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EXHIBIT 4 (J)
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF PARTICIPATING PREFERRED STOCK
OF
H&R BLOCK, INC.
I, Ozzie Wenich, the Senior Vice President and Chief
Financial Officer of H&R Block, Inc. (the "Company"), a corporation organized
and existing under The General and Business Corporation Law of the State of
Missouri, in accordance with the provisions of Section 351.180.7 thereof, DO
HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Company's Articles of Incorporation, as amended, the Board of
Directors on July 14, 1988 adopted a resolution creating a series of shares of
voting Preferred Stock designated as Participating Preferred Stock, pursuant to
a Certificate of Designation, Preferences and Rights of Participating Preferred
Stock filed with the Missouri Secretary of State, with such Participating
Preferred Stock having the powers, preferences and relative, participating,
optional and other special rights with the qualifications, limitations or
restrictions set forth below.
That pursuant to the authority conferred upon the Board of
Directors by the Company's Articles of Incorporation, as amended, the Board of
Directors on July 20, 1998, adopted the following resolution amending the
Company's Certificate of Designation, Preferences and Rights of Participating
Preferred Stock to increase the number of shares designated Participating
Preferred Stock:
RESOLVED, that it is desirable and in the best interests of
the Company that the number of shares designated Participating Preferred Stock
be increased from 600,000 to 1,200,000.
The powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as set forth below:
Section 1. Designation and Amount. There shall be a series of
the voting preferred stock of the Company which shall be designated as
"Participating Preferred Stock," without par value, and the number of shares
constituting such series shall be 1,200,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Participating Preferred Stock
to a number less than that of the shares then outstanding plus the number of
shares issuable upon
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exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Company.
Section 2. Dividends and Distributions.
(a) Subject to the rights of the holders of any shares of any
series of preferred stock of the Company ranking prior and superior to the
Participating Preferred Stock with respect to dividends, the holders of shares
of Participating Preferred Stock, in preference to the holders of shares of
Common Stock, without par value (the "Common Stock"), of the Company and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of January, April, July
and October in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Participating Preferred Stock. In the
event the Company shall at any time after July 25, 1998 (the "Rights
Declaration Date") declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount to
which holders of shares of Participating Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(b) The Company shall declare a dividend or distribution on
the Participating Preferred Stock as provided in paragraph (a) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share
on the Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date
of issue of such shares is prior to the record date for
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the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Participating
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Participating Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Participating Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record date shall
be not more than sixty days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of
Participating Preferred Stock shall have the following voting rights:
(a) Each share of Participating Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Company.
(b) Except as otherwise provided herein, in the Company's
Articles of Incorporation or by law, the holders of shares of Participating
Preferred Stock, the holders of shares of Common Stock, and the holders of
shares of any other capital stock of the Company having general voting rights,
shall vote together as one class on all matters submitted to a vote of
stockholders of the Company.
(c) Except as otherwise set forth herein or in the Company's
Articles of Incorporation, and except as otherwise provided by law, holders of
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Participating
Preferred Stock outstanding shall have been paid in full, the Company shall
not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution
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or winding up) with the Participating Preferred Stock, except
dividends paid ratably on the Participating Preferred Stock and all
such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) except as permitted in Section 4(a)(iv) below,
redeem or purchase or otherwise acquire for consideration shares of
any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Participating
Preferred Stock, provided that the Company may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in
exchange for share of any stock of the Company ranking junior (either
as to dividends or upon dissolution, liquidation or winding up) to the
Participating Preferred stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Participating Preferred Stock, or any shares of stock
ranking on a parity with the Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any shares of stock
of the Company unless the Company could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Participating
Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition
thereof. The Company shall cause all such shares upon their cancellation to be
authorized but unissued shares of Preferred Stock which may be reissued as part
of a new series of Preferred Stock to be created by resolution or resolutions
of the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Company, no distribution shall be made to the
holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Participating Preferred Stock
unless, prior thereto, the holders of shares of Participating Preferred Stock
shall have received per share, the greater of $100.00 or 100 times the payment
made per share of Common Stock, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Liquidation Preference"). Following the payment of the full
amount of the Liquidation Preference, no additional distributions shall be made
to the holders of shares of Participating Preferred Stock, unless, prior
thereto, the holders
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of shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Liquidation
Preference by (ii) 100 (as appropriately adjusted a set forth in subparagraph
(c) below to reflect such events as stock dividends, and subdivisions,
combinations and consolidations with respect to the Common Stock) (such number
in clause (ii) being referred to as the "Adjustment Number"). Following the
payment of the full amount of the Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Participating Preferred
Stock and Common Stock, respectively, holders of Participating Preferred Stock
and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Participating Preferred Stock
and Common Stock, on a per share basis, respectively.
(b) In the event there are not sufficient assets available to
permit payment in full of the Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if any, which rank on a
parity with the Participating Preferred Stock, then such remaining assets shall
be distributed ratably to the holders of such parity shares in proportion to
their respective liquidation preferences. In the event there are not sufficient
assets available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(c) In the event the Company shall at any time after the
Rights Declaration Date declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise
then by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that are
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, Etc. In case the Company
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case the shares
of Participating Preferred Stock shall at the same time be similarly exchanged
or changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is exchanged or changed.
In the event the Company shall at any time after the Rights Declaration Date
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Participating
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
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immediately after such event and the denominator of which is the number of
shares of Common Stock that are outstanding immediately prior to such event.
Section 8. Redemption. The shares of Participating Preferred
Stock shall not be redeemable.
Section 9. Ranking. The Participating Preferred Stock shall
rank junior to all other series of the Company's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment. The Articles of Incorporation of the
Company shall not be further amended in any manner which would materially alter
or change the powers, preferences or special rights of the Participating
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding shares of Participating
Preferred Stock voting separately as a class.
Section 11. Fractional Shares. Participating Preferred Stock
may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Participating Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Amendment of the
Certificate of Designation has been executed by the Company by its Senior Vice
President and attested by its Secretary on this 17th day of July, 1998.
H&R BLOCK, INC.
By: /s/ Ozzie Wenich
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Ozzie Wenich, Senior Vice President
and Chief Financial Officer
ATTEST:
/s/ James H. Ingraham
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James H. Ingraham, Vice President, Legal
and Secretary
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STATE OF Missouri )
)SS.
COUNTY OF Jackson )
BE IT REMEMBERED, that on this 17th day of July, 1998, before
me, the undersigned, a Notary Public in and for said County and State,
personally appeared Ozzie Wenich and James H. Ingraham, who declared that they
are the Senior Vice President and Secretary, respectively, of the corporation
named in the foregoing certificate, and acknowledged that they executed the
foregoing certificate on behalf of the corporation.
/s/ Barbara Phillips
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Notary Public
My Commission Expires:
February 7, 2007
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