RESTATED ARTICLES OF INCORPORATION
OF
SOVEREIGN BANCORP, INC.
FIRST. The name of the Corporation is Sovereign Bancorp,
Inc.
SECOND. The location and post office address of the
Corporation's registered office in this Commonwealth is
1130 Berkshire Boulevard, Wyomissing, Berks County, Pennsylvania
19610.
THIRD. The Corporation was incorporated on March 24, 1987,
under the provisions of the Business Corporation Law, the Act
approved May 5, 1933, P.L. 364, as amended (the "Pennsylvania
Business Corporation Law"). The purpose of the Corporation is
and it shall have unlimited power to engage in and to do any
lawful act concerning any or all lawful business for which
corporations may be incorporated under such Law.
FOURTH. The term of the Corporation's existence is
perpetual.
FIFTH. The aggregate number of shares of capital stock
which the Corporation shall have authority to issue is
107,500,000 shares, divided into two classes consisting of
100,000,000 shares of common stock without par value ("Common
Stock") and 7,500,000 shares of preferred stock, having such par
value as the board of directors shall fix and determine, as
provided in Article SIXTH below ("Preferred Stock").
SIXTH. The Preferred Stock may be issued from time to time
as a class without series or, if so determined by the board of
directors of the Corporation, either in whole or in part, in one
or more series. There is hereby expressly granted to and vested
in the board of directors of the Corporation authority to fix and
determine (except as fixed and determined herein), by resolution,
the par value, voting powers, full or limited, or no voting
powers, and such designations, preferences and relative,
participating, optional or other special rights, if any, and the
qualifications, limitations or restrictions thereof, if any,
including specifically, but not limited to, the dividend rights,
conversion rights, redemption rights and liquidation preferences,
if any, of any wholly unissued series of Preferred Stock (or the
entire class of Preferred Stock if none of such shares have been
issued), the number of shares constituting any such series and
the terms and conditions of the issue thereof. Prior to the
issuance of any shares of Preferred Stock, a statement setting
forth a copy of each such resolution or resolutions and the
number of shares of Preferred Stock of each such class or series
shall be executed and filed in accordance with the Pennsylvania
Business Corporation Law. Unless otherwise provided in any such
resolution or resolutions, the number of shares of capital stock
of any such class or series so set forth in such resolution or
resolutions may thereafter be increased or decreased (but not
below the number of shares then outstanding), by a statement
likewise executed and filed setting forth a statement that a
specified increase or decrease therein had been authorized and
directed by a resolution or resolutions likewise adopted by the
board of directors of the Corporation. In case the number of
such shares shall be decreased, the number of shares so specified
in the statement shall resume the status they had prior to the
adoption of the first resolution or resolutions.
SEVENTH. Each holder of record of Common Stock shall have
the right to one vote for each share of Common Stock standing in
such holder's name on the books of the Corporation. No
shareholder shall be entitled to cumulate any votes for the
election of directors.
EIGHTH. The management, control and government of the
Corporation shall be vested in a board of directors consisting of
not less than six (6) nor more than twenty-five (25) members in
number, as fixed by the board of directors of the Corporation
from time to time. The directors of the Corporation shall be
divided into three classes: Class I, Class II and Class III.
Each Class shall be as nearly equal in number as possible. If
the number of Class I, Class II or Class III directors is fixed
for any term of office, it shall not be increased during that
term, except by a majority vote of the board of directors. The
term of office of each Class shall be three (3) years, so that
the term of office of one class of directors shall expire each
year when their respective successors have been duly elected by
the shareholders and qualified. At each annual election by the
shareholders of the Corporation, the directors chosen to succeed
those whose terms then expire shall be identified as being of the
same class as the directors they succeed. If, for any reason, a
vacancy occurs on the board of directors of the Corporation, a
majority of the remaining directors shall have the exclusive
power to fill the vacancy by electing a director to hold office
for the unexpired term in respect of which the vacancy occurred.
No director of the Corporation shall be removed from office, as a
director, by the vote of shareholders, unless the votes of
shareholders cast in favor of the resolution for the removal of
such director constitute at least a majority of the votes which
all shareholders would be entitled to cast at an annual election
of directors.
NINTH. [Intentionally omitted.]
TENTH. No holder of any class of capital stock of the
Corporation shall have preemptive rights, and the Corporation
shall have the right to issue and to sell to any person or
persons any shares of its capital stock or any option, warrant or
right to acquire capital stock, or any securities having
conversion or option rights without first offering such shares,
rights or securities to any holder of any class of capital stock
of the Corporation.
ELEVENTH. Except as set forth below, the affirmative vote
of shareholders entitled to cast at least 80 percent (80%) of the
votes which all shareholders of the Corporation are entitled to
cast, and if any class of shares is entitled to vote as a
separate class, the affirmative vote of shareholders entitled to
cast at least a majority of the votes entitled to be cast by the
outstanding shares of such class (or such greater amount as
required by the provisions of these Articles of Incorporation
establishing such class) shall be required to approve any of the
following:
(a) any merger or consolidation of the Corporation
with or into any other corporation;
(b) any share exchange in which a corporation, person
or entity acquires the issued or outstanding shares of
capital stock of the Corporation pursuant to a vote of
shareholders;
(c) any sale, lease, exchange or other transfer of
all, or substantially all, of the assets of the Corporation
to any other corporation, person or entity; or
(d) any transaction similar to, or having similar
effect as, any of the foregoing transactions,
if, in any case, as of the record date for the determination of
shareholders entitled to notice thereof and to vote thereon, such
other corporation, person or entity is the beneficial owner,
directly or indirectly, of shares of capital stock of the
Corporation issued, outstanding and entitled to cast five percent
(5%) or more of the votes which all shareholders of the
Corporation are then entitled to cast.
If any of the transactions identified above in this Article
ELEVENTH is with a corporation, person or entity that is not the
beneficial owner, directly or indirectly, of shares of capital
stock of the Corporation issued, outstanding and entitled to cast
five percent (5%) or more of the votes which all shareholders of
the Corporation are then entitled to cast, then the affirmative
vote of shareholders entitled to cast at least a majority of the
votes which all shareholders are entitled to cast shall be
required to approve any such transaction. An affirmative vote as
provided in the foregoing provisions shall, to the extent
permitted by law, be in lieu of the vote of the shareholders
otherwise required by law.
The board of directors of the Corporation shall have the
power and duty to determine, for purposes of this Article
ELEVENTH, on the basis of information known to the board, if and
when such other corporation, person or entity is the beneficial
owner, directly or indirectly, of shares of capital stock of the
Corporation issued, outstanding and entitled to cast five percent
(5%) or more of the votes which all shareholders of the
Corporation are then entitled to cast, and/or if any transaction
is similar to, or has an effect similar to, any of the
transactions identified above in this Article ELEVENTH. Any such
determination shall be conclusive and binding for all purposes of
this Article ELEVENTH. The Corporation may voluntarily
completely liquidate and/or dissolve only in accordance with all
applicable laws and only if the proposed liquidation and/or
dissolution is approved by the affirmative vote of shareholders
entitled to cast at least 80 percent (80%) of the votes which all
shareholders are entitled to cast. The provisions of this
Article ELEVENTH shall not apply to any transaction which is
approved in advance by 66-2/3 percent (66-2/3%) of the members of
the board of directors of the Corporation, at a meeting duly
called and held.
TWELFTH. [Intentionally omitted.]
THIRTEENTH. No action required to be taken or which may be
taken at any annual or special meeting of shareholders of the
Corporation may be taken without a meeting, and the power of the
shareholders of the Corporation to consent in writing to action
without a meeting is specifically denied. The presence, in
person or by proxy, of shareholders entitled to cast at least a
majority of the votes which all shareholders are entitled to cast
shall constitute a quorum of shareholders at any annual or
special meeting of shareholders of the Corporation.
FOURTEENTH. The authority to make, amend, alter, change or
repeal the By-Laws of the Corporation is hereby expressly and
solely granted to and vested in the board of directors of the
Corporation, subject always to the power of the shareholders to
change such action by the affirmative vote of shareholders of the
Corporation entitled to cast at least 66-2/3 percent (66-2/3%) of
the votes which all shareholders are entitled to cast, except
that Article Eight of the By-Laws of the Corporation relating to
limitations on directors' liabilities and indemnification of
directors, officers and others may not be amended to increase the
exposure to liability for directors or to decrease the
indemnification of directors, officers and others except by the
affirmative vote of 66-2/3 percent (66-2/3%) of the entire board
of directors or by the affirmative vote of shareholders of the
Corporation entitled to cast at least 80 percent (80%) of the
votes which all shareholders are entitled to cast.
FIFTEENTH. The board of directors of the Corporation, when
evaluating any offer of another party to (a) make a tender or
exchange offer for any equity security of the Corporation,
(b) merge or consolidate the Corporation with another
corporation, (c) purchase or otherwise acquire all or
substantially all of the properties and assets of the
Corporation, or (d) engage in any transaction similar to, or
having similar effects as, any of the foregoing transactions,
shall, in connection with the exercise of its judgment in
determining what is in the best interests of the Corporation and
its shareholders, give due consideration to all relevant factors,
including without limitation the social and economic effects of
the proposed transaction on the depositors, employees, suppliers,
customers and other constituents of the Corporation and its
subsidiaries and on the communities in which the Corporation and
its subsidiaries operate or are located, the business reputation
of the other party, and the board of directors' evaluation of the
then value of the Corporation in a freely negotiated sale and of
the future prospects of the Corporation as an independent entity.
SIXTEENTH. If any corporation, person, entity, or group
becomes the beneficial owner, directly or indirectly, of shares
of capital stock of the Corporation having the right to cast in
the aggregate 25 percent (25%) or more of all votes entitled to
be cast by all issued and outstanding shares of capital stock of
the Corporation entitled to vote, such corporation, person,
entity or group shall within thirty (30) days thereafter offer to
purchase all shares of capital stock of the Corporation issued,
outstanding and entitled to vote. Such offer to purchase shall
be at a price per share equal to the highest price paid for
shares of the respective class or series of capital stock of the
Corporation purchased by such corporation, person, entity or
group within the preceding twelve months. If such corporation,
person, entity or group did not purchase any shares of a
particular class or series of capital stock of the Corporation
within the preceding twelve months, such offer to purchase shall
be at a price per share equal to the fair market value of such
class or series of capital stock on the date on which such
corporation, person, entity or group becomes the beneficial
owner, directly or indirectly, of shares of capital stock of the
Corporation having the right to cast in the aggregate 25 percent
(25%) or more of all votes entitled to be cast by all issued and
outstanding capital stock of the Corporation. Such offer shall
provide that the purchase price for such shares shall be payable
in cash. The provisions of this Article SIXTEENTH shall not
apply if 80 percent (80%) or more of the members of the board of
directors of the Corporation approve in advance the acquisition
of beneficial ownership by such corporation, person, entity or
group, of shares of capital stock of the Corporation having the
right to cast in the aggregate 25 percent (25%) or more of all
votes entitled to be cast by all issued and outstanding shares of
capital stock of the Corporation. The provisions of this Article
SIXTEENTH shall be in addition to and not in lieu of any rights
granted under Section 910 of the Pennsylvania Business
Corporation Law and any amendment or restatement of such section
("Section 910"); provided, however, that if the provisions of
this Article SIXTEENTH and Section 910 are both applicable in any
given instance, the price per share to be paid for shares of
capital stock of the Corporation issued, outstanding and entitled
to vote shall be the higher of the price per share determined in
accordance with this Article SIXTEENTH or the price per share
determined in accordance with the provisions of Section 910.
SEVENTEENTH. The Corporation reserves the right to amend,
alter, change or repeal any provision contained in its Articles
of Incorporation in the manner now or hereafter prescribed by
statute and all rights conferred upon shareholders and directors
herein are hereby granted subject to this reservation; provided,
however, that the provisions set forth in Articles SEVENTH,
EIGHTH, ELEVENTH and THIRTEENTH through FIFTEENTH, inclusive, of
these Articles of Incorporation may not be repealed, altered or
amended, in any respect whatsoever, unless such repeal,
alteration or amendment is approved by either (a) the affirmative
vote of shareholders of the Corporation entitled to cast at least
80 percent (80%) of the votes which all shareholders of the
Corporation are then entitled to cast or (b) the affirmative vote
of 80 percent (80%) of the members of the board of directors of
the Corporation and the affirmative vote of shareholders of the
Corporation entitled to cast at least a majority of the votes
which all shareholders of the Corporation are then entitled to
cast.
APPENDIX I
SOVEREIGN BANCORP, INC.
RESOLUTION OF THE BOARD OF DIRECTORS
ADOPTED ON SEPTEMBER 19, 1989, AND
FILED WITH THE SECRETARY OF THE COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE ON OCTOBER 16, 1989
TERMS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
RESOLVED that, pursuant to the authority vested in the
Board of Directors of the Corporation by the Articles of
Incorporation, the Board of Directors does hereby provide for the
issue of a series of Preferred Stock, without par value, of the
Corporation, to be designated "Series A Junior Participating
Preferred Stock" (hereinafter referred to as the "Series A
Preferred Stock" or "this Series"), initially consisting of
25,000 shares, and to the extent that the designations, powers,
preferences and relative and other special rights and the
qualifications, limitations and restrictions of the Series A
Preferred Stock are not stated and expressed in the Articles of
Incorporation, does hereby fix and herein state and express such
designations, powers, preferences and relative and other special
rights and the qualifications, limitations and restrictions
thereof, as follows (all terms used herein which are defined in
the Articles of Incorporation shall be deemed to have the
meanings provided therein):
1. Designation and Amount. The designation of the
series of Preferred Stock created by this resolution shall be
"Series A Junior Participating Preferred Stock" and the number of
shares constituting such Series is Twenty-Five Thousand (25,000).
Such number of shares may be increased or decreased by resolution
of the Board of Directors; provided, that no decrease shall
reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of
any outstanding securities of the Corporation convertible into
shares of this Series.
2. Dividends.
(A) Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock
ranking prior and superior to the shares of this Series with
respect to dividends, the holders of shares of this Series shall
be entitled to receive, when and as declared by the Board of
Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on April 1, July 1,
October 1, and January 1 of each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of this Series,
in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $10.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in Common Stock
or a subdivision of the outstanding Common Stock (by
reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
this Series. In the event the Company shall at any time after
September 19, 1989 (the "Rights Declaration Date") declare any
dividend on the Common Stock payable in Common Stock, subdivide
the outstanding Common Stock, or combine the outstanding Common
Stock into a smaller number of shares, then in each such case the
amount to which holders of shares of this Series were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of Common Stock
outstanding immediately after such event and the denominator of
which is the number of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (A) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $10.00 per share on Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of this Series, unless the date of issue of
such shares is prior to the record date for the first Quarterly
Dividend Payment Date in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders
of shares of this Series entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on
the shares of this Series in an amount less than the total amount
of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of
this Series entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more
than days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock
shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of the shareholders of the Corporation. In
the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
Common Stock (by reclassification or otherwise than by payment of
a dividend in Common Stock) into a greater or lesser number of
Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is
the number of Common Stock outstanding immediately after such
event and the denominator of which is the number of Common Stock
that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any
other resolutions creating a series of Preferred Stock or any
similar stock, or by law, the holders of shares of Series A
Preferred Stock and the holders of Common Stock and any other
capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise
provided by law, holders of Series A Preferred Stock shall have
no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate
action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other
dividends or distributions payable on the Series A Preferred
Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends, or make any
other distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any
other distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock, provided that
the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock;
or
(iv) redeem or purchase or otherwise acquire
for consideration any shares of Series A Preferred stock, or
any shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire
for consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preferred Sock and may be reissued as part of
a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Articles of
Incorporation, or in any other resolutions creating a series of
Preferred Stock or any similar stock or as otherwise required by
law.
6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (A) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100.00 per share, plus an
amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred stock
shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per
share to holders of Common Stock, or (B) to the holders of shares
of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion
to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
Common Stock (by reclassification or otherwise than by payment of
a dividend in Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under the proviso
in clause (A) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
7. Consolidation, Merger, Etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the Common Shares are
exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into
which or for which each Common Stock is changed or exchanged. In
the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
Common Stock (by reclassification or otherwise than by payment of
a dividend in Common Stock) into a greater or lesser number of
shares of Common Stock then in each such case the amount set
forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable.
9. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the
Corporation's Preferred Stock.
10. Amendment. The Articles of Incorporation of the
Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special
rights of the Series A Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single class.
APPENDIX II
SOVEREIGN BANCORP, INC.
RESOLUTION OF THE BOARD OF DIRECTORS
ADOPTED ON MAY 9, 1995, AND FILED WITH
THE SECRETARY OF THE COMMONWEALTH OF PENNSYLVANIA,
DEPARTMENT OF STATE ON MAY 15, 1995
TERMS OF 6-1/4% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES B
RESOLVED that, pursuant to the authority vested in the
Board of Directors of the Corporation by the Articles of
Incorporation, the Board of Directors does hereby provide for the
issue of a series of Preferred Stock, without par value, of the
Corporation, to be designated "6-1/4% Cumulative Convertible
Preferred Stock, Series B" (hereinafter referred to as the
"Series B Preferred Stock" or "this Series"), initially
consisting of 2,000,000 shares, and to the extent that the
designations, powers, preferences and relative and other special
rights and the qualifications, limitations and restrictions of
the Series B Preferred Stock are not stated and expressed in the
Articles of Incorporation, does hereby fix and herein state and
express such designations, powers, preferences and relative and
other special rights and the qualifications, limitations and
restrictions thereof, as follows (all terms used herein which are
defined in the Articles of Incorporation shall be deemed to have
the meanings provided therein):
1. Designation and Amount. The designation of the
series of Preferred Stock created by this resolution shall be
"6-1/4% Cumulative Convertible Preferred Stock, Series B" and the
number of shares constituting such Series is Two Million
(2,000,000). Such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series B Preferred
Stock to a number less than the number of shares then
outstanding.
2. Dividends.
(a) The holders of record of Series B Preferred
Stock shall be entitled to receive, as and if declared by the
Board of Directors of the Corporation, out of any funds legally
available for the purpose, cumulative cash dividends on each
share of Series B Preferred Stock in the amount of 6-1/4% per
annum (calculated as a percentage of the liquidation preference
applicable to the Series B Preferred Stock as provided herein).
Dividends shall accrue from the date of original issuance and
shall be payable, as and if declared by the Board of Directors,
on February 15, May 15, August 15, and November 15 of each year,
commencing August 15, 1995. Each such dividend shall be paid to
the holders of record of shares of Series B Preferred Stock as
they appear on the stock register of the Corporation on the
applicable record date, which shall be a date not more than
30 days nor less than 10 days preceding the dividend payment
date, as shall be fixed by the Board of Directors of the
Corporation.
(b) If there shall be outstanding shares of any
other series of Preferred Stock ranking on a parity as to
dividends with the Series B Preferred Stock, the Corporation, in
making any dividend payment on account of arrears on the Series B
Preferred Stock or such other series of Preferred Stock, shall
make payments ratably upon all outstanding shares of Series B
Preferred Stock and such other series of Preferred Stock in
proportion to the respective amounts of dividends in arrears upon
all such outstanding shares of Series B Preferred Stock and such
other series of Preferred Stock to the date of such dividend
payment.
(c) No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or
payments which may be in arrears.
(d) Dividends payable on the Series B Preferred
Stock for any period less than a full quarterly dividend period,
and for any portion of the initial dividend period occurring
prior to August 15, 1995, shall be computed on the basis of a
360-day year of four 90-day quarters and the actual number of
days elapsed in the period for which payable.
3. Redemption.
(a) The Corporation, at its option, may redeem
shares of the Series B Preferred Stock, in whole or in part, at
any time or from time to time, at a redemption price as set forth
below, plus accrued and unpaid dividends thereon to the date
fixed for redemption:
If Redeemed During the Twelve Months Redemption
Beginning May 15, Price
1998 ............................................. $52.188
1999 ............................................. 51.075
2000 ............................................. 51.563
2001 ............................................. 51.250
2002 ............................................. 50.938
2003 ............................................. 50.625
2004 ............................................. 50.313
2005 and thereafter............................... 50.000
Notwithstanding the foregoing, no shares of Series B Preferred
Stock shall be redeemed hereunder prior to May 15, 1998.
If the Corporation shall redeem shares of Series B
Preferred Stock pursuant to this subparagraph (a), notice of such
redemption shall be mailed by first-class mail, postage prepaid,
not less than 30 nor more than 60 days prior to the redemption
date, to each holder of record of the shares to be redeemed, at
such holder's address as the same appears on the stock register
of the Corporation. Each such notice shall state: (a) the
redemption date; (b) the number of shares of Series B Preferred
Stock to be redeemed and, if less than all the shares held by
such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (c) the redemption price; (d) the
place or places where certificates for such shares are to be
surrendered for payment of the redemption price; and (e) that
dividends on the shares to be redeemed will cease to accrue on
such redemption date. Notice having been mailed as aforesaid,
from and after the redemption date (unless default shall be made
by the Corporation in providing money for the payment of the
redemption price) dividends on the shares of the Series B
Preferred Stock so called for redemption shall cease to accrue,
and said shares shall no longer be deemed to be outstanding, and
all rights of the holders thereof as shareholders of the
Corporation (except the right to receive from the Corporation the
redemption price) shall cease. Upon surrender in accordance with
said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require and the notice
shall so state), such shares shall be redeemed by the Corporation
at the redemption price aforesaid. If less than all the
outstanding shares of Series B Preferred Stock are to be
redeemed, shares to be redeemed shall be selected by the
Corporation from outstanding shares of Series B Preferred Stock
are to be deemed, shares to be redeemed shall be selected by the
Corporation from outstanding shares of Series B Preferred Stock
not previously called for redemption by lot or pro rata (as
nearly as may be) in any method determined by the Corporation in
its sole discretion to be equitable.
(b) In no event shall the Corporation redeem or
purchase any shares of Series B Preferred Stock pursuant to this
Section 4 unless full cumulative dividends shall have been paid
or declared and set apart for payment upon all outstanding shares
of Series B Preferred Stock, or any other series of Preferred
Stock then outstanding ranking on a parity with or prior to the
Series B Preferred Stock as to dividends, for all past dividend
periods, and unless all matured obligations of the Corporation
with respect to all sinking funds, retirement funds or purchase
funds for all series of Preferred Stock then outstanding have
been met.
(c) All shares of Series B Preferred Stock
redeemed by the Corporation shall be restored to the status of
authorized but unissued shares of Preferred Stock, without
designation as to series, and may thereafter be reissued by the
Corporation as shares of one or more series of Preferred Stock
other than Series B Preferred Stock.
4. Conversion Rights.
(a) The holder of any share or shares of Series B
Preferred Stock shall have the right, at any time, to convert any
shares of Series B Preferred Stock (except any share of Series B
Preferred Stock which shall have been called for redemption
pursuant to the provisions hereof, the conversion right with
respect thereto shall terminate on the close of business of the
date fixed for redemption) into fully paid and non-assessable
shares of the Common Stock of the Corporation, at a conversion
rate of 4.752 shares of Common Stock for each share of Series B
Preferred Stock, subject to adjustment as hereinafter provided.
The conversion right herein granted shall be exercised by the
surrender of a certificate or certificates for Series B Preferred
Stock to be so converted at the office of any transfer agent for
the Series B Preferred Stock, at any time during its usual
business hours, together with written notice that the holder
elects to convert the same, or a stated number of shares thereof,
which notice shall state the name or names (with addresses) in
which the certificate or certificates of Common Stock shall be
issued. Every such notice of election to convert shall
constitute a contract between the holder of such Series B
Preferred Stock and the Corporation, whereby such holder shall be
deemed to subscribe for the amount of Common Stock which he will
be entitled to receive upon such conversion and, in payment and
satisfaction of such subscription (and any cash adjustment to
which he may be entitled), to surrender such Series B Preferred
Stock and to release the Corporation from all obligation on the
shares to be converted and whereby the Corporation shall be
deemed to agree that the surrender of such shares and the
extinguishment of obligation thereon shall constitute full
payment for the Common Stock so subscribed for and to be issued
upon such conversion.
(b) As promptly as practicable after the
conversion of any Series B Preferred Stock and the payment in
cash of any amount required by paragraph (h) of this Section 4,
the Corporation shall deliver or cause to be delivered to or upon
the written order of the holder of such Series B Preferred Stock
certificates representing the number of shares of Common Stock
issuable upon such conversion, issued in such name or names as
such holder shall have directed, together with cash in respect of
any fractional interest in a share of Common Stock issuable upon
such conversion and, if only a part of such Series B Preferred
Stock is converted, a certificate or certificates for the
unconverted shares of Series B Preferred Stock. Such conversion
shall be deemed to have been made at the close of business on the
day of surrender of the Series B Preferred Stock for conversion,
and the rights of the holder of such stock as a Series B
Preferred Shareholder, in respect of the stock surrendered for
conversion, shall cease at such time and the person or persons in
whose name or names the certificates for such shares are to be
issued shall be treated for all purposes as having become the
record holder or holders of Common Stock at such time and such
conversion shall be at the conversion rate in effect at such
time; provided, however, that no such surrender on any date when
the stock transfer books of the Corporation shall be closed shall
be effective to constitute the person or persons entitled to
receive the shares of Common Stock upon such conversion as the
record holder or holders of such shares on such date, but such
surrender shall be effective to constitute the person or persons
entitled to receive such shares of Common Stock as the record
holder or holders thereof for all purposes at the opening of
business on the next succeeding day on which such stock transfer
books are open and such conversion shall be at the conversion
rate in effect at the opening of business on such next succeeding
day.
If the last day for the exercise of the conversion is a
legal holiday in the city in which the transfer agent to which
shares are presented for conversion is located, then such
conversion right may be exercised (at the conversion rate in
effect on such last day) upon the next succeeding day not in such
city a legal holiday.
(c) No payment or adjustment shall be made upon
any conversion in respect of dividends accrued and unpaid on the
Series B Preferred Stock to the date of conversion or in respect
of any dividends on the Common Stock issued upon such conversion.
(d) The conversion rate shall be subject to
adjustment from time to time as follows:
(i) In case the Corporation shall at any
time (A) pay a dividend or make a distribution on shares of
its Common Stock in shares of its capital stock (whether
shares of Common Stock or of capital stock of any other
class), (B) subdivide or reclassify its outstanding shares
of Common Stock into a greater number of securities
(including shares of Common Stock), or (C) combine or
reclassify its outstanding shares of Common Stock into a
smaller number of shares (including shares of Common Stock),
the conversion rate in effect immediately prior thereto
shall be adjusted so that the holder of record of any shares
of Series B Preferred Stock thereafter surrendered for
conversion shall be entitled to receive the number of shares
of the Corporation which he would have owned or have been
entitled to receive after the happening of any of the events
described above had such shares of Series B Preferred Stock
been converted immediately prior to the happening of such
event. An adjustment made pursuant to this subparagraph (i)
shall become effective immediately after the record date in
the case of a dividend and shall become effective
immediately after the effective date in the case of a
subdivision or combination; provided, however, that in the
event no record date is specified for any dividend, such
adjustment shall become effective on the payment date for
such dividend. If, as a result of an adjustment made
pursuant to this subparagraph (i), the holder of any
Series B Preferred Stock thereafter converted shall become
entitled to receive shares of two or more classes of capital
stock of the Corporation, the Board of Directors of the
Corporation (whose determination shall be conclusive) shall
determine the allocation of the adjusted conversion rate
between or among shares of such classes of capital stock.
In the event that any time, as a result of an adjustment
made to this subparagraph (i), the holder of any Series B
Preferred Stock thereafter converted shall become entitled
to receive any shares or other securities of the Corporation
other than shares of Common Stock, thereafter the number of
such other shares so received upon conversion of any
Series B Preferred Stock shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the shares
of Common Stock contained in this paragraph 4(d), and other
provisions of this Section 4 with respect to the shares of
Common Stock shall apply on like term to any such other
shares or other securities.
(ii) In case the Corporation shall fix a
record date for the issuance of rights or warrants to all
holders of its Common Stock (or securities convertible into
Common Stock) entitling them (for a period expiring within
45 days after such record date) to subscribe for or purchase
Common Stock at a price per share (or a conversion price per
share) less than the current market price per share of
Common Stock (as defined in subparagraph (iv) below) at such
record date, the conversion rate in effect immediately prior
thereto shall be adjusted so that the same shall equal the
rate determined by multiplying the conversion rate in effect
immediately prior to such record date by a fraction of which
the numerator shall be the number of shares of Common Stock
outstanding on such record date plus the number of
additional shares of Common Stock offered for subscription
or purchase (or into which the convertible securities so
offered are initially convertible), and of which the
denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares
which the aggregate offering price of the total number of
shares so offered (or the aggregate initial conversion price
of the convertible securities so offered) would purchase at
such current market price. Such adjustment shall be made
successively whenever such a record date is fixed, and
become effective immediately after such record date;
provided, however, that, in the event no record date is
fixed, such adjustment shall be made successively and shall
become effective on the distribution date. In determining
whether any rights or warrants entitle the holders to
subscribe for or purchase shares of Common Stock at less
than such current market price, and in determining the
aggregate offering price of such shares, there shall be
taken into account any consideration received by the
Corporation for such rights or warrants, the value of such
consideration, if other than cash, to be determined by the
Board of Directors of the Corporation. Common Stock owned
by or held for the account of the Corporation or any
majority owned subsidiary shall not be deemed outstanding
for the purpose of any adjustment required under this
subparagraph (ii).
(iii) In case the Corporation shall fix a
record date for making a distribution to all holders of its
Common Stock evidences of its indebtedness or assets
(excluding regular quarterly or other periodic or recurring
cash dividends or distributions and cash dividends or
distributions paid from retained earnings or referred to in
subparagraph (i) above) or rights or warrants to subscribe
or purchase (excluding those referred to in
subparagraph (ii) above), then in each such case the
conversion rate shall be adjusted so that the same shall
equal the rate determined by multiplying the conversion rate
in effect immediately prior to such record date by a
fraction of which the numerator shall be the current market
price (as defined in subparagraph (iv) below) per share of
the Common Stock on such record date, and the denominator of
which shall be such current market price per share of Common
Stock, less the then fair market value (as determined in
good faith by the Board of Directors, whose determination
shall be conclusive) of the portion of the assets or
evidences of indebtedness so distributed or of such rights
or warrants applicable to one share of Common Stock. Such
adjustment shall be made successively whenever such a record
date is fixed and shall become effective immediately after
such record date. Notwithstanding the foregoing, in the
event that the Corporation shall distribute any rights or
warrants to acquire capital stock ("Rights") pursuant to
this subparagraph (iii), the distribution of separate
certificates representing such Rights subsequent to their
initial distribution (whether or not such distribution shall
have occurred prior to the date of the issuance of such
Series B Preferred Stock) shall be deemed to be the
distribution of such Rights for purposes of this
subparagraph (iii); provided that the Corporation may, in
lieu of making any adjustment pursuant to this
subparagraph (iii) upon a distribution of separate
certificates representing such Rights, make proper provision
so that each holder of such Series B Preferred Stock who
converts such Series B Preferred Stock (or any portion
thereof) (A) before the record date for such distribution of
separate certificates shall be entitled to receive upon such
conversion shares of Common Stock issued with Rights and
(B) after such record date and prior to the expiration,
redemption or termination of such Rights shall be entitled
to receive upon such conversion, in addition to the shares
of Common Stock issuable upon such conversion, the same
number of such rights as would a holder of the number of
shares of Common Stock that such Series B Preferred Stock so
converted would have entitled the holder thereof to purchase
in accordance with the terms and provisions of and
applicable to the Rights if such Series B Preferred Stock
were converted immediately prior to the record date for such
distribution; provided, however, that, in the event no
record date is fixed, such adjustment shall be made
successively and shall become effective on the distribution
date. Common Stock owned by or held for the account of the
Corporation or any majority owned subsidiary shall not be
deemed outstanding for the purpose of any adjustment
required under this subparagraph (iii).
(iv) For the purpose of any computation
under subparagraph (ii) and (iii) above, the current market
price per share of Common Stock at any date shall be deemed
to be the average of the daily closing prices for the thirty
consecutive business days commencing forty-five business
days before the day in question. The closing price for any
day shall be (A) if the Common Stock is listed or admitted
for trading on any national securities exchange, the last
sale price (regular way), or the average of the closing bid
and ask prices, if no sale occurred, of Common Stock on the
principal securities exchange on which the Common Stock is
listed, (B) if not listed as described in (A) but if quoted
on the Nasdaq Stock Market (formerly the National Market
System of the National Association of Securities Dealers,
Inc. Automated Quotation System) the last sale price, or the
average of the closing bid and ask prices, if no sale
occurred, of Common Stock on the Nasdaq Stock Market, (C) if
not quoted as described in clause (B), the mean between the
closing high bid and low asked quotations of Common Stock on
the National Association of Securities Dealers, Inc.
Automated Quotation System, or any similar system or
automated dissemination of quotations of securities prices
then in common use, if so quoted, or (D) if not quoted as
described in clauses (B) or (C), the mean between the high
bid and low asked quotations for Common Stock as reported by
the National Quotation Bureau Incorporated if at least two
securities dealers have inserted both bid and asked
quotations for common stock on at least 5 of the 10
preceding days. If none of the conditions set forth above
is met, the closing price of Common Stock on any day or the
average of such closing prices for any period shall be the
fair market value of Common Stock as determined by a member
firm of the New York Stock Exchange, Inc. selected by the
Corporation.
(v) A. Nothing contained herein shall be
construed to require an adjustment in the conversion
rate as a result of the issuance of Common Stock
pursuant to, or the granting or exercise of any rights
under, the Corporation's Dividend Reinvestment and
Stock Purchase Plan, the Corporation's Employee Stock
Purchase Plan, the Corporation's Stock Option Plan or
any successor or similar plans providing for the
purchase of shares of Common Stock by the Corporation's
shareholders or employees at a price not less than 90%
of the "average market price" during the "pricing
period" as such terms, or equivalent terms, are defined
in, and as calculated pursuant to, such plans from time
to time.
B. In addition, no adjustment in the
conversion rate shall be required unless such
adjustment would require an increase or decrease of at
least 1% in such rate; provided, however, that any
adjustments which by reason of this subparagraph (v)(B)
are not required to be made shall be carried forward
and taken into account in any subsequent adjustment;
further provided, however, that any adjustments which
by reason of this subparagraph (v)(B) are not otherwise
required to be made shall be made no later than 3 years
after the date on which occurs an event that requires
an adjustment to be made or carried forward.
C. All calculations under this
Section 4 shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.
Anything in this Section 4 to the contrary
notwithstanding, the Corporation shall be entitled to
make such increases in the conversion rate, in addition
to those required by this paragraph (d), as it in its
discretion shall determine to be advisable in order
that any stock dividends, subdivision of shares,
distribution of rights to purchase stock or securities,
or distribution of securities convertible into or
exchangeable for stock hereafter made by the
Corporation to its shareholders shall not be taxable.
(vi) In any case in which this paragraph (d)
provides that an adjustment shall become effective after a
record date for an event, the Corporation may defer until
the occurrence of such event (A) delivering to the holder of
any Series B Preferred Stock converted after such record
date and before the occurrence of such event the additional
shares of stock deliverable upon such conversion by reason
of the adjustment required by such event over and above the
Common Stock deliverable upon such conversion before giving
effect to such adjustment and (B) paying to such holder any
amount in cash in lieu of any fraction pursuant to
paragraph (a), provided, however, that the Corporation shall
deliver to such holder a due bill or other appropriate
instrument evidencing such holder's rights to receive such
additional shares, and such cash, upon the occurrence of the
event requiring such adjustment. If such event does not
occur, no adjustments shall be made pursuant to this
paragraph (d).
(e) No fractional shares of stock shall be issued
upon the conversion of any Series B Preferred Stock. If more
than one share of Series B Preferred Stock shall be surrendered
for conversion at one time by the same holder, the number of full
shares of stock which shall be issuable upon conversion thereof
shall be computed on the basis of the aggregate number of shares
of Series B Preferred Stock so surrendered. Instead of any
fractional share of stock which would otherwise be issuable upon
conversion of any Series B Preferred Stock, the Corporation shall
pay a cash adjustment in respect of such fraction in an amount
equal to the same fraction of the closing price per share of
Common Stock on the business day which immediately precedes the
day of conversion. The closing price for such business day shall
be (A) if the Common Stock is listed or admitted for trading on
any national securities exchange, the last sale price (regular
way), or the average of the closing bid and ask prices, if no
sale occurred, of Common Stock on the principal securities
exchange on which the Common Stock is listed, (B) if not listed
as described in (A) but if quoted on the Nasdaq Stock Market
(formerly the National Market System of the National Association
of Securities Dealers, Inc. Automated Quotation System) the last
sale price, or the average of the closing bid and ask prices, if
no sale occurred, of Common Stock on the Nasdaq Stock Market,
(C) if not quoted as described in clause (B), the mean between
the closing high bid and low asked quotations of Common Stock on
the National Association of Securities Dealers, Inc. Automated
Quotation System, or any similar system or automated
dissemination of quotations of securities prices then in common
use, if so quoted, or (D) if not quoted as described in
clauses (B) or (C), the mean between the high bid and low asked
quotations for Common Stock as reported by the National Quotation
Bureau Incorporated if at least two securities dealers have
inserted both bid and asked quotations for common stock on at
least 5 of the 10 preceding days. If none of the conditions set
forth above is met, the closing price of Common Stock on any day
or the average of such closing prices for any period shall be the
fair market value of Common Stock as determined by a member firm
of the New York Stock Exchange, Inc. selected by the Corporation.
(f) In case of any of the following shall occur
while any Series B Preferred Stock is outstanding: (i) any
reclassification or change of the outstanding shares of Common
Stock deliverable upon conversion of the Series B Preferred 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 as a result of a
subdivision or combination, but including any change in the
shares of Common Stock into two or more classes or series of
securities); or (ii) any consolidation or merger to which the
Corporation is a party (other than a consolidation or a merger in
which the Corporation is the continuing corporation and which
does not result in any reclassification of, or change other than
a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or
combination in, the outstanding shares of Common Stock issuable
upon conversion of the Series B Preferred Stock); or (iii) any
sale or conveyance to another corporation of the properties and
assets of the Corporation as an entirety or substantially as an
entirety; then the Corporation, or such successor or purchasing
corporation, as the case may be, shall make appropriate provision
in its charter or otherwise so that the holders of the Series B
Preferred Stock then outstanding shall have the right at any time
thereafter to convert such Series B Preferred Stock into the kind
and amount of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation,
merger, sale or conveyance by a holder of the number of shares of
Common Stock issuable upon conversion of such Series B Preferred
Stock immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. Such provision shall
provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this
Section 4. The above provisions of this paragraph (f) shall
similarly apply to successive reclassifications, changes,
consolidations, mergers, sales or conveyances.
(g) The Corporation will at all times reserve and
keep available out of its authorized but unissued or treasury
stock, solely for the purpose of issue upon conversion of the
Series D Preferred Stock as provided in this Section 4, such
number of shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding Series B
Preferred Stock.
(h) The issuance of certificates for shares of
Common Stock upon conversion of Series B Preferred Stock shall be
made without charge to the converting shareholder for such
certificates or for any tax in respect of the issuance of such
certificates, and such certificates shall be issued in the name
of, or in such name or names as may be directed by, the holder of
the Series B Preferred Stock converted. However, if any such
certificate is to be issued in a name other than that of the
holder of the converted Series B Preferred Stock, the Corporation
shall not be required to issue or deliver any stock certificate
or certificates unless and until the holder has paid to the
Corporation the amount of any tax which may be payable in respect
of any transfer involved in such issuance or shall establish to
the satisfaction of the Corporation that such tax has been paid.
678 Whenever the conversion rate then in effect
is adjusted as herein provided, the Corporation shall mail to
each holder of the Series B Preferred Stock at such holder's
address as it shall appear on the books of the Corporation a
statement setting forth the adjusted conversion rate, then and
thereafter effective under the provisions hereof together with
the facts, in reasonable detail, upon which such adjustment is
based.
(j) In case any of the following shall occur
while any Series B Preferred Stock is outstanding: (i) the
Corporation shall declare a dividend (or any other distribution)
on its Common Stock other than in cash out of its current or
retained earnings; or (ii) other than pursuant to the shareholder
or employee plans, or any successor plans, in accordance with
paragraph (d)(v)(A) above, the Corporation shall authorize the
granting to the holders of its Common Stock of rights or warrants
to subscribe for or purchase any shares of capital stock of any
class or of any other rights or warrants; or (iii) any
reclassification or change of the outstanding shares of Common
Stock deliverable upon conversion of the Series B Preferred 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 as a result of a
subdivision or combination, but including any changes in the
shares of Common Stock into two or more classes or series of
securities); or any consolidation or merger to which the
Corporation is a party (other than a consolidation or a merger in
which the Corporation is the continuing corporation and which
does not result in any reclassification of, or change other than
a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or
combination in, the outstanding shares of Common Stock issuable
upon conversion of the Series B Preferred Stock); or (iv) any
sale or conveyance to another corporation of the properties and
assets of the Corporation as an entirety or substantially as an
entirety; or (v) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation; then the
Corporation shall mail to each holder of Series B Preferred Stock
at such holder's address as it shall appear on the books of the
Corporation, at least fifteen days prior to the applicable record
date hereinafter specified, a notice stating (x) the record date
for such dividend, distribution or rights, or, if a record is not
to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution or rights
are to be determined, or (y) the date on which such
reclassification, consolidation, merger, dissolution, liquidation
or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such
reclassification, consolidation, merger, dissolution, liquidation
or winding up. No failure to mail such notice or any defect
therein or in the mailing thereof shall affect the legality or
validity of any such transaction or any adjustment in the
conversion rate or conversion price required by this Section 4.
5. Voting. (a) Except as hereinafter in this
Section 5 expressly provided or as otherwise required by law, the
Series B Preferred Stock shall have no voting power.
(b) Whenever and as often as dividends payable on
any share or shares of the Preferred Stock of the Corporation at
the time outstanding shall be accumulated and unpaid in an amount
equivalent to or exceeding six quarterly dividends (whether or
not declared and whether or not consecutive), the number of
directors constituting the full Board of Directors shall be
increased by two in the manner prescribed by law and the Articles
of Incorporation and Bylaws of the Corporation and the holders of
record of the Preferred Stock of all series shall thereafter have
the right, voting noncumulatively separately as a single class,
to elect two directors to the Board of Directors. In any
election of directors, the holders of Series B Preferred Stock
shall be entitled to cast one vote per share.
(c) At any time when the right of holders of
Series Stock to elect two additional directors shall have so
vested, the Corporation may, and upon the written request of the
holders of record of not less than 10% of the Series B Preferred
Stock then outstanding (or 10% of all Preferred Stock having the
right to vote for such directors in case holders of shares of
other series of Preferred Stock shall also have the right to
elect directors in such circumstances) shall, call a special
meeting of holders of such Series B Preferred Stock (and other
series of Preferred Stock, if applicable) for the election of
directors. In the case of such a written request, such special
meeting shall be held within 60 days after the delivery of such
request, and, in either case, at the place and upon the notice
provided by law and in the Bylaws of the Corporation; except that
the Corporation shall not be required to call such a special
meeting if the request is received less than 120 days before the
date fixed for the next ensuing annual meeting of shareholders of
the Corporation. At all meetings of shareholders at which
holders of Preferred Stock shall be entitled to vote for
directors as a single class, the holders of a majority of the
outstanding shares of each class or series of capital stock of
the Corporation having the right to vote as a single class shall
be necessary to constitute a quorum, whether present in person or
by proxy, for the election by that class or series of its
designated directors. Directors to be elected by shareholders
voting as a class shall be elected by the vote of at least a
plurality of votes cast by such shareholders present in person or
proxy at the meeting.
(d) The two directors elected as provided in this
subsection shall serve until the next annual meeting of
shareholders of the Corporation at which directors of the class
in which such directors are serving are to be elected and until
their respective successors shall be elected and qualified or the
earlier expiration of their terms as provided in this subsection.
No such director may be removed without the vote or consent of
holders of a majority of the shares of Series B Preferred Stock
(or holders of a majority of shares of Preferred Stock having the
right to vote in the election of such director in case holders of
shares of other series of Preferred Stock shall also have the
right to elect such director). In case any vacancy shall occur
among the directors elected by such shareholders voting as a
class, such vacancy may be filled by the remaining director so
elected, or his successor then in office, and the director so
elected to fill such vacancy shall serve for the unexpired term
of the director for which the vacancy is being filled.
(e) Such voting rights of the holders of
Preferred Stock as a single class, once effective, shall continue
only until all arrears in dividends (whether or not declared) on
the Preferred Stock shall have been paid or declared and set
apart for payment at which time the right of the Preferred Stock
to vote as a single class for the election of directors, as
herein set forth, shall terminate.
(f) The consent of the holders of at least
two-thirds of the number of shares of Preferred Stock at the time
outstanding, given in person or by proxy, either in writing or at
a meeting of stockholders at which the holders of the Preferred
Stock shall vote separately as a class without regard to series,
the holders of shares of Series B Preferred Stock being entitled
to cast one vote per share thereon, shall be necessary for
effecting or validating:
(i) any change in the Articles of
Incorporation or Bylaws of the Corporation which would
materially and adversely alter or change the preferences,
privileges, rights or powers given to the holders of the
Preferred Stock, provided, that if one or more but not all
series of Preferred Stock at the time outstanding are so
affected, only the consent of the holders of at least
two-thirds of each series so affected, voting separately as
a class, shall be required; or
(ii) the issuance of any shares of any other
class of stock of the Corporation ranking prior to the
Preferred Stock.
The term "ranking prior to the Preferred Stock" shall mean
and include all shares of stock of the Corporation in
respect of which the rights of the holders thereof as to the
payment of dividends or as to distributions in the event of
a voluntary or an involuntary liquidation, dissolution or
winding up of the corporation, are given preference over the
rights of the holders of the Preferred Stock.
6. Liquidation Rights. (a) In the event of any
liquidation, dissolution or winding up of the Corporation,
voluntary or involuntary, the holders of all shares of Series B
Preferred Stock shall be entitled to be paid in full out of the
assets of the Corporation available for distribution to
shareholders, before any distribution of assets shall be made to
the holders of Common Stock or of any other shares of stock of
the Corporation ranking as to any such distribution junior to the
Series B Preferred Stock, an amount equal to $50 per share plus
an amount equal to any accrued and unpaid dividends thereon to
the date fixed for payment of such distribution. If, upon any
voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, the amounts payable with respect to the
Series B Preferred Stock and any other shares of stock of the
Corporation ranking as to any such distribution on a parity with
the Series B Preferred Stock are not paid in full, the holders of
the Series B Preferred Stock and of such other shares shall share
ratably in any such distribution of assets of the Corporation in
proportion to the full respective preferential amounts to which
they are entitled. After payment to the holders of the Series B
Preferred Stock of the full preferential amounts provided for in
this Section 6, the holders of the Series B Preferred Stock shall
be entitled to no further participation in any distribution of
assets by the Corporation.
(b) None of the following shall be considered a
liquidation, dissolution or winding up of the Corporation within
the meaning of this section:
(i) a consolidation or merger of the
Corporation with or into any other corporation;
(ii) a merger of any other corporation into
the Corporation;
(iii) a reorganization of the Corporation;
(iv) the purchase or redemption of all or
part of the outstanding shares of any class or classes of
the Corporation;
(v) a sale or transfer of all or any part of
its assets;
:\DM a share exchange to which the
Corporation is a party; or
(vii) a division of the Corporation.
7. Limitation on Dividends on Junior Stock. So long
as any Series B Preferred Stock shall be outstanding, the
Corporation shall not declare any dividends on the Common Stock
of the Corporation or any other stock of the Corporation ranking
as to dividends or distribution of assets junior to the Series B
Preferred Stock (the Common Stock and any such other stock being
herein referred to as "Junior Stock"), or make any payment on
account of, or set apart money for, a sinking or other analogous
fund for the purchase, redemption or other retirement of any
shares of Junior Stock, or make any distribution in respect
thereof, whether in cash or property or in obligations or stock
of the Corporation, other than Junior Stock (such dividends,
payments, setting apart and distributions being herein called
"Junior Stock Payments"), unless all of the conditions set forth
in the following subsections A and B shall exist at the date of
such declaration in the case of any such dividend, or the date of
such setting apart in that case of any such fund, or the date of
such payment or distribution in the case of any other Junior
Stock Payment:
A. Full cumulative dividends shall have
been paid or declared and set apart for payment upon all
outstanding shares of Preferred Stock other than Junior
Stock.
B. The Corporation shall not be in default
or in arrears with respect to any sinking or other analogous
fund or any call for tenders, obligation or other agreement
for the purchase, redemption or other retirement of any
shares of Preferred Stock other than Junior Stock.