CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF SERIES C CONVERTIBLE
PREFERRED STOCK
OF
TIME WARNER INC.
____________________
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
____________________
TIME WARNER INC., a corporation organized and
existing by virtue of the General Corporation Law of the
State of Delaware (the "Corporation"), does hereby certify
that the following resolution was duly adopted by action of
the Board of Directors of the Corporation at a meeting duly
held on March 16, 1995.
RESOLVED that pursuant to the authority expressly
granted to and vested in the Board of Directors of the
Corporation by the provisions of Section 2 of Article IV of
the Restated Certificate of Incorporation of the
Corporation, as amended from time to time (the "Certificate
of Incorporation"), and Section 151(g) of the General
Corporation Law of the State of Delaware, such Board of
Directors hereby creates, from the authorized shares of
Preferred Stock, par value $1.00 per share (the "Preferred
Stock"), of the Corporation authorized to be issued
pursuant to the Certificate of Incorporation, a series of Preferred
Stock, and hereby fixes the voting powers, designations,
preferences and relative, participating, optional or other
special rights, and qualifications, limitations or
restrictions thereof, of the shares of such series as
follows:
The series of Preferred Stock hereby established
shall consist of 3,350,000 shares designated as Series C
Convertible Preferred Stock or such higher number of shares
(not in excess of the total number of shares of authorized
Preferred Stock then available for issuance) as shall be
determined from time to time by the Board of Directors. The
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rights, preferences and limitations of such series shall
be as follows:
1. Definitions. As used herein, the following
terms shall have the indicated meanings:
1.1 "Board of Directors" shall mean the
Board of Directors of the Corporation or, with respect to
any action to be taken by the Board of Directors, any com-
mittee of the Board of Directors duly authorized to take
such action.
1.2 "Certificate" shall mean the
certificate of the voting powers, designations, preferences and
relative, participating, optional or other special rights,
and qualifications, limitations or restrictions thereof, of
Series C Convertible Preferred Stock filed with respect to
this resolution with the Secretary of State of the State of
Delaware pursuant to Section 151 of the General Corporation
Law of the State of Delaware.
1.3 "Closing Price" of the Common Stock
shall mean the last reported sale price of the Common Stock
(regular way) as shown on the Composite Tape of the NYSE,
or, in case no such sale takes place on such day, the
average of the closing bid and asked prices on the NYSE,
or, if the Common Stock is not listed or admitted to trading
on the NYSE, on the principal national securities exchange on
which such stock is listed or admitted to trading, or, if
it is not listed or admitted to trading on any national
securities exchange, the last reported sale price of the Common
Stock, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, in either
case as reported by NASDAQ.
1.4 "Common Stock" shall mean the class of
Common Stock, par value $1.00 per share, of the Corporation
authorized at the date of the Certificate, or any other
class of stock resulting from (x) successive changes or
reclassifications of such Common Stock consisting solely of
changes in par value, or from par value to no par value or
(y) a subdivision or combination, and in any such case
including any shares thereof authorized after the date of
the Certificate.
1.5 "Conversion Price" shall have the
meaning set forth in Section 3.1 hereof.
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1.6 "Conversion Rate" shall have the
meaning set forth in Section 3.1 hereof.
1.7 "Converting Holder" shall have the
meaning assigned to such term in Section 3.5 hereof.
1.8 "Current Market Price" of the Common
Stock on any date shall mean the average of the daily
Closing Prices per share of the Common Stock for the five
(5) consecutive Trading Days ending on the Trading Day
immediately preceding the applicable conversion, redemption
or exchange date referred to in Section 3 or Section 4.
1.9 "Dividend Payment Date" shall have the
meaning set forth in Section 2.1 hereof.
1.10 "Effective Time" shall mean the time
as of which the merger described in the Merger Agreement
shall become effective pursuant to the Merger Agreement and the
General Corporation Law of the State of Delaware.
1.11 "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
1.12 "Junior Stock" shall mean the Common
Stock, the Series A Stock and the shares of any other class
or series of stock of the Corporation which, by the terms
of the Certificate of Incorporation or of the instrument by
which the Board of Directors, acting pursuant to authority
granted in the Certificate of Incorporation, shall fix the
relative rights, preferences and limitations thereof, shall
be junior to the Series C Stock in respect of the right to
receive dividends or to participate in any distribution of
assets other than by way of dividends.
1.13 "Liquidation Value" shall have the
meaning set forth in Section 6.1 hereof.
1.14 "Merger Agreement" shall mean the
Agreement and Plan of Merger dated as of September 12, 1994, as
the same may be amended from time to time, among the
Corporation, Summit Communications Group, Inc., a Delaware
corporation and the stockholders of Summit Communications
Group, Inc. named therein.
1.15 "NASDAQ" shall mean the National
Association of Securities Dealers Automated Quotation
System.
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1.16 "NYSE" shall mean the New York Stock
Exchange, Inc.
1.17 "Parity Stock" shall mean the Series B
Stock and the shares of any other class or series of stock
of the Corporation which, by the terms of the Certificate
of Incorporation or of the instrument by which the Board of
Directors, acting pursuant to authority granted in the Cer-
tificate of Incorporation, shall fix the relative rights,
preferences and limitations thereof, shall, in the event
that the stated dividends thereon are not paid in full, be
entitled to share ratably with the Series C Stock in the
payment of dividends, including accumulations, if any, in
accordance with the sums which would be payable on such
shares if all dividends were declared and paid in full, or
shall, in the event that the amounts payable thereon on
liquidation are not paid in full, be entitled to share rat-
ably with the Series C Stock in any distribution of assets
other than by way of dividends in accordance with the sums
which would be payable in such distribution if all sums pay-
able were discharged in full; provided, however, that the
term "Parity Stock" shall be deemed to refer (i) in
Section 2.2 hereof, to any stock which is Parity Stock in respect
of dividend rights; (ii) in Section 6 hereof, to any stock
which is Parity Stock in respect of the distribution of
assets; and (iii) in Sections 5.2 and 5.3 hereof, to any
stock which is Parity Stock in respect of either dividend
rights or the distribution of assets and which, pursuant to
the Certificate of Incorporation or any instrument in which
the Board of Directors, acting pursuant to authority
granted in the Certificate of Incorporation, shall so designate,
is entitled to vote with the holders of Series C Stock.
1.18 "Preferred Stock" shall mean the class
of Preferred Stock, par value $1.00 per share, of the Corpo-
ration authorized at the date of the Certificate, including
any shares thereof authorized after the date of the Certifi-
cate.
1.19 "Pro Rata Repurchase" shall mean the
purchase of shares of Common Stock by the Corporation or by
any of its subsidiaries, which purchase is subject to
Section 13(e) of the Exchange Act or is made pursuant to an
offer made available to all holders of Common Stock, but
excluding any purchase made in open market transactions
that satisfies the conditions of clause (b) of Rule 10b-18
under the Exchange Act or has been designed (as reasonably
determined by the Board of Directors or a committee
thereof) to prevent such purchase from having a material effect on
5
the trading market of the Common Stock. The "Effective
Date" of a Pro Rata Repurchase shall mean the applicable
expiration date (including all extensions thereof) of any
tender or exchange offer which is a Pro Rata Repurchase or
the date of purchase with respect to any Pro Rata
Repurchase which is not a tender or exchange offer.
1.20 "Record Date" shall have the meaning
set forth in Section 2.1 hereof.
1.21 "Redemption Price" shall have the
meaning set forth in Section 4.1 hereof.
1.22 "Redemption Rescission Event" shall
mean the occurrence of (a) any general suspension of
trading in, or limitation on prices for, securities on the
principal national securities exchange on which shares of
Common Stock are registered and listed for trading (or, if
shares of Common Stock are not registered and listed for
trading on any such exchange, in the over-the-counter
market) for more than six-and-one-half (6-1/2) consecutive
trading hours, (b) any decline in either the Dow Jones
Industrial Average or the Standard & Poor's Index of 400
Industrial Companies (or any successor index published by
Dow Jones & Company, Inc. or Standard & Poor's Corporation)
by either (i) an amount in excess of 10%, measured from the
close of business on any Trading Day to the close of
business on the next succeeding Trading Day during the
period commencing on the Trading Day preceding the day
notice of any redemption or exchange of shares of this
Series is given (or, if such notice is given after the
close of business on a Trading Day, commencing on such
Trading Day) and ending at the earlier of (x) the time and
date fixed for redemption or exchange in such notice and
(y) the time and date at which the Corporation shall have
irrevocably deposited funds with a designated bank or trust
company pursuant to Section 3.5 or (ii) an amount in excess
of 15% (or, if the time and date fixed for redemption or
exchange is more than 15 days following the date on which
notice of redemption or exchange is given, 20%), measured
from the close of business on the Trading Day preceding the
day notice of such redemption or exchange is given (or, if
such notice is given after the close of business on a
Trading Day, from such Trading Day) to the close of
business on any Trading Day on or prior to the earlier of
the dates specified in clauses (x) and (y) above, (c) a
declaration of a banking moratorium or any suspension of
payments in respect of banks by Federal or state
authorities in the United States or (d) the commencement of
a war or armed hostilities or other national
6
or international calamity directly or indirectly involving the
United States which in the reasonable judgment of the
Corporation could have a material adverse effect on the
market for the Common Stock.
1.23 "Rescission Date" shall have the
meaning set forth in Section 4.5 hereof.
1.24 "Senior Stock" shall mean the shares
of any class or series of stock of the Corporation which, by
the terms of the Certificate of Incorporation or of the
instrument by which the Board of Directors, acting pursuant
to authority granted in the Certificate of Incorporation,
shall fix the relative rights, preferences and limitations
thereof, shall be senior to the Series C Stock in respect
of the right to receive dividends or to participate in any
distribution of assets other than by way of dividends.
1.25 "Series A Stock" shall mean the series
of Preferred Stock authorized and designated as Series A
Participating Preferred Stock at the date of the Certifi- cate,
including any shares thereof authorized and designated
after the date of the Certificate.
1.26 "Series B Stock" shall mean the series
of Preferred Stock authorized and designated as Series B
6.40% Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated
after the date of the Certificate.
1.27 "Series C Stock" and "this Series"
shall mean the series of Preferred Stock authorized and
designated as the Series C Convertible Preferred Stock,
including any shares thereof authorized and designated
after the date of the Certificate.
1.28 "Surrendered Shares" shall have the
meaning set forth in Section 3.5 hereof.
1.29 "Trading Day" shall mean, so long as
the Common Stock is listed or admitted to trading on the
NYSE, a day on which the NYSE is open for the transaction
of business, or, if the Common Stock is not listed or
admitted to trading on the NYSE, a day on which the principal
national securities exchange on which the Common Stock is
listed is open for the transaction of business, or, if the
Common Stock is not so listed or admitted for trading on
any national securities exchange, a day on which the National
7
Market System of NASDAQ is open for the transaction of
business.
2. Cash Dividends.
2.1 The holders of the outstanding Series C
Stock shall be entitled to receive quarter-annual
dividends, as and when declared by the Board of Directors out of
funds legally available therefor. Each quarter-annual dividend
shall be an amount per share equal to (i) in the case of
each Dividend Payment Date (as defined below) occurring
after the Effective Time through the Dividend Payment Date
coinciding with the fifth anniversary of the Effective
Time, the greater of (A) $.9375 per $100 in Liquidation Value of
Series C Stock (which is equivalent to $3.75 per annum) and
(B) an amount per $100 in Liquidation Value of Series C
Stock equal to the product of (1) the Conversion Rate and
(2) the aggregate per share amount of regularly scheduled
dividends paid in cash on the Common Stock during the
period from but excluding the immediately preceding Dividend
Payment Date to and including such Dividend Payment Date
and (ii) in the case of each Dividend Payment Date occurring
thereafter, an amount per $100 in Liquidation Value of
Series C Stock equal to the product of (1) the Conversion
Rate and (2) the aggregate per share amount of regularly
scheduled dividends paid in cash on the Common Stock during
the period from but excluding the immediately preceding
Dividend Payment Date to and including such Dividend
Payment Date. All dividends shall be payable in cash on or about
the first day of February, May, August and November in each
year, beginning on the first such date that is more than 15
days after the Effective Time, as fixed by the Board of
Directors, or such other dates as are fixed by the Board of
Directors (provided that the fifth anniversary of the
Effective Time shall be a Dividend Payment Date) (each a
"Dividend Payment Date"), to the holders of record of
Series C Stock at the close of business on or about the 15th day
of the month next preceding such first day of February,
May, August and November (or fifth anniversary of the
Effective Time), as the case may be, as fixed by the Board
of Directors, or such other dates as are fixed by the Board
of Directors (each a "Record Date"). In the case of
dividends payable in respect of periods prior to the fifth
anniversary of the Effective Time, (i) such dividends shall
accrue on each share on a day-to-day basis, whether or not
earned or declared, from and after the day immediately suc-
ceeding the Effective Time and (ii) any such dividends that
become payable for any partial dividend period shall be
computed on the basis of the actual days elapsed in such
8
period. From and after the fifth anniversary of the
Effective Time, dividends on the Series C Stock (determined
as to amount as provided herein) shall accrue to the
extent, but only to the extent, that regularly scheduled cash
dividends are declared by the Board of Directors on the
Common Stock with a payment date after the fifth
anniversary of the Effective Time (or, in the case of Series C Stock
originally issued after the fifth anniversary of the
Effective Time, after the Dividend Payment Date next
preceding such date of original issuance). All dividends
that accrue in accordance with the foregoing provisions
shall be cumulative from and after the day immediately suc-
ceeding the Effective Time. The amount payable to each
holder of record on any Dividend Payment Date shall be
rounded to the nearest cent.
2.2 Except as hereinafter provided in this
Section 2.2, unless all dividends on the outstanding shares
of Series C Stock and any Parity Stock that shall have
accrued and become payable as of any date shall have been
paid, or declared and funds set apart for payment thereof,
no dividend or other distribution (payable other than in
shares of Junior Stock) shall be paid to the holders of
Junior Stock or Parity Stock, and no shares of Series C
Stock, Parity Stock or Junior Stock shall be purchased or
redeemed by the Corporation or any of its subsidiaries
(except by conversion into or exchange for, or out of the
net cash proceeds from the concurrent sale of, Junior
Stock), nor shall any monies be paid or made available for
a sinking fund for the purchase or redemption of any
Series C Stock, Junior Stock or Parity Stock; provided, however,
that nothing herein shall prevent the Corporation from
completing the purchase of Series C Stock, Parity Stock or
Junior Stock for which a purchase contract was entered
into, or the notice of redemption of which was originally
published, prior to the date on which any such dividends
were first required to be paid. When dividends are not
paid in full upon the shares of this Series and any Parity
Stock, all dividends declared upon shares of this Series
and all Parity Stock shall be declared pro rata so that the
amount of dividends declared per share on this Series and
all such Parity Stock shall in all cases bear to each other
the same ratio that accrued dividends per share on the
shares of this Series and all such Parity Stock bear to
each other. Holders of shares of this Series shall not be
entitled to any dividends, whether payable in cash,
property or stock, in excess of the full amount of dividends
that become payable pursuant to the terms of this Section 2. No
interest, or sum of money in lieu of interest, shall be
9
payable in respect of any dividend payment or payments on
this Series which may be in arrears.
3. Conversion Rights.
3.1 Each holder of a share of this Series
shall have the right at any time or, as to any share of
this Series called for redemption or exchange, at any time
prior to the close of business on the date fixed for redemption
or exchange (unless the Corporation defaults in the payment
of the Redemption Price, fails to exchange the shares of
this Series for the applicable number of shares of Common
Stock and any applicable cash amount, or exercises its
right to rescind such redemption or exchange pursuant to
Section 4.5, in which case such right shall not terminate
at the close of business on such date), to convert such
share into fully paid and nonassessable shares of Common
Stock at a rate of 2.08264 shares of Common Stock for each
share of this Series, subject to adjustment as provided in
this Section 3 (such rate, as so adjusted from time to
time, is herein called the "Conversion Rate"). The
"Conversion Price" at any time shall equal $100 divided by
the Conversion Rate in effect at such time (rounded to the
nearest one hundredth of a cent).
3.2 If any shares of this Series are surren-
dered for conversion subsequent to the Record Date
preceding a Dividend Payment Date but on or prior to such Dividend
Payment Date (except shares called for redemption or
exchange on a redemption date or exchange date between such
Record Date and Dividend Payment Date and with respect to
which such redemption or exchange has not been rescinded),
the registered holder of such shares at the close of
business on such Record Date shall be entitled to receive
the dividend, if any, payable on such shares on such
Dividend Payment Date notwithstanding the conversion
thereof. Shares of this Series surrendered for conversion
during the period from the close of business on any Record
Date next preceding any Dividend Payment Date to the
opening of business on such Dividend Payment Date shall (except in
the case of shares which have been called for redemption or
exchange on a redemption date or exchange date within such
period and with respect to which such redemption or
exchange has not been rescinded) be accompanied by payment in New
York Clearing House funds or other funds acceptable to the
Corporation of an amount equal to the dividend payable on
such Dividend Payment Date on the shares being surrendered
for conversion. Except as provided in this Section 3.2, no
adjustments in respect of payments of dividends on shares
10
surrendered for conversion or any dividend on the Common
Stock issued upon conversion shall be made upon the conver-
sion of any shares of this Series.
3.3 The Corporation may, but shall not be
required to, in connection with any conversion of shares of
this Series, issue a fraction of a share of Common Stock,
and if the Corporation shall determine not to issue any
such fraction, the Corporation shall, subject to
Section 3.6(f), make a cash payment (rounded to the nearest cent) equal to
such fraction multiplied by the Closing Price of the Common
Stock on the last Trading Day prior to the date of
conversion.
3.4 Any holder of shares of this Series
electing to convert such shares into Common Stock shall sur-
render the certificate or certificates for such shares at
the office of the transfer agent or agents therefor (or at
such other place as the Corporation may designate by notice
to the holders of shares of this Series) during regular
business hours, duly endorsed to the Corporation or in blank,
or accompanied by instruments of transfer to the Cor-
poration or in blank, or in form satisfactory to the Corpo-
ration, and shall give written notice to the Corporation at
such office that such holder elects to convert such shares
of this Series. The Corporation shall, as soon as
practicable (subject to Section 3.6(f)) after such deposit
of certificates for shares of this Series, accompanied by
the written notice above prescribed and the payment of cash
in the amount required by Section 3.2, if any, issue and
deliver at such office to the holder for whose account such
shares were surrendered, or to his nominee, certificates
representing the number of shares of Common Stock and the
cash, if any, to which such holder is entitled upon such
conversion.
3.5 Conversion shall be deemed to have been
made as of the date that certificates for the shares of
this Series to be converted, and the written notice and payment
prescribed in Sections 3.2 and 3.4 are received by the
transfer agent or agents for this Series; and the person
entitled to receive the Common Stock issuable upon such con-
version shall be treated for all purposes as the record holder
of such Common Stock on such date. Notwithstanding
anything to the contrary contained herein, in the event the
Corporation shall have rescinded a redemption or exchange
of shares of this Series pursuant to Section 4.5, any holder
of shares of this Series that shall have surrendered shares
of this Series for conversion following the day on which notice
11
of the subsequently rescinded redemption or exchange
shall have been given but prior to the later of (a) the
close of business on the Trading Day next succeeding the
date on which public announcement of the rescission of such
redemption or exchange shall have been made and (b) the
date of the mailing of the notice of rescission required by
Section 4.5 (a "Converting Holder") may rescind the
conversion of such shares surrendered for conversion by
(i) properly completing a form prescribed by the Corporation
and mailed to holders of shares of this Series (including
Converting Holders) with the Corporation's notice of
rescission, which form shall provide for the certification
by any Converting Holder rescinding a conversion on behalf
of any beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of shares of this Series that the
beneficial ownership (within the meaning of such Rule) of
such shares shall not have changed from the date on which
such shares were surrendered for conversion to the date of
such certification and (ii) delivering such form to the
Corporation no later than the close of business on that
date which is fifteen (15) Trading Days following the date of
the mailing of the Corporation's notice of rescission. The
delivery of such form by a Converting Holder shall be
accompanied by (x) any certificates representing shares of
Common Stock issued to such Converting Holder upon a
conversion of shares of this Series that shall be rescinded
by the proper delivery of such form (the "Surrendered
Shares"), (y) any securities, evidences of indebtedness or
assets (other than cash) distributed by the Corporation to
such Converting Holder by reason of such Converting
Holder's being a record holder of Surrendered Shares and
(z) payment in New York Clearing House funds or other funds acceptable
to the Corporation of an amount equal to the sum of (I) any
cash such Converting Holder may have received in lieu of
the issuance of fractional shares upon conversion and (II) any
cash paid or payable by the Corporation to such Converting
Holder by reason of such Converting Holder being a record
holder of Surrendered Shares. Upon receipt by the
Corporation of any such form properly completed by a
Converting Holder and any certificates, securities,
evidences of indebtedness, assets or cash payments required
to be returned or made by such Converting Holder to the
Corporation as set forth above, the Corporation shall
instruct the transfer agent or agents for shares of Common
Stock and shares of this Series to cancel any certificates
representing Surrendered Shares (which Surrendered Shares
shall be deposited in the treasury of the Corporation) and
reissue certificates representing shares of this Series to
such Converting Holder (which shares of this Series shall be
12
deemed to have been outstanding at all times during the
period following their surrender for conversion). The
Corporation shall, as promptly as practicable, and in no
event more than five (5) Trading Days, following the
receipt of any such properly completed form and any such
certificates, securities, evidences of indebtedness, assets
or cash payments required to be so returned or made, pay to
the Converting Holder or as otherwise directed by such
Converting Holder any dividend or other payment made on
such shares during the period from the time such shares shall
have been surrendered for conversion to the rescission of
such conversion. All questions as to the validity, form,
eligibility (including time or receipt) and acceptance of
any form submitted to the Corporation to rescind the
conversion of shares of this Series, including questions as
to the proper completion or execution of any such form or
any certification contained therein, shall be resolved by
the Corporation, whose determination shall be final and
binding. The Corporation shall not be required to deliver
certificates for shares of Common Stock while the stock
transfer books for such stock or for this Series are duly
closed for any purpose or during any period commencing at a
Redemption Rescission Event and ending at either (i) the
time and date at which the Corporation's right of
rescission shall expire pursuant to Section 4.5 if the Corporation
shall not have exercised such right or (ii) the close of
business on that day which is fifteen (15) Trading Days
following the date of the mailing of a notice of rescission
pursuant to Section 4.4 if the Corporation shall have
exercised such right of rescission, but certificates for
shares of Common Stock shall be issued and delivered as
soon as practicable after the opening of such books or the
expiration of such period.
3.6 The Conversion Rate shall be adjusted
from time to time as follows:
(a) In case the Corporation shall, at any
time or from time to time while any of the Series C
Stock is outstanding, (i) pay a dividend in shares of
its Common Stock, (ii) combine its outstanding shares
of Common Stock into a smaller number of shares,
(iii) subdivide its outstanding shares of Common Stock or
(iv) issue by reclassification of its shares of Common
Stock any shares of stock of the Corporation, then the
Conversion Rate in effect immediately before such
action shall be adjusted so that the holders of the
Series C Stock, upon conversion of all shares thereof
immediately following such event, shall be
13
entitled to receive the kind and amount of shares of capital
stock of the Corporation which they would have owned or been
entitled to receive upon or by reason of such event if
such shares of Series C Stock had been converted
immediately before the record date (or, if no record
date, the effective date) for such event. An
adjustment made pursuant to this Section 3.6(a) shall
become effective retroactively immediately after the
record date in the case of a dividend or distribution
and shall become effective retroactively immediately
after the effective date in the case of a subdivision,
combination or reclassification. For the purposes of
this Section 3.6(a), each holder of Series C Stock
shall be deemed to have failed to exercise any right
to elect the kind or amount of securities receivable
upon the payment of any such dividend, subdivision,
combination or reclassification (provided that if the kind
or amount of securities receivable upon such dividend,
subdivision, combination or reclassification is not
the same for each nonelecting share, then the kind and
amount of securities receivable upon such dividend,
subdivision, combination or reclassification for each
nonelecting share shall be deemed to be the kind and
amount so receivable per share by a plurality of the
nonelecting shares).
(b) In case the Corporation shall, at any
time or from time to time while any of the Series C
Stock is outstanding, issue rights or warrants to all
holders of shares of its Common Stock entitling them
(for a period expiring within 45 days after the record
date for such issuance) to subscribe for or purchase
shares of Common Stock (or securities convertible into
shares of Common Stock) at a price per share less than
the Current Market Price of the Common Stock at such
record date (treating the price per share of the secu-
rities convertible into Common Stock as equal to
(x) the sum of (i) the price for a unit of the security
convertible into Common Stock plus (ii) any additional
consideration initially payable upon the conversion of
such security into Common Stock divided by (y) the num-
ber of shares of Common Stock initially underlying
such convertible security), the Conversion Rate shall be
adjusted so that it shall equal the rate determined by
multiplying the Conversion Rate in effect immediately
prior to the date of issuance of such rights or
warrants by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants plus the
14
number of additional shares of Common Stock
offered for subscription or purchase (or into which
the convertible securities so offered are initially
convertible), and the denominator of which shall be
the number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants plus
the number of shares which the aggregate offering
price of the total number of shares so offered for
subscription or purchase (or the aggregate purchase
price of the convertible securities so offered plus
the aggregate amount of any additional consideration
initially payable upon conversion into Common Stock)
would purchase at such Current Market Price of the
Common Stock. Such adjustment shall become effective
retroactively immediately after the record date for
the determination of stockholders entitled to receive
such rights or warrants.
(c) In case the Corporation shall, at any
time or from time to time while any of the Series C
Stock is outstanding, distribute to all holders of
shares of its Common Stock (including any such dis-
tribution made in connection with a consolidation or
merger in which the Corporation is the continuing cor-
poration and the Common Stock is not changed or
exchanged) cash, evidences of its indebtedness,
securities or assets (excluding (i) regularly
scheduled cash dividends in amounts, if any, determined from
time to time by the Board of Directors or
(ii) dividends payable in shares of Common Stock for which
adjustment is made under Section 3.6(a)) or rights or
warrants to subscribe for or purchase securities of
the Corporation (excluding those referred to in
Section 3.6(b)), then in each such case the Conversion Rate
shall be adjusted so that it shall equal the rate
determined by multiplying the Conversion Rate in effect
immediately prior to the date of such distribution by
a fraction, the numerator of which shall be the
Current Market Price of the Common Stock on the record
date referred to below, and the denominator of which
shall be such Current Market Price of the Common Stock
less the then fair market value (as determined by the
Board of Directors of the Corporation, whose
determination shall be conclusive) of the portion of
the cash or assets or evidences of indebtedness or
securities so distributed or of such subscription
rights or warrants applicable to one share of Common
Stock (provided that such denominator shall never be
less than 1.0); provided, however, that no adjustment
shall be made with respect to any distribution of
rights to purchase securities of
15
the Corporation if the holder of shares of this Series would
otherwise be entitled to receive such rights upon conversion at
any time of shares of this Series into Common Stock unless
such rights are subsequently redeemed by the
Corporation, in which case such redemption shall be
treated for purposes of this Section as a dividend on
the Common Stock. Such adjustment shall be made
whenever any such distribution is made and shall become
effective retroactively immediately after the record
date for the determination of stockholders entitled
to receive such distribution.
(d) In case the Corporation or any subsidi-
ary thereof shall, at any time and from time to time
while any of the Series C Stock is outstanding, make a
Pro Rata Repurchase, the Conversion Rate in effect
immediately prior to such action shall be adjusted by
multiplying such Conversion Rate by a fraction, the
numerator of which shall be the product of (i) the
number of shares of Common Stock outstanding
immediately before such Pro Rata Repurchase minus the
number of shares of Common Stock repurchased in such
Pro Rata Repurchase and (ii) the Current Market Price
of the Common Stock as of the day immediately
preceding the first public announcement by the Corporation of
the intent to effect such Pro Rata Repurchase, and the
denominator of which shall be (i) the product of
(x) the number of shares of Common Stock outstanding
immediately before such Pro Rata Repurchase and
(y) the Current Market Price of the Common Stock as of the
day immediately preceding the first public announcement
by the Corporation of the intent to effect such Pro Rata
Repurchase minus (ii) the aggregate purchase price of
the Pro Rata Repurchase (provided that such
denominator shall never be less than 1.0). Such adjustment shall
become effective immediately after the Effective Date
of such Pro Rata Repurchase.
(e) The Corporation shall be entitled to
make such additional adjustments in the Conversion
Rate, in addition to those required by subsec-
tions 3.6(a), 3.6(b), 3.6(c) and 3.6(d), as shall be
necessary in order that any dividend or distribution
in Common Stock, any subdivision, reclassification or
com- bination of shares of Common Stock or any issuance of
rights or warrants referred to above, shall not be tax-
able to the holders of Common Stock for United States
Federal income tax purposes.
16
(f) In any case in which this Section 3.6
shall require that any adjustment be made effective as
of or retroactively immediately following a record
date, the Corporation may elect to defer (but only for
five (5) Trading Days following the filing of the
statement referred to in Section 3.6(h)) issuing to the
holder of any shares of this Series converted after
such record date (i) the shares of Common Stock and
other capital stock of the Corporation issuable upon
such conversion over and above (ii) the shares of
Common Stock and other capital stock of the
Corporation issuable upon such conversion on the basis of the
Conversion Rate prior to adjustment; provided,
however, that the Corporation shall deliver to such holder a
due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares
upon the occurrence of the event requiring such
adjustment.
(g) All calculations under this Section 3.6
shall be made to the nearest cent, one-hundredth of a
share or, in the case of the Conversion Rate, one ten-
thousandth. Notwithstanding any other provision of
this Section 3.6, the Corporation shall not be
required to make any adjustment of the Conversion Rate unless
such adjustment would require an increase or decrease
of at least 1.0000% of such rate. Any lesser
adjustment shall be carried forward and shall be made
at the time of and together with the next subsequent
adjustment which, together with any adjustment or
adjustments so carried forward, shall amount to an
increase or decrease of at least 1.0000% in such rate.
Any adjustments under this Section 3.6 shall be made
successively whenever an event requiring such an
adjustment occurs.
(h) Whenever an adjustment in the
Conversion Rate is required, the Corporation shall forthwith
place on file with its transfer agent or agents for
this Series a statement signed by a duly authorized
officer of the Corporation, stating the adjusted
Conversion Rate determined as provided herein. Such
statements shall set forth in reasonable detail such
facts as shall be necessary to show the reason for and
the manner of computing such adjustment. Promptly
after the adjustment of the Conversion Rate, the
Corporation shall mail a notice thereof to each holder
of shares of this Series.
17
(i) In the event that at any time as a
result of an adjustment made pursuant to this
Section 3.6, the holder of any share of this Series thereafter
surrendered for conversion shall become entitled to
receive any shares of stock of the Corporation other
than shares of Common Stock, the conversion rate of
such other shares so receivable upon conversion of any
such share of this Series shall be subject to
adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions
with respect to Common Stock contained in subpara-
graphs (a) through (h) and (j) of this Section 3.6,
and the provisions of Section 3.1 through 3.5 and 3.7
through 3.10 shall apply on like or similar terms to
any such other shares and the determination of the
Board of Directors as to any such adjustment shall be
conclusive.
(j) No adjustment shall be made pursuant to
this Section 3.6 (i) if the effect thereof would be to
reduce the Conversion Price below the par value of the
Common Stock or (ii) subject to Section 3.6(f) hereof,
with respect to any share of Series C Stock that is
converted, prior to the time such adjustment otherwise
would be made.
3.7 In case of either (a) any consolidation
or merger to which the Corporation is a party, other than a
merger or consolidation in which the Corporation is the sur-
viving or continuing corporation and which does not result
in any reclassification of, or change (other than a change
in par value or from par value to no par value or from no
par value to par value, or as a result of a subdivision or
combination) in, outstanding shares of Common Stock or
(b) any sale or conveyance of all or substantially all of the
property and assets of the Corporation, then each share of
this Series then outstanding shall be converted in such
merger or consolidation or shall be convertible from and
after such sale or conveyance of property and assets into
the kind and amount of shares of stock or other securities
and property receivable upon such consolidation, merger,
sale or conveyance by a holder of the number of shares of
Common Stock into which such shares of this Series could
have been converted immediately prior to such
consolidation, merger, sale or conveyance, subject to adjustment which
shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3 (and assuming
such holder of Common Stock failed to exercise his rights
of election, if any, as to the kind or amount of securities,
18
cash or other property receivable upon such consolidation,
merger, sale or conveyance (provided that if the kind or
amount of securities, cash or other property receivable
upon such consolidation, merger, sale or conveyance is not the
same for each nonelecting share, then the kind and amount
of securities, cash or other property receivable upon such
consolidation, merger, sale or conveyance for each
nonelecting share shall be deemed to be the kind and amount so receiva-
ble per share by a plurality of the nonelecting shares)).
The Corporation shall not enter into any of the
transactions referred to in clauses (a) or (b) of the preceding
sentence unless effective provision shall be made so as to give
effect to the provisions set forth in this Section 3.7.
The provisions of this Section 3.7 shall apply similarly to
successive consolidations, mergers, sales or conveyances.
3.8 The Corporation shall at all times
reserve and keep available, free from preemptive rights,
out of its authorized but unissued stock, for the purpose of
effecting the conversion of the shares of this Series, such
number of its duly authorized shares of Common Stock (or,
if applicable, any other shares of capital stock of the
Corporation) as shall from time to time be sufficient to
effect the conversion of all outstanding shares of this
Series into such Common Stock (or such other shares of
capital stock) at any time (assuming that, at the time of
the computation of such number of shares, all such Common
Stock (or such other shares of capital stock) would be held
by a single holder); provided, however, that nothing
contained herein shall preclude the Corporation from
satisfying its obligations in respect of the conversion of
the shares by delivery of purchased shares of Common Stock
(or such other shares of capital stock) that are held in
the treasury of the Corporation. The Corporation shall from
time to time, in accordance with the laws of the State of
Delaware, use its best efforts to cause the authorized
amount of Common Stock (or such other shares of capital
stock) to be increased if the aggregate of the authorized
amount of the Common Stock (or such other shares of capital
stock) remaining unissued and the issued shares of such
Common Stock (or such other shares of capital stock) in its
treasury (other than any shares of such Common Stock (or
such other shares capital stock) reserved for issuance in
any other connection) shall not be sufficient to permit the
conversion of the shares of this Series into the Common
Stock (or such other shares of capital stock).
3.9 If any shares of Common Stock which
would be issuable upon conversion of shares of this Series
19
hereunder require registration with or approval of any gov-
ernmental authority before such shares may be issued upon
conversion, the Corporation will in good faith and as expe-
ditiously as possible cause such shares to be duly regis-
tered or approved, as the case may be. The Corporation
will endeavor to list the shares of (or depositary shares repre-
senting fractional interests in) Common Stock required to
be delivered upon conversion of shares of this Series prior
to such delivery upon the principal national securities
exchange upon which the outstanding Common Stock is listed
at the time of such delivery.
3.10 The Corporation shall pay any and all
issue or other taxes that may be payable in respect of any
issue or delivery of shares of Common Stock on conversion
of shares of this Series pursuant hereto. The Corporation
shall not, however, be required to pay any tax which is pay-
able in respect of any transfer involved in the issue or
delivery of Common Stock in a name other than that in which
the shares of this Series so converted were registered, and
no such issue or delivery shall be made unless and until
the person requesting such issue has paid to the Corporation
the amount of such tax, or has established, to the
satisfaction of the Corporation, that such tax has been
paid.
3.11 In case (i) of a consolidation or
merger to which the Corporation is a party and in which the
Common Stock is to be exchanged for securities or other
property or of the sale or conveyance to another person or
entity or group of persons or entities acting in concert as
a partnership, limited partnership, syndicate or other
group (within the meaning of Rule 13d-3 under the Exchange Act)
of all or substantially all of the property and assets of
the Corporation, (ii) of the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation,
or (iii) of any Pro Rata Repurchase or other action
triggering an adjustment to the Conversion Rate pursuant to
this Section 3; then, in each case, the Corporation shall
cause to be filed with the transfer agent or agents for the
Series C Stock, and shall cause to be mailed, first-class
postage prepaid, to the holders of record of the
outstanding shares of Series C Stock, at least fifteen (15) days prior
to the applicable record date hereinafter specified, a
notice stating (x) the date on which a record is to be
taken for the purpose of any distribution or grant of rights or
warrants triggering an adjustment to the Common Stock
Conversion Rate pursuant to this Section 3, or, if a record
is not to be taken, the date as of which the holders of
record of Common Stock entitled to such distribution, rights
20
or warrants are to be determined, or (y) the date on which
any reclassification, consolidation, merger, sale,
conveyance, dissolution, liquidation, winding up or Pro
Rata Repurchase triggering an adjustment to the Conversion Rate
pursuant to this Section 3 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 deliverable
upon such reclassification, consolidation, merger, sale,
conveyance, dissolution, liquidation, winding up or Pro
Rata Repurchase. Failure to give such notice or any defect
therein shall not affect the legality or validity of the
proceedings described in clause (i), (ii) or (iii) of this
Section 3.11.
4. Redemption or Exchange.
4.1 Redemption or Exchange at the Option of
the Corporation. (a) The Corporation may, at its sole
option, subject to Section 2.2 hereof, from time to time on
and after the fifth anniversary of the Effective Time,
redeem, out of funds legally available therefor, or, as
provided below, exchange shares of Common Stock for, all or
any part of the outstanding shares of this Series. The
redemption or exchange price for each share of this Series
called for redemption or exchange pursuant to clause (i) of
the next sentence of this Section 4.1(a) shall be the
Liquidation Value together in each case with an amount
equal to the accrued and unpaid dividends to the date fixed for
redemption or exchange (hereinafter collectively referred
to as the "Redemption Price"). On the date fixed for
redemption or exchange the Corporation shall, at its
option, effect either
(i)(A) a redemption of the shares of this
Series to be redeemed by way of payment, out of funds
legally available therefor, of cash equal to the
aggregate Redemption Price for the shares of this
Series then being redeemed, (B) an exchange of the
shares of this Series being exchanged for shares of
Common Stock the aggregate Current Market Price of
which shall be equal to the aggregate Redemption Price
of the shares of this Series then being exchanged
(provided that the Corporation shall be entitled to
deliver cash in lieu of any fractional share of Common
Stock (determined in a manner consistent with
Section 3.3)) or (C) any combination thereof with respect
to each share of this Series called for redemption or
exchange; provided, however, that the
21
Corporation may not redeem or exchange any shares of this
Series pursuant to this clause (i) unless the Closing Price
of the Common Stock shall have equalled or exceeded
125% of the applicable Conversion Price (as determined
in accordance with Section 3) for at least twenty
(20) Trading Days within thirty (30) consecutive Trading
Days ending within fifteen (15) Trading Days prior to
the date notice of redemption is given; or
(ii) an exchange of the shares of this
Series being exchanged for shares of Common Stock at a rate
of exchange per $100 in Liquidation Value of Series C
Stock equal to the Conversion Rate (provided that the
Corporation shall be entitled to deliver cash in lieu
of any fractional share of Common Stock (determined in
a manner consistent with Section 3.3)); provided,
however, that the Corporation may not exchange any
shares of this Series pursuant to this clause (ii)
unless all dividends with respect to such shares
accrued through the Dividend Payment Date immediately
prior to the date fixed for such exchange shall have
been declared and paid in accordance with Section 2
hereof. Except as provided in the proviso in the
previous sentence, upon receipt of shares of Common
Stock in exchange for shares of this Series being
exchanged pursuant to this clause (ii), the holders of
such shares of this Series shall not be entitled to
any accrued and unpaid dividends to the date fixed for
exchange.
(b) Notwithstanding clauses (i)(B), (i)(C) and
(ii) of Section 4.1(a), the Corporation shall be entitled
to effect an exchange of shares of Series C Stock for Common
Stock only to the extent Common Stock shall be available
for issuance (including delivery of previously issued shares
of Common Stock held in the Corporation's treasury) on the
date for exchange and only to the extent shares of Common
Stock are issued and exchanged for shares of this Series on
a timely basis in accordance with the terms of this
Section 4. Certificates for shares of Common Stock issued in
exchange for surrendered shares pursuant to this
Section 4.1 shall be made available by the Corporation not later
than the fifth Trading Day following the date for exchange;
subject, however, to Section 4.2.
4.2 In the event that fewer than all the
outstanding shares of this Series are to be redeemed or
exchanged pursuant to Section 4.1(a), the number of shares
to be redeemed or exchanged from each holder of shares of
22
this Series shall be determined by the Corporation by lot
or pro rata or by any other method as may be determined by
the Board of Directors in its sole discretion to be equitable,
and the certificate of the Corporation's Secretary or an
Assistant Secretary filed with the transfer agent or
transfer agents for this Series in respect of such
determination by the Board of Directors shall be conclusive.
4.3 In the event the Corporation shall
redeem or exchange shares of this Series pursuant to
Section 4.1(a), notice of such redemption or exchange shall be
given by first class mail, postage prepaid, mailed not less
than fifteen (15) nor more than sixty (60) days prior to
the date fixed for redemption or exchange, as applicable,
to each record holder of the shares to be redeemed or
exchanged, at such holder's address as the same appears on
the books of the Corporation. Each such notice shall
state: (i) whether the shares of this Series are to be
redeemed or exchanged and, if exchanged, whether such
shares are to be exchanged at the Redemption Price or the
Conversion Rate; (ii) the time and date as of which the
redemption or exchange shall occur; (iii) the total number
of shares of this Series to be redeemed or exchanged and,
if fewer than all the shares held by such holder are to be
redeemed or exchanged, the number of such shares to be
redeemed or exchanged from such holder; (iv) the Redemption
Price, if applicable; (v) that shares of this Series called
for redemption or exchange may be converted at any time
prior to the time and date fixed for redemption or exchange
(unless the Corporation shall, in the case of a redemption,
default in payment of the Redemption Price or, in the case
of an exchange, fail to exchange the shares of this Series
for the applicable number of shares of Common Stock and
amount of cash, or shall exercise its right to rescind such
redemption or exchange pursuant to Section 4.5, in which
case such right of conversion shall not terminate at such
time and date); (vi) the applicable Conversion Price or
Conversion Rate; (vii) the place or places where
certificates for such shares are to be surrendered (A) for
payment of the Redemption Price, in the case of redemption,
or (B) for delivery of certificates representing the shares
of Common Stock and for payment of any applicable cash
amount, in the case of exchange; and (viii) that, in the
case of any redemption or exchange pursuant to Section
4.1(a)(i), dividends on the shares to be redeemed or
exchanged will cease to accrue on such date fixed for
redemption or exchange.
23
4.4 If notice of redemption or exchange
shall have been given by the Corporation as provided in
Section 4.3, dividends on the shares of this Series so
called for redemption or exchange shall cease to accrue,
such shares shall no longer be deemed to be outstanding,
and all rights of the holders thereof as stockholders of the
Corporation with respect to shares so called for redemption
or exchange (except (i) in the case of redemption, the
right to receive from the Corporation the Redemption Price
without interest and, in the case of exchange, the right to
receive from the Corporation the shares of Common Stock and
cash amount, if any, exchanged therefor and (ii) the right
to convert such shares in accordance with Section 3) shall
cease (including any right to receive dividends otherwise
payable on any Dividend Payment Date that would have
occurred after the time and date of redemption or exchange)
either (i) in the case of a redemption or exchange pursuant
to Section 4.1(a), from and after the time and date fixed
in the notice of redemption or exchange as the time and date
of redemption or exchange (unless the Corporation shall
(x) in the case of a redemption, default in the payment of the
Redemption Price, (y) in the case of an exchange, fail to
exchange the shares of this Series for the applicable
number of shares of Common Stock and any applicable cash amount
pursuant to Section 4.1, or (z) exercise its right to
rescind such redemption pursuant to Section 4.5, in which
case such rights shall not terminate at such time and date)
or (ii) if the Corporation shall so elect and state in the
notice of redemption or exchange, from and after the time
and date (which date shall be the date of redemption or
exchange or an earlier date not less than fifteen (15) days
after the date of mailing of the redemption or exchange
notice) on which the Corporation shall irrevocably deposit
with a designated bank or trust company doing business in
the Borough of Manhattan, City and State of New York, as
paying agent, money sufficient to pay at the office of such
paying agent, on the redemption date, the Redemption Price,
in the case of redemption, or certificates representing the
shares of Common Stock to be so exchanged and any
applicable cash amount, in the case of an exchange. Any money or
certificates so deposited with any such paying agent which
shall not be required for such redemption or exchange
because of the exercise of any right of conversion or
otherwise shall be returned to the Corporation forthwith.
Upon surrender (in accordance with the notice of redemption
or exchange) of the certificate or certificates for any
shares of this Series to be so redeemed or exchanged
(properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice of redemption or
24
exchange shall so state), such shares shall be redeemed or
exchanged by the Corporation at the Redemption Price or the
Conversion Rate, as applicable, as set forth in Section 4.1
(unless the Corporation shall have exercised its right to
rescind such redemption or exchange pursuant to
Section 4.5). In case fewer than all the shares represented by any
such certificate are to be redeemed or exchanged, a new
certificate shall be issued representing the unredeemed
shares (or fractions thereof as provided in Section 7.3),
without cost to the holder thereof, together with the
amount of cash, if any, in lieu of fractional shares other than
those issuable in accordance with Section 7.3. Subject to
applicable escheat laws, any moneys so set aside by the
Corporation in the case of redemption and unclaimed at the
end of one year from the 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 the Redemption Price without interest. Any interest
accrued on funds so deposited shall be paid to the
Corporation from time to time.
4.5 In the event that a Redemption
Rescission Event shall occur following any day on which a
notice of redemption or exchange shall have been given
pursuant to Section 4.3 but at or prior to the earlier of
(a) the time and date fixed for redemption or exchange as
set forth in such notice of redemption or exchange and
(b) the time and date at which the Corporation shall have
irrevocably deposited funds or certificates with a
designated bank or trust company pursuant to Section 4.4,
the Corporation may, at its sole option, at any time prior
to the earliest of (i) the close of business on that day
which is two (2) Trading Days following such Redemption
Rescission Event, (ii) the time and date fixed for
redemption or exchange as set forth in such notice and
(iii) the time and date on which the Corporation shall have
irrevocably deposited such funds with a designated bank or
trust company, rescind the redemption or exchange to which
such notice of redemption or exchange shall have related by
making a public announcement of such rescission (the date
on which such public announcement shall have been made being
hereinafter referred to as the "Rescission Date"). The
Corporation shall be deemed to have made such announcement
if it shall issue a release to the Dow Jones News Service,
Reuters Information Services or any successor news wire
service. From and after the making of such announcement,
the Corporation shall have no obligation to redeem or
exchange shares of this Series called for redemption or
25
exchange pursuant to such notice of redemption or exchange
or to pay the redemption or exchange price therefor and all
rights of holders of shares of this Series shall be
restored as if such notice of redemption or exchange had not been
given. The Corporation shall give notice of any such
rescission by first-class mail, postage prepaid, mailed as
promptly as practicable, but in no event later than the
close of business on that date which is five (5) Trading
Days following the Rescission Date to each record holder of
shares of this Series at the close of business on the
Rescission Date and to any other person or entity that was
a record holder of shares of this Series and that shall have
surrendered shares of this Series for conversion following
the giving of notice of the subsequently rescinded
redemption or exchange. Each notice of rescission shall
(w) state that the redemption or exchange described in the
notice of redemption or exchange has been rescinded,
(x) state that any Converting Holder shall be entitled to
rescind the conversion of shares of this Series surrendered
for conversion following the day on which notice of
redemption or exchange was given but on or prior to the
date of the mailing of the Corporation's notice of rescission,
(y) be accompanied by a form prescribed by the Corporation
to be used by any Converting Holder rescinding the
conversion of shares so surrendered for conversion (and
instructions for the completion and delivery of such form,
including instructions with respect to payments that may be
required to accompany such delivery shall be in accordance
with Section 3.5) and (z) state that such form must be
properly completed and received by the Corporation no later
than the close of business on a date that shall be fifteen
(15) Trading Days following the date of the mailing of such
notice of rescission.
5. Voting. The shares of this Series shall have
no voting rights except as required by law or as set forth
below.
5.1 Each share of this Series shall be enti-
tled to vote together with holders of the shares of Common
Stock (and any other class or series which may similarly be
entitled to vote with the shares of Common Stock) as a
single class upon all matters upon which holders of Common
Stock are entitled to vote. In any such vote, the holders
of this Series shall be entitled to two (2) votes per $100
in Liquidation Value of Series C Stock, subject to
adjustment at the same time and in the same manner as each
adjustment of the Conversion Rate pursuant to Section 3.6,
so that the holders of this Series shall be entitled
26
following such adjustment to the number of votes equal to
the number of votes such holders were entitled to under
this Section 5.1 immediately prior to such adjustment
multiplied by a fraction (x) the numerator of which is the Conversion
Rate as adjusted pursuant to Section 3.6 and (y) the
denominator of which is the Conversion Rate immediately
prior to such adjustment.
5.2(a) So long as any shares of this Series
remain outstanding, unless a greater percentage shall then
be required by law, the Corporation shall not, without the
affirmative vote at a meeting or the written consent with
or without a meeting of the holders of shares of this Series
representing at least 66-2/3% of the aggregate voting power
of shares of this Series then outstanding (i) authorize any
Senior Stock or reclassify any Junior Stock or Parity Stock
as Senior Stock or (ii) amend, alter or repeal any of the
provisions of the Certificate or the Certificate of Incorpo-
ration, so as in any such case to materially and adversely
affect the preferences, special rights, powers or
privileges of the shares of this Series; provided, however, that no
amendment which effects a split of this Series or which
effects a combination of the shares of this Series into a
fewer number of Shares shall be deemed to have any such
material adverse effect.
b) No consent of holders of shares of this
Series shall be required for (i) the creation of any indebt-
edness of any kind of the Corporation, (ii) the authoriza-
tion or issuance of any class of Junior Stock or Parity
Stock, (iii) the authorization, designation or issuance of
additional shares of Series C Stock or (iv) subject to
Section 5.2(a), the authorization or issuance of any other
shares of Preferred Stock.
5.3(a) If and whenever at any time or times
dividends payable on shares of this Series shall have been
in arrears and unpaid in an aggregate amount equal to or
exceeding the amount of dividends payable thereon for six
quarterly dividend periods, then the number of directors
constituting the Board of Directors shall be increased by
two and the holders of shares of this Series, together with
the holders of any shares of any Parity Stock as to which
in each case dividends are in arrears and unpaid in an
aggregate amount equal to or exceeding the amount of
dividends payable thereon for six quarterly dividend
periods, shall have the exclusive right, voting separately
as a class with such other series, to elect two directors
of the Corporation.
27
(b) Such voting right may be exercised
initially either by written consent or at a special meeting
of the holders of the Preferred Stock having such voting
right, called as hereinafter provided, or at any annual
meeting of stockholders held for the purpose of electing
directors, and thereafter at each such annual meeting until
such time as all dividends accumulated on the shares of
this Series shall have been paid in full and all dividends
payable on the shares of this Series on four subsequent
consecutive Dividend Payment Dates shall have been paid in
full on such dates or funds shall have been set aside for
the payment thereof, at which time such voting right and
the term of the directors elected pursuant to Section 5.3(a)
shall terminate.
(c) At any time when such voting right
shall have vested in holders of shares of such series of
Preferred Stock described in Section 5.3(a), and if such
right shall not already have been exercised by written
consent, a proper officer of the Corporation may call, and,
upon the written request, addressed to the Secretary of the
Corporation, of the record holders of shares representing
twenty-five percent (25%) of the voting power of the shares
then outstanding of such Preferred Stock having such voting
right, shall call, a special meeting of the holders of such
Preferred Stock having such voting right. Such meeting
shall be held at the earliest practicable date upon the
notice required for annual meetings of stockholders at the
place for holding annual meetings of stockholders of the
Corporation, or, if none, at a place designated by the
Board of Directors. Notwithstanding the provisions of this
Section 5.3(c), no such special meeting shall be called
during a period within 60 days immediately preceding the
date fixed for the next annual meeting of stockholders.
(d) At any meeting held for the purpose of
electing directors at which the holders of such Preferred
Stock shall have the right to elect directors as provided
herein, the presence in person or by proxy of the holders
of shares representing more than fifty percent (50%) in
voting power of the then outstanding shares of such Preferred
Stock having such right shall be required and shall be
sufficient to constitute a quorum of such class for the
election of directors by such class.
(e) Any director elected by holders of
Preferred Stock pursuant to the voting right created under
this Section 5.3 shall hold office until the next annual
meeting of stockholders (unless such term has previously
28
terminated pursuant to Section 5.3(b)) and any vacancy in
respect of any such director shall be filled only by vote
of the remaining director so elected, or if there be no such
remaining director, by the holders of such Preferred Stock
entitled to elect such director or directors by written
consent or at a special meeting called in accordance with
the procedures set forth in Section 5.3(c), or, if no
special meeting is called or written consent executed, at
the next annual meeting of stockholders. Upon any
termination of such voting right, subject to applicable
law, the term of office of all directors elected by holders of
such Preferred Stock voting separately as a class pursuant
to this Section 5.3 shall terminate.
(f) In exercising the voting rights set
forth in this Section 5.3, each share of this Series shall
have a number of votes equal to its Liquidation Value.
6. Liquidation Rights.
6.1 Upon the dissolution, liquidation or
winding up of the Corporation, whether voluntary or involun-
tary, the holders of the shares of this Series shall be
entitled to receive out of the assets of the Corporation
available for distribution to stockholders, in preference to the
holders of, and before any payment or distribution shall be
made on, Junior Stock, the amount of $100 per share (which
amount shall be appropriately adjusted from time to time to
reflect any split or combination of the shares of this
Series) (the "Liquidation Value"), plus an amount equal to
all accrued and unpaid dividends to the date of final
distribution.
6.2 Neither the sale, exchange or other con-
veyance (for cash, shares of stock, securities or other con-
sideration) of all or substantially all the property and
assets of the Corporation nor the merger or consolidation
of the Corporation into or with any other corporation, or the
merger or consolidation of any other corporation into or
with the Corporation, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for
the purposes of this Section 6.
6.3 After the payment to the holders of the
shares of this Series of full preferential amounts provided
for in this Section 6, the holders of this Series as such
shall have no right or claim to any of the remaining assets
of the Corporation.
29
6.4 In the event the assets of the Corpora-
tion available for distribution to the holders of shares of
this Series upon any dissolution, liquidation or winding up
of the Corporation, whether voluntary or involuntary, shall
be insufficient to pay in full all amounts to which such
holders are entitled pursuant to Section 6.1, no such dis-
tribution shall be made on account of any shares of any
Parity Stock upon such dissolution, liquidation or winding
up unless proportionate distributive amounts shall be paid
on account of the shares of this Series, ratably, in propor-
tion to the full distributable amounts for which holders of
all Parity Stock are entitled upon such dissolution,
liquidation or winding up.
7. Other Provisions.
7.1 All notices from the Corporation to the
holders shall be given by first class mail. With respect
to any notice to a holder of shares of this Series required
to be provided hereunder, neither failure to mail such
notice, 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 referred to in such
notice with respect to the other holders or affect the
legality or validity of any distribution, right, warrant,
reclassification, consolidation, merger, conveyance, trans-
fer, dissolution, liquidation or winding up, or the vote
upon any such action. Any notice which was mailed in the
manner herein provided shall be conclusively presumed to
have been duly given whether or not the holder receives the
notice.
7.2 Any shares of this Series which have
been converted, redeemed, exchanged or otherwise acquired
by the Corporation shall, after such conversion, redemption,
exchange or acquisition, as the case may be, be retired and
the Corporation shall take all appropriate action to cause
such shares to obtain the status of authorized but unissued
shares of Preferred Stock, without designation as to
series, until such shares are once more designated as part of a
particular series by the Board of Directors. The
Corporation may cause a certificate setting forth a
resolution adopted by the Board of Directors that none of
the authorized shares of this Series are outstanding to be
filed with the Secretary of State of the State of Delaware.
When such certificate becomes effective, all references to
Series C Stock shall be eliminated from the Certificate of
Incorporation and the shares of Preferred Stock designated
hereby as Series C Stock shall have the status of authorized
30
and unissued shares of Preferred Stock and may be reissued
as part of any new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors.
7.3 The shares of this Series shall be issu-
able in whole shares or, if authorized by the Board of
Directors of the Corporation (or any authorized committee
thereof), in any fraction of a whole share so authorized or
any integral multiple of such fraction.
7.4 Subject to Section 7.6, the Corporation
shall be entitled to recognize the exclusive right of a
person registered on its records as the holder of shares of
this Series, and such record holder shall be deemed the
holder of such shares for all purposes.
7.5 All notice periods referred to in the
Certificate shall commence on the date of the mailing of
the applicable notice.
7.6 Certificates for shares of this Series
shall bear such legends as the Corporation shall from time
to time deem appropriate.
IN WITNESS WHEREOF, Time Warner Inc. has
caused this certificate to be signed and attested this 28th
day of April, 1995.
TIME WARNER INC.,
by
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Name:
Title:
Attest:
by:
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Name:
Title: