EXHIBIT 4(A)
FORM OF
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PEPSICO, INC.
FIRST: The name of the corporation is PepsiCo, Inc., hereinafter referred to
as the "Corporation".
SECOND: The Corporation is to have perpetual existence.
THIRD: The address of the Corporation's registered office in this State
shall be 213 Broad Street, New Bern, Craven County, North Carolina, 28560, and
the name of its registered agent at such address shall be F. Blackwell Stith.
FOURTH: The purpose or purposes for which the Corporation is organized and
the objects proposed to be transacted, promoted or carried on by it are as
follows:
(1) To engage in the manufacture, purchase, sale, bottling and distribution,
either at wholesale, retail or otherwise, of beverages, syrups, flavors and
extracts, carbonated and aerated water, soda water, mineral waters, soft drinks
and non-alcoholic beverages of every kind, and any and all other commodities,
substances and products of every kind, nature and description;
(2) To purchase, lease, construct or otherwise acquire, and to hold, own,
use, maintain, manage and operate, plants, factories, warehouses, stores, shops
and other establishments, facilities and equipment, of every kind, nature and
description, used or useful in the conduct of the business of the Corporation;
(3) To manufacture, purchase, sell and generally to trade and deal in and
with goods, wares, products and merchandise of every kind, nature and
description, and to engage or participate in any mercantile, manufacturing or
trading business of any kind or character whatsoever;
(4) To build, erect, construct, purchase, hold or otherwise acquire, own,
provide, maintain, establish, lease and operate, buy, sell, exchange or
otherwise dispose of mills, factories, warehouses, agencies, buildings,
structures, offices, works, plants and work shops, with suitable plant, engines,
boilers, machinery and equipment, and all things of whatsoever kind and nature
suitable, necessary, useful or advisable in connection with any or all of the
objects herein set forth;
(5) To acquire by purchase, lease or otherwise, upon such terms and
conditions and in such manner as the board of directors of the Corporation shall
determine or agree to, and to the extent to which the same may be allowed by
law, all or any part of the property, real and personal, tangible or intangible,
of any nature whatsoever, including the good will, business and rights of all
kinds, of any other corporation or of any person, firm or association, which may
be useful or convenient in the business of the Corporation and to pay for the
same in cash, stocks, bonds or in other securities of the Corporation, or partly
in cash and partly in such stocks, bonds or other securities, or in such other
manner as may be agreed, and to hold, possess and improve such properties, and
to assume in connection with the acquisition of any such property any
liabilities of any such corporation, person, firm or association, and to conduct
in any legal manner the whole or any part of any business so acquired, and to
pledge, mortgage, sell or otherwise dispose of the same. To carry on the
business of warehousing and all business incidental thereto, including the issue
of warehouse receipts, negotiable or otherwise, and the making of advances or
loans upon the security of goods warehoused; to maintain and conduct stores for
the general sale of merchandise, both at wholesale and retail;
(6) To borrow money, and, from time to time, to make, accept, endorse,
execute and issue bonds, debentures, promissory notes, bills of exchange and
other obligations of the Corporation for moneys borrowed or in payment of
property acquired or for any of the other objects or purposes of the Corporation
or its business, and to secure the payment of any such obligations by mortgage,
pledge,
deed, indenture, agreement or other instrument of trust, or by other lien upon,
assignment of, or agreement in regard to all or any part of the property,
rights, privileges or franchises of the Corporation wheresoever situated,
whether now owned or hereafter to be acquired;
(7) To apply for, obtain, register, purchase, lease, or otherwise acquire,
and to hold, use, own, operate and introduce, and to sell, assign or otherwise
dispose of, any trade marks, trade names, patents, inventions, improvements and
processes used in connection with or acquired under letters patent of the United
States or elsewhere, and to use, exercise, develop, grant licenses in respect
of, or otherwise turn to account any such trade marks, patents, licenses,
processes and the like;
(8) To guarantee and to acquire, by purchase, subscription or otherwise, and
to hold and own and to sell, assign, transfer, pledge or otherwise dispose of
the stock, or certificates of interest in shares of stock, bonds, debentures and
other securities and obligations of any other corporation, domestic or foreign,
and to issue in exchange therefor the stock, bonds, or other obligations of the
Corporation, and while the owner of any such stock, certificates of interest in
shares of stock, bonds, debentures, obligations and other evidences of
indebtedness, to possess and exercise in respect thereof all of the rights,
powers and privileges of ownership, including the right to vote thereon, and
also in the manner, and to the extent now or hereafter authorized or permitted
by the laws of the State of North Carolina, to purchase, acquire, own and hold
and to dispose of the stock, bonds or other evidence of indebtedness of the
Corporation;
(9) To guarantee the payment of dividends upon any shares of the capital
stock of, or the performance of any contract by any other corporation or
association in which the Corporation shall have an interest, and to endorse or
otherwise guarantee the payment of the principal and interest, or either, of any
bonds, debentures, notes, securities, or other evidences of indebtedness created
or issued by any such other corporation or association or by individuals or
partnerships, to aid in any manner any other corporation or association, any
bonds or other securities or evidences of indebtedness of which, or shares of
stock in which (or voting trust certificates therefor) are held by or for the
Corporation, or in which, or in the welfare of which, the Corporation shall have
any interest, and to do any acts or things designed to protect, preserve,
improve or enhance the value of any such bonds or other securities or property
of the Corporation, but nothing contained herein shall be construed to authorize
the Corporation to engage in the business of a guaranty or trust company;
(10) In general, to do any or all of the things hereinbefore set forth, and
such other things as are incidental or conducive to the attainment of the
objects and purposes of the Corporation, as principal, factor, agent, contractor
or otherwise, either alone or in conjunction with any person, firm, association
or corporation, and in carrying on its business, and for the purpose of
attaining or furthering any of its objects, to make and perform contracts, and
to do all such acts and things, and to exercise any and all such powers, to the
same extent as a natural person might or could lawfully do to the extent allowed
by law;
(11) To have one or more offices and to carry on its operations and transact
its business within and without the State of North Carolina and in other states
of the United States of America, and in the districts, territories or
dependencies of the United States and in any and all foreign countries and,
without restriction or limit as to the amount, to purchase or otherwise acquire,
hold, own, mortgage, sell, convey or otherwise dispose of real and personal
property of every class and description in any of the states, districts,
territories or dependencies of the United States, and in any and all foreign
countries, subject always to the laws of such state, district, territory,
dependency or foreign country; and
(12) To do any or all of the things herein set forth, and such other things
as are incidental or conducive to the attainment of the above objects, to the
same extent a natural person might or could do, and in any part of the world, in
so far as the same are not inconsistent with the laws of the State of North
Carolina.
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The purposes and powers specified in any clause contained in this Fourth
Article shall, except where otherwise expressed in said articles, be in nowise
limited or restricted by reference to or inferences from the terms of any other
clause of this or any other article of these Articles of Incorporation, but the
purposes and powers specified in each of the clauses of this article shall be
regarded as independent purposes and powers.
In general, the Corporation shall have the authority to carry on any other
business in connection with the foregoing, whether manufacturing or otherwise,
and to have and to exercise all the powers conferred by the laws of the State of
North Carolina upon corporations formed under the North Carolina Business
Corporation Act.
FIFTH: The total number of shares of Common Stock which the Corporation
shall have authority to issue is 3,600,000,000 of the par value of one and
two-thirds cents (1-2/3(cent)) per share. The total number of shares of
Convertible Preferred Stock which the Corporation shall have authority to issue
is 3,000,000 of no par per share. The preferences, limitations and relative
rights of the shares of the Convertible Preferred Stock are attached to these
Amended and Restated Articles of Incorporation as "Exhibit A," and made a part
hereof as if set forth in full herein.
SIXTH: The private property of the stockholders shall not be subject to the
payment of corporate debts to any extent whatever.
SEVENTH: No holder of the Corporation's Common Stock and no holder of the
Corporation's Convertible Preferred Stock shall be entitled, as of right, to
subscribe for, purchase or receive any part of any new or additional issue of
its capital stock, of any class, whether now or hereafter authorized (including
treasury stock), or of any bonds, debentures or other securities convertible
into stock, or warrants or options to purchase stock of any class, but all such
additional shares of stock or bonds, debentures or other securities convertible
into stock, including all stock now or hereafter authorized, may be issued and
disposed of by the board of directors from time to time to such person or
persons and upon such terms and for such consideration (so far as may be
permitted by law) as the board of directors in their absolute discretion may
from time to time fix and determine.
EIGHTH: The following provisions are intended for the regulation of the
business and for the conduct of the internal affairs of the Corporation, and it
is expressly provided that the same are intended to be in furtherance and not in
limitation of the powers conferred by statute:
(1) The number of directors of the Corporation shall be fixed and may be
altered from time to time, as may be provided in the by-laws, but at no time is
the number of directors to be less than three. The directors need not be
stockholders. In case of any increase in the number of directors, the additional
directors may be elected by the directors or by the stockholders entitled to
vote therefor at an annual or special meeting, as shall be provided in the
by-laws;
(2) The board of directors may, by resolution passed by a majority of the
whole board, designate three or more of their number to constitute an executive
committee, to the extent provided in said resolution or in the by-laws, shall
have and exercise the powers of the board of directors in the management of the
business and affairs of the Corporation, and may have power to authorize the
seal of the Corporation to be affixed to all papers which may require it. From
time to time the by-laws, or the board of directors by resolution, may provide
methods for the permanent or temporary filling of any vacancy in the executive
committee or in any other committee appointed by the board;
(3) The board of directors shall have power to sell, assign, transfer,
convey, exchange, or otherwise dispose of the property, effects, assets,
franchises and good will of the Corporation as an entirety, for cash, for the
securities of any other corporation, or for any other consideration, pursuant to
the vote at the special meeting called for the purpose, of the holders of at
least two-thirds of the issued and outstanding Common Stock and Convertible
Preferred Stock of the Corporation voting as a single class.
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(4) The board of directors may make by-laws from time to time, and may
alter, amend or repeal any by-laws, but any by-laws made by the board of
directors may be altered, amended or repealed by the stockholders entitled to
vote;
(5) In case of any vacancy in the board of directors, through death,
resignation, disqualification or other cause, the remaining directors by an
affirmative vote of a majority thereof, may elect a successor to hold office for
the unexpired portion of the term of the directors whose place shall be vacant,
and until the election of a successor;
(6) The directors shall have power, from time to time, to determine whether
and to what extent, and at what times and places and under what conditions and
regulations, the accounts and books of the Corporation, or any of them, shall be
open to the inspection of stockholders; and no stockholder shall have any right
to inspect any books or account or document of the Corporation except as
conferred by the statutes of the State of North Carolina, or authorized by the
directors;
(7) The board of directors shall have power to appoint such standing
committees as they may determine, with such powers as shall be conferred by them
or as may be authorized by the by-laws;
(8) The board of directors shall elect a president and vice president and
appoint a secretary and treasurer. Any two of such offices may be held by the
same person, except that the president shall hold no other of such offices. The
board of directors may also appoint one or more additional vice presidents, one
or more assistant secretaries, and one or more assistant treasurers, and to the
extent provided by the by-laws or by the board of directors by resolution from
time to time, the persons so appointed shall have and exercise the powers of the
president, secretary and treasurer, respectively. The board of directors may
appoint other and additional officers, with such powers as the directors may
deem advisable;
(9) Both stockholders and directors shall have power, if the by-laws so
provide, to hold their meetings and have one or more offices without the State
of North Carolina, and to keep the books of the Corporation (subject to the
provisions of the statutes) outside of the State of North Carolina, at such
places as may be from time to time designated;
(10) The Corporation may in its by-laws confer powers additional to the
foregoing upon the directors, in addition to the powers and authorities
expressly conferred upon them by the statutes;
(11) No contract or other transaction between the Corporation and any other
corporation shall be affected or invalidated by the fact that any one or more of
the directors of the Corporation is or are interested in, or is a director or
officer, or are directors or officers of, such other corporation, and any
director or directors, individually or jointly, may be a party or parties to, or
may be interested in, any contract or transaction of the Corporation or in which
the Corporation is interested; and no contract, act or transaction of the
Corporation with any person or persons, firm or corporation, shall be affected
or invalidated by the fact that any director or directors of the Corporation is
a party, or are parties, to or interested in such contract, act or transaction,
or in any way connected with such person or person, firm or corporation, and
each and every such person or persons, firm or corporation, and each and every
person who may become a director of the Corporation is hereby relieved from any
liability that might otherwise exist from contracting with the Corporation for
the benefit of himself or any firm, association or corporation in which he may
be in any wise interested;
(12) The Corporation reserves the right to amend, alter, change, or repeal
any provision herein contained, in the manner now or hereafter prescribed by
law, and all the rights conferred on stockholders hereunder are granted and are
to be held and enjoyed subject to such rights of amendment, alteration, change
or repeal.
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NINTH: The number of directors constituting the Board of Directors at the
date hereof shall be thirteen; and the names and addresses of the persons who
are to serve as directors until the next meeting of stockholders, or until their
successors are elected and qualified, are:
NAME ADDRESS
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John F. Akers................................. 700 Anderson Hill Road
Purchase, New York 10577
Robert E. Allen............................... 700 Anderson Hill Road
Purchase, New York 10577
Roger A. Enrico............................... 700 Anderson Hill Road
Purchase, New York 10577
Peter Foy..................................... 700 Anderson Hill Road
Purchase, New York 10577
Ray L. Hunt................................... 700 Anderson Hill Road
Purchase, New York 10577
Arthur C. Martinez............................ 700 Anderson Hill Road
Purchase, New York 10577
John J. Murphy................................ 700 Anderson Hill Road
Purchase, New York 10577
Franklin D. Raines............................ 700 Anderson Hill Road
Purchase, New York 10577
Sharon Percy Rockefeller...................... 700 Anderson Hill Road
Purchase, New York 10577
Steven S Reinemund............................ 700 Anderson Hill Road
Purchase, New York 10577
Franklin A. Thomas............................ 700 Anderson Hill Road
Purchase, New York 10577
Cynthia M. Trudell............................ 700 Anderson Hill Road
Purchase, New York 10577
Solomon D. Trujillo........................... 700 Anderson Hill Road
Purchase, New York 10577
TENTH: Stockholders do not have the right to cumulate their vote for the
election of directors.
ELEVENTH: The name and address of the incorporator is:
Arch E. Lynch, Jr............................. 3600 Glenwood Avenue
Raleigh, North Carolina 27605
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EXHIBIT A
SECTION 1. DESIGNATION AND AMOUNT; SPECIAL PURPOSE RESTRICTED TRANSFER ISSUE.
(A) Shares of Convertible Preferred Stock shall be issued only to Fidelity
Trust Management Co., or any duly appointed successor trustee (the "Trustee") of
The Quaker 401(k) Plan for Salaried Employees, as amended, or any successor plan
(the "Plan"). All references to the holder of shares of Convertible Preferred
Stock shall mean the Trustee. In the event of any transfer of record ownership
of shares of Convertible Preferred Stock to any person other than any successor
trustee under the Plan, the shares of Convertible Preferred Stock so
transferred, upon such transfer and without any further action by the
Corporation or the holder thereof, shall be automatically converted into shares
of Common Stock of the Corporation pursuant to Section 5 hereof and no such
transferee shall have any of the voting powers, preferences and relative,
participating, optional or special rights ascribed to shares of Convertible
Preferred Stock hereunder but, rather, only the powers and rights pertaining to
the Common Stock into which such shares of Convertible Preferred Stock shall be
so converted. In the event of such a conversion, the transferee of the shares of
Convertible Preferred Stock shall be treated for all purposes as the record
holder of the shares of Common Stock into which such shares of Convertible
Preferred Stock have been automatically converted as of the date of such
transfer. Certificates representing shares of Convertible Preferred Stock shall
bear a legend to reflect the foregoing provisions. Notwithstanding the foregoing
provisions of this Section 1, shares of Convertible Preferred Stock (i) may be
converted into shares of Common Stock as provided by Section 5 hereof and the
shares of Common Stock issued upon such conversion may be transferred by the
holder thereof as permitted by law and (ii) shall be redeemable by the
Corporation upon the terms and conditions provided by Sections 6, 7 and 8
hereof.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any stock of the Corporation
ranking senior to the Convertible Preferred Stock in respect of dividends and
subject to the provisions for adjustment hereinafter set forth, the holders of
shares of Convertible Preferred Stock shall be entitled to receive, when, as and
if declared by the board of directors out of funds legally available therefor,
cumulative cash dividends ("preferred dividends") in an amount per share equal
to $5.46 per share per annum, and no more, payable quarterly in arrears,
one-fourth on each fifteenth day of January, April, July and October of each
year (each a "dividend payment date") commencing on , 2001(1), to
holders of record at the start of business on such dividend payment date. In the
event that any dividend payment date shall fall on any day other than a
"business day" (as hereinafter defined), the dividend payment due on such
dividend payment date shall be paid on the business day immediately succeeding
such dividend payment date. Preferred dividends shall begin to accrue on
outstanding shares of Convertible Preferred Stock from the date of issuance of
such shares of Convertible Preferred Stock. Preferred dividends shall accrue on
a daily basis, but preferred dividends accrued after issuance of the shares of
Convertible Preferred Stock for any period less than a full quarterly period
between dividend payment dates shall be computed on the basis of a 360-day year
of 30-day months. If, at the date shares of Convertible Preferred Stock are
first issued, there are accrued but unpaid dividends on shares of Series B ESOP
Convertible Preferred Stock of The Quaker Oats Company, such accrued but unpaid
dividends will be carried forward and paid on , 2001(2), without
interest, in addition to the dividends on shares of Convertible Preferred Stock
which are accrued and payable as of such date. Accrued but unpaid preferred
dividends shall cumulate as of the dividend payment date on which they first
became payable, but no interest shall accrue on accumulated but unpaid preferred
dividends.
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(1) First dividend payment date occurring after the Effective Time of merger
to be entered here.
(2) First dividend payment date occurring after the Effective Time of merger
to be entered here.
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(B) So long as any shares of Convertible Preferred Stock shall be
outstanding, no dividend shall be declared or paid or set apart for payment on
any other series of stock of the Corporation ranking on a parity with the
Convertible Preferred Stock as to dividends, unless there shall also be or have
been declared and paid or set apart for payment on the Convertible Preferred
Stock dividends for all dividend payment periods of the Convertible Preferred
Stock ending on or before the dividend payment date of such parity stock,
ratably in proportion to the respective amounts of dividends accumulated and
unpaid through such dividend period on the Convertible Preferred Stock and
accumulated and unpaid on such parity stock through the dividend payment period
on such parity stock next preceding such dividend payment date. In the event
that full cumulative dividends on the Convertible Preferred Stock have not been
declared and paid or set apart for payment when due, the Corporation shall not
declare or pay or set apart for payment any dividends or make any other
distributions on, or make any payment on account of the purchase, redemption or
other retirement of any other class of stock or series thereof of the
Corporation ranking, as to dividends or as to distributions in the event of a
liquidation, dissolution or winding-up of the Corporation, junior to the
Convertible Preferred Stock until full cumulative dividends on the Convertible
Preferred Stock shall have been paid or declared and set apart for payment;
provided, however, that the foregoing shall not apply to (i) any dividend
payable solely in any shares of any stock of the Corporation ranking, as to
dividends and as to distributions in the event of a liquidation, dissolution or
winding-up of the Corporation, junior to the Convertible Preferred Stock or (ii)
the acquisition of shares of any stock of the Corporation ranking as to
dividends or as to distributions in the event of a liquidation, dissolution or
winding-up of the Corporation, junior to the Convertible Preferred Stock in
exchange solely for shares of any other stock of the Corporation ranking, as to
dividends and as to distributions in the event of a liquidation, dissolution or
winding-up of the Corporation, junior to the Convertible Preferred Stock.
SECTION 3. VOTING RIGHTS.
The holders of shares of Convertible Preferred Stock shall have the
following voting rights:
(A) The holders of Convertible Preferred Stock shall be entitled to vote on
all matters submitted to a vote of the shareholders of the Corporation, voting
together with the holders of Common Stock as one class. The holder of each share
of Convertible Preferred Stock shall be entitled to a number of votes equal to
the number of shares of Common Stock into which such share of Convertible
Preferred Stock could be converted on the record date for determining the
shareholders entitled to vote, rounded to the nearest one-tenth of a vote; it
being understood that whenever the "conversion price" (as defined in Section 5
hereof) is adjusted as provided in Section 9 hereof, the voting rights of the
Convertible Preferred Stock shall also be similarly adjusted.
(B) Except as otherwise required by law or set forth herein, holders of
Convertible 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 the taking of any
corporate action; provided, however, that the vote of at least two-thirds of the
outstanding shares of Convertible Preferred Stock, voting separately as a
series, shall be necessary to adopt any alteration, amendment or repeal of any
provision of the Corporation's articles of incorporation, as amended from time
to time (including any such alteration, amendment or repeal effected by any
merger or consolidation in which the Corporation is the surviving or resulting
corporation), if such amendment, alteration or repeal would alter or change the
powers, preferences, or special rights of the shares of Convertible Preferred
Stock so as to affect them adversely.
SECTION 4. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, the holders of Convertible Preferred Stock shall be entitled
to receive out of assets of the Corporation which remain after satisfaction in
full of all valid claims of creditors of the Corporation and which are
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available for payment to shareholders, and subject to the rights of the holders
of any the Corporation's stock ranking senior to or on a parity with the
Convertible Preferred Stock in respect of distribution upon liquidation,
dissolution or winding up of the Corporation, before any amount shall be paid or
distributed among the holders of Common Stock or any other shares ranking junior
to the Convertible Preferred Stock in respect of distributions upon liquidation,
dissolution or winding up of the Corporation, liquidating distributions in the
amount of $78.00 per share (the "Liquidation Preference"), plus an amount equal
to all accrued and unpaid dividends thereon to the date fixed for distribution,
and no more. If upon any liquidation, dissolution or winding up of the
Corporation, the amounts payable with respect to the Convertible Preferred Stock
and any other stock of the Corporation ranking as to any such distribution on a
parity with the Convertible Preferred Stock are not paid in full, the holders of
the Convertible Preferred Stock and such other stock shall share ratably in any
distribution of assets in proportion to the full respective preferential amounts
to which they are entitled. After payment of the full amount to which they are
entitled as provided by the foregoing provisions of this Section 4(A), the
holders of shares of Convertible Preferred Stock shall not be entitled to any
further right or claim to any of the remaining assets of the Corporation.
(B) Neither the merger or consolidation of the Corporation with or into any
other corporation, nor the merger or consolidation of any other corporation with
or into the Corporation, nor the sale, lease, exchange or other transfer of all
or any portion of the assets of the Corporation, shall be deemed to be a
dissolution, liquidation or winding up of the affairs of the Corporation for
purposes of this Section 4, but the holders of Convertible Preferred Stock shall
nevertheless be entitled in the event of any such merger or consolidation to the
rights provided by Section 8 hereof.
(C) Written notice of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, stating the payment date or dates when, and
the place or places where, the amounts distributable to holders of Convertible
Preferred Stock in such circumstances shall be payable, shall be given by
first-class mail, postage prepaid, mailed not less than twenty (20) days prior
to any payment date stated therein, to the holders of Convertible Preferred
Stock, at the address shown on the books of the Corporation or any transfer
agent for the Convertible Preferred Stock.
SECTION 5. CONVERSION INTO COMMON STOCK.
(A) A holder of shares of Convertible Preferred Stock shall be entitled, at
any time prior to the close of business on the date fixed for redemption of such
shares pursuant to Sections 6, 7 and 8 hereof, to cause any or all of such
shares to be converted into shares of Common Stock, initially at a conversion
rate equal to the ratio of:
(i) $78.00; to
(ii) the amount which initially shall be $ (3), and which shall be
adjusted as hereinafter provided (and, as so adjusted, rounded to the
nearest ten-thousandth, is hereinafter sometimes referred to as the
"conversion price").
(B) Any holder of shares of Convertible Preferred Stock desiring to convert
such shares into shares of Common Stock shall surrender the certificate or
certificates representing the shares of Convertible Preferred Stock being
converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto), at the
Corporation's principal executive office or the offices of the transfer agent
for the Convertible Preferred Stock or such office or offices in the continental
United States of an agent for conversion as may from time to time be designated
by notice to the holders of the Convertible Preferred Stock by the Corporation
or the transfer agent for the Convertible Preferred Stock, accompanied by
written notice of conversion. Such notice of conversion shall specify (i) the
number of shares of Convertible Preferred Stock to be converted and
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(3) This number will be inserted once the Exchange Ratio for the merger has
been determined.
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the name or names in which such holder wishes the certificate or certificates
for Common Stock and for any shares of Convertible Preferred Stock not to be so
converted to be issued and (ii) the address to which such holder wishes delivery
to be made of such new certificates to be issued upon such conversion.
(C) Upon surrender of a certificate representing a share or shares of
Convertible Preferred Stock for conversion, the Corporation shall issue and send
by hand delivery (with receipt to be acknowledged) or by first class mail,
postage prepaid, to the holder thereof or to such holder's designee, at the
address designated by such holder, a certificate or certificates for the number
of shares of Common Stock to which such holder shall be entitled upon
conversion. In the event that there shall have been surrendered a certificate or
certificates representing shares of Convertible Preferred Stock, only part of
which are to be converted, the Corporation shall issue and deliver to such
holder or such holder's designee a new certificate or certificates representing
the number of shares of Convertible Preferred Stock which shall not have been
converted.
(D) The issuance by the Corporation of shares of Common Stock upon a
conversion of shares of Convertible Preferred Stock into shares of Common Stock
made at the option of the holder thereof shall be effective as of the earlier of
(i) the delivery to such holder or such holder's designee of the certificates
representing the shares of Common Stock issued upon conversion thereof or (ii)
the commencement of business on the second business day after the surrender of
the certificate or certificates for the shares of Convertible Preferred Stock to
be converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto) as provided by this
resolution. On and after the effective day of conversion, the person or persons
entitled to receive the Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock, but no allowance or adjustment shall be made in respect of
dividends payable to holders of Common Stock in respect of any period prior to
such effective date. The Corporation shall not be obligated to pay any dividends
which shall have been declared and shall be payable to holders of shares of
Convertible Preferred Stock on a dividend payment date if such dividend payment
date for such dividend is subsequent to the effective date of conversion of such
shares.
(E) The Corporation shall not be obligated to deliver to holders of
Convertible Preferred Stock any fractional share of a share of Common Stock
issuable upon any conversion of such shares of Convertible Preferred Stock, but
in lieu thereof may make a cash payment in respect thereof in any manner
permitted by law.
(F) The Corporation shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for issuance upon the conversion of
shares of Convertible Preferred Stock as herein provided, free from any
preemptive rights, such number of shares of Common Stock as shall from time to
time be issuable upon the conversion of all the shares of Convertible Preferred
Stock then outstanding. Nothing contained herein shall preclude the Corporation
from issuing shares of Common Stock held in its treasury upon the conversion of
shares of Convertible Preferred Stock into Common Stock pursuant to the terms
hereof. The Corporation shall prepare and shall use its best efforts to obtain
and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all requirements
as to registration or qualification of the Common Stock, in order to enable the
Corporation lawfully to issue and deliver to each holder of record of
Convertible Preferred Stock such number of shares of its Common Stock as shall
from time to time be sufficient to effect the conversion of all shares of
Convertible Preferred Stock then outstanding and convertible into shares of
Common Stock.
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SECTION 6. REDEMPTION AT THE CORPORATION'S OPTION.
(A) The Convertible Preferred Stock shall be redeemable, in whole or in
part, at any time after the date of issuance, to the extent permitted by
paragraphs 6(D) and 8(C), at the Liquidation Preference, plus, in each case, an
amount equal to all accrued and unpaid dividends thereon to the date fixed for
redemption. Payment of the redemption price shall be made by the Corporation in
cash or shares of Common Stock or a combination thereof, as permitted by
paragraph (E) of this Section 6. From and after the date fixed for redemption,
dividends on shares of Convertible Preferred Stock called for redemption will
cease to accrue, such shares will no longer be deemed to be outstanding and all
rights in respect of such shares of the Corporation shall cease, except the
right to receive the redemption price. If less than all of the outstanding
shares of Convertible Preferred Stock are to be redeemed, the Corporation shall
either redeem a portion of the shares of each holder determined pro rata based
on the number of shares held by each holder or shall select the shares to be
redeemed by lot, as may be determined by the board of directors of the
Corporation.
(B) Unless otherwise required by law, notice of any redemption effected
pursuant to Sections 6 or 7 hereof will be sent to the holders of Convertible
Preferred Stock at the address shown on the Corporation's books or any transfer
agent for the Convertible Preferred Stock by first class mail, postage prepaid,
mailed not less than thirty (30) days nor more than sixty (60) days prior to the
redemption date. Each such notice shall state: (i) the redemption date;
(ii) the total number of shares of the Convertible Preferred Stock to be
redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for conversion or payment of the redemption price;
(v) that dividends on the shares to be redeemed will cease to accrue on such
redemption date; and (vi) the conversion rights of the shares to be redeemed,
the period within which conversion rights may be exercised, and the conversion
price and number of shares of Common Stock issuable upon conversion of a share
of Convertible Preferred Stock at the time. Upon surrender of the certificate
for any shares so called for redemption and not previously converted (properly
endorsed or assigned for transfer, if the Corporation's board of directors shall
so require and the notice shall so state), such shares shall be redeemed by the
Corporation at the date fixed for redemption and at the redemption price set
forth in paragraph (A) of this Section 6.
(C) In the event of a change in the federal tax law of the United States of
America which has the effect of precluding the Corporation from claiming any of
the tax deductions for dividends paid on the Convertible Preferred Stock when
such dividends are used as provided under Section 404(k)(2) of the Internal
Revenue Code, as in effect on the date shares of Convertible Preferred Stock are
initially issued, or if the Plan is determined by the Internal Revenue Service
not to be initially qualified within the meaning of Sections 401(a) and
4975(e)(7) of the Internal Revenue Code, the Corporation may, in its sole
discretion, and notwithstanding anything to the contrary in paragraph (A) of
this Section 6, within 60 days of such event, elect to redeem any or all of such
shares for the greater of (A) the fair market value of the shares of Convertible
Preferred Stock to be so redeemed or (B) the amount payable in respect of the
shares upon liquidation of the Corporation pursuant to Section 4 hereof.
(D) In the event that the Plan is terminated in accordance with its terms,
and notwithstanding anything to the contrary in paragraph (A) of this Section 6,
the Corporation shall, as soon thereafter as practicable, call for redemption
all then outstanding shares of Convertible Preferred Stock for an amount equal
to the greater of the fair market value or the redemption price, as calculated
pursuant to Section 6(A). The Corporation shall give 30 business days' notice to
all record holders of Convertible Preferred Stock prior to any such termination,
provided, however, that the failure to give any such notice shall not affect the
validity of such corporate action.
(E) The Corporation, at its option, may make payment of the redemption price
required upon redemption of shares of Convertible Preferred Stock in cash or in
shares of Common Stock or in a
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combination of such shares and cash, any such shares of Common Stock to be
valued for such purposes at their fair market value (as defined in paragraph
(G) of Section 9 hereof).
SECTION 7. OTHER REDEMPTION RIGHTS.
Shares of Convertible Preferred Stock shall be redeemed by the Corporation
for cash or, if the Corporation so elects, in shares of Common Stock, or a
combination of such shares and cash, any such shares of Common Stock to be
valued for such purpose as provided by paragraph (E) of Section 6, at the
redemption price as set forth in the following sentence, at the option of the
holder at any time and from time to time upon notice to the Corporation given
not less than five (5) business days prior to the date fixed by the holder in
such notice for such redemption, upon certification by such holder to the
Corporation of the following events: (i) when and to the extent necessary for
such holder to provide for distributions required to be made to participants
under, or to satisfy an investment election provided to participants in
accordance with, the Plan, or any successor plan; (ii) when and to the extent
necessary for such holder to make any payments of principal, interest or premium
due and payable (whether as scheduled or upon acceleration) under (a) the Loan
Agreement between the Trustee and the lenders, (b) any refinancing of or
substitution for the foregoing; or (c) any other indebtedness incurred by the
holder for the benefit of the Plan; or (iii) in the event that the Plan is not
initially determined by the Internal Revenue Service to be qualified within the
meaning of Sections 401(a) and 4975(e) (7) of the Internal Revenue Code. The
redemption price for shares of Convertible Preferred Stock to be redeemed under
this Section 7 shall be equal to: (I) in the case of clause (i) next above, the
fair market value of the shares of Convertible Preferred Stock to be so
redeemed; (II) in the case of clause (ii) next above, the greater of (A) the
fair market value of the shares of Convertible Preferred Stock to be so redeemed
or (B) the redemption price set forth in paragraph (A) of Section 6 hereof; or
(III) in the case of clause (iii) next above, the greater of (A) the fair market
value of the shares of Convertible Preferred Stock to be so redeemed or (B) the
amount payable in respect of the shares upon liquidation of the Corporation
pursuant to Section 4 hereof.
SECTION 8. CONSOLIDATION, MERGER, ETC.
(A) In the event that the Corporation shall consummate any consolidation or
merger or similar business combination, pursuant to which the outstanding shares
of Common Stock are by operation of law exchanged solely for or changed,
reclassified or converted solely into stock that constitutes "employer
securities" with respect to a holder of Convertible Preferred Stock within the
meaning of Section 409(1) of the Internal Revenue Code, and "qualifying employer
securities" within the meaning of Section 407(d)(5) of the Employee Retirement
Income Security Act of 1974, as amended, or any successor provisions of law
("Qualifying Securities"), and, if applicable, for a cash payment in lieu of
fractional shares, if any, the shares of Convertible Preferred Stock of such
holder shall, in connection with such consolidation, merger or similar business
combination, be converted into and exchanged for preferred stock of the issuer
of such Qualifying Securities, having in respect of such issuer, insofar as
possible, the same powers, preferences and relative, participating, optional or
other special rights (including the redemption rights provided by Sections 6, 7
and 8 hereof), and the qualifications, limitations or restrictions thereon, that
the Convertible Preferred Stock had immediately prior to such transaction,
except that after such transaction each share of the Convertible Preferred Stock
shall be convertible, otherwise on the terms and conditions provided by Section
5 hereof, into the number and kind of Qualifying Securities so receivable by a
holder of the number of shares of Common Stock into which such shares of
Convertible Preferred Stock could have been converted immediately prior to such
transaction; provided, however, that if by virtue of the structure of such
transaction, a holder of Common Stock is required to make an election with
respect to the nature and kind of consideration to be received in such
transaction, which election cannot practicably be made by the holders of the
Convertible Preferred Stock, then the shares of Convertible Preferred Stock
shall, by virtue of such transaction and on the same terms as apply to the
holders of Common Stock, be converted into or
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exchanged for the aggregate amount of stock, securities, cash or other property
(payable in kind) receivable by a holder of the number of shares of Common Stock
into which such shares of Convertible Preferred Stock could have been converted
immediately prior to such transaction if such holder of Common Stock failed to
exercise any rights of election to receive any kind or amount of stock,
securities, cash or other property (other than such Qualifying Securities and a
cash payment, if applicable, in lieu of fractional shares) receivable upon such
transaction (provided that, if the kind or amount of Qualifying Securities
receivable upon such transaction is not the same for each non-electing share,
then the kind and amount so receivable upon such transaction for each
non-electing share shall be the kind and amount so receivable per share by the
plurality of the non-electing shares). The rights of the Convertible Preferred
Stock as preferred stock of such issuer of Qualifying Securities shall
successively be subject to adjustments pursuant to Section 9 hereof after any
such transaction as nearly equivalent as practicable to the adjustment provided
for by such section prior to such transaction. The Corporation shall not
consummate any such merger, consolidation or similar transaction unless the
issuer of Qualifying Securities shall have agreed to recognize and honor the
rights of the holders of shares of Convertible Preferred Stock as set forth in
this paragraph (A).
(B) In the event that the Corporation shall consummate any consolidation or
merger or similar business combination, pursuant to which the outstanding shares
of Common Stock are by operation of law exchanged for or changed, reclassified
or converted into other stock or securities or cash or any other property, or
any combination thereof, other than any such consideration which is constituted
solely of Qualifying Securities (as referred to in paragraph (A) of this Section
8) and cash payments, if applicable, in lieu of fractional shares, outstanding
shares of Convertible Preferred Stock shall, without any action on the part of
the Corporation or any holder thereof (but subject to paragraph (C) of this
Section 8), be deemed to have been automatically converted immediately prior to
the consummation of such merger, consolidation or similar transaction into the
number of shares of Common Stock into which such shares of Convertible
Preferred Stock could have been converted at such time so that each share of
Convertible Preferred Stock shall, by virtue of such transaction and on the same
terms as apply to the holders of Common Stock, be converted into or exchanged
for the aggregate amount of stock, securities, cash or other property (payable
in like kind) receivable by a holder of the number of shares of Common Stock
into which such shares of Convertible Preferred Stock could have been converted
immediately prior to such transaction; provided, however, that if by virtue of
the structure of such transaction, a holder of Common Stock is required to make
an election with respect to the nature and kind of consideration to be received
in such transaction, which election cannot practicably be made by the holders of
the Convertible Preferred Stock, then the shares of Convertible Preferred Stock
shall, by virtue of such transaction and on the same terms as apply to the
holders of Common Stock, be converted into or exchanged for the aggregate amount
of stock, securities, cash or other property (payable in kind) receivable by a
holder of the number of shares of Common Stock into which such shares of
Convertible Preferred Stock could have been converted immediately prior to such
transaction if such holder of Common Stock failed to exercise any rights of
election as to the kind or amount of stock, securities, cash or other property
receivable upon such transaction (provided that, if the kind or amount of stock,
securities, cash or other property receivable upon such transaction is not the
same for each non-electing share, then the kind and amount of stock, securities,
cash or other property receivable upon such transaction for each non-electing
share shall be the kind and amount so receivable per share by a plurality of the
non-electing shares).
(C) In the event the Corporation shall enter into any agreement providing
for any consolidation or merger or similar business combination described in
paragraph (B) of this Section 8, then the Corporation shall as soon as
practicable thereafter (and in any event at least 10 business days before the
closing of such transaction) give notice of such agreement and the material
terms thereof to each holder of Convertible Preferred Stock and each such holder
shall have the right to elect, by written
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notice to the Corporation, to receive, upon consummation of such transaction (if
and when such transaction is consummated), from the Corporation or the successor
of the Corporation, in redemption and retirement of such Convertible Preferred
Stock, a cash payment equal to the higher of the redemption price as determined
in accordance with paragraph 6(A) or the fair market value of shares of
Convertible Preferred Stock. No such notice of redemption shall be effective
unless given to the Corporation prior to the close of business on the second
business day prior to the closing of such transaction, unless the Corporation or
its successor shall waive such prior notice, but any notice of redemption so
given prior to such time may be withdrawn by notice of withdrawal given to the
Corporation prior to the close of business on the second business day prior to
the closing of such transaction.
SECTION 9. ANTI-DILUTION ADJUSTMENTS.
(A) In the event the Corporation shall, at any time or from time to time
while any of the shares of the Convertible Preferred Stock are outstanding, (i)
pay a dividend or make a distribution in respect of the Common Stock in shares
of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
in each case whether by reclassification of shares, recapitalization of the
Corporation (including a recapitalization effected by a merger or consolidation
to which Section B hereof does not apply) or otherwise, the conversion price in
effect immediately prior to such action shall be adjusted by multiplying such
conversion price by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately before such event, and the denominator
of which is the number of shares of Common Stock outstanding immediately after
such event. An adjustment made pursuant to this paragraph 9(A) shall be given
effect, upon payment of such a dividend or distribution, as of the record date
for the determination of shareholders entitled to receive such dividend or
distribution (on a retroactive basis) and in the case of a subdivision or
combination shall become effective immediately as of the effective date thereof.
(B) In the event that the Corporation shall, at any time or from time to
time while any of the shares of Convertible Preferred Stock are outstanding,
issue to holders of shares of Common Stock as a dividend or distribution,
including by way of a reclassification of shares or a recapitalization of the
Corporation, any right or warrant to purchase shares of Common Stock (but not
including as such a right or warrant any security convertible into or
exchangeable for shares of Common Stock) at a purchase price per share less than
the fair market value (as hereinafter defined) of a share of Common Stock on the
date of issuance of such right or warrant, then, subject to the provisions of
paragraphs (E) and (F) of this Section 9, the conversion price shall be adjusted
by multiplying such conversion price by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding immediately before such
issuance of rights or warrants plus the number of shares of Common Stock which
could be purchased at the fair market value of a share of Common Stock at the
time of such issuance for the maximum aggregate consideration payable upon
exercise in full of all such rights or warrants, and the denominator of which
shall be the number of shares of Common Stock outstanding immediately before
such issuance of rights or warrants plus the maximum number of shares of Common
Stock that could be acquired upon exercise in full of all such rights and
warrants.
(C) In the event the Corporation shall, at any time or from time to time
while any of the shares of Convertible Preferred Stock are outstanding, issue,
sell or exchange shares of Common Stock (other than pursuant to (i) any right or
warrant to purchase or acquire shares of Common Stock for which adjustment has
been made pursuant to paragraph (B) of this Section 9 (including as such a right
or warrant any security convertible into or exchangeable for shares of Common
Stock) and (ii) any employee or director incentive or benefit plan or
arrangement, including any employment, severance or consulting agreement, of the
Corporation or any subsidiary of the Corporation heretofore or hereafter
adopted) for a consideration having a fair market value, on the date of such
issuance, sale or exchange,
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less than the fair market value of such shares on the date of issuance, sale or
exchange, then, subject to the provisions of paragraphs (E) and (F) of this
Section 9, the conversion price shall be adjusted by multiplying such conversion
price by a fraction, the numerator of which shall be the sum of (i) the fair
market value of all the shares of Common Stock outstanding on the day
immediately preceding the first public announcement of such issuance, sale or
exchange plus (ii) the fair market value of the consideration received by the
Corporation in respect of such issuance, sale or exchange of shares of Common
Stock, and the denominator of which shall be the product of (a) the fair market
value of a share of Common Stock on the day immediately preceding the first
public announcement of such issuance, sale or exchange multiplied by (b) the sum
of the number of shares of Common Stock outstanding on such day plus the number
of shares of Common Stock so issued, sold or exchanged by the Corporation. In
the event the Corporation shall, at any time or from time to time while any
shares of Convertible Preferred Stock are outstanding, issue, sell or exchange
any right or warrant to purchase or acquire shares of Common Stock (including as
such a right or warrant any security convertible into or exchangeable for shares
of Common Stock), other than any such issuance to holders of shares of Common
Stock as a dividend or distribution (including by way of a reclassification of
shares or a recapitalization of the Corporation) and other than pursuant to any
employee or director incentive or benefit plan or arrangement (including any
employment, severance or consulting agreement) of the Corporation or any
subsidiary of the Corporation heretofore or hereafter adopted, for a
consideration having a fair market value, on the date of such issuance, sale or
exchange, less than the non-dilutive amount (as hereinafter defined), then,
subject to the provisions of paragraphs (E) and (F) of this Section 9, the
conversion price shall be adjusted by multiplying such conversion price by a
fraction the numerator of which shall be the sum of (I) the fair market value of
all the shares of Common Stock outstanding on the day immediately preceding the
first public announcement of such issuance, sale or exchange plus (II) the fair
market value of the consideration received by the Corporation in respect of such
issuance, sale or exchange of such right or warrant plus (III) the fair market
value at the time of such issuance of the consideration which the Corporation
would receive upon exercise in full of all such rights or warrants, and the
denominator of which shall be the product of (i) the fair market value of a
share of Common Stock on the day immediately preceding the first public
announcement of such issuance, sale or exchange multiplied by (ii) the sum of
the number of shares of Common Stock outstanding on such day plus the maximum
number of shares of Common Stock which could be acquired pursuant to such right
or warrant at the time of the issuance, sale or exchange of such right or
warrant (assuming shares of Common Stock could be acquired pursuant to such
right or warrant at such time).
(D) In the event the Corporation shall, at any time or from time to time
while any of the shares of Convertible Preferred Stock are outstanding, make an
extraordinary distribution (as hereinafter defined) in respect of the Common
Stock, whether by dividend, distribution, reclassification of shares or
recapitalization of the Corporation (including a recapitalization or
reclassification effected by a merger or consolidation to which Section 8 hereof
does not apply) or effect a pro rata repurchase (as hereinafter defined) of
Common Stock, the conversion price in effect immediately prior to such
extraordinary distribution or pro rata repurchase shall, subject to paragraphs
(E) and (F) of this Section 9, be adjusted by multiplying such conversion price
by the fraction the numerator of which is (i) the fair market value of all the
shares of Common Stock outstanding on the day before the ex-dividend date with
respect to an extraordinary distribution which is paid in cash and on the
distribution date with respect to an extraordinary distribution which is paid
other than in cash, or on the applicable expiration date (including all
extensions thereof) of any tender offer which is a pro rata repurchase, or on
the date of purchase with respect to any pro rata repurchase which is not a
tender offer, as the case may be, minus (ii) the fair market value of the
extraordinary distribution or the aggregate purchase price of the pro rata
repurchase, as the case may be, and the denominator of which shall be the
product of (a) the number of shares of Common Stock outstanding immediately
before such extraordinary distribution or pro rata repurchase minus, in the case
of a pro rata repurchase, the
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number of shares of Common Stock repurchased by the Corporation multiplied by
(b) the fair market value of a share of Common Stock on the day before the
ex-dividend date with respect to an extraordinary distribution which is paid in
cash and on the distribution date with respect to an extraordinary distribution
which is paid other than in cash, or on the applicable expiration date
(including all extensions thereof) of any tender offer which is a pro rata
repurchase or on the date of purchase with respect to any pro rata repurchase
which is not a tender offer, as the case may be. The Corporation shall send each
holder of Convertible Preferred Stock (i) notice of its intent to make any
dividend or distribution and (ii) notice of any offer by the Corporation to make
a pro rata repurchase, in each case at the same time as, or as soon as
practicable after, such offer is first communicated (including by announcement
of a record date in accordance with the rules of any stock exchange on which the
Common Stock is listed or admitted to trading) to holders of Common Stock. Such
notice shall indicate the intended record date and the amount and nature of such
dividend or distribution, or the number of shares subject to such offer for a
pro rata repurchase and the purchase price payable by the Corporation pursuant
to such offer, as well as the conversion price and the number of shares of
Common Stock into which a share of Convertible Preferred Stock may be converted
at such time.
(E) Notwithstanding any other provisions of this Section 9, the Corporation
shall not be required to make any adjustment to the conversion price unless such
adjustment would require an increase or decrease of at least one percent (1%) in
the conversion price. Any lesser adjustment shall be carried forward and shall
be made no later than the time of, and together with, the next subsequent
adjustment which, together with any adjustment or adjustments so carried
forward, shall amount to an increase or decrease of at least one percent (1%) in
the conversion price.
(F) If the Corporation shall make any dividend or distribution on the Common
Stock or issue any Common Stock, other capital stock or other security of the
Corporation or any rights or warrants to purchase or acquire any such security,
which transaction does not result in an adjustment to the conversion price
pursuant to the foregoing provisions of this Section 9, the Corporation's board
of directors shall consider whether such action is of such a nature that an
adjustment to the conversion price should equitably be made in respect of such
transaction. If in such case the Corporation's board of directors determines
that an adjustment to the conversion price should be made, an adjustment shall
be made effective as of such date, as determined by the Corporation's board of
directors (which adjustment shall in no event adversely affect the powers,
preferences, or special rights of this Convertible Preferred Stock as set forth
herein). The determination of the Corporation's board of directors as to whether
an adjustment to the conversion price should be made pursuant to the foregoing
provisions of this paragraph 9(F), and, if so, as to what adjustment should be
made and when, shall be final and binding on the Corporation and all
shareholders of the Corporation. The Corporation shall be entitled to make such
additional adjustments in the conversion price, in addition to those required by
the foregoing provisions of this Section 9, as shall be necessary in order that
any dividend or distribution in shares of capital stock of the Corporation,
subdivision, reclassification or combination of shares of stock of the
Corporation or any recapitalization of the Corporation shall not be taxable to
the holders of the Common Stock.
(G) For purposes of this description of the Convertible Preferred Stock, the
following definitions shall apply:
"business day" shall mean each day that is not a Saturday, Sunday or a day
on which state or federally chartered banking institutions in Chicago, Illinois
or New York, New York are not required to be open.
"current market price" of publicly traded shares of Common Stock or any
other class of capital stock or other security of the Corporation or any other
issuer for any day shall mean the last reported sales price, regular way, or, in
the event that no sale takes place on such day, the average of the reported
closing bid and asked prices, regular way, in either case as reported on the New
York Stock
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Exchange Composite Tape or, if such security is not listed or admitted to
trading on the New York Stock Exchange, on the principal national securities
exchange on which such security is listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the NASDAQ
National Market System or, if such security is not quoted on such National
Market System, the average of the closing bid and asked prices on each such day
in the over-the-counter market as reported by NASDAQ or, if bid and asked prices
for such security on each such day shall not have been reported through NASDAQ,
the average of the bid and asked prices for such day as furnished by any New
York Stock Exchange member firm regularly making a market in such security
selected for such purpose by the the Corporation's board of directors or a
committee thereof, in each case, on each trading day during the adjustment
period. "adjustment period" shall mean the period of five (5) consecutive
trading days preceding, and including, the date as of which the fair market
value of a security is to be determined.
"extraordinary distribution" shall mean any dividend or other distribution
to holders of Common Stock (effected while any of the shares of Convertible
Preferred Stock are outstanding) (i) of cash, where the aggregate amount of such
cash dividend or distribution together with the amount of all cash dividends and
distributions made during the preceding period of 12 months, when combined with
the aggregate amount of all pro rata repurchases (for this purpose, including
only that portion of the aggregate purchase price of such "pro rata repurchase"
(as hereinafter defined) which is in excess of the fair market value of the
Common Stock repurchased as determined on the applicable expiration date
(including all extensions thereof) of any tender offer or exchange offer which
is a Pro Rata Repurchase, or the date of purchase with respect to any other pro
rata repurchase which is not a tender offer or exchange offer made during such
period), exceeds 12 1/2% of the aggregate fair market value of all shares of
Common Stock outstanding on the day before the ex-dividend date with respect to
such extraordinary distribution which is paid in cash and on the distribution
date with respect to an extraordinary distribution which is paid other than in
cash, and/or (ii) of any shares of the Corporation's capital stock (other than
shares of Common Stock), other securities of the Corporation (other than the
securities of the type referred to in paragraph (B) or (C) of this Section 9),
evidences of indebtedness of the Corporation or any other person or any other
property (including shares of any subsidiary of the Corporation) or any
combination thereof. The fair market value of an extraordinary distribution for
purposes of paragraph (D) of this Section 9 shall be equal to the sum of the
fair market value of such extraordinary distribution plus the amount of any cash
dividends which are not extraordinary distributions made during such 12-month
period and not previously included in the calculation of an adjustment pursuant
to paragraph (D) of this Section 9.
"fair market value" shall mean the amount of cash received or, as to shares
of Common Stock or any other class of capital stock or securities of the
Corporation or any other issuer which are publicly traded, the average of the
current market prices of such shares or securities for each day of the
adjustment period. The "fair market value" of any security which is not publicly
traded or of any other property shall mean the fair value thereof as determined
by an independent commercial or investment banking or appraisal firm experienced
in the valuation of such securities or property selected in good faith by the
Corporation's board of directors or a committee thereof, or, if no such
commercial or investment banking or appraisal firm is in the good faith judgment
of the board of directors or such committee available to make such
determination, as determined in good faith by the Corporation's board of
directors or such committee.
"non-dilutive amount" in respect of an issuance, sale or exchange by the
Corporation of any right or warrant to purchase or acquire shares of Common
Stock (including any security convertible into or exchangeable for shares of
Common Stock) shall mean the remainder of (i) the product of the fair market
value of a share of Common Stock on the day preceding the first public
announcement of such issuance, sale or exchange multiplied by the maximum number
of shares of Common Stock which could be acquired on such date upon the exercise
in full of such rights and warrants (including upon the
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conversion or exchange of all such convertible or exchangeable securities),
whether or not exercisable (or convertible or exchangeable) at such date, minus
(ii) the aggregate amount payable pursuant to such right or warrant to purchase
or acquire such maximum number of shares of Common Stock; provided, however,
that in no event shall the non-dilutive amount be less than zero. For purposes
of the foregoing sentence, in the case of a security convertible into or
exchangeable for shares of Common Stock, the amount payable pursuant to a right
or warrant to purchase or acquire shares of Common Stock shall be the fair
market value of such security on the date of the issuance, sale or exchange of
such security by the Corporation.
"pro rata repurchase" shall mean any purchase of shares of Common Stock by
the Corporation or any subsidiary thereof, whether for cash, shares of capital
stock of the Corporation, other securities of the Corporation, evidences of
indebtedness of the Corporation or any other person or any other property
(including shares of a subsidiary of the Corporation), or any combination
thereof, effected while any of the shares of Convertible Preferred Stock are
outstanding, pursuant to any tender offer or exchange offer subject to Section
13(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or any successor provision of law, or pursuant to any other offer available to
substantially all holders of Common Stock; provided, however, that no purchase
of shares by the Corporation, or any subsidiary thereof made in open market
transactions shall be deemed a pro rata repurchase. For purposes of this
paragraph 9(G), shares shall be deemed to have been purchased by the Corporation
or any subsidiary thereof "in open market transactions" if they have been
purchased substantially in accordance with the requirements of Rule l0b-18 as
such rule is in effect under the Exchange Act on the date shares of Convertible
Preferred Stock are initially issued by the Corporation, or on such other terms
and conditions as the Corporation's board of directors or a committee thereof
shall have determined are reasonably designed to prevent such purchases from
having a material effect on the trading market for the Common Stock.
(H) Whenever an adjustment to the conversion price and the related voting
rights of the Convertible Preferred Stock is required, the Corporation shall
forthwith place on file with the transfer agent(s) for the Common Stock and for
the Convertible Preferred Stock, if any, and with the Secretary of the
Corporation, a statement signed by two officers of the Corporation stating the
adjusted conversion price determined as provided herein, and the resulting
conversion ratio, and the voting rights (as appropriately adjusted), of the
Convertible Preferred Stock. Such statement shall set forth in reasonable detail
such facts as shall be necessary to show the reason for and the manner of
computing such adjustment, including any determination of fair market value
involved in such computation. Promptly after each adjustment to the conversion
price and the related voting rights of the Convertible Preferred Stock, the
Corporation shall mail a notice thereof and of the then prevailing conversion
rate to each holder of shares of the Convertible Preferred Stock.
SECTION 10. RANKING; RETIREMENT OF SHARES.
(A) The Convertible Preferred Stock shall rank senior to the Common Stock as
to the payment of dividends and the distribution of assets on liquidation,
dissolution and winding up of the Corporation, and, unless otherwise provided in
the articles of incorporation of the Corporation, as the same may be amended,
the Convertible Preferred Stock shall rank PARI PASSU with all future series of
the Corporation's preferred stock as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up.
(B) Any shares of Convertible Preferred Stock acquired by the Corporation by
reason of the conversion or redemption of such shares, or otherwise so acquired,
shall be restored to the status of authorized but unissued shares of preferred
stock, with no par value per share, of the Corporation, undesignated as to
series, and may thereafter be reissued as part of a new or existing series of
such preferred stock as permitted by law.
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SECTION 11. MISCELLANEOUS.
(A) All notices referred to herein shall be in writing, and all notices
hereunder shall be deemed to have been given upon the earlier of receipt thereof
or three (3) business days after the mailing thereof if sent by registered mail
(unless first-class mail shall be specifically permitted for such notice
elsewhere herein) with postage prepaid, addressed: (i) if to the Corporation, to
its office at 700 Anderson Hill Road, Purchase, New York, 10577-1441 (Attention:
Secretary), or to the transfer agent for the Convertible Preferred Stock, or
other agent of the Corporation designated as permitted herein or (ii) if to any
holder of the Convertible Preferred Stock or Common Stock, as the case may be,
to such holder at the address of such holder as listed in the stock record books
of the Corporation (which may include the records of any transfer agent for the
Convertible Preferred Stock or Common Stock, as the case may be) or (iii) to
such other address as the Corporation or any such holder, as the case may be,
shall have designated by notice similarly given.
(B) The Corporation shall give 15 business days' notice to all record
holders of Convertible Preferred Stock prior to the record date to be
established with respect to any extraordinary event, setting forth the material
provisions relating to such extraordinary event, provided, however, that the
failure to give any such notice shall not affect the validity of any such
corporate action.
"extraordinary event" as used herein means (i) any non-cash dividend payable
with respect to the Common Stock, (ii); any cash dividend in an amount exceeding
10% of the conversion price on the date the dividend is declared, (iii) any
recapitalization, reclassification, consolidation, merger or similar event as a
result of which shares of Common Stock are converted into or exchanged for any
other securities or property, (iv) any sale of all or substantially all of the
assets of the Corporation, or (v) the adoption of any repurchase program under
which the Corporation may purchase more than 15% of the Corporation's then
outstanding Common Stock.
(C) The term "Common Stock" as used in this description of the Convertible
Preferred Stock means the Corporation's Common Stock, par value one and
two-thirds cents (1 2/3 cents) per share, or any other class of stock resulting
from successive changes or reclassifications of such Common Stock consisting
solely of changes in par value, or from par value to no par value, or from no
par value to par value. In the event that, at any time as a result of an
adjustment made pursuant to Section 9 hereof, the holder of any share of the
Convertible Preferred Stock upon thereafter surrendering such shares for
conversion, shall become entitled to receive any shares or other securities of
the Corporation other than shares of Common Stock, the conversion price in
respect of such other shares or securities so receivable upon conversion of
shares of Convertible Preferred Stock shall thereafter be adjusted, and shall be
subject to further adjustment from time to time, in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to Common Stock
contained in Section 9 hereof, and the provisions of Sections 1 through 8, 10
and 11 hereof with respect to the Common Stock shall apply on like or similar
terms to any such other shares or securities.
(D) The Corporation shall pay any and all stock transfer and documentary
stamp taxes that may be payable in respect of any issuance or delivery of shares
of Convertible Preferred Stock or shares of Common Stock or other securities
issued on account of Convertible Preferred Stock pursuant hereto or certificates
representing such shares or securities. The Corporation shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issuance or delivery of shares of Convertible Preferred Stock or
Common Stock or other securities in a name other than that in which the shares
of Convertible Preferred Stock with respect to which such shares or other
securities are issued or delivered were registered, or in respect of any payment
to any person with respect to any such shares or securities other than a payment
to the registered holder thereof, and shall not be required to make any such
issuance, delivery or payment unless and until the person otherwise entitled to
such issuance, delivery or payment has paid to the Corporation the amount of any
such tax or has established, to the satisfaction of the Corporation, that such
tax has been paid or is not payable.
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(E) In the event that a holder of shares of Convertible Preferred Stock
shall not by written notice designate the name in which shares of Common Stock
to be issued upon conversion of such shares should be registered or to whom
payment upon redemption of shares of Convertible Preferred Stock should be made
or the address to which the certificate or certificates representing such
shares, or such payment, should be sent, the Corporation shall be entitled to
register such shares, and make such payment, in the name of the holder of such
Convertible Preferred Stock as shown on the records of the Corporation and to
send the certificate or certificates representing such shares, or such payment,
to the address of such holder shown on the records of the Corporation.
(F) Unless otherwise provided in the Corporation's articles of
incorporation, as the same may be amended, all payments in the form of
dividends, distributions on voluntary or involuntary dissolution, liquidation or
winding up or otherwise made upon the shares of Convertible Preferred Stock and
any other stock ranking on a parity with the Convertible Preferred Stock with
respect to such dividend or distribution shall be pro rata, so that amounts paid
per share on the Convertible Preferred Stock and such other stock shall in all
cases bear to each other the same ratio that the required dividends,
distributions or payments, as the case may be, then payable per share on the
shares of the Convertible Preferred Stock and such other stock bear to each
other.
(G) The Corporation may appoint, and from time to time discharge and change,
a transfer agent for the Convertible Preferred Stock. Upon any such appointment
or discharge of a transfer agent, the Corporation shall send notice thereof by
first-class mail, postage prepaid, to each holder of record of Convertible
Preferred Stock.
(H) Unless otherwise indicated, references in this Exhibit A to Sections or
paragraphs are references to a Section or paragraph of this Exhibit A.
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