EXHIBIT 3.9
CORRECTED CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES B CONVERTIBLE PREFERRED STOCK
OF
PHILLIPS-VAN HEUSEN CORPORATION
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WHEREAS, pursuant to the provisions of ss.103(f) of the
Delaware General Corporation Law (the "DGCL"), the Corporation (as hereinafter
defined) hereby corrects the defects in the Certificate of Designations,
Preferences and Rights of Series B Convertible Preferred Stock of the
Corporation, which was filed on February 10, 2003, so as to cause the Corrected
Certificate of Designations, Preferences and Rights of Series B Convertible
Preferred Stock of the Corporation to accurately reflect the actions of the
Board;
WHEREAS, the inaccuracies or defects to be corrected are as
follows:
1. Section 6(h), subclause (iv):
(iv) shares of Common Stock issuable upon the
exercise of stock options or other awards
made or denominated in shares of Common Stock
under any of the Company's stock plans
including any stock option, stock purchase,
restricted stock or similar plan hereafter
adopted by the Board of Directors and, if
required by applicable Law or stock exchange
requirement, approved by the stockholders of
the Company, and
2. Section 7(a), subclause (A):
(A) the sixth month anniversary of the
maturity date of any notes, bonds or
debentures issued to refinance (the
"Refinancing") the notes issued pursuant to
the CK Purchase Agreement, provided that such
Refinancing occurs within two years of the
Original Issue Date, or;
WHEREAS, the corrections are as follows:
1. Section 6(h), subclause (iv):
(iv) shares of Common Stock issuable upon the
exercise of stock options or other awards
made or denominated in shares of Common Stock
under any of the Corporation's stock plans
including any stock option, stock purchase,
restricted stock or similar plan hereafter
adopted by the Board of Directors and, if
required by applicable Law or stock exchange
requirement, approved by the stockholders of
the Corporation, and
2. Section 7(a), subclause (A):
(A) the sixth month anniversary of the
maturity date of any notes, bonds or
debentures issued to refinance (the
"Refinancing") the notes issued pursuant to
the Term Loan Agreement, dated as of December
16, 2002, by and between the Corporation,
each of the lenders listed thereto, and Apax
Managers, Inc., as the administrative agent,
provided that such Refinancing occurs within
two years of the Original Issue Date, or;
PHILLIPS-VAN HEUSEN CORPORATION, a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY THAT:
A. Pursuant to authority conferred upon the Board of Directors
(the "Board") by Article FOURTH of the Certificate of Incorporation of the
Corporation (the "Certificate of Incorporation") and pursuant to the provisions
of ss.151 of the Delaware General Corporation Law, the Board adopted and
approved the following resolution providing for the designations, preferences
and relative, participating, optional and other rights, and the qualifications,
limitations and restrictions of the Series B Convertible Preferred Stock.
WHEREAS, the Certificate of Incorporation provides for two
classes of shares known as common stock, $1.00 par value per share (the "Common
Stock"), and preferred stock, $100 par value per share (the "Preferred Stock");
and
WHEREAS, the Board is authorized by the Certificate of
Incorporation to provide for the issuance of the shares of Preferred Stock in
series, and by filing a certificate pursuant to the applicable law of the State
of Delaware, to establish from time to time the number of shares to be included
in such series and to fix the designations, preferences and rights of the shares
of each such series and the qualifications, limitations and restrictions
thereof.
NOW, THEREFORE, BE IT RESOLVED, that the Board deems it
advisable to, and hereby does, designate a Series B Convertible Preferred Stock
and fixes and determines the preferences, rights, qualifications, limitations
and restrictions relating to the Series B Convertible Preferred Stock as
follows:
1. DESIGNATION. The shares of such series of Preferred Stock
shall be designated "Series B Convertible Preferred Stock" (referred to herein
as the "Series B Stock").
2. AUTHORIZED NUMBER. The number of shares constituting the
Series B Stock shall be 10,000.
3. RANKING. The Series B Stock shall rank, as to dividends and
upon Liquidation (as defined in Section 5(a) hereof), senior and prior to the
Common Stock, the Corporation's Series A Cumulative Participating Preferred
Stock (the "Series A Stock") and to all other classes or series of stock issued
by the Corporation. All equity securities of the
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Corporation to which the Series B Stock ranks prior, with respect to dividends
and upon Liquidation, including, without limitation, the Common Stock and the
Series A Stock, are collectively referred to herein as "Junior Securities." The
Corporation shall not have or create any class of stock ranking on parity with,
or senior to, the Series B Stock, without the affirmative vote of the holders of
a majority of the shares of Series B Stock, voting separately as a class.
4. DIVIDENDS.
(a) Dividend Accrual and Payment. The holders of the Series
B Stock shall be entitled to receive, if, as and when declared by the Board out
of funds legally available for the payment therefor, cash dividends at the rate
of 8% per annum (the "Dividend Rate") of the Series B Issue Price. Dividends
shall accrue daily but shall be payable quarterly in equal installments on the
first day immediately following the end of the Corporation's fiscal quarter, or,
if any such date is a Saturday, Sunday or legal holiday, then on the next day
which is not a Saturday, Sunday or legal holiday (each a "Dividend Payment
Date"). If any shares of Series B Stock are issued on a date which does not
coincide with the Dividend Payment Date, then the initial dividend accrual
period applicable to such shares shall be the period from the date of issuance
thereof (the "Original Issue Date") through the last day of the Corporation's
fiscal quarter in which such shares are issued. If the date fixed for redemption
of or payment of a final liquidating distribution on any shares of Series B
Stock, or the date on which any shares of Series B Stock are converted into
Common Stock, does not coincide with the Dividend Payment Date, then subject to
the provisions hereof relating to such redemption, payment or conversion, the
final dividend accrual period applicable to such shares shall be the period from
the first day of the Corporation's fiscal quarter during which such redemption,
payment or conversion occurs through the redemption, payment or conversion date.
Dividends shall be cumulative and shall compound at the Dividend Rate as of each
Dividend Payment Date (hereinafter referred to as the "Dividends"). Dividends
with respect to any quarter may be paid in cash at the discretion of the Board
on the related Dividend Payment Date. Dividends not so paid in cash may not be
paid in cash until (i) a Liquidation as part of the Liquidation Preference or
(ii) a Redemption pursuant to Article 7 hereof.
(b) Dividend Limitation on Junior Securities. Except for
the Annual Cash Dividend (as defined in Section 10(g) hereof), for so long as
any shares of Series B Stock are outstanding, the Corporation shall not declare,
pay or set apart for payment, any dividend on any Junior Securities or make any
payment on account of, or set apart for payment, money for a sinking or other
similar fund for, the purchase, redemption or other retirement of, any Junior
Securities or any warrants, rights, calls or options exercisable or exchangeable
for or convertible into any Junior Securities, or make any distribution in
respect thereof, either directly or indirectly, and whether in cash, obligations
or shares of the Corporation or other property (other than distributions or
dividends in Junior Securities to the holder of Junior Securities).
(c) Dividends on Fractional Shares. Each fractional share
of Series B Stock outstanding shall be entitled to a ratably proportionate
amount of all Dividends accruing with respect to each outstanding share of
Series B Stock pursuant to Section 4(a) hereof, and all such Dividends with
respect to such outstanding fractional shares shall be payable in the same
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manner and at such times as provided for in Section 4(a) hereof with respect to
Dividends on each outstanding share of Series B Stock.
5. LIQUIDATION.
(a) Liquidation Procedure. Upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary
(a "Liquidation"), the holders of the shares of Series B Stock shall be
entitled, before any distribution or payment is made upon any Junior Securities,
to be paid an amount equal to (i) $25,000 per share of Series B Stock,
representing the liquidation preference per share of the Series B Stock (as
adjusted for any combinations, divisions or similar recapitalizations affecting
the shares of Series B Stock) (the "Series B Issue Price"), plus (ii) all
accrued and unpaid Dividends on the Series B Stock to such date (together with
the Series B Issue Price, the "Liquidation Preference"). If upon Liquidation,
the assets to be distributed among the holders of Series B Stock shall be
insufficient to permit payment in full to the holders of Series B Stock of the
Liquidation Preference, then the entire assets of the Corporation shall be
distributed ratably among such holders in proportion to the full respective
Liquidation Preference to which they are entitled.
(b) Remaining Assets. Upon Liquidation, after the holders
of Series B Stock shall have been paid in full the Liquidation Preference, the
remaining assets of the Corporation legally available for distribution shall be
distributed ratably among the holders of the Junior Securities then outstanding.
(c) Fractional Shares. The Liquidation Preference with
respect to each outstanding fractional share of Series B Stock shall be equal to
a ratably proportionate amount of the Liquidation Preference with respect to
each outstanding share of Series B Stock.
(d) Mergers, Reorganizations, Etc. The holders of at least
a majority of the then outstanding shares of Series B Stock, may elect to deem
the merger, reorganization or consolidation of the Corporation into or with
another corporation or other similar transaction or series of related
transactions in which more than 50% of the voting power of the Corporation is
disposed of in exchange for property, rights or securities distributed to
holders thereof by the acquiring person, firm or other entity, or the sale of
all or substantially all the assets of the Corporation (the foregoing being
referred to collectively as an "Acquisition"), as a Liquidation for purposes of
this Section 5.
6. CONVERSION. The rights of the holders of shares of the
Series B Stock to convert such shares into shares of Common Stock of the
Corporation (the "Conversion Rights"), and the terms and conditions of such
conversion, shall be as follows:
(a) Right to Convert.
(i) By the Holders of the Series B Stock.
(A) Each share of Series B Stock shall be convertible,
at the option of the holder thereof, at any time after the
Original Issue Date, at the office of the Corporation or its
transfer agent, into that number of the fully paid and
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nonassessable shares of Common Stock determined in accordance
with the provisions of Section 6(c) below. In order to convert
shares of the Series B Stock into shares of Common Stock, the
holder thereof shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or
its transfer agent, together with written notice to the
Corporation stating that it elects to convert the same and
setting forth the name or names it wishes the certificate or
certificates for Common Stock to be issued, and the number of
shares of Series B Stock being converted.
(B) The Corporation shall, as soon as practicable after
the surrender of the certificate or certificates evidencing
shares of Series B Stock for conversion at the office of the
Corporation or its transfer agent, issue to each holder of
such shares, or its nominee or nominees, a certificate or
certificates evidencing the number of shares of Common Stock
to which it shall be entitled and, in the event that only a
part of the shares evidenced by such certificate or
certificates are converted, a certificate evidencing the
number of shares of Series B Stock which are not converted.
Such conversion shall be deemed to have been made immediately
prior to the close of business on the date of such surrender
of the shares of Series B Stock to be converted, and the
person or persons entitled to receive the shares of 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 date and shall, with respect to such
shares, have only those rights of a holder of Common Stock of
the Corporation.
(b) By the Corporation.
(A) If at any time after the fourth anniversary of the
Original Issue Date, the Market Price (as defined below) on
the New York Stock Exchange of the Common Stock for any 60
consecutive trading days equals or exceeds 225% of the
Conversion Price then in effect, all of the Series B Stock, at
the election of the Corporation (the "Company Conversion"),
will convert into that number of the fully paid and
nonassessable shares of Common Stock determined in accordance
with the provisions of Section 6(c) below, without any action
on the part of the holders of the Series B Stock. The
Corporation will give written notice of such election to the
holders of Series B Stock, which notice shall be given at
least 10 business days prior to such conversion (the
"Conversion Notice"). The Company Conversion is deemed to
occur on the date the Conversion Notice is given.
(c) Conversion of the Series B Stock.
(i) Each share of Series B Stock shall be convertible
at any time after the Original Issue Date, at the option of the holder of record
thereof, into the number of fully paid and nonassessable shares of Common Stock
equal to the quotient of (x) the Liquidation Preference of such share of Series
B Stock being converted divided by (y) the Conversion Price (as defined below).
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(ii) No fractional shares of Common Stock shall be
issued upon conversion of the Series B Stock. All shares of Common Stock
(including fractions thereof) issuable upon conversion of more than one share of
Series B Stock by a holder thereof shall be aggregated for purposes of
determining whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion would
result in the issuance of any fractional share, the Corporation shall, in lieu
of issuing any fractional share, pay cash equal to the product of such fraction
multiplied by the Market Price on the date of conversion.
As used herein, "Market Price" for any day means, with respect to the
shares of Common Stock, the volume weighted average price as reported by
Bloomberg (or if such information is not available from Bloomberg, from another
nationally recognized independent pricing source). If there is no publicly
traded market for the shares of Common Stock, pricing information will be
obtained directly from broker/dealers and active market makers such as banks and
securities firms. In instances where there is no readily available pricing
information, the Board shall determine in good faith the fair value of the
Common Stock, which determination shall be set forth in a certificate by the
Secretary of the Corporation.
(d) Conversion Price. The conversion price per share for the
Series B Stock shall initially be $14.00 (the "Conversion Price") and shall be
subject to adjustment from time to time as provided herein.
(e) Adjustment for Stock Splits and Combinations. If
outstanding shares of the Common Stock of the Corporation shall be subdivided
into a greater number of shares, or a dividend in Common Stock or other
securities of the Corporation convertible into or exchangeable for Common Stock
(in which latter event the number of shares of Common Stock issuable upon the
conversion or exchange of such securities shall be deemed to have been
distributed) shall be paid in respect to the Common Stock of the Corporation,
the Conversion Price in effect immediately prior to such subdivision or at the
record date of such dividend shall, simultaneously with the effectiveness of
such subdivision or immediately after the record date of such dividend, be
proportionately reduced, and conversely, if outstanding shares of the Common
Stock of the Corporation shall be combined into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination shall
simultaneously with the effectiveness of such combination, be proportionately
increased. Any adjustment to the Conversion Price under this Section 6(e) shall
become effective at the close of business on the date the subdivision or
combination referred to herein becomes effective.
(f) Reorganizations, Mergers, Consolidations or
Reclassifications. In the event of any capital reorganization, any
reclassification of the Common Stock (other than a change in par value), or the
consolidation or merger of the Corporation with or into another Person
(collectively referred to hereinafter as "Reorganizations"), the holders of the
Series B Stock shall thereafter be entitled to receive, and provision shall be
made therefor in any agreement relating to a Reorganization, upon conversion of
the Series B Stock the kind and number of shares of Common Stock or other
securities or property (including cash) of the Corporation, or other corporation
resulting from such consolidation or surviving such merger to which a holder of
the number of shares of the Common Stock of the Corporation which the
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Series B Stock entitled the holder thereof to convert to immediately prior to
such Reorganization would have been entitled to receive with respect to such
reorganization; and in any such case appropriate adjustment shall be made in the
application of the provisions herein set forth with respect to the rights and
interests thereafter of the holders of the Series B Stock, to the end that the
provisions set forth herein (including the specified changes and other
adjustments to the Conversion Price) shall thereafter be applicable, as nearly
as reasonably may be, in relation to any shares, other securities or property
thereafter receivable upon conversion of the Series B Stock. The provisions of
this Section 6(f) shall similarly apply to successive Reorganizations.
(g) Sale of Additional Shares.
(i) If at any time or from time to time the Corporation
shall issue or sell Additional Shares of Common Stock (as hereinafter defined),
or is deemed by the express provisions of this subsection (g) to issue or sell
Additional Shares of Common Stock, other than as a subdivision or combination of
shares of Common Stock as provided in Section 6(e) above, for a consideration
per share less than the then existing Conversion Price, then the existing
Conversion Price shall be reduced, as of the opening of business on the date of
such issuance or sale, to a price determined by dividing (A) an amount equal to
the sum of (1) the applicable Conversion Price immediately prior to such
issuance or sale multiplied by the number of shares of Common Stock deemed
outstanding at the close of business on the day before the date of such issuance
or sale, plus (2) the aggregate consideration, if any, received or to be
received by the Corporation upon such issuance or sale, by (B) an amount equal
to the sum of (1) the number of shares of Common Stock deemed outstanding
immediately prior to such issuance or sale, plus (2) the total number of
Additional Shares of Common Stock so issued. For the purposes of the preceding
sentence, the number of shares of Common Stock deemed to be outstanding as of a
given date shall be the sum of (i) the number of shares of Common Stock actually
outstanding, and (ii) the number of shares of Common Stock into which the then
outstanding shares of Series B Stock could be converted if fully converted on
the day immediately preceding the given date.
(ii) For the purpose of making any adjustment in the
Conversion Price or number of shares of Common Stock issuable upon conversion of
the Series B Stock, as provided above, the following provisions shall be
applicable:
(A) In case of the issuance of Common Stock for
consideration in whole or in part for cash, the consideration
shall be deemed to be the amount of cash paid therefor, plus
the value of any property other than cash received by the
Corporation as determined in accordance with clause (B) below.
(B) In case of the issuance of Common Stock for
consideration in whole or in part in property or consideration
other than cash, the value of such property or consideration
other than cash shall be deemed to be the fair value thereof
as determined in good faith by the Board.
(C) In case of the issuance of (x) options, warrants,
or other rights to acquire or to purchase or to subscribe for
Common Stock (whether or not
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at the time exercisable), (y) securities convertible into or
exchangeable for Common Stock or (z) options to purchase or
rights to subscribe for such convertible or exchangeable
securities (whether or not at the time so convertible or
exchangeable): (1) the aggregate maximum number of shares of
Common Stock deliverable upon exercise of such options,
warrants, or other rights to acquire or to purchase, or to
subscribe for Common Stock (whether or not at the time
exercisable) shall be deemed to have been issued at the time
such options or rights were issued and for a consideration
equal to the consideration (determined in the manner provided
in clauses (A) and (B) above), if any, received by the
Corporation upon the issuance of such options, warrants or
rights plus the purchase price provided in such options,
warrants or rights for the shares of Common Stock covered
thereby; (2) the aggregate maximum number of shares of Common
Stock deliverable upon conversion of, or in exchange for, any
such convertible or exchangeable securities or upon the
exercise of options to purchase, or to subscribe for, such
convertible or exchangeable securities and subsequent
conversion or exchange thereof shall be deemed to have been
issued at the time such securities were issued or such
options, warrants or rights were issued and for a
consideration equal to the consideration received by the
Corporation for any such securities and related options or
rights, plus the additional consideration, if any, to be
received by the Corporation upon the conversion or exchange of
such securities or the exercise of any related options,
warrants or rights (determined in the manner provided in
clauses (A) and (B) above); and (3) on the expiration of any
warrant, right or option or on the termination of any right to
convert or exchange any convertible or exchangeable
securities, (whether or not at the time so convertible or
exchangeable): the Conversion Price then in effect shall
thereupon be readjusted to the Conversion Price as would have
been in effect had the adjustment made upon the granting or
issuance of such warrants, rights or options or convertible or
exchangeable securities (whether or not at the time so
convertible or exchangeable): been made upon the basis of the
issuance or sale of only the number of shares of Common Stock
actually issued upon the exercise of such options, warrants or
rights or upon the conversion or exchange of such convertible
or exchangeable securities. No readjustment pursuant to clause
(3) above shall have the effect of increasing the Conversion
Price to an amount which exceeds the lower of (x) the
Conversion Price on the original adjustment date or (y) the
Conversion Price that would have resulted from any issuance of
Additional Shares of Common Stock between the original
adjustment date and such readjustment date.
(h) Additional Shares of Common Stock. "Additional
Shares of Common Stock" shall mean all shares of Common Stock issued or deemed
to be issued or issuable by the Corporation, whether or not subsequently
reacquired or retired by the Corporation, other than (i) shares of Common Stock
issued upon the conversion of the Series B Stock, (ii) shares of Common Stock
issued in connection with any stock split, stock dividend or recapitalization of
the Corporation, (iii) shares of Common Stock issued upon exercise of the
Warrants (as defined below), (iv) shares of Common Stock issuable upon the
exercise of stock options or other awards made or denominated in shares of
Common Stock under any of the
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Corporation's stock plans including any stock option, stock purchase, restricted
stock or similar plan hereafter adopted by the Board of Directors and, if
required by applicable Law or stock exchange requirement, approved by the
stockholders of the Corporation, and (v) shares of Common Stock issued pursuant
to an acquisition of a business (including, without limitation, by way of an
acquisition of capital stock) or the assets of a business (which assets do not
consist primarily of cash or cash equivalents) approved by the Board of
Directors. "Warrants" shall mean the warrants exercisable to purchase an
aggregate of 320,000 shares of Common Stock, issued in connection with that
certain Stock Purchase Agreement, dated as of December 17, 2002 (the "CK
Purchase Agreement"), by and among the Corporation, Calvin Klein Inc., a New
York corporation., Calvin Klein (Europe), Inc., a Delaware corporation, Calvin
Klein (Europe II), Corp., a Delaware corporation, Calvin Klein Europe S.R.L., an
Italian limited partnership, CK Service Corp., a Delaware corporation, Calvin
Klein, Barry Schwartz, Trust for the Benefit of the Issue of Calvin Klein, Trust
for the Benefit of the Issue of Barry Schwartz, Stephanie Schwartz-Ferdman and
Jonathan Schwartz.
(i) Certificate of Adjustment. In each case of an
adjustment or readjustment of the Conversion Price or the number of shares of
Common Stock or other securities issuable upon conversion of the Series B Stock,
the Corporation, at its expense, shall cause the Chief Financial Officer of the
Corporation to compute such adjustment or readjustment in accordance with this
Certificate of Incorporation and prepare a certificate showing such adjustment
or readjustment, and shall mail such certificate, by first-class mail, postage
prepaid, to each registered holder of the Series B Stock at the holder's address
as shown on the Corporation's stock transfer books. The certificate shall set
forth such adjustment or readjustment, showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (i) the
consideration received or to be received by the Corporation for any Additional
Shares of Common Stock issued or sold or deemed to have been issued or sold,
(ii) the Conversion Price at the time in effect for the Series B Stock, and
(iii) the number of Additional Shares of Common Stock and the type and amount,
if any, of other property which at the time would be received upon conversion of
the Series B Stock.
(j) Reservation of Stock Issuable Upon Conversion. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of Series B Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect a conversion of all
outstanding shares of the Series B Stock, and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of the Series B Stock, the
Corporation shall promptly seek such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
(k) Payment of Taxes. The Corporation shall pay all
taxes and other governmental charges (other than any income or other taxes
imposed upon the profits realized by the recipient) that may be imposed in
respect of the issue or delivery of shares of Common Stock or other securities
or property upon conversion of shares of Series B Stock; provided that, the
Corporation shall not pay any taxes or other governmental charge, imposed in
connection with
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any transfer involved in the issue and delivery of shares of Common Stock or
other securities in a name other than that of which the shares of Series B Stock
so converted were registered.
(l) No Impairment. The Corporation shall not amend its
Certificate of Incorporation or participate in any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, for the purpose of avoiding or seeking to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but shall at all times in good faith use its best
efforts, and assist in carrying out all such action as may be reasonably
necessary or appropriate in order to protect the conversion rights of the
holders of the Series B Stock against dilution or other impairment.
(m) Minimum Adjustment. No adjustment of the Conversion
Price shall be made if the amount of any such adjustment would be an amount less
than one percent (1%) of the Conversion Price then in effect, but any such
amount shall be carried forward and an adjustment in respect thereof shall be
made at the time of and together with any subsequent adjustment which, together
with such amount and any other amount or amounts so carried forward, shall
aggregate an increase or decrease of one percent (1%) or more.
(n) Certain Adjustments. The Conversion Price shall not
be adjusted upward except in the event of a combination of the outstanding
shares of Common Stock into a smaller number of shares of Common Stock or in the
event of a readjustment of the Conversion Price pursuant to Section 6(g)(ii)(C).
7. REDEMPTION.
(a) Redemption. On or after the later of (A) the sixth
month anniversary of the maturity date of any notes, bonds or debentures issued
to refinance (the "Refinancing") the notes issued pursuant to the Term Loan
Agreement, dated as of December 16, 2002, by and between the Corporation, each
of the lenders listed thereto, and Apax Managers, Inc., as the administrative
agent, provided that such Refinancing occurs within two years of the Original
Issue Date, or (B) November 1, 2008, the holders holding a majority of the
shares of Series B Stock shall have the right, by written notice delivered to
the Corporation (the "Holders' Redemption Demand"), to require the Corporation
to redeem, no later than thirty (30) days after the Corporation's receipt of the
Holders' Redemption Demand, all or any portion of the Series B Stock owned by
such holder or holders at a price per share equal to one hundred percent (100%)
of the Liquidation Preference on the Redemption Date. The date on which the
Corporation redeems the Series B Stock at the option of any holder of Series B
Stock pursuant to this Section 7(a) is referred to herein as the "Redemption
Date."
(b) Redemption Procedure. On or prior to the Redemption
Date, the Corporation shall deposit the aggregate Series B Stock Issue Price
plus an aggregate amount equal to all accrued and unpaid Dividends on all
outstanding shares of Series B Stock to be so redeemed to the Redemption Date
(the "Redemption Price") with a bank or trust corporation having aggregate
capital and surplus in excess of $500,000,000 as a trust fund for the benefit of
the holders of the shares of Series B Stock, with irrevocable instructions and
authority to the
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bank or trust corporation to pay the allocable portion of the Redemption Price
for such shares to their respective holders on or after the Redemption Date upon
receipt of the certificate or certificates of the shares of Series B Stock to be
redeemed. From and after the Redemption Date, unless there shall have been a
default in payment of the Redemption Price, all rights of the holders of shares
of Series B Stock as holders of Series B Stock (except the right to receive the
Redemption Price upon surrender of their certificate or certificates) shall
cease as to those shares of Series B Stock redeemed, and such shares shall not
thereafter be transferred on the books of the Corporation or be deemed to be
outstanding for any purpose whatsoever. If on the Redemption Date the funds of
the Corporation legally available for redemption of shares of Series B Stock are
insufficient to redeem the total number of shares of Series B Stock to be
redeemed on such date, then the Corporation will use those funds which are
legally available therefor to redeem the maximum possible number of shares of
Series B Stock ratably among the holders of such shares to be redeemed based
upon their holdings of Series B Stock. Payments shall first be applied against
accrued and unpaid Dividends and thereafter against the remainder of the
Redemption Price. The shares of Series B Stock not redeemed shall remain
outstanding and entitled to all the rights and preferences provided herein. At
any time thereafter when additional funds of the Corporation are legally
available for the redemption of shares of Series B Stock such funds will
immediately be used to redeem the balance of the shares of Series B Stock to be
redeemed. No dividends or other distributions shall be declared or paid on, nor
shall the Corporation redeem, purchase or acquire any shares of, the Common
Stock or any other class or series of stock of the Corporation unless the
Redemption Price per share of all shares elected to be redeemed shall have been
paid in full. Until the Redemption Price for each share of Series B Stock
elected to be redeemed shall have been paid in full, such share of Series B
Stock shall remain outstanding for all purposes and entitle the holder thereof
to all the rights and privileges provided herein, including, without limitation,
that Dividends and interest thereon shall continue to accrue and, if unpaid
prior to the date such shares are redeemed, shall be included as part of the
Redemption Price as provided in this Section 7(b).
(c) Prohibited Redemption. The Corporation shall not
have the right to redeem any shares of the Series B Stock, including any
fractional share of the Series B Stock.
8. THE RIGHTS.
(a) General. Each share of Series B Stock shall also
represent the number of Rights equal to the number of shares of Common Stock
into which such share of Series B Stock and Dividends thereon are convertible at
any time.
(b) Terms. The terms and conditions of the Rights are
set forth in that certain Rights Agreement, dated as of June 10, 1986, as
amended, by and between the Corporation and The Bank of New York (successor to
The Chase Manhattan Bank, N.A.) (as amended, the "Rights Agreement").
(c) Reservation of Stock Issuable Upon Exercise. The
Corporation shall, at all times, reserve and keep available out of its
authorized but unissued shares of Series A Stock, such number of its shares of
Series A Stock as shall, from time to time, be sufficient upon exercise of the
Rights and, if at any time the number of authorized but unissued shares of
Series
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A Stock shall not be sufficient to effect the exercise of all then outstanding
Rights, the Corporation shall promptly seek such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Series A Stock to such number of shares as shall be sufficient for
such purpose.
The terms "Right" and "Distribution Date" shall have the
respective meanings given to such terms in the Rights Agreement.
9. VOTING RIGHTS.
(a) General. Subject to the other provisions contained
herein, each holder of Series B Stock shall have full voting rights and powers
equal to the voting rights and powers of the holders of Common Stock, and shall
be entitled to notice of any stockholders' meeting in accordance with the bylaws
of the Corporation (as in effect at the time in question) and applicable law,
and shall be entitled to vote, together with the holders of Common Stock, with
respect to any question upon which the holders of Common Stock have the right to
vote, except as may be otherwise provided by applicable law. Except as otherwise
expressly provided herein or as required by law, the holders of Series B Stock
and the holders of Common Stock shall vote together and not as separate classes.
(b) Series B Stock. On all matters put to a vote to the
holders of Common Stock, each holder of shares of Series B Stock shall be
entitled to the number of votes equal to the number of shares of Common Stock
into which such shares of Series B Stock could be converted pursuant to the
provisions of Section 6 above at the record date for the determination of the
stockholders entitled to vote or, if no such record date is established, the
date such vote is taken or any written consent of stockholders is solicited.
(c) Board Size. The authorized number of directors of
the Board shall be fourteen (14). The Corporation shall not alter the authorized
number of directors in its Certificate of Incorporation, bylaws or otherwise,
without first obtaining the written consent, or affirmative vote at a meeting,
of the holders of a majority of the then outstanding shares of the Series B
Stock, consenting or voting (as the case may be) separately as a class.
(d) Board of Directors Election and Removal.
(i) Election of Directors. (A) For so long as at
least sixty-five percent (65%) of the shares of Series B Stock issued on the
Original Issue Date remain outstanding, the holders of the Series B Stock,
voting as a separate series, shall be entitled to elect three (3) directors of
the Corporation ("Series B Directors"); (B) if more than thirty-five percent
(35%) but less than sixty-five percent (65%) of the shares of Series B Stock
issued on the Original Issue Date remain outstanding, the holders of the Series
B Stock, voting as a separate series, shall be entitled to elect two (2) Series
B Directors; and (C) if more than ten percent (10%) but less than thirty-five
percent (35%) of the shares of Series B Stock issued on the Original Issue Date
remain outstanding, the holders of the Series B Stock, voting as a separate
series, shall be entitled to elect one (1) Series B Director.
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(ii) Quorum; Required Vote.
(A) Quorum. At any meeting held for the purpose of
electing directors, the presence in person or by proxy of the
holders of a majority of the shares of the Series B Stock
shall constitute a quorum for the election of directors to be
elected solely by the holders of the Series B Stock.
(B) Required Vote. With respect to the election of
any Series B Director or Directors by the holders of the
outstanding shares of Series B Stock, that candidate or those
candidates (as applicable) shall be elected who either: (i) in
the case of any such vote conducted at a meeting of the
holders of the Series B Stock, receive the highest number of
affirmative votes of the outstanding shares of the Series B
Stock, up to the number of directors to be elected by the
Series B Stock; or (ii) in the case of any such vote taken by
written consent without a meeting, are elected by the written
consent of the holders of a majority of outstanding shares of
the Series B Stock.
(C) Removal. Subject to Section 141(k) of the DGCL,
any director who shall have been elected to the Board by the
holders of the Series B Stock may be removed during his or her
term of office, without cause, by, and only by, the
affirmative vote of shares representing a majority of the
voting power of all the outstanding shares of the Series B
Stock entitled to vote, given either at a meeting of such
stockholders duly called for that purpose or pursuant to a
written consent of stockholders without a meeting.
(D) Procedures. Any meeting of the holders of the
Series B Stock, and any action taken by the holders of the
Series B Stock by written consent without a meeting, in order
to elect or remove a director under this Section 11(d), shall
be held in accordance with the procedures and provisions of
the Corporation's bylaws, the DGCL and applicable law
regarding stockholder meetings and stockholder actions by
written consent, as such are then in effect (including but not
limited to procedures and provisions for determining the
record date for shares entitled to vote).
(E) Termination. Notwithstanding anything to
contrary contained in this Section 9(d), the provisions of
this Section 9(d) shall cease to be of any further force or
effect upon the date on which less than ten percent (10%) of
the shares of Series B Stock issued on the Original Issue Date
remain outstanding.
10. PROTECTIVE PROVISIONS. For so long as any shares of Series
B Stock are outstanding, the Corporation will not, without first obtaining the
written consent or affirmative vote of holders of at least a majority of the
shares of Series B Stock then outstanding, voting separately as a class, take
any action with respect to any of the matters set forth in Sections 10(a)
through 10(h).
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(a) Change the Series B Stock. Materially amend, alter,
repeal, impair or change, in any respect, the rights, preferences, powers,
privileges, restrictions, qualifications or limitations of the Series B Stock.
(b) Create New Stock. Authorize, establish, create or
issue any additional series of Preferred Stock or any other new class or series
of equity securities or any securities convertible into equity securities of the
Corporation, in each case which would have a preference over, or be on a parity
with, the Series B Stock with respect to dividends or upon Liquidation.
(c) Increase the Series B Stock. Authorize or agree to
authorize any increase in the number of shares of Series B Stock or issue any
additional shares of Series B Stock.
(d) Amend Charter or Bylaws. Amend, alter or repeal any
provision of the Certificate of Incorporation of the Corporation or bylaws of
the Corporation which would adversely affect any right, preference, privilege or
voting power of the Series B Stock or the holders thereof.
(e) Increase Directors. Increase the number of
directors of the Corporation above fourteen (14).
(f) Increase Debt.
(i) Generally. Incur or assume Indebtedness, on a
consolidated basis, to an amount that exceeds 4.5 times the Consolidated EBITDA
of the Corporation. In the case of Indebtedness incurred or assumed in
connection with the acquisition of a business, Consolidated EBITDA will be
determined on a pro forma basis in accordance with Article 11 of Regulation S-X
promulgated by the SEC and shall take into account EBITDA of the acquired entity
as well as debt incurred, assumed or refinanced in connection with such
acquisition.
"Consolidated EBITDA" shall mean, for any twelve-month period,
the sum, determined on a consolidated basis, of (A) net income (or net loss),
(B) interest expense, (C) income tax expense, (D) depreciation expense and (E)
amortization, determined in accordance with GAAP.
"Indebtedness" means all obligations, contingent and
otherwise, for money borrowed or for the purchase of capital assets which in
accordance with GAAP should be classified on the obligor's balance sheet as
liabilities, or to which reference should be made by footnotes thereto,
including without limitation, in any event and whether or not so classified: (A)
all debt and similar monetary obligations, whether direct or indirect; (B) all
liabilities secured by any mortgage, pledge, security interest, lien, charge or
other encumbrance existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; (C) all
guaranties, endorsements and other contingent obligations whether direct or
indirect in respect of Indebtedness or performance of others, including any
obligation to supply
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funds to or in any manner to invest in, directly or indirectly, the debtor, to
purchase Indebtedness, or to assure the owner of Indebtedness against loss,
through an agreement to purchase goods, supplies or services for the purpose of
enabling the debtor to make payment of the Indebtedness held by such owner or
otherwise; and (D) obligations to reimburse issuers of any letters of credit.
(g) Pay Dividends. Except for the Dividends, declare or
pay any dividends (other than dividends payable solely in shares of its Common
Stock) on or declare or make any other distribution, purchase, redemption or
acquisition, directly or indirectly, on account of any shares of Preferred Stock
or Common Stock now or hereafter outstanding; provided, however, that the
Corporation shall be permitted to: (i) purchase shares of Common Stock held by
former employees of the Corporation, provided, that such purchase occurs within
120 days of the date on which such employee's employment with the Corporation
ceased, and the aggregate amount of such purchases do not exceed $5,000,000 in
any 12 month period, (ii) pay or declare cash dividends on the shares of Common
Stock in the same aggregate amount as was paid in fiscal 2002 (the "2002
Aggregate Amount"), (iii) declare or pay cash dividends on the shares of Common
Stock in excess of the 2002 aggregate amount, provided, that such cash dividends
do not exceed the average percentage of net income which dividends paid on the
Common Stock for the preceding three fiscal years (the "Annual Cash Dividend")
represented, and (iv) redeem all of the issued and outstanding Rights.
(h) Material Actions. Agree to take any of the
foregoing actions.
11. NOTICES OF RECORD DATE. Upon (i) any taking by the
Corporation of a record of the holders of any class of securities (including the
Series B Stock) for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution (other than the Annual
Cash Dividend), or (ii) any Acquisition (as defined in Section 2(d)), or other
capital reorganization of the Corporation, any reclassification or
recapitalization of the capital stock of the Corporation, any merger or
consolidation of the Corporation with or into, any other corporation, or any
Liquidation, or any other action of the type or types requiring an adjustment to
the Conversion Price or the number or character of the Series B Stock as set
forth herein, the Corporation shall mail to each holder of Series B Stock at
least twenty (20) days prior to the record date specified therein a notice
specifying (A) the date on which any such record is to be taken for the purpose
of such dividend (other than the Annual Cash Dividend) or distribution and a
description of such dividend (other than the Annual Cash Dividend) or
distribution, (B) the date on which any such Acquisition, reorganization,
reclassification, transfer, consolidation, merger, Liquidation, or other action
is expected to become effective, and (C) the date, if any, that is to be fixed
as to when the holders of record of Common Stock (or other securities) shall be
entitled to exchange their shares of Common Stock (or other securities) for
securities or other property deliverable upon such Acquisition, reorganization,
reclassification, transfer, Liquidation, or other action. Such notice shall also
set forth such facts with respect thereto as shall be reasonably necessary to
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Conversion Price and the number, kind, or class
of shares or other securities or property which shall be deliverable upon the
occurrence of such action or deliverable upon the conversion of Series B Stock.
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12. TAX TREATMENT. The Corporation shall not treat accrued and
unpaid Dividends as "dividends" under Sections 301 or 305 of the Internal
Revenue Code until such time as the Dividends are actually paid in cash or
converted into shares of Common Stock.
13. HEADINGS OF SUBDIVISIONS. The headings of the various
subdivisions hereof are for convenience of reference only and shall not affect
the interpretation of any of the provisions hereof.
14. NO REISSUANCE OF SERIES B STOCK. No share or shares of
Series B Stock acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares of Series B Stock
shall be canceled, retired and eliminated from the shares of Series B Stock
which the Corporation shall be authorized to issue. Any such shares of Series B
Stock acquired by the Corporation shall have the status of authorized and
unissued shares of Preferred Stock issuable in undesignated Series and may be
redesignated and reissued in any series other than as Series B Stock.
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IN WITNESS WHEREOF, the undersigned has executed this
Corrected Certificate of Designation this 17th day of April, 2003.
PHILLIPS-VAN HEUSEN CORPORATION
By: /s/ Mark D. Fischer
-----------------------------------------
Name: Mark D. Fischer
Title: Vice President, General Counsel, Secretary
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