when first
exercisable, as the case may be (and such shares shall
be deemed to be Additional Common Stock for purposes of
Section 6(c) hereof). The consideration deemed to be
received by the Corporation at the time of the issuance
of such convertible securities or such rights, options
or warrants shall be the consideration so received
determined as provided in Section 6(d)(1) and (2) hereof
plus (x) any consideration or adjustment payment to be
received by the Corporation in connection with such
conversion or, as applicable, (y) the aggregate price at
which shares of the Corporation's Common Stock are to be
delivered upon the exercise of such rights, options or
warrants when first exercisable (or, if no price is
specified and such shares are to be delivered at an
option price related to the market value of the subject
Common Stock, an aggregate option price bearing the same
relation to the market value of the subject Common Stock
at the time such rights, options or warrants were
granted). If, subsequently, (1) such number of shares
into which such convertible security is convertible, or
34
which are deliverable upon the exercise of such rights,
options or warrants, is increased or (2) the conversion
or exercise price of such convertible security, rights,
options or warrants is decreased, then the calculations
under the preceding two sentences (and any resulting
adjustment to the current conversion price under Section
6(c) hereof) with respect to such convertible security,
rights, options or warrants, as the case may be, shall
be recalculated as of the time of such issuance but
giving effect to such changes (but any such
recalculation shall not result in the current conversion
price being higher than that which would be calculated
without regard to such issuance). On the expiration or
termination of such rights, options or warrants, or
rights to convert, the conversion price hereunder shall
be readjusted (up or down as the case may be) to such
current conversion price as would have been obtained had
the adjustments made with respect to the issuance of
such rights, options, warrants or convertible securities
been made upon the basis of the delivery of only the
number of shares of the Corporation's Common Stock
actually delivered upon the exercise of such rights,
options or warrants or upon the conversion of any such
securities and at the actual exercise or conversion
prices (but any such recalculation shall not result in
the current conversion price being higher than that
which would be calculated without regard to such
issuance).
(4) Number of Shares Outstanding. The number of
shares of the Corporation's Common Stock as at the time
outstanding shall exclude all shares of the
Corporation's Common Stock then owned or held by or for
the account of the Corporation but shall include the
aggregate number of shares of the Corporation's Common
Stock at the time deliverable in respect of the
convertible securities, rights, options and warrants
referred to in Section 6(d)(3) and 6(e) hereof;
provided, that to the extent that such rights, options,
warrants or conversion privileges are not exercised,
such shares of the Corporation's Common Stock shall be
deemed to be outstanding only until the expiration dates
of the rights, warrants, options or conversion
privileges or the prior cancellation thereof.
(e) Exclusions from the Adjustment for Additional
Stock Issuances. No adjustment of the current conversion
price under Section 6(c) hereof shall be made as a result of
or in connection with:
35
(1) the issuance of shares of Common Stock upon
conversion of the shares of New Series A Preferred Stock
or the Convertible Debentures or the Parity Preferred
Stock (or the issuance of any shares of New Series A
Preferred Stock or any Parity Preferred Stock); or
(2) the issuance of shares of Junior Preferred
Stock, Common Stock, cash or other securities pursuant
to the Corporation's Shareholder Rights Plans or rights
issued thereunder, provided Section 1(c) hereof is
complied with;
(3) the issuance of the Corporation's Common Stock
(x) to the Corporation's stock purchase plans or other
similar compensation or benefit plans, in each case the
beneficiaries of which are officers, directors or
employees of the Corporation or (y) to officers,
directors and employees of the Corporation or its
subsidiaries (or the grant to or exercise by any such
persons of options, warrants or rights to purchase or
acquire Common Stock), all (under the preceding clause
(x) or (y)) pursuant to the Corporation's employment
agreements, stock option, stock incentive and stock
purchase plans approved by the Corporation's Board of
Directors; provided, that the aggregate number of shares
of Common Stock which have been issued in any fiscal
year commencing after January 25, 1992 (or are subject
to outstanding warrants, options or other rights which
have been issued or granted in any fiscal year
commencing after January 25, 1992) at any time
(excluding shares, options, warrants or rights referred
to in clause (4) below) shall not exceed 3.5% of the
number of shares of Common Stock outstanding at the
beginning of the fiscal year (commencing after January
25, 1992) in which such shares or options, warrants or
rights were granted (the "Allowable Shares"); provided,
further, that the number of Allowable Shares during any
one fiscal year may be increased by
(i) any unissued shares of Common Stock subject to
any cancelled, terminated or forfeited option, warrant
or right which was outstanding on April 15, 1992 or any
forfeited shares which were outstanding on April 15,
1992,
(ii) any unissued shares of Common Stock subject
to any cancelled, terminated or forfeited option,
warrant or right granted in any fiscal year commencing
after January 25, 1992 or any forfeited shares so
36
granted (without duplication as to any shares of Common
Stock referred to in clause (i) above) and
(iii) any Allowable Shares from a preceding fiscal
year (but after January 25, 1992) which Allowable Shares
were not issued or otherwise subject to issuance
pursuant to any options, warrants or rights granted
during any fiscal year commencing after January 25,
1992;
provided, further, that any shares of Common Stock
referred to in clauses (i), (ii) or (iii) above which
are thereafter issued or are subject to any options,
warrants or rights granted in such fiscal year in excess
of the amount of Allowable Shares permitted to be issued
and granted in any fiscal year under this Section
6(e)(3) shall not be considered Allowable Shares in any
subsequent fiscal year; and provided, further, there
shall be an adjustment as provided in Section 6(c)
hereof to the extent the Corporation has issued options,
warrants or rights to purchase Common Stock or shares of
Common Stock to such plans, officers, directors and
employees of the Corporation or its subsidiaries in any
fiscal year in excess of the Allowable Shares (as may be
increased in accordance with this Section 6(e)(3)); and
(4) the issuance of shares of Common Stock upon
exercise of options, warrants and rights to purchase or
acquire Common Stock which options, warrants and rights
are issued and outstanding as of April 15, 1992 and
which were issued pursuant to the Corporation's
employment agreements, stock option, stock incentive and
stock purchase plans approved by the Corporation's Board
of Directors.
(f) Accountants' Certification. Whenever the
current conversion price is adjusted as provided in this
Section 6, the Corporation will promptly obtain a certificate
of a firm of independent public accountants of recognized
national standing selected by the Board of Directors of the
Corporation (who may be the regular auditors of the
Corporation) setting forth the current conversion price as so
adjusted, the computation of such adjustment and a brief
statement of the facts accounting for such adjustment, and
will mail to the holders of the shares of New Series A
Preferred Stock a copy of such certificate from such firm of
independent public accountants.
(g) Determination of Market Price. For the
purpose of any computation under this Section 6, the current
37
"Market Price" per share of the Corporation's Common Stock on
any date shall be deemed to be the average of the daily
closing prices for the ten (10) consecutive trading dates
commencing twelve (12) trading days before such date (subject
to the last three sentences of this Section 6(g)). The
closing price for each day shall be the last reported sale
price regular way or, in case no such sale takes place on
such day, the average of the closing bid and asked prices
regular way, in either case on the principal national
securities exchange on which the Corporation's Common Stock
is listed or admitted to trading, or if the Corporation's
Common Stock is not listed or admitted to trading on any
national securities exchange, the average of the highest
reported bid and lowest reported asked prices as furnished by
the National Association of Securities Dealers Inc.,
Automated Quotation System Level I, or comparable system. If
the closing price cannot be so determined, then the Market
Price shall be determined:
(x) by the written agreement of the Corporation and the
holders of shares of New Series A Preferred Stock
representing a majority of the Common Shares then
obtainable from the conversion of outstanding
shares of New Series A Preferred Stock, or
(y) in the event that no such agreement is reached
within twenty (20) days after the event giving rise
to the need to determine the Market Price, by the
agreement of two arbitrators, one of whom shall be
selected by the Corporation and the other of whom
shall be selected by such majority holders or
(z) if the two arbitrators so selected fail to agree
within twenty (20) days, by a third arbitrator
selected by the mutual agreement of the other two
(with all costs and expenses of any arbitrators to
be paid by the Corporation).
The Corporation shall cooperate, and shall provide all
necessary information and assistance, to permit any
determination under the preceding clauses (x), (y) or (z).
If the Corporation conducts an underwritten public offering
of the Corporation's Common Stock, and if such public
offering raises at least $5,000,000 of net proceeds to the
Corporation and/or selling stockholders thereunder, then for
purposes of Section 6(c) hereof the Corporation shall be
deemed to have issued such shares of its Common Stock sold in
such underwritten public offering for a consideration per
share equal to the then current Market Price per share. If
at a time when the current Market Price per share of the
38
Common Stock can be determined pursuant to the first two
sentences of this Section 6.4(g), the Corporation issues any
of its Common Stock in a private placement without
registration under Section 5 of the Securities Act (and such
shares of Common Stock are not so registered at any time
within six (6) months after the issuance of such Common
Stock) at a purchase price per share which yields the
Corporation a Net Price equal to or in excess of ninety
percent (90%) of the Market Price per share (as would
otherwise be determined under the first two sentences of this
paragraph (g) on the trading date immediately preceding such
issuance (or the date the price for such placement is
determined, provided the closing occurs within thirty (30)
days after such date), then for purposes of Section 6.4(c)
hereof the Corporation shall be deemed to have sold such
shares of its Common Stock in such private placement at their
Market Price per share; the "Net Price" shall be calculated,
on a per share basis, after deducting all brokers', dealers',
placement agents' and underwriters' fees and commissions and
any other expenses borne by the Corporation or its
subsidiaries in connection with such placement which
expenses, if such proceeds were raised in a public offering,
would be required to be disclosed in Part II of a
registration statement under Section 5 of the Securities Act.
With respect to issuances of Additional Common Stock in
connection with an acquisition of the assets of a business or
of capital stock of a business or a merger with a corporation
where the Corporation is the surviving entity, the then
current Market Price per share of Additional Common Stock
issued by the Corporation to make such acquisition or
consummate such merger shall be determined as of the earlier
of the date when a binding letter of commitment or a binding
agreement with respect thereto was executed and delivered by
the Corporation, and the assets or capital stock being
acquired by the Corporation in exchange for the issuance of
such Additional Common Stock shall be deemed to be equal to
such then current Market Price; provided that (x) the closing
of such transaction occurs no later than three (3) months
after such date, and (y) the use of such Common Stock was
approved, authorized and/or ratified by the Board of
Directors of the Corporation on or before the delivery of the
acquisition agreements and the amount of such Additional
Common Stock was deemed by the Board to be equal (together
with other consideration paid by the Corporation in such
transaction) to the fair value of the assets or capital stock
being acquired.
(h) Special Adjustments. The current conversion
price with respect to a share of New Series A Preferred Stock
39
shall be adjusted downward to a price equal to the greater of
the then Market Price per Common Share or $3.50:
(x) automatically upon the occurrence of a Control
Adjustment Event except with respect to any shares
of New Series A Preferred Stock as to which the
Corporation shall have previously issued a Call and
which shares shall have been redeemed in accordance
with such Call; or
(y) upon the election (made in writing by notice to the
Corporation at any time after the date set for
redemption in the notice provided under Section
4(d) hereof) of the holder of such share of New
Series A Preferred Stock, in lieu of receiving the
Mandatory Redemption Price if the Corporation is
required to pay the Mandatory Redemption Price to
such holder of such share of the New Series A
Preferred Stock and does not pay such Mandatory
Redemption Price within ten (10) days after the
Corporation is to make such payment under Section
4(c) hereof;
provided that, in no event shall the then current conversion
price be increased by this Section 6(h).
(i) April 15, 2007 Adjustment. On April 15, 2007,
the then current conversion price shall be adjusted downward
to a price equal to an amount which is equal to the product
of (x) the Market Price times (y) 1.20; provided, that for
purposes of this Section 6(i), "Market Price" shall be
determined under Section 6(g) hereof but in applying Section
6(g) to this Section 6(i) the daily closing prices shall be
averaged for the thirty (30) trading days preceding April 15,
2007 in applying the first sentence of Section 6(g);
provided, further, that in no event shall the current
conversion price be increased by this Section 6(i) and in no
event shall the current conversion price be reduced to an
amount less than $7.00; provided, further, that any other
adjustments under this Section 6 occurring on such day shall
be made assuming the current conversion price at the start of
business on such day had been reduced pursuant to this
Section 6(i).
(j) Antidilution Adjustments under other
Securities. Without limiting any other rights available
hereunder to the holders of shares of New Series A Preferred
Stock, if there is an antidilution adjustment
40
(x) under any security which is convertible into
Common Stock of the Corporation whether issued
prior to or after the date hereof (except for
the shares of New Series A Preferred Stock or
the Convertible Debentures) or
(y) under any right, option or warrant to purchase
Common Stock of the Corporation whether issued
prior to or after the date hereof (other than
securities the issuance of which was excluded
from adjustment under Section 6(e)(2) or (3)
hereof, if any),
which (in the case of clause (x) or (y)) results in a
reduction in the exercise, conversion or purchase price with
respect to such security, right, option or warrant to an
amount less than the then current conversion price or results
in an increase in the number of shares obtainable under such
security, right, option or warrant which has an effect
equivalent to lowering a conversion or exercise price to an
amount less than the then current conversion price, then an
adjustment shall be made under this Section 6(j) to the then
current conversion price hereunder. Any such adjustment
under this Section 6(j) shall be whichever of the following
results in a lower current conversion price:
(A) a reduction in the current conversion
price equal to the percentage reduction in such
exercise or purchase price with respect to such
security, right, option or warrant, or
(B) a reduction in the current conversion
price which will result in the same percentage
increase in the number of Common Shares available
under this Section 6 as the percentage increase in
the number of shares available under such security,
right, option or warrant.
Any such adjustment under this Section 6(j) shall only be
made if it would result in a lower current conversion price
than that which would be determined pursuant to any other
antidilution adjustment otherwise required under this Section
6 as a result of the event or circumstance which triggered
the adjustment to the security, right, option or warrant
described in clause (x) or (y) above (and if any such
adjustment is so made under this Section 6(j), then such
other antidilution adjustment otherwise required under this
Section 6 shall not be made as a result of such event or
circumstance).
41
(k) Other Adjustments. In case any event shall
occur as to which any of the provisions of this Section 6 are
not strictly applicable but the failure to make any
adjustment would not fairly protect the conversion rights
represented by the shares of New Series A Preferred Stock in
accordance with the essential intent and principles of
Sections 5 and 6 hereof, then, in each such case, the
Corporation shall appoint a firm of independent public
accountants of recognized national standing selected by the
Board of Directors of the Corporation (who may be the regular
auditors of the Corporation), which shall give their opinion
upon the adjustment, if any, on a basis consistent with the
provisions of Sections 5 and 6 hereof, necessary to preserve,
without dilution, the conversion rights represented by the
shares of New Series A Preferred Stock. Upon receipt of such
opinion, the Corporation will promptly mail copies thereof to
the holders of the shares of New Series A Preferred Stock and
shall make the adjustments described therein.
(l) Meaning of "Issuance". References in this
Agreement to "issuances" of stock by the Corporation include
issuances by the Corporation of previously unissued shares
and issuances or other transfers by the Corporation of
treasury stock.
(m) Consolidation or Merger. If the Corporation
shall at any time consolidate with or merge into another
corporation (where the Corporation is not the continuing
corporation after such merger or consolidation), or the
Corporation shall sell, transfer or lease all or
substantially all of its assets, or the Corporation shall
change its Common Shares into property other than capital
stock, then, in any such case, the holder of a share of New
Series A Preferred Stock shall thereupon (and thereafter) be
entitled to receive, upon the conversion of such share of New
Series A Preferred Stock in whole or in part, the securities
or other property to which (and upon the same terms and with
the same rights as) a holder of the number of Common Shares
deliverable upon conversion of such share of New Series A
Preferred Stock would have been entitled if such conversion
had occurred immediately prior to such consolidation or
merger, such sale of assets or such change (with any record
date requirement being deemed to have been satisfied), and
such conversion rights shall thereafter continue to be
subject to further adjustments under this Section 6, without
limiting any other rights of holders of shares of New Series
A Preferred Stock. The Corporation shall take such steps in
connection with such consolidation or merger, such sale of
assets or such change as may be necessary to assure such
holder that the provisions of the shares of New Series A
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Preferred Stock shall thereafter continue to be applicable in
relation to any securities or property thereafter deliverable
upon the conversion of the shares of New Series A Preferred
Stock, including, but not limited to, obtaining a written
obligation to supply such securities or property upon such
conversion and to be so bound by the shares of New Series A
Preferred Stock.
(n) Notices. In case at any time
(i) the Corporation shall take any action which
would require an adjustment in the current conversion
price pursuant to Section 6(a), (c) or (j); or
(ii) the Corporation shall authorize the granting
to the holders of its Common Stock of any Distributions
on Common Stock as set forth in Section 6(b); or
(iii) there shall be any reorganization,
reclassification or change of the Corporation's Common
Stock (other than a change in par value or from par
value to no par value or from no par value to par
value), or any consolidation or merger to which the
Corporation is a party and for which approval of any
stockholders of the Corporation is required, or any
sale, transfer or lease of all or substantially all of
the assets of the Corporation; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the
Corporation;
then, in any one or more of such cases, the Corporation shall
give written notice to the holders of the shares of New
Series A Preferred Stock, not less than ten (10) days before
any record date or other date set for definitive action, of
the date on which such action, distribution, reorganization,
reclassification, change, sale, transfer, lease,
consolidation, merger, dissolution, liquidation or winding-up
shall take place, as the case may be. Such notice shall also
set forth such facts as shall indicate the effect of any such
action (to the extent such effect may be known at the date of
such notice) on the current conversion price and the kind and
amount of the shares and other securities and property
deliverable upon conversion of the shares of New Series A
Preferred Stock. Such notice shall also specify any date as
of which the holders of the Common Stock of record shall be
entitled to exchange their Common Stock for securities or
other property deliverable upon any such reorganization,
reclassification, change, sale, transfer, lease,
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consolidation, merger, dissolution, liquidation or winding-
up, as the case may be. Failure to deliver the notice
required hereunder by the Corporation will not invalidate any
such transaction.
7. Voting Rights.
Other than as required by applicable law, the New
Series A Preferred Stock shall not have any voting powers
either general or special, except that (in addition to voting
rights provided by applicable law):
(a) Consent Required. So long as any shares of
the New Series A Preferred Stock remain outstanding, unless
the vote or consent of the holders of a greater number of
shares shall then be required by law, the affirmative vote or
consent of the holders of at least two-third (2/3) of all of
the shares of New Series A Preferred Stock at the time
outstanding, voting separately as a class, given in person or
by proxy either in writing (as may be permitted by law and
the Certificate of Incorporation and By-laws of the
Corporation) or at any special or annual meeting, shall be
necessary to permit, effect or validate the taking of any
Restricted Actions by the Corporation; except that if any
shares of New Series A Preferred Stock have been called for
redemption pursuant to Section 4(a) hereof, the Corporation
may not amend this Certificate of Designations, until such
time as all amounts payable under Section 4 hereof with
respect to such shares called for redemption have been paid
in full in cash (or such amounts payable have been set aside
for payment in cash pursuant to Section 4(e) hereof).
(b) Additional Voting Rights.
(i) Whenever, at any time or times, full
cumulative dividends on any share of New Series A Preferred
Stock shall equal $8.00 or more (the occurrence of which is
hereinafter referred to as a "Dividend Default"), the holders
of New Series A Preferred Stock shall have the exclusive
collective right, voting separately as a class, to elect two
(2) directors of the Corporation.
(ii) At elections for such directors, each holder
of New Series A Preferred Stock shall be entitled to one vote
for each share held. Upon the vesting of the right of the
holders of New Series A Preferred Stock to elect directors
pursuant to clause (i) above, the maximum authorized number
of members of the Board of Directors of the Corporation shall
automatically be increased by two and the two vacancies so
created shall be filled by vote of the holders of outstanding
44
New Series A Preferred Stock as hereinafter set forth. The
right of holders of New Series A Preferred Stock, voting
separately as a class, to elect members of the Board of
Directors of the Corporation as a result of Section 7(b)(i)
above shall continue until such time as full cumulative
dividends on all shares of New Series A Preferred Stock shall
have been paid in full, at which time such right shall
terminate, except as herein or by law expressly provided,
subject to revesting in the event of each and every
subsequent Dividend Default.
(iii) Whenever such voting right under this
Section 7(b) shall have vested and for so long as a Dividend
Default shall have occurred and be continuing, such right may
be exercised at a special meeting of the holders of shares of
New Series A Preferred Stock called as hereinafter provided,
or at any annual meeting of stockholders held for the purpose
of electing directors, or if permitted under the terms of the
Certificate of Incorporation by the written consent of such
holders pursuant to Section 228 of the General Corporation
Law of the State of Delaware.
(iv) At any time when such voting right under this
Section 7(b) shall have vested in the holders of shares of
New Series A Preferred Stock entitled to vote thereon, and if
such right shall not already have been initially exercised,
an officer of the Corporation shall, upon the written request
of at least 25% of the holders of record of shares of the New
Series A Preferred Stock then outstanding, addressed to the
Treasurer of the Corporation, call a special meeting of
holders of shares of the New Series A Preferred Stock. Such
meeting shall be held at the earliest practicable date upon
the notice required for annual meetings of stockholders at
the place for holding annual meetings of stockholders of the
Corporation or, if none, at a place designated by the
Treasurer of the Corporation. If such meeting shall not be
called by the proper officers of the Corporation within 30
days after the personal service of such written request upon
the Treasurer of the Corporation, or within 30 days after
mailing the same within the United States, by registered
mail, addressed to the Treasurer of the Corporation at its
principal office (such mailing to be evidenced by the
registry receipt issued by the postal authorities), then the
holders of record of at least 25% of the shares of New Series
A Preferred Stock then outstanding may designate in writing
any person to call such meeting at the expense of the
Corporation, and such meeting may be called by such person so
designated upon the notice required for annual meetings of
stockholders and shall be held at the same place as is
elsewhere provided in this paragraph. Any holder of shares
45
of New Series A Preferred Stock then outstanding that would
be entitled to vote at such meeting shall have access to the
stock books of the Corporation for the purpose of causing a
meeting of stockholders to be called pursuant to the
provisions of this paragraph.
(v) The directors elected pursuant to this Section
7(b) shall serve until such time as the full cumulative
dividends with respect to each share of New Series A
Preferred through the then most recent Dividend Payment Date
have been paid in full or until their respective successors
shall be elected and shall qualify. Any director elected by
the holders of New Series A Preferred Stock may be removed
by, and shall not be removed otherwise than by, the vote of
the holders of a majority of the outstanding shares of the
New Series A Preferred Stock who were entitled to participate
in such election of directors, voting as a separate class, at
a meeting called for such purpose (or by written consent if
permitted under the terms of the Certificate of Incorporation
as permitted by law and the Certificate of Incorporation and
By-laws of the Corporation. If the office of any director
elected by the holders of New Series A Preferred Stock,
voting as a class, becomes vacant by reason of death,
resignation, retirement, disqualification or removal from
office or otherwise, the remaining director elected by the
holders of New Series A Preferred Stock, voting as a class,
may choose a successor who shall hold office for the
unexpired term in respect of which such vacancy occurred.
Whenever the terms of office of the directors elected by the
holders of New Series A Preferred Stock, voting as a class,
shall so terminate and the special voting powers vested in
the holders of New Series A Preferred Stock shall have
expired, the number of directors shall be automatically
decreased by two irrespective of any increase made pursuant
to the provisions of this Section 7(b).
8. Rights Plans. The Corporation shall not adopt
or maintain any shareholder rights plan which discriminates
in any way (other than the notice to be provided to holders
of New Series A Preferred Stock as described below) against
any holder of New Series A Preferred Stock as such (whether
by language or operation), including, without limitation,
restricting (i) the ability to convert into Common Stock
under the terms hereof and (ii) the ability to receive rights
under such plan with respect to Common Stock acquired by
conversion hereunder which rights are generally available to
holders of Common Stock. The Corporation shall notify the
holders of the New Series A Preferred Stock at least five (5)
Business Days prior to (I) the date which under the terms of
any shareholder rights plan causes or triggers the rights
46
issued thereunder to be exercisable by any person and (II)
the date on which such rights (or the right to receive such
rights) terminate or expire, such notice in the case of
clause (I) to describe in reasonable detail the terms of such
rights and the manner of operation of the plan upon the
occurrence of such triggering event.
9. Notices. Unless otherwise expressly specified
or permitted by the terms hereof, all notices, requests,
demands, consents and other communications hereunder shall be
in writing and shall be delivered by hand or by overnight
delivery service or shall be sent by telex or telecopy
(confirmed by registered, certified or overnight mail or
courier, postage and delivery charges prepaid), to the
following addresses:
(a) if to the holder of a share of New Series A
Preferred Stock, at the holder's address as set forth in the
stock register of the Corporation, or at such other address
as may have been furnished to the Corporation by the holder
in writing; or
(b) if to the Corporation, at 770 Cochituate Road,
Framingham, Massachusetts 01701, attention: General Counsel,
or at such other address as may have been furnished in
writing by the Corporation to the holders of the shares of
New Series A Preferred Stock;
(c) if to the Transfer Agent or the transfer
office of the Corporation, at the office of the Corporation
listed in clause (b) above unless and until the Corporation
appoints a Transfer Agent for the New Series A Preferred
Stock and notifies the holders of the New Series A Preferred
Stock of the Transfer Agent's address for all communications
to the Transfer Agent or to the transfer office hereunder.
Whenever any notice is required to be given hereunder, such
notice shall be deemed given and such requirement satisfied
only when such notice is delivered or if sent by telex or
telecopier, when received, unless otherwise expressly
specified or permitted by the terms hereof, except that at
such time as any of the shares of the New Series A Preferred
Stock have been registered under the Securities Act of 1933,
as amended, then notice will also be deemed to have been
given upon the day which is two (2) days after the mailing by
first class mail of the notice when such notice has been
deposited for mailing with the United States Postal Service
(or its successor).
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IN WITNESS WHEREOF, The TJX Companies, Inc., has
caused this Certificate of Designations to be signed by its
Vice President - Finance and its Secretary this 12th day of
August, 1992.
THE TJX COMPANIES, INC.
By /s/ Steven R. Wishner
Steven R. Wishner,
Vice President -
Finance
Attest: /s/ Jay H. Meltzer
Jay H. Meltzer,
Secretary
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