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CONFORMED COPY EXHIBIT 4
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF VOTING CUMULATIVE
PREFERRED STOCK, SERIES A
of
H. J. HEINZ FINANCE COMPANY
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
I, the undersigned, Leonard A. Cullo, President of H. J. Heinz Finance
Company, a Delaware corporation (hereinafter called the "CORPORATION"), pursuant
to the provisions of Sections 103 and 151 of the General Corporation Law of the
State of Delaware, do hereby make this Certificate of Designations and do hereby
state and certify that pursuant to the authority expressly vested in the board
of directors of the Corporation (the "BOARD OF DIRECTORS") by the Certificate of
Incorporation, the Board of Directors duly adopted the following resolution:
RESOLVED, that, pursuant to Article 4 of the Certificate of
Incorporation, which authorizes 5,000 shares of preferred stock, no par value
(the "PREFERRED STOCK"), the Board of Directors hereby fixes the powers,
designations, preferences and relative, participating, optional and other
special rights, and the qualifications, limitations and restrictions, of a
series of Preferred Stock.
RESOLVED, that each share of such series of Preferred Stock shall rank
equally in all respects and shall be subject to the following provisions:
1. Number of Shares and Designation. 3,250 shares of the Preferred
Stock of the Corporation shall be designated as Voting Cumulative Preferred
Stock, Series A (the "SERIES A PREFERRED STOCK").
2. Rank. (a) The Series A Preferred Stock shall, with respect to
dividend rights and rights upon liquidation, dissolution and winding up, rank
senior to the common stock of the Corporation, $1.00 par value (the "COMMON
STOCK") and all other classes or series of equity securities of the Corporation
now or hereafter issued (collectively with the Common Stock, "JUNIOR
SECURITIES"), except equity securities of the Corporation expressly designated
as ranking at
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parity (whether with respect to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock (collectively, the "PARITY
SECURITIES") and any indebtedness of the Corporation and its subsidiaries. So
long as any shares of Series A Preferred Stock remain outstanding, the
Corporation shall not, without the approval of a majority of the Independent
Directors (as defined herein) authorize, create, increase the authorized number
of shares of or issue any Parity Securities if (i) immediately after such action
the Consolidated Net Worth (as defined herein) of the Corporation would decline
from the level immediately prior to such action or (ii) an Increased Dividend
Rate Event or a Special Voting Rights Event (each as defined herein) has
occurred and is continuing.
(b) So long as any shares of Series A Preferred Stock remain
outstanding, the Corporation shall not authorize, create or issue any shares
that would rank senior to the Series A Preferred Stock (whether with respect to
dividends or upon liquidation, dissolution, winding up or otherwise)
(collectively, "SENIOR SECURITIES").
(c) The Corporation may at any time issue additional Junior Securities
without the consent of the holders of the Series A Preferred Stock or the
Independent Directors.
(d) The respective definitions of Senior Securities, Junior Securities,
and Parity Securities shall also include any rights or options exercisable for
or into any of the Senior Securities, Junior Securities and Parity Securities,
as the case may be. The Series A Preferred Stock shall be subject to the
creation of Junior Securities and Parity Securities, as provided herein.
3. Dividends. (a) The holders of shares of Series A Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available for the payment of dividends, cash
dividends at the annual rate of the stated liquidation preference per share
($100,000 per share) equal to 6.226% (the "ANNUAL DIVIDEND RATE"). Such
dividends shall be payable in arrears in equal amounts quarterly on January 15,
April 15, July 15 and October 15 of each year (unless such day is not a business
day, in which event on the next succeeding business day) (each of such dates
being a "DIVIDEND PAYMENT DATE" and each such quarterly period being a "DIVIDEND
PERIOD"), commencing October 15, 2001. Such dividends shall be cumulative from
the date of issue, whether or not in any Dividend Period or Periods there shall
be funds of the Corporation legally available for the payment of such dividends.
Each dividend shall be payable to holders of record as they appear on the
securities register of the Corporation on the corresponding record date. The
record dates for the Series A
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Preferred Stock will be, for so long as the Series A Preferred Stock remains in
book-entry form, one business day prior to the relevant Dividend Payment Date
and, in the event that any of the Series A Preferred Stock is not in book-entry
form, the fifteenth day (whether or not a business day) prior to the relevant
Dividend Payment Date. Accrued and unpaid dividends for any past Dividend
Periods may be declared and paid at any time, without reference to any Dividend
Payment Date, to holders of record on such date, not more than 45 days preceding
the payment date thereof, as may be fixed by the Board of Directors.
(b) The amount of dividends payable for each full Dividend Period for
the Series A Preferred Stock shall be computed by dividing the Annual Dividend
Rate by four. The amount of dividends payable for the initial Dividend Period,
or any other period shorter or longer than a full Dividend Period, on the Series
A Preferred Stock shall be computed on the basis of twelve 30-day months and a
360-day year. Except as provided in Paragraphs 4 and 5 hereof, holders of shares
of Series A Preferred Stock shall not be entitled to any dividends, whether
payable in cash, property or stock, in excess of cumulative dividends, as herein
provided, on the Series A Preferred Stock. No interest, or sum of money in lieu
of interest, shall be payable in respect of any dividend payment or payments on
the Series A Preferred Stock that may be in arrears.
(c) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions (other than dividends or
distributions in the form of Parity Securities or Junior Securities or dividends
as described in the next succeeding sentence) shall be declared or paid or set
apart for payment on Parity Securities, for any period unless full cumulative
dividends have been or contemporaneously are declared and paid, or declared and
a sum sufficient for the payment thereof set apart for such payment, on the
Series A Preferred Stock for all Dividend Periods terminating on or prior to the
date of payment of the dividend on such class or series of Parity Securities.
When dividends are not paid in full, or a sum sufficient for such payment is not
set apart, as aforesaid, all dividends declared upon shares of the Series A
Preferred Stock and all dividends declared upon any Parity Securities shall be
declared ratably in proportion to the respective amounts of dividends
accumulated and unpaid on the Series A Preferred Stock and accumulated and
unpaid on such Parity Securities.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions (other than dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Junior Securities) shall be declared or paid or set apart
for payment on Junior Securities, nor shall any Junior Securities be redeemed,
purchased or otherwise acquired or funds set apart for redemption, purchase or
acquisition of Junior Securities (all such dividends, distributions, redemptions
or
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purchases being hereinafter referred to as a "JUNIOR SECURITIES DISTRIBUTION")
for any consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any shares of any such stock) by the Corporation,
directly or indirectly (except by conversion into or exchange for Junior
Securities), unless in each case (i) full cumulative dividends on all
outstanding shares of the Series A Preferred Stock and any other Parity
Securities shall have been paid or set apart for payment for all past Dividend
Periods with respect to the Series A Preferred Stock and all past dividend
periods with respect to such Parity Securities and (ii) sufficient funds shall
have been paid or set apart for the payment of the dividend for the current
Dividend Period with respect to the Series A Preferred Stock and the current
dividend period with respect to such Parity Securities.
(e) So long as any shares of the Series A Preferred Stock are
outstanding, the Corporation shall not declare or make any Junior Securities
Distribution (other than dividends or distributions paid in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Junior
Securities) for any consideration (or any moneys be paid to or made available
for a sinking fund for the redemption of any shares of any such stock) by the
Corporation, directly or indirectly (except by conversion into or exchange for
Junior Securities), if an Increased Dividend Rate Event or a Special Voting
Rights Event has occurred and is continuing or would result from such Junior
Securities Distribution.
4. Increased Dividends. (a) If any Increased Dividend Rate Event has
occurred and is continuing, holders of shares of Series A Preferred Stock shall
be entitled to receive, out of funds legally available for the payment of
dividends, in addition to any dividends otherwise accrued on the Series A
Preferred Stock, a cash dividend (the "ADDITIONAL DIVIDEND") at an annual rate
per share (the "INCREASED DIVIDEND RATE") equal to the product of (i) the Annual
Dividend Rate and (ii) 0.25. The amount of Additional Dividends payable shall be
computed by multiplying the Increased Dividend Rate by a fraction, the numerator
of which is (x) the number of days during the relevant Dividend Period such
Increased Dividend Rate Event continues without cure and (y) the denominator of
which is 360. Additional Dividends which shall have accrued shall be payable (if
declared) on the next succeeding Dividend Payment Date to the holders of record
of the shares of the Series A Preferred Stock on such record dates applicable to
such Dividend Payment Date. For the avoidance of doubt, any Additional Dividends
shall immediately cease to accrue upon the payment, discharge or other cure of
such failure, action or other event giving rise to an Increased Dividend Rate
Event.
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(b) As used herein, an "INCREASED DIVIDEND RATE EVENT" means:
(i) the Corporation shall have failed to pay accrued dividends
(other than any Additional Dividends, but including Gross-Up Payments,
if any) on the Series A Preferred Stock for any two Dividend Periods
(whether or not consecutive), and such failure continues for 30 days
following written notice thereof from holders of at least 10% of the
outstanding shares of Series A Preferred Stock;
(ii) the Corporation shall have failed to pay or discharge its
Mandatory Redemption Obligation (as defined herein) on the Redemption
Date (as defined herein);
(iii) the Corporation is merged, voluntarily liquidates or
reorganizes, sells, leases, transfers or otherwise disposes of all or
substantially all of its assets, effects any business combination with
any person or permits any person to merge into it, or sell, lease,
transfer or otherwise dispose of all or substantially all its assets,
in each case at any time and without possibility of cure; provided
that, such action shall not constitute an Increased Dividend Rate
Event: if (1) in the case of a reorganization, merger, consolidation or
other business combination, (A) if the Corporation survives, the Series
A Preferred Stock maintains all the preferences, redemption and other
rights, voting powers, restrictions, limitations as to dividends or
other distributions, qualifications and terms or conditions it had
prior to such transaction and the Corporation remains an affiliate of
H. J. Heinz Company, or (B) if the Corporation does not survive, (x)
the surviving entity shall be H. J. Heinz Company or an affiliate of H.
J. Heinz Company, (y) each holder of shares of the Series A Preferred
Stock immediately prior to such transaction shall receive securities of
the surviving entity with the same preferences, redemption and other
rights, voting powers, restrictions, limitations as to dividends or
other distributions, qualifications and terms and conditions as the
Series A Preferred Stock held by such holder immediately prior thereto
and (z) no Trigger Event has occurred and is continuing and (2) both
Standard & Poor's Rating Group and Moody's Investors Services, Inc. (or
any successor thereto) affirm the rating of the Series A Preferred
Stock (or, in the case of clause (B), the Securities of such surviving
entity) as in effect immediately prior to such transaction, after
giving effect to such action; or
(iv) a Trigger Event occurs and is continuing for a period of
30 days following written notice to the Corporation from holders of at
least 25% of outstanding shares of the Series A Preferred Stock.
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(c) As used herein, a "TRIGGER EVENT" means:
(i) the failure by the Corporation to maintain, or the entry
by the Corporation, without the vote or consent of holders of
two-thirds of the shares of Series A Preferred Stock then outstanding,
voting as a separate class, at a meeting duly called and held, into any
amendment (other than to increase the amount that may be borrowed
thereunder) of, or consent to any non-compliance with, or waiver of its
rights under, the Liquidity Agreement dated as of June 26, 2001 between
the Corporation and H. J. Heinz Company or any other loan agreement or
line of credit between the Corporation and one or more unaffiliated
financial institutions the obligations of the Corporation under which
are guaranteed by H. J. Heinz Company (such liquidity agreement or
other agreement or line of credit being referred to herein as the
"LIQUIDITY FACILITY"); provided that a Trigger Event shall not include
any such entry into any amendment, consent or waiver, without such vote
or consent, with respect to the Liquidity Facility (1) adds to the
rights, privileges or protections of the Corporation under the
Liquidity Facility, (2) cures any ambiguity or corrects or supplements
any provision contained in the Liquidity Facility that may be defective
or inconsistent with any provisions contained therein or (3) makes such
other provisions with regard to matters or questions arising under the
Liquidity Facility that does not have a material adverse affect on the
Corporation's credit quality.
(ii) the Corporation shall fail to maintain a Minimum Net
Worth Ratio as measured at the end of each fiscal quarter of the
Corporation (each such date a "TESTING DATE") for a period of 30 days
following notice of such failure to the Corporation from any holder of
shares of Series A Preferred Stock.
(d) As used herein,
(i) "MINIMUM NET WORTH RATIO" means a Consolidated Net Worth
Ratio as of the Testing Date of not less than 100%, or at the
Corporation's option with respect to any Testing Date, an Appraised Net
Worth Ratio of not less than 125%. The Corporation will promptly
provide written notice to each holder of Series A Preferred Stock of
its election to apply the Appraised Net Worth Ratio with respect to a
Testing Date, and will make available to holders of Series A Preferred
Stock upon request the relevant Independent Appraisal Report.
(ii) "CONSOLIDATED NET WORTH RATIO" means the ratio of (i) the
stockholders' equity of the Corporation and its consolidated
subsidiaries (including for this purpose the Series A Preferred Stock
and any Parity
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Securities if otherwise excluded) determined in accordance with U.S.
GAAP ("CONSOLIDATED NET WORTH") to (ii) then-applicable redemption
price for the Series A Preferred Stock and any Parity Securities.
(iii) "APPRAISED NET WORTH RATIO" means the ratio of (1) (a)
the Appraised Company Net Worth as specified in the applicable
Independent Appraisal Report less (b) the aggregate amount of any
distributions by the Corporation with respect to, or for repurchase or
redemption of, any Junior Securities made subsequent to such
Independent Appraisal Report (to the extent not reflected therein) to
(2) the then-applicable Redemption Price for the Series A Preferred
Stock and any Parity Securities.
(iv) "APPRAISED COMPANY NET WORTH" means the excess of (i) the
fair value of the Corporation's unconsolidated assets over (ii) the
Corporation's unconsolidated liabilities (excluding, for this purpose,
the Series A Preferred Stock and any Parity Securities, if otherwise
included), as specified in an appraisal report prepared by a nationally
recognized firm of independent auditors or other independent
specialists in the valuation field (an "INDEPENDENT APPRAISAL REPORT"),
which report is dated not earlier than nine months prior to the Testing
Date.
5. DRP Adjustment. (a) If, prior to 18 months after the date of the
original issuance of the Series A Preferred Stock, one or more amendments to the
Internal Revenue Code of 1986, as amended (the "CODE"), are enacted that reduce
the percentage of the dividends-received deduction (it being understood such
deduction currently is 70%) as specified in section 243(a)(1) of the Code or any
successor provision (the "DIVIDENDS-RECEIVED PERCENTAGE"), the amount of each
dividend payable (if declared) per share of Series A Preferred Stock for
dividend payments made on or after the effective date of such change in the Code
will be adjusted by multiplying the amount of the dividend payable described
above (before adjustment) by the following fraction (the "DRD FORMULA"), and
rounding the result to the nearest cent (with one-half cent rounded up):
1-.35(1-.70)
1-.35(1-DRP)
For the purposes of the DRD Formula, "DRP" means the Dividends-Received
Percentage (expressed as a decimal) applicable to the dividend in question;
provided, however, that if the Dividends-Received Percentage applicable to the
dividend in question shall be less than 50%, then the DRP shall equal .50.
Notwithstanding the foregoing provisions, if, with respect to any such
amendment, the Corporation receives either an opinion of nationally recognized
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independent tax counsel or a private letter ruling or similar form of
authorization from the Internal Revenue Service ("IRS") to the effect that such
amendment does not apply to a dividend payable on the Series A Preferred Stock,
then such amendment will not result in the adjustment provided for pursuant to
the DRD Formula with respect to such dividend.
(b) If any such amendment to the Code specified in Paragraph 5(a)
hereof is enacted and the reduction in the Dividends-Received Percentage
retroactively applies to a Dividend Payment Date as to which the Corporation
previously paid dividends on the Series A Preferred Stock (each, an "AFFECTED
DIVIDEND PAYMENT DATE"), the Corporation will pay (if declared) additional
dividends (the "RETROACTIVE DIVIDENDS") on the next succeeding Dividend Payment
Date to holders of Series A Preferred Stock on the Dividend Payment Record Date
applicable to such Dividend Payment Date (or, if such amendment is enacted after
the dividend payable on such Dividend Payment Date has been declared, to holders
of Series A Preferred Stock on the Dividend Payment Record Date following the
date of enactment) in an amount equal to the excess of (x) the product of the
dividends paid by the Corporation on each Affected Dividend Payment Date and the
DRD Formula (where the DRP used in the DRD Formula would be equal to the greater
of the Dividends-Received Percentage and .50 applied to each Affected Dividend
Payment Date) over (y) the sum of the dividends paid by the Corporation on each
Affected Dividend Payment Date. The Corporation will only make one payment of
Retroactive Dividends for any such amendment. Notwithstanding the foregoing
provisions, if, with respect to any such amendment, the Corporation receives
either an opinion of nationally recognized independent tax counsel or a private
letter ruling or similar form of guidance from the IRS to the effect that such
amendment does not apply to a dividend payable on an Affected Dividend Payment
Date for the Series A Preferred Stock, then such amendment will not result in
the payment of Retroactive Dividends with respect to such Affected Dividend
Payment Date.
(c) For the avoidance of any doubt, no adjustment in the dividends
payable by the Corporation shall be made, and no Retroactive Dividends shall be
payable by the Corporation, in respect of the enactment of any amendment to the
Code 18 months or more after the date of original issuance of the Series A
Preferred Stock that reduces the Dividends-Received Percentage.
(d) In the event that the amount of dividends payable per share of the
Series A Preferred Stock is adjusted pursuant to the DRD Formula and/or
Retroactive Dividends are to be paid, the Corporation will give notice of each
such adjustment and, if applicable, any Retroactive Dividends to the holders of
Series A Preferred Stock.
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6. Earnings and Profits Gross-Up Payments. (a) If any distributions on
shares of Series A Preferred Stock with respect to any taxable year of the
Corporation are not eligible for the dividend received deduction for U.S.
federal income tax purposes solely on account of insufficient current or
accumulated earnings and profits of the Corporation ("APPLICABLE
DISTRIBUTION(S)"), the Corporation will, within 120 days after the end of such
taxable year, provide notice thereof to each holder of shares of Series A
Preferred Stock that was entitled to receive an Applicable Distribution during
such taxable year. The Corporation shall, within 30 days after such notice is
given, pay, out of lawful funds, to each such holder an amount equal to the
aggregate Gross-Up Payment (as defined below) with respect to all Applicable
Distributions during such taxable year. Gross-Up Payments, if not made when due,
shall be treated as accrued and unpaid dividends on shares of Series A Preferred
Stock.
(b) As used herein, "GROSS-UP PAYMENT(S)" means payment with respect to
an Applicable Distribution of an amount which, when taken together with such
Applicable Distribution, would cause the net yield in dollars (after federal
income tax consequences and treating, for purposes of calculating net yield in
dollars, that portion of the Applicable Distribution otherwise treated as a
return of capital as capital gain received upon the taxable sale or exchange of
shares of Series A Preferred Stock) from the aggregate of both the Applicable
Distributions and the Gross-Up Payment to be equal to the net yield in dollars
(after U.S. federal income tax consequences) that would have been realized if
the amount of the aggregate Applicable Distributions treated as a return of
capital instead had been treated as a dividend for U.S. federal income tax
purposes. Such Gross-Up Payment will be calculated without consideration being
given to the time value of money, assuming the Gross-Up Payment is subject to
tax as ordinary income, giving effect to the dividends received deduction (as
adjusted pursuant to Paragraph 5 above) that would have applied to each such
Applicable Distribution had it been treated as a dividend for U.S. federal
income tax purposes, and using the maximum marginal corporate U.S. federal tax
rate applicable to ordinary income and capital gains, as the case may be. The
Corporation shall provide notice to each holder of shares of Series A Preferred
Stock of the right to receive a Gross-Up Payment in respect of any taxable year
of the Corporation, if applicable, no later than 120 days following the end of
such year, and any applicable Gross-Up Payment will be due within 30 days of
such notice. Gross-Up Payments, if not made when due, will be treated as accrued
and unpaid dividends on the shares of Series A Preferred Stock.
7. Liquidation Preference. (a) In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
before any payment or distribution of the assets of the Corporation (whether
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capital or surplus) shall be made to or set apart for the holders of Junior
Securities, the holders of shares of Series A Preferred Stock shall be entitled
to receive $100,000 per share of Series A Preferred Stock plus an amount equal
to all dividends (whether or not earned or declared) accrued and unpaid thereon
to and including the date of final distribution to such holders; but such
holders shall not be entitled to any further payment. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of the shares of Series A
Preferred Stock shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any Parity Securities, then such assets,
or the proceeds thereof, shall be distributed among the holders of shares of
Series A Preferred Stock and any such other Parity Securities ratably in
accordance with the respective amounts that would be payable on such shares of
Series A Preferred Stock and any such other stock if all amounts payable thereon
were paid in full. For the purposes of this Paragraph 7, (i) a consolidation or
merger of the Corporation with one or more corporations, or (ii) a sale or
transfer of all or substantially all of the Corporation's assets, shall not be
deemed to be a liquidation, dissolution or winding up, voluntary or involuntary,
of the Corporation.
(b) Subject to the rights of the holders of any Parity Securities,
after payment shall have been made in full to the holders of the Series A
Preferred Stock, as provided in this Paragraph 7, any other series or class or
classes of Junior Securities shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all assets
remaining to be paid or distributed, and the holders of the Series A Preferred
Stock shall not be entitled to share therein.
8. Redemption.
(a) On July 15, 2008 (the "REDEMPTION DATE"), the Corporation shall
redeem all outstanding shares of the Series A Preferred Stock, at a redemption
price of $100,000 per share in cash, together with accrued and unpaid dividends
thereon to such date, without interest (the "REDEMPTION PRICE") out of funds
legally available for such payment. The Series A Preferred Stock shall not be
redeemable by the Corporation prior to the Redemption Date. If the Redemption
Date falls on a day that is not a business day, the Redemption Price will be
payable on the next succeeding business day without adjustment for interest or
further payment as a result of the delay.
(b) Shares of Series A Preferred Stock that 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)
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have the status of authorized and unissued shares of the class of Preferred
Stock undesignated as to series and may be redesignated and reissued as part of
any series of the Preferred Stock; provided that no such issued and reacquired
shares of Series A Preferred Stock shall be reissued or sold as Series A
Preferred Stock.
9. Procedure for Redemption.
(a) In the event the Corporation shall redeem shares of Series A
Preferred Stock, notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 days nor more than 60 days prior to the
Redemption Date, to each holder of record of the shares to be redeemed at such
holder's address as the same appears on the stock register of the Corporation;
provided that neither the failure to give such notice nor any defect therein
shall affect the validity of the giving of notice for the redemption of any
share of Series A Preferred Stock to be redeemed except as to the holder to whom
the Corporation has failed to give said notice or except as to the holder whose
notice was defective. Each such notice shall state: (i) the Redemption Date;
(ii) the number of shares of Series A Preferred Stock to be redeemed; (iii) the
Redemption Price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date.
(b) Notice having been duly given, from and after the Redemption Date
(unless default shall be made by the Corporation in providing money for the
payment of the redemption price of the shares called for redemption), dividends
on the shares of Series A Preferred Stock so called for redemption shall cease
to accrue, and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the Corporation the redemption
price) shall cease. Upon surrender in accordance with said notice of the
certificates for any shares so redeemed (properly endorsed or assigned for
transfer, if the Board of Directors of the Corporation shall so require and the
notice shall so state), such share shall be redeemed by the Corporation at the
Redemption Price aforesaid.
(c) Payment of the Redemption Price of the Series A Preferred Stock
shall be made only upon surrender of the share certificates to Mellon Investor
Services, as paying agent to the Corporation (including any successor to Mellon
Investor Services approved by the Corporation as its paying agent, the "PAYING
AGENT"). If the Corporation gives or causes to be given a notice of redemption,
timely pays to the Paying Agent an amount of cash sufficient to redeem the
Series A Preferred Stock and gives the Paying Agent irrevocable instructions and
authority to pay the full amount payable on redemption of the Series A Preferred
Stock to holders of the Series A Preferred Stock, then on the date of such
payment, all rights of the holders of Series A Preferred Stock, as such, will
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terminate (except the right of the holders of Series A Preferred Stock to
receive the full amount payable upon redemption thereof upon surrender of the
share certificates, but without interest) and the Series A Preferred Stock will
no longer be deemed to be outstanding for any purpose. Any funds paid to the
Paying Agent which are unclaimed at the end of two years from the Redemption
Date will be returned to the Corporation, after which the holders of Series A
Preferred Stock will look only to the Corporation for payment of the Redemption
Price of the Series A Preferred Stock.
10. Voting Rights.
(a) In addition to the other voting rights provided in this Certificate
of Designations or as otherwise required by law or the Certificate of
Incorporation of the Corporation, as amended, holders of shares of the Series A
Preferred Stock and any Parity Securities expressly designated with the same
voting rights as the Series A Preferred Stock (collectively, the "VOTING PARITY
SECURITIES") shall be entitled to vote together as a separate voting class to
elect a number of directors of the Corporation which is equal to the smallest
whole number that is not less than 25% of the Board of Directors (such director
or directors collectively referred to as the "INDEPENDENT DIRECTORS"). For so
long as shares of Series A Preferred Stock are outstanding, the Corporation
shall have no fewer than one Independent Director. The initial Independent
Director is Mr. Andrew L. Stidd. Except with respect to (i) the election of
directors, as to which the Series A Preferred Stock shall have only the voting
rights provided in the first sentence of this Paragraph 10, and (ii) those
matters for which a series or class vote is required by applicable law, the
Certificate of Incorporation, as amended, or this Certificate of Designations,
holders of shares of Series A Preferred Stock shall be entitled to cast one vote
per share on all matters submitted for a vote of the stockholders of the
Corporation and with respect to such matters shall vote together with the
holders of Voting Parity Securities and with the holders of the Common Stock,
all voting as a single class.
(b) Except (i) with respect to Special Voting Rights Matters upon the
occurrence and during the continuance of a Special Voting Rights Event or (ii)
as otherwise provided in this Certificate of Designations, each Independent
Director shall be entitled to cast one vote (voting together with each member of
the Board of Directors) on all matters before the Board of Directors. The
Independent Directors shall hold office until the next annual meeting of the
stockholders or special meeting held in lieu thereof. If any vacancy shall occur
among the Independent Directors, then the other Independent Director or
Independent Directors shall designate a successor to fill such vacancy to serve
until the next annual meeting of the stockholders or special meeting held in
lieu thereof;
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provided that if there are no Independent Directors to designate such a
successor, within 40 days after the creation of such vacancy or vacancies, the
Secretary of the Corporation shall call a special meeting of the holders of
Series A Preferred Stock and any Voting Parity Securities entitled to vote for
the election of Independent Directors and such vacancy or vacancies shall be
filled at such special meeting to serve until the next annual meeting of the
stockholders or special meeting held in lieu thereof. Any Independent Director
may be removed, with or without cause, by the holders of a majority of Series A
Preferred Stock and any Voting Parity Securities outstanding entitled to vote
for the election of Independent Directors. Election and removal of Independent
Directors requires the vote of the holders of the Series A Preferred Stock,
voting together as a class with holders of any Voting Parity Securities, holding
a plurality, in the case of an election, or a majority, in the case of removal,
in voting power of the outstanding shares of Series A Preferred Stock and Voting
Parity Securities.
(c) A meeting of holders of Series A Preferred Stock and any Voting
Parity Securities may be called by the holders of at least 25% in voting power
of the outstanding shares of Series A Preferred Stock and any Voting Parity
Securities, voting together as a class. Any shares of Series A Preferred Stock
held directly or indirectly by the Corporation or any corporation of which the
Corporation holds a majority of the shares entitled to vote in the election of
directors shall not be entitled to vote or be counted for quorum purposes.
(d) For so long as any shares of Series A Preferred Stock are
outstanding, the following actions of the Corporation shall require the approval
of a majority of the Independent Directors: (i) the issuance of Parity
Securities requiring approval of Independent Directors as set forth in Paragraph
2(a) hereof and (ii) if and for so long as a Special Voting Rights Event has
occurred and is continuing, any action of the Board of Directors with respect to
Special Voting Rights Matters. For so long as there is only one Independent
Director, any action requiring the approval of a majority of the Independent
Directors shall be approved by such Independent Director. In the event the
Independent Directors cast an equal number of votes for and against approval of
a given action requiring the approval of a majority of the Independent
Directors, such action shall be deemed not to have been approved by a majority
of Independent Directors.
(e) If and for so long as a Special Voting Rights Event has occurred
and is continuing while any shares of Series A Preferred Stock are outstanding,
the Independent Directors shall have "SPECIAL VOTING RIGHTS" enabling the
Independent Directors only (and not any directors that are not Independent
Directors) to cast votes in meetings of the Board of Directors (or to take
action by consent in lieu thereof) with respect to, but only with respect to
following matters (collectively, the "SPECIAL VOTING RIGHTS MATTERS"):
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(i) the declaration and payment of dividends on, or the
payment of the Redemption Price of, the Series A Preferred Stock and
any Parity Securities, to the extent that funds are legally available
therefor; and then,
(ii) if, but only if, all Special Voting Rights Events then
existing cannot be cured by the taking of such actions described in
clause (i) hereof, to cause the Corporation to enforce and not waive
its rights under all material contracts with affiliates, including the
Liquidity Facility; and then,
(iii) if, but only if, all Special Voting Rights Events then
existing cannot be cured by the taking of such actions described in
clause (ii) hereof, to cause the sale or disposition of any of the
Corporation's assets for a commercially reasonable consideration or to
cause the repayment, retirement or redemption in accordance with their
terms of any or all of the Corporation's liabilities that rank senior
to the Series A Preferred Stock, in each case as, if and to the extent
that the taking of such actions would enable the Corporation to cure
the occurrence and continuance of any then existing Special Voting
Rights Event. At any time that the Independent Directors shall have
Special Voting Rights, a majority of the Independent Directors shall be
entitled to take action on behalf of the Board of Directors only with
respect to any Special Voting Rights Matter.
(f) All Special Voting Rights of the Independent Directors shall
terminate immediately at such time as all Special Voting Rights Events then
existing have been cured or, if earlier, when shares of the Series A Preferred
Stock shall have been redeemed in full or are otherwise no longer outstanding.
All Special Voting Rights Events shall be deemed to have been cured and not to
be continuing at such time when (i) all accrued and unpaid dividends on the
Series A Preferred Stock shall have been declared and paid, (ii) if after the
Redemption Date, the Mandatory Redemption Obligation shall have been paid or
otherwise discharged, or, as the case may be, (iii) no Trigger Event that
materially adversely affects the financial condition of the Corporation and its
consolidated subsidiaries, taken as a whole, is continuing.
(g) Notwithstanding the foregoing and for the avoidance of doubt:
(i) Independent Directors shall not have Special Voting Rights
with respect to any matter before the Board of Directors other than the
Special Voting Rights Matters; and
(ii) Special Voting Rights Matters do not include any action by
the Independent Directors or the Board of Directors to elect or remove
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managers of H. J. Heinz Company, L.P. ("HEINZ LP") under the interest
in Heinz LP designated as the Class B Interest pursuant to the First
Amended and Restated Limited Partnership Agreement of Heinz LP dated of
May 3, 2001 or to exercise any rights of the Corporation as a limited
partner or shareholder of Heinz LP or any other subsidiary of the
Corporation (other than the right of a limited partner or shareholder
to dispose of its limited partnership interests or shares).
(h) As used herein, a "SPECIAL VOTING RIGHTS EVENT" means:
(i) the giving of notice by the Independent Director of the
failure by the Corporation to pay accrued dividends on the Series A
Preferred Stock in full (including any Gross-Up Payments), which
failure has continued for four consecutive quarterly periods, subject
to a 10 day cure period following notice from the Independent Director;
(ii) the failure by the Corporation to pay or otherwise
discharge its Mandatory Redemption Obligation on the Redemption Date
subject to a 10 day cure period following notice from the Independent
Director; or
(iii) a Trigger Event that materially adversely affects the
financial condition or credit quality of the Corporation occurs and is
continuing for at least 60 days following written notice from the
holders of a majority of outstanding shares of the Series A Preferred
Stock.
(i) For so long as any shares of Series A Preferred Stock are
outstanding, the Corporation shall not, without the consent or vote of holders
of a majority of shares of the Series A Preferred Stock, voting as a class,
amend, alter or repeal (i) any provision of the Corporation's Certificate of
Incorporation (including the terms of the Series A Preferred Stock, but
excluding the filing of any Certificate of Designations with respect to any
Parity Securities or Junior Securities otherwise permitted to be issued
hereunder) or (ii) any provision of the Corporation's Bylaws, in each case, if
such amendment, alteration or repeal would materially and adversely affect the
rights, preferences, powers or privileges of the Series A Preferred Stock.
(j) For so long as any shares of Series A Preferred Stock are
outstanding, the Corporation shall not, without the consent or vote of each
holder of shares of the Series A Preferred Stock amend, alter or repeal the
Corporation's Certificate of Incorporation (including the terms of the Series A
Preferred Stock) that would (i) reduce the rate of or change or have the effect
of changing the time for payment of any dividends on the Series A Preferred
Stock, (ii) reduce the
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redemption price therefor or (iii) make any amount payable on the Series A
Preferred Stock payable in other than U.S. dollars.
11. Maintain Existence. The Corporation shall not merge, voluntarily
liquidate or reorganize, sell, lease, transfer or otherwise dispose of all or
substantially all of its assets, effect any business combination with any person
or permit any person to merge into it, or sell, lease, transfer or otherwise
dispose of all or substantially all its assets, in each case at any time and
without possibility of cure, unless in the case of a reorganization, merger,
consolidation or other business combination, (A) if the Corporation survives,
the Series A Preferred Stock shall maintain all the preferences, redemption and
other rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms and conditions it had prior to such
transaction and the Corporation remains an affiliate of H. J. Heinz Company, or
(B) if the Corporation does not survive, (x) the surviving entity shall be H. J.
Heinz Company or an affiliate of H. J. Heinz Company, (y) each holder of shares
of the Series A Preferred Stock immediately prior to such transaction shall
receive securities with the same preferences, redemption and other rights,
voting powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms and conditions of the surviving entity as the Series A
Preferred Stock held by such holder immediately prior thereto and (z) no Trigger
Event has occurred and is continuing.
12. General Provisions. (a) The term "AFFILIATE" as used herein means,
with respect to any Person, a Person that directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, such Person.
(b) The term "PERSON" as used herein means any corporation, limited
liability company, partnership, trust, organization, association, other entity
or individual.
(c) The term "OUTSTANDING", when used with reference to shares of
stock, shall mean issued shares, excluding shares held by the Corporation or a
subsidiary.
(d) 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.
(e) Each holder of Series A Preferred Stock, by acceptance thereof,
acknowledges and agrees that payments of dividends, interest, premium and
principal on, and exchange, redemption and repurchase of, such securities by the
Corporation are or may become subject to restrictions on the Corporation
contained in certain credit and financing agreements.
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IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be signed and attested by the undersigned this 5th day of July
2001.
H. J. HEINZ FINANCE COMPANY
By: /s/ Leonard A. Cullo, Jr.
----------------------------
Name: Leonard A. Cullo, Jr.
Title: President
ATTEST:
/s/ Michael E. Hooton
-----------------------
Name: Michael E. Hooton
Assistant Secretary