(As amended and restated through October 20, 1998)
ELI LILLY AND COMPANY
(an Indiana corporation)
AMENDED ARTICLES OF INCORPORATION
1. The name of the Corporation shall be
ELI LILLY AND COMPANY.
2. The purposes for which the Corporation is formed are to engage in any
lawful act or activity for which a corporation may be organized under the
Indiana Business Corporation Law.
3. The period during which the Corporation is to continue as a
corporation is perpetual.
4. The total number of shares which the Corporation shall have authority
to issue is 3,205,000,000 shares, consisting of 3,200,000,000 shares of Common
Stock and 5,000,000 shares of Preferred Stock. The Corporation's shares do not
have any par or stated value, except that, solely for the purpose of any statute
or regulation imposing any tax or fee based upon the capitalization of the
Corporation, each of the Corporation's shares shall be deemed to have a par
value of $0.01 per share.
5. The following provisions shall apply to the Corporation's shares:
(a) The Corporation shall have the power to acquire (by purchase,
redemption, or otherwise), hold, own, pledge, sell, transfer, assign,
reissue, cancel, or otherwise dispose of the shares of the Corporation in
the manner and to the extent now or hereafter permitted by the laws of the
State of Indiana (but such power shall not imply an obligation on the part
of the owner or holder of any share to sell or otherwise transfer such
share to the Corporation), including the power to purchase, redeem, or
otherwise acquire the Corporation's own shares, directly or indirectly, and
without pro rata treatment of the owners or holders of any class or series
of shares, unless, after giving effect thereto, the Corporation would not
be able to pay its debts as they become due in the usual course of business
or the Corporation's total assets would be less than its total liabilities
(and without regard to any amounts that would be needed, if the Corporation
were to be dissolved at the time of the purchase, redemption, or other
acquisition, to satisfy the preferential rights upon dissolution of
shareholders whose preferential rights are superior to those of the holders
of the shares of the Corporation being purchased, redeemed, or otherwise
acquired, unless otherwise expressly provided with respect to a series of
Preferred Stock). Shares of the Corporation purchased, redeemed, or
otherwise acquired by it shall constitute authorized but unissued shares,
unless prior to any such purchase, redemption, or other acquisition, or
within thirty (30) days thereafter, the Board of Directors adopts a
resolution providing that such shares constitute authorized and issued but
not outstanding shares.
(b) Preferred Stock of any series that has been redeemed (whether
through the operation of a retirement or sinking fund or otherwise) or
purchased by the Corporation, or which, if convertible, have been converted
into shares of the Corporation of any other
class or series, may be reissued as a part of such series or of any other
series of Preferred Stock, subject to such limitations (if any) as may be
fixed by the Board of Directors with respect to such series of Preferred
Stock in accordance with the provisions of Article 7 of these Amended
Articles of Incorporation.
(c) The Board of Directors of the Corporation may dispose of, issue,
and sell shares in accordance with, and in such amounts as may be permitted
by, the laws of the State of Indiana and the provisions of these Amended
Articles of Incorporation and for such consideration, at such price or
prices, at such time or times and upon such terms and conditions (including
the privilege of selectively repurchasing the same) as the Board of
Directors of the Corporation shall determine, without the authorization or
approval by any shareholders of the Corporation. Shares may be disposed of,
issued, and sold to such persons, firms, or corporations as the Board of
Directors may determine, without any preemptive or other right on the part
of the owners or holders of other shares of the Corporation of any class or
kind to acquire such shares by reason of their ownership of such other
shares.
6. The following provisions shall apply to the Common Stock:
(a) Except as otherwise provided by the Indiana Business Corporation
Law and subject to such shareholder disclosure and recognition procedures
(which may include voting prohibition sanctions) as the Corporation may by
action of its Board of Directors establish, shares of Common Stock shall
have unlimited voting rights and each outstanding share of Common Stock
shall, when validly issued by the Corporation, entitle the record holder
thereof to one vote at all shareholders' meetings on all matters submitted
to a vote of the shareholders of the Corporation.
(b) Shares of Common Stock shall be equal in every respect insofar as
their relationship to the Corporation is concerned, but such equality of
rights shall not imply equality of treatment as to redemption or other
acquisition of shares by the Corporation. Subject to the rights of the
holders of any outstanding series of Preferred Stock, the holders of Common
Stock shall be entitled to share ratably in such dividends or other
distributions (other than purchases, redemptions, or other acquisitions of
shares by the Corporation), if any, as are declared and paid from time to
time on the Common Stock at the discretion of the Board of Directors.
(c) In the event of any liquidation, dissolution, or winding up of
the Corporation, either voluntary or involuntary, after payment shall have
been made to the holders of any outstanding series of Preferred Stock of
the full amount to which they shall be entitled, the holders of Common
Stock shall be entitled, to the exclusion of the holders of the Preferred
Stock of any and all series, to share, ratably according to the number of
shares of Common Stock held by them, in all remaining assets of the
Corporation available for distribution to its shareholders.
7. The Board of Directors is hereby expressly authorized to provide, out
of the unissued shares of Preferred Stock, for one or more series of Preferred
Stock. Before any shares of any such series are issued, the Board of Directors
shall fix, and hereby is expressly empowered to fix, by the adoption and filing
in accordance with the Indiana Business Corporation Law, of an amendment or
amendments to these Amended Articles of Incorporation, the terms of such
Preferred Stock or series of Preferred Stock, including the following:
(a) the designation of such series, the number of shares to
constitute such series and the stated value thereof if different from the
par value thereof;
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(b) whether the shares of such series shall have voting rights, in
addition to any voting rights provided by law, and, if so, the terms of
such voting rights, which may be general or limited and may include the
right, under specified circumstances, to elect additional directors;
(c) the dividends, if any, payable on such series, whether any such
dividends shall be cumulative, and, if so, from what dates, the conditions
and dates upon which such dividends shall be payable, the preference or
relation which such dividends shall bear to the dividends payable on any
shares of stock of any other class or any other series of Preferred Stock;
(d) whether the shares of such series shall be subject to redemption
by the Corporation and, if so, the times, prices and other conditions of
such redemption;
(e) the amount or amounts payable upon shares of such series upon,
and the rights of the holders of such series in, the voluntary or
involuntary liquidation, dissolution or winding up, or upon any
distribution of the assets, of the Corporation;
(f) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and
manner in which any such retirement or sinking fund shall be applied to the
purchase or redemption of the shares of such series for retirement or other
corporate purposes and the terms and provisions relative to the operation
thereof;
(g) whether the shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or any other series of
Preferred Stock or any other securities (whether or not issued by the
Corporation) and, if so, the price or prices or the rate or rates of
conversion or exchange and the method, if any, of adjusting the same, and
any other terms and conditions of conversion or exchange;
(h) the limitations and restrictions, if any, to be effective while
any shares of such series are outstanding upon the payment of dividends or
the making of other distributions on, and upon the purchase, redemption or
other acquisition by the Corporation of, the Common Stock or shares of
stock of any other class or any other series of Preferred Stock;
(i) the conditions or restrictions, if any, upon the creation of
indebtedness of the Corporation or upon the issue of any additional stock,
including additional shares of such series or of any other series of
Preferred Stock or of any other class of stock; and
(j) any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications, limitations and
restrictions thereof.
Except to the extent otherwise expressly provided in these Amended Articles of
Incorporation or required by law (i) no share of Preferred Stock shall have any
voting rights other than those which shall be fixed by the Board of Directors
pursuant to this Article 7 and (ii) no share of Common Stock shall have any
voting rights with respect to any amendment to the terms of any series of
Preferred Stock; provided however, that in the case of this clause (ii) the
terms of such series of Preferred Stock, as so amended, could have been
established without any vote of any shares of Common Stock.
8. The Corporation shall have the power to declare and pay dividends or
other
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distributions upon the issued and outstanding shares of the Corporation, subject
to the limitation that a dividend or other distribution may not be made if,
after giving it effect, the Corporation would not be able to pay its debts as
they become due in the usual course of business or the Corporation's total
assets would be less than its total liabilities (and without regard to any
amounts that would be needed, if the Corporation were to be dissolved at the
time of the dividend or other distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
of the holders of shares receiving the dividend or other distribution, unless
otherwise expressly provided with respect to any outstanding series of Preferred
Stock). The Corporation shall have the power to issue shares of one class or
series as a share dividend or other distribution in respect of that class or
series or one or more other classes or series.
9. The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation, and it is
expressly provided that the same are intended to be in furtherance and not in
limitation or exclusion of the powers conferred by statute:
(a) The number of directors of the Corporation, exclusive of
directors who may be elected by the holders of any one or more series of
Preferred Stock pursuant to Article 7(b) (the "Preferred Stock Directors"),
shall not be less than nine, the exact number to be fixed from time to time
solely by resolution of the Board of Directors, acting by not less than a
majority of the directors then in office.
(b) The Board of Directors (exclusive of Preferred Stock Directors)
shall be divided into three classes, with the term of office of one class
expiring each year. At the annual meeting of shareholders in 1985, five
directors of the first class shall be elected to hold office for a term
expiring at the 1986 annual meeting, five directors of the second class
shall be elected to hold office for a term expiring at the 1987 annual
meeting, and six directors of the third class shall be elected to hold
office for a term expiring at the 1988 annual meeting. Commencing with the
annual meeting of shareholders in 1986, each class of directors whose term
shall then expire shall be elected to hold office for a three-year term. In
the case of any vacancy on the Board of Directors, including a vacancy
created by an increase in the number of directors, the vacancy shall be
filled by election of the Board of Directors with the director so elected
to serve for the remainder of the term of the director being replaced or,
in the case of an additional director, for the remainder of the term of the
class to which the director has been assigned. All directors shall continue
in office until the election and qualification of their respective
successors in office. When the number of directors is changed, any newly
created directorships or any decrease in directorships shall be so assigned
among the classes by a majority of the directors then in office, though
less than a quorum, as to make all classes as nearly equal in number as
possible. No decrease in the number of directors shall have the effect of
shortening the term of any incumbent director. Election of directors need
not be by written ballot unless the By-laws so provide.
(c) Any director or directors (exclusive of Preferred Stock
Directors) may be removed from office at any time, but only for cause and
only by the affirmative vote of at least 80% of the votes entitled to be
cast by holders of all the outstanding shares of Voting Stock (as defined
in Article 13 hereof), voting together as a single class.
(d) Notwithstanding any other provision of these Amended Articles of
Incorporation or of law which might otherwise permit a lesser vote or no
vote, but in addition to any affirmative vote of the holders of any
particular class of Voting Stock required by law or these Amended Articles
of Incorporation, the affirmative vote of at
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least 80% of the votes entitled to be cast by holders of all the
outstanding shares of Voting Stock, voting together as a single class,
shall be required to alter, amend or repeal this Article 9.
10. The Board of Directors of the Corporation is exclusively authorized
(a) to adopt, repeal, alter or amend the By-laws of the Corporation by the vote
of a majority of the entire Board of Directors and (b) to adopt any By-laws
which the Board of Directors may deem necessary or desirable for the efficient
conduct of the affairs of the Corporation, including, without limitation,
provisions governing the conduct of, and the matters which may properly be
brought before, meetings of the shareholders and provisions specifying the
manner and extent to which prior notice shall be given of the submission of
proposals to be submitted at any meeting of shareholders or of nominations of
elections of directors to be held at any such meeting.
11. The Corporation shall, to the fullest extent permitted by applicable
law now or hereafter in effect, indemnify any person who is or was a director,
officer or employee of the Corporation (an "Eligible Person") and who is or was
involved in any manner (including, without limitation, as a party or a witness)
or is threatened to be made so involved in any threatened, pending or completed
investigation, claim, action, suit or proceeding, whether civil, criminal,
administrative or investigative (including, without limitation, any action, suit
or proceeding by or in the right of the Corporation to procure a judgment in its
favor) (a "Proceeding") by reason of the fact that such person is or was a
director, officer or employee of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee, partner, member,
manager, trustee, fiduciary or agent of another corporation, partnership, joint
venture, limited liability company, trust or other enterprise (including,
without limitation, any employee benefit plan), against all expenses (including
attorneys' fees), judgments, fines or penalties (including excise taxes assessed
with respect to an employee benefit plan) and amounts paid in settlement
actually and reasonably incurred by such Eligible Person in connection with such
Proceeding; provided, however, that the foregoing shall not apply to a
Proceeding commenced by an Eligible Person except to the extent provided
otherwise in the Corporation's By-laws or an agreement with an Eligible Person.
The Corporation may establish provisions supplemental to or in furtherance of
the provisions of this Article 11, including, but not limited to, provisions
concerning the determination of any Eligible Person to indemnification,
mandatory or permissive advancement of expenses to an Eligible Person incurred
in connection with a Proceeding, the effect of any change in control of the
Corporation on indemnification and advancement of expenses and the funding or
other payment of amounts necessary to effect indemnification and advancement of
expenses, in the By-laws of the Corporation or in agreements with any Eligible
Person.
12. Except as otherwise expressly provided for in these Amended Articles
of Incorporation, the Corporation reserves the right to amend, alter or repeal
any provision contained in these Amended Articles of Incorporation, in the
manner now or hereafter prescribed by law, and all rights conferred upon
shareholders herein are subject to this reservation.
13. In addition to all other requirements imposed by law and these Amended
Articles and except as otherwise expressly provided in paragraph (c) of this
Article 13, none of the actions or transactions listed below shall be effected
by the Corporation, or approved by the Corporation as a shareholder of any
majority-owned subsidiary of the Corporation if, as of the record date for the
determination of the shareholders entitled to vote thereon, any Related Person
(as hereinafter defined) exists, unless the applicable requirements of
paragraphs (b), (c), (d), (e), and (f) of this Article 13 are satisfied.
(a) The actions or transactions within the scope of this Article 13
are as follows:
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(i) any merger or consolidation of the Corporation or any of
its subsidiaries into or with such Related Person;
(ii) any sale, lease, exchange, or other disposition of all or
any substantial part of the assets of the Corporation or any of its
majority-owned subsidiaries to or with such Related Person;
(iii) the issuance or delivery of any Voting Stock (as
hereinafter defined) or of voting securities of any of the
Corporation's majority-owned subsidiaries to such Related Person in
exchange for cash, other assets or securities, or a combination
thereof;
(iv) any voluntary dissolution or liquidation of the
Corporation;
(v) any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its subsidiaries, or any
other transaction (whether or not with or otherwise involving a
Related Person) that has the effect, directly or indirectly, of
increasing the proportionate share of any class or series of capital
stock of the Corporation, or any securities convertible into capital
stock of the Corporation or into equity securities of any subsidiary,
that is beneficially owned by any Related Person; or
(vi) any agreement, contract, or other arrangement providing for
any one or more of the actions specified in the foregoing clauses (i)
through (v).
(b) The actions and transactions described in paragraph (a) of this
Article 13 shall have been authorized by the affirmative vote of at least
80% of all of the votes entitled to be cast by holders of the outstanding
shares of Voting Stock, voting together as a single class.
(c) Notwithstanding paragraph (b) of this Article 13, the 80% voting
requirement shall not be applicable if any action or transaction specified
in paragraph (a) is approved by the Corporation's Board of Directors and by
a majority of the Continuing Directors (as hereinafter defined).
(d) Unless approved by a majority of the Continuing Directors, after
becoming a Related Person and prior to consummation of such action or
transaction.
(i) the Related Person shall not have acquired from the
Corporation or any of its subsidiaries any newly issued or treasury
shares of capital stock or any newly issued securities convertible
into capital stock of the Corporation or any of its majority-owned
subsidiaries, directly or indirectly (except upon conversion of
convertible securities acquired by it prior to becoming a Related
Person or as a result of a pro rata stock dividend or stock split or
other distribution of stock to all shareholders pro rata);
(ii) such Related Person shall not have received the benefit
directly or indirectly (except proportionately as a shareholder) of
any loans, advances, guarantees, pledges, or other financial
assistance or tax credits provided by the Corporation or any of its
majority-owned subsidiaries, or made any major changes in the
Corporation's or any of its majority-owned subsidiaries' businesses or
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capital structures or reduced the current rate of dividends payable on
the Corporation's capital stock below the rate in effect immediately
prior to the time such Related Person became a Related Person; and
(iii) such Related Person shall have taken all required actions
within its power to ensure that the Corporation's Board of Directors
included representation by Continuing Directors at least proportionate
to the voting power of the shareholdings of Voting Stock of the
Corporation's Remaining Public Shareholders (as hereinafter defined),
with a Continuing Director to occupy an additional Board position if a
fractional right to a director results and, in any event, with at
least one Continuing Director to serve on the Board so long as there
are any Remaining Public Shareholders.
(e) A proxy statement responsive to the requirements of the
Securities Exchange Act of 1934, as amended, whether or not the Corporation
is then subject to such requirements, shall be mailed to the shareholders
of the Corporation for the purpose of soliciting shareholder approval of
such action or transaction and shall contain at the front thereof, in a
prominent place, any recommendations as to the advisability or
inadvisability of the action or transaction which the Continuing Directors
may choose to state and, if deemed advisable by a majority of the
Continuing Directors, the opinion of an investment banking firm selected by
a majority of the Continuing Directors as to the fairness (or not) of the
terms of the action or transaction from a financial point of view to the
Remaining Public Shareholders, such investment banking firm to be paid a
reasonable fee for its services by the Corporation. The requirements of
this paragraph (e) shall not apply to any such action or transaction which
is approved by a majority of the Continuing Directors.
(f) For the purpose of this Article 13
(i) the term "Related Person" shall mean any other corporation,
person, or entity which beneficially owns or controls, directly or
indirectly, 5% or more of the outstanding shares of Voting Stock, and
any Affiliate or Associate (as those terms are defined in the General
Rules and Regulations under the Securities Exchange Act of 1934) of a
Related Person; provided, however, that the term Related Person shall
not include (a) the Corporation or any of its subsidiaries, (b) any
profit-sharing, employee stock ownership or other employee benefit
plan of the Corporation or any subsidiary of the Corporation or any
trustee of or fiduciary with respect to any such plan when acting in
such capacity, or (c) Lilly Endowment, Inc.; and further provided,
that no corporation, person, or entity shall be deemed to be a Related
Person solely by reason of being an Affiliate or Associate of Lilly
Endowment, Inc.;
(ii) a Related Person shall be deemed to own or control,
directly or indirectly, any outstanding shares of Voting Stock owned
by it or any Affiliate or Associate of record or beneficially,
including without limitation shares
a. which it has the right to acquire pursuant to any
agreement, or upon exercise of conversion rights, warrants, or
options, or otherwise or
b. which are beneficially owned, directly or indirectly
(including shares deemed owned through application of clause a.
above), by any other corporation, person, or other entity with
which it or its Affiliate or Associate has any agreement,
arrangement, or understanding for the
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purpose of acquiring, holding, voting, or disposing of Voting
Stock, or which is its Affiliate (other than the Corporation) or
Associate (other than the Corporation);
(iii) the term "Voting Stock" shall mean all shares of any class
of capital stock of the Corporation which are entitled to vote
generally in the election of directors;
(iv) the term "Continuing Director" shall mean a director who is
not an Affiliate or Associate or representative of a Related Person
and who was a member of the Board of Directors of the Corporation
immediately prior to the time that any Related Person involved in the
proposed action or transaction became a Related Person or a director
who is not an Affiliate or Associate or representative of a Related
Person and who was nominated by a majority of the remaining Continuing
Directors; and
(v) the term "Remaining Public Shareholders" shall mean the
holders of the Corporation's capital stock other than the Related
Person.
(g) A majority of the Continuing Directors of the Corporation shall
have the power and duty to determine for the purposes of this Article 13,
on the basis of information then known to the Continuing Directors, whether
(i) any Related Person exists or is an Affiliate or an Associate of another
and (ii) any proposed sale, lease, exchange, or other disposition of part
of the assets of the Corporation or any majority-owned subsidiary involves
a substantial part of the assets of the Corporation or any of its
subsidiaries. Any such determination by the Continuing Directors shall be
conclusive and binding for all purposes.
(h) Nothing contained in this Article 13 shall be construed to
relieve any Related Person or any Affiliate or Associate of any Related
Person from any fiduciary obligation imposed by law.
(i) The fact that any action or transaction complies with the
provisions of this Article 13 shall not be construed to waive or satisfy
any other requirement of law or these Amended Articles of Incorporation or
to impose any fiduciary duty, obligation, or responsibility on the Board of
Directors or any member thereof, to approve such action or transaction or
recommend its adoption or approval to the shareholders of the Corporation,
nor shall such compliance limit, prohibit, or otherwise restrict in any
manner the Board of Directors, or any member thereof, with respect to
evaluations of or actions and responses taken with respect to such action
or transaction. The Board of Directors of the Corporation, when evaluating
any actions or transactions described in paragraph (a) of this Article 13,
shall, in connection with the exercise of its judgment in determining what
is in the best interests of the Corporation and its shareholders, give due
consideration to all relevant factors, including without limitation the
social and economic effects on the employees, customers, suppliers, and
other constituents of the Corporation and its subsidiaries and on the
communities in which the Corporation and its subsidiaries operate or are
located.
(j) Notwithstanding any other provision of these Amended Articles of
Incorporation or of law which might otherwise permit a lesser vote or no
vote, but in addition to any affirmative vote of the holders of any
particular class of Voting Stock required by law or these Amended Articles
of Incorporation, the affirmative vote of the holders of at least 80% of
the votes entitled to be cast by holders of all the outstanding
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shares of Voting Stock, voting together as a single class, shall be
required to alter, amend, or repeal this Article 13.
14. A total of 1,500,000 shares of the 5,000,000 shares of authorized
Preferred Stock are designated as "Series B Junior Participating Preferred
Stock" (the "Series B Preferred Stock"). Such number of shares may be increased
or decreased by resolution of the Board of Directors; provided that no decrease
shall reduce the number of shares of Series B Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series B Preferred Stock. The Series B Preferred Stock shall
possess the rights, preferences, qualifications, limitations, and restrictions
set forth below:
(a) The holders of shares of Series B Preferred Stock shall have the
following rights to dividends and distributions:
(i) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series B Preferred Stock with respect to dividends,
the holders of shares of Series B Preferred Stock, in preference to
the holders of Common Stock, without par value (the "Common Stock"),
of the Corporation, and of any other junior stock, shall be entitled
to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable
in cash on the tenth day of March, June, September and December in
each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Series B Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (a) $10 or (b) subject to
the provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non- cash
dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series B Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of
Series B Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(ii) The Corporation shall declare a dividend or distribution on
the Series B Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during
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the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $10 per
share on the Series B Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(iii) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of
holders of shares of Series B Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares
of Series B Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series B Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
(b) The holders of shares of Series B Preferred Stock shall have the
following voting rights:
(i) Subject to the provision for adjustment hereinafter set
forth, each share of Series B Preferred Stock shall entitle the holder
thereof to 1000 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which
holders of shares of Series B Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(ii) Except as otherwise provided herein, in any other Articles
of Amendment creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series B Preferred Stock
and the holders of shares of Common Stock and any other capital stock
of the Corporation having general voting rights shall vote together as
one class on all matters submitted to a vote of stockholders of the
Corporation.
(iii) Except as set forth herein, or as otherwise provided by
law, holders of Series B Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
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(c) The Corporation shall be subject to the following restrictions:
(i) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series B Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
a. declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Series B Preferred Stock;
b. declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series B Preferred Stock, except dividends paid ratably
on the Series B Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
c. redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series B
Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series B Preferred Stock; or
d. redeem or purchase or otherwise acquire for consideration
any shares of Series B Preferred Stock, or any shares of stock
ranking on a parity with the Series B Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
(ii) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (i) of this Article 14(c), purchase or otherwise acquire
such shares at such time and in such manner.
(d) Any shares of Series B Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the
Articles of Incorporation, or in any other Articles of Amendment creating a
series of Preferred Stock or any similar stock or as otherwise required by
law.
(e) Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of
stock ranking junior (either as to
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dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received the greater of (a) $1000 per share,
plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment, or (b) an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (ii) to the
holders of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B Preferred
Stock, except distributions made ratably on the Series B Preferred Stock
and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution
or winding up. In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under the proviso in clause (i) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
(f) In case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series B
Preferred Stock shall at the same time be similarly exchanged or changed
into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of
Series B Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
(g) The shares of Series B Preferred Stock shall not be redeemable.
(h) The Series B Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series
of any other class of the Corporation's Preferred Stock.
(i) The Amended Articles of Incorporation of the Corporation shall not
be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series B Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series B Preferred Stock,
voting together as a single class.
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(j) In the event that the Rights Agreement dated as of July 20, 1998
between the Corporation and First Chicago Trust Company of New York, as
Rights Agent (or any successor Rights Agent) is terminated or expires prior
to the issuance of any shares of Series B Preferred Stock, all shares of
Series B Preferred Stock shall become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set forth in
the Articles of Incorporation or in any other Articles of Amendment
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
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