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EXHIBIT 4(o)
Draft of May 8, 1995
AMERICAN GENERAL CORPORATION
STATEMENT OF RESOLUTION ESTABLISHING A SERIES OF SHARES
PROVIDING FOR THE ISSUANCE OF SERIES A
CUMULATIVE CONVERTIBLE PREFERRED STOCK PURSUANT TO
ARTICLE 2.13 OF THE TEXAS BUSINESS CORPORATION ACT
Pursuant to the provisions of Article 2.13 of the Texas Business
Corporation Act, the undersigned corporation submits the following statement
for the purpose of establishing and designating a series of shares of its
Preferred Stock and fixing and determining the designations, preferences,
limitations and relative rights thereof:
1. The name of the corporation is American General Corporation
(the "Corporation").
2. The following resolutions, establishing and designating a
series of shares and fixing and determining the designations, preferences,
limitations and relative rights thereof, was duly adopted by the Board of
Directors of the Corporation or an authorized committee thereof on
________________, 1995:
RESOLVED, that pursuant to Article Four of the Restated Articles of
Incorporation of the Corporation, as amended, which authorizes the
issuance of three hundred sixty million (360,000,000) shares,
consisting of sixty million (60,000,000) shares of Preferred Stock of
the par value of one dollar fifty cents ($1.50) per share (hereinafter
referred to as the "Preferred Stock"), none of which is currently
outstanding, and three hundred million (300,000,000) shares of Common
Stock of the par value of fifty cents ($.50) per share (hereinafter
referred to as the "Common Stock"), the Corporation hereby provides
for the issuance of a series of Preferred Stock, designated as Series
A Cumulative Convertible Preferred Stock, and hereby fixes the
designations, preferences, limitations and relative rights of the
shares of the Series A Cumulative Convertible Preferred Stock, in
addition to those set forth in such Article Four, which shall be as
follows:
SECTION 1. DESIGNATION AND AMOUNT; SPECIAL PURPOSE; RESTRICTION
ON SENIOR SERIES.
(a) The shares of this series of Preferred Stock shall be
designated as "Series A Cumulative Convertible Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting such series shall be
________, par value $1.50 per share. The number of authorized shares of Series
A Preferred Stock may be reduced to a number not less than the number of shares
then issued plus the number of shares then issuable upon the conversion of the
then outstanding Subordinated Debentures (as defined in Section 1(b))
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by further resolution duly adopted by the Board of Directors of the Corporation
or a duly authorized committee thereof and by the filing of a certificate
pursuant to the provisions of the Texas Business Corporation Act stating that
such reduction has been so authorized.
(b) Shares of Series A Preferred Stock shall be issued only upon
conversion of _____% Series A Convertible Junior Subordinated Debentures due
2025 of the Corporation (the "Subordinated Debentures"). Such conversion may
occur immediately following the exchange of all outstanding _____ Preferred
Securities, Series A (the "American General Delaware Series A Preferred
Securities") of American General Delaware, L.L.C., a Delaware limited liability
company ("American General Delaware"), for Subordinated Debentures pursuant to
a valid exchange election (the "Exchange Election") by the holders of a
majority of the aggregate liquidation preference of the American General
Delaware Series A Preferred Securities then outstanding in accordance with the
provisions of Section 9 of the Written Action, dated as of ____________, 1995,
of the Managing Member of American General Delaware establishing the terms of
the American General Delaware Series A Preferred Securities.
(c) Prior to an Exchange Election and if any American General
Delaware Series A Preferred Securities are then outstanding, the Corporation
shall not authorize or issue any other class or series of capital stock ranking
senior to the Series A Preferred Stock as to the payment of dividends or
distribution of assets upon liquidation, dissolution or winding-up of the
Corporation without the approval of the holders of not less than 66-2/3% of the
aggregate liquidation preference of the American General Delaware Series A
Preferred Securities then outstanding.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(a)(1) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors of the
Corporation out of funds legally available therefor, cumulative cash dividends
at a rate per annum of _____% of the liquidation preference of $___________ per
share of Series A Preferred Stock. The amount of dividends payable for a full
monthly dividend period shall be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period shorter than a full
monthly dividend period, shall be computed on the basis of the actual number of
days elapsed in such period. Dividends on the Series A Preferred Stock shall
accrue from the date of the Exchange Election and, subject to the declaration
of such dividends, shall be payable in United States dollars monthly in arrears
on the last day of each calendar month of each year.
(2) Dividends shall accrue and be cumulative whether or not
they have been earned or declared and whether or not there are funds of the
Corporation legally available for the payment of dividends. Accrued but unpaid
interest (including additional interest, if any, payable in accordance with the
terms of the Subordinated Debentures) on the
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Subordinated Debentures converted into Series A Preferred Stock, if any, on the
date of the Exchange Election shall constitute, and be treated as, accumulated
and unpaid dividends on the Series A Preferred Stock.
(b) Dividends will be payable to the holders of shares of Series A
Preferred Stock as of the relevant record dates, which, if and so long as the
Series A Preferred Stock is represented by one or more global certificates
through the book-entry system of a Clearing Agency (as defined below), will be
one Business Day (as defined below) prior to the related dividend payment
dates. In the event that the Series A Preferred Stock shall not continue to be
so represented, the Board of Directors shall have the right to select relevant
record dates that are more than one Business Day prior to the related dividend
payment dates. A "Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), that is acting as depositary for the
Series A Preferred Stock and in whose name (or nominee's name) shall be
registered one or more global certificates representing Series A Preferred
Stock and which shall undertake to effect book-entry transfers and pledges of
interests in the Series A Preferred Stock. In the event that any date on which
dividends are payable on the Series A Preferred Stock is not a Business Day,
then payment of the dividend payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any 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. A "Business Day" means any day other than a Saturday,
Sunday or other day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
(c) If full cumulative dividends on the Series A Preferred Stock
have not been declared and paid or irrevocably set apart for payment when due,
then, subject to the next succeeding sentence, the Corporation shall not
declare or pay any dividend on any Dividend Pari Passu Security or Dividend
Junior Security (each as defined below). The preceding sentence, however,
shall not apply to, or prohibit (i) dividends as a result of a reclassification
of Dividend Pari Passu Securities or Dividend Junior Securities, (ii) dividends
of any share purchase rights issued by the Corporation pursuant to the Rights
Agreement, dated as of July 27, 1989, between the Corporation and First Chicago
Trust Company of New York, as amended from time to time, (iii) dividends or
distributions of similar share purchase rights in the future, (iv) dividends or
distributions in shares of Common Stock or another class or series of capital
stock of the Corporation that is junior to the Series A Preferred Stock as to
the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding-up of the Corporation, or (v) dividends with respect to
Dividend Pari Passu Securities in accordance with the following sentence. If
full cumulative dividends have not been paid upon the shares of Series A
Preferred Stock and any other class or series of Dividend Pari Passu
Securities, all dividends declared upon shares of Series A Preferred Stock and
any other such series of Dividend Pari Passu
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Securities shall, if declared, be declared pro rata so that the amount of cash
dividends declared per share on the Series A Preferred Stock and such other
class or series of Dividend Pari Passu Securities shall in all cases bear to
each other the same ratio that accumulated and unpaid dividends per share on
the shares of Series A Preferred Stock and such other class or series of
Dividend Pari Passu Securities bear to each other.
The term "Dividend Pari Passu Security" means any preference stock or
preferred stock or other capital stock of the Corporation and any guarantee
entered into by the Corporation in respect of any preference stock or preferred
stock of any affiliate of the Corporation ranking pari passu with the Series A
Preferred Stock as to the payment of dividends. "Dividend Junior Security"
means Common Stock, Series A Junior Participating Preferred Stock of the
Corporation and any other class or series of capital stock of the Corporation
ranking junior to the Series A Preferred Stock as to the payment of dividends.
(d) Accruals of dividends on the Series A Preferred Stock shall
not bear interest, regardless of whether funds shall be legally available for
the declaration or payment thereof.
SECTION 3. VOTING RIGHTS.
(a) The holders of the shares of Series A Preferred Stock shall
have no right or power to vote on any question or matter or in any proceeding
or to be represented at, or to receive notice of, any meeting of shareholders
of the Corporation, except as specifically required by the laws of the State of
Texas or by the provisions of the Restated Articles of Incorporation of the
Corporation, as amended, and except as provided in this Section 3.
(b) In the event that full cumulative dividends on the Series A
Preferred Stock are not paid for 18 consecutive monthly dividend periods
(including for this purpose any monthly periods in which full dividends were
not paid on the American General Delaware Series A Preferred Securities prior
to the Exchange Election), the number of directors of the Corporation
constituting the entire Board of Directors shall be increased by two persons
and the holders of shares of the Series A Preferred Stock (voting separately as
a class together with the holders of shares of all other series of capital
stock of the Corporation ranking pari passu with the Series A Preferred Stock
as to the payment of dividends and having the then present right to elect one
or more directors as a result of a dividend arrearage but not then entitled to
other separate voting rights to elect one or more directors in the event of
such an arrearage (herein referred to as "Class Voting Stock")), shall have the
right to elect such directors to fill such positions at any regular meeting of
shareholders or special meeting held in place thereof, or at a special meeting
of the holders of the Series A Preferred Stock and such other Class Voting
Stock called as provided in paragraph (c) below. Whenever all arrearages of
dividends on the Series A Preferred Stock then outstanding shall have been paid
or declared and irrevocably set apart for payment, then the right of the
holders of shares of the Series A Preferred Stock (and, subject to the terms of
such other Class Voting Stock, such other Class Voting Stock) to elect such
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additional two directors shall cease (but subject always to the same provisions
for the vesting of such voting rights in the case of any similar future
arrearages in dividends), and the terms of office of all persons elected as
directors by the holders of shares of the Series A Preferred Stock and such
other Class Voting Stock shall forthwith terminate and the number of the Board
of Directors shall be reduced accordingly.
(c) At any time after the voting power referred to in paragraph
(b) above, shall have been so vested in the holders of shares of the Series A
Preferred Stock, the Secretary of the Corporation may, and upon the written
request of any holder or the holders of at least 10% of the number of shares of
Series A Preferred Stock then outstanding (addressed to the Secretary at the
principal executive office of the Corporation) shall, call a special meeting of
the holders of shares of the Series A Preferred Stock and all other Class
Voting Stock for the election of the two directors to be elected by them;
provided that the Secretary shall not be required to call such special meeting
if the request for such meeting is received less than 45 calendar days before
the date fixed for the next ensuing annual meeting of shareholders. Such call
shall be made by notice similar to that provided in the by-laws of the
Corporation for a special meeting of the shareholders or as required by law.
Subject to the foregoing provisions, if any such special meeting required to be
called as above provided shall not be called by the Secretary within 20
calendar days after receipt of an appropriate request, then any holder of
shares of Series A Preferred Stock may call such meeting, upon the notice above
provided, and for that purpose shall have access to the stock books and records
of the Corporation. Except as otherwise provided by law, at any such meeting,
the holders of a majority of the number of shares of Series A Preferred Stock
and such other Class Voting Stock then outstanding shall constitute a quorum
for the purpose of electing directors as contemplated in paragraph (b) above.
If at any such meeting or adjournment thereof a quorum of such holders of
Series A Preferred Stock and such other Class Voting Stock shall not be
present, no election of directors by the Series A Preferred Stock and such
other Class Voting Stock shall take place, and any such meeting may be
adjourned from time to time for periods not exceeding 30 calendar days until a
quorum of the Series A Preferred Stock and the Class Voting Stock is present at
such adjourned meeting. Unless otherwise provided by law, directors to be
elected by the holders of Series A Preferred Stock and such other Class Voting
Stock shall be elected by a plurality of the votes cast by such holders at a
meeting at which a quorum is present. Notwithstanding the foregoing, the
absence of a quorum of the Series A Preferred Stock and such other Class Voting
Stock shall not prevent the voting of, including the election of, directors by
the holders of Common Stock and other classes of capital stock at such meeting.
(d) Any director who shall have been elected by holders of shares
of Series A Preferred Stock (or by the holders of shares of Series A Preferred
Stock, voting separately as a class together with the holders of one or more
other series of Class Voting Stock), or any director so elected as provided
below, may be removed at any time during a class voting period, either for or
without cause, by, and only by, the affirmative vote of the holders of a
majority of the number of shares of Series A Preferred Stock then outstanding,
voting
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separately as a class together with the holders of all other series of Class
Voting Stock then outstanding, if any, given at a special meeting of such
shareholders called for the purpose, and any vacancy thereby created may be
filled during such class voting period only by the holders of shares of Series
A Preferred Stock and the other series, if any, of Class Voting Stock. In case
any vacancy (other than as provided in the preceding sentence) shall occur
among the directors elected by the holders of shares of the Series A Preferred
Stock (and such other Class Voting Stock), a successor shall be elected by the
Board of Directors to serve until the next annual meeting of the shareholders
or special meeting held in place thereof upon the nomination of the then
remaining director elected by the holders of the Series A Preferred Stock (and
such other Class Voting Stock) or the successor of such remaining director.
(e) So long as any shares of Series A Preferred Stock are
outstanding, the consent of the holders of not less than 66-2/3% of the number
of shares of Series A Preferred Stock then outstanding, given in person or by
proxy either at a regular meeting or at a special meeting called for that
purpose or pursuant to written consents, at which or pursuant to which, as the
case may be, the holders of Series A Preferred Stock shall vote separately as a
series, shall be necessary for effecting, validating or authorizing any one or
more of the following:
(1) The amendment, alteration or repeal of any of the
provisions of this statement of Resolution Establishing A Series of
Shares, the Restated Articles of Incorporation, or any amendment
thereto, or any other certificate filed pursuant to law (including any
such amendment, alteration or repeal effected by any merger or
consolidation to which the Corporation is a party) that would
adversely affect any of the designations, preferences, limitations or
relative rights of the shares of Series A Preferred Stock then
outstanding; provided, however, that any amendment or amendments to
the provisions of the Restated Articles of Incorporation, as amended,
so as to authorize or create, or to increase the authorized amount of,
any capital stock of the Corporation ranking pari passu with or junior
to the Series A Preferred Stock as to the payment of dividends and as
to the distribution of assets upon any liquidation, dissolution or
winding-up of the Corporation shall not be deemed to affect adversely
the designations, preferences, limitations, or relative rights of the
Series A Preferred Stock;
(2) The authorization or creation of any shares of any
class or series, or any security convertible into shares of any class
or series, of capital stock ranking senior to the Series A Preferred
Stock as to the payment of dividends or as to the distribution of
assets upon any liquidation, dissolution or winding-up of the
Corporation; or
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(3) Any merger or consolidation with or into, or any
conveyance, transfer, or lease of all or substantially all of the
assets of the Corporation to, any other corporation or other entity,
in either case that would adversely affect any of the designations,
preferences, limitations or relative rights of the shares of Series A
Preferred Stock then outstanding.
(f) In connection with any matter on which holders of shares of
Series A Preferred Stock are entitled to vote (including, without limitation,
(i) with respect to the election of directors as set forth in the preceding
paragraphs of this Section 3 or (ii) any matter on which holders of shares of
Series A Preferred Stock are entitled to vote as a class or otherwise pursuant
to the laws of the State of Texas or the provisions of the Restated Articles of
Incorporation, as amended), each holder of a share of Series A Preferred Stock
shall be entitled to one vote for such share of Series A Preferred Stock held
by such holder. Notwithstanding anything to the contrary herein, if the
Restated Articles of the Corporation, as amended, provide that shares of any
Class Voting Stock are entitled to more or less than one vote per share when
voting together with the Series A Preferred Stock every reference in this
Section 3 to a majority or another specified portion of the number of shares of
Series A Preferred Stock and Class Voting Stock shall mean a majority or such
other portion of the votes entitled to be cast in respect of such shares.
SECTION 4. REDEMPTION.
(a) If at any time following the Conversion Expiration Date (as
defined below), less than ten percent (10%) of the number of shares of Series A
Preferred Stock issued upon the Exchange Election remains outstanding, such
shares of Series A Preferred Stock shall be redeemable, at the option of the
Corporation, in whole but not in part, at a cash redemption price of
$__________ per share equal to the liquidation preference for such Series A
Preferred Stock, plus accumulated and unpaid dividends (whether or not earned
or declared), to the date fixed for redemption thereof (the "Redemption
Price").
(b) The Series A Preferred Stock shall be redeemable, at the
option of the Corporation, in whole or in part, from time to time, on after
______________, 2003, at the Redemption Price. The Corporation may not redeem
the Series A Preferred Stock in part unless all accumulated and unpaid
dividends (whether or not earned or declared) have been paid in full on all
shares of Series A Preferred Stock for all monthly dividend periods terminating
on or prior to the date of redemption.
(c) Unless otherwise required by law, notice of any redemption of
the Series A Preferred Stock (a "Notice of Redemption") shall be irrevocable
and shall be given by the Corporation or sent to the holders of Series A
Preferred Stock by first-class mail, postage prepaid, not fewer than 30 nor
more than 60 calendar days prior to the date fixed for redemption. If all of
the shares of Series A Preferred Stock are held in the name of the Clearing
Agency (or its nominees), the Notice of Redemption shall be sent to such
Clearing
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Agency. Each Notice of Redemption shall state: (i) the fact that shares of
Series A Preferred Stock are being redeemed and the number of such shares; (ii)
the date fixed for redemption; (iii) the Redemption Price; (iv) the place or
places where certificates for such shares are to be surrendered for payment of
the Redemption Price; (v) that dividends on the shares to be redeemed will
cease to accrue on such redemption date; and (vi) that conversion rights with
respect to the shares to be redeemed will cease on the close of business on the
third Business Day preceding the date fixed for redemption. If less than all
outstanding shares of Series A Preferred Stock are to be redeemed, the shares
to be redeemed will be selected ratably or by lot or in such other manner as
may be fair and equitable and the Notice of Redemption shall also specify the
number of shares of Series A Preferred Stock to be redeemed from each
applicable holder. Such notice shall be deemed to be given on the day such
notice is deposited in the United States mail, postage prepaid, addressed to
the shareholder at such shareholder's address as it appears on the books of the
Corporation or the stock transfer agent for the Series A Preferred Stock. No
defect in the Notice of Redemption or in the mailing thereof with respect to
any share of Series A Preferred Stock shall affect the validity of the
proceedings for such redemption with respect to any other share of Series A
Preferred Stock.
(d) If the Corporation gives a Notice of Redemption, then, by
12:00 noon, New York time, on the date fixed for redemption, if the Series A
Preferred Stock is represented by one or more global certificates through the
book-entry system of a Clearing Agency, the Corporation shall irrevocably
deposit an amount sufficient to pay the Redemption Price to the holders of the
shares of Series A Preferred Stock called for redemption with the Clearing
Agency and give the Clearing Agency irrevocable instructions and authority to
pay, on and after the date fixed for redemption, the Redemption Price to the
holders of the Series A Preferred Stock to be redeemed, and if the Series A
Preferred Stock is not represented by such global certificates through the
book-entry system of a Clearing Agency, the Corporation shall irrevocably
deposit with any bank or trust company in the State of Texas, or any bank or
trust company in the United States duly appointed and acting as transfer agent
for the Corporation, as a trust fund, an amount sufficient to pay the
Redemption Price to the holders of the shares of Series A Preferred Stock
called for redemption, with irrevocable instructions and authority to such bank
or trust company to give the Notice of Redemption and to pay, on and after the
date fixed for such redemption, to the respective holders of shares of Series A
Preferred Stock, as evidenced by a list of holders of such shares certified by
the President, any Vice President, the Secretary or an Assistant Secretary of
the Corporation, the Redemption Price upon surrender of their respective share
certificates. If a Notice of Redemption shall have been given and funds
irrevocably deposited as required, then immediately prior to the close of
business on the date fixed for redemption, such shares of Series A Preferred
Stock called for redemption shall no longer be deemed to be outstanding, and
the holders thereof shall cease to be shareholders with respect to such shares
and all rights of such holders will cease, except the right of such holders to
receive the Redemption Price (subject, in the case of holders of certificated
shares, to the surrender of their respective certificates therefor), but
without
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additional interest from and after such redemption date. In case the holders
of such shares of Series A Preferred Stock shall not, within six years after
such deposit, claim the amount deposited for redemption thereof, such bank or
trust company shall upon demand pay over to the Corporation the balance of such
amount so deposited to be held in trust and such bank or trust company shall
thereupon be relieved of all responsibility to the holders of Series A
Preferred Stock. In the event that any date fixed for redemption of Series A
Preferred Stock is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment 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 the event
that payment of the Redemption Price is improperly withheld or refused and not
paid by the Corporation, dividends on the Series A Preferred Stock called for
redemption will continue to accumulate at the then applicable rate, from the
original redemption date to the date that the Redemption Price is actually paid
and the holders of such Series A Preferred Stock may exercise all of their
rights as holders thereof.
(e) Subject to the next succeeding sentence, the Corporation may
not, and shall not permit any of its majority-owned subsidiaries to, purchase
any shares of Series A Preferred Stock or redeem, purchase, acquire or make a
liquidation payment with respect to any capital stock of the Corporation or
make any guarantee payment with respect to the foregoing, unless all
accumulated dividends shall have been declared and paid or irrevocably set
apart for payment upon all shares of Series A Preferred Stock then outstanding
for all monthly dividend periods terminating on or prior to the date thereof.
The preceding sentence, however, shall not apply to, or prohibit (i) purchases
or acquisitions of shares of Common Stock in connection with the satisfaction
by the Corporation or any of its majority-owned subsidiaries of its obligations
under any employee benefit plans or the satisfaction by the Corporation of its
obligations pursuant to any put contract requiring the Corporation to purchase
Common Stock, (ii) any of the actions described in the preceding sentence as a
result of a reclassification of capital stock of the Corporation or the
exchange or conversion of one class or series of capital stock of the
Corporation for another class or series of capital stock of the Corporation,
(iii) redemptions or purchases of any share purchase rights issued by the
Corporation pursuant to the Rights Agreement, dated as of July 27, 1989,
between the Corporation and First Chicago Trust Company of New York, as amended
from time to time, (iv) the redemption or purchase of similar share purchase
rights in the future, or (v) the purchase of fractional interests in shares of
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged.
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SECTION 5. LIQUIDATION, DISSOLUTION OR WINDING-UP.
(a) Upon any voluntary or involuntary liquidation, dissolution, or
winding-up of the Corporation, the holders of Series A Preferred Stock at the
time outstanding will be entitled to receive out of the net assets of the
Corporation legally available for distribution to shareholders after
satisfaction of liabilities to creditors as required by the Texas Business
Corporation Act, subject to the rights of the holders of any stock of the
Corporation ranking senior to the Series A Preferred Stock in respect of
distributions of assets upon liquidation, dissolution, or winding-up of the
Corporation and holders of Liquidation Pari Passu Securities (as defined
below), but before any distribution of assets is made with respect to any
Liquidation Junior Securities (as defined below), an amount equal to the
aggregate of the liquidation preference of $_________ per share plus an amount
equal to all accumulated and unpaid dividends thereon (whether or not earned or
declared) to the date of payment. If, upon any liquidation, dissolution or
winding-up of the Corporation, the assets available for distribution are
insufficient to pay in full the liquidation preference to the holders of the
Series A Preferred Stock and any Liquidation Pari Passu Securities, the holders
of the Series A Preferred Stock and such Liquidation Pari Passu Securities
shall share ratably in any distribution of assets based on the proportion of
their full respective liquidation preferences to the aggregate amount of the
unpaid liquidation preferences of the Series A Preferred Stock and such
Liquidation Pari Passu Securities. After payment of the full amount to which
they are entitled as provided by the foregoing provisions of this Section 5(a),
the holders of shares of Series A Preferred Stock shall not be entitled to any
further right or claim to any of the remaining assets of the Corporation.
The term "Liquidation Pari Passu Security" means any preference stock
or preferred stock or other capital stock of the Corporation and any guarantee
entered into by the Corporation in respect of any preference stock or preferred
stock of any affiliate of the Corporation ranking pari passu with the Series A
Preferred Stock as to the distributions of assets upon liquidation, dissolution
or winding-up of the Corporation. "Liquidation Junior Security" means Common
Stock, Series A Junior Participating preferred Stock of the Corporation and any
other class or series of capital stock of the Corporation ranking junior to the
Series A Preferred Stock as to distributions of assets upon liquidation,
dissolution or winding-up of the Corporation.
(b) Neither the merger or consolidation of the Corporation with or
into any other corporation or other entity, nor the merger or consolidation of
any other corporation with or into the Corporation or other entity, nor the
conveyance, transfer or lease of all or substantially all of the assets of the
Corporation, shall be deemed to be a liquidation, dissolution or winding-up,
voluntary or involuntary, of the affairs of the Corporation for purposes of
this Section 5.
(c) Written notice of any voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, stating the payment date or dates
when, and the place or
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places where, the amounts distributable to holders of Series A Preferred Stock
in such circumstances shall be payable, shall be delivered personally or given
by first-class mail, postage prepaid, not fewer than 30 calendar days prior to
any payment date stated therein, to the holders of Series A Preferred Stock, at
the addresses shown on the books of the Corporation or the transfer agent for
the Series A Preferred Stock. No defect in such notice or in the mailing
thereof shall affect the Corporation's ability to consummate a voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation.
SECTION 6. CONVERSION RIGHTS OF SERIES A PREFERRED STOCK.
(a) Each share of Series A Preferred Stock shall be convertible at
any time before the close of business on the Conversion Expiration Date, at the
option of the holder thereof, into such number of shares of Common Stock as is
determined by dividing $__________ by the then applicable conversion price (the
"Conversion Price") determined as hereinafter provided. The Conversion Price
shall initially be $__________ per share and shall be adjusted as provided in
Section 7.
(b) Holders of record of Series A Preferred Stock at the close of
business on a dividend record date will be entitled to receive the dividend
payable on such shares of Series A Preferred Stock on the corresponding
dividend payment date notwithstanding the conversion thereof following such
dividend payment record date but on or prior to such dividend payment date.
Except as provided in the immediately preceding sentence, the Corporation will
make no payment, allowance or adjustment for accumulated and unpaid dividends,
whether or not in arrears, on converted shares of Series A Preferred Stock.
(c) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, such fractional interest will be
paid in cash by the Corporation based on the Current Market Price (as defined
in Section 6(h)) of the Common Stock on the date on which the certificate or
certificates for such shares of Series A Preferred Stock were duly surrendered
for conversion, or, if such date is not a Trading Day for the Common Stock (as
defined in Section 7(e), on the next Trading Day.
(d) Shares of Series A Preferred Stock that have been called for
redemption will not be convertible after the close of business on the third
Business Day preceding the date fixed for redemption, unless the Corporation
defaults in making payment of the Redemption Price payable on redemption.
(e) Any holder of shares of Series A Preferred Stock desiring to
convert such shares into shares of Common Stock shall surrender the certificate
or certificates representing the shares of Series A Preferred Stock being
converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto), at the offices of
the transfer agent for the Series A Preferred Stock or such office or offices
in the continental United States of an agent for conversion as may
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from time to time be designated by notice to the holders of the Series A
Preferred Stock by the Corporation or the transfer agent for the Series A
Preferred Stock, accompanied by irrevocable notice of conversion, on any day
that is a Business Day. Such notice of conversion (i) shall specify the number
of shares of Series A Preferred Stock to be converted and the name or names, if
other than the holder, in which the certificate or certificates for Common
Stock, and for any shares of Series A Preferred Stock not to be so converted,
are to be issued (subject to compliance with applicable legal requirements if
any of such certificates are to be issued in a name other than the name of the
holder), (ii) shall direct the Corporation or such transfer agent to convert
such Series A Preferred Stock into Common Stock, and (iii) shall specify the
address to which such holder wishes delivery to be made of such new
certificates issued upon such conversion (the "Notice of Conversion").
(f) Upon surrender of a certificate representing a share or shares
of Series A Preferred Stock for conversion, the Corporation shall issue and
send by hand delivery or by first-class mail, postage prepaid, to the holder
thereof, at the address designated by such holder, a certificate or
certificates representing the number of full shares of Common Stock to which
such holder shall be entitled upon conversion, together with the cash payment,
if any, in lieu of any fractional share of Common Stock. If a certificate or
certificates representing shares of Series A Preferred Stock, only part of
which are to be converted, shall have been surrendered, then the Corporation
shall also issue and deliver to such holder or such holder's designee in the
manner provided in the immediately preceding sentence a new certificate or
certificates representing the number of shares of Series A Preferred Stock that
shall not have been converted.
(g) Shares of Series A Preferred Stock shall be deemed to have
been converted immediately prior to the close of business on the day on which
the certificate or certificates for the shares of Series A Preferred Stock to
be converted, are surrendered to the Corporation, or at the offices of the
transfer agent or conversion agent (in accordance with the provisions of
Section 6(e)), accompanied by a Notice of Conversion (the "Conversion Date").
The person or persons entitled to receive the Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock at such time.
(h)(1) On and after _________ __, ____, the Corporation shall have
the right, at its option, to cause the conversion rights of holders of shares
of Series A Preferred Stock set forth in this Section 6 to expire if (A) the
Corporation has paid in full all accumulated and unpaid dividends on all shares
of Series A Preferred Stock for all monthly dividend periods terminating on or
prior to such date, and (B) for 20 Trading Days within any period of 30
consecutive Trading Days, including the last Trading Day of such period, the
Current Market Price of the Common Stock of the Corporation on each of such 20
Trading Days shall have exceeded 120% of the Conversion Price in effect on such
Trading Day.
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(2) In order to exercise its option to cause the
conversion rights of holders of shares of Series A Preferred Stock to expire,
the Corporation must issue a press release for publication on the Dow Jones
News Service or on a comparable news service (the "Press Release") prior to the
opening of business on the second Trading Day after any period in which the
conditions in the preceding paragraph have been met, which shall state that the
Corporation has elected to exercise its right to extinguish the conversion
rights of holders of shares of Series A Preferred Stock, specify the Conversion
Expiration Date (as defined below) and provide the Conversion Price of the
Series A Preferred Stock and the Current Market Price of the Common Stock, in
each case as of the close of business on the Trading Day next preceding the
date of the Press Release. If the Corporation exercises the option described
in this Section 6(h), the "Conversion Expiration Date" shall be the close of
business on a date selected by the Corporation, which shall be not less than 30
or more than 60 calendar days after the date on which the Corporation issues
the Press Release; provided, however, that if the Corporation does not exercise
the option described in this Section 6(h), the "Conversion Expiration Date"
with respect to any shares of Series A Preferred Stock called for redemption
shall be the close of business on the third Business Day prior to the date
fixed for redemption pursuant to Section 4, unless the Corporation defaults in
making payment of the Redemption Price payable on redemption.
(3) In addition to the Press Release, notice of the
expiration of conversion rights (a "Notice of Conversion Expiration") must be
given by the Corporation by first-class mail to each holder of shares of Series
A Preferred Stock not more than four Business Days after the Corporation issues
the Press Release. Each such mailed Notice of Conversion Expiration shall
state: (A) the Conversion Expiration Date; (B) the Conversion Price of the
Series A Preferred Stock and the Current Market Price of the Common Stock, in
each case as of the close of business on the Trading Day next preceding the
date of the Press Release; (C) the place or places at which a Notice of
Conversion may be given and shares of Series A Preferred Stock may be
surrendered prior to the Conversion Expiration Date for certificates
representing shares of Common Stock in accordance with Section 6(e); and (D)
such other information or instructions as the Corporation deems necessary or
advisable to enable a holder of shares of Series A Preferred Stock to exercise
its conversion right hereunder. For purposes of the calculation of the
Conversion Expiration Date and the dates on which notices are given pursuant to
this Section 6(h), a Notice of Conversion Expiration shall be deemed to have
been given on the day such notice is first mailed by first-class mail, postage
prepaid, to each holder of shares of Series A Preferred Stock at the address of
the holder appearing in the books and records of the Corporation (whether or
not the holder receives the Notice of Conversion Expiration). No defect in the
Notice of Conversion Expiration or in the mailing thereof with respect to any
share of Series A Preferred Stock shall affect the validity of such notice with
respect to any other share of Series A Preferred Stock. As of the close of
business on the Conversion Expiration Date, the shares of Series A Preferred
Stock shall be deemed to be non-convertible securities.
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(4) As used in this Section 6, "Current Market Price" of shares of
Common Stock for any day means the last reported sales price, regular way, on
such day, or, if no sale takes place on such day, the average of the reported
closing bid and asked prices on such day, regular way, in either case as
reported on the New York Stock Exchange Composite Tape, or, if the Common Stock
is not listed or admitted to trading on the New York Stock Exchange (the
"NYSE"), on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or if the Common Stock is not listed or
admitted to trading on a national securities exchange, on the National Market
System of the National Association of Securities Dealers, Inc., or, if the
Common Stock is not quoted or admitted to trading on such quotation system, on
the principal quotation system on which the Common Stock is listed or admitted
to trading or quoted, or, if not listed or admitted to trading or quoted on any
national securities exchange or quotation system, the average of the closing
bid and asked prices of the Common Stock in the over-the-counter market on the
day in question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or, if not so available in such
manner, as furnished by any NYSE member firm selected from time to time by the
Board of Directors of the Corporation for that purpose or, if not so available
in such manner, as otherwise determined in good faith by the Board of
Directors.
(i) The Corporation shall at all times reserve and keep available
out of its authorized and unissued Common Stock, solely for issuance upon the
conversion of shares of Series A Preferred Stock as herein provided, free from
any preemptive or other similar rights, such number of shares of Common Stock
as shall from time to time be issuable upon the conversion of all the shares of
Series A Preferred Stock then outstanding. Notwithstanding the foregoing, the
Corporation shall be entitled to deliver upon conversion of Series A Preferred
Stock, shares of Common Stock reacquired and held in the treasury of the
Corporation (in lieu of the issuance of authorized and unissued shares of
Common Stock), so long as any such treasury shares are free and clear of all
liens, charges, claims, equities, security interests and encumbrances. Any
shares of Common Stock delivered upon conversion of the Series A Preferred
Stock shall be duly authorized, valid, issued, fully paid and non-assessable,
free and clear of all liens, charges, claims, equities, security interests and
other encumbrances, except for United States withholding taxes. The
Corporation shall use its best efforts to obtain and keep in force such
governmental or regulatory permits or other authorizations as may be required
by law, and shall comply with all applicable requirements as to registration or
qualification of the Common Stock (and all listing requirements of any stock
exchange on which the Common Stock is then listed that are at the time
applicable), in order to enable the Corporation lawfully to issue and deliver
such number of shares of its Common Stock as shall from time to time be
sufficient to effect the conversion of all shares of Series A Preferred Stock
then outstanding and convertible into shares of Common Stock.
(j) Whenever the Corporation shall issue shares of Common Stock
upon conversion of Series A Preferred Stock, the Corporation shall issue,
together with each such
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share of Common Stock, one right to purchase Series A Junior Participating
Preferred Stock of the Corporation (or other securities in lieu thereof)
pursuant to the Rights Agreement, dated as of July 27, 1989, between the
Company and First Chicago Trust Company of New York, as amended, or any similar
rights issued to holders of Common Stock in addition thereto or in replacement
therefor (such rights, together with any additional or replacement rights,
being collectively referred to as the "Rights"), whether or not such Rights
shall be exercisable at such time, but only if such Rights are issued and
outstanding and held by other holders of Common Stock (or are evidenced by
outstanding share certificates representing Common Stock) at such time and
have not expired or been redeemed.
SECTION 7. ADJUSTMENT OF CONVERSION PRICE.
(a) Adjustment of Conversion Price. The Conversion Price shall be
subject to adjustment from time to time as follows:
(i) If the Corporation shall pay or make a dividend or
other distribution exclusively in Common Stock on any class or series
of capital stock of the Corporation, then the Conversion Price in
effect at the opening of business on the day following the date fixed
for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination and the denominator shall be
the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such reduction to
become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of
this subparagraph (i), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the
Corporation. The Corporation shall not pay any dividend or make any
distribution exclusively in Common Stock on shares of any class or
series of capital stock of the Corporation held in the treasury of the
Corporation.
(ii) Subject to Section 7(g), if the Corporation shall pay
or make a dividend or other distribution on the outstanding shares of
Common Stock consisting exclusively of, or shall otherwise issue to
all holders of the outstanding shares of Common Stock, rights (other
than Rights) or warrants entitling the holders thereof to subscribe
for or purchase shares of Common Stock at a price per share (taking
into account the consideration received for the issuance of such right
or warrant plus any consideration to be received upon the exercise
thereof) less than the Current Price per share (determined as provided
in subparagraph (vi) of this Section 7(a)) of the Common Stock on the
date fixed for the determination of shareholders entitled to receive
such rights or warrants, then the Conversion Price in effect at the
opening of business on the day following the date fixed for such
determination shall be reduced by multiplying such Conversion Price by
a fraction, of which the
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numerator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination plus
the number of shares of Common Stock which the aggregate of the
offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such Current
Price per share and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such reduction to become
effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of
this subparagraph (ii), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the
Corporation. The Corporation shall not issue any rights or warrants
in respect of shares of Common Stock held in the treasury of the
Corporation. In case any rights or warrants referred to in this
subparagraph (ii) in respect of which an adjustment shall have been
made shall expire or terminate unexercised, the Conversion Price shall
be readjusted at the time of such expiration to the Conversion Price
that would have been in effect if no adjustment had been made on
account of the distribution or issuance of such expired rights or
warrants.
(iii) If outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, then the
Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately reduced and, conversely, if outstanding shares of
Common Stock shall be combined into a smaller number of shares of
Common Stock, then the Conversion Price in effect at the opening of
business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction
or increase, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(iv) Subject to the last sentence of this subparagraph
(iv), if the Corporation shall, by dividend or otherwise, pay or
otherwise distribute to all holders of Common Stock evidences of its
indebtedness, shares of any class or series of capital stock of the
Corporation, cash, securities or other assets other than Excluded
Dividends (as defined below), then the Conversion Price shall be
reduced so that the same shall equal the price determined by
multiplying (A) the Conversion Price in effect immediately prior to
the effectiveness of the Conversion Price reduction contemplated by
this subparagraph (iv) by (B) a fraction of which the numerator shall
be the Current Price per share (determined as provided in subparagraph
(vi) of this Section 7(a)) of the Common Stock on the date fixed for
the payment of such distribution (the "Reference Date") less the fair
market value, on the Reference Date, of the portion of the evidences
of indebtedness, shares of capital stock, cash, securities or other
assets so distributed (other than Excluded Dividends) applicable
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to one share of Common Stock and the denominator shall be such Current
Price per share of the Common Stock, such reduction to become
effective immediately prior to the opening of business on the day
following the Reference Date. "Excluded Dividends" shall mean (1) any
dividend or distribution referred to in subparagraph (i) of this
Section 7(a), (2) any dividend, distribution or issuance of rights or
warrants referred to in subparagraph (ii) of this Section 7(a) or of
Rights, (3) any regular cash dividend on the Common Stock that does
not exceed the per share amount of the immediately preceding regular
cash dividend on the Common Stock (as adjusted to appropriately
reflect any of the events referred to in subparagraphs (i) and (iii)
of this Section 7(a)), and (4) in the case of any other dividend or
distribution (cash or otherwise), that portion thereof which, when
combined with the per share fair market value of all other dividends
and distributions paid by the Corporation on Common Stock during the
365-day period ending on the date of declaration of such dividend or
distribution (as adjusted to appropriately reflect any of the events
referred to in subparagraphs (i) and (iii) of this Section 7(a) and
excluding dividends and distributions referred to in clauses (1) and
(2) and dividends and distributions, or portions thereof, that
resulted in an adjustment to the Conversion Price (or would have but
for the application of Section 7(a)(viii), 7(f) or 7(g)), does not
exceed 15% of the Current Price per share of the Common Stock on the
Trading Day immediately preceding the date of declaration of such
dividend or distribution. The fair market value of any dividend or
distribution not paid in cash shall be determined in good faith by
the Board of Directors of the Corporation, whose determination shall
be conclusive and described in a resolution of the Board of Directors
of the Corporation. For purposes of this subparagraph (iv), any
dividend or distribution that includes shares of Common Stock or
rights or warrants to subscribe for or purchase shares of Common Stock
shall be deemed instead to be (1) a dividend or distribution of the
evidences of indebtedness, shares of capital stock of the Corporation,
cash or assets other than such shares of Common Stock or such rights
or warrants (making any Conversion Price reduction required by this
subparagraph (iv)) immediately followed by (2) a dividend or
distribution of such shares of Common Stock or such rights or warrants
(making any further Conversion Price reduction required by
subparagraphs (i) or (ii) of this Section 7(a) and, in the case of
rights or warrants, subject to the last sentence of such subparagraph
(ii)), except (A) the Reference Date of such dividend or distribution
as defined in this subparagraph (iv) shall be substituted as "the date
fixed for the determination of shareholders entitled to receive such
dividend or other distribution," "the date fixed for the determination
of shareholders entitled to receive such rights or warrants" and "the
date fixed for such determination" within the meaning of subparagraphs
(i) and (ii) of this Section 7(a) and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such
determination" within the meaning of subparagraph (i) of this Section
7(a).
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(v) If a tender or exchange offer made by the Corporation
or any subsidiary of the Corporation for all or any portion of the
Corporation's Common Stock shall expire and such tender or exchange
offer shall involve the payment by the Corporation or such subsidiary
of consideration per share of Common Stock having a fair market value
(as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the
Board of Directors) at the last time (the "Tender Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange
offer (as it may have been amended) that exceeds 110% of the Current
Price per share (determined as provided in subparagraph (vi) of this
Section 7(a)) of the Common Stock on the Trading Day next succeeding
the Tender Expiration Time, then the Conversion Price shall be reduced
so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the effectiveness of
the Conversion Price reduction contemplated by this subparagraph (v)
by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares)
at the Tender Expiration Time multiplied by the Current Price per
share (determined as provided in subparagraph (vi) of this Section
7(a)) of the Common Stock on the Trading Day next succeeding the
Tender Expiration Time and the denominator shall be the sum of (x) the
fair market value (determined as aforesaid) of the aggregate
consideration payable to shareholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the
Tender Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) at the Tender Expiration Time and the Current Price
per share (determined as provided in subparagraph (vi) of this Section
7(a)) of the Common Stock on the Trading Day next succeeding the
Tender Expiration Time, such reduction to become effective immediately
prior to the opening of business on the day following the Tender
Expiration Time. Notwithstanding anything contained in this Section
7(a)(v) to the contrary, no adjustment shall be made to the
Conversion Price in the case of a tender or exchange offer of the
character described in Rule 13e-4(h)(5) under the Exchange Act, or any
successor rule thereto.
(vi) For the purpose of any computation under
subparagraphs (ii), (iv) and (v) of this Section 7(a), the Current
Price per share of Common Stock on any date in question shall be
deemed to be the average of the daily Closing Prices (as defined in
Section 7(e)) for the five consecutive Trading Days selected by the
Corporation commencing not more than 20 Trading Days before, and
ending not later than, the earlier of the day in question and, if
applicable, the day before the "ex" date with respect to the issuance
or distribution requiring such computation; provided, however, that if
another event occurs that would require an adjustment pursuant to
subparagraph (i) through (v), inclusive, the Board of Directors of the
Corporation
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may make such adjustments to the Closing Prices during such five
Trading Day period as it deems appropriate to effectuate the intent of
the adjustments in this Section 7(a), in which case any such
determination by the Board of Directors of the Corporation shall be
set forth in a Board Resolution and shall be conclusive. For purposes
of this paragraph, the term "ex" date, (1) when used with respect to
any issuance or distribution, means the first date on which the Common
Stock trades regular way on the relevant exchange or in the relevant
market from which the Closing Prices were obtained without the right
to receive such issuance or distribution, and (2) when used with
respect to any tender or exchange offer means the first date on which
the Common Stock trades regular way on such exchange or in such market
after the Tender Expiration Time of such offer.
(vii) The Corporation may make such reductions in the
Conversion Price, in addition to those required by subparagraphs (i),
(ii), (iii), (iv) and (v) of this Section 7(a), as it considers to be
advisable to avoid or diminish any income tax to holders of Common
Stock or holders of rights to purchase Common Stock or securities
convertible into Common Stock, resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. The Corporation from time to
time may reduce the Conversion Price by any amount selected by the
Corporation for any period of time if the period is at least twenty
days, and the Board of Directors of the Corporation shall have made a
determination that such reduction would be in the best interest of the
Corporation, which determination shall be conclusive. Whenever the
Conversion Price is reduced pursuant to the preceding sentence, the
Corporation shall mail to holders of record of the Series A Preferred
Stock a notice of the reduction at least fifteen days prior to the
date the reduced Conversion Price takes effect, and such notice shall
state the reduced Conversion Price and the period it will be in
effect.
(viii) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or decrease
of at least 1% in the Conversion Price; provided, however, that any
adjustments which by reason of this subparagraph (viii) are not
required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 7
shall be made to the nearest cent or to the nearest 1/100 of a share,
as the case may be, with one-half cent and 5/1000th of a share,
respectively, being rounded upward.
(ix) Whenever the Conversion Price is adjusted as herein
provided:
(1) the Corporation shall compute the adjusted
Conversion Price and shall prepare a certificate signed by the
Chief Financial Officer, the Treasurer or a Vice President of
the Corporation setting forth the adjusted Conversion Price
and showing in reasonable detail the facts upon which such
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adjustment is based, and such certificate shall forthwith be
filed with the transfer agent for the Series A Preferred
Stock; and
(2) a notice stating that the Conversion Price
has been adjusted and setting forth the adjusted Conversion
Price shall, as soon as practicable, be mailed by the
Corporation to all holders of shares of Series A Preferred
Stock at their last addresses as they shall appear upon the
stock transfer books of the Corporation.
(b) Reclassification, Consolidation, Merger Or Sale Of Assets. In
the event that the Corporation shall be a party to any transaction (including
without limitation any recapitalization or reclassification of the Common Stock
(other than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or combination of
the Common Stock), any consolidation of the Corporation with, or merger of the
Corporation into, any other person, any merger of another person into the
Corporation (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock),
any sale or transfer of all or substantially all of the assets of the
Corporation or any compulsory share exchange, in each case pursuant to which
the Common Stock is converted into the right to receive other securities, cash
or other property), then lawful provision shall be made as part of the terms of
such transaction whereby each holder of shares of Series A Preferred Stock then
outstanding shall have the right thereafter to convert such shares only into
(i) in the case of any such transaction other than a Common Stock Fundamental
Change (as defined in Section 7(e)), the kind and amount of securities, cash
and other property receivable upon the consummation of such transaction by a
holder of that number of shares of Common Stock into which such shares of
Series A Preferred Stock could have been converted immediately prior to such
transaction, after giving effect, in the case of any Non-Stock Fundamental
Change (as defined in Section 7(e)), to any adjustment in the Conversion Price
required by the provisions of Section 7(d), and (ii) in the case of a Common
Stock Fundamental Change, common stock of the kind received by holders of
Common Stock as a result of such Common Stock Fundamental Change in an amount
determined pursuant to the provisions of Section 7(d). The Corporation or the
person formed by such consolidation or resulting from such merger or which
acquired such assets or which acquired the Corporation's shares, as the case
may be, shall make provision in its certificate or articles of incorporation or
other constituent document to establish such right. Such certificate or
articles of incorporation or other constituent document shall provide for
adjustments which, for events subsequent to the effective date of such
provisions in such certificate or articles of incorporation or other
constituent document, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 7. The above provisions shall
similarly apply to successive transactions of the foregoing type.
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(c) Prior Notice Of Certain Events. In case:
(i) the Corporation shall (1) declare any dividend (or
any other distribution) on its Common Stock, other than (A) a dividend
payable in shares of Common Stock or (B) a dividend payable in cash
that would not require an adjustment pursuant to 7(a)(iv) or (2)
authorize a tender or exchange offer that would require an adjustment
pursuant to 7(a)(v); or
(ii) the Corporation shall authorize the granting to all
holders of Common Stock of rights or warrants to subscribe for or
purchase any shares of stock of any class or series or of any other
rights or warrants (other than Rights); or
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the
Corporation is a party and for which approval of any shareholders of
the Corporation shall be required, or of the sale or transfer of all
or substantially all of the assets of the Corporation or of any
compulsory share exchange whereby the Common Stock is converted into
other securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed with the transfer agent for the
Series A Preferred Stock, and shall cause to be mailed to the holders of record
of the Series A Preferred Stock, at their last addresses as they shall appear
upon the stock transfer books of the Corporation, at least fifteen calendar
days prior to the applicable record or effective date hereinafter specified, a
notice stating (x) the date on which a record (if any) is to be taken for the
purpose of such dividend, distribution, rights or warrants or, if a record is
not to be taken, the date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, share exchange, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).
(d) Adjustments In Case Of Fundamental Changes. Notwithstanding
any other provision in this Section 7 to the contrary, if any Fundamental
Change (as defined in
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Section 7(e)) occurs, then the Conversion Price in effect will be adjusted
immediately after such Fundamental Change as described below. In addition, in
the event of a Common Stock Fundamental Change, the Series A Preferred Stock
shall be convertible solely into common stock of the kind received by holders
of Common Stock as the result of such Common Stock Fundamental Change as more
specifically provided in the following clauses (d)(i) and (d)(ii).
For purposes of calculating any adjustment to be made pursuant to this Section
7(d) in the event of a Fundamental Change, immediately after such Fundamental
Change:
(i) in the case of a Non-Stock Fundamental Change, the
Conversion Price shall thereupon become the lower of (A) the
Conversion Price in effect immediately prior to such Non-Stock
Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to this Section 7, and (B) the result
obtained by multiplying the greater of the Applicable Price (as
defined in Section 7(e)) or the then applicable Reference Market Price
(as defined in Section 7(e)) by a fraction, of which the numerator
shall be $50 and the denominator shall be the amount set forth below
(based on the date such Non-Stock Fundamental Change occurs):
Twelve Months
Ending , Denominator
-------------------------- -----------
1996 . . . . . . . . . . . . . . . . . . . . . . . $
1997 . . . . . . . . . . . . . . . . . . . . . . . $
1998 . . . . . . . . . . . . . . . . . . . . . . . $
1999 . . . . . . . . . . . . . . . . . . . . . . . $
2000 . . . . . . . . . . . . . . . . . . . . . . . $
2001 . . . . . . . . . . . . . . . . . . . . . . . $
2002 . . . . . . . . . . . . . . . . . . . . . . . $
2003 and thereafter . . . . . . . . . . . . . . . $
; and
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price in effect immediately prior to such Common Stock
Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to this Section 7, shall thereupon be
adjusted by multiplying such Conversion Price by a fraction, of which
the numerator shall be the Purchaser Stock Price (as defined in
Section 7(e)) and the denominator shall be the Applicable Price;
provided, however, that in the event of a Common Stock Fundamental
Change in which (A) 100% by value of the consideration received by a
holder of Common Stock is common stock of the successor, acquiror or
other third party (and cash, if any, is paid only with respect to any
fractional interests in such common stock resulting from such Common
Stock
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Fundamental Change) and (B) all of the Common Stock shall have been
exchanged for, converted into or acquired for common stock (and cash
with respect to fractional interests) of the successor, acquiror or
other third party, the Conversion Price in effect immediately prior to
such Common Stock Fundamental Change shall thereupon be adjusted by
multiplying such Conversion Price by a fraction, of which the
numerator shall be one (1) and the denominator shall be the number of
shares of common stock of the successor, acquiror, or other third
party received by a holder of one share of Common Stock as a result of
such Common Stock Fundamental Change.
(e) Definitions. The following definitions shall apply to terms
used in this Section 7:
(i) "Applicable Price" shall mean (i) in the event of a
Non-Stock Fundamental Change in which the holders of the Common Stock
receive only cash, the amount of cash received by a holder of one
share of Common Stock and (ii) in the event of any other Non-Stock
Fundamental Change or any Common Stock Fundamental Change, the average
of the daily Closing Prices of the Common Stock for the ten
consecutive Trading Days prior to and including the record date for
the determination of the holders of Common Stock entitled to receive
securities, cash or other property in connection with such Non-Stock
Fundamental Change or Common Stock Fundamental Change, or, if there is
no such record date, the date upon which the holders of the Common
Stock shall have the right to receive such securities, cash or other
property (such record date or distribution date being hereinafter
referred to as the "Entitlement Date"), in each case, as adjusted in
good faith by the Board of Directors of the Corporation to
appropriately reflect any of the events referred to in subparagraphs
(i), (ii), (iii), (iv) and (v) of Section 7(a).
(ii) "Closing Price" of any common stock on any day shall
mean the reported last sale price, regular way, on such day, or, if no
sale takes place on such day, the average of the reported closing bid
and asked prices on such day, regular way, in either case as reported
on the principal national securities exchange on which such common
stock is listed or admitted to trading, or, if such common stock is
not listed or admitted to trading on a national securities exchange,
on the National Market System of the National Association of
Securities Dealers, Inc., or, if such common stock is not quoted or
admitted to trading on such quotation system, on the quotation system
on which such common stock is listed or admitted to trading or quoted,
or, if not listed or admitted to trading or quoted on any national
securities exchange or quotation system, the average of the closing
bid and asked prices of such common stock in the over-the-counter
market on the day in question as reported by the National Quotation
Bureau Incorporated, or a similar generally accepted reporting
service, or, if not so available in such manner, as furnished by any
NYSE member firm selected from time to time by the Board of Directors
of the
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Corporation for that purpose or, if not so available in such manner,
as otherwise determined in good faith by the Board of Directors of the
Corporation.
(iii) "Common Stock Fundamental Change" shall mean any
Fundamental Change in which more than 50% by value (as determined in
good faith by the Board of Directors of the Corporation) of the
consideration received by holders of Common Stock consists of common
stock that for each of the ten consecutive Trading Days prior to the
Entitlement Date has been admitted for listing or admitted for listing
subject to notice of issuance on a national securities exchange or
quoted on the National Market System of the National Association of
Securities Dealers, Inc.; provided, however, that a Fundamental Change
shall not be a Common Stock Fundamental Change unless either (i) the
Corporation continues to exist after the occurrence of such
Fundamental Change and the outstanding shares of Series A Preferred
Stock continue to exist as outstanding shares of Series A Preferred
Stock, or (ii) not later than the occurrence of such Fundamental
Change, the outstanding shares of Series A Preferred Stock are
converted into or exchanged for shares of convertible preferred stock
of the entity succeeding to the business of the Corporation, which
convertible preferred stock has designations, preferences, limitations
and relative rights substantially similar to those of the Series A
Preferred Stock.
(iv) "Conversion Price" shall have the meaning given that
term in Section 6(a).
(v) "Fundamental Change" shall mean the occurrence of any
transaction or event in connection with a plan pursuant to which all
or substantially all of the Common Stock shall be exchanged for,
converted into, acquired for or constitute solely the right to receive
securities, cash or other property (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); provided, however,
that, in the case of a plan involving more than one such transaction
or event, for purposes of adjustment of the Conversion Price, such
Fundamental Change shall be deemed to have occurred when substantially
all of the Common Stock shall be exchanged for, converted into, or
acquired for or constitute solely the right to receive securities,
cash or other property, but the adjustment shall be based upon the
highest weighted average per share consideration that a holder of
Common Stock could have received in such transactions or events as a
result of which more than 50% of the Common Stock shall have been
exchanged for, converted into, or acquired for or constitute solely
the right to receive securities, cash or other property.
(vi) "Non-Stock Fundamental Change" shall mean any
Fundamental Change other than a Common Stock Fundamental Change.
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(vii) "Purchased Shares" shall have the meaning given that
term in Section 7(a)(v).
(viii) "Purchaser Stock Price" shall mean, with respect to
any Common Stock Fundamental Change, the average of the daily Closing
Prices of the common stock received in such Common Stock Fundamental
Change for the ten consecutive Trading Days prior to and including the
Entitlement Date, as adjusted in good faith by the Board of Directors
of the Corporation to appropriately reflect any of the events referred
to in subparagraphs (i), (ii), (iii), (iv), and (v) of Section 7(a).
(ix) "Reference Date" shall have the meaning given that
term in Section 13(a)(iv).
(x) "Reference Market Price" shall initially mean
$__________ and in the event of any adjustment to the Conversion Price
other than as a result of a Non-Stock Fundamental Change, the
Reference Market Price shall also be adjusted so that the ratio of the
Reference Market Price to the Conversion Price after giving effect to
any such adjustment shall always be the same as the ratio of $_____ to
the initial Conversion Price.
(xi) "Tender Expiration Time" shall have the meaning given
that term in Section 7(a)(v).
(xii) "Trading Day" shall mean, with respect to any
security listed or admitted to trading on the NYSE, any day on which
such securities are traded on the NYSE, or, if such security is not
listed or admitted to trading on the NYSE, on the principal national
securities exchange on which such security is listed or admitted to
trading, or, if such security is not listed or admitted to trading on
a national securities exchange, on the National Market System of the
National Association of Securities Dealers, Inc., or, if such security
is not quoted or admitted to trading on such quotation system, on the
principal quotation system on which such security is listed or
admitted to trading or quoted, or, if not listed or admitted to
trading or quoted on any national securities exchange or quotation
system, in the over-the-counter market.
(f) Dividend Or Interest Reinvestment Plans. Notwithstanding the
foregoing provisions of this Section 7, no adjustment of the Conversion Price
shall be required to be made upon the issuance of any shares of Common Stock
pursuant to any present or future plan providing for the reinvestment of
dividends or interest payable on securities of the Corporation and the
investment of additional optional amounts in shares of Common Stock under any
such plan, and the issuance of any shares of Common Stock or options or rights
to purchase such shares pursuant to any present or future employee, officer,
director or consultant benefit plan or program or agreement of the Corporation
or a subsidiary of the
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Corporation or pursuant to any option, warrant, right or exercisable,
exchangeable or convertible security outstanding as of the date the Series A
Preferred Stock was first designated pursuant to this Statement of Resolution
Establishing a Series of Shares.
(g) Certain Rights. Notwithstanding any other provision of this
Section 7, the issuance or distribution of Rights shall not be deemed to
constitute an issuance or a distribution or dividend of rights, warrants, or
other securities to which any of the adjustment provisions described above
applies.
(h) Certain Additional Rights. In case the Corporation shall, by
dividend or otherwise, declare or make a distribution on its Common Stock
referred to in Section 7(a)(iv) (including, without limitation, dividends or
distributions referred to in the last sentence of Section 7(a)(iv) but
excluding the Excluded Dividends), the holder of each share of Series A
Preferred Stock, upon the conversion thereof subsequent to the close of
business on the date fixed for the determination of shareholders entitled to
receive such distribution and prior to the effectiveness of the Conversion
Price adjustment in respect of such distribution, shall also be entitled to
receive for each share of Common Stock into which such share of Series A
Preferred Stock is converted, the portion of the shares of Common Stock,
rights, warrants, evidences of indebtedness, shares of capital stock, cash and
assets so distributed applicable to one share of Common Stock; provided,
however, that, at the election of the Corporation (whose election shall be
evidenced by a resolution of the Board of Directors of the Corporation or a
committee thereof) with respect to all holders so converting, the Corporation
may, in lieu of distributing to such holders any portion of such distribution
not consisting of cash or securities of the Corporation, pay such holders an
amount in cash equal to the fair market value thereof (as determined in good
faith by the Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors of the Corporation or a
committee thereof). If any conversion of a share of Series A Preferred Stock
described in the immediately preceding sentence occurs prior to the payment
date for a distribution to holders of Common Stock which the holder of the
share of Series A Preferred Stock so converted is entitled to receive in
accordance with the immediately preceding sentence, the Corporation may elect
(such election to be evidenced by a resolution of the Board of Directors) to
distribute to such holder a due bill for the shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash or assets to
which such holder is so entitled, provided that such due bill (i) meets any
applicable requirements of the principal national securities exchange or other
market on which the Common Stock is then traded, and (ii) requires payment or
delivery of such shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets no later than the date of
payment or delivery thereof to holders of shares of Common Stock receiving such
distribution.
(i) One Adjustment. There shall be no adjustment of the
Conversion Price in case of the issuance of any capital stock (or securities
convertible into or exchangeable for
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capital stock) of the Corporation or any other distribution or event except as
specifically described in this Section 7. If any action would require
adjustment of the Conversion Price pursuant to more than one of the provisions
of this Section 7, only one adjustment shall be made and such adjustment shall
be the amount of adjustment that has the highest absolute value to the holders
of the Series A Preferred Stock.
SECTION 8. RANKING; RETIREMENT OF SHARES.
(a) The Series A Preferred Stock shall rank senior to Common Stock
and Series A Junior Participating Preferred Stock of the Corporation to the
payment of dividends and amounts upon the liquidation, dissolution or
winding-up of the Corporation. The ranking of any subsequent series of
Preferred Stock, par value $1.50 per share, issued by the Corporation, or other
class or series capital stock of the Corporation, as compared to the Series A
Preferred Stock as to the payment of dividends and distributions of assets upon
the liquidation, dissolution or winding-up of the Corporation shall be as
specified in the Restated Articles of Incorporation, as amended, of the
Corporation, or the Statement of Resolution Establishing a Series of Shares
pertaining to such series.
(b) Any shares of Series A Preferred Stock acquired by the
Corporation by reason of the conversion or redemption of such shares, or
otherwise so acquired, shall be retired as shares of Series A Preferred Stock
and restored to the status of authorized but unissued shares of Preferred
Stock, par value $1.50 per share, of the Corporation, without designation as to
series, and may thereafter be reissued.
SECTION 9. MISCELLANEOUS.
(a) All notices referred to herein shall be in writing, and all
notices hereunder shall be deemed to have been given upon the earlier of
receipt thereof or three Business Days after the mailing thereof if sent by
registered or certified mail (unless first-class mail shall be specifically
permitted for such notice under the terms of this Section 9(a) with postage
prepaid addressed: (i) if to the Corporation, to its principal executive
offices (Attention: Secretary) or to the transfer agent for the Series A
Preferred Stock, or other agent of the Corporation designated as permitted by
this Section 9(a), or (ii) if to any holder of the Series A Preferred Stock or
Common Stock, as the case may be, to such holder at the address of such holder
as listed in the stock record books of the Corporation (which may include the
records of any transfer agent for the Series A Preferred Stock or Common Stock,
as the case may be), or (iii) to such other address as the Corporation or any
such holder, as the case may be, shall have designated by notice similarly
given.
(b) The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance or
delivery of shares of Series A Preferred Stock or shares of Common Stock or
other securities issued on account of Series A Preferred Stock pursuant hereto
or certificates representing such shares or
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securities. The Corporation shall not, however, be required to pay any such
tax that may be payable in respect of any transfer involving the issuance or
delivery of shares of Series A Preferred Stock or Common Stock or other
securities in a name other than that in which the shares of Series A Preferred
Stock with respect to which such shares or other securities are issued or
delivered were registered, or in respect of any payment to any person with
respect to any such shares or securities other than a payment to the registered
holder thereof, and shall not be required to make any such issuance, delivery
or payment unless and until the person otherwise entitled to such issuance,
delivery or payment has paid to the Corporation the amount of any such tax or
has established, to the satisfaction of the Corporation, that such tax has been
paid or is not payable.
(c) In the event that a holder of shares of Series A Preferred
Stock shall not by written notice designate the name in which shares of Common
Stock to be issued upon conversion of such shares should be registered or to
whom payment upon redemption of shares of Series A Preferred Stock should be
made or the address to which the certificate or certificates representing such
shares, or such payment, should be sent, the Corporation shall be entitled to
register such shares, and make such payment, in the name of the holder of such
Series A Preferred Stock as shown on the records of the Corporation and to send
the certificate or certificates representing such shares, or such payment, to
the address of such holder shown on the records of the Corporation.
(d) Registrar and Transfer Agent. The Corporation may appoint,
and from time to time discharge and change, a transfer agent for the Series A
Preferred Stock.
(e) Whenever possible, each provision hereof shall be interpreted
in such a manner as to be effective and valid under applicable law, but if any
provision hereof is held to be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating or otherwise adversely affecting the remaining
provisions hereof. If a court of competent jurisdiction should determine that
a provision hereof would be valid or enforceable if a period of time were
extended or shortened or a particular percentage were increased or decreased,
then such court may make such change as shall be necessary to render the
provision in question effective and valid under applicable law.
RESOLVED FURTHER, that, before the Corporation shall issue any shares
of the Series A Cumulative Convertible Preferred Stock, a statement
pursuant to Article 2.13 of the Texas Business Corporation Act, to be
entitled a "Statement of Resolution Establishing a Series of Shares,"
shall be made, executed, and filed in accordance with the provisions
of such Act, and that 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
and intent of this and the foregoing resolution.
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IN WITNESS WHEREOF, this Statement of Resolution Establishing a Series
of Shares has been made under the hand of the undersigned, the
___________________, and ____________________ of the Corporation, this ______
day of ____________, 1995.
________________________________________
________________________________________
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STATE OF TEXAS )
)
COUNTY OF HARRIS )
Before me, a notary public, on this day personally appeared
____________________, known to me to be the person whose name is subscribed to
the foregoing document and, being by me first duly sworn, declared that the
statements therein contained are true and correct.
Given under my hand and seal of office this ________ day of
______________ A.D., ____________________.
________________________________
Notary Public, State of Texas
My commission expires:
(Notarial Seal)
__________________________, 19__.
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