Exhibit 3.1
FORM OF
RESTATED CERTIFICATE OF INCORPORATION
OF
ASSURANT, INC.
The present name of the corporation is Assurant, Inc. The corporation
was incorporated under the name "Assurant, Inc." by the filing of its original
Certificate of Incorporation with the Secretary of State of the State of
Delaware on October 10, 2003. This Restated Certificate of Incorporation of the
corporation, which both restates and further amends the provisions of the
corporation's Certificate of Incorporation, was duly adopted in accordance with
the provisions of Sections 242 and 245 of the General Corporation Law of the
State of Delaware. The Certificate of Incorporation of the corporation is hereby
amended and restated to read in its entirety as follows:
FIRST: The name of the corporation is Assurant, Inc.
SECOND: The registered office and registered agent of the
corporation is The Corporation Trust Company, 1209 Orange Street, Wilmington,
New Castle County, Delaware 19801.
THIRD: The purposes of the corporation are to engage in any
lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: (1) The total number of shares of all classes of stock
which the corporation shall have authority to issue is 1,000,550,002, consisting
of (a) 200,000,000 shares of Preferred Stock, par value $1.00 per share
("Preferred Stock"), (b) 800,000,000 shares of Common Stock, par value $0.01 per
share ("Common Stock"), (c) 150,001 shares of Class B Common Stock, par value
$0.01 per share ("Class B Common Stock") and (d) 400,001 shares of Class C
Common Stock, par value $0.01 per share ("Class C Common Stock").
(2) The Board of Directors is hereby expressly authorized, by
resolution or resolutions, to provide, out of the unissued shares of Preferred
Stock, the designation of each series of Preferred Stock and, with respect to
each such series, to fix the number of shares constituting such series and fix
the voting power, full or limited or no voting power, the powers, preferences
and relative, participating, optional or other special rights, if any, and any
qualifications, limitations or restrictions thereof, of the shares of such
series. The powers, preferences and relative, participating, optional and other
special rights of each series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding.
(3) (a) Each holder of Common Stock, as such, shall be
entitled to one vote for each share of Common Stock held of record by such
holder on all matters on which stockholders generally are entitled to vote;
provided, however, that, to the fullest extent permitted by law, holders of
Common Stock, as such, shall have no voting power with respect to, and shall not
be entitled to vote on, any amendment to this Restated Certificate of
Incorporation (including any certificate of designations relating to any series
of Preferred Stock) that relates solely to the terms of one or more outstanding
series of Preferred Stock, the Class B Common Stock or the Class C Common Stock
if the holders of such affected series are entitled, either separately or
together with the holders of one or more other such series or classes, to vote
thereon pursuant to this Restated Certificate of Incorporation (including any
certificate of designations
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relating to any series of Preferred Stock) or pursuant to the General
Corporation Law of the State of Delaware.
(b) Except as otherwise required by law, holders of a series
of Preferred Stock, the Class B Common Stock or the Class C Common Stock, as
such, shall be entitled only to such voting rights, if any, as shall expressly
be granted thereto by this Restated Certificate of Incorporation (including any
certificate of designations relating to such series or class of stock).
(c) Subject to applicable law and the rights, if any, of the
holders of any outstanding series of Preferred Stock, the Class B Common Stock
or the Class C Common Stock or any class or series of stock having a preference
over or the right to participate with the Common Stock with respect to the
payment of dividends, dividends may be declared and paid on the Common Stock at
such times and in such amounts as the Board of Directors in its discretion shall
determine.
(d) Upon the dissolution, liquidation or winding up of the
corporation, subject to the rights, if any, of the holders of any outstanding
series of Preferred Stock, the Class B Common Stock or the Class C Common Stock
or any class or series of stock having a preference over or the right to
participate with the Common Stock with respect to the distribution of assets of
the corporation upon such dissolution, liquidation or winding up of the
corporation, the holders of the Common Stock, as such, shall be entitled to
receive the assets of the corporation available for distribution to its
stockholders ratably in proportion to the number of shares held by them.
(4) The Class B Common Stock and the Class C Common Stock
shall have the powers, preferences, rights, qualifications, limitations and
restrictions set forth on Schedule 1 hereto and Schedule 2 hereto, respectively,
which are hereby incorporated herein by reference. Upon conversion of all shares
of Class B Common Stock and all shares of Class C Common Stock into Common
Stock, all such shares of Class B Common Stock and Class C Common Stock shall be
retired and become authorized but unissued shares of Class B Common Stock and
Class C Common Stock, as applicable, but such shares may not be reissued.
FIFTH: Except as otherwise provided in the By-Laws, the Board
of Directors shall be authorized to make, amend, alter, change, add to or repeal
the By-Laws of the corporation in any manner not inconsistent with the laws of
the State of Delaware, subject to the power of the stockholders to amend, alter,
change, add to or repeal the By-Laws made by the Board of Directors.
SIXTH: Except as otherwise provided by the General Corporation
Law of the State of Delaware as the same exists or may hereafter be amended, no
director of the corporation shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director to
the fullest extent permitted by law. Any repeal or modification of this Article
SIXTH by the stockholders of the corporation shall not adversely affect any
right or protection of a director of the corporation existing at the time of
such repeal or modification.
SEVENTH: (1) The business and affairs of the corporation shall
be managed by or under the direction of a Board of Directors with the exact
number of directors to be determined from time to time by resolution adopted by
affirmative vote of a majority of the Board of Directors, which, subject to any
rights of holders of any series of Preferred Stock, the Class B Common Stock or
the Class C Common Stock to elect directors, for so long as the Fortis Group
owns at least 50% of the outstanding Common Stock of the Corporation, shall
consist of not more than 14 directors and for so long as the Fortis Group owns
at least 10% of the outstanding Common Stock of the Corporation but less than
50%, shall consist of not more than 12 directors.
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The directors shall be divided into three classes designated
Class I, Class II and Class III. Each class shall consist, as nearly as
possible, of one-third of the total number of directors constituting the entire
Board of Directors. Class I directors shall be originally elected for a term
expiring at the first succeeding annual meeting of stockholders following the
effectiveness of this Restated Certificate of Incorporation, Class II directors
shall be originally elected for a term expiring at the second succeeding annual
meeting of stockholders following the effectiveness of this Restated Certificate
of Incorporation, and Class III directors shall be originally elected for a term
expiring at the third succeeding annual meeting of stockholders following the
effectiveness of this Restated Certificate of Incorporation. Commencing at the
first annual meeting of stockholders following the effectiveness of this
Restated Certificate of Incorporation, successors to the class of directors
whose term expires at that annual meeting shall be elected for a term expiring
at the third succeeding annual meeting. If the number of directors is changed,
any increase or decrease shall be apportioned among the classes so as to
maintain the number of directors in each class as nearly equal as possible, and
any additional director of any class elected to fill a newly created
directorship resulting from an increase in such class shall hold office for a
term that shall coincide with the remaining term of that class, but in no case
shall a decrease in the number of directors remove or shorten the term of any
incumbent director. A director shall hold office until the annual meeting for
the year in which his term expires and until his successor shall be elected and
shall qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office. Subject to the second paragraph of
Article II, Section 2 of the By-Laws as in effect on the date of effectiveness
of this Restated Certificate of Incorporation until such provision terminates in
accordance with its terms, any newly created directorship on the Board of
Directors that results from an increase in the number of directors and any
vacancy occurring in the Board of Directors shall be filled only by a majority
of the directors then in office, although less than a quorum, or by a sole
remaining director. Any director elected to fill a vacancy not resulting from an
increase in the number of directors shall have the same remaining term as that
of his predecessor.
(2) Notwithstanding the foregoing, whenever the holders of any
one or more series of Preferred Stock issued by the corporation, the Class B
Common Stock or the Class C Common Stock shall have the right, voting separately
as a series or separately as a class with one or more such other series, to
elect directors at an annual or special meeting of stockholders, the election,
term of office, removal, filling of vacancies and other features of such
directorships shall be governed by the terms of this Restated Certificate of
Incorporation (including any certificate of designations relating to any series
of Preferred Stock) applicable thereto, and such directors so elected shall not
be divided into classes pursuant to this Article Seventh unless expressly
provided by such terms.
(3) Subject to Article II, Section 10 of the By-Laws as in
effect on the date of effectiveness of this Restated Certificate of
Incorporation until Article II, Section 10 terminates in accordance with its
terms, any director may be removed with cause, by holders of at least two-thirds
of the outstanding voting power then entitled to vote at an election of
directors. No director may be removed without cause.
EIGHTH: Any action required or permitted to be taken by the
holders of the Common Stock of the corporation must be effected at a duly called
annual or special meeting of such holders and may not be effected by any consent
in writing by such holders. Notwithstanding this Article EIGHTH, the holders of
any series of Preferred Stock of the corporation shall be entitled to take
action by written consent to such extent, if any, as may be provided in the
terms of such series. Except as otherwise required by law and subject to the
rights of the holders of any series of Preferred Stock, the Class B Common Stock
or the Class C Common Stock, special meetings of stockholders of the corporation
may be called only by the Chief Executive Officer of the corporation or by the
Board of Directors pursuant to a resolution approved by the Board of Directors.
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NINTH: Notwithstanding anything contained in this Restated
Certificate of Incorporation to the contrary, the affirmative vote of the
holders of at least two-thirds of all the outstanding voting power of the
corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required (i) to alter, amend or repeal
Article FIFTH, Article SIXTH, Article SEVENTH, Article EIGHTH or this Article
NINTH of this Restated Certificate of Incorporation or to adopt any provision
inconsistent therewith, (ii) to approve any merger or consolidation with or into
any other Person (as hereinafter defined); (iii) to approve the sale, lease,
exchange, transfer (by liquidation or otherwise) or other disposition of all or
substantially all of the corporation's properties and assets of the
corporation's and its Subsidiaries (as hereinafter defined), taken as a whole to
any Person (as hereinafter defined) or Persons, whether in a single transaction
or a series of related transactions or (iv) for the stockholders to alter, amend
or repeal Section 2 and Section 11 of Article I of the By-Laws, Sections 1, 6
and 7 of Article II of the By-Laws, Article X of the By-Laws or the proviso to
Article IX of the By-Laws or to adopt any provision inconsistent with any of
such Sections or with such proviso of the By-Laws.
TENTH: For purposes of Articles SEVENTH and NINTH the
following terms shall have the following meanings:
(a) "Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under
common control with such Person other than an officer or director of
such Person. For the purpose of this definition, the term "control"
(including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect
to any Person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
(b) "Fortis Group" means Fortis SA/NV a public company established
as a societe anonyme/naamloze vennootschap under the laws of Belgium
and Fortis N.V., a public company established as a naamloze
vennootschap under the laws of the Netherlands, and its Affiliates.
(c) "Person" means an individual, corporation, limited liability
company, partnership, association, trust or other entity or
organization, including a government or political subdivision or an
agency or instrumentality thereof. The term "Persons" shall exclude
Affiliates of the corporation. The term "Person" and "Persons" shall
include any person or group of persons within the meaning of the
Securities Exchange Act of 1934, as amended.
(d) "Subsidiary" means, with respect to any Person, any entity of
which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly
owned by such Person.
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IN WITNESS WHEREOF, Assurant, Inc. has caused this certificate
to be signed by Katherine Greenzang, its Senior Vice President, General Counsel
and Secretary, this ___ day of _______, 2004.
ASSURANT, INC.
By: ________________________
Name:
Title:
SCHEDULE 1
TERMS OF
CLASS B COMMON STOCK
OF
ASSURANT, INC.
ARTICLE 1
DEFINITIONS
SECTION 1.01 Definitions. In this Schedule 1 to the Restated
Certificate of Incorporation, unless the context otherwise requires:
"AFFILIATE" means, with respect to a specified Person, any other
Person that directly or indirectly controls, is controlled by, or is under
common control with, such specified Person.
"BOARD OF DIRECTORS" means the Board of Directors of the
Corporation.
"BOOK-ENTRY INTEREST" means a beneficial ownership in the Class B
Shares, ownership and transfers of which are maintained through book entries of
the Registrar as set forth in Section 9.04(b) of this Schedule 1.
"BUSINESS DAY" means any day on which commercial and foreign
exchange markets settle payments in each of London, England, New York, New York
and Chicago, Illinois.
"CERTIFICATE OF INCORPORATION" means the Restated Certificate of
Incorporation of the Corporation.
"CLASS B SHARE LIQUIDATION AMOUNT" means, with respect to each Class
B Share, an amount equal to the greater of (i) its liquidation preference of
US$1,000, plus an amount (whether or not declared) equal to US$1,000 multiplied
by the Class B Share Indicative Rate multiplied by a fraction, the numerator of
which is the number of days in the current Dividend Period that have passed
prior to the date on which the liquidation occurs and the denominator of which
is the total number of days in the current Dividend Period and (ii) an amount
equal to the amount that would be payable with respect to such Class B Share if,
immediately prior to the dissolution, liquidation or winding up of the
Corporation, such Class B Share were converted into the Corresponding Number of
Junior Shares.
"CLASS B SHARES" has the meaning set forth in Section 2.01.
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"CLASS C SHARES" means the Class C Common Stock, par value $0.01 per
share, of the Corporation.
"CLEARING AGENCY" means the clearing agency with respect to the
Class B Shares.
"CODE" means the United States Internal Revenue Code of 1986, as
amended.
"COMMON SHARES" means the shares of Common Stock, par value $0.01
per share, of the Corporation.
"CORPORATION" means Assurant, Inc., a Delaware corporation.
"DEPOSITARY" means the Depositary Trust Company.
"DIVIDEND" means a cash distribution to holders of the Class B
Shares from the Corporation with respect to any applicable Dividend Period and
payable on an applicable Dividend Date.
"DIVIDEND DATE" means the 1st day of March and September in each
year (or the next Business Day if such day is not a Business Day) commencing
March 1, 2004, with respect to Dividends on the Class B Shares.
"DIVIDEND PERIOD" means a period from September 1, 2003 (in case of
the first Dividend Period) or, in all other cases, a period from a Dividend
Date with respect to the Class B Shares to but excluding the next succeeding
Dividend Date for the Class B Shares.
"FORTIS INSURANCE" means Fortis Insurance N.V., a company with
limited liability incorporated as naamloze vennootschap under Dutch law.
"IAI" means a Person that is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act or the
analog provisions of any successor rule.
"INITIAL PUBLIC OFFERING" means the initial public offering of the
Corporation pursuant to which Fortis Insurance is selling Common Shares
registered pursuant to a Registration Statement on Form S-1 under the Securities
Act of 1933, as amended, on a broadly distributed basis, not limited to
sophisticated investors, pursuant to a firm-commitment or best-efforts
underwriting arrangement.
"IPO PRICE" means the price per share at which the Common Shares
will be initially offered to the public in the Initial Public Offering as set
forth on the cover page to the prospectus with respect thereto.
"IRS" means the United States Internal Revenue Service.
"LIBOR DETERMINATION DATE" means the LIBOR Determination Date with
respect to the Class B Shares, initially March 1, 2005, and thereafter will be
two Business Days prior to each Dividend Date occurring thereafter.
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"MERGER EFFECTIVE DATE" means the effective date of the merger
of Fortis, Inc., a Nevada corporation, with and into the Corporation, as
defined in the Agreement and Plan of Merger, to be entered into by Fortis,
Inc. and the Corporation.
"MINIMUM NET WORTH AMOUNT" initially means $1.6 billion. The Minimum
Net Worth Amount will be increased by the proceeds paid to the Corporation in
consideration for the issuance and sale of additional Class B Shares or Class C
Shares or any of its preferred stock ranking pari passu with or senior to the
Class B Shares or Class C Shares with respect to the payment of dividends or
amounts payable upon liquidation. The Minimum Net Worth Amount will be reduced
by the amounts paid to purchase or redeem any Class B Shares or Class C Shares
or any of its preferred stock ranking pari passu with or senior to the Class B
Shares or the Class C Shares, but only by an amount equal to the liquidation
preference of such shares. The net worth of the Corporation will be determined
in accordance with US GAAP.
"1940 ACT" means the U.S. Investment Company Act of 1940, as
amended.
"OUTSTANDING", when used with reference to shares of stock, means
issued shares, excluding shares held by the Corporation or a subsidiary.
"PARTNERSHIP I" means Fortis (US) Funding Partners I LP, a Delaware
limited partnership.
"PARTNERSHIP TAX EVENT" means any one of the following: (i) Trust I
or Partnership I becoming subject to more than a de minimis amount of taxes or
similar assessments, (ii) RegCaPS I Payments are not effectively deductible in
computing the taxable income of Fortis Insurance for Dutch corporate income tax
purposes; (iii) Dividends received by Partnership I are included in the taxable
income of Fortis Insurance for Dutch income tax purposes; or (iv) RegCaPS I
Payments are subject to withholding tax in The Netherlands.
"PERSON" means any individual, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited liability company,
or other legal entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"PREFERRED STOCK" means the 19,160 shares of Series B Preferred
Stock of the Corporation to be issued on the Merger Effective Date and the 5,000
shares of Series C Preferred Stock of the Corporation to be issued on the Merger
Effective Date.
"QIB" means a qualified institutional buyer within the meaning of
Rule 144A under the Securities Act.
"REGCAPS I" means the regulatory capital partnership securities of
Partnership 1.
"REGCAPS I PAYMENT DATE" means the 1st day of March and September in
each year (or the next Business Day if such Day is not a Business Day)
commencing September 1, 2000 with respect to the RegCaPS I Payments (as defined
below).
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"REGCAPS I PAYMENT PERIOD" means a period from and including the
date of the original issuance of the RegCaPS I in the case of the first RegCaPS
I Payment Period or, in all other cases, a RegCaPS 1 Payment Date with respect
to the RegCaPS I to but excluding the next succeeding RegCaPS I Payment Date for
the RegCaPS I.
"REGCAPS I PAYMENTS" means cash distributions to the holders of the
RegCaPS I from Partnership I with respect to any applicable RegCaPS I Payment
Period and payable on an applicable RegCaPS I Payment Date.
"SECURITIES ACT" means the U.S. Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the U.S. Securities Exchange Act of
1934, as amended.
"SERIES B PREFERRED STOCK" means the Series B Preferred Stock of the
Corporation, liquidation preference $1,000 per share.
"SERIES C PREFERRED STOCK" means the Series C Preferred Stock of the
Corporation, liquidation preference $1,000 per share.
"SIX-MONTH LIBOR" means with respect to any LIBOR Determination
Date, a rate determined on the basis of the offered rates for six-month United
States dollar deposits of not less than a principal amount equal to that which
is representative for a single transaction in such market at such time,
commencing on the second Business Day immediately following such LIBOR
Determination Date, which appears on US LIBOR Telerate Page 3750 (or a successor
page) as of approximately 11:00 a.m., London time, on such LIBOR Determination
Date.
If on any LIBOR Determination Date no rate appears on US LIBOR
Telerate Page 3750 (or a successor page) as of approximately 11:00 a.m., London
time, the Paying Agent shall on such LIBOR Determination Date request the four
major reference banks in the London interbank market selected by the Paying
Agent to provide the Paying Agent with a quotation of the rate at which
six-month deposits in United States dollars, commencing on the second Business
Day immediately following such LIBOR Determination Date, are offered by it to
prime banks in the London interbank market as of approximately 11:00 a.m.,
London time, on such LIBOR Determination Date and in a principal amount equal to
that which is representative for a single transaction in such market at such
time. If at least two such quotations are provided, Six-Month LIBOR for such
LIBOR Determination Date will be the arithmetic mean of such quotations as
calculated by the Paying Agent. If fewer than two quotations are provided,
Six-Month LIBOR for such LIBOR Determination Date will be the arithmetic mean of
the rates quoted as of approximately 11:00 a.m., London time, on such LIBOR
Determination Date by three major banks in the London interbank market selected
by the Paying Agent for loans in United States dollars to leading European
banks, having a six-month maturity commencing on the second Business Day
immediately following such LIBOR Determination Date and in a principal amount
equal to that which is representative for a single transaction in such market at
such time; provided, however, that, if the banks selected as aforesaid by the
Paying Agent are not quoting as mentioned in this sentence, Six-Month LIBOR for
such LIBOR Determination Date will be Six-Month LIBOR determined with respect to
(i) the immediately preceding Dividend
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Period for purposes of the Class B Shares and (ii) the immediately preceding
RegCaPS I Payment Period for purposes of the RegCaPS I.
"SPECIAL INDEPENDENT DIRECTORS" means the independent directors of
the Corporation elected by the holders of the Class B Shares upon the failure of
the Corporation to pay Dividends for five consecutive Dividend Periods.
"TRANSFER AGENT" means the transfer agent with respect to the Class
B Shares which shall initially be the Corporation.
"TRUST I" means Fortis (US) RegCaPS Funding Trust I, a Delaware
statutory business trust.
"TRUST CAPITAL SECURITIES I" means 150,000 trust capital securities,
liquidation preference US$1,000 each, representing undivided beneficial
ownership interests in Trust I.
"TRUST SECURITIES I" means the Trust Capital Securities I, together
with the Trust Common Securities I, liquidation preference US$100 each,
representing undivided beneficial ownership interests in Trust I.
"US GAAP" means the generally accepted accounting principles in the
United States.
ARTICLE 2
NUMBER AND DESIGNATION
SECTION 2.01 Number and Designation. The Class B Common Stock of the
Corporation shall consist of 150,001 shares of Class B Common Stock, par value
$0.01 per share, of the Corporation and shall be designated as CLASS B COMMON
STOCK (the "CLASS B SHARES"). The Class B Shares shall have a liquidation
preference of one thousand dollars ($1,000) per share.
ARTICLE 3
RANK
SECTION 3.01 Rank. (a) The Class B Shares shall, only with respect
to payments of dividends at the Class B Share Indicative Rate (as defined below)
and with respect to the payment of the Class B Share Liquidation Amount upon the
liquidation, dissolution and winding up of the Corporation, rank senior to all
of the Common Shares. In all other respects, the Class B Shares shall rank pari
passu with the Common Shares and participate equally with the Common Shares with
respect to dividends and other distributions paid by the Corporation and with
respect to any amounts payable upon its liquidation, dissolution or winding up.
The Class B Shares will rank junior in all respects to any indebtedness of the
Corporation, and to the Preferred Stock. The Class B Shares shall rank pari
passu with the Class C Shares for all purposes. All securities of the
Corporation to which the Class B Shares ranks prior (whether with respect to
dividends or upon liquidation, dissolution, winding up or otherwise), including
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the Common Shares, are collectively referred to herein as the "JUNIOR SHARES."
The definition of Junior Shares shall also include any rights or options
exercisable for or convertible into any of the Junior Shares.
(b) Without prior consent of the holders of not less than a majority
of the outstanding Class B Shares, the Corporation shall not issue any class or
series of equity securities whose terms provide that such securities rank senior
or pari passu with the Class B Shares with respect to the rights to receive
dividends and other distributions or with respect to any amounts payable upon
liquidation, dissolution or winding up. If the Corporation has paid in full the
lesser of (i) each of its last four Dividends in full at the Class B Share
Indicative Rate on their respective Dividend Payment Dates or (ii) prior to the
fourth scheduled Dividend Payment Date, all Dividends that could have been paid
on the Class B Shares, the Corporation may issue an unlimited amount of
additional Class B Shares and other equity securities ranking pari passu with
the Class B Shares without the consent of the holders of the Class B Shares.
ARTICLE 4
DIVIDENDS
SECTION 4.01 Rate; Dividend Date. (a) Each Class B Share shall be
entitled to receive cash Dividends on a non-cumulative basis, when, as and if
declared by the Board of Directors, out of funds legally available for the
payment of dividends on each Dividend Date commencing March 1, 2004. The
Corporation expects that the Dividend will be declared initially at a rate at
least equal to a fixed rate of 7.48% of the stated liquidation preference of
$1,000 per Class B Share and after March 1, 2005, at a variable rate of
Six-Month LIBOR plus 1.10%, reset semiannually (the "CLASS B SHARE INDICATIVE
RATE"). The amount of Dividends will be computed on the basis of a 365- or
366-day year, as the case may be, and the actual number of days in such Dividend
Period divided by 365 or 366, as the case may be. When Dividends are paid on the
Class B Shares at less than the Class B Share Indicative Rate, all Dividends
declared on the Class B Shares will be paid pro rata.
(b) The Paying Agent will calculate Six-Month LIBOR as of each LIBOR
Determination Date and shall make such rate calculation available to holders of
Class B Shares. The Paying Agent also shall determine the Dividends payable on
each Dividend Date and give notice thereof (including the applicable rate,
amount, the applicable period and payment) to the holders of Class B Shares. The
notices set forth in this paragraph shall be sent by first class mail to the
address of each holder of Class B Shares as it appears on the register kept by
the Registrar and shall be available at the offices of the Paying Agent.
SECTION 4.02 Dividend Restrictions. (a) No cash dividend or other
distribution may be declared or paid or set apart for payment on any Junior
Shares and neither the Corporation nor any of its Affiliates may purchase or
redeem for cash any outstanding Junior Shares, unless:
(i) full Dividends have been declared and paid or set apart for
payment on the Class B Shares in an amount at least equal to the greater
of (A) the Dividends payable during such Dividend Period at the Class B
Share Indicative Rate or (B) the dividends
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paid by the Corporation on the Corresponding Number of Junior Shares (as
defined below) during such Dividend Period (treating any cash payment in
connection with a purchase or redemption of Junior Shares by the
Corporation as a cash dividend);
(ii) Partnership I has paid the full amount of RegCaPS I Payments
for the current RegCaPS I Payment Period; and
(iii) such repurchase or redemption does not cause the net worth of
the Corporation to be less than the Minimum Net Worth Amount.
(b) (i) If a Dividend is paid on the Class B Shares during any
Dividend Period at a rate less than the Class B Share Indicative Rate, the
Corporation may not make any dividend payments on the Junior Shares and may only
make dividend payments on its other securities that rank pari passu with the
Class B Shares, if any, in the same proportion as the partial Dividend paid on
the Class B Shares for the current Dividend Period bears to the full Dividend
payment determined for such Dividend Period at the Class B Share Indicative
Rate.
(ii) For so long as the RegCaPS I are outstanding, if a partial
RegCaPS I Payment is made for any RegCaPS I Payment Period, the
Corporation may not make any dividend payments on its Junior Shares and
may only make dividend payments on its other securities that rank pari
passu with the Class B Shares in the same proportion as the lesser of (i)
the proportion the partial RegCaPS I Payment made for the current RegCaPS
I Payment Period bears to the RegCaPS I Payment determined for such
RegCaPS I Payment Period and (ii) the proportion the partial Dividend paid
on the Class B Shares for the corresponding Dividend Period bears to the
Dividend payment determined for such Dividend Period at the Class B Share
Indicative Rate.
Additionally, for so long as the Trust Capital Securities I, RegCaPS
I or Class B Shares are outstanding, all shares of common or preferred stock
issued by majority-owned subsidiaries of the Corporation which shares are not
beneficially owned by the Corporation or its wholly-owned subsidiaries will be
subject to the restrictions set forth above on the payment of dividends and
other payments.
(c) The various payment restrictions and obligations described in
Section 4.02 above and applicable in respect of any Dividend Period or RegCaPS I
Payment Period in which a Dividend on the Class B Shares is not paid in any
amount at least equal to the Class B Share Indicative Rate or the full amount of
RegCaPS I Payments is not paid shall apply, mutatis mutandis, to the extent that
any Gross-Up Payment (as defined below) to Qualified Investors (as defined
below) is not declared and paid or set apart for payment as and when due in
respect of a fiscal year; provided that such payment restrictions and
obligations will remain in effect, not only during the current Dividend Period
or RegCaPS I Payment Period, but until such Gross-Up Payment is declared and
paid or set apart for payment.
(d) For purposes of determining whether the Dividends paid or set
apart for payment on the Class B Shares for a Dividend Period are sufficient to
permit a cash dividend or other distribution on the Junior Shares or a purchase
or redemption of Junior Shares for cash, each Class B Share will correspond to a
specific number of Junior Shares (the "CORRESPONDING
8
NUMBER OF JUNIOR SHARES"). The initial Corresponding Number of Junior Shares
will be 2.2996 Common Shares, which the Board of Directors has determined
reflects the fair value of a single Class B Share relative to the fair value of
a single Junior Share, and will be subject to adjustment if the Corporation (A)
pays all or a portion of a dividend or other distribution with respect to any
class of Junior Shares by issuing additional Junior Shares, (B) subdivides or
splits the outstanding shares of any class of its Junior Shares into a larger
number of shares, (C) combines the outstanding shares of any class of its Junior
Shares into a smaller number of shares or (D) issues by reclassification of the
shares of any class of its Junior Shares any shares of any other class of Junior
Shares. In any such event, the Corresponding Number of Junior Shares will be
multiplied by a fraction, the numerator of which is the number of Junior Shares
outstanding immediately after such event and the denominator of which is the
number of Junior Shares outstanding immediately before such event. If, as a
result of such event, any class of Junior Shares other than Common Shares is
outstanding, the number of such other Junior Shares equivalent to one Common
Share shall be determined by the Board of Directors in good faith for purposes
of making the foregoing adjustment to the Corresponding Number of Junior Shares.
(e) The Corporation intends that the holders of the RegCaPS I and
the Trust Capital Securities I shall be third party beneficiaries of, and
entitled to enforce, the provisions of this Section 4.02, as if such provisions
constituted a contract between the Corporation and the holders of the Class B
Shares, and the holders of the RegCaPS I and the Trust Capital Securities I were
third-party beneficiaries to such contract.
SECTION 4.03 Issuance, Purchase and Redemption of Junior Shares.
Other than in the circumstances described in Section 4.02 above, the Corporation
shall not issue any Junior Shares or purchase or redeem any outstanding Junior
Shares unless, prior to such issuance, purchase or redemption, the Board of
Directors determines in good faith that the terms of such issuance, purchase or
redemption reflect the fair value of the Junior Shares to be issued, purchased
or redeemed. In addition, the Corporation will not purchase or redeem any Junior
Shares if such purchase or redemption would cause the net worth of the
Corporation (determined in accordance with US GAAP), as of the last day of the
most recently ended fiscal quarter and after giving affect to such purchase or
redemption, to be less than the Minimum Net Worth Amount.
SECTION 4.04 Payment of Dividends. Dividends and other payments on
the Class B Shares will be payable to the holders thereof as they appear on the
books and records of the Corporation on the relevant record dates, which will be
one Business Day prior to the relevant Dividend Date or other payment date. Such
Dividends will be paid through the Paying Agent who will hold amounts received
from the Corporation in respect of the Class B Shares for the benefit of the
holders of the Class B Shares. In the event that any Class B Shares do not
remain in book-entry only form, the relevant record dates shall be the 15th day
of the month of the relevant Dividend Date or other payment date. In the event
that any Dividend Date is not a Business Day, payment of the Dividends payable
on such date will be made on the next succeeding day which is a Business Day
(without any interest or other payment in respect of the dividends subject to
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. If a
Dividend is not paid in full on the applicable Dividend Date, notice of the
failure to pay such Dividend will be sent to each
9
holder of Class B Shares by first-class mail to such holder's address as shown
in the register kept by the Registrar.
SECTION 4.05 Intentionally Omitted.
SECTION 4.06 Earnings and Profits Gross-up Payments. (a) To the
extent that dividends paid with respect to the Class B Shares or Common Shares
exceed the Corporation's earnings and profits as calculated for U.S. federal
income tax purposes, they will not constitute dividends for U.S. federal income
tax purposes and will not qualify for the dividends-received deduction. In such
event, additional distributions will be made by the Corporation to place each
holder of the Class B Shares in the same position it would have been in if all
dividends from the Corporation were paid from such earnings and profits,
assuming for these purposes that such holder was eligible for the
dividends-received deduction.
(b) If any Dividend on the Class B Shares with respect to any fiscal
year (including any Gross-Up Payment (as defined below)) constitutes, in whole
or in part, a return of capital (or is treated as gain from the sale or exchange
of the Class B Shares) (a "QUALIFYING DIVIDEND"), the Corporation will pay (if
declared), within 180 days after the end of such fiscal year, out of funds
legally available therefor, an amount equal to the aggregate Gross-Up Payments
to Qualified Investors (as defined below) with respect to all Qualifying
Dividends on the Class B Shares during such fiscal year. A "QUALIFIED INVESTOR"
with respect to a Qualifying Dividend during a fiscal year means a person who
was entitled to receive such Qualifying Dividend.
(c) A "GROSS-UP PAYMENT" to a Qualified Investor with respect to all
Qualifying Dividends during a fiscal year means an additional Dividend on the
Class B Shares to a Qualifying Investor in an amount which, when taken together
with the aggregate Qualifying Dividends paid to such Qualified Investor during
such fiscal year, would cause such Qualified Investor's net yield in dollars
(after U.S. federal income tax consequences and treating, for purposes of
calculating net yield in dollars, the sum of that portion of the Qualifying
Dividends and the Gross-Up Payment otherwise treated as a return of capital as
capital gain recognized upon the taxable sale or exchange of Class B Shares)
from the aggregate of both the Qualifying Dividends and the Gross-Up Payment to
be equal to the net yield in dollars (after U.S. federal income tax
consequences) which would have been received by such Qualified Investor if the
entire amount of the aggregate Qualifying Dividends had instead been treated as
a dividend for U.S. federal income tax purposes. Such Gross-Up Payment shall be
calculated using the applicable maximum marginal U.S federal corporate income
tax rate applicable to ordinary income and capital gains, as the case may be,
and, where applicable, the dividends-received deduction, as specified in Section
243(a)(i) of the Code or any successor provision, without consideration being
given to the time value of money, the U.S. federal income tax situation of any
specific Qualified Investor, or any state or local tax consequences that may
arise. The Corporation shall make a determination, based upon the reasonably
estimated earnings and profits of that portion, if any, of a Qualifying Dividend
for a fiscal year that will be treated as dividend for U.S. federal income tax
purposes, and such determination shall be final and binding for purposes of
calculating the amount of the Gross-Up Payments with respect to all Qualifying
Dividends for such fiscal year.
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ARTICLE 5
LIQUIDATION PREFERENCE
SECTION 5.01 Liquidation Preference. (a) In the event of any
voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, after payment or provision for the liabilities of the Corporation
and the expenses of such dissolution, liquidation or winding up, the holders of
the outstanding Class B Shares will be entitled to receive out of the assets of
the Corporation or proceeds thereof available for distribution to holders of
Class B Shares, before any payment or distribution of assets is made to holders
of the Common Shares or any other Junior Shares, the Class B Share Liquidation
Amount. If the assets of the Corporation available for distribution in such
event are insufficient to pay in full the aggregate amount payable to holders of
the Class B Shares and holders of all other classes or series of equity
securities of the Corporation, if any, ranking, as to the distribution of assets
upon dissolution, liquidation or winding up of the Corporation, on a parity with
the Class B Shares, the assets will be distributed to the holders of Class B
Shares and holders of such other equity interests pro rata, based on the full
respective preferential amounts to which they are entitled. After payment of the
full amount of the distribution of assets upon dissolution, liquidation or
winding up of the Corporation to which they are entitled, the holders of Class B
Shares will not be entitled to any further participation in any distribution of
assets by the Corporation.
(b) Notwithstanding Section 5.01(a) above, holders of Class B Shares
will not be entitled to be paid any amount in respect of a dissolution,
liquidation or winding up of the Corporation until holders of any classes or
series of securities of the Corporation ranking, as to the distribution of
assets upon dissolution, liquidation or winding up of the Corporation, prior to
the Class B Shares have been paid all amounts to which such classes or series
are entitled. At the time of issuance of the Class B Shares, no class or series
of securities of the Corporation ranking prior to the Class B Shares with
respect to the distribution of assets upon dissolution, liquidation or winding
up of the Corporation exists other than the Series B Preferred Stock and Series
C Preferred Stock.
(c) Notwithstanding anything else in this Schedule 1, neither the
sale, lease or exchange (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property and assets of the
Corporation, nor the merger, consolidation or combination of the Corporation
into or with any other person or the merger, consolidation or combination of any
other person 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 5.01.
ARTICLE 6
REDEMPTION
SECTION 6.01 Optional Redemption. (a) The Class B Shares will not be
subject to mandatory redemption at any time. Prior to March 1, 2030, Class B
Shares will not be subject to optional redemption. On or after March 1, 2030,
Class B Shares may be redeemed at the option of the Corporation at any time, in
whole but not in part, at their fair market value (the "REDEMPTION AMOUNT") as
determined by a nationally recognized investment bank retained by
11
the Corporation, based on the amount that would have been payable with respect
to such Class B Share if the Corporation were liquidated as of the applicable
redemption date and, immediately prior to such liquidation, such Class B Share
were converted into the Corresponding Number of Junior Shares.
SECTION 6.02 Procedure for Redemption. (a) Notice of any redemption
of the Class B Shares (a "REDEMPTION NOTICE") will be given by the Corporation
by mail to each holder of Class B Shares not fewer than 30 nor more than 60 days
before the date fixed for redemption. For purposes of the calculation of the
date of redemption and the dates on which notices are given pursuant to this
Section 6.02(a), a Redemption Notice shall be deemed to be given on the day such
notice is first mailed, by first-class mail, postage prepaid, to holders of the
Class B Shares. Each Redemption Notice shall be addressed to the holders of
Class B Shares at the address of each such holder appearing in the books and
records of the Corporation. No defect in the Redemption Notice or in the mailing
thereof with respect to any holder of Class B Shares shall affect the validity
of the redemption proceedings with respect to any other holder of Class B
Shares.
(b) If the Corporation gives a Redemption Notice (which notice will
be irrevocable), then by 12:00 noon, New York City time, on the redemption date,
the Corporation (A) if the Class B Shares are in book-entry form with the
Depositary Trust Company ("DTC"), will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Amount and will give DTC irrevocable
instructions and authority to pay the Redemption Amount in respect of the Class
B Shares held through DTC in global form or (B) if the Class B Shares are held
in certificated form (each such certificate a "CLASS B SHARE CERTIFICATE"), will
deposit with the Paying Agent, funds sufficient to pay the applicable Redemption
Amount of any such Class B Shares and will give to the Paying Agent irrevocable
instructions and authority to pay such amounts to the holders of Class B Shares,
upon surrender of their certificates, by delivery of check, mailed to the
address of the relevant holder appearing on the books and records of the
Corporation on the redemption date. For these purposes, the applicable
Redemption Amount shall not include Dividends which are being paid to holders of
Class B Shares who were holders of Class B Shares on a relevant record date.
Upon satisfaction of the foregoing conditions, then immediately prior to the
close of business on the date of such deposit or payment, all rights of holders
of Class B Shares so called for redemption will cease, except the right of the
holders of Class B Shares to receive the Redemption Amount, but without interest
on such Redemption Amount, and from and after the date fixed for redemption,
such Class B Shares will not receive dividends or bear interest.
(c) In the event that any date fixed for redemption of Class B
Shares is not a Business Day, then payment of the Redemption Amount payable on
such date will be made on the next succeeding Business Day (and without any
interest in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day in each case, with the same force and effect as if made
on such date fixed for redemption. In the event that payment of the Redemption
Amount is improperly withheld or refused and not paid by the Corporation,
Dividends on the Class B Shares called for redemption will continue to be
payable in accordance with the terms hereof from the original redemption date
until the Redemption Amount is actually paid.
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(d) The Corporation shall not be required to register or cause to be
registered the transfer of any Class B Shares which have been called for
redemption.
(e) Except as provided in Article 10, the Class B Shares which have
been issued and reacquired in any manner, including shares purchased or
redeemed, shall (upon compliance with any applicable provisions of the laws of
the State of Delaware) have the status of authorized and unissued Class B Shares
and may be reissued.
ARTICLE 7
VOTING RIGHTS
SECTION 7.01 Voting Rights. (a) The holders of the Class B Shares
will be entitled to one vote per share and will be entitled to vote with the
Common Shares as a single class on all matters submitted to a vote of the Common
Shares (other than those matters affecting only the Common Shares). Except as
provided in Article 10, prior to transferring ownership of any Class B Shares to
a transferee other than Partnership I or Trust I, such Class B Shares shall be
converted to the same number of shares of a class of stock of the Corporation
(the "CONVERSION SHARES") having rights, preferences and privileges
substantially identical to the Class B Shares except that the Conversion Shares
will be entitled to no voting rights other than as required by law and other
than with respect to adverse amendments to the terms of the Conversion Shares
and the issuance of equity securities that rank senior to or pari passu with the
Conversion Shares with respect to the payment of dividends or amounts upon
liquidation.
(b) The holders of the Class B Shares and the Conversion Shares will
be entitled to vote separately as a single class on the matters described in
this paragraph. The consent of the holders of not less than a majority of the
outstanding Class B Shares and Conversion Shares, voting as a single class, is
required (i) to amend, alter, supplement or repeal the terms of the Class B
Shares and the Conversion Shares (it being a condition to any such amendment,
alteration, supplement or repeal that it have a substantially identical effect
on the rights, preferences and privileges of both the Class B Shares and the
Conversion Shares), or (ii) if the Corporation has not paid in full the lesser
of (A) each of the last four Dividends on their respective Dividend Payment
Dates or (B) prior to the fourth scheduled Dividend Payment Date, all Dividends
that could have been paid on the Class B Shares and the Conversion Shares, for
the Corporation to issue, or to increase the authorized amount of, the Class B
Shares or the Conversion Shares or any other equity securities that rank pari
passu with or senior to the Class B Shares and the Conversion Shares. Further,
if the Corporation has paid in full the lesser of (A) each of the last four
Dividends at the Class B Share Indicative Rate on their respective Dividend
Payment Dates or (B) prior to the fourth scheduled Dividend Payment Date, all
Dividends that could have been paid on the Class B Shares and the Conversion
Shares, the Corporation may issue an unlimited amount of additional Class B
Shares and Conversion Shares and other equity securities that rank pari passu
with the Class B Shares and the Conversion Shares without the consent of the
holders of the Class B Shares or the Conversion Shares.
(c) Whenever Dividends on the Class B Shares and the Conversion
Shares are in arrears for five or more consecutive Dividend Periods, the holders
of Class B Shares and the Conversion Shares, voting as a single class will be
entitled, subject to any necessary regulatory
13
actions, to elect two Special Independent Directors to the Board of Directors,
subject to any necessary regulatory actions, at a special meeting called by the
holders of record of at least 25% of the Class B Shares and the Conversion
Shares in the aggregate. The Special Independent Directors shall vacate office
if Dividends are resumed and are paid regularly for at least two consecutive
Dividend Periods.
(d) Notwithstanding the foregoing, the Corporation shall have the
right, without the prior consent of the holders of Class B Shares, to amend,
alter, supplement or repeal any terms of the Class B Shares (i) to cure any
ambiguity, or to cure, correct or supplement any defective provision thereof or
(ii) to make any other provision with respect to matters or questions arising
with respect to the Class B Shares that is not inconsistent with the provisions
thereof so long as such action does not materially and adversely affect any of
the rights, preferences and privileges of the holders of Class B Shares,
provided, however, that any increase in the amount of authorized or issued Class
B Shares will be deemed not to materially and adversely affect any of the
rights, preferences and privileges of the holders of Class B Shares.
(e) The consent or votes required in Section 7.01(b) and (c) above
shall be in addition to any approval of stockholders of the Corporation which
may be required by law or pursuant to any provision of the Corporation's
Certificate of Incorporation or By-Laws, which approval shall be obtained by
vote of the stockholders of the Corporation in the manner provided in Section
7.01(a) above.
SECTION 7.02 No Affiliate Voting. (a) Notwithstanding that holders
of Class B Shares are entitled to vote or consent under any of the circumstances
described above, any of the Class B Shares at such time that are beneficially
owned by the Corporation or by any entity directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Corporation
shall not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding, provided, however, that
persons (other than Affiliates of the Corporation) to whom the Corporation or
any of its subsidiaries have pledged Class B Shares may vote or consent with
respect to such pledged Class B Shares pursuant to the terms of such pledge;
provided, further, that any Class B Shares held in the trust may be voted in
accordance with this Certificate; provided that any Class B Shares held by
Partnership I or Trust I may be voted in accordance with the terms of the Class
B Shares by Trust I or Partnership I, respectively.
ARTICLE 8
MERGER, CONSOLIDATION OR AMALGAMATION OF THE CORPORATION
SECTION 8.01 Merger, Consolidation or Amalgamation of the
Corporation. The Corporation may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other entity, except as
described below. The Corporation may, with the consent of at least one of the
Special Independent Directors, if any, on the Board of Directors at the time the
issue is considered and without the consent of the holders of the Class B
Shares, consolidate, amalgamate, merge with or into, or be replaced by a
corporation organized as such under the laws of any State of the United States;
provided, that:
14
(a) if the Corporation is not the survivor, such successor entity
either (x) expressly assumes all of the obligations of the Corporation under the
Class B Shares or (y) substitutes securities for the Class B Shares (the
"SUCCESSOR SECURITIES"), so long as the Successor Securities rank the same as
the Class B Shares rank with respect to Dividends and other payments thereon;
(b) such merger, consolidation, amalgamation or replacement does not
adversely affect any of the rights, preferences and privileges of the holders of
the Class B shares (including any Successor Securities) in any material respect;
(c) prior to such merger, consolidation, amalgamation or
replacement, the Corporation has received an opinion of a nationally recognized
law firm experienced in such matters to the effect that (i) such merger,
consolidation, amalgamation or replacement will not adversely affect any of the
rights, preferences and privileges of the holders of the Class B Shares
(including any Successor Securities) in any material respect and (ii) following
such merger, consolidation, amalgamation or replacement, the Corporation (or
such successor entity) will not be required to register under the 1940 Act; and
(d) distributions with respect to the Successor Securities would be
eligible for the dividends-received deduction.
ARTICLE 9
TRANSFER OF CLASS B SHARES
SECTION 9.01 General. The Corporation shall provide for the
registration of Class B Share Certificates and for transfers of Class B Share
Certificates. Upon surrender for registration of transfer of any Class B Share
Certificate, the Corporation shall cause one or more new Class B Share
Certificates to be issued in the name of the designated transferee or
transferees. Every Class B Share Certificate surrendered for registration of
transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Corporation duly executed by the holder of such Class B
Shares or his or her attorney duly authorized in writing. Each Class B Share
Certificate surrendered for registration of transfer shall be cancelled by the
Corporation. A transferee of a Class B Share Certificate shall be entitled to
the rights and subject to the obligations of a holder of Class B Shares
hereunder upon the receipt by the transferee of a Class B Share Certificate,
which receipt shall be deemed to constitute a request by such transferee that
the books and records of the Corporation reflect such transferee as a holder of
Class B Shares.
SECTION 9.02 Definitive Certificates. Unless and until the
Corporation issues a global Class B Share Certificate pursuant to Section
9.03(a), the Corporation shall only issue definitive Class B Share Certificates
to the holders of Class B Shares. The Corporation may treat the Person in whose
name any Class B Share Certificate shall be registered on the books and records
of the Corporation as the sole holder of such Class B Share Certificate and of
the Class B Shares represented by such Class B Share Certificate for purposes of
receiving Dividends and for all other purposes whatsoever (including without
limitation, tax returns and information reports) and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in
15
such Class B Share Certificate or in the Class B Shares represented by such
Class B Share Certificate on the part of any other Person, whether or not the
Corporation shall have actual or other notice thereof.
SECTION 9.03 Book Entry Provisions.
(a) General. The provisions of this Section 9.03(a) shall apply only
in the event that the Class B Shares are distributed to the holders of RegCaPS I
or Trust Securities I in connection with the involuntary or voluntary
dissolution, winding up or liquidation of Partnership 1 or of Trust I. Upon the
occurrence of such event, a global Class B Share Certificate representing the
Book-Entry Interests shall be delivered to DTC, the initial Clearing Agency, by,
or on behalf of, the Corporation and any previously issued and still outstanding
definitive Class B Share Certificates shall be of no further force and effect.
The global Class B Share Certificate shall initially be registered on the books
and records of the Corporation in the name of Cede & Co., the nominee of DTC,
and no holder of Class B Shares will receive a new definitive Class B Share
Certificate representing such holder's interests in such Class B Share
Certificate, except as provided in Section 9.03(c). In connection with the
involuntary or voluntary dissolution, winding up or liquidation of Partnership I
and of Trust I, Cede & Co., the nominee of DTC, shall automatically be deemed to
be the holder of all of the Class B Shares. Unless and until new definitive,
fully registered Class B Share Certificates (the "DEFINITIVE CLASS B SHARE
CERTIFICATES") have been issued to the holders of Class B Shares pursuant to
Section 9.03(c):
(i) The provisions of this Section shall be in full force and
effect;
(ii) The Corporation shall be entitled to deal with the Clearing
Agency for all purposes of this Certificate (including the payment of
Dividends, Redemption Amounts and liquidation proceeds on the Class B
Share Certificates and receiving approvals, votes or consents hereunder)
as the sole holder of the Class B Share Certificates and shall have no
obligation to the holders of Class B Shares;
(iii) None of the Corporation, the Board of Directors, or any
Special Independent Director or any agents of any of the foregoing shall
have any liability or responsibility for any aspect of the records
relating to or Dividends made on account of beneficial ownership interests
in a global Class B Share Certificate for such beneficial ownership
interests or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests; and
(iv) Except as provided in Section 9.03(c) below, the holders of
Class B Shares will not be entitled to receive physical delivery of the
Class B Shares in definitive form and will not be considered holders
thereof for any purpose under this Certificate of Designations, and no
global Class B Share Certificate representing Class B Shares shall be
exchangeable, except for another global Class B Share Certificate of like
denomination and tenor to be registered in the name of DTC or Cede & Co.,
or to a successor Depositary or its nominee. Accordingly, each holder of
Class B Shares must rely on the procedures of DTC or if such person is not
a Participant, on the procedures of
16
the Participant through which such person owns its interest to exercise
any rights of a holder under this Certificate of Designations.
(b) Notices to Clearing Agency. Whenever a notice or other
communication to the holders of Class B Shares is required under the Partnership
Agreement, unless and until definitive Class B Share Certificates shall have
been issued to the holders of Class B Shares pursuant to Section 9.03(c), the
Corporation shall give all such notices and communications specified herein to
be given to the holders of Class B Shares to the Clearing Agency, and shall have
no obligations to the holders of Class B Shares.
(c) Definitive Class B Share Certificates. Definitive Class B Share
Certificates shall be prepared by the Corporation and exchangeable for the
global Class B Share Certificate or Certificates if and only if (i) the
Depositary notifies the Corporation that it is unwilling or unable to continue
its services as a securities Depositary and no successor Depositary shall have
been appointed, (ii) the Depositary, at any time, ceases to be a Clearing Agency
registered under the Exchange Act at such time as the Depositary is required to
be so registered to act as such Depositary and no successor Depositary shall
have been appointed, or (iii) the Corporation, in its sole discretion,
determines that such global Class B Share Certificate shall be so exchangeable.
Upon surrender of the global Class B Share Certificate or Certificates
representing the Book-Entry Interests by the Clearing Agency, accompanied by
registration instructions, the Corporation shall cause definitive Class B Share
Certificates to be delivered to holders of Class B Shares in accordance with the
instructions of the Clearing Agency. The Corporation shall not be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. The definitive Class B Share
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as may be required by any national securities exchange on which
Class B Shares may be listed and is reasonably acceptable to the Corporation, as
evidenced by its execution thereof
SECTION 9.04 Registrar, Transfer Agent and Paying Agent.
(a) The Corporation will act as Registrar, Transfer Agent and Paying
Agent for the Class B Shares for so long as the Class B Shares are held by
Partnership I or, if Partnership I is liquidated in connection with a
Partnership Tax Event, for so long as the Class B Shares remain in book-entry
only form.
(b) Except in such case where the Corporation shall act as Registrar
or Paying Agent pursuant to Section 9.04(a) hereof, the Corporation shall
maintain in the Borough of Manhattan, City of New York, State of New York (i) an
office or agency where Class B Shares may be presented for registration of
transfer or for exchange ("REGISTRAR") and (ii) an office or agency where Class
B Shares may be presented for payment ("PAYING AGENT"). The Registrar shall keep
a register of the Class B Shares and of their transfer and exchange. The
Corporation may appoint the Registrar and the Paying Agent and may appoint one
or more co-registrars and one or more additional paying agents in such other
locations as it shall determine. The term "PAYING AGENT" includes any additional
paying agent. The Corporation may change any Paying Agent, Registrar or
co-registrar without prior notice to any holder. If the Corporation fails to
appoint or maintain another entity as Registrar or Paying Agent, the Corporation
shall act as such.
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(c) Registration of transfers of Class B Shares shall be effected
without charge by or on behalf of the Corporation, but upon payment (with the
giving of such indemnity as the Corporation may require) in respect of any tax
or other governmental charges that may be imposed.
SECTION 9.05 Transfer Restrictions. The Class B Shares may only be
transferred (i) to QIBs and (ii) to IAIs who, if they are not QIBs, prior to
such transfer, furnish to the Corporation or the Transfer Agent a signed letter
containing certain representations and agreements relating to restrictions on
transfer by such IAI. The foregoing restriction may be waived if the
Corporation, in its sole discretion, determines such restrictions are no longer
necessary to preserve the Corporation's exemptions from registration
requirements under the Securities Act, the Securities Exchange Act and the 1940
Act. Any purported purchase or transfer of the Class B Shares in violation of
such restrictions will be null and void. Furthermore the Corporation may also
require the sale of Class B Shares held by holders who fail to comply with the
foregoing.
ARTICLE 10
CONVERSION OF CLASS B SHARES
SECTION 10.01 Conversion of Class B Shares. Upon closing of the
Initial Public Offering, each issued and outstanding Class B Share shall convert
automatically (without any action required on the part of the holder) into a
number of Common Shares equal to the amount provided in clause (i) of the
definition of Class B Share Liquidation Amount divided by the IPO Price. The
Class B Shares which have been converted shall be retired and become authorized
but unissued shares of Class B Common Stock, but such shares may not be
reissued.
ARTICLE 11
GENERAL PROVISIONS
SECTION 11.01 General Provisions. The headings of the paragraphs,
subparagraphs. clauses and subclauses of this Certificate of Designations are
for convenience of reference only and shall not define, limit or affect any of
the provisions hereof.
SCHEDULE 2
TERMS OF
CLASS C COMMON STOCK
OF
ASSURANT, INC.
ARTICLE 1
DEFINITIONS
SECTION 1.01 Definitions. In this Schedule 2 to Restated Certificate
of Incorporation, unless the context otherwise requires:
"AFFILIATE" means, with respect to a specified Person, any other
Person that directly or indirectly controls, is controlled by, or is under
common control with, such specified Person.
"BOARD OF DIRECTORS" means the Board of Directors of the
Corporation.
"BOOK-ENTRY INTEREST" means a beneficial ownership in the Class C
Shares, ownership and transfers of which are maintained through book entries of
the Registrar as set forth in Section 9.04(b) of this Schedule 2.
"BUSINESS DAY" means any day on which commercial and foreign
exchange markets settle payments in each of London, England, New York, New York
and Chicago, Illinois.
"CERTIFICATE OF INCORPORATION" means the Restated Certificate of
Incorporation of the Corporation.
"CLASS B SHARES" means shares of Class B Common Stock, par value
$0.01 per share, of the Corporation.
"CLASS C SHARES" has the meaning set forth in Section 2.01.
"CLASS C SHARE LIQUIDATION AMOUNT" means, with respect to each Class
C Share, an amount equal to the greater of (i) its liquidation preference of
US$1,000, plus an amount (whether or not declared) equal to US$1,000 multiplied
by the Class C Share Indicative Rate multiplied by a fraction, the numerator of
which is the number of days in the current Dividend Period that have passed
prior to the date on which the liquidation occurs and the denominator of which
is the total number of days in the current Dividend Period and (ii) an amount
equal to the amount that would be payable with respect to such Class C Share if,
immediately prior to the dissolution, liquidation or winding up of the
Corporation, such Class C Share were converted into the Corresponding Number of
Junior Shares.
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"CLEARING AGENCY" means the clearing agency with respect to the
Class C Shares.
"CODE" means the United States Internal Revenue Code of 1986, as
amended.
"COMMON SHARES" means the shares of Common Stock, par value $0.01
per share, of the Corporation.
"CORPORATION" means Assurant, Inc., a Delaware corporation.
"DEPOSITARY" means the Depositary Trust Company.
"DIVIDEND" means a cash distribution to holders of the Class C
Shares from the Corporation with respect to any applicable Dividend Period and
payable on an applicable Dividend Date.
"DIVIDEND DATE" means the 1st day of March and September in each
year (or the next Business Day if such day is not a Business Day) commencing
March 1, 2004, with respect to Dividends on the Class C Shares.
"DIVIDEND PERIOD" means a period from September 1, 2003 (in case of
the first Dividend Period) or, in all other cases, a period from a Dividend
Date with respect to the Class C Shares to but excluding the next succeeding
Dividend Date for the Class C Shares.
"FORTIS INSURANCE" means Fortis Insurance N.V., a company with
limited liability incorporated as naamloze vennootschap under Dutch law.
"IAI" means a Person that is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act or the
analog provisions of any successor rule.
"INITIAL PUBLIC OFFERING" means the initial public offering of the
Corporation pursuant to which Fortis Insurance is selling Common Shares
registered pursuant to a Registration Statement on Form S-1 under the Securities
Act of 1933, as amended, on a broadly distributed basis, not limited to
sophisticated investors, pursuant to a firm-commitment or best-efforts
underwriting arrangement.
"IPO PRICE" means the price per share at which the Common Shares
will be initially offered to the public in the Initial Public Offering as set
forth on the cover page to the prospectus with respect thereto.
"IRS" means the United States Internal Revenue Service.
"LIBOR DETERMINATION DATE" means the LIBOR Determination Date with
respect to the Class C Shares, initially March 1, 2010, and thereafter will be
two Business Days prior to each Dividend Date occurring thereafter.
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"MERGER EFFECTIVE DATE" means the effective date of the merger
of Fortis, Inc., a Nevada corporation, with and into the Corporation, as
defined in the Agreement and Plan of Merger, to be entered into by Fortis,
Inc. and the Corporation.
"MINIMUM NET WORTH AMOUNT" initially means $1.6 billion. The Minimum
Net Worth Amount will be increased by the proceeds paid to the Corporation in
consideration for the issuance and sale of additional Class C Shares or Class B
Shares or any of its preferred stock ranking pari passu with or senior to the
Class C Shares or Class B Shares with respect to the payment of dividends or
amounts payable upon liquidation. The Minimum Net Worth Amount will be reduced
by the amounts paid to purchase or redeem any Class C Shares or Class B Shares
or any of its preferred stock ranking pari passu with or senior to the Class C
Shares or the Class B Shares, but only by an amount equal to the liquidation
preference of such shares. The net worth of the Corporation will be determined
in accordance with US GAAP.
"1940 ACT" means the U.S. Investment Company Act of 1940, as
amended.
"OUTSTANDING", when used with reference to shares of stock, means
issued shares, excluding shares held by the Corporation or a subsidiary.
"PARTNERSHIP II" means Fortis (US) Funding Partners II LP, a
Delaware limited partnership.
"PARTNERSHIP TAX EVENT" means any one of the following: (i) Trust II
or Partnership II becoming subject to more than a de minimis amount of taxes or
similar assessments; (ii) RegCaPS II Payments are not effectively deductible in
computing the taxable income of Fortis Insurance for Dutch corporate income tax
purposes; (iii) Dividends received by Partnership II are included in the taxable
income of Fortis Insurance for Dutch income tax purposes; or (iv) RegCaPS II
Payments are subject to withholding tax in The Netherlands.
"PERSON" means any individual, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited liability company,
or other legal entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"PREFERRED STOCK" means the 19,160 shares of Series B Preferred
Stock of the Corporation to be issued on the Merger Effective Date and the 5,000
shares of Series C Preferred Stock of the Corporation to be issued on the Merger
Effective Date.
"QIB" means a qualified institutional buyer within the meaning of
Rule 144A under the Securities Act.
"REGCAPS II" means the regulatory capital partnership securities of
Partnership II.
"REGCAPS II PAYMENT DATE" means the 1st day of March and September
in each year (or the next Business Day if such Day is not a Business Day)
commencing September 1, 2000 with respect to the RegCaPS II Payments (as defined
below).
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"REGCAPS II PAYMENT PERIOD" means a period from and including the
date of the original issuance of the RegCaPS II in the case of the first RegCaPS
II Payment Period or, in all other cases, a RegCaPS II Payment Date with respect
to the RegCaPS II to but excluding the next succeeding RegCaPS II Payment Date
for the RegCaPS II.
"REGCAPS II PAYMENTS" means cash distributions to the holders of the
RegCaPS II from Partnership II with respect to any applicable RegCaPS II Payment
Period and payable on an applicable RegCaPS II Payment Date.
"SECURITIES ACT" means the U.S. Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the U.S. Securities Exchange Act of
1934, as amended.
"SERIES B PREFERRED STOCK" means the Series B Preferred Stock of the
Corporation, liquidation preference $1,000 per share.
"SERIES C PREFERRED STOCK" means the Series C Preferred Stock of the
Corporation, liquidation preference $1,000 per share.
"SIX-MONTH LIBOR" means with respect to any LIBOR Determination
Date, a rate determined on the basis of the offered rates for six-month United
States dollar deposits of not less than a principal amount equal to that which
is representative for a single transaction in such market at such time,
commencing on the second Business Day immediately following such LIBOR
Determination Date, which appears on US LIBOR Telerate Page 3750 (or a successor
page) as of approximately 11:00 a.m., London time, on such LIBOR Determination
Date.
If on any LIBOR Determination Date no rate appears on US LIBOR
Telerate Page 3750 (or a successor page) as of approximately 11:00 a.m., London
time, the Paying Agent shall on such LIBOR Determination Date request the four
major reference banks in the London interbank market selected by the Paying
Agent to provide the Paying Agent with a quotation of the rate at which
six-month deposits in United States dollars, commencing on the second Business
Day immediately following such LIBOR Determination Date, are offered by it to
prime banks in the London interbank market as of approximately 11:00 a.m.,
London time, on such LIBOR Determination Date and in a principal amount equal to
that which is representative for a single transaction in such market at such
time. If at least two such quotations are provided, Six-Month LIBOR for such
LIBOR Determination Date will be the arithmetic mean of such quotations as
calculated by the Paying Agent. If fewer than two quotations are provided,
Six-Month LIBOR for such LIBOR Determination Date will be the arithmetic mean of
the rates quoted as of approximately 11:00 a. m., London time, on such LIBOR
Determination Date by three major banks in the London interbank market selected
by the Paying Agent for loans in United States dollars to leading European
banks, having a six-month maturity commencing on the second Business Day
immediately following such LIBOR Determination Date and in a principal amount
equal to that which is representative for a single transaction in such market at
such time; provided, however, that, if the banks selected as aforesaid by the
Paying Agent are not quoting as mentioned in this sentence, Six-Month LIBOR for
such LIBOR Determination Date will be Six-Month LIBOR determined with respect to
(i) the immediately preceding Dividend
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Period for purposes of the Class C Shares and (ii) the immediately preceding
RegCaPS II Payment Period for purposes of the RegCaPS II.
"SPECIAL INDEPENDENT DIRECTORS" means the independent directors of
the Corporation elected by the holders of the Class C Shares upon the failure of
the Corporation to pay Dividends for five consecutive Dividend Periods.
"TRANSFER AGENT" means the transfer agent with respect to the Class
C Shares which shall initially be the Corporation.
"TRUST II" means Fortis (US) RegCaPS Funding Trust II, a Delaware
statutory business trust.
"TRUST CAPITAL SECURITIES II" means the 400,000 trust capital
securities, liquidation preference US$1,000 each, representing undivided
beneficial ownership interests in Trust II.
"TRUST SECURITIES II" means the Trust Capital Securities II,
together with the Trust Common Securities II, liquidation preference US$100
each, representing undivided beneficial ownership interests in Trust II.
"US GAAP" means the generally accepted accounting principles in the
United States.
ARTICLE 2
NUMBER AND DESIGNATION
SECTION 2.01 Number and Designation. The Class C Common Stock of the
Corporation shall consist of 400,001 shares of Class C Common Stock, par value
$0.01 per share, of the Corporation and shall be designated as CLASS C COMMON
STOCK (the "CLASS C SHARES"). The Class C Shares shall have a liquidation
preference of one thousand dollars ($1,000) per share.
ARTICLE 3
RANK
SECTION 3.01 Rank. (a) The Class C Shares shall, only with respect
to payments of dividends at the Class C Share Indicative Rate (as defined below)
and with respect to the payment of the Class C Share Liquidation Amount upon the
liquidation, dissolution and winding up of the Corporation, rank senior to all
of the Common Shares. In all other respects, the Class C Shares shall rank pari
passu with the Common Shares and participate equally with the Common Shares with
respect to dividends and other distributions paid by the Corporation and with
respect to any amounts payable upon its liquidation, dissolution or winding up.
The Class C Shares will rank junior in all respects to any indebtedness of the
Corporation, and to the Preferred Stock. The Class C Shares shall rank pari
passu with the Class B Shares for all purposes. All securities of the
Corporation to which the Class C Shares ranks prior (whether
6
with respect to dividends or upon liquidation, dissolution, winding up or
otherwise), including the Common Shares, are collectively referred to herein as
the "JUNIOR SHARES". The definition of Junior Shares shall also include any
rights or options exercisable for or convertible into any of the Junior Shares.
(b) Without prior consent of the holders of not less than a majority
of the outstanding Class C Shares, the Corporation shall not issue any class or
series of equity securities whose terms provide that such securities rank senior
or pari passu with the Class C Shares with respect to the rights to receive
dividends and other distributions or with respect to any amounts payable upon
liquidation, dissolution or winding up. If the Corporation has paid in full the
lesser of (i) each of its last four Dividends in full at the Class C Share
Indicative Rate on their respective Dividend Payment Dates or (ii) prior to the
fourth scheduled Dividend Payment Date, all Dividends that could have been paid
on the Class C Shares, the Corporation may issue an unlimited amount of
additional Class C Shares and other equity securities ranking pari passu with
the Class C Shares without the consent of the holders of the Class C Shares.
ARTICLE 4
DIVIDENDS
SECTION 4.01 Rate; Dividend Date. (a) Each Class C Share shall be
entitled to receive cash Dividends on a non-cumulative basis, when, as and if
declared by the Board of Directors, out of funds legally available for the
payment of dividends on each Dividend Date commencing March 1, 2004. The
Corporation expects that the Dividend will be declared initially at a rate at
least equal to a fixed rate of 7.68% of the stated liquidation preference of
$1,000 per Class C Share and after March 1, 2010, at a variable rate of
Six-Month LIBOR plus 1.25%, reset semiannually (the "CLASS C SHARE INDICATIVE
RATE"). The amount of Dividends will be computed on the basis of a 365- or
366-day year, as the case may be, and the actual number of days in such Dividend
Period divided by 365 or 366, as the case may be. When Dividends are paid on the
Class C Shares at less than the Class C Share Indicative Rate, all Dividends
declared on the Class C Shares will be paid pro rata.
(b) The Paying Agent will calculate Six-Month LIBOR as of each LIBOR
Determination Date and shall make such rate calculation available to holders of
Class C Shares. The Paying Agent also shall determine the Dividends payable on
each Dividend Date and give notice thereof (including the applicable rate,
amount, the applicable period and payment) to the holders of Class C Shares. The
notices set forth in this paragraph shall be sent by first class mail to the
address of each holder of Class C Shares as it appears on the register kept by
the Registrar and shall be available at the offices of the Paying Agent.
SECTION 4.02 Dividend Restrictions. (a) No cash dividend or other
distribution may be declared or paid or set apart for payment on any Junior
Shares and neither the Corporation nor any of its Affiliates may purchase or
redeem for cash any outstanding Junior Shares, unless:
(i) full Dividends have been declared and paid or set apart for
payment on the Class C Shares in an amount at least equal to the greater
of (A) the Dividends payable
7
during such Dividend Period at the Class C Share Indicative Rate or (B)
the dividends paid by the Corporation on the Corresponding Number of
Junior Shares (as defined below) during such Dividend Period (treating any
cash payment in connection with a purchase or redemption of Junior Shares
by the Corporation as a cash dividend);
(ii) Partnership II has paid the full amount of RegCaPS II Payments
for the current RegCaPS II Payment Period; and
(iii) such repurchase or redemption does not cause the net worth of
the Corporation to be less than the Minimum Net Worth Amount.
(b) (i) If a Dividend is paid on the Class C Shares during any
Dividend Period at a rate less than the Class C Share Indicative Rate, the
Corporation may not make any dividend payments on the Junior Shares and may only
make dividend payments on its other securities that rank pari passu with the
Class C Shares, if any, in the same proportion as the partial Dividend paid on
the Class C Shares for the current Dividend Period bears to the full Dividend
payment determined for such Dividend Period at the Class C Share Indicative
Rate.
(ii) For so long as the RegCaPS II are outstanding, if a partial
RegCaPS II Payment is made for any RegCaPS II Payment Period, the
Corporation may not make any dividend payments on its Junior Shares and
may only make dividend payments on its other securities that rank pari
passu with the Class C Shares in the same proportion as the lesser of (i)
the proportion the partial RegCaPS II Payment made for the current RegCaPS
II Payment Period bears to the RegCaPS II Payment determined for such
RegCaPS II Payment Period and (ii) the proportion the partial Dividend
paid on the Class C Shares for the corresponding Dividend Period bears to
the Dividend payment determined for such Dividend Period at the Class C
Share Indicative Rate.
Additionally, for so long as the Trust Capital Securities II,
RegCaPS II or Class C Shares are outstanding, all shares of common or preferred
stock issued by majority-owned subsidiaries of the Corporation which shares are
not beneficially owned by the Corporation or its wholly-owned subsidiaries will
be subject to the restrictions set forth above on the payment of dividends and
other payments.
(c) The various payment restrictions and obligations described in
Section 4.02 above and applicable in respect of any Dividend Period or RegCaPS
II Payment Period in which a Dividend on the Class C Shares is not paid in any
amount at least equal to the Class C Share Indicative Rate or the full amount of
RegCaPS II Payments is not paid shall apply, mutatis mutandis, to the extent
that any Gross-Up Payment (as defined below) to Qualified Investors (as defined
below) is not declared and paid or set apart for payment as and when due in
respect of a fiscal year, provided that such payment restrictions and
obligations will remain in effect, not only during the current Dividend Period
or RegCaPS II Payment Period, but until such Gross-Up Payment is declared and
paid or set apart for payment.
(d) For purposes of determining whether the Dividends paid or set
apart for payment on the Class C Shares for a Dividend Period are sufficient to
permit a cash dividend or other distribution on the Junior Shares or a purchase
or redemption of Junior Shares for cash,
8
each Class C Share will correspond to a specific number of Junior Shares (the
"CORRESPONDING NUMBER OF JUNIOR SHARES"). The initial Corresponding Number of
Junior Shares will be 2.2996 Common Shares, which the Board of Directors has
determined reflects the fair value of a single Class C Share relative to the
fair value of a single Junior Share, and will be subject to adjustment if the
Corporation (A) pays all or a portion of a dividend or other distribution with
respect to any class of Junior Shares by issuing additional Junior Shares, (B)
subdivides or splits the outstanding shares of any class of its Junior Shares
into a larger number of shares, (C) combines the outstanding shares of any class
of its Junior Shares into a smaller number of shares or (D) issues by
reclassification of the shares of any class of its Junior Shares any shares of
any other class of Junior Shares. In any such event, the Corresponding Number of
Junior Shares will be multiplied by a fraction, the numerator of which is the
number of Junior Shares outstanding immediately after such event and the
denominator of which is the number of Junior Shares outstanding immediately
before such event. If, as a result of such event, any class of Junior Shares
other than Common Shares is outstanding, the number of such other Junior Shares
equivalent to one Common Share shall be determined by the Board of Directors in
good faith for purposes of making the foregoing adjustment to the Corresponding
Number of Junior Shares.
(e) The Corporation intends that the holders of the RegCaPS II and
the Trust Capital Securities II shall be third party beneficiaries of, and
entitled to enforce, the provisions of this Section 4.02, as if such provisions
constituted a contract between the Corporation and the holders of the Class C
Shares, and the holders of the RegCaPS II and the Trust Capital Securities II
were third-party beneficiaries to such contract.
SECTION 4.03 Issuance, Purchase and Redemption of Junior Shares.
Other than in the circumstances described in Section 4.02 above, the Corporation
shall not issue any Junior Shares or purchase or redeem any outstanding Junior
Shares unless, prior to such issuance, purchase or redemption, the Board of
Directors determines in good faith that the terms of such issuance, purchase or
redemption reflect the fair value of the Junior Shares to be issued, purchased
or redeemed. In addition, the Corporation will not purchase or redeem any Junior
Shares if such purchase or redemption would cause the net worth of the
Corporation (determined in accordance with US GAAP), as of the last day of the
most recently ended fiscal quarter and after giving affect to such purchase or
redemption, to be less than the Minimum Net Worth Amount.
SECTION 4.04 Payment of Dividends. Dividends and other payments on
the Class C Shares will be payable to the holders thereof as they appear on the
books and records of the Corporation on the relevant record dates, which will be
one Business Day prior to the relevant Dividend Date or other payment date. Such
Dividends will be paid through the Paying Agent who will hold amounts received
from the Corporation in respect of the Class C Shares for the benefit of the
holders of the Class C Shares. In the event that any Class C Shares do not
remain in book-entry only form, the relevant record dates shall be the 15th day
of the month of the relevant Dividend Date or other payment date. In the event
that any Dividend Date is not a Business Day, payment of the Dividends payable
on such date will be made on the next succeeding day which is a Business Day
(without any interest or other payment in respect of the dividends subject to
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. If a
Dividend is not paid in full on
9
the applicable Dividend Date, notice of the failure to pay such Dividend will be
sent to each holder of Class C Shares by first-class mail to such holder's
address as shown in the register kept by the Registrar.
SECTION 4.05 Intentionally Omitted.
SECTION 4.06 Earnings and Profits Gross-up Payments. (a) To the
extent that dividends paid with respect to the Class C Shares or Common Shares
exceed the Corporation's earnings and profits as calculated for U.S. federal
income tax purposes, they will not constitute dividends for U.S. federal income
tax purposes and will not qualify for the dividends-received deduction. In such
event, additional distributions will be made by the Corporation to place each
holder of the Class C Shares in the same position it would have been in if all
dividends from the Corporation were paid from such earnings and profits,
assuming for these purposes that such holder was eligible for the
dividends-received deduction.
(b) If any Dividend on the Class C Shares with respect to any fiscal
year (including any Gross-Up Payment (as defined below)) constitutes, in whole
or in part, a return of capital (or is treated as gain from the sale or exchange
of the Class C Shares) (a "QUALIFYING DIVIDEND"), the Corporation will pay (if
declared), within 180 days after the end of such fiscal year, out of funds
legally available therefor, an amount equal to the aggregate Gross-Up Payments
to Qualified Investors (as defined below) with respect to all Qualifying
Dividends on the Class C Shares during such fiscal year. A "QUALIFIED INVESTOR"
with respect to a Qualifying Dividend during a fiscal year means a person who
was entitled to receive such Qualifying Dividend.
(c) A "GROSS-UP PAYMENT" to a Qualified Investor with respect to all
Qualifying Dividends during a fiscal year means an additional Dividend on the
Class C Shares to a Qualifying Investor in an amount which, when taken together
with the aggregate Qualifying Dividends paid to such Qualified Investor during
such fiscal year, would cause such Qualified Investor's net yield in dollars
(after U.S. federal income tax consequences and treating, for purposes of
calculating net yield in dollars, the sum of that portion of the Qualifying
Dividends and the Gross-Up Payment otherwise treated as a return of capital as
capital gain recognized upon the taxable sale or exchange of Class C Shares)
from the aggregate of both the Qualifying Dividends and the Gross-Up Payment to
be equal to the net yield in dollars (after U.S. federal income tax
consequences) which would have been received by such Qualified Investor if the
entire amount of the aggregate Qualifying Dividends had instead been treated as
a dividend for U.S. federal income tax purposes. Such Gross-Up Payment shall be
calculated using the applicable maximum marginal U.S. federal corporate income
tax rate applicable to ordinary income and capital gains, as the case may be,
and, where applicable, the dividends-received deduction, as specified in Section
243(a)(i) of the Code or any successor provision, without consideration being
given to the time value of money, the U.S. federal income tax situation of any
specific Qualified Investor, or any state or local tax consequences that may
arise. The Corporation shall make a determination, based upon the reasonably
estimated earnings and profits of that portion, if any, of a Qualifying Dividend
for a fiscal year that will be treated as dividend for U.S. federal income tax
purposes, and such determination shall be final and binding for purposes of
calculating the amount of the Gross-Up Payments with respect to all Qualifying
Dividends for such fiscal year.
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ARTICLE 5
LIQUIDATION PREFERENCE
SECTION 5.01 Liquidation Preference. (a) In the event of any
voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, after payment or provision for the liabilities of the Corporation
and the expenses of such dissolution, liquidation or winding up, the holders of
the outstanding Class C Shares will be entitled to receive out of the assets of
the Corporation or proceeds thereof available for distribution to holders of
Class C Shares, before any payment or distribution of assets is made to holders
of the Common Shares or any other Junior Shares, the Class C Share Liquidation
Amount. If the assets of the Corporation available for distribution in such
event are insufficient to pay in full the aggregate amount payable to holders of
the Class C Shares and holders of all other classes or series of equity
securities of the Corporation, if any, ranking, as to the distribution of assets
upon dissolution, liquidation or winding up of the Corporation, on a parity with
the Class C Shares, the assets will be distributed to the holders of Class C
Shares and holders of such other equity interests pro rata, based on the full
respective preferential amounts to which they are entitled. After payment of the
full amount of the distribution of assets upon dissolution, liquidation or
winding up of the Corporation to which they are entitled, the holders of Class C
Shares will not be entitled to any further participation in any distribution of
assets by the Corporation.
(b) Notwithstanding Section 5.01(a) above, holders of Class C Shares
will not be entitled to be paid any amount in respect of a dissolution,
liquidation or winding up of the Corporation until holders of any classes or
series of securities of the Corporation ranking, as to the distribution of
assets upon dissolution, liquidation or winding up of the Corporation, prior to
the Class C Shares have been paid all amounts to which such classes or series
are entitled. At the time of issuance of the Class C Shares, no class or series
of securities of the Corporation ranking prior to the Class C Shares with
respect to the distribution of assets upon dissolution, liquidation or winding
up of the Corporation exists other than the Series B Preferred Stock and Series
C Preferred Stock.
(c) Notwithstanding anything else in this Schedule 2, neither the
sale, lease or exchange (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property and assets of the
Corporation, nor the merger, consolidation or combination of the Corporation
into or with any other person or the merger, consolidation or combination of any
other. person 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 5.01.
ARTICLE 6
REDEMPTION
SECTION 6.01 Optional Redemption. (a) The Class C Shares will not be
subject to mandatory redemption at any time. Prior to March 1, 2030, Class C
Shares will not be subject to optional redemption. On or after March 1, 2030,
Class C Shares may be redeemed at the option of the Corporation at any time, in
whole but not in part, at their fair market value (the "REDEMPTION AMOUNT") as
determined by a nationally recognized investment bank retained by
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the Corporation, based on the amount that would have been payable with respect
to such Class C Share if the Corporation were liquidated as of the applicable
redemption date and, immediately prior to such liquidation, such Class C Share
were converted into the Corresponding Number of Junior Shares.
SECTION 6.02 Procedure for Redemption. (a) Notice of any redemption
of the Class C Shares (a "REDEMPTION NOTICE") will be given by the Corporation
by mail to each holder of Class C Shares not fewer than 30 nor more than 60 days
before the date fixed for redemption. For purposes of the calculation of the
date of redemption and the dates on which notices are given pursuant to this
Section 6.02(a), a Redemption Notice shall be deemed to be given on the day such
notice is first mailed, by first-class mail, postage prepaid, to holders of the
Class C Shares. Each Redemption Notice shall be addressed to the holders of
Class C Shares at the address of each such holder appearing in the books and
records of the Corporation. No defect in the Redemption Notice or in the mailing
thereof with respect to any holder of Class C Shares shall affect the validity
of the redemption proceedings with respect to any other holder of Class C
Shares.
(b) If the Corporation gives a Redemption Notice (which notice will
be irrevocable), then by 12:00 noon, New York City time, on the redemption date,
the Corporation (A) if the Class C Shares are in book-entry form with the
Depositary Trust Company ("DTC"), will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Amount and will give DTC irrevocable
instructions and authority to pay the Redemption Amount in respect of the Class
C Shares held through DTC in global form or (B) if the Class C Shares are held
in certificated form (each such certificate a "Class C Share Certificate"), will
deposit with the Paying Agent, funds sufficient to pay the applicable Redemption
Amount of any such Class C Shares and will give to the Paying Agent irrevocable
instructions and authority to pay such amounts to the holders of Class C Shares,
upon surrender of their certificates, by delivery of check, mailed to the
address of the relevant holder appearing on the books and records of the
Corporation on the redemption date. For these purposes, the applicable
Redemption Amount shall not include Dividends which are being paid to holders of
Class C Shares who were holders of Class C Shares on a relevant record date.
Upon satisfaction of the foregoing conditions, then immediately prior to the
close of business on the date of such deposit or payment, all rights of holders
of Class C Shares so called for redemption will cease, except the right of the
holders of Class C Shares to receive the Redemption Amount, but without interest
on such Redemption Amount, and from and after the date fixed for redemption,
such Class C Shares will not receive dividends or bear interest.
(c) In the event that any date fixed for redemption of Class C
Shares is not a Business Day, then payment of the Redemption Amount payable on
such date will be made on the next succeeding Business Day (and without any
interest in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day in each case, with the same force and effect as if made
on such date fixed for redemption. In the event that payment of the Redemption
Amount is improperly withheld or refused and not paid by the Corporation,
Dividends on the Class C Shares called for redemption will continue to be
payable in accordance with the terms hereof from the original redemption date
until the Redemption Amount is actually paid.
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(d) The Corporation shall not be required to register or cause to be
registered the transfer of any Class C Shares which have been called for
redemption.
(e) Except as provided in Article 10, the Class C Shares which have
been issued and reacquired in any manner, including shares purchased or
redeemed, shall (upon compliance with any applicable provisions of the laws of
the State of Delaware) have the status of authorized and unissued Class C Shares
and may be reissued.
ARTICLE 7
VOTING RIGHTS
SECTION 7.01 Voting Rights. (a) The holders of the Class C Shares
will be entitled to one vote per share and will be entitled to vote with the
Common Shares as a single class on all matters submitted to a vote of the Common
Shares (other than those matters affecting only the Common Shares). Except as
provided in Article 10, prior to transferring ownership of any Class C Shares to
a transferee other than Partnership II or Trust II, such Class C Shares shall be
converted to the same number of shares of a class of stock of the Corporation
(the "CONVERSION SHARES") having rights, preferences and privileges
substantially identical to the Class C Shares except that the Conversion Shares
will be entitled to no voting rights other than as required by law and other
than with respect to adverse amendments to the terms of the Conversion Shares
and the issuance of equity securities that rank senior to or pari passu with the
Conversion Shares with respect to the payment of dividends or amounts upon
liquidation.
(b) The holders of the Class C Shares and the Conversion Shares will
be entitled to vote separately as a single class on the matters described in
this paragraph. The consent of the holders of not less than a majority of the
outstanding Class C Shares and Conversion Shares, voting as a single class, is
required (i) to amend, alter, supplement or repeal the terms of the Class C
Shares and the Conversion Shares (it being a condition to any such amendment,
alteration, supplement or repeal that it have a substantially identical effect
on the rights, preferences and privileges of both the Class C Shares and the
Conversion Shares), or (ii) if the Corporation has not paid in full the lesser
of (A) each of the last four Dividends on their respective Dividend Payment
Dates or (B) prior to the fourth scheduled Dividend Payment Date, all Dividends
that could have been paid on the Class C Shares and the Conversion Shares, for
the Corporation to issue, or to increase the authorized amount of, the Class C
Shares or the Conversion Shares or any other equity securities that rank pari
passu with or senior to the Class C Shares and the Conversion Shares. Further,
if the Corporation has paid in full the lesser of (A) each of the last four
Dividends at the Class C Share Indicative Rate on their respective Dividend
Payment Dates or (B) prior to the fourth scheduled Dividend Payment Date, all
Dividends that could have been paid on the Class C Shares and the Conversion
Shares, the Corporation may issue an unlimited amount of additional Class C
Shares and the Conversion Shares and other equity securities that rank pari
passu with the Class C Shares and the Conversion Shares without the consent of
the holders of the Class C Shares or the Conversion Shares.
(c) Whenever Dividends on the Class C Shares and the Conversion
Shares are in arrears for five or more consecutive Dividend Periods, the holders
of Class C Shares and the Conversion Shares, voting as a single class, will be
entitled, subject to any necessary regulatory
13
actions, to elect two Special Independent Directors to the Board of Directors,
subject to any necessary regulatory actions, at a special meeting called by the
holders of record of at least 25% of the Class C Shares and the Conversion
Shares in the aggregate. The Special Independent Directors shall vacate office
if Dividends are resumed and are paid regularly for at least two consecutive
Dividend Periods.
(d) Notwithstanding the foregoing, the Corporation shall have the
right, without the prior consent of the holders of Class C Shares, to amend,
alter, supplement or repeal any terms of the Class C Shares (i) to cure any
ambiguity, or to cure, correct or supplement any defective provision thereof or
(ii) to make any other provision with respect to matters or questions arising
with respect to the Class C Shares that is not inconsistent with the provisions
thereof so long as such action does not materially and adversely affect any of
the rights, preferences and privileges of the holders of Class C Shares;
provided however, that any increase in the amount of authorized or issued Class
C Shares will be deemed not to materially and adversely affect any of the
rights, preferences and privileges of the holders of Class C Shares.
(e) The consent or votes required in Section 7.01(b) and (c) above
shall be in addition to any approval of stockholders of the Corporation which
may be required by law or pursuant to any provision of the Corporation's
Certificate of Incorporation or By-Laws, which approval shall be obtained by
vote of the stockholders of the Corporation in the manner provided in Section
7.01(a) above.
SECTION 7.02 No Affiliate Voting. Notwithstanding that holders of
Class C Shares are entitled to vote or consent under any of the circumstances
described above, any of the Class C Shares at such time that are beneficially
owned by the Corporation or by any entity directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Corporation
shall not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding; provided, however, that
persons (other than Affiliates of the Corporation) to whom the Corporation or
any of its subsidiaries have pledged Class C Shares may vote or consent with
respect to such pledged Class C Shares pursuant to the terms of such pledge;
provided, further, that any Class C Shares held in the trust may be voted in
accordance with this Certificate; provided that any Class C Shares held by
Partnership II or Trust II may be voted in accordance with the terms of the
Class C Shares by Trust II or Partnership II, respectively.
ARTICLE 8
MERGER, CONSOLIDATION OR AMALGAMATION OF THE CORPORATION
SECTION 8.01 Merger, Consolidation or Amalgamation of the
Corporation. The Corporation may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other entity, except as
described below. The Corporation may, with the consent of at least one of the
Special Independent Directors, if any, on the Board of Directors at the time the
issue is considered and without the consent of the holders of the Class C
Shares, consolidate, amalgamate, merge with or into, or be replaced by a
corporation organized as such under the laws of any State of the United States;
provided, that:
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(a) if the Corporation is not the survivor, such successor entity
either (x) expressly assumes all of the obligations of the Corporation under the
Class C Shares or (y) substitutes securities for the Class C Shares (the
"SUCCESSOR SECURITIES"), so long as the Successor Securities rank the same as
the Class C Shares rank with respect to Dividends and other payments thereon;
(b) such merger, consolidation, amalgamation or replacement does not
adversely affect any of the rights, preferences and privileges of the holders of
the Class C shares (including any Successor Securities) in any material respect;
(c) prior to such merger, consolidation, amalgamation or
replacement, the Corporation has received an opinion of a nationally recognized
law firm experienced in such matters to the effect that: (i) such merger,
consolidation, amalgamation or replacement will not adversely affect any of the
rights, preferences and privileges of the holders of the Class C Shares
(including any Successor Securities) in any material respect and (ii) following
such merger, consolidation, amalgamation or replacement, the Corporation (or
such successor entity) will not be required to register under the 1940 Act; and
(d) distributions with respect to the Successor Securities would be
eligible for the dividends-received deduction.
ARTICLE 9
TRANSFER OF CLASS C SHARES
SECTION 9.01 General. The Corporation shall provide for the
registration of Class C Share Certificates and for transfers of Class C Share
Certificates. Upon surrender for registration of transfer of any Class C Share
Certificate, the Corporation shall cause one or more new Class C Share
Certificates to be issued in the name of the designated transferee or
transferees. Every Class C Share Certificate surrendered for registration of
transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Corporation duly executed by the holder of such Class C
Shares or his or her attorney duly authorized in writing. Each Class C Share
Certificate surrendered for registration of transfer shall be cancelled by the
Corporation. A transferee of a Class C Share Certificate shall be entitled to
the rights and subject to the obligations of a holder of Class C Shares
hereunder upon the receipt by the transferee of a Class C Share Certificate,
which receipt shall be deemed to constitute a request by such transferee that
the books and records of the Corporation reflect such transferee as a holder of
Class C Shares.
SECTION 9.02 Definitive Certificates. Unless and until the
Corporation issues a global Class C Share Certificate pursuant to Section
9.03(a) the Corporation shall only issue definitive Class C Share Certificates
to the holders of Class C Shares. The Corporation may treat the Person in whose
name any Class C Share Certificate shall be registered on the books and records
of the Corporation as the sole holder of such Class C Share Certificate and of
the Class C Shares represented by such Class C Share Certificate for purposes of
receiving Dividends and for all other purposes whatsoever (including without
limitation, tax returns and information reports) and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in
15
such Class C Share Certificate or in the Class C Shares represented by such
Class C Share Certificate on the part of any other Person, whether or not the
Corporation shall have actual or other notice thereof
SECTION 9.03 Book Entry Provisions.
(a) General. The provisions of this Section 9.03(a) shall apply only
in the event that the Class C Shares are distributed to the holders of RegCaPS
II or Trust Securities II in connection with the involuntary or voluntary
dissolution, winding up or liquidation of Partnership II or of Trust II. Upon
the occurrence of such event, a global Class C Share Certificate representing
the Book-Entry Interests shall be delivered to DTC, the initial Clearing Agency,
by, or on behalf of the Corporation and any previously issued and still
outstanding definitive Class C Share Certificates shall be of no further force
and effect. The global Class C Share Certificate shall initially be registered
on the books and records of the Corporation in the name of Cede & Co., the
nominee of DTC, and no holder of Class C Shares will receive a new definitive
Class C Share Certificate representing such holder's interests in such Class C
Share Certificate, except as provided in Section 9.03(c). In connection with the
involuntary or voluntary dissolution, winding up or liquidation of Partnership
II and of Trust II, Cede & Co., the nominee of DTC, shall automatically be
deemed to be the holder of all of the Class C Shares. Unless and until new
definitive, fully registered Class C Share Certificates (the "DEFINITIVE CLASS C
SHARE CERTIFICATES") have been issued to the holders of Class C Shares pursuant
to Section 9.03(c):
(i) The provisions of this Section shall be in full force and
effect;
(ii) The Corporation shall be entitled to deal with the Clearing
Agency for all purposes of this Certificate (including the payment of
Dividends, Redemption Amounts and liquidation proceeds on the Class C
Share Certificates and receiving approvals, votes or consents hereunder)
as the sole holder of the Class C Share Certificates and shall have no
obligation to the holders of Class C Shares;
(iii) None of the Corporation, the Board of Directors, or any
Special Independent Director or any agents of any of the foregoing shall
have any liability or responsibility for any aspect of the records
relating to or Dividends made on account of beneficial ownership interests
in a global Class C Share Certificate for such beneficial ownership
interests or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests; and
(iv) Except as provided in Section 9.03(c) below, the holders of
Class C Shares will not be entitled to receive physical delivery of the
Class C Shares in definitive form and will not be considered holders
thereof for any purpose under this Certificate of Designations, and no
global Class C Share Certificate representing Class C Shares shall be
exchangeable, except for another global Class C Share Certificate of like
denomination and tenor to be registered in the name of DTC or Cede & Co.,
or to a successor Depositary or its nominee. Accordingly, each holder of
Class C Shares must rely on the procedures of DTC or if such person is not
a Participant, on the procedures of
16
the Participant through which such person owns its interest to exercise
any rights of a holder under this Certificate of Designations.
(b) Notices to Clearing Agency. Whenever a notice or other
communication to the holders of Class C Shares is required under the Partnership
Agreement, unless and until definitive Class C Share Certificates shall have
been issued to the holders of Class C Shares pursuant to Section 9.03(c) the
Corporation shall give all such notices and communications specified herein to
be given to the holders of Class C Shares to the Clearing Agency, and shall have
no obligations to the holders of Class C Shares.
(c) Definitive Class C Share Certificates. Definitive Class C Share
Certificates shall be prepared by the Corporation and exchangeable for the
global Class C Share Certificate or Certificates if and only if (i) the
Depositary notifies the Corporation that it is unwilling or unable to continue
its services as a securities Depositary and no successor Depositary shall have
been appointed, (ii) the Depositary, at any time, ceases to be a Clearing Agency
registered under the Exchange Act at such time as the Depositary is required to
be so registered to act as such Depositary and no successor Depositary shall
have been appointed, or (iii) the Corporation, in its sole discretion,
determines that such global Class C Share Certificate shall be so exchangeable.
Upon surrender of the global Class C Share Certificate or Certificates
representing the Book-Entry Interests by the Clearing Agency, accompanied by
registration instructions, the Corporation shall cause definitive Class C Share
Certificates to be delivered to holders of Class C Shares in accordance with the
instructions of the Clearing Agency. The Corporation shall not be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. The definitive Class C Share
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as may be required by any national securities exchange on which
Class C Shares may be listed and is reasonably acceptable to the Corporation, as
evidenced by its execution thereof.
SECTION 9.04 Registrar, Transfer Agent and Paying Agent.
(a) The Corporation will act as Registrar, Transfer Agent and Paying
Agent for the Class C Shares for so long as the Class C Shares are held by
Partnership II or, if Partnership II is liquidated in connection with a
Partnership Tax Event, for so long as the Class C Shares remain in book-entry
only form.
(b) Except in such case where the Corporation shall act as Registrar
or Paying Agent pursuant to Section 9.04(a) hereof, the Corporation shall
maintain in the Borough of Manhattan, City of New York, State of New York (i) an
office or agency where Class C Shares may be presented for registration of
transfer or for exchange ("REGISTRAR") and (ii) an office or agency where Class
C Shares may be presented for payment ("PAYING AGENT"). The Registrar shall keep
a register of the Class C Shares and of their transfer and exchange. The
Corporation may appoint the Registrar and the Paying Agent and may appoint one
or more co-registrars and one or more additional paying agents in such other
locations as it shall determine. The term "PAYING AGENT" includes any additional
paying agent. The Corporation may change any Paying Agent, Registrar or
co-registrar without prior notice to any holder. If the Corporation fails to
appoint or maintain another entity as Registrar or Paying Agent, the Corporation
shall act as such.
17
(c) Registration of transfers of Class C Shares shall be effected
without charge by or on behalf of the Corporation, but upon payment (with the
giving of such indemnity as the Corporation may require) in respect of any tax
or other governmental charges that may be imposed.
SECTION 9.05 Transfer Restrictions. The Class C Shares may only be
transferred (i) to QIBs and (ii) to IAIs who, if they are not QIBs, prior to
such transfer, furnish to the Corporation or the Transfer Agent a signed letter
containing certain representations and agreements relating to restrictions on
transfer by such IAI. The foregoing restriction may be waived if the
Corporation, in its sole discretion, determines such restrictions are no longer
necessary to preserve the Corporation's exemptions from registration
requirements under the Securities Act, the Securities Exchange Act and the 1940
Act. Any purported purchase or transfer of the Class C Shares in violation of
such restrictions will be null and void. Furthermore the Corporation may also
require the sale of Class C Shares held by holders who fail to comply with the
foregoing.
ARTICLE 10
CONVERSION OF CLASS C SHARES
SECTION 10.01 Conversion of Class C Shares. Upon closing of the
Initial Public Offering, each issued and outstanding Class C Share shall convert
automatically (without any action required on the part of the holder) into a
number of Common Shares equal to the amount provided in clause (i) of the
definition of Class C Share Liquidation Amount divided by the IPO Price. The
Class C Shares which have been converted shall be retired and become authorized
but unissued shares of Class C Common Stock, but such shares may not be
reissued.
ARTICLE 11
GENERAL PROVISIONS
SECTION 11.01 General Provisions. The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designations are
for convenience of reference only and shall not define, limit or affect any of
the provisions hereof.
CERTIFICATE OF DESIGNATION, RIGHTS AND PREFERENCES
OF THE
SERIES B PREFERRED STOCK
OF
ASSURANT, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Assurant, Inc. (the "Corporation"), a corporation organized and existing
under the General Corporation Law of the State of Delaware, does hereby certify
that, pursuant to the provisions of Section 151 of the General Corporation Law
of the State of Delaware, its Board of Directors duly adopted the following
resolutions on December 12, 2003, which resolutions remain in full force and
effect as of the date hereof:
WHEREAS, the Certificate of Incorporation of the Corporation authorizes
the issuance of 20,000,000 shares of preferred stock, par value one dollar
($1.00) per share ("Preferred Stock"), and, further, authorizes the Board of
Directors of the Corporation (the "Board of Directors"), by resolution or
resolutions, to divide and establish any or all of the unissued shares of
Preferred Stock not then allocated to any series of Preferred Stock into one or
more series, and without limiting the generality of the foregoing, to fix and
determine the designation of each such series, the number of shares which shall
constitute such series and such voting powers, and such preferences and relative
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof of the shares of each class or series so established;
WHEREAS, it is the desire of the Board of Directors, pursuant to its
authority as aforesaid, to authorize and fix the terms of a series of preferred
stock and the number of shares constituting such series:
NOW, THEREFORE, BE IT RESOLVED, that a series of Preferred Stock with the
powers, designations, preferences, rights, qualifications, limitations and
restrictions as provided herein is hereby authorized and established as follows:
1. Designation; Rank.
(a) Designation. There is hereby designated, out of the authorized but
unissued shares of Preferred Stock of the Corporation, a series thereof to
consist of Nineteen Thousand One Hundred Sixty (19,160) shares, par value one
dollar ($1.00) per share, with such series being known as "Series B Preferred
Stock" (the "Series B Stock"). The Series B Stock has a liquidation preference
of one thousand dollars ($1,000.00) per whole share (the "Liquidation Price").
(b) Rank. The Series B Stock ranks, with respect to rights to receive
dividends and distributions upon liquidation, winding up or dissolution of the
Corporation (a) senior to the Corporation's Common Stock, par value $0.01 per
share (the "Common Stock"), the Corporation's Class B Common Stock, par value
$0.01 per share (the "Class B Common Stock") and the Corporation's Class C
Common Stock, par value $0.01 per share (the "Class C Common Stock," and
together with the Common Stock and the Class B Common Stock, the "Common
Shares"), and any series of Preferred Stock issued by the Corporation whose
terms provide specifically that such series will rank junior to the Series B
Stock with respect to rights to receive payment of dividends and distributions
upon liquidation or whose terms fail to specify the ranking of such class or
series relative to the Series B Stock with respect to rights to receive payment
of dividends and distributions upon liquidation (together with the Common
Shares, the "Junior Securities"), and (b) on a parity with the Corporation's
Series C Preferred Stock, par value $1.00 per share (the "Series C Stock"), and
any other series of Preferred Stock issued by the Corporation whose terms
provide specifically that such series shall rank on a parity with the Series B
Stock with respect to rights to receive payment of dividends and distributions
upon liquidation (collectively, the "Parity Securities"). Without the prior
approval of the holders of a majority of the Series B Stock, the Corporation
shall not issue any class or series of security whose terms provide that such
security shall rank senior to the Series B Stock with respect to rights to
receive payment of dividends and distributions upon liquidation.
(c) No Fractional Shares. The Corporation shall not be required under any
circumstances to issue any fractional shares of Series B Stock.
2. Dividends; Priority.
(a) Rate, Payment Date. The Holders of Series B Stock shall be entitled to
receive, as declared by the Corporation, out of the funds of the Corporation
legally available therefor under applicable Delaware law, cash dividends at the
rate of four percent (4.0%) per share per annum (the "Dividend Rate"),
multiplied by the Liquidation Price of such share. Such dividends shall be
payable in arrears in equal amounts on a quarterly basis, within ten Business
Days following each March 31, June 30, September 30 and December 31 of each year
(each of such dates being a "Dividend Payment Date" and each such quarterly
period being a "Dividend Period"). Such dividends shall be cumulative from the
Merger Effective Date, whether or not in any Dividend Period there shall be
funds of the Corporation legally available for the payment of such dividends.
Dividends payable on the Series B Stock for any period less than a full
quarterly Dividend Period shall be computed on the basis of the actual number of
days elapsed and the actual number of days for such partial Dividend Period.
(b) Additional Dividends. For any Dividend Period commencing after the
issuance of the Series B Stock with respect to which the dividend is not
declared and fully paid in cash at the Dividend Rate on the Dividend Payment
Date at the end of such Dividend Period, to the extent permitted by applicable
law, such dividends shall be added (solely for the purpose of calculating
dividends payable on the Series B Stock) to the Liquidation Price of the Series
B Stock effective at the beginning of the Dividend Period next succeeding the
Dividend Period as to which such dividends were not paid and shall thereafter
accumulate additional dividends in respect thereof ("Additional Dividends") at
the Dividend Rate until such unpaid dividends have been paid in full.
(c) Record Date. Dividends shall be paid to the holders of record of
shares of Series B Stock as they appear in the stock register of the Corporation
at the close of business on the record date therefor, which record date shall be
the tenth Business Day immediately preceding the Dividend Payment Date relating
thereto.
3. Redemption.
(a) Optional Redemption by Holder. The shares of Series B Stock may be
redeemed at the election of any holder thereof, to the extent that the
Corporation has funds legally available therefor under applicable Delaware law,
as follows:
(i) A holder may require that the Corporation redeem any or all of
such holder's shares of Series B Stock at any time after the fifth (5th)
anniversary date of the Original Issue Date at a redemption price equal to
the Liquidation Price per whole share, together with an amount equal to
accumulated and unpaid dividends thereon to the date of redemption (the
"Redemption Price"). Such redemption may be for all or part of the shares
of Series B Stock held by such holder, as requested by such holder, but if
less than all such shares are being redeemed, such redemption on any one
date must be for not less than the lesser of (1) 1,000 shares of Series B
Stock or (2) the maximum number of shares of Series B Stock for which the
Corporation has funds legally available to redeem.
(ii) If and whenever two consecutive quarterly dividends payable on
the Series B Stock are in arrears and are not paid in full, a holder may
require that the Corporation redeem all, but not less than all, of such
holder's shares of Series B Stock at the Redemption Price; provided,
however, that such holder shall have given the Corporation a written
notice that such dividends are in arrears and the Corporation shall not
have paid such dividends within 10 days after receipt of the notice.
(iii) In the event that the Corporation's Net Worth is less than
$500,000,000 for any 30-day period, a holder may require that the
Corporation redeem all, but not less than all, of such holder's shares of
Series B Stock at the Redemption Price.
The Corporation's failure to redeem because it does not have funds legally
available therefor under applicable Delaware law shall not excuse a breach
by the Corporation of this Certificate and for failure to redeem.
(b) Optional Redemption by the Corporation. The shares of Series B Stock
may be redeemed at the election of the Corporation, to the extent that the
Corporation has funds legally available therefor under applicable Delaware law,
as follows:
(i) The Corporation may redeem all outstanding shares of the Series
B Stock at any time after the Original Issue Date in the event that the
Corporation has submitted to its stockholders a proposed matter or action
that entitles the holders of the Series B Stock, pursuant to applicable
law, to vote as a class, separately or with the holders of other series of
the Corporation's Preferred Stock, on such matter or action, and such
holders do not vote as requested by the Corporation. If such matter or
action, if approved
and consummated, would change a material term of this Certificate, then
the redemption pursuant to this Section 3(b)(i) shall be at the Redemption
Price, plus an amount equal to any of the following expenses that are
incurred by such holder solely and directly as a result of such
redemption: federal, state or local income taxes, penalties and interest
with respect to such income taxes, and reasonable accounting and legal
fees (collectively, the "Early Redemption Expenses"). Otherwise, such
redemption pursuant to this Section 3(b)(i) shall be at the Redemption
Price. In any event, the Corporation must redeem all shares of the Series
B Stock then outstanding.
(ii) The Corporation may redeem, at the Redemption Price, any or all
of the outstanding shares of the Series B Stock at any time after the
Original Issue Date in the event that the Corporation (or its predecessor)
is entitled to be indemnified by the Initial Holders for a claim pursuant
to the Merger Agreement. In such event, the Corporation shall be entitled
to redeem a number of whole shares of the Series B Stock such that the
aggregate Redemption Price thereof will be at least equal to the amount of
the claim. The Corporation shall not be required to pay to the holders the
Redemption Price in cash, but such amount shall be deemed applied to the
amount of the outstanding indemnification claim.
(iii) The Corporation may redeem, at the Redemption Price, all
outstanding shares of the Series B Stock at any time that such shares are
owned by a Charitable Organization.
(iv) The Corporation may redeem all outstanding shares of the Series
B Stock at any time after the Original Issue Date in its discretion;
provided, however, that the Corporation must redeem all shares of the
Series B Stock then outstanding, and the price for such redemption shall
be the Redemption Price plus the Early Redemption Expenses.
(c) Mandatory Redemption. Within ninety days following the twentieth (20th)
anniversary of the Original Issue Date, the Corporation shall redeem all shares
of the Series B Stock then outstanding, to the extent that the Corporation has
funds legally available therefor under applicable Delaware law, at the
Redemption Price.
(d) Procedures.
(i) To exercise redemption rights pursuant to Section 3(a) above, a
holder of Series B Stock shall deliver a written notice to the Corporation
stating the number of shares of Series B Stock to be redeemed, the
certificate number(s) representing such shares and the requested
redemption date, which shall be no sooner than 90 days and no later than
120 days after the date of the notice.
(ii) To exercise redemption rights pursuant to Section 3(b) above,
the Corporation shall deliver a written notice to each holder of Series B
Stock stating the requested redemption date, which shall be no sooner than
90 days and no later than 120 days after the date of the notice and, in
the case of a redemption pursuant to Section 3(b)(ii) or 3(b)(iii), the
number of shares to be redeemed.
(iii) Upon the date specified for redemption in the applicable
notice, and upon delivery to the Corporation of the certificate(s)
representing the shares of Series B Stock to be so redeemed (executed for
transfer in a manner reasonably acceptable to the Corporation), the
Corporation shall (except as set forth in Section 3(b)(ii)) pay to each
holder of such Series B Stock to be redeemed the requisite redemption
amount in cash, by means of a wire transfer to an account specified in
advance by such holder (or by means of a Corporation check if no such
account is specified). Simultaneously upon payment of the requisite
redemption amount, the holder shall tender the redeemed shares of Series B
Stock and shall execute and endorse the stock certificates and deliver
them to the Corporation and take whatever other action is necessary to
deliver to the Corporation
good and marketable title to the shares, free and clear of any claims,
options, charges, encumbrances or rights of others. The holder shall, in
writing, represent and warrant to the Corporation that it is conveying
such shares, with full warranties of good and marketable title, free and
clear of any claims, options, charges, encumbrances or rights of others.
If on such specified redemption date the certificate(s) representing the
shares of Series B Stock to be redeemed have not been delivered to the
Corporation with appropriate execution for transfer, the Corporation shall
set aside the funds required for the redemption of such shares, separate
and apart from its other funds, for the account of the holder of the
shares to be so redeemed, and the Corporation will deliver such amount of
funds (without any obligation to pay interest thereon) to the holder upon
the Corporation's receipt of the stock certificate(s) in accordance with
this Section.
(iv) On and after the date specified for redemption in the
applicable notice, the shares of Series B Stock to be redeemed shall be
deemed cancelled, whether or not the certificate(s) representing such
shares have been delivered to the Corporation in accordance with the
provisions of this Section and shall not be entitled to any future
dividends or liquidation distributions, but only the redemption amount as
set out in this Section 3 plus accrued dividends to the specified
redemption date. In case fewer than all of the shares represented by any
certificate are redeemed, a new certificate representing the unredeemed
shares shall be issued without cost to the holder thereof upon receipt by
the Corporation of the original certificate.
(v) The Corporation shall not be required to redeem any fractional
shares of Series B Stock. In the event that a redemption of whole shares
pursuant to Section 3(b)(ii) results in a Redemption Price greater than
the amount of the related indemnification claim, the Corporation shall pay
to the holders any excess in cash.
(e) Status After Redemption. Shares of Series B Stock redeemed, purchased
or otherwise acquired for value by the Corporation shall, after such
acquisition, have the status of authorized and unissued shares of Preferred
Stock of the Corporation and may be reissued by the Corporation at any time as
shares of any series of Preferred Stock other than as shares of Series B Stock.
4. Liquidation Rights; Priority.
(a) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary- or involuntary (a "Liquidation"),
the holders of shares of the Series B Stock shall be entitled to receive, after
payment or provision for payment of the debts and other liabilities of the
Corporation, out of the remaining net assets of the Corporation, whether such
assets are capital or surplus and whether or not any dividends as such are
declared, the Liquidation Price of one thousand dollars ($1,000.00) per whole
share, together with an amount equal to all accumulated and unpaid dividends
thereon to the date fixed for distribution (collectively, the "Liquidation
Amount"), before any distribution shall be made with respect to any Junior
Securities.
(b) Except as otherwise provided in this Section 4, holders of Series B
Stock shall not be entitled to any participation in any distribution of assets
in the event of any Liquidation. For
the purposes of this Section 4, neither the voluntary sale, lease, conveyance,
exchange or transfer (for cash, securities or other consideration) of all or
substantially all of the assets of the Corporation, nor the consolidation or
merger of the Corporation with one or more Persons (as defined in Section 11
hereof), shall be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation.
(c) If, upon any Liquidation, the Liquidation Amount is not paid in full,
the holders of the Preferred Stock shall share in such distribution in
accordance with the respective certificates of designation of such stock. If,
upon any Liquidation, the amounts payable with respect to the Series B Stock and
any Parity Securities are not paid in full, holders of the Series B Stock and
holders of any Parity Securities will share ratably in any distribution of the
assets of the Corporation in proportion to the respective amounts that would be
payable per share if such assets were sufficient to permit payment in full.
(d) Written notice of any Liquidation stating a payment date and the place
where the distributive amounts shall be payable, shall be given not less than
thirty days prior to the payment date stated therein, to the holders of record
of the Series B Stock at their respective addresses as the same shall appear on
the books of the Corporation.
(e) Any liquidation payment with respect to each fractional share of the
Series B Stock outstanding shall be equal to a ratably proportionate amount of
the Liquidation Amount with respect to each outstanding whole share of Series B
Stock.
5. Restricted Payments.
The Corporation may not directly or indirectly declare, pay or set apart
for payment dividends on or make any payment on account of, or set apart for
payment money for a sinking or other similar fund for the purchase, redemption
or other acquisition of, or make any distribution in respect of, whether in
cash, obligations or shares of the Corporation or other property, any Parity
Securities or Junior Securities if at the time of such action, the Corporation
is in arrears in the payment of dividends on the Series B Stock, meaning that
full cumulative dividends at the Dividend Rate on the Series B Stock as of the
then most recent Dividend Payment Date have not been declared and paid in full
in cash. None of the foregoing restrictions shall apply to (i) the acquisition
of Parity Securities or Junior Securities (or options, rights or warrants to
acquire shares of Parity Securities or Junior Securities) in exchange for or
upon conversion thereof into shares of Capital Stock (as defined in Section 11
hereof) of the Corporation or upon the exercise of options, rights or warrants
to acquire such shares, (ii) the repurchase of Capital Stock of the Corporation
from employees or former employees of the Corporation or its Subsidiaries (as
defined in Section 11 hereof) pursuant to employee benefit plans, employment or
consulting contracts or any agreement among the Corporation and its
securityholders, (iii) the acquisition of any shares of Capital Stock of the
Corporation or options, rights or warrants to acquire such shares in connection
with a purchase price adjustment arising out of acquisitions by the Corporation
(or its predecessor) pursuant to which such shares of Capital Stock or options,
rights or warrants to acquire such shares were issued, (iv) the rescission of
any agreement by the Corporation pursuant to which shares of Capital Stock of
the Corporation (or its predecessor) or options, rights or warrants to acquire
such shares were issued subsequent to the Original Issue Date, or (v) a dividend
on Parity
Securities or Junior Securities at any time in additional shares of the
respective Parity Security or Junior Security.
6. Restrictions on Transferability; Right of First Refusal.
(a) Restrictions on Transferability. Holders shall not be permitted to
sell, give, assign, pledge, transfer, encumber or otherwise dispose of (each a
"Transfer") any or all of the shares of the Series B Stock except in accordance
with this Section 6.
(b) Permitted Transfers. Each of the Initial Holders may Transfer any or
all of such Initial Holder's shares of Series B Stock to any of the following
Persons (each a "Permitted Transferee"): (i) any member of such Initial Holder's
immediate family, which means any of such Initial Holder's spouses, parents,
children, grandchildren, siblings, mothers- and fathers-in-law, sons- and
daughters-in-law, or brothers- and sisters-in-law, or any trust established for
the benefit of any such Person or any DeLue Family Partnership; and (ii) any
organization (a "Charitable Organization") that is exempt from taxation pursuant
to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or any
successor law thereto. A Transfer by an Initial Holder to any Person other than
a Permitted Transferee shall be null and void, unless it is approved by the
Corporation in advance.
(c) Right of First Refusal.
(i) Offer. If any holder desires to Transfer any of such holder's
Series B Stock to any Person other than a Permitted Transferee, such
holder shall make a bona fide offer to sell to the Corporation all of such
shares that it desires to Transfer for the lesser of the proposed purchase
price or the Liquidation Price. Such offer shall be in writing and shall
specify the nature of the Transfer in which such selling holder desires to
engage, including the name or names of the other party or parties to such
proposed transaction and the terms thereof, including the purchase price
and payment terms and shall have attached a written copy of the proposed
binding, bona fide and unconditional offer (containing all terms required
for closing the proposed purchase) to or from the other party or parties
to the proposed transaction (the "Bona Fide Offer"). The Corporation shall
then be entitled to accept the offer from the selling holder at the same
price as set forth in the Bona Fide Offer, and the Corporation may accept
the offer only as to all of the shares that the holder desires to
Transfer. If the Corporation rejects the offer or fails to accept the
offer in writing within thirty days after receipt thereof, then all of
such shares shall be released from the restrictions contained in Section
6(a) solely for the purpose of completing within ninety days the
transaction contemplated in the above offer. Otherwise, the Series B Stock
shall remain subject to Section 6(a) hereof. Any Person acquiring Series B
Stock pursuant to a Transfer shall take such stock subject to all the
provisions hereof, including, but not limited to, the provisions of this
Section 6. The Corporation's purchase of shares pursuant to this Section 6
shall in no way be deemed a redemption pursuant to Section 3(b)(iv).
(ii) Closing. The closing (the "Closing") of a purchase by the
Corporation pursuant to Section 6(c)(i) shall take place at a location and
(subject to any time limitation set forth in this Certificate), on a date
mutually agreed upon by the parties;
provided, however, that such Closing may take place by exchanging
documents by overnight mail or such other means as may be mutually agreed
upon by the parties.
(iii) Payment of Purchase Price. Subject to the provisions of
Section 6(c)(iv), the purchase price for the Series B Stock purchased by
the Corporation pursuant to this Section 6(c) shall be paid by the
Corporation either, at the Corporation's election, in cash by means of a
wire transfer to an account specified in advance by such holder (or by
means of a Corporation check if no such account is specified), or in a
form of consideration reasonably equivalent to the form specified in the
Bona Fide Offer. Simultaneously upon payment of the purchase price, the
selling holder shall tender such holder's Series B Stock and shall execute
and endorse the stock certificates and deliver them to the Corporation and
take whatever other action is necessary to deliver to the Corporation good
and marketable title to the shares, free and clear of any claims, options,
charges, encumbrances or rights of others. The selling holder shall, in
writing, represent and warrant to the Corporation that it is conveying
such shares, with full warranties of good and marketable title, free and
clear of any claims, options, charges, encumbrances or rights of others.
7. Voting Rights.
Each share of Series B Stock issued and outstanding from time to time
shall be entitled to one vote on all matters upon which the holders of Common
Stock of the Corporation are entitled to vote, and in all such matters, the
holders of the Series B Stock shall vote with the holders of the Common Stock
and not as a separate class. Such voting rights shall be in addition to any
other voting rights to which the holders of Series B Stock may be entitled
pursuant to the General Corporation Law of the State of Delaware.
8. No Conversion Rights.
The shares of Series B Stock shall not be convertible into Common Stock or
any other equity security, derivative or otherwise, of the Corporation.
9. Reports.
The Corporation shall deliver to the holders of the Series B Stock (i)
copies of its internally prepared quarterly balance sheet and income statement
within sixty days after the end of each calendar quarter, and (ii) copies of its
annual balance sheet and income statement, including any notes thereto and any
auditors' reports thereon, within one hundred twenty days after the end of each
fiscal year.
10. Notices.
Any notice required or to be given hereunder shall be in writing and shall
be deemed sufficient when (i) mailed by United States certified mail, return
receipt requested, (ii) mailed by overnight express mail, (iii) sent by
facsimile or telecopy machine, followed by confirmation mailed by first-class
U.S. mail or overnight express mail, or (iv) delivered in person, at the address
set forth below, or such other address as a Person may provide in accordance
with the procedure for notices set forth in this Section:
If to the Corporation: Assurant, Inc.
One Chase Manhattan Plaza, 41st Floor
New York, New York 10005
Attn: General Counsel
Telephone: 212-859-7021
Telecopy: 212-859-7034
If to the Initial Holders: Robert S. and Rita DeLue
2486 Butternut Drive
Hillsborough, CA 94010
Telephone: 415-342-2252
With a copy (which shall Anderlini, Finkelstein, Emerick & McSweeney
not constitute notice) to: 400 South El Camino Real, Suite 700
San Mateo, CA 94402
Attn: Brian J. McSweeney
Telephone: 415-348-0102
Telecopy: 415-348-0962
If to any permitted transferee of either such holder, to the address
provided to the Corporation by such transferee.
11. Certain Definitions.
The following terms shall have the meanings set forth below:
"Affiliate" means, when used with reference to any Person, any Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with that Person. For the purposes of this definition, "control"
when used with respect to any specified Person means the power to direct or
cause the direction of the management or policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" means any day other than a Saturday, a Sunday, any day on
which the New York Stock Exchange is closed or any other day on which banking
institutions in New York, New York are authorized or required by law to be
closed.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of corporate stock or any and all
equivalent ownership interests in a Person (other than a corporation).
"Certificate" means this Certificate of Designation, Rights and
Preferences of the Series B Preferred Stock of Assurant, Inc.
"DeLue Family Partnership" means a family limited partnership of which the
Initial Holders hold a majority interest and the remaining interests are held by
immediate family members of the Initial Holders.
"Initial Holders" means Robert S. DeLue and Rita DeLue, as joint tenants
with rights of survivorship.
"Merger" means the merger of Fortis, Inc., a Nevada corporation, with and
into the Corporation.
"Merger Agreement" means collectively (i) the Agreement and Plan of Merger
dated February 6, 1997, by and among Fortis, Inc., a Nevada corporation, ACSIA
Acquisition Corp., Associated California State Insurance Agencies, Inc. and the
Initial Holders, and (ii) the Agreement and Plan of Merger dated February 6,
1997, by and among Fortis, Inc., a Nevada corporation, Ardiel Acquisition Corp.,
Ardiel Insurance Services, Inc., and the Initial Holders.
"Merger Effective Date" means the effective date of the Merger, as defined
in the Agreement and Plan of Merger, to be entered into by Fortis, Inc., a
Nevada corporation, and the Corporation.
"Net Worth" means total assets less total liabilities of the Corporation
and its subsidiaries on a consolidated basis, as reflected on a balance sheet
prepared in accordance with generally accepted accounting principles and
delivered pursuant to Section 10.
"Original Issue Date" means the date upon which the transactions
contemplated by the Merger Agreement were consummated.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Subsidiary" means, with respect to any Person, any corporation, limited
or general partnership, trust, association or other business entity of which an
aggregate of 50% or more of the outstanding Capital Stock or other interests
entitled to vote in the election of the board of directors of such corporation
(irrespective of whether, at the time, Capital Stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency), managers, trustees or other controlling
Persons, or an equivalent controlling interest therein, of such Person is, at
the time, directly or indirectly, owned by such Person and/or one or more
Subsidiaries of such Person.
The following terms are defined in the following Section of this
Certificate:
Term Section
"Additional Dividends" 2(b)
"Charitable Organization" 6(b)
"Class B Common Stock" l(b)
"Class C Common Stock" 1(b)
"Closing" 6(c)(ii)
"Common Shares" 1(b)
"Common Stock" 1(b)
"Dividend Payment Date" 2(a)
"Dividend Period" 2(a)
"Dividend Rate" 2(a)
"Early Redemption Expenses" 3(b)(i)
"Junior Securities" 1(b)
"Liquidation Amount" 4(a)
"Liquidation Price" 1(a)
"Parity Securities" 1(b)
"Permitted Transferee" 6(b)
"Redemption Price" 3(a)(i)
"Series B Stock" 1(c)
"Transfer" 6(a)
12. Binding Arbitration.
Any dispute among the parties with respect to this Certificate shall be
settled by binding arbitration in accordance with the provisions for binding
arbitration set forth in Article 12 of the Merger Agreement.
AND FURTHER RESOLVED, that, before the Corporation shall issue any shares
of the Series B Stock, a certificate pursuant to Section 151 of the General
Corporation Law of the State of Delaware shall be made, executed, acknowledged,
filed and recorded in accordance with the provisions of said Section 151, and
the proper officers of the Corporation are hereby authorized and directed to do
all acts and things which may be necessary or proper in their opinion to carry
into effect the purposes of and intent of this and the foregoing resolutions.
IN WITNESS WHEREOF, Assurant, Inc. has caused this certificate to be
signed by Katherine Greenzang, its Senior Vice President, General Counsel and
Secretary, this ______ day of ____________, 2004.
ASSURANT, INC.,
a Delaware corporation
By:
---------------------------------------
Name: Katherine Greenzang
Title: Senior Vice President,
General Counsel and Secretary
CERTIFICATE OF DESIGNATION, RIGHTS AND PREFERENCES
OF THE
SERIES C PREFERRED STOCK
OF
ASSURANT, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Assurant, Inc. (the "Corporation"), a corporation organized and existing
under the General Corporation Law of the State of Delaware, does hereby certify
that, pursuant to the provisions of Section 151 of the General Corporation Law
of the State of Delaware, its Board of Directors duly adopted the following
resolutions on December 12, 2003, which resolutions remain in full force and
effect as of the date hereof:
WHEREAS, the Certificate of Incorporation of the Corporation authorizes
the issuance of 20,000,000 shares of preferred stock, par value one dollar
($1.00) per share ("Preferred Stock"), and, further, authorizes the Board of
Directors of the Corporation (the "Board of Directors"), by resolution or
resolutions, at any time and from time to time, to divide and establish any or
all of the unissued shares of Preferred Stock not then allocated to any series
of Preferred Stock into one or more series, and without limiting the generality
of the foregoing, to fix and determine the designation of each such series, the
number of shares which shall constitute such series and such voting powers, and
such preferences and relative participating, optional or other special rights,
and qualifications, limitations or restrictions thereof of the shares of each
class or series so established;
WHEREAS, it is the desire of the Board of Directors, pursuant to its
authority as aforesaid, to authorize and fix the terms of a series of preferred
stock and the number of shares constituting such series:
NOW, THEREFORE, BE IT RESOLVED, that a series of Preferred Stock with the
powers, designations, preferences, rights, qualifications, limitations and
restrictions as provided herein is hereby authorized and established as follows:
1. Designation; Rank.
(a) Designation. There is hereby designated, out of the authorized but
unissued shares of Preferred Stock of the Corporation, a series thereof to
consist of Five Thousand (5,000) shares, par value one dollar ($1.00) per share,
with such series being known as "Series C Preferred Stock" (the "Series C
Stock"). The Series C Stock has a liquidation preference of one thousand dollars
($1,000.00) per whole share (the "Liquidation Price").
(b) Rank. The Series C Stock ranks, with respect to rights to receive
dividends and distributions upon liquidation, winding up or dissolution of the
Corporation (a) senior to the Corporation's Common Stock, par value $0.01 per
share (the "Common Stock"), the Corporation's Class B Common Stock, par value
$0.01 per share (the "Class B Common Stock") and the Corporation's Class C
Common Stock, par value $0.01 per share (the "Class C Common Stock," and
together with the Common Stock and the Class B Common Stock, the "Common
Shares"), and any series of Preferred Stock issued by the Corporation whose
terms provide specifically that such series will rank junior to the Series C
Stock with respect to rights to receive payment of dividends and distributions
upon liquidation or whose terms fail to specify the ranking of such class or
series relative to the Series C Stock with respect to rights to receive payment
of dividends and distributions upon liquidation (together with the Common
Shares, the "Junior Securities"), and (b) on a parity with the Corporation's
Series B Preferred Stock, par value $1.00 per share (the "Series B Stock"), and
any other series of Preferred Stock issued by the Corporation whose terms
provide specifically that such series shall rank on a parity with the Series C
Stock with respect to rights to receive payment of dividends and distributions
upon liquidation (collectively, the "Parity Securities"). Without the prior
approval of the holders of a majority of the Series C Stock, the Corporation
shall not issue any class or series of security whose terms provide that such
security shall rank senior to the Series C Stock with respect to rights to
receive payment of dividends and distributions upon liquidation.
(c) No Fractional Shares. The Corporation shall not be required under any
circumstances to issue any fractional shares of Series C Stock.
2. Dividends; Priority.
(a) Rate, Payment Date. The Holders of Series C Stock shall be entitled to
receive, as declared by the Corporation, out of the funds of the Corporation
legally available therefor under applicable Delaware law, cash dividends at the
rate of four and one-half percent (4.5%) per share per annum (the "Dividend
Rate"), multiplied by the Liquidation Price of such share. Such dividends shall
be payable in arrears in equal amounts on a quarterly basis, within ten Business
Days following each March 31, June 30, September 30 and December 31 of each year
(each of such dates being a "Dividend Payment Date" and each such quarterly
period being a "Dividend Period"). Such dividends shall be cumulative from the
Merger Effective Date, whether or not in any Dividend Period there shall be
funds of the Corporation legally available for the payment of such dividends.
Dividends payable on the Series C Stock for any period less than a full
quarterly Dividend Period shall be computed on the basis of the actual number of
days elapsed and the actual number of days for such partial Dividend Period.
(b) Additional Dividends. For any Dividend Period commencing after the
issuance of the Series C Stock with respect to which the dividend is not
declared and fully paid in cash at the Dividend Rate on the Dividend Payment
Date at the end of such Dividend Period, to the extent permitted by applicable
law, such dividends shall be added (solely for the purpose of calculating
dividends payable on the Series C Stock) to the Liquidation Price of the Series
C Stock effective at the beginning of the Dividend Period next succeeding the
Dividend Period as to which such dividends were not paid and shall thereafter
accumulate additional dividends in respect thereof ("Additional Dividends") at
the Dividend Rate until such unpaid dividends have been paid in full.
(c) Record Date. Dividends shall be paid to the holders of record of
shares of Series C Stock as they appear in the stock register of the Corporation
at the close of business on the record date therefor, which record date shall be
the tenth Business Day immediately preceding the Dividend Payment Date relating
thereto.
3. Redemption.
(a) Optional Redemption by Holder. The shares of Series C Stock may be
redeemed at the election of any holder thereof, to the extent that the
Corporation has funds legally available therefor under applicable Delaware law,
as follows:
(i) A holder may require that the Corporation redeem any or all of
such holder's shares of Series C Stock at any time after the earlier of (1) the
twenty-fifth (25th) anniversary date of the Original Issue Date or (2) the date
of death of the last to die of Robert S. DeLue and Rita DeLue, at a redemption
price equal to the Liquidation Price per whole share, together with an amount
equal to accumulated and unpaid dividends thereon to the date of redemption (the
"Redemption Price"). Such redemption may be for all or part of the shares of
Series C Stock held by such holder, as requested by such holder, but if less
than all such shares are being redeemed, such redemption on any one date must be
for not less than the lesser of (1) 1,000 shares of Series C Stock or (2) the
maximum number of shares of Series C Stock for which the Corporation has funds
legally available to redeem.
(ii) If and whenever two consecutive quarterly dividends payable on
the Series C Stock are in arrears and are not paid in full, a holder may require
that the Corporation redeem all, but not less than all, of such holder's shares
of Series C Stock at the Redemption Price; provided, however, that such holder
shall have given the Corporation a written notice that such dividends are in
arrears and the Corporation shall not have paid such dividends within 10 days
after receipt of the notice.
(iii) In the event that the Corporation's Net Worth is less than
$500,000,000 for any 30-day period, a holder may require that the Corporation
redeem all, but not less than all, of such holder's shares of Series C Stock at
the Redemption Price.
The Corporation's failure to redeem because it does not have funds legally
available therefor under applicable Delaware law shall not excuse a breach by
the Corporation of this Certificate and for failure to redeem.
(b) Optional Redemption by the Corporation. The shares of Series C Stock
may be redeemed at the election of the Corporation, to the extent that the
Corporation has funds legally available therefor under applicable Delaware law,
as follows:
(i) The Corporation may redeem all outstanding shares of the Series C
Stock at any time after the Original Issue Date in the event that the
Corporation has submitted to its stockholders a proposed matter or action that
entitles the holders of the Series C Stock, pursuant to applicable law, to vote
as a class, separately or with the holders of other series of the Corporation's
Preferred Stock, on such matter or action, and such holders do not vote as
requested by the Corporation. If such matter or action, if approved and
consummated, would change a material term of this Certificate, then the
redemption pursuant to this Section 3(b)(i) shall be at the Redemption Price,
plus an amount equal to any of the following expenses that are
incurred by such holder solely and directly as a result of such redemption:
federal, state or local income taxes, penalties and interest with respect to
such income taxes, and reasonable accounting and legal fees (collectively, the
"Early Redemption Expenses"). Otherwise, such-redemption pursuant to this
Section 3(b)(i) shall be at the Redemption Price. In any event, the Corporation
must redeem all shares of the Series C Stock then outstanding.
(ii) The Corporation may redeem, at the Redemption Price, all
outstanding shares of the Series C Stock at any time that such shares are owned
by a Charitable Organization.
(iii) The Corporation may redeem all outstanding shares of the Series
C Stock at any time after the Original Issue Date in its discretion; provided,
however, that the Corporation must redeem all shares of the Series C Stock then
outstanding, and the price for such redemption shall be the Redemption Price
plus the Early Redemption Expenses.
(c) Mandatory Redemption. Within ninety days following the thirtieth
(30th) anniversary of the Original Issue Date, the Corporation shall redeem all
shares of the Series C Stock then outstanding, to the extent that the
Corporation has funds legally available therefor under applicable Delaware law,
at the Redemption Price.
(d) Procedures.
(i) To exercise redemption rights pursuant to Section 3(a) above, a
holder of Series C Stock shall deliver a written notice to the Corporation
stating the number of shares of Series C Stock to be redeemed, the certificate
number(s) representing such shares and the requested redemption date, which
shall be no sooner than 90 days and no later than 120 days after the date of the
notice.
(ii) To exercise redemption rights pursuant to Section 3(b) above, the
Corporation shall deliver a written notice to each holder of Series C Stock
stating the requested redemption date, which shall be no sooner than 90 days and
no later than 120 days after the date of the notice and, in the case of a
redempt4ion pursuant to Section 3(b)(ii) or 3(b)(iii), the number of shares to
be redeemed.
(iii) Upon the date specified for redemption in the applicable notice,
and upon delivery to the Corporation of the certificate(s) representing the
shares of Series C Stock to be so redeemed (executed for transfer in a manner
reasonably acceptable to the Corporation), the Corporation shall (except as set
forth in Section 3(b)(ii)) pay to each holder of such Series C Stock to be
redeemed the requisite redemption amount in cash, by means of a wire transfer to
an account specified in advance by such holder (or by means of a Corporation
check if no such
account is specified). Simultaneously upon payment of the requisite redemption
amount, the holder shall tender the redeemed shares of Series C Stock and shall
execute and endorse the stock certificates and deliver them to the Corporation
and take whatever other action is necessary to deliver to the Corporation good
and marketable title to the shares, free and clear of any claims, options,
charges., encumbrances or rights of others. The holder shall, in writing,
represent and warrant to the Corporation that it is conveying such shares, with
full warranties of good and marketable title, free and clear of any claims,
options, charges, encumbrances or rights of others. If on such specified
redemption date the certificate(s) representing the shares of Series C Stock to
be redeemed have not been delivered to the Corporation with appropriate
execution for transfer, the Corporation shall set aside the funds required for
the redemption of such shares, separate and apart from its other funds, for the
account of the holder of the shares to be so redeemed, and the Corporation will
deliver such amount of funds (without any obligation to pay interest thereon) to
the holder upon the Corporation's receipt of the stock certificate(s) in
accordance with this Section.
(iv) On and after the date specified for redemption in the applicable
notice, the shares of Series C Stock to be redeemed shall be deemed cancelled,
whether or not the certificate(s) representing such shares have been delivered
to the Corporation in accordance with the provisions of this Section and shall
not be entitled to any future dividends or liquidation distributions, but only
the redemption amount as set out in this Section 3 plus accrued dividends to the
specified redemption date. In case fewer than all of the shares represented by
any certificate are redeemed, a new certificate representing the unredeemed
shares shall be issued without cost to the holder thereof upon receipt by the
Corporation of the original certificate.
(v) The Corporation shall not be required to redeem any fractional
shares of Series C Stock. In the event that a redemption of whole shares
pursuant to Section 3(b)(ii) results in a Redemption Price greater than the
amount of the related indemnification claim, the Corporation shall pay to the
holders any excess in cash.
(e) Status After Redemption. Shares of Series C Stock redeemed, purchased
or otherwise acquired for value by the Corporation shall, after such
acquisition, have the status of authorized and unissued shares of Preferred
Stock of the Corporation and may be reissued by the Corporation at any time as
shares of any series of Preferred Stock other than as shares of Series C Stock.
4. Liquidation Rights; Priority.
(a) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary (a "Liquidation"),
the holders of shares of the Series C Stock shall be entitled to receive, after
payment or provision for payment of the debts and other liabilities of the
Corporation, out of the remaining net assets of the Corporation, whether such
assets are capital or surplus and whether or not any dividends as such are
declared, the Liquidation Price of one thousand dollars ($1,000.00) per whole
share, together with an amount equal to all accumulated and unpaid dividends
thereon to the date fixed for distribution (collectively, the "Liquidation
Amount"), before any distribution shall be made with respect to any Junior
Securities.
(b) Except as otherwise provided in this Section 4, holders of Series C
Stock shall not be entitled to any participation in any distribution of assets
in the event of any Liquidation. For the purposes of this Section 4, neither the
voluntary sale, lease, conveyance, exchange or transfer (for cash, securities or
other consideration) of all or substantially all of the assets of the
Corporation, nor the consolidation or merger of the Corporation with one or more
Persons (as defined in Section 11 hereof), shall be deemed to be a voluntary or
involuntary liquidation, dissolution or winding up of the Corporation.
(c) If, upon any Liquidation, the Liquidation Amount is not paid in full,
the holders of the Preferred Stock shall share in such distribution in
accordance with the respective certificates of designation of such stock. If,
upon any Liquidation, the amounts payable with respect to the Series C Stock and
any Parity Securities are not paid in full, holders of the Series C Stock and
holders of any Parity Securities will share ratably in any distribution of the
assets of the Corporation in proportion to the respective amounts that would be
payable per share if such assets were sufficient to permit payment in full.
(d) Written notice of any Liquidation stating a payment date and the place
where the distributive amounts shall be payable, shall be given not less than
thirty days prior to the payment date stated therein, to the holders of record
of the Series C Stock at their respective addresses as the same shall appear on
the books of the Corporation.
(e) Any liquidation payment with respect to each fractional share of the
Series C Stock outstanding shall be equal to a ratably proportionate amount of
the Liquidation Amount with respect to each outstanding whole share of Series C
Stock.
5. Restricted Payments.
The Corporation may not directly or indirectly declare, pay or set
apart for payment dividends on or make any payment on account of, or set apart
for payment money for a sinking or other similar fund for the purchase,
redemption or other acquisition of, or make any distribution in respect of,
whether in cash, obligations or shares of the Corporation or other property, any
Parity Securities or Junior Securities if at the time of such action, the
Corporation is in arrears in the payment of dividends on the Series C Stock,
meaning that full cumulative dividends at the Dividend Rate on the Series C
Stock as of the then most recent Dividend Payment Date have not been declared
and paid in full in cash. None of the foregoing restrictions shall apply to: (i)
the acquisition of Parity Securities or Junior Securities (or options, rights or
warrants to acquire shares of Parity Securities or Junior Securities) in
exchange for or upon conversion thereof into shares of Capital Stock (as defined
in Section 11 hereof) of the Corporation or upon the exercise of options, rights
or warrants to acquire such shares; (ii) the repurchase of Capital Stock of the
Corporation from employees or former employees of the Corporation or its
Subsidiaries (as defined in Section 11 hereof) pursuant to employee benefit
plans, employment or consulting contracts or any agreement among the Corporation
and its securityholders; (iii) the acquisition of any shares of Capital Stock of
the Corporation or options, rights or warrants to acquire such shares in
connection with a purchase price adjustment arising out of acquisitions by the
Corporation (or its predecessor) pursuant to which such shares of Capital Stock
or options, rights or warrants to acquire such shares were issued; (iv) the
rescission of any agreement by the Corporation pursuant to which shares of
Capital Stock of the Corporation (or its predecessor) or options, rights or
warrants to acquire such shares were issued subsequent to the Original Issue
Date; or (v) a dividend on Parity Securities or Junior Securities at any time in
additional shares of the respective Parity Security or Junior Security.
6. Restrictions on Transferability; Right of First Refusal.
(a) Restrictions on Transferability. Holders shall not be permitted to
sell, give, assign, pledge, transfer, encumber or otherwise dispose of (each a
"Transfer") any or all of the shares of the Series C Stock except in accordance
with this Section 6.
(b) Permitted Transfers. Each of the Initial Holders may Transfer any
or all of such Initial Holder's shares of Series C Stock to any of the following
Persons (each a "Permitted Transferee"): (i) any member of such Initial Holder's
immediate family, which means any of such Initial Holder's spouses, parents,
children, grandchildren, siblings, mothers- and fathers-in-law, sons- and
daughters-in-law, or brothers- and sisters-in-law, or any trust established for
the benefit of any such Person or any DeLue Family Partnership, and (ii) any
organization (a "Charitable Organization") that is exempt from taxation pursuant
to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or any
successor law thereto. A Transfer by an Initial Holder to any Person other than
a Permitted Transferee shall be null and void, unless it is approved by the
Corporation in advance.
(c) Right of First Refusal.
(i) Offer. If any holder desires to Transfer any of such holder's
Series C Stock to any Person other than a Permitted Transferee, such holder
shall make a bona fide offer to sell to the Corporation all of such shares that
it desires to Transfer for the lesser of the proposed purchase price or the
Liquidation Price. Such offer shall be in writing and shall specify the nature
of the Transfer in which such selling holder desires to engage, including the
name or names of the other party or parties to such proposed transaction and the
terms thereof, including the purchase price and payment terms and shall have
attached a written copy of the proposed binding, bona fide and unconditional
offer (containing all terms required for closing the proposed purchase) to or
from the other party or parties to the proposed transaction (the "Bona Fide
Offer"). The Corporation shall then be entitled to accept the offer from the
selling holder at the same price as set forth in the Bona Fide Offer, and the
Corporation may accept the offer only as to all of the shares that the holder
desires to Transfer. If the Corporation rejects the offer or fails to accept the
offer in writing within thirty days after receipt thereof, then all of such
shares shall be released from the restrictions contained in Section 6(a) solely
for the purpose of completing within ninety days the transaction contemplated in
the above offer. Otherwise, the Series C Stock shall remain subject to Section
6(a) hereof. Any Person acquiring Series C Stock pursuant to a Transfer shall
take such stock subject to all the provisions hereof, including, but not limited
to, the provisions of this Section 6. The Corporation's purchase of shares
pursuant to this Section 6 shall in no way be deemed a redemption pursuant to
Section 3(b)(iv).
(ii) Closing. The closing (the "Closing") of a purchase by the
Corporation pursuant to Section 6(c)(i) shall take place at a location and
(subject to any time limitation set forth in this Certificate), on a date
mutually agreed upon by the parties; provided, however, that
such Closing may take place by exchanging documents by overnight mail or such
other means as may be mutually agreed upon by the parties.
(iii) Payment of Purchase Price. Subject to the provisions of Section
6(c)(iv), the purchase price for the Series C Stock purchased by the Corporation
pursuant to this Section 6(c) shall be paid by the Corporation either, at the
Corporation's election, in cash by means of a wire transfer to an account
specified in advance by such holder (or by means of a Corporation check if no
such account is specified), or in a form of consideration reasonably equivalent
to the form specified in the Bona Fide Offer. Simultaneously upon payment of the
purchase price, the selling holder shall tender such holder's Series C Stock and
shall execute and endorse the stock certificates and deliver them to the
Corporation and take whatever other action is necessary to deliver to the
Corporation good and marketable title to the shares, free and clear -of any
claims, options, charges, encumbrances or rights of others. The selling holder
shall, in writing, represent and warrant to the Corporation that it is conveying
such shares, with full warranties of good and marketable title, free and clear
of any claims, options, charges, encumbrances or rights of others.
7. Voting Rights.
Each share of Series C Stock issued and outstanding from time to time
shall be entitled to one vote on all matters upon which the holders of Common
Stock of the Corporation are entitled to vote, and in all such matters, the
holders of the Series C Stock shall vote with the holders of the Common Stock
and not as a separate class. Such voting rights shall be in addition to any
other voting rights to which the holders of Series C Stock may be entitled
pursuant to the General Corporation Law of the State of Delaware.
8. No Conversion Rights.
The shares of Series C Stock shall not be convertible into Common Stock or
any other equity security, derivative or otherwise, of the Corporation.
9. Reports.
The Corporation shall deliver to the holders of the Series C Stock (i)
copies of its internally prepared quarterly balance sheet and income statement
within sixty days after the end of each calendar quarter, and (ii) copies of its
annual balance sheet and income statement, including any notes thereto and any
auditors' reports thereon, within one hundred twenty days after the end of each
fiscal year.
10. Notices.
Any notice required or to be given hereunder shall be in writing and shall
be deemed sufficient when (i) mailed by United States certified mail, return
receipt requested, (ii) mailed by overnight express mail, (iii) sent by
facsimile or telecopy machine, followed by confirmation mailed by first-class
U.S. mail or overnight express mail, or (iv) delivered in person, at the address
set forth below, or such other address as a Person may provide in accordance
with the procedure for notices set forth in this Section:
If to the Corporation: Assurant, Inc.
One Chase Manhattan Plaza, 41st Floor
New York, New York 10005
Attn: General Counsel
Telephone: 212-859-7021
Telecopy: 212-859-7034
If to the Initial Holders: Robert S. and Rita DeLue
2486 Butternut Drive
Hillsborough, CA 94010
Telephone: 415-342-2252
With a copy (which shall Anderlini, Finkelstein, Emerick & McSweeney
not constitute notice) to: 400 South El Camino Real, Suite 700
San Mateo, CA 94402
Attn: Brian J. McSweeney
Telephone: 415-348-0102
Telecopy: 415-348-0962
If to any permitted transferee of either such holder, to the address
provided to the Corporation by such transferee.
11. Certain Definitions.
The following terms shall have the meanings set forth below:
"Affiliate" means, when used with reference to any Person, any Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with that Person. For the purposes of this definition, "control"
when used with respect to any specified Person means the power to direct or
cause the direction of the management or policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" means any day other than a Saturday, a Sunday, any day on
which the New York Stock Exchange is closed or any other day on which banking
institutions in New York, New York are authorized or required by law to be
closed.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of corporate stock or any and all
equivalent ownership interests in a Person (other than a corporation).
"Certificate" means this Certificate of Designation, Rights and
Preferences of the Series C Preferred Stock of Assurant, Inc.
"DeLue Family Partnership" means a family limited partnership of which the
Initial Holders hold a majority interest and the remaining interests are held by
immediate family members of the Initial Holders.
"Initial Holders" means Robert S. DeLue and Rita DeLue, as joint tenants
with rights of survivorship.
"Merger" means the merger of Fortis, Inc., a Nevada corporation, with and
into the Corporation.
"Merger Agreement " means collectively (i) the Agreement and Plan of
Merger dated February 6, 1997, by and among Fortis, Inc., a Nevada corporation,
ACSIA Acquisition Corp., Associated California State Insurance Agencies, Inc.,
and the Initial Holders, and (ii) the Agreement and Plan of Merger dated
February 6, 1997, by and among Fortis, Inc., a Nevada corporation, Ardiel
Acquisition Corp., Ardiel Insurance Services, Inc., and the Initial Holders.
"Merger Effective Date" means the effective date of the Merger, as defined
in the Agreement and Plan of Merger, to be entered into by Fortis, Inc., a
Nevada corporation, and the Corporation.
"Net Worth" means total assets less total liabilities of the Corporation
and its subsidiaries on a consolidated basis, as reflected on a balance sheet
prepared in accordance with generally accepted accounting principles and
delivered pursuant to Section 9.
"Original Issue Date" means the date upon which the transactions
contemplated by the Merger Agreement were consummated.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Subsidiary" means, with respect to any Person, any corporation, limited
or general partnership, trust, association or other business entity of which an
aggregate of 50% or more of the outstanding Capital Stock or other interests
entitled to vote in the election of the board of directors of such corporation
(irrespective of whether, at the time, Capital Stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency), managers, trustees or other controlling
Persons, or an equivalent controlling interest therein, of such Person is at the
time, directly or indirectly, owned by such Person and/or one or more
Subsidiaries of such Person.
The following terms are defined in the following Section of this
Certificate:
Term Section
"Additional Dividends" 2(b)
"Charitable Organization" 6(b)
"Class B Common Stock" 1(b)
"Class C Common Stock" 1(b)
"Closing" 6(c)(ii)
"Common Shares" 1(b)
"Common Stock" 1(b)
"Dividend Payment Date" 2(a)
"Dividend Period" 2(a)
"Dividend Rate" 2(a)
"Early Redemption Expenses" 3(b)(i)
"Junior Securities" 1(b)
"Liquidation Amount" 4(a)
"Liquidation Price" 1(a)
"Parity Securities" 1(b)
"Permitted Transferee'" 6(b)
"Redemption Price" 3(a)(i)
"Series C Stock" 1(b)
"Transfer" 6(a)
12. Binding Arbitration.
Any dispute among the parties with respect to this Certificate shall be
settled by binding arbitration in accordance with the provisions for binding
arbitration set forth in Article 12 of the Merger Agreement.
AND FURTHER RESOLVED, that, before the Corporation shall issue any shares
of the Series C Stock, a certificate pursuant to Section 151 of the General
Corporation Law of the State of Delaware shall be made, executed, acknowledged,
filed and recorded in accordance with the provisions of said Section 151, and
the proper officers of the Corporation are hereby authorized and directed to do
all acts and things which may be necessary or proper in their opinion to carry
into effect the purposes of and intent of this and the foregoing resolutions.
IN WITNESS WHEREOF, Assurant, Inc. has caused this certificate to be
signed by Katherine Greenzang, its Senior Vice President, General Counsel and
Secretary, this ___ day of _______, 2004.
ASSURANT, INC.,
a Delaware corporation
By:
-------------------------------------
Name: Katherine Greenzang
Title: Senior Vice President, General
Counsel and Secretary