Exhibit 3.1
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
ALCO STANDARD CORPORATION
FIRST: The name of the Corporation shall be ALCO STANDARD CORPORATION.
SECOND: The principal office of the Corporation in the State of Ohio is to be
located at Cleveland in Cuyahoga County.
THIRD: The purposes for which, and for any of which, the Corporation is formed
are as follows:
1. To develop, manufacture, service, repair, treat, finish, buy, sell and
generally deal in, in every manner, articles, materials and products of every
kind and description, to own, hold and deal in, in every manner, all real and
personal property, and to do all things necessary or incidental to the foregoing
purposes.
2. In general to carry on any other lawful business whatsoever which is
calculated, directly or indirectly, to promote the interests of the Corporation
or to enhance the value of its properties; and to have and exercise all rights,
powers and privileges which are now or may hereafter be conferred upon
corporations by the laws of Ohio; provided, however, that nothing contained in
this Article Third shall be construed as authorizing the Corporation to carry on
the business of a public utility or railroad as defined by the public utility
laws of the State of Ohio.
The Corporation reserves the right at any time and from time to time to
substantially change its purposes in any manner now or hereafter permitted by
statute. Any change of the purposes of the Corporation authorized or approved by
the holders of shares entitled to exercise the proportion of the voting power of
the Corporation now or hereafter required by statute for such authorization or
approval shall be binding and conclusive upon every shareholder of the
Corporation as fully as if such shareholder had voted therefor; and no
shareholder, notwithstanding that he may have voted against such change of
purposes or may have objected in writing thereto, shall be entitled to payment
of the fair cash value of his shares.
FOURTH: The number of shares which the Corporation is authorized to have
outstanding is 152,135,878 consisting of 2,135,878 shares of Serial Preferred
Stock of no par value (hereinafter called "Serial Preferred Stock"), and
150,000,000 shares of Common Stock of no par value (hereinafter called "Common
Stock"). The shares of such classes shall have the following express terms:
Division A
EXPRESS TERMS OF THE SERIAL PREFERRED STOCK
1. Series and Rank. The Serial Preferred Stock may be issued from time
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to time in one or more series. All shares of Serial Preferred Stock shall
be of equal
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rank and shall be identical, except in respect of the matters that may be fixed
by the Board of Directors as hereinafter provided, and each share of each series
shall be identical with all other shares of such series, except as to the date
from which dividends are cumulative. Subject to the provisions of Sections 2 to
7, both inclusive, of this Division, which provisions shall apply to all Serial
Preferred Stock, the Board of Directors hereby is authorized to cause such
shares to be issued in one or more series and with respect to each such series
prior to the issuance thereof to fix:
(a) The designation of the series, which may be by distinguishing number,
letter or title.
(b) The number of shares of the series, which number the Board of
Directors may (except where otherwise provided in the creation of the series)
increase or decrease (but not below the number of shares thereof then
outstanding).
(c) The annual dividend rate of the series.
(d) The dates at which dividends, if declared, shall be payable, and the
dates from which dividends shall be cumulative.
(e) The redemption rights and price or prices, if any, for shares of the
series.
(f) The terms and amount of any sinking fund provided for the purchase
or redemption of shares of the series.
(g) The amounts payable on shares of the series in the event of any
liquidation, dissolution or winding up of the affairs of the Corporation, which
amount may vary depending upon whether such liquidation, dissolution or winding
up is voluntary or involuntary.
(h) Whether the shares of the series shall be convertible into Common
Stock, and, if so, the conversion price or prices, any adjustments thereof, and
all other terms and conditions upon which such conversion may be made.
(i) Restrictions on the issuance of shares of the same series or of any
other class or series.
The Board of Directors is authorized to adopt from time to time amendments
to the Articles of Incorporation fixing, with respect to each such series, the
matters described in clauses (a) to (i), both inclusive, of this Section 1.
2. Dividends. The holders of the Serial Preferred Stock of each series
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shall be entitled to receive, when and as declared by the Board of Directors,
out of funds of the Corporation legally available for dividends, dividends in
cash at the rate for such series fixed in accordance with the provisions of
Section 1 of this Division, and no more, payable quarterly on the dates fixed
for such series. Such dividends on each share of Serial Preferred Stock shall
accrue and be cumulative, whether or
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not earned or declared, from and after the date or dates fixed with respect to
such series. No dividends may be paid upon or declared or set apart for any of
the Serial Preferred Stock for any quarterly dividend period unless at the same
time a like proportionate dividend for the same quarterly dividend period,
ratably in proportion to the respective annual dividend rates fixed therefor,
shall be paid upon or declared or set apart for all Serial Preferred Stock of
all series then issued and outstanding and entitled to receive such dividend.
3. Dividends on or Distributions to Holders of Junior Stock.
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So long as any shares of Serial Preferred Stock are outstanding, the Corporation
shall not (a) declare or pay any dividends (other than dividends payable in
Common Stock or other shares of the Corporation ranking junior to the Serial
Preferred Stock) to holders of Common Stock or shares of the Corporation of any
other class ranking on a parity with or junior to the Serial Preferred Stock, or
(b) make any distributions of assets (directly or indirectly, by purchase;
redemption or otherwise) to the holders of Common Stock or shares of the
Corporation of any other class ranking on a parity with or junior to the Serial
Preferred Stock (except in the case of shares purchased in compromise of claims
or to prevent loss on doubtful debts and except in the case of shares purchased
out of the proceeds of the sale of Common Stock or other shares ranking junior
to the Serial Preferred Stock received by the Corporation, subsequent to
January 1, 1968):
(a) Unless all accrued and unpaid dividends on shares of Serial Preferred
Stock, including the full dividends for the then quarterly dividend period,
shall have been paid or declared and funds sufficient for payment thereof set
apart; and
(b) Unless there shall be no arrearages with respect to redemption of
shares of Serial Preferred Stock from any sinking fund provided for shares of
such series in accordance with provisions of Section 1 of this Division.
4. Voting Rights. The holders of Serial Preferred Stock shall be
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entitled at all times to one vote for each share, and except as otherwise
required by law, the holders of the Serial Preferred Stock and Common Stock of
the Corporation shall vote together as one class on all matters, subject,
however, to the special voting rights conferred upon the holders of the Serial
Preferred Stock as hereinafter provided.
If and when the Corporation shall be in default in the payment, in whole or
in part, of each of six quarterly dividends (whether or not consecutive) accrued
on any series of Serial Preferred Stock whether or not earned or declared, the
holders of the Serial Preferred Stock of all series, voting separately as a
single class, shall be entitled to elect two Directors of the Corporation, to
serve in addition to the Directors otherwise elected.
Such rights to elect additional Directors may be exercised at any annual
meeting of shareholders or, within the limitation hereinafter provided, at a
special meeting of shareholders held for such purpose. If such default shall
occur more than 90 days preceding the date of the next annual meeting of
shareholders as fixed by
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the Regulations of the Corporation, then a special meeting of the holders of the
Serial Preferred Stock shall be called by the Secretary of the Corporation upon
the written request of the holders of not less than 10% of the Serial Preferred
Stock then outstanding, such meeting to be held within 60 days after the
delivery to the Secretary of such request or such later time as may be
reasonably required to obtain clearance from the Securities and Exchange
Commission. Such additional Directors, whether elected at an annual meeting or
at a special meeting, shall serve until the next annual meeting and until their
successors shall be duly elected and qualified, unless their terms shall sooner
terminate pursuant to the provisions of this Section 4. At any meeting for the
purpose of electing such additional Directors, the holders of 35% of the Serial
Preferred Stock then outstanding shall constitute a quorum, and any such meeting
shall be valid, notwithstanding that a quorum of the outstanding shares of any
other class or classes shall not be present or represented thereat. At the time
of any such meeting at which a quorum shall be present, the number of Directors
constituting the whole Board of Directors shall be deemed to be increased by
two.
If and when all dividends in default on the Serial Preferred Stock shall be
paid or declared and funds sufficient for the payment thereof irrevocably set
aside for payment, the right of the holders of the Serial Preferred Stock as a
class to elect two Directors shall then cease and if any Directors were elected
by the holders of the Serial Preferred Stock, as a class, the term of such
Directors shall terminate, and the number of Directors constituting the whole
Board of Directors shall be accordingly reduced. The above provisions for the
vesting of such voting rights in the holders of the Serial Preferred Stock, as a
class, shall apply, however, in case of any subsequent default or failure under
this Section 4.
The rights of the holders of Serial Preferred Stock to elect two Directors
provided by this Section 4 shall, when in effect, be in lieu of, and not in
addition to, all other rights otherwise held by the holders of Serial Preferred
Stock to vote as a class with the Common Stock for the election of Directors.
5. Action Requiring Serial Preferred Stock Consent.
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(a) So long as any shares of Serial Preferred Stock shall be outstanding,
the Corporation shall not, without (i) the affirmative vote of the holders of at
least two-thirds of the shares of Serial Preferred Stock at the time
outstanding, given in person or by proxy, either at a special meeting called for
the purpose, or at any annual meeting of shareholders if appropriate notice of
such proposed action is given, at which all of the shares of Serial Preferred
Stock shall vote separately as a single class, or (ii) the written consent of
the holders of at least two-thirds of the shares of Serial Preferred Stock at
the time outstanding:
A) Amend or repeal any of the provisions of the Articles or Regulations of
the Corporation so as to affect adversely the preferences, rights, powers or
privileges of the Serial Preferred Stock or the holders thereof.
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B) Authorize or issue any class or series of any class of the stock of the
Corporation ranking prior to the Serial Preferred Stock, or authorize or issue
any obligations or securities convertible into any such class.
C) Purchase or redeem (for sinking fund purposes or otherwise) less than
all of the Serial Preferred Stock then outstanding except in accordance with a
stock purchase offer made to all holders of record of Serial Preferred Stock,
unless all accrued and unpaid dividends on the Serial Preferred Stock, including
all dividends for the then quarterly dividend period, shall have been paid or
declared and funds sufficient for the payment thereof set apart, and unless all
accrued sinking fund obligations applicable thereto shall have been complied
with.
D) Sell, lease or convey all or substantially all of the property or
business of the Corporation, or voluntarily liquidate or dissolve the
Corporation, or consolidate or merge the Corporation with or into any other
corporation; provided, however, that no such class vote or consent of the
holders of the Serial Preferred Stock shall be required for consolidation or
merger of the Corporation if (i) each holder of shares of Serial Preferred Stock
immediately prior to such consolidation or merger shall, upon the occurrence
thereof, possess the same or an equivalent number of shares of the resulting
corporation (which may be the Corporation or another corporation) having
substantially the same or equivalent terms and provisions as the shares of
Serial Preferred Stock, and (ii) the resulting corporation will have,
immediately after such consolidation or merger, no stock either authorized or
outstanding ranking prior to or on a parity with such shares, other than stock
of the Corporation theretofore authorized ranking prior to or on a parity with
the Serial Preferred Stock (or stock of the resulting corporation into which
such stock of the Corporation is changed pursuant to the merger or
consolidation).
(b) So long as any shares of Serial Preferred Stock shall be outstanding,
the Corporation shall not, without (i) the affirmative vote of the holders of at
least a majority of the shares of Serial Preferred Stock at the time
outstanding, given in person or by proxy, either at a special meeting called for
the purpose, or at any annual meeting of shareholders if appropriate notice of
such proposed action is given, at which all of the shares of Serial Preferred
Stock shall vote separately as a single class, or (ii) the written consent of
the holders of at least a majority of the shares of Serial Preferred Stock at
the time outstanding: A) authorize or issue any class of the stock of the
Corporation ranking on a parity with the Serial Preferred Stock, with respect to
the payment of dividends or upon liquidation, dissolution and winding up of the
Corporation, or authorize or issue any obligations or securities convertible
into any such class, or B) increase the authorized number of shares of the
Serial Preferred Stock or increase the authorized number of shares of any class
ranking on a parity with the Serial Preferred Stock, with respect to the payment
of dividends or upon liquidation, dissolution and winding up of the Corporation,
or authorize or issue any obligations or securities convertible into any such
class.
(c) So long as any shares of a series of Serial Preferred Stock shall be
outstanding, the Corporation shall not, without (i) the affirmative vote of the
holders
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of at least two-thirds of the shares of such series at the time outstanding,
given in person or by proxy, either at a special meeting or at any annual
meeting of shareholders if appropriate notice of such proposed action is given,
at which all of the shares of such series shall vote separately as a single
class, or (ii) the written consent of the holders of at least two-thirds of the
shares of such series at the time outstanding, amend or repeal any of the
provisions of the Articles or Regulations of the Corporation so as to affect
adversely and particularly the preferences, rights, powers or privileges of such
series of Serial Preferred Stock or the holders thereof.
(d) Notwithstanding the foregoing, (i) no such vote or consent of the
holders of the Serial Preferred Stock shall be required if, prior to or
contemporaneously with the happening of any of the events listed in
subparagraphs (a) or (b) above, provision has been made in accordance with the
provisions fixed by the Directors for the redemption of all of the Serial
Preferred Stock at the time outstanding and (ii) no such vote or consent of the
holders of any series of Serial Preferred Stock shall be required if, prior to
or contemporaneously with the happening of any of the events listed in
subparagraph (c) above, provision has been made in accordance with the
provisions fixed by the Directors for the redemption of all shares of such
series of Serial Preferred Stock at the time outstanding.
6. Liquidation Rights. In the event of the liquidation, dissolution or
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winding up of the Corporation, whether voluntary or involuntary, the holders of
Serial Preferred Stock shall be entitled to receive out of the assets of the
Corporation, before any payment or distribution shall be made to the holders of
Common Stock or any other class of stock junior to the Serial Preferred Stock as
to rights upon liquidation, payment of the amount per share provided for in the
resolution or resolutions adopted by the Board of Directors providing for the
issuance of such shares, plus an amount equal to all dividends accrued to the
date of such payment and unpaid, whether or not earned or declared but without
interest, and no more.
If, upon any liquidation, dissolution or winding up of the Corporation, the
assets available for distribution shall be insufficient to pay the holders of
all outstanding shares of Serial Preferred Stock the amounts to which they shall
respectively be entitled, the holders of Serial Preferred Stock of all series
shall share ratably in any distribution of assets according to the respective
amounts which would be payable in respect of the shares held by them upon such
distribution if all amounts payable in respect of the Serial Preferred Stock of
all series were paid in full. Neither the consolidation or merger of the
Corporation into or with any other corporation or corporations, nor the sale or
transfer by the Corporation of all or any part of its assets, nor the reduction
of the capital stock of the Corporation, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of any of the
provisions of this Section 6.
7. Definitions. For the purpose of this Division:
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Whenever reference is made to shares "ranking prior to the Serial Preferred
Stock" or "on a parity with the Serial Preferred Stock" such reference shall
mean and
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include all shares 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 any involuntary liquidation, dissolution or winding up of the
Corporation are given preference over, or rank on an equality with, (as the case
may be) the rights of the holders of the Serial Preferred Stock; and whenever
reference is made to shares "ranking junior to the Serial Preferred Stock" such
reference shall mean and include all shares of the Corporation in respect of
which the rights of the holders as to the payment of dividends and as to
distributions in the event of an involuntary liquidation, dissolution or winding
up of the Corporation are junior and subordinate to the rights of the holders of
the Serial Preferred Stock.
8. Express Terms of the Series 12 Preferred Stock
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There is hereby established a series of the Serial Preferred Stock to be
known as Series 12 Preferred Stock to which all of the Express Terms of the
Serial Preferred Stock set forth in 1 through 7 above as well as the following
provisions shall be applicable:
(a) The designation of the series is Series 12 Preferred Stock;
(b) The number of shares of the series, which number the Board of
Directors may increase or decrease (but not below the number of shares then
outstanding) is 480,000 shares;
(c) The annual dividend rate of the series shall be in an amount per share
(rounded to the nearest cent) equal to, but no more than, the greater of (x)
$6.80 or (y) subject to the provision for adjustment thereinafter set forth, one
hundred times the aggregate per share amount of all cash dividends, and one
hundred times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock of the Corporation
since the immediately preceding Quarterly Dividend Payment Date (as defined in
subparagraph (d) below), or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of a share or fraction of a share of
Series 12 Preferred Stock (the "Original Issue Date"). In the event the
Corporation shall at any time on or after the Original Issue Date declare or pay
any dividend on the shares of Common Stock payable in shares of 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 to which holders of shares of Series 12 Preferred Stock are
entitled (without giving effect to such event) under clause (y) 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.
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The Corporation shall declare a dividend or distribution on the Series 12
Preferred Stock as provided in the paragraph above immediately after it declares
a dividend or distribution on the Common Stock (other than a dividend payable in
shares of 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 $6.80 per share on the Series 12 Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. The record date for any such dividend or distribution shall be the tenth
Trading Day prior to the Quarterly Dividend Payment Date.
(d) The dividends provided above shall be payable quarterly on January 1,
April 1, July 1, and October 1 in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date");
(e) The Corporation, at the option of the Board of Directors, may at any
time redeem all and may from time to time redeem any part of the outstanding
shares of Series 12 Preferred Stock on any date fixed by the Board of Directors,
upon notice given as hereinafter provided, by paying in cash for each share
thereof to be redeemed an amount equal to the Market Price (as hereinafter
defined) of the Common Stock on the Trading Day (as hereinafter defined)
immediately prior to the date fixed for redemption, multiplied by one hundred
(the "Multiplier"), plus, in each case, an amount equal to all dividends thereon
accrued to the date fixed for redemption and unpaid whether or not earned or
declared but without interest (such amounts being in this subparagraph (e)
sometimes referred to as the "redemption price"). In case of the redemption of
a part only of the outstanding shares of Series 12 Preferred, the shares to be
redeemed shall be selected by lot in such manner as the Board of Directors shall
determine. Not less than thirty (30) nor more than ninety (90) days prior
written notice shall be given by mail, first class postage prepaid, to the
holders of record of the shares of Series 12 Preferred to be redeemed.
On or after the date fixed for redemption and stated in such notice, the
holder of each share of Series 12 Preferred Stock called for redemption shall
surrender the certificate therefor at the place designated in such notice and
shall thereupon be entitled to receive payment of the redemption price.
If such notice of redemption shall have been duly given as provided above
and if on the date fixed for redemption funds sufficient to redeem the shares
called for redemption shall be irrevocably set aside for the payment thereof,
then, notwithstanding that the certificate for any share of Series 12 Preferred
Stock so called for redemption shall not have been surrendered, from and after
such date the shares so called for redemption shall no longer be deemed to be
outstanding and dividends thereon shall cease to accrue and all rights with
respect to the shares so called for redemption, including rights, if any, to
receive notices and to vote, shall forthwith on such date cease and determine,
except only the right of the holders thereof to receive the redemption price
without interest upon surrender of the certificates therefor; provided, however,
that if such notice of redemption shall have
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been duly given as provided above and if on or prior to the date fixed for
redemption there shall have been deposited with a bank or trust company having a
capital and surplus of more than $5,000,000 named in such notice of redemption,
in trust for the account of the holders of the shares so called for redemption,
funds sufficient to redeem, on the date fixed for redemption, the shares called
for redemption, then upon the making of such deposit in trust (although made
prior to the date fixed for redemption), the shares so called and with respect
to which such deposit shall have been made shall no longer be deemed to be
outstanding and all rights with respect to such shares, including rights, if
any, to receive notices and to vote, shall forthwith cease and determine, except
only the right of the holders thereof to receive, out of the funds so deposited
in trust, forthwith and without awaiting the date fixed for redemption, the
redemption price thereof, without interest, upon surrender of the certificates
therefor, upon to but not after the close of business on the second business day
prior to the date fixed for redemption of such shares. Any interest accrued on
such funds shall belong to the Corporation and shall be paid to it from time to
time. In case any shares called for redemption shall be converted after deposit
of the redemption price thereof, the redemption price of the shares so converted
shall be returned to the Corporation. Any other funds so deposited and unclaimed
at the end of two years after the date fixed for redemption shall be repaid to
the Corporation upon its request, and thereafter the holders of the shares so
called for redemption shall be entitled to receive payment of the redemption
price, but without interest only from the Corporation.
In the event the Corporation shall at any time on or after the Original
Issue Date declare or pay any dividend on the shares of Common Stock payable in
shares of 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 to which holders of
Series 12 Preferred Stock were entitled (without giving effect to such event),
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.
As used herein the term "Market Price" per share of the Common Stock on any
date of determination shall mean the average of the daily closing prices per
share of the Common Stock (determined as described below) on each of the 20
consecutive Trading Days through and including the Trading Day immediately
preceding such date; provided, however, that if the Company shall at any time
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(i) declare a dividend on the Common Stock payable in Common Stock, (ii)
subdivide the outstanding Common Stock, (iii) combine the outstanding Common
Stock into a smaller number of shares of Common Stock or (iv) issue any shares
in a reclassification of the Common Stock, and such event or an event of a type
analogous to any such event shall have caused the closing prices used to
determine the Market Price on any Trading Days not to be fully comparable with
the closing price on such date of determination, each such closing price so used
shall be
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appropriately adjusted in order to make it fully comparable with the closing
price on such date of determination. The closing price per share of the Common
Stock on any date shall be the last sale price, regular way, or, in case no such
sale takes place on such date, the average of the closing bid and asked prices,
regular way, for each share of the Common Stock, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
the Common Stock is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Common Stock is listed or admitted to trading or, if the Common
Stock is not listed or admitted to trading on any national securities exchange,
the average of the high bid and low asked prices for each share of Common Stock
in the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the Common Stock is not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the securities
elected by the Board of Directors of the Corporation; provided, however, that if
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on any such date the Common Stock is not listed or admitted for trading on a
national securities exchange or traded in the over-the-counter market, the
closing price per share of the Common Stock on such date shall mean the fair
value per share of Common Stock on such date as determined in good faith by the
Board of Directors of the Corporation, after consultation with a nationally
recognized investment banking firm with respect to the fair value per share of
such securities, and set forth in a certificate delivered to the Corporation.
As used herein, the term "Trading Day," when used with respect to the
Common Stock, shall mean a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, a Business Day (defined to mean any
day other than a Saturday, Sunday or a day on which banking institutions in New
York, New York are generally authorized or obligated by law or executive order
to close.)
(f) Except as otherwise provided herein, the holders of shares of this
Series 12 Preferred Stock shall not have any rights herein to convert such
shares into or exchange such shares for shares of any other class or classes or
of any other series of any class or classes of capital stock of the Corporation.
(g) In case the Corporation shall enter into any consolidation, merger
combination, reclassification or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or securities, cash and/or
any other property, then in any such case the shares of Series 12 Preferred
Stock shall at the same time be similarly exchanged or changed in an amount per
share (subject to the provision for adjustment hereinafter set forth) equal to
one hundred 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 share of Common Stock is
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changed or exchanged. In the event the Corporation shall at any time on or after
the Original Issue Date declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise)
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 12 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.
(h) Upon the liquidation, dissolution or winding up of the Corporation,
the holders of the shares of this Series shall be entitled to receive and amount
equal to the greater of (x) $7,500 or (y) 100 times the aggregate per share
amount received by the holders of Common Stock upon such liquidation,
dissolution or winding up.
(i) Series 12 Preferred Stock may be issued in fractions of a share which
shall entitle the holder, in proportion to such holders fractional shares to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series 12 Preferred Stock.
9. Express Terms of the Series AA Preferred Stock
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There is hereby established a series of the Serial Preferred Stock to be
known as Series AA Convertible Preferred Stock to which all of the Express Terms
of the Serial Preferred Stock set forth in 1 through 7 above as well as the
following provisions shall be applicable:
(a) The designation of the series is Series AA Convertible Preferred
Stock;
(b) The number of shares of the series, which number the Board of
Directors may increase or decrease (but not below the number of shares then
outstanding) is 40,250 shares;
(c) The annual dividend rate of the series shall be in an amount per share
equal to, but no more than, $237.50 through January 2, 1996 and $325.00
thereafter.
(d) The dividends provided above shall accrue from the date of original
issue of the Series AA Preferred Stock and be payable quarterly on January 2,
April 1, July 1 and October 1 of each year, commencing April 1, 1993 (each such
date being referred to herein as a "Dividend Payment Date"), to holders of
record as they appear on the stock records of the Corporation at the close of
business on such record dates, not exceeding 60 days preceding the payment dates
thereof, as shall be fixed by the Board of Directors. Dividends payable
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on the Series AA Preferred Stock for any period greater or less than a full
dividend period will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Dividends payable on the Series AA Preferred Stock for
each full dividend period will be computed by dividing the annual dividend rate
by four.
(e)(i) The Series AA Preferred Stock shall not be redeemable by the
Corporation prior to January 9, 1996. On and after that date, the Corporation,
at its option, may redeem the shares of Series AA Preferred Stock, in whole or
in part, as set forth herein, subject to the provisions described below.
(ii)(A) The Series AA Preferred Stock may be redeemed for Common Stock,
in whole or in part, at the option of the Corporation, at any time on or after
January 9, 1996, until January 9, 2000 only if for 20 Trading Days, within any
period of 30 consecutive Trading Days, including the last Trading Day of such
period, the Current Market Price of the Common Stock on each of such 20 Trading
Days exceeds 130% of the Conversion Price in effect on such Trading Day. In
order to exercise this redemption option, the Corporation must issue a press
release announcing the redemption (the "Press Release") prior to the opening of
business on the second Trading Day after the condition in the preceding sentence
has been met. The Press Release shall announce the redemption and set forth the
number of shares of Series AA Preferred Stock which the Corporation intends to
redeem.
(B) Upon redemption of Series AA Preferred Stock by the Corporation on the
date specified in the notice to holders required under paragraph (C) of this
clause (ii) (the "Stock Call Date"), each share of Series AA Preferred Stock so
redeemed shall be converted into a number of shares of Common Stock equal to the
liquidation preference of the shares of Series AA Preferred Stock being redeemed
divided by the Conversion Price as of the opening of business on the Stock Call
Date. The Stock Call Date shall be selected by the Corporation, shall be
specified in the notice of redemption and shall be not less than 30 days or more
than 60 days after the date on which the Corporation issues the Press Release.
Upon any redemption of Series AA Preferred Stock for Common Stock, the
Corporation shall pay any accrued and unpaid dividends in arrears for any
Dividend Period ending on or prior to the Stock Call Date. If a Stock Call Date
falls after a dividend payment record date and prior to the corresponding
dividend payment date, then each holder of Series AA Preferred Stock at the
close of business on such dividend payment record date shall be entitled to the
dividend payable on such shares on the corresponding dividend payment date
notwithstanding the redemption of such shares before such dividend payment date.
In the case of any Stock Call Date occurring prior to the record date for the
April 1, 1996 Dividend Payment Date, the holders of the Series AA Preferred
Stock to be redeemed on such Stock Call Date shall be entitled to any accrued
and unpaid dividends through January 2, 1996 but not thereafter. Except as
provided above, the Corporation shall make no payment or allowance for unpaid
dividends, whether or not in arrears, on shares of Series AA Preferred Stock
called for redemption for Common Stock or on the shares of Common Stock issued
upon such redemption.
- 13 -
(C) If the Corporation elects to redeem shares of Series AA Preferred
Stock pursuant to paragraph (A) of this clause (ii), notice of such redemption
shall be given not more than four Business Days after the date on which the
Corporation issues the Press Release, to each holder of record of the shares to
be redeemed. Such notice shall be provided by first class mail, postage prepaid,
at such holder's address as the same appears on the stock records of the
Corporation, and shall state, as appropriate: (1) the Stock Call Date; (2) the
number of shares of Series AA Preferred Stock (expressed in 1/100 of a share of
Series AA 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 (expressed in 1/100
of a share of Series AA Preferred Stock) to be redeemed from such holder;
(3) the number of shares of Common Stock to be issued with respect to each 1/100
of a share of Series AA Preferred Stock; (4) the place or places at which
certificates for such shares are to be surrendered for certificates representing
shares of Common Stock; (5) the then-current Conversion Price; and (6) that
dividends on the shares to be redeemed shall cease to accrue on such Stock Call
Date, except as otherwise provided herein.
At the close of business on the Stock Call Date, each holder of Series AA
Preferred Stock to be redeemed (unless the Company defaults in the delivery of
the shares of Common Stock or cash payable on such Stock Call Date) shall be
deemed to be the record holder of the number of shares of Common Stock into
which such Series AA Preferred Stock is to be redeemed, regardless of whether
such holder has surrendered the certificates representing the Series AA
Preferred Stock. As promptly as practicable after the surrender in accordance
with said notice of the certificates for any such shares so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so require and the
notice shall so state), such shares shall be exchanged for certificates of
shares of Common Stock and any cash (without interest thereon) for which such
shares have been redeemed.
(D) No fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon redemption of the Series AA Preferred Stock.
Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the redemption of a share of Series AA Preferred
Stock, the Corporation shall pay to the holder of such share an amount in cash
(computed to the nearest cent) based upon the Current Market Price of Common
Stock on the Trading Day immediately preceding the Stock Call Date. If more
than one share shall be surrendered for redemption at one time by the same
holder, the number of full shares of Common Stock issuable upon redemption
thereof shall be computed on the basis of the aggregate number of shares of
Series AA Preferred Stock so surrendered.
(E) The Corporation covenants that any shares of Common Stock issued upon
redemption of the Series AA Preferred Stock shall be validly issued, fully paid
and non-assessable. The Corporation shall endeavor to list the shares of Common
Stock required to be delivered upon redemption of the Series AA Preferred Stock,
prior to such redemption, upon each national securities exchange, if any, upon
which the outstanding Common Stock is listed at the time of such delivery.
- 14 -
The Corporation shall endeavor to take any action necessary to ensure that
any shares of Common Stock issued upon the redemption of Series AA Preferred
Stock are freely transferable and not subject to any resale restrictions under
the Securities Act of 1933, as amended (the "Act"), or any applicable state
securities or blue sky laws.
(iii)(A) The Series AA Preferred Stock may be redeemed for cash, in whole
or in part, at the option of the Corporation, at any time on or after January 9,
2000 at the Redemption Price.
(B) At least 30 days but not more than 60 days prior to the date fixed for
the redemption of the Series AA Preferred Stock for cash, a written notice will
be mailed to each holder of record of the Series AA Preferred Stock to be
redeemed, notifying such holder of the Company's election to redeem such shares
stating the date fixed for redemption thereof, and calling upon such holder to
surrender to the Company on the redemption date at the place designated in such
notice the certificate or certificates representing the number of shares
specified therein. On or after the redemption date, each holder of the Series
AA Preferred Stock to be redeemed must present and surrender his certificate or
certificates for such shares to the Company at the place designated in such
notice and thereupon the redemption price of such shares will be paid to or on
the order of the person whose name appears on such certificate or certificates
as the owner thereof and each surrendered certificate will be cancelled.
(iv)(A) If full cumulative dividends on the Series AA Preferred Stock
and any other class or series of stock of the Corporation ranking, as to
dividends and amounts distributable on liquidation, dissolution or winding up,
on a parity with the Series AA Preferred Stock have not been paid or declared
and set apart for payment, the Series AA Preferred Stock may not be redeemed in
part and the Corporation may not purchase or acquire shares of Series AA
Preferred Stock, otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of shares of Series AA Preferred Stock.
(B) If fewer than all the outstanding shares of Series AA Preferred Stock
are called for redemption, shares to be redeemed shall be selected by the
Corporation from outstanding shares of Series AA Preferred Stock not previously
called for redemption by lot or pro rata (as nearly as may be). If fewer than
all the shares represented by any certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares without cost to the holder
thereof. Neither the failure to mail any notice of redemption required by this
Section (e), nor any defect therein or in the mailing thereof, to any particular
holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice which
was mailed in the manner herein provided shall be conclusively presumed to have
been duly given on the date mailed whether or not the holder receives the
notice.
- 15 -
(C) Notice of any redemption pursuant to this Section (e) having been duly
mailed, from and after the Stock Call Date or other redemption date (unless the
Corporation shall fail to make available a number of shares of Common Stock or
amount of cash necessary to effect such redemption), (i) except as otherwise
provided herein, dividends on the shares of the Series AA Preferred Stock so
called for redemption shall cease to accrue, (ii) said shares shall no longer be
deemed to be outstanding, and (iii) all rights of the holders thereof as holders
of Series AA Preferred Stock of the Corporation shall cease (except the rights
to receive the shares of Common Stock or cash payable upon such redemption,
without interest thereon, upon surrender and endorsement of their certificates
if so required and to receive any dividends payable thereon). The Corporation's
obligation to provide shares of Common Stock or cash in accordance with the
preceding sentence shall be deemed fulfilled if, on or before the Stock Call
Date, the Corporation shall deposit with a bank or trust company that has an
office in the Borough of Manhattan, City of New York, and that has, or is an
affiliate of a bank or trust company that has, a capital and surplus of at least
$50,000,000, any shares of Common Stock and cash necessary for such redemption,
in trust, with irrevocable instructions that such shares of Common Stock and
cash be applied to the redemption of the shares of Series AA Preferred Stock so
called for redemption.
No interest shall accrue for the benefit of the holders of Series AA
Preferred Stock to be redeemed on any cash so set aside by the Corporation.
Subject to applicable escheat laws, any such cash unclaimed at the end of two
years from the Stock Call Date or other redemption date shall revert to the
general funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of the
Corporation for the payment of such cash.
(f) Holders of shares of Series AA Preferred Stock shall have the right to
convert all or a portion of such shares into shares of Common Stock, as follows:
(A) Subject to and upon compliance with the provisions of this Section
(f), a holder of shares of Series AA Preferred Stock shall have the right, at
his or her option, at any time, to convert such shares into the number of fully
paid and nonassessable shares of Common Stock obtained by dividing the aggregate
liquidation preference of such shares by the Conversion Price (as in effect at
the time and on the date provided for in the last paragraph of paragraph (B) of
this Section (f)) by surrendering such shares to be converted, such surrender to
be made in the manner provided in paragraph (B) of this Section (f); provided
--------
however, that the right to convert shares called for redemption pursuant to
- - -------
Section (e) shall terminate at the close of business on the date fixed for such
redemption, unless the Corporation shall default in making payment of any shares
of Common Stock and any cash payable upon such redemption under Section (e)
hereof. Any share of Series AA Preferred Stock may be converted, at the request
of its holder, in part into Common Stock. If a part of a share of Series AA
Preferred Stock is converted, then the Corporation will convert such share into
the requested shares of Common Stock
- 16 -
(subject to paragraph (C) of this Section (f)) and issue a fractional share of
Series AA Preferred Stock evidencing the remaining interest of such holder.
(B) In order to exercise the conversion right, the holder of each share of
Series AA Preferred Stock to be converted shall surrender the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Transfer Agent in the Borough of Manhattan, City of
New York, accompanied by written notice to the Corporation that the holder
thereof elects to convert Series AA Preferred Stock or a specified portion
thereof. Unless the shares issuable on conversion are to be issued in the same
name as the name in which such share of Series AA Preferred Stock is registered,
each share surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation, duly executed by the holder
or such holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid).
Holders of shares of Series AA Preferred Stock at the close of business on
a dividend payment record date shall be entitled to receive the dividend payable
on such shares on the corresponding dividend payment date notwithstanding the
conversion thereof following such dividend payment record date and prior to such
dividend payment date. However, shares of Series AA Preferred Stock surrendered
for conversion during the period between the close of business on any dividend
payment record date and the opening of business on the corresponding dividend
payment date (except shares converted after the issuance of a notice of
redemption with respect to a Stock Call Date or other redemption date during
such period, which shall be entitled to such dividend on the dividend payment
date) must be accompanied by payment of an amount equal to the dividend payable
on such shares on such dividend payment date. A holder of shares of Series AA
Preferred Stock on a dividend payment record date who (or whose transferee)
tenders any such shares for conversion into shares of Common Stock on such
dividend payment date will receive the dividend payable by the Corporation on
such shares of Series AA Preferred Stock on such date, and the converting holder
need not include payment of the amount of such dividend upon surrender of shares
of Series AA Preferred Stock for conversion. Except as provided above, the
Corporation shall make no payment or allowance for unpaid dividends, whether or
not in arrears, on converted shares or for dividends on the shares of Common
Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates for shares
of Series AA Preferred Stock as aforesaid, the Corporation shall issue and shall
deliver at such office to such holder, or on his or her written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares in accordance with provisions of
this Section (f), and any fractional interest in respect of a share of Common
Stock arising upon such conversion shall be settled as provided in paragraph (C)
of this Section (f).
- 17 -
Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date on which the certificates for shares of Series
AA Preferred Stock shall have been surrendered and such notice (and if
applicable, payment of an amount equal to the dividend payable on such shares)
received by the Corporation as aforesaid, and the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares presented thereby at such time on such date and
such conversion shall be at the Conversion Price in effect at such time on such
date, unless the stock transfer books of the Corporation shall be closed on that
date, in which event such person or persons shall be deemed to have become such
holder or holders of record at the close of business on the next succeeding day
on which such stock transfer books are open, but such conversion shall be at the
Conversion Price in effect on the date upon which such shares shall have been
surrendered and such notice received by the Corporation.
(C) No fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon conversion of the Series AA Preferred Stock.
Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of Series AA Preferred
Stock, the Corporation shall pay to the holder of such share an amount in cash
based upon the Current Market Price of Common Stock on the Trading Day
immediately preceding the date of conversion. If more than one share shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on the
basis of the aggregate number of shares of Series AA Preferred Stock so
surrendered.
(D) The Conversion Price shall be adjusted from time to time as follows:
(i) If the Corporation shall after the Issue Date (A) pay a dividend or
make a distribution on its capital stock in shares of its Common Stock, (B)
subdivide its outstanding Common Stock into a greater number of shares, (C)
combine its outstanding Common Stock into a smaller number of shares or (D)
issue any shares of capital stock by reclassification of its Common Stock,
the Conversion Price in effect at the opening of business on the day next
following the date fixed for the determination of stockholders entitled to
receive such dividend or distribution or at the opening of business on the
day next following the day on which such subdivision, combination or
reclassification becomes effective, as the case may be, shall be adjusted
so that the holder of any share of Series AA Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the number of
shares of Common Stock that such holder would have owned or have been
entitled to receive after the happening of any of the events described
above had such share been converted immediately prior to the record date in
the case of a dividend or distribution or the effective date in the case of
a subdivision, combination or reclassification. An adjustment made
pursuant to this subparagraph (i) shall become effective immediately after
the opening of
- 18 -
business on the day next following the record date (except as provided in
paragraph (H) below) in the case of a dividend or distribution and shall
become effective immediately after the opening of business on the day next
following the effective date in the case of a subdivision, combination or
reclassification.
(ii) If the Corporation shall issue after the Issue Date rights or
warrants (in each case, other than the Rights) to all holders of Common
Stock entitling them (for a period expiring within 45 days after the record
date mentioned below) to subscribe for or purchase Common Stock at a price
per share less than the Fair Market Value per share of Common Stock on the
record date for the determination of stockholders entitled to receive such
rights or warrants, then the Conversion Price in effect at the opening of
business on the day next following such record date shall be adjusted to
equal the price determined by multiplying (I) the Conversion Price in
effect immediately prior to the opening of business on the day next
following the date fixed for such determination by (II) a fraction, the
numerator of which shall be the sum of (A) the number of shares of Common
Stock outstanding on the close of business on the date fixed for such
determination and (B) the number of shares that the aggregate proceeds to
the Corporation from the exercise of such rights or warrants for Common
Stock would purchase at such Fair Market Value, and the denominator of
which shall be the sum of (A) the number of shares of Common Stock
outstanding on the close of business on the date fixed for such
determination and (B) the number of additional shares of Common Stock
offered for subscription or purchase pursuant to such rights or warrants.
Such adjustment shall become effective immediately after the opening of
business on the day next following such record date (except as provided in
paragraph (H) below). In determining whether any rights or warrants
entitle the holders of Common Stock to subscribe for or purchase shares of
Common Stock at less than such Fair Market Value, there shall be taken into
account any consideration received by the Corporation upon issuance and
upon exercise of such rights or warrants, the value of such consideration,
if other than cash, to be determined by the Board of Directors.
(iii) If the Corporation shall distribute to all holders of its Common
Stock any shares of capital stock of the Corporation (other than Common
Stock) or evidences of its indebtedness or assets (excluding cash dividends
or distributions paid from profits or surplus of the Corporation) or rights
or warrants (in each case, other than the Rights) to subscribe for or
purchase any of its securities (excluding those rights and warrants issued
to all holders of Common Stock entitling them for a period expiring within
45 days after the record date referred to in subparagraph (ii) above to
subscribe for or purchase Common Stock, which rights and warrants are
referred to in and treated under subparagraph (ii) above) (any of the
foregoing being hereinafter in this subparagraph (iii) called the
"Securities"), then in each such case the Conversion Price shall be
adjusted so that it shall equal the price determined by multiplying (I) the
Conversion Price in effect immediately prior
- 19 -
to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by (II) a fraction, the
numerator of which shall be the Fair Market Value per share of the Common
Stock on the record date mentioned below less the then fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive) of the portion of the capital stock or assets or evidences of
indebtedness so distributed or of such rights or warrants applicable to one
share of Common Stock, and the denominator of which shall be the Fair
Market Value per share of the Common Stock on the record date mentioned
below. Such adjustment shall become effective immediately at the opening of
business on the Business Day next following (except as provided in
paragraph (H) below) the record date for the determination of shareholders
entitled to receive such distribution. For the purpose of this clause
(iii), the distribution of a Security, which is distributed not only to the
holders of the Common Stock on the date fixed for the determination of
stockholders entitled to such distribution of such Security, but also is
distributed with each share of Common Stock delivered to a person
converting a share of Series AA Preferred Stock after such determination
date or is distributed prior to conversion to persons holding shares of
Series AA Preferred Stock (as though they had converted their Series AA
Preferred Stock into Common Stock immediately prior to close of business on
the date fixed for the determination of stockholders entitled to receive
such distribution), shall not require an adjustment of the Conversion Price
pursuant to this clause (iii); provided that on the date, if any, on which
--------
a Person converting a share of Series AA Preferred Stock would no longer be
entitled to receive such Security with a share of Common Stock (other than
as a result of the termination of all such Securities), a distribution of
such Securities shall be deemed to have occurred and the Conversion Price
shall be adjusted as provided in this clause (iii) (and such day shall be
deemed to be "the date fixed for the determination of the stockholders
entitled to receive such distribution" and "the record date" within the
meaning of the two preceding sentences).
(iv) No adjustment in the Conversion Price shall be required unless such
adjustment would require a cumulative increase or decrease of at least 1%
in such price; provided, however, that any adjustments that by reason of
-------- -------
this subparagraph (iv) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment until made; and
provided, further, that any adjustment shall be required and made in
-------- -------
accordance with the provisions of this Section (f) (other than this
subparagraph (iv)) not later than such time as may be required in order to
preserve the tax-free nature of a distribution to the holders of shares of
Common Stock. Notwithstanding any other provisions of this Section (f),
the Corporation shall not be required to make any adjustment of the
Conversion Price for the issuance of any shares of Common Stock pursuant to
any plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional
amounts in shares of Common Stock under
- 20 -
such plan. All calculations under this Section (f) shall be made to the
nearest 1/100 of a cent (with $.00005 being rounded upward) or to the
nearest 1/10,000 of a share (with .00005 of a share being rounded upward),
as the case may be. Anything in this paragraph (D) to the contrary
notwithstanding, the Corporation shall be entitled, to the extent permitted
by law, to make such reductions in the Conversion Price, 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, reclassification or combination of shares, distribution of rights
or warrants to purchase stock or securities, or a distribution of other
assets (other than cash dividends) hereafter made by the Corporation to its
stockholders shall not be taxable.
(E) If the Corporation shall be a party to any transaction (including
without limitation a merger, consolidation, sale of all or substantially all of
the Corporation's assets or recapitalization of the Common Stock and excluding
any transaction as to which subparagraph (D) (i) of this Section (f) applies)
(each of the foregoing being referred to herein as a "Transaction"), in each
case as a result of which shares of Common Stock shall be converted into the
right to receive stock, securities or other property (including cash or any
combination thereof), receivable upon the consummation of such Transaction by a
holder of that number of shares or fraction thereof of Common Stock into which
one share of Series AA Preferred Stock was convertible immediately prior to such
Transaction, assuming such holder of Common Stock (i) is not a Person with which
the Corporation consolidated or into which the Corporation merged or which
merged into the Corporation or to which such sale or transfer was made, as the
case may be ("Constituent Person"), or an affiliate of a Constituent Person and
(ii) failed to exercise his rights of election, if any, as to the kind or amount
of stock, securities and other property (including cash) receivable upon such
Transaction (provided that if the kind or amount of stock securities and other
property (including cash) receivable upon such Transaction is not the same for
each share of Common Stock of the Corporation held immediately prior to such
Transaction by other than a Constituent Person or an affiliate thereof and in
respect of which such rights of election shall not have been exercised ("non-
electing share"), then for the purpose of this paragraph (E) the kind and amount
of stock, securities and other property (including cash) receivable upon such
Transaction by each non-electing share shall be deemed to be the kind and amount
so receivable per share by a plurality of the non-electing shares). The
Corporation shall not be a party to any Transaction unless the terms of such
Transaction are consistent with the provisions of this paragraph (E) and it
shall not consent or agree to the occurrence of any Transaction until the
Corporation has entered into an agreement with the successor or purchasing
entity, as the case may be, for the benefit of the holders of the Series AA
Preferred Stock that will contain provisions enabling the holders of the Series
AA Preferred Stock that remains outstanding after such Transaction to convert
into the consideration received by holders of Common Stock at the Conversion
Price in effect immediately prior to such Transaction. The provisions of this
paragraph (E) shall similarly apply to successive Transactions.
- 21 -
(F) If:
(i) the Corporation shall declare a dividend (or any other distribution)
on the Common Stock (other than in cash out of profits or surplus and other
than the Rights); or
(ii) the Corporation shall authorize the granting to the holders of the
Common Stock of rights or warrants (other than the Rights) to subscribe for
or purchase any shares of any class or any other rights or warrants (other
than the Rights); or
(iii) there shall be any reclassification of the Common Stock (other
than an event to which subparagraph (D) (i) of this Section (f) applies) or
any consolidation or merger to which the Corporation is a party and for
which approval of any stockholders of the Corporation is required, or the
sale or transfer of all or substantially all of the assets of the
Corporation as an entirety; or
(iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation,
then the Corporation shall cause to be filed with the Transfer Agent and
shall cause to be mailed to the holders of shares of the Series AA Preferred
Stock at their addresses as shown on the stock records of the Corporation, as
promptly as possible, but at least 15 days prior to the applicable date
hereinafter specified, a notice stating (A) the date on which a record is to be
taken for the purpose of such dividend, distribution or rights or warrants, 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 or warrants
are to be determined or (B) the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution 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, if any, deliverable upon such
reclassification, consolidation merger, sale, transfer, liquidation, dissolution
or winding up. Failure to give or receive such notice or any defect therein
shall not affect the legality or validity of the proceedings described in this
Section (f).
(G) Whenever the Conversion Price is adjusted as herein provided, the
Corporation shall promptly file with the Transfer Agent an officer's certificate
setting forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be prima facie evidence of the correctness of such adjustment. Promptly after
delivery of such certificate, the Corporation shall prepare a notice of such
adjustment of the Conversion Price setting forth the adjusted Conversion Price
and the effective date of such adjustment and shall mail such notice of such
adjustment of the Conversion Price to the holder of each share of Series AA
Preferred Stock at such holder's last address as shown on the stock records of
the Corporation.
- 22 -
(H) In any case in which paragraph (D) of this Section (f) provides that
an adjustment shall become effective on the day next following a record date for
an event, the Corporation may defer until the occurrence of such event (A)
issuing to the holder of any share of Series AA Preferred Stock converted after
such record date and before the occurrence of such event the additional shares
of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable 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 (C) of this
Section (f).
(I) For purposes of this Section (f), the number of shares of Common Stock
at any time outstanding shall not include any shares of Common Stock then owned
or held by or for the account of the Corporation. The Corporation shall not pay
a dividend or make any distribution on shares of Common Stock held in the
treasury of the Corporation.
(J) There shall be no adjustment of the Conversion Price in case of the
issuance of any stock of the Corporation in a reorganization, acquisition or
other similar transaction except as specifically set forth in this Section (f).
If any action or transaction would require adjustment of the Conversion Price
pursuant to more than one paragraph of this Section (f), only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value.
(K) If the Corporation shall take any action affecting the Common Stock,
other than action described in this Section (f), that in the opinion of the
Board of Directors would materially adversely affect the conversion rights of
the holders of the shares of Series AA Preferred Stock, the Conversion Price for
the Series AA Preferred Stock may be adjusted, to the extent permitted by law,
in such manner, if any, and at such time, as the Board of Directors may
determine to be equitable in the circumstances.
(L) The Corporation covenants that it will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Common Stock or its issued shares of Common Stock held in
its treasury, or both, for the purpose of effecting conversion of the Series AA
Preferred Stock, the full number of shares of Common Stock deliverable upon the
conversion of all outstanding shares of Series AA Preferred Stock not
theretofore converted. For purposes of this paragraph (L), the number of shares
of Common Stock that shall be deliverable upon the conversion of all outstanding
shares of Series AA Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.
The Corporation covenants that any shares of Common Stock issued upon
conversion of the Series AA Preferred Stock shall be validly issued, fully paid
and non-assessable. Before taking any action that would cause an adjustment
reducing the Conversion Price below the then-par value of the shares of Common
Stock deliverable upon conversion of the Series AA Preferred Stock, the
Corporation will
- 23 -
take any corporate action that, in the opinion of its counsel, may be necessary
in order that the Corporation may validly and legally issue fully-paid and
nonassessable shares of Common Stock at such adjusted Conversion Price.
The Corporation shall endeavor to list the shares of Common Stock required
to be delivered upon conversion of the Series AA Preferred Stock, prior to such
delivery, upon each national securities exchange, if any, upon which the
outstanding Common Stock is listed at the time of such delivery.
Prior to the delivery of any securities that the Corporation shall be
obligated to deliver upon conversion of the Series AA Preferred Stock, the
Corporation shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority.
(M) The Corporation will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Common Stock or other securities or property on conversion of the Series AA
Preferred Stock pursuant hereto; provided, however, that the Corporation shall
-------- -------
not be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or other securities
or property in a name other than that of the holder of the Series AA Preferred
Stock to be converted and no such issue or delivery shall be made unless and
until the person requesting such issue or delivery has paid to the Corporation
the amount of any such tax or established, to the reasonable satisfaction of the
Corporation, that such tax has been paid.
(g) For purposes of the Series AA Preferred Stock, the following terms
shall have the meanings indicated:
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which state or federally chartered banking institutions in New York, New York
are not required to be open.
"Conversion Price" shall mean the conversion price per share of Common
Stock for which the Series AA Preferred Stock is convertible, as such Conversion
Price may be adjusted pursuant to Section (f). The initial conversion price
will be $44.64.
"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 on such
day, or, if no sale takes place on such day, the average of the reported closing
bid and asked prices on such day, regular way, in either case as reported on the
New York Stock Exchange or, if such security is not listed or admitted for
trading on the New York Stock Exchange ("NYSE"), on the principal national
securities exchange on which such security is listed or admitted for trading or,
if not listed or admitted for trading on any national securities exchange, on
the National Market System of the National Association of Securities Dealers,
Inc. Automated Quotations System ("NASDAQ")
- 24 -
or, if such security is not quoted on such National Market System, the average
of the closing bid and asked prices on such day in the over-the-counter market
as reported by NASDAQ or, if bid and asked prices for such security on such day
shall not have been reported through NASDAQ, the average of the bid and asked
prices on such day as furnished by any NYSE member firm regularly making a
market in such security selected for such purpose by the Board of Directors.
"Fair Market Value" shall mean the average of the daily Current Market
Prices of a share of Common Stock during the five (5) consecutive Trading Days
selected by the Corporation commencing not more than 20 Trading Days before, and
ending not later than, the earlier of the day in question and the day before the
"ex" date with respect to the issuance or distribution requiring such
computation. The term "'ex' date", when used with respect to any issuance or
distribution, means the first day on which the Common Stock trades regular way,
without the right to receive such issuance or distribution, on the exchange or
in the market, as the case may be, used to determine that day's Current Market
Price.
"Redemption Price" shall mean the redemption price per share of Series AA
Preferred Stock, which shall be subject to reduction from time to time in an
amount equal to the per share fair market value (as determined by the Board of
Directors, whose determination shall be conclusive) of any Securities
distributed to holders of Series AA Preferred Stock as described in Section
(f)(D)(iii). The initial Redemption Price shall be $5,000.
"Rights" shall mean the rights of the Corporation which are issuable under
the Corporation's Stockholder Rights Plan adopted on February 10, 1988 and as
amended from time to time, or rights to purchase any capital stock of the
Corporation under any successor shareholder rights plan or plan adopted in
replacement of the Corporation's Stockholder Rights Plan.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of dividends or other distribution by the Board of Directors, the
allocation of funds to be so paid on any series or class of capital stock of the
Corporation; provided, however, that if any funds for any class of Common Stock
-------- -------
or Series Preferred Stock or any class or series of stock ranking on a parity
with the Series AA Preferred Stock as to the payment of dividends are placed in
a separate account of the Corporation or delivered to a disbursing, paying or
other similar agent, then "set apart for payment" with respect to the Series AA
Preferred Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.
"Trading Day" shall mean any day on which the securities in question are
traded on the NYSE, or if such securities are not listed or admitted for trading
on the NYSE, on the principal national securities
- 25 -
exchange on which such securities are listed or admitted, or if not listed or
admitted for trading on any national securities exchange, on the National Market
System of the NASDAQ, or if such securities are not quoted on such National
Market System, in the applicable securities market in which the securities are
traded.
"Transfer Agent" means National City Bank or such other agent or agents of
the Corporation as may be designated by the Board of Directors as the transfer
agent for the Series AA Preferred Stock.
(h) Upon the liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of the shares of this Series AA
Preferred Stock shall be entitled to receive an amount equal to $5,000 per
share, plus accrued and unpaid dividends thereon (whether or not earned or
declared) at the date of final distribution to such holders.
(i) Series AA Preferred Stock may be issued in fractions of a share which
shall entitle the holder, in proportion to such holder's fractional shares to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series AA Preferred Stock.
10. Express Terms of the Series BB Preferred Stock
----------------------------------------------
There is hereby established a series of the Serial Preferred Stock to be
known as Series BB Conversion Preferred Stock to which all of the Express Terms
of the Serial Preferred Stock set forth in 1 through 7 above as well as the
following provisions shall be applicable:
I. Designation and Number. The designation of the series is Series BB
----------------------
Conversion Preferred Stock. The number of shares of the series, which number
the Board of Directors may increase or decrease (but not below the number of
shares then outstanding) is 38,772 shares.
II. Dividend Rate and Dividend Payment Dates. The annual dividend rate of
----------------------------------------
the series shall be in an amount per share equal to, but no more than, $504.00.
The dividends provided above shall accrue from the date of original issue of the
Series BB Preferred Stock and be payable quarterly on January 1, April 1, July 1
and October 1 of each year, commencing October 1, 1995 (each such date being
referred to herein as a "Dividend Payment Date"), to holders of record as they
appear on the stock records of the Corporation at the close of business on such
record dates, not exceeding 60 days preceding the payment dates thereof, as
shall be fixed by the Board of Directors. Dividends payable on the Series BB
Preferred Stock for any period greater or less than a full dividend period will
be computed on the basis of a 360-day year consisting of twelve 30-day months.
Dividends payable on the Series BB Preferred Stock for each full dividend period
will be computed by dividing the annual dividend rate by four.
- 26 -
III. Conversion.
----------
(a) Mandatory Conversion. Unless earlier converted at the option of the
--------------------
holder in accordance with the provisions of paragraph (b), on October 1, 1998
(the "Mandatory Conversion Date"), each outstanding share of the Series BB
Preferred Stock shall convert automatically (the "Automatic Conversion") into
(i) shares of authorized Common Stock (the "Common Stock") at the Exchange Rate
(as hereinafter defined) in effect on the Mandatory Conversion Date and (ii) the
right to receive an amount in cash equal to all accrued and unpaid dividends on
such share to the Mandatory Conversion Date, whether or not earned or declared,
out of funds legally available therefor. The Exchange Rate is equal to (a) if
the Current Market Price is greater than or equal to $94.40 per share (the
"Threshold Price"), 81.965 shares of Common Stock (the "Upper Exchange Rate"),
(b) if the Current Market Price is less than the Threshold Price but greater
than the Initial Price, the number of shares of Common Stock having a value
(determined at the Current Market Price) equal to 100 times the Initial Price
(the "Middle Exchange Rate"), and (c) if the Current Market Price is less than
or equal to the Initial Price, 100 shares of Common Stock (the "Lower Exchange
Rate") per share of Series BB Preferred Stock, and is subject to adjustment as
set forth in paragraph (c) below. Dividends on the shares of Series BB
Preferred Stock shall cease to accrue and such shares of Series BB Preferred
Stock shall cease to be outstanding on the Mandatory Conversion Date. The
Corporation shall make such arrangements as it deems appropriate for the
issuance of certificates representing shares of Common Stock and for the payment
of cash in respect of such accrued and unpaid dividends, if any, or cash in lieu
of fractional shares, if any, in exchange for and contingent upon surrender of
certificates representing the shares of Series BB Preferred Stock, and the
Corporation may defer the payment of dividends on such shares of Common Stock
and the voting thereof until, and make such payment and voting contingent upon,
the surrender of such certificates representing the shares of Series BB
Preferred Stock, provided that the Corporation shall give the holders of the
shares of Series BB Preferred Stock such notice of any such actions as the
Corporation deems appropriate or is legally required and upon such surrender
such holders shall be entitled to receive such dividends declared and paid on
such shares of Common Stock subsequent to the Mandatory Conversion Date.
Amounts payable in cash in respect of the shares of Series BB Preferred Stock or
in respect of such shares of Common Stock shall not bear interest.
(b) Optional Conversion. Shares of Series BB Preferred Stock are
-------------------
convertible, in whole or in part, at the option of the holders thereof
("Optional Conversion"), at any time after September 25, 1995 and prior to the
Mandatory Conversion Date, into shares of Common Stock at a rate of 81.965
shares of Common Stock for each share of Series BB Preferred Stock (the
"Optional Conversion Rate"), subject to adjustment as set forth below.
Optional Conversion of shares of Series BB Preferred Stock may be effected
by delivering certificates evidencing such shares, together with written notice
of conversion and a proper assignment of such certificates to the Corporation or
in
- 27 -
blank (and, if applicable, payment of an amount equal to the dividend payable on
such shares), to the office of any transfer agent for the Series BB Preferred
Stock or to any other office or agency maintained by the Corporation for that
purpose and otherwise in accordance with Optional Conversion procedures
established by the Corporation. Each Optional Conversion shall be deemed to have
been effected immediately prior to the close of business on the date on which
the foregoing requirements shall have been satisfied. The Optional Conversion
shall be at the Optional Conversion Rate in effect at such time and on such
date.
Holders of shares of Series BB Preferred Stock at the close of business on
a dividend payment record date shall be entitled to receive the dividend payable
on such shares on the corresponding Dividend Payment Date notwithstanding the
Optional Conversion of such shares following such record date and prior to such
Dividend Payment Date. However, shares of Series BB Preferred Stock surrendered
for Optional Conversion after the close of business on a dividend payment record
date and before the opening of business on the next succeeding Dividend Payment
Date must be accompanied by payment in cash of an amount equal to the dividend
payable on such shares on such Dividend Payment Date. Except as provided above,
upon any Optional Conversion of shares of Series BB Preferred Stock, the
Corporation shall make no payment or allowance for unpaid Preferred Dividends,
whether or not in arrears, on such shares of Series BB Preferred Stock as to
which Optional Conversion has been effected or for dividends or distributions on
the shares of Common Stock issued upon such Optional Conversion.
(c) Adjustments to the Exchange Rate and the Optional Conversion Rate.
-----------------------------------------------------------------
The Exchange Rate and the Optional Conversion Rate shall each be subject to
adjustment from time to time as provided below in this paragraph (c).
(i) If the Corporation shall pay or make a dividend or other
distribution with respect to its Common Stock in shares of Common
Stock (including by way of reclassification of any shares of its
Common Stock), the Exchange Rate and the Optional Conversion Rate in
effect at the opening of business on the day following the date fixed
for the determination of stockholders entitled to receive such
dividend or other distribution shall each be increased by multiplying
such Exchange Rate and Optional Conversion Rate by a fraction of which
the numerator shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the total number of shares of Common Stock
constituting such dividend or other distribution, and of which the
denominator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination,
such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination.
- 28 -
(ii) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Exchange Rate and the Optional Conversion Rate in effect at the
opening of business on the day following the day upon which such
subdivision becomes effective shall each be proportionately increased,
and, conversely, in case outstanding shares of Common Stock shall be
combined into a smaller number of shares of Common Stock, the Exchange
Rate and the Optional Conversion Rate in effect at the opening of
business on the day following the day upon which such combination
becomes effective shall each be proportionately reduced, such
increases or reductions, as the case may be, to become effective
immediately after the opening of business on the day following the day
upon which such subdivision or combination becomes effective.
(iii) If the Corporation shall, after the date hereof, issue
rights or warrants, in each case other than the Rights, to all holders
of its Common Stock entitling them (for a period not exceeding 45 days
from the date of such issuance) to subscribe for or purchase shares of
Common Stock at a price per share less than the Fair Market Value of
the Common Stock on the record date for the determination of
stockholders entitled to receive such rights or warrants, then in each
case the Exchange Rate and the Optional Conversion Rate shall each be
adjusted by multiplying the Exchange Rate and the Optional Conversion
Rate in effect on such record date, by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants, immediately prior to
such issuance, plus the number of additional shares of Common Stock
offered for subscription or purchase pursuant to such rights or
warrants, and of which the denominator shall be the number of shares
of Common Stock outstanding on the date of issuance of such rights or
warrants, immediately prior to such issuance, plus the number of
shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock so offered for subscription or
purchase pursuant to such rights or warrants would purchase at such
Fair Market Value (determined by multiplying such total number of
shares by the exercise price of such rights or warrants and dividing
the product so obtained by such Fair Market Value). Shares of Common
Stock owned by the Corporation or by another company of which a
majority of the shares entitled to vote in the election of directors
are held, directly or indirectly, by the Corporation shall not be
deemed to be outstanding for purposes of such computation. Such
adjustment shall become effective at the opening of business on the
business day next following the record date for the determination of
stockholders entitled to receive such rights or warrants. To the
extent that shares of Common Stock are not delivered after the
expiration of such rights or warrants, the Exchange Rate and the
Optional Conversion Rate shall each be readjusted to
- 29 -
the Exchange Rate and the Optional Conversion Rate which would then be
in effect had the adjustments made upon the issuance of such rights or
warrants been made upon the basis of the issuance of rights or
warrants in respect of only the number of shares of Common Stock
actually delivered.
(iv) If the Corporation shall pay a dividend or make a
distribution to all holders of its Common Stock consisting of
evidences of its indebtedness or other assets (including shares of
capital stock of the Corporation other than Common Stock but excluding
any cash dividends or any dividends or other distributions referred to
in clauses (i) and (ii) above), or shall issue to all holders of its
Common Stock rights or warrants to subscribe for or purchase any of
its securities (other than those referred to in clause (iii) above),
then in each such case the Exchange Rate and the Optional Conversion
Rate shall each be adjusted by multiplying the Exchange Rate and the
Optional Conversion Rate in effect on the record date for such
dividend or distribution or for the determination of stockholders
entitled to receive such rights or warrants, as the case may be, by a
fraction of which the numerator shall be the Fair Market Value per
share of the Common Stock on such record date), and of which the
denominator shall be such Fair Market Price per share of Common Stock
less the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive) as of such record date of the
portion of the assets or evidences of indebtedness so distributed, or
of such subscription rights or warrants, applicable to one share of
Common Stock. Such adjustment shall become effective on the opening of
business on the business day next following the record date for such
dividend or distribution or for the determination of stockholders
entitled to receive such rights or warrants, as the case may be.
(v) Any shares of Common Stock issuable in payment of a dividend
or other distribution shall be deemed to have been issued immediately
prior to the close of business on the record date for such dividend or
other distribution for purposes of calculating the number of
outstanding shares of Common Stock under subparagraph (ii) above.
(vi) Anything in this subsection III notwithstanding, the
Corporation shall be entitled to make such upward adjustments in the
Exchange Rate and the Optional Conversion Rate, in addition to those
required by this subsection III as the Corporation in its sole
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 (or any transaction which could be treated as
any of the foregoing transactions pursuant to Section 305 of the
Internal
- 30 -
Revenue Code of 1986, as amended) hereafter made by the Corporation to
its stockholders shall not be taxable.
(vii) In any case in which this paragraph (c) shall require that an
adjustment as a result of any event become effective at the opening of
business on the business day next following a record date and the date
fixed for conversion pursuant to paragraph (a) occurs after such
record date, but before the occurrence of such event, the Corporation
may in its sole discretion elect to defer the following until after
the occurrence of such event: (A) issuing to the holder of any shares
of Series BB Preferred Stock surrendered for conversion the additional
shares of Common Stock issuable upon such conversion over the shares
of Common Stock issuable before giving effect to such adjustment; and
(B) paying to such holder any amount in cash in lieu of a fractional
share of Common Stock pursuant to paragraph (g).
(viii) For purposes hereof, an "adjustment in the Exchange Rate"
means, and shall be implemented by, an adjustment of the nature and
amount specified, effected in the manner specified, in each of the
Upper Exchange Rate, the Middle Exchange Rate and the Lower Exchange
Rate. If an adjustment is made to the Exchange Rate pursuant to this
paragraph (c), an adjustment shall also be made to the Current Market
Price solely to determine which of clauses (a), (b) or (c) of the
definition of Exchange Rate in paragraph (a) will apply on the
Mandatory Conversion Date. Such adjustment shall be made by
multiplying the Current Market Price by a fraction of which the
numerator shall be the Exchange Rate immediately after such adjustment
pursuant to paragraph (c) and the denominator shall be the Exchange
Rate immediately before such adjustment. All adjustments to the
Exchange Rate and the Optional Conversion Rate shall be calculated to
the nearest 1/10,000th of a share of Common Stock. No adjustment in
the Exchange Rate or in the Optional Conversion Rate shall be required
unless such adjustment would require an increase or decrease of at
least one percent in the Lower Exchange Rate; provided, however, any
adjustments which by reason of this subparagraph are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All adjustments to the Exchange Rate and the
Optional Conversion Rate shall be made successively.
(ix) Before taking any action that would cause an adjustment
increasing the Exchange Rate or the Optional Conversion Rate such that
the conversion price (for purposes of this paragraph (c), an amount
equal to the liquidation value per share of Series BB Preferred Stock
divided by the Optional Conversion Rate, respectively, as in effect
from time to time) would be below the then par value of the Common
Stock, the Corporation will take any corporate action which
- 31 -
may, in the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and nonassessable
shares of Common Stock at the Optional Conversion Rate as so adjusted.
(d) Adjustment for Certain Consolidations or Mergers. In case of any
------------------------------------------------
consolidation or merger to which the Corporation is a party (other than a merger
or consolidation in which the Corporation is the continuing corporation and in
which the Common Stock outstanding immediately prior to the merger or
consolidation remains unchanged), or in case of any sale or transfer to another
corporation of the property of the Corporation as an entirety or substantially
as an entirety, or in case of any statutory exchange of securities with another
corporation (other than in connection with a merger or acquisition), proper
provision shall be made so that each share of the Series BB Preferred Stock
shall, after consummation of such transaction, be subject to (i) conversion at
the option of the holder into the kind and amount of securities, cash or other
property receivable upon consummation of such transaction by a holder of the
number of shares of Common Stock into which such share of the Series BB
Preferred Stock might have been converted immediately prior to consummation of
such transaction, and (ii) conversion on the Mandatory Conversion Date into the
kind and amount of securities, cash or other property receivable upon
consummation of such transaction by a holder of the number of shares of Common
Stock into which such share of the Series BB Preferred Stock would have been
converted if the conversion on the Mandatory Conversion Date had occurred
immediately prior to the date of consummation of such transaction; assuming in
each case that such holder of Common Stock failed to exercise rights of
election, if any, as to the kind or amount of securities, cash or other property
receivable upon consummation of such transaction (provided that if the kind or
amount of securities, cash or other property receivable upon consummation of
such transaction is not the same for each nonelecting share, then the kind and
amount of securities, cash or other property receivable upon consummation of
such transaction for each nonelecting share shall be deemed to be the kind and
amount so receivable per share by a plurality of the nonelecting shares). The
kind and amount of securities into which the shares of the Series BB Preferred
Stock shall be convertible after consummation of such transaction shall be
subject to adjustment as described in paragraph (c) following the date of
consummation of such transaction. The Corporation may not become a party to any
such transaction unless the terms thereof are consistent with the foregoing.
(e) Notice of Adjustments. Whenever the Exchange Rate and Optional
---------------------
Conversion Rate are adjusted as provided in paragraph (c), the Corporation
shall:
(i) Forthwith compute the adjusted Exchange Rate and Optional
Conversion Rate and prepare a certificate signed by the Chief
Financial Officer, any Vice President, the Treasurer or the Controller
of the Corporation setting forth the adjusted Exchange Rate and
Optional Conversion Rate, the method of calculation thereof in
reasonable detail and the facts requiring such adjustment and upon
which such
- 32 -
adjustment is based, which certificate shall be prima facie evidence
of the correctness of the adjustment, and file such certificate
forthwith with the Transfer Agent;
(ii) Make a prompt public announcement stating that the Exchange
Rate and Optional Conversion Rate have been adjusted and setting forth
the adjusted Exchange Rate and Optional Conversion Rate; and
(iii) Promptly mail a notice stating that the Exchange Rate and
Optional Conversion Rate have been adjusted, the facts requiring such
adjustment and upon which such adjustment is based and setting forth
the adjusted Exchange Rate and Optional Conversion Rate, to the
holders of record of the outstanding shares of the Series BB Preferred
Stock at or prior to the time the Corporation mails an interim
statement to its stockholders covering the fiscal quarter period
during which the facts requiring such adjustment occurred but in any
event within 45 days of the end of such fiscal quarter period.
(f) Notices of Proposed Actions. In case, at any time while any of the
---------------------------
shares of Series BB Preferred Stock are outstanding,
(i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock, (other than in cash out of profits
or surplus and other than the Rights), or
(ii) the Corporation shall authorize the issuance to all holders
of the Common Stock of rights or warrants (other than the Rights) to
subscribe for or purchase shares of the Common Stock or of any other
subscription rights or warrants, or
(iii) of any reclassification of the Common Stock (other than a
Subdivision or combination thereof) or of any consolidation or merger
to which the Corporation is a party and for which approval of any
stockholders of the Corporation is required (except for a merger of
the Corporation into one of its subsidiaries solely for the purpose of
changing the corporate domicile of the Corporation to another state of
the United States and in connection with which there is no substantive
change in the rights or privileges of any securities of the
Corporation other than changes resulting from differences in the
corporate statutes of the then existing and the new state of
domicile), or of the sale or transfer of all or substantially all of
the assets of the Corporation,
then the Corporation shall cause to be filed at each office or agency
maintained for the purpose of conversion of the shares of Series BB Preferred
Stock, and shall cause to be mailed to the holders of shares of Series BB
Preferred Stock at their last addresses as they shall appear on the stock
register, as promptly as possible, but at least 15 days before the date
hereinafter specified (or the earlier
- 33 -
of the dates hereinafter specified, in the event that more than one date is
specified), a notice stating (A) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights or warrants, 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, rights or warrants are to be
determined, or (B) the date on which any such reclassification, consolidation,
merger, sale, transfer, 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 Common Stock for securities
or other property (including cash), if any, deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. The failure to give or receive the notice required by
this paragraph (f) or any defect therein shall not affect the legality or
validity of any such dividend, distribution, right or warrant or other action.
(g) No Fractional Shares. No fractional shares of Common Stock shall be
--------------------
issued upon the conversion of any shares of the Series BB Preferred Stock. In
lieu of any fraction of a share of Common Stock which would otherwise be
issuable in respect of the aggregate number of shares of the Series BB Preferred
Stock surrendered by the same holder upon Automatic Conversion or Optional
Conversion, such holder shall have the right to receive an amount in cash
(computed to the nearest cent) equal to the same fraction of the Closing Price
of the Common Stock determined (A) as of the fifth Trading Day immediately
preceding the Mandatory Conversion Date, in the case of Automatic Conversion or
(B) as of the second Trading immediately preceding the effective date of
conversion, in the case of an Optional Conversion by a holder. If more than one
share of Series BB Preferred Stock shall be surrendered for conversion at one
time by or for the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares of the Series BB Preferred Stock so surrendered.
(h) Treasury Shares. For the purposes of this subsection III, the number
---------------
of shares of Common Stock at any time outstanding shall not include shares held
in the treasury of the Corporation but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of shares of Common Stock.
The Corporation will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.
(i) Other Action. If the Corporation shall take any action affecting the
------------
Common Stock, other than action described in this subsection III, that in the
opinion of the Board of Directors would materially adversely affect the
conversion rights of the holders of the shares of Series BB Preferred stock, the
Exchange Rate and/or the Optional Conversion Rate for the Series BB Preferred
Stock may be adjusted, to the extent permitted by law, in such manner, if any,
and at such time, as the Board of Directors may determine to be equitable in the
circumstances.
(j) Conversion. The Corporation covenants that it will at all times
----------
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but
- 34 -
unissued shares of Common Stock for the purpose of effecting conversion of the
Series BB Preferred Stock, the full number of shares of Common Stock deliverable
upon the conversion of all outstanding shares of Series BB Preferred Stock not
theretofore converted. For purposes of this paragraph (j), the number of shares
of Common Stock that shall be deliverable upon the conversion of all outstanding
shares of Series BB Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.
The Corporation covenants that any shares of Common Stock issued upon
conversion of the Series BB Preferred Stock shall be validly issued, fully paid
and non-assessable.
The Corporation shall endeavor to list the shares of Common Stock required
to be delivered upon conversion of the Series BB Preferred Stock, prior to such
delivery, upon each national securities exchange, if any, upon which the
outstanding Common Stock is listed at the time of such delivery.
Prior to the delivery of any securities that the Corporation shall be
obligated to deliver upon conversion of the Series BB Preferred stock, the
Corporation shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority.
(k) Taxes. The Corporation will pay any and all documentary stamp or
-----
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the
Series BB Preferred Stock pursuant thereto; provided, however, that the
-------- -------
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of shares of Common Stock or
other securities or property in a name other than that of the holder of the
Series BB Preferred Stock to be converted and no such issue or delivery shall be
made unless and until the person requesting such issue or delivery has paid to
the Corporation the amount of any of such tax or established, to the reasonable
satisfaction of the Corporation, that such tax has been paid.
IV. Definition. For purposes of the Series BB Preferred Stock, the
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following terms shall have the meanings indicated:
"business day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in the state of New York are authorized or obligated
by law or executive order to close.
"Initial Price" shall mean $77.375 per share of Common Stock.
"Current Market Price" per share of the Common Stock shall mean the average
Closing Price per share of the Common Stock of the Company on the 20
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Trading Days immediately prior to, but not including, the Mandatory Conversion
Date.
"Closing Price" of a share of Common Stock on any date of determination
shall mean the closing sale price (or, if no closing sale price is reported, the
last reported sale price) of such share on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if it is not so listed on a United States national or regional
securities exchange, as reported by The Nasdaq Stock Market, or, if it is not so
reported, the last quoted bid price for the Common Stock in the over-the-counter
market as reported by the National Quotation Bureau or similar organization, or,
if such bid price is not available, the market value of a share of Common Stock
on such date as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company.
"Fair Market Value" on any day shall mean the average of the daily Closing
Prices of a share of Common Stock of the Company on the five (5) consecutive
Trading Days selected by the Corporation commencing not more than 20 Trading
Days before, and ending not later than, the earlier of the day in question and
the day before the "ex" date with respect to the issuance or distribution
requiring such computation. The term "'ex' date", when used with respect to any
issuance or distribution, means the first day on which the Common Stock trades
regular way, without the right to receive such issuance or distribution, on the
exchange or in the market, as the case may be, used to determine that day's
Closing Price.
"Rights" shall mean the rights of the Corporation which are issuable under
the Corporation's Stockholder Rights Plan adopted on February 10, 1988 and as
amended from time to time, or rights to purchase any capital stock of the
Corporation under any successor shareholder rights plan or plan adopted in
replacement of the Corporation's Stockholder Rights Plan.
"Trading Day" shall mean a day on which the Common Stock (a) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (b) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of such security.
"Transfer Agent" means National City Bank or such other agent or agents of
the Corporation as may be designated by the Board of Directors as the transfer
agent for the Series BB Preferred Stock.
V. Liquidation, etc.. Upon the liquidation, dissolution or winding up of
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the Corporation, whether voluntary or involuntary, the holders of the shares of
this Series BB Preferred Stock shall be entitled to receive an amount equal to
$77.375 per share, plus accrued and unpaid dividends thereon (whether or not
earned or declared) at the date of final distribution to such holders.
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VI. Issuance of Fractional Shares. Series BB Preferred Stock may be
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issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series BB Preferred Stock.
Division B
EXPRESS TERMS OF THE COMMON STOCK
The Common Stock shall be subject to the express terms of the Serial
Preferred Stock. Each share of Common Stock shall be equal to every other share
of Common Stock. The holders of shares of Common Stock shall be entitled to one
vote for each share of such stock upon all matters presented to the
shareholders.
FIFTH: No holders of any class of shares of the Corporation shall have any
preemptive right to purchase or have offered to them for purchase any shares or
other securities of the Corporation.
SIXTH: The Corporation may from time to time, pursuant to authorization by
the Board of Directors and without action by the shareholders, purchase or
otherwise acquire shares of the Corporation of any class or classes in such
manner, upon such terms and in such amounts as the Board of Directors shall
determine; subject, however, to such limitation or restriction, if any, as is
contained in the express terms of any class of shares of the Corporation
outstanding at the time of the purchase or acquisition in question.
SEVENTH: A director or officer of the Corporation shall not be
disqualified by his office from dealing or contracting with the Corporation as a
vendor, purchaser, employee, agent or otherwise; nor shall any transaction,
contract or other act of the Corporation be void or voidable or in any way
affected or invalidated by reason of the fact that any director or officer, or
any firm in which such director or officer is a member, or any corporation of
which such director or officer is a member, or any corporation of which such
director or officer is a shareholder, director or officer, is in any way
interested in such transaction, contract or other act, provided the fact that
such director, officer, firm or corporation is so interested shall be disclosed
or shall be known to the Board of Directors or such members thereof as shall be
present at any meeting of the Board of Directors at which action upon any such
transaction, contract or other act shall be taken; nor shall any such director
or officer be accountable or responsible to the Corporation for or in respect of
any such transaction, contract or other act of the Corporation or for any gains
or profits realized by him by reason of the fact that he or any firm of which he
is a member or any corporation of which he is a shareholder, director or officer
is interested in such transaction, contract or other act; and any such director
may be counted in determining the existence of a quorum at any meeting of the
Board of Directors of the Corporation which shall authorize or take action in
respect of any such
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transaction, contract or other act, and may vote thereat to authorize, ratify or
approve any such transaction, contract or other act with like force and effect
as if he or any firm of which he is a member or any corporation of which he is a
shareholder, director or officer were not interested in such transaction,
contract or other act.
EIGHTH: Notwithstanding any provision of the Ohio Revised Code now or
hereafter in force requiring for any purpose the vote, consent, waiver or
release of the holders of shares entitling them to exercise two-thirds, or any
other proportion, of the voting power of the Corporation or of any class or
classes of shares thereof, such action, unless otherwise expressly required by
statute or by these Articles, may be taken by the vote, consent, waiver or
release of the holders of shares entitling them to exercise a majority of the
voting power of the Corporation or of such class or classes.
NINTH: No shareholder of the Corporation may cumulate such shareholder's
voting power in the election of directors of the Corporation.
TENTH: Any and every statute of the State of Ohio hereafter enacted,
whereby the rights, powers or privileges of corporations or of the shareholders
of corporations organized under the laws of the State of Ohio are increased or
diminished or in any way affected, or whereby effect is given to the action
taken by any number, less than all, of the shareholders of any such corporation,
shall apply to the Corporation and shall be binding not only upon the
Corporation but upon every shareholder of the Corporation to the same extent as
if such statute had been in force at the date of filing these Amended and
Restated Articles of Incorporation of the Corporation in the office of the
Secretary of the State of Ohio.
ELEVENTH: These Amended and Restated Articles of Incorporation shall
supersede and take the place of the heretofore existing Amended Articles of
Incorporation as amended of the Corporation.