Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A CUMULATIVE PREFERRED STOCK
of
EIG, CO.
Pursuant to Section 151 of the Delaware General
Corporation Law
EIG, CO., a corporation organized and existing
under and by virtue of the laws of Delaware (hereinafter
called the "Corporation"), pursuant to the provisions of
Section 151 of the Delaware General Corporation Law, does
by Michael L. Downs, its President, and Roberta A.
O'Brien, its Corporate Secretary, hereby certify that,
pursuant to authority expressly vested in the Board of
Directors of the Corporation by the provisions of its
Certificate of Incorporation, said Board of Directors at
a meeting duly called and held on ___________, duly
adopted resolutions providing for the issuance of a
series of Preferred Stock, without par value, of the
Corporation and setting forth the voting powers, designa-
tion, preferences and relative, participating, optional
and other special rights of such series and the qualifi-
cation, limitation and restrictions of such rights, to
the extent that the foregoing are not set forth in the
Certificate of Incorporation of the Corporation, which
resolutions are as follows:
RESOLVED, that pursuant to the authority vested
in the Board of Directors of this Corporation in accor-
dance with the provisions of its Certificate of Incorpo-
ration, a series of Preferred Stock of the Corporation be
and it hereby is created, and that the designation and
amount thereof and the voting powers, preferences and
relative, participating, optional and other special
rights of the shares of such series, and the qualifica-
tions, limitations or restrictions thereof are as fol-
lows:
SECTION 1. Number of Shares and Designations.
Two thousand (2,000) shares of the Preferred Stock,
without par value, of the Corporation are constituted as
a series thereof designated as Series A Cumulative Pre-
ferred Stock (the "Series A Preferred Stock").
SECTION 2. Definitions. For purposes of the
Series A Preferred Stock, the following terms shall have
the meanings indicated:
2.1 "Board of Directors" shall mean the board
of directors of the Corporation or any committee autho-
rized by such board of directors to perform any of its
responsibilities with respect to the Series A Preferred
Stock.
2.2 "Business Day" shall mean any day other
than a Saturday, Sunday or a day on which state or feder-
ally chartered banking institutions in New York, New York
are not required to be open.
2.3 "Certificate" shall mean the Certificate
of Incorporation of the Corporation, as amended from time
to time.
2.4 "Common Stock" shall mean the common stock
of the Corporation, without par value.
2.5 "Dividend Payment Date" shall mean the
last business day of January, April, July and October in
each year, commencing on the last business day of April
in 1995; provided, however, that if any Dividend Payment
Date falls on any day other than a Business Day, the
dividend payment due on such Dividend Payment Date shall
be paid on the Business Day immediately following such
Dividend Payment Date.
2.6 "Dividend Periods" shall mean quarterly
dividend periods commencing on the last business day of
January, April, July and October of each year and ending
on and including the day preceding the first day of the
next succeeding Dividend Period (other than the initial
Dividend Period, which shall commence on February 1, 1995
and end on and include April 27, 1995).
2.7 "Equivalent Amount" shall mean an amount
equal to what the Net After-Tax Return (as defined below)
would have been had the regular cash dividend to a holder
of Series A Preferred Stock at the Base Rate been paid
entirely out of the current or accumulated earnings and
profits of the Corporation for Federal income tax purpos-
es. "Net After-Tax Return" means, with respect to any
regular cash dividend that would have been paid at the
Base Rate on shares of Series A Preferred Stock, the
amount of such regular cash dividend less the Federal
corporate income tax to which such regular cash dividend
would be subject, giving effect to the deduction then
allowed domestic corporations (the "Dividends Received
Deduction") with respect to dividends received that are
paid out of the current or accumulated earnings and
profits of the Corporation, as determined for Federal
income tax purposes. For purposes of the foregoing, (A)
the portion of any regular cash dividend not made out of
current or accumulated earnings and profits of the Corpo-
ration, as determined for Federal income tax purposes,
otherwise treated as a return of capital, shall be treat-
ed as gain received by a domestic insurance corporation
upon a taxable sale or exchange of shares of Preferred
Stock, (B) the applicable tax rate and the percentage of
the dividend at the Equivalent Amount, if any, that
qualifies for the Dividends Received Deduction shall
respectively be assumed to be the highest marginal Feder-
al corporate income tax rate and the highest percentage
that would apply to the dividend under the law in effect
at the time of the payment of the dividend if received by
a holder of Preferred Stock that is a domestic insurance
corporation generally eligible for the Dividends Received
Deduction and reporting taxable income based on a calen-
dar year, disregarding any minimum tax, and (C) the char-
acter of the dividend at the Equivalent Amount for Feder-
al income tax purposes shall be as determined under the
law in effect when such dividend is paid.
2.8 "Gross-Up Event" shall mean that all or a
portion of a dividend payment with respect to the Series
A Preferred Stock shall constitute a return of capital.
2.9 "Issue Date" shall mean the first date on
which shares of Series A Preferred Stock are issued and
sold.
2.10 "Junior Stock" shall mean the Common
Stock and any class or series of shares of preferred
stock of the Corporation other than the Series A Pre-
ferred Stock.
2.11 "Liquidation Preference" shall have the
meaning set forth in Section 4.1 hereof.
2.12 "Person" shall mean any individual, firm,
partnership, corporation or other entity, and shall
include any successor (by merger or otherwise) of such
entity.
2.13 "Series A Preferred Stock" shall mean the
series of Preferred Stock of the Corporation, without par
value, designated Series A Cumulative Preferred Stock.
2.14 "set apart for payment" shall be deemed
to include, without any action other than the following,
the recording by the Corporation in its accounting led-
gers of any accounting or bookkeeping entry which indi-
cates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of
funds to be so paid on any series or class of capital
stock of the Corporation; provided, however, that if any
funds for any class or series of Junior Stock or any
class or series of stock ranking on a parity with the
Series A Preferred Stock as to the payment of dividends
are placed in a separate account of the Corporation or
delivered to a disbursing, paying or other similar agent,
then "set apart for payment" with respect to the Series A
Preferred Stock shall mean placing such funds in a sepa-
rate account or delivering such funds to a disbursing,
paying or other similar agent.
2.15 "Stated Value" shall have the meaning set
forth in Section 4.1 hereof.
2.16 "Transfer Agent" means such agent or
agents of the Corporation as may be designated by the
Board of Directors as the transfer agent for the Series A
Preferred Stock.
SECTION 3. Dividends.
3.1 The holders of shares of the Series A
Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors out of assets
legally available for that purpose, dividends payable in
cash at the rate per annum (the "Base Rate") of $650 per
share of Series A Preferred Stock, provided that the Base
Rate (i) shall increase $10 on each anniversary of the
Issue Date commencing on the second anniversary of the
Issue Date and (ii) the Base Rate for any Dividend Period
shall be adjusted, if a Gross-Up Event shall be in ef-
fect, to the Equivalent Amount. Such dividends shall be
cumulative from February 1, 1995, whether or not in any
Dividend Period or Periods there shall be assets of the
Corporation legally available for the payment of such
dividends, and shall be payable quarterly, when, as and
if declared by the Board of Directors, in arrears on
Dividend Payment Dates, commencing on April 28, 1995.
Each such dividend shall be payable in arrears to the
holders of record of shares of the Series A Preferred
Stock, as they appear on the stock records of the Corpo-
ration at the close of business on such record dates,
which shall not be more than 60 days nor less than
10 days preceding the payment dates thereof, as shall be
fixed by the Board of Directors or a duly authorized
committee thereof. Accrued and unpaid dividends for any
past Dividend Periods may be declared and paid at any
time, without reference to any Dividend Payment Date, to
holders of record on such date, not exceeding 45 days
preceding the payment date thereof, as may be fixed by
the Board of Directors.
3.2 The amount of dividends payable for each
full Dividend Period for the Series A Preferred Stock
shall be computed by dividing the Rate by four, and then
applying any adjustment pursuant to clause (ii) of the
first sentence of Section 3.1. The amount of dividends
payable for the initial Dividend Period, or any other
period shorter or longer than a full Dividend Period, on
the Series A Preferred Stock shall be computed on the
basis of twelve 30-day months and a 360-day year. Hold-
ers of shares of Series A Preferred Stock shall not be
entitled to any dividends, whether payable in cash,
property or stock, in excess of cumulative dividends, as
herein provided, on the Series A Preferred Stock. No
interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on
the Series A Preferred Stock that may be in arrears.
3.3 So long as any shares of the 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 stock of the Corporation ranking, as to divi-
dends and amounts distributable upon liquidation, disso-
lution or winding up, on a parity with the Series A Pre-
ferred Stock, for any period unless full cumulative
dividends have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment
thereof set apart for such payment on the Series A Pre-
ferred Stock for all Dividend Periods terminating on or
prior to the date of payment of the dividend on such
class or series of parity stock. When dividends are not
paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, all dividends declared upon
shares of the Series A Preferred Stock and all dividends
declared upon any other class or series of stock ranking
on a parity as to dividends and amount distributable upon
liquidation, dissolution or winding up shall be declared
ratably in proportion to the respective amounts of divi-
dends accumulated and unpaid on the Series A Preferred
Stock and accumulated and unpaid on such parity stock.
3.4 So long as any shares of the Series A
Preferred Stock are outstanding, no dividends (other than
dividends or distributions paid in shares of, or options,
warrants or rights to subscribe for or purchase shares
of, Junior Stock) shall be declared or paid or set apart
for payment or other distribution declared or made upon
Junior Stock, nor shall any Junior Stock or any series of
stock of the Corporation ranking, as to dividends and
amounts distributable upon liquidation, dissolution or
winding up, on a parity with Series A Preferred Stock be
redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of shares of
Common Stock made for purposes of an employee incentive
or benefit plan of the Corporation or any subsidiary) for
any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any
shares of any such stock) by the Corporation, directly or
indirectly (except by conversion into or exchange for
Junior Stock), unless in each case the full cumulative
dividends on all outstanding shares of the Series A
Preferred Stock and any other stock of the Corporation
ranking on a parity with the Series A Preferred Stock, as
to dividends and amounts distributable upon liquidation,
dissolution or winding up shall have been paid or set
apart for payment for all past Dividend Periods with
respect to the Series A Preferred Stock and all past
dividend periods with respect to such parity stock.
SECTION 4. Payments upon Liquidation.
4.1 In the event of any liquidation, disso-
lution or winding up of the Corporation before any pay-
ment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set
apart for the holders of Junior Stock, the holders of the
shares of Series A Preferred Stock shall be entitled to
receive Ten Thousand Dollars ($10,000) per share of Se-
ries A Preferred Stock (the "Stated Value") plus an
amount equal to all dividends (whether or not earned or
declared) accrued and unpaid thereon to the date of final
distribution to such holders (the "Liquidation Prefer-
ence"); but such holders shall not be entitled to any
further payment. If, upon any liquidation, dissolution
or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the
holders of the shares of Series A Preferred Stock shall
be insufficient to pay in full the Liquidation Prefer-
ence, and the liquidation preference on all other shares
of any class or series of stock ranking, as to dividends
and amounts distributable upon liquidation, dissolution
or winding up, on a parity with the Series A Preferred
Stock, then such assets, or the proceeds thereof, shall
be distributed among the holders of shares of Series A
Preferred Stock and any such other parity stock ratably
in accordance with the respective amounts that would be
payable on such shares of Series A Preferred Stock and
any such other stock if all amounts payable thereon were
paid in full. For the purposes of this Section 4, (i) a
consolidation or merger of the Corporation with one or
more corporations, or (ii) a sale or transfer of all or
substantially all of the Corporation's assets, shall not
be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, of the Corporation.
4.2 Subject to the rights of the holders of
shares of any series or class or classes of stock ranking
on a parity with or prior to the Series A Preferred Stock
as to dividends and amounts distributable upon liquida-
tion, dissolution or winding up of the Corporation, after
payment shall have been made to the holders of the Se-
ries A Preferred Stock, as and to the fullest extent
provided in this Section 4, any other series or class or
classes of Junior Stock shall, subject to the respective
terms and provisions (if any) applying thereto, be enti-
tled to receive any and all assets remaining to be paid
or distributed, and the holders of the Series A Preferred
Stock shall not be entitled to share therein.
SECTION 5. Mandatory Redemption. The Corpo-
ration shall purchase or redeem any outstanding shares of
Series A Preferred Stock at the Stated Value of the share
or shares to be purchased or redeemed, plus all dividends
accrued and unpaid on such share or shares up to the date
of such purchase or redemption, on the tenth anniversary
of the Issue Date.
SECTION 6. Shares to Be Retired. All shares
of Series A Preferred Stock which shall have been issued
and reacquired in any manner by the Corporation (exclud-
ing, until the Corporation elects to retire them, shares
which are held as treasury shares) shall be restored to
the status of authorized but unissued shares of Serial
Preferred Stock, without designation as to series.
SECTION 7. Ranking. Any class or series of
stock of the Corporation shall be deemed to rank junior
to the Series A Preferred Stock, as to the payment of
dividends or as to the distribution of assets upon liqui-
dation, dissolution or winding up.
SECTION 8. Voting. Except as required by law,
holders of Series A Preferred Stock shall have no voting
rights and their consent shall not be required for taking
any corporate action.
SECTION 9. Record Holders. The Corporation
and the Transfer Agent may deem and treat the record
holder of any shares of Series A Preferred Stock as the
true and lawful owner thereof for all purposes, and
neither the Corporation nor the Transfer Agent shall be
affected by any notice to the contrary.
RESOLVED, FURTHER, that the proper officers of
the Corporation be and they are hereby authorized and
directed, jointly and severally, to prepare, execute and
file a certificate setting forth a copy of the foregoing
resolutions and to execute any and all other documents
and take any and all other steps necessary or appropriate
in order to comply with the laws of the State of Delaware
and effectuate the purposes of said resolutions.
IN WITNESS WHEREOF, EIG, CO. has caused this
Certificate to be signed in its name by Michael L. Downs,
its President, and Roberta A. O'Brien, its Corporate
Secretary, as of this day of , 199 .
EIG, CO.
___________________________
Name: Michael L. Downs
Title: President
Attest:
_____________________________
Name: Roberta A. O'Brien
Title: Secretary
STATE OF CONNECTICUT)
) ss.:
COUNTY OF HARTFORD )
On this day of , 199 , before me,
_______________________, a Notary Public in and for said
County and State, residing therein, dully commissioned
and sworn, personally appeared Michael L. Downs and
Roberta A. O'Brien known to me or proved to me on the
basis of satisfactory evidence to be the President and
the Corporate Secretary, respectively, of EIG, CO.,
a Delaware corporation, the Corporation that executed the
foregoing Certificate of Designation and Preferences, and
upon oath did severally depose and say, each for himself
and not for the other, that he is the officer of said
Corporation as above designated; that he is acquainted
with the seal of said Corporation and that the seal
affixed to said instrument is the corporate seal of said
Corporation; that the signatures to said instrument were
made by said officers of said Corporation as indicated
after said signatures; and that the said Corporation
executed the said instrument freely and voluntarily and
for the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto subscribed
my name and affixed my official seal at my office in the
County of Hartford, State of Connecticut, on the day and
year in this certificate first above written.
______________________________
Notary Public in and for the
County of Hartford
State of Connecticut
[SEAL]
My Commission Expires: