Exhibit 3.1 (iv)
CERTIFICATE OF STOCK DESIGNATION
OF
MONTGOMERY WARD HOLDING CORP.
Certificate of the Designation, preferences and relative
participating, optional and other special rights of the Series C Preferred
Stock, par value $1.00 per share, and the qualifications, limitations and
restrictions thereof which have not been set forth in the Certificate of
Incorporation, as amended.
__________________________________________________
Pursuant to Sections 141 and 151 of the General
Corporation Law of the State of Delaware
__________________________________________________
The undersigned, Roger V. Goddu, as Chief Executive Officer of
Montgomery Ward Holding Corp., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify that the Board of Directors of the
Corporation, by unanimous written consent, duly adopted the following
resolution:
RESOLVED: That the Board of Directors hereby provides for the issue of a series
of shares pursuant to the provisions of Part B of Article FOURTH of the
Certificate of Incorporation of $1.00 par value Additional Preferred Stock of
the Corporation and hereby fixes for designation, preferences and relative
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations and restrictions thereof, as follows:
This series is designated as the Series C Preferred Stock of the Corporation
(the "Series C Preferred Stock"). Except as otherwise provided herein, each
share of Series C Preferred Stock shall be identical in all respects to all
other shares of Series C Preferred Stock and shall entitle the holder thereof to
the same rights and privileges as to which the holders of the other shares of
Series C Preferred Stock are entitled. The Series C Preferred Stock shall
consist of 1,000 shares, as issued from time to time and as decreased from time
to time (but not below the number of shares of the Series C Preferred Stock then
outstanding), by further resolution of the Board of Directors.
1. Rank. The Series C Preferred Stock shall, with respect to dividend
rights and rights on liquidation, winding up and dissolution, rank prior to the
Common Stock, but junior to the Senior Preferred Stock.
2. Dividends.
(a) In each year, the holders of the shares of Series C
Preferred Stock shall be entitled to receive, before any dividends shall
be declared and paid upon or set aside for the Common Stock or any other
Stock Junior to the Series C Preferred Stock (defined in Section
2(a)(i)(A)), when and as declared by the Board of Directors, except as
may be prohibited by Section 5, out of funds legally available for that
purpose, cumulative cash dividends payable quarterly in arrears on the
last business day of March, June, September and December (each of such
dates being a "Dividend Payment Date") at a rate per annum equal to 15%
based on the then effective Liquidation Payment (defined in Section 3(a))
(computed after taking into account Accrued Dividends (defined in Section
2(c)(i)) (the "Dividend Rate"); provided, however, that the dividend
payable on the Dividend Payment Date with respect to any share of Series
C Preferred Stock first occurring after the date of first issuance (the
"Issuance Date") shall be based upon the number of days from and
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including March 4, 1997 (the "Initial Accrual Date") up to and including
such Dividend Payment Date and a 365-day year. The period from the
Initial Accrual Date to the initial Dividend Payment Date and each
quarterly period between consecutive Dividend Payment Dates, shall
hereinafter be referred to as a "Dividend Period." Such dividends shall
be paid to the holders of record at the close of business on the date
specified by the Board of Directors of the Corporation at the time such
dividend is declared; provided, however, that such date shall not be more
than sixty (60) days prior to the respective Dividend Payment Date.
Dividends on the Series C Preferred Stock shall be cumulative from the
Initial Accrual Date (whether or not there shall be net profits or net
assets of the Corporation legally available for the payment of such
dividends). If for any reason the full dividend on any Dividend Payment
Date is not paid in cash, the unpaid amount of such Accrued Dividend
shall automatically without any further action of the Board of Directors
be deemed added to the amount of the Liquidation Payment on such Dividend
Payment Date. It is further provided that:
(i) except as provided in Section 2(a)(ii), the Corporation
shall not take any of the following actions:
(A) declare, order or pay any dividend on any class of stock
ranking as to dividends or on liquidation junior to the Series C
Preferred Stock (such junior stock being herein sometimes
referred to as the "Stock Junior to the Series C Preferred
Stock"), or
(B) redeem any Stock Junior to the Series C Preferred Stock,
(each of such actions described in clauses 2(a)(i)(A) or (B) above
being herein sometimes referred to as a "Junior Distribution" and the
proposed date of each such action being herein sometimes referred to
as a "Proposed Junior Distribution Date") if the Corporation shall
not, on or before the Proposed Junior Distribution Date, have
completed both of the following:
(1) declared on the outstanding shares of Series C Preferred
Stock, and paid or set apart for payment, all "Accrued Dividends"
(defined in Section 2(c)(i)) to the Proposed Junior Distribution
Date and
(2) paid or deposited as required in this Certificate of
Designation all amounts payable to holders of Series C Preferred
Stock in respect of the mandatory redemption required to have
been paid or deposited for their benefit on the "Mandatory
Redemption Date" (defined in Section 4(i), if such Mandatory
Redemption Date occurs on or prior to such Proposed Junior
Distribution Date.
(ii) the Corporation may redeem or purchase any shares of Common
Stock in accordance with either (x) the terms, conditions and
provisions of the "Stockholders Agreement" (defined in Section C.1 of
Article FOURTH of the Certificate of Incorporation) or (y) the Terms
and Conditions (as defined in the Stockholders Agreement), if on or
before the date of each such proposed Common Stock redemption or
purchase (each such time, with respect to redemptions or purchases
under either the Stockholders Agreement or the Terms and Conditions,
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being herein sometimes referred to as a "Proposed Common Stock
Repurchase Date"), the Corporation shall have:
(A) declared on the outstanding shares of Series C Preferred
Stock, and paid or set apart for payment, all Accrued Dividends
(defined in Section 2(c)(i)) through all Dividend Payment Dates
occurring on or prior to such Proposed Common Stock Repurchase
Date, and
(B) paid or deposited as required in this Certificate of
Designation all amounts payable to holders of Series C Preferred
Stock in respect of the mandatory redemption required to have
been paid or deposited for their benefit on the "Mandatory
Redemption Date" (defined in Section 4(i)), if such Mandatory
Redemption Date occurs on or prior to such Proposed Common Stock
Repurchase Date.
All dividends declared upon Series C Preferred Stock and any other class
of stock ranking on a parity as to dividends with the Series C Preferred
Stock shall be declared pro rata per share.
(b) Each fractional share of the Series C Preferred Stock outstanding
shall be entitled to a ratably proportionate amount of all dividends to
which each outstanding full share of the Series C Preferred Stock is
entitled pursuant to Section 2(a) hereof, and all of such dividends with
respect to such outstanding fractional shares shall be fully cumulative
and shall accrue (whether or not declared) and shall be payable in the
same manner and at such times as provided for in Section 2(a) with
respect to dividends on each outstanding full share of the Series C
Preferred Stock.
(c) Definitions.
(i) The term "Accrued Dividends" with respect to the Series C
Preferred Stock shall mean, as of any given time, the then "Full
Cumulative Dividends" (defined in Section 2(c)(ii)) less the amount
of all dividends theretofore paid in cash upon the relevant shares of
Series C Preferred Stock.
(ii) The term "Full Cumulative Dividends" with respect to the
Series C Preferred Stock shall mean (whether or not in any Dividend
Period, or any part thereof, in respect of which such term is used
there shall have been net profits or net assets of the Corporation
legally available for the payment of such dividends) that amount which
shall be equal to dividends upon the relevant shares at the full rate
fixed for Series C Preferred Stock as provided herein for the period
of time elapsed from the Initial Accrual Date to the date as of which
Full Cumulative Dividends are computed.
(d) Shares of Series C Preferred Stock which have been issued and
reacquired in any manner, including shares purchased or exchanged, shall
not be reissued.
3. Rights on Liquidation, Dissolution or Winding Up.
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series C Preferred Stock then
outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders,
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whether from capital, surplus or earnings, except as may be prohibited by
Section 5, but after payments required to be made to the holders of any
stock ranking senior upon liquidation to the Series C Preferred Stock and
before any payment shall be made to the holders of any stock ranking on
liquidation junior to the Series C Preferred Stock, an amount equal to
one hundred thousand dollars ($100,000) per share, plus an amount equal
to Accrued Dividends (as defined in Section 2(c)(i)) to the date of
payment (the "Liquidation Payment"). If upon any liquidation, dissolution
or winding up of the Corporation the assets of the Corporation available
for distribution to its stockholders shall be insufficient to pay the
holders of shares of Series C Preferred Stock the full amounts to which
they respectively shall be entitled, the holders of shares of Series C
Preferred Stock, and any class of stock ranking on liquidation on a
parity with the Series C Preferred Stock, shall share ratably in any
distribution of assets according to the respective amounts which would be
payable in respect of the shares held by them upon such distribution if
all amounts payable on or with respect to said shares were paid in full.
In the event of any liquidation, dissolution or winding up of the
Corporation after payment shall have been made to the holders of shares
of Series C Preferred Stock and any class of stock ranking on liquidation
on a parity with the Series C Preferred Stock of the full amount to which
they shall be entitled as aforesaid, the holders of any class or classes
of stock ranking on liquidation junior to the Senior Preferred Stock
shall be entitled, to the exclusion of the holders of shares of Series C
Preferred Stock, to share, according to their respective rights and
preferences, in all remaining assets of the Corporation available for
distribution to its stockholders.
(b) The Liquidation Payment with respect to each fractional share of
the Series C Preferred Stock outstanding shall be equal to a ratably
proportionate amount of the Liquidation Payment with respect to each
outstanding share of Series C Preferred Stock.
(c) For the purposes of this Section 3, neither the consolidation or
merger of the Corporation into or with any other corporation or
corporations, nor the sale or transfer by the Corporation of all or any
part of its assets shall be deemed to be a liquidation, dissolution or
winding up of the Corporation, unless such transaction shall be in
connection with the liquidation, dissolution or winding up of the
Corporation.
4. Redemption
(a) Mandatory Redemption.
(i) Except as may be prohibited by Section 5, on September 30,
2002, the Corporation shall redeem all of the outstanding shares of
Series C Preferred Stock at a redemption price of (A) one hundred
thousand dollars ($100,000) per share (payable in cash or other
consideration as the Corporation and holders of a majority of the
Series C Preferred Stock may agree), plus (B) an amount equal to
Accrued Dividends (defined in Section 2(c)(i)) to the date of payment
(the "Redemption Price") (each such date being herein sometimes
referred to as the "Mandatory Redemption Date")
(ii) On and after the Mandatory Redemption Date (unless default
shall be made by the Corporation in depositing moneys for the payment
of the Redemption Price as hereinafter provided), all rights of the
holders of shares of Series C Preferred Stock as stockholders of the
Corporation with respect to those shares of Series C Preferred
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Stock to be redeemed, except the right to receive the Redemption Price
as hereinafter provided, shall cease and terminate.
(iii) The Corporation shall provide moneys for the payment of
the Redemption Price by depositing on the Mandatory Redemption Date
the amount thereof for the account of the holders of record of the
Series C Preferred Stock entitled thereto with Bank of America
Illinois, or such other bank or trust company doing business in the
City of Chicago, as may be designated by (A) the holders of not less
than a majority of the outstanding shares of Series C Preferred Stock,
and, failing said designation, (B) the Corporation, as paying agent
for the benefit of such holders. The holders of the shares of Series C
Preferred Stock redeemed shall surrender to the Corporation the
certificates for the shares of Series C Preferred Stock so redeemed.
Upon notification by such designated bank or trust company to the
holders of the Series C Preferred Stock that such moneys representing
the Redemption Price have been deposited by the Corporation, the
shares designated for redemption shall no longer be outstanding,
whether or not the certificates for the shares so redeemed have been
received by the Corporation on the date of such notification and all
rights relating thereto shall cease and terminate.
(b) Optional Redemption.
(i) So long as any shares of Series C Preferred Stock are
outstanding, except as may be prohibited by Section 5, the Corporation
may, at the option of the Board of Directors, at any time or from time
to time after the Issuance Date, redeem the whole or any part of such
Series C Preferred Stock. Any redemption pursuant to this Section
4(b)(i) shall be at the Redemption Price. If less than all the shares
of Series C Preferred Stock at any time outstanding shall be called
for redemption, the redemption shall be made pro rata with respect to
such shares and in such manner as may be prescribed by resolution of
the Board of Directors. The date of each such redemption is herein
sometimes referred to as an "Optional Redemption Date".
(ii) Notice of every redemption pursuant to this Section 4(b)
shall be sent by first-class mail, postage prepaid, to the holders of
record of the shares of Series C Preferred Stock so to be redeemed at
their respective addresses as the same shall appear on the books of
the Corporation. Such notice shall be mailed not less than ten (10)
business days in advance of the Optional Redemption Date to the
holders of record of the shares of Series C Preferred Stock so to be
redeemed. On and after the Optional Redemption Date, unless default
shall be made by the Corporation in providing moneys to the bank or
trust company for the account of the holders of record of the Series C
Preferred Stock as provided in Section 4(a)(iii) for the payment of
the Redemption Price, all rights of the holders of Series C Preferred
Stock as stockholders of the Corporation with respect to those shares
of Series C Preferred Stock to be redeemed, except the right to
receive the Redemption Price, shall cease and terminate whether or not
the certificates for the shares so redeemed have been received by the
Corporation as provided in Section 4(a)(iii). In this Section
4(b)(ii), a business day refers to any day, except a Saturday, Sunday
or any day on which banks in the City of Chicago are authorized or
required by law to close.
(c) Each fractional share of the Series C Preferred Stock outstanding
shall be entitled to a ratably proportionate fraction of the Redemption
Price payable in respect of
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each outstanding full share of the Series C Preferred Stock pursuant to
this Section 4, and such fraction of the price shall be payable in the
same manner and at such times as provided for in this Section 4 with
respect to redemptions of each outstanding full share of the Series C
Preferred Stock.
(d) The foregoing provisions of this Section 4 to the contrary
notwithstanding but without limitation of the Corporation's obligations
to make mandatory redemptions as required by Section 4(a), unless the
Accrued Dividends on all outstanding shares of Series C Preferred Stock
shall have been paid in cash or contemporaneously are declared and paid
through the date of a proposed optional redemption, none of the shares of
Series C Preferred Stock shall be redeemed unless all outstanding shares
of Series C Preferred Stock are simultaneously redeemed and the
Corporation shall not purchase by optional redemption or otherwise
acquire any shares of Series C Preferred Stock; provided, however, that
the foregoing shall not prevent the purchase or acquisition of shares of
Series C Preferred Stock pursuant to a purchase or exchange offer made on
the same terms to holders of all outstanding shares of Series C Preferred
Stock.
(e) If fewer than all the outstanding shares of Series C Preferred
Stock are to be redeemed, the number of shares to be redeemed shall be
determined by the Board of Directors in accordance with the provisions of
this Certificate of Designation, and the shares to be redeemed shall be
determined by lot or pro rata as may be determined by the Board of
Directors.
5. Restriction on Payments. Anything contained in this Article to the
contrary notwithstanding, no cash dividends or dividends paid by transfer
of any other property on shares of the Series C Preferred Stock shall be
declared by the Board of Directors or paid or set apart for payment by the
Corporation, no distribution in respect of the Series C Preferred Stock
shall be paid or set apart for payment by the Corporation, and no payment
shall be made by the Corporation with respect to any redemption of Series C
Preferred Stock (such payments, distributions and settings aside being
herein sometimes referred to collectively as "Distributions") at any time
when the terms and provisions of any agreement to which the Corporation or
any other member of the "Ward Group" (defined in Section C.1 of Article
FOURTH of the Certificate of Incorporation) is a party relating to
indebtedness for money borrowed specifically prohibits or limits such
Distribution (and such Distribution exceeds said limits), or such
Distribution would constitute a breach, default or event of default
thereunder.
6. Voting Rights. Except as expressly provided in the Certificate of
Incorporation, this Certificate of Designation or as required by law (in
relation to which the holders of shares of Series C Preferred Stock shall
be treated as a class), the holders of shares of Series C Preferred Stock
shall not have voting rights and at every meeting of the stockholders of
the Corporation, or by written consent in lieu of any such meeting, all
voting power in the election of directors and/or for all other purposes
shall be vested exclusively in the holders of shares of Common Stock.
Without limitation of the next preceding sentence and without implication
that the contrary would otherwise be true, no consent of the holders of
Series C Preferred Stock shall be required for (a) the creation of any
indebtedness of any kind of the Corporation, (b) the creation of any class
of stock of the Corporation junior in right as to dividends and upon
liquidation to the Series C Preferred Stock, or (c) any increase or
decrease in the amount of authorized Common Stock or any increase, decrease
or change in the par value thereof.
7. Amendment. The Certificate of Incorporation of the Corporation shall
not be
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amended in any manner which would alter or change the powers, preferences
or special rights of the Series C Preferred Stock so as to affect the
holders thereof adversely (including, without limitation, providing for the
creation of any new class of capital stock senior to, or on a parity with,
the Series C Preferred Stock as to dividend, redemption rights or on
liquidation) without the affirmative vote of the holders of at least a
majority of the outstanding shares of Series C Preferred Stock, voting
together as a single class. The Board of Directors reserves the right to
act by resolution from time to time to decrease the number of shares which
constitute Series C Preferred Stock (but not below the number of shares
thereof outstanding).
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IN WITNESS WHEREOF, MONTGOMERY WARD HOLDING CORP. has caused this
certificate to be signed by Roger V. Goddu, its Chief Executive Officer, and
attested by Spencer H. Heine, its Secretary, this 29th day of May, 1997.
MONTGOMERY WARD HOLDING CORP.
By: /s/ Roger V. Goddu
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Roger V. Goddu
Chief Executive Officer
(CORPORATE SEAL)
ATTEST:
By: /s/ Spencer H. Heine
-----------------------------------------
Spencer H. Heine
Secretary
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