Item 14(c) Exhibit #3(i)
Corning Incorporated
----------------
RESTATED CERTIFICATE OF INCORPORATION
Under Section 807 of the Business Corporation Law
----------------
April 24, 1997
[Filed with Secretary of State of
State of New York on
November 19, 1998]
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RESTATED CERTIFICATE OF INCORPORATION
OF
CORNING INCORPORATED
Under Section 807 of the Business Corporation Law
----------------
We, ROGER G. ACKERMAN and A. JOHN PECK, JR., being, respectively, the Chairman
and the Secretary of Corning Incorporated, a corporation organized under the
laws of the State of New York, DO HEREBY CERTIFY as follows:
FIRST: The name of the Corporation is Corning Incorporated.
SECOND: The Certificate of Incorporation of the Corporation (being the
Preliminary Certificate of Consolidation Forming the Corporation) was filed in
the office of the Secretary of State of the State of New York on December 24,
1936.
THIRD: The text of the Certificate of Incorporation of the Corporation, as
amended heretofore, is hereby restated without further amendment to read as
follows:
1. The name of the Corporation is Corning Incorporated.
2. The purposes for which the Corporation is to be formed are:
To make, manufacture, purchase, lease or otherwise acquire, dispose of
or otherwise deal in and with glass, glassware, refractory, ceramic, plastic,
wood and metal products, chemicals and related products, electrical, electronic
and other related products, machinery, tools, materials and other articles and
products, including those materials which are or may be necessary or useful for
the manufacture of any of the products hereinbefore mentioned or in addition
thereto; to conduct scientific and technological research; and to purchase,
lease or otherwise acquire and to sell, dispose of or otherwise deal in and with
any and all interest in real and personal property of any and all kinds,
tangible or intangible, including patent rights, inventions, secret processes
and other similar property.
3. In the absence of actual fraud or bad faith, no contract or
transaction between the Corporation and any other association or corporation
shall be affected by the fact that any of the directors or officers of this
Corporation are interested in or are directors or officers of such other
association or corporation, and any director or officer of this Corporation
individually may be a party to or may be interested in any such contract or
transaction of this Corporation and no such contract or transaction of this
Corporation with any person or persons, firm, association or corporation shall
be affected by the fact that any director or officer of this Corporation is a
party to or interested in such contract or transaction or in any way connected
with such person or persons, firm, association or corporation, and each and
every person who may become a director or officer of this Corporation is hereby
relieved from any liability that might otherwise exist from thus contracting
with the Corporation for the benefit of himself or any person, firm, association
or corporation in which he may be in anywise interested unless it be shown that
he acted in the transaction in bad faith.
4. The total number of shares which the Corporation may henceforth have
is 510,000,000, of which 10,000,000 shares are to have a par value of $100 each
and 500,000,000 are to have a par value of $.50 each, which shares shall be
classified as follows:
10,000,000 shares, of the par value of $100 each, are to be Series
Preferred Stock; and
500,000,000 shares, of the par value of $.50 each, are to be Common
Stock.
The relative voting, dividend, liquidation and other rights,
preferences and limitations of the shares of each class are as follows:
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I. The Preferred Stock may be issued from time to time in one or more
series, each such series to have the number of shares and designation, and the
shares of each such series to have such relative rights, preferences or
limitations, as the Board of Directors, subject to the limitations prescribed by
law or provided herein, may from time to time fix, before issuance, by
delivering an appropriate certificate of amendment to the Department of State
pursuant to the Business Corporation Law of the State of New York. The authority
of the Board of Directors with respect to each series shall include, but not be
limited to, the fixing of the following:
(a) The number of shares to constitute the series and the distinctive
designation thereof;
(b) The dividend rate on the shares of the series; whether dividends
shall be cumulative, and, if so, from what date or dates;
(c) Whether or not the shares of the series shall be redeemable and, if
redeemable, the terms upon which the shares of the series may be redeemed and
the premium, if any, over and above the par value thereof and any dividends
accrued thereon which the shares of the series shall be entitled to receive upon
the redemption thereof;
(d) Whether or not the shares of the series shall be subject to the
operation of a retirement or sinking fund to be applied to the purchase or
redemption of such shares for retirement and, if such retirement or sinking fund
be established, the annual amount thereof and the terms and provisions relative
to the operation thereof;
(e) Whether or not the shares of the series shall be convertible into
shares of any class or classes of stock of the Corporation, with or without par
value, or of any other series of the same class and, if convertible, the
conversion price or prices or the rate at which such conversion may be made and
the method, if any, of adjusting the same;
(f) The rights of the shares of the series in the event of voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation;
(g) The restrictions, if any, on the payment of dividends upon, and the
making of the distributions to any class of stock ranking junior to the shares
of the series, and the restrictions, if any, on the purchase or redemption of
the shares of any such junior class;
(h) Whether the series shall have voting rights, in addition to the
voting rights provided by law, and, if so, the terms of such voting rights; and
(i) Any other relative rights, preferences and limitations of the
series.
II. Holders of shares of Preferred Stock shall be entitled to receive,
when and as declared by the Board of Directors, out of funds legally available
for the payment of dividends, dividends at the rates fixed by the Board of
Directors for the respective series, before any dividends shall be declared and
paid, or set apart for payment, on any other class of stock of the Corporation
ranking junior to the Preferred Stock either as to dividends or assets, with
respect to the same dividend period.
III. Whenever, at any time, dividends on the then outstanding Preferred
Stock as may be required by the terms of the certificate creating the series
representing the shares outstanding shall have been paid or declared and set
apart for payment on the then outstanding Preferred Stock and after complying
with all the provisions with respect to any retirement or sinking fund or funds
for any series of Preferred Stock, the Board of Directors may, subject to the
provisions of any certificate creating any series of Preferred Stock with
respect to the payment of dividends on any other class or classes of stock,
declare and pay dividends on the Common Stock, and the Preferred Stock shall not
be entitled to share therein.
IV. Upon any liquidation, dissolution or winding-up of the Corporation,
after payment, if any is required, shall have been made in full to the Preferred
Stock as provided in any certificate creating any series thereof, but not prior
thereto, the Common Stock shall, subject to the respective terms and provisions,
if any, of any such certificate, be entitled to receive any and all assets
remaining to be paid or distributed, and the Preferred Stock shall not be
entitled to share therein.
V. No holder of Common Stock or any series of Preferred Stock shall, as
such holder, have any preemptive or preferential right of subscription to any
stock of any class of the Corporation or to any obligations convertible into any
such stock or to any right of subscription to, or to any warrant or option for,
the purchase of any stock, other than such, if any, as the Board of Directors of
the Corporation in its discretion may determine from time to time.
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VI. The holders of the Common Stock shall have the right to vote on all
questions to the exclusion of all other classes of stock, except as by law
expressly provided or as otherwise expressly provided with respect to the
holders of any other class or classes of stock.
4A. Series A Junior Participating Preferred Stock
(1) Designation and Amount. An aggregate of 2,400,000 shares of Series
Preferred Stock, par value $100, of the Corporation are hereby constituted as a
series designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock").
(2) Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock or any similar stock ranking prior and
superior to the Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock, in preference to the holders of 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 first day
of January, April, July and October 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 A 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, 100 times the aggregate per share amount
of all cash dividends, and 100 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 A 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 A 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.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (a) of this Section
immediately after it declares a dividend or distribution of 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 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 A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A 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 A 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 A 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 holder of shares of Series A 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.
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(3) Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100 votes
on all matters submitted to a vote of the shareholders 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 A
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.
(b) Except as otherwise provided herein, in any other Certificate of
Amendment establishing a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A 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 shareholders of the Corporation.
(c) Except as set forth herein, holders of Series A Preferred Stock
shall have no voting rights.
(4) Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A 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 A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) 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 A Preferred Stock;
(ii) 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 A Preferred Stock, except dividends
paid ratably on the Series A 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;
(iii) 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 A 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 A preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A 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.
(b) 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 (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
(5) Reacquired Shares. Any shares of Series A 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
Certificate of Incorporation, in any other Certificate of Amendment establishing
a series of Preferred Stock or any similar stock or as otherwise required by
law.
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(6) Liquidation, Dissolution, or Winding-Up. Upon any liquidation,
dissolution or winding-up of the Corporation, no distribution shall be made (i)
to the holder of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding-up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 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 A Preferred Stock,
except distributions made ratably on the Series A 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 wind-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 A Preferred Stock were
entitled immediately prior to such event under the provision 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.
(7) Consolidation, Merger, etc. 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 A 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 100 times the aggregate amount of stock,
securities, cash and/or any other property, 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 A 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.
(8) Redemption. The shares of Series A Preferred Stock shall not
be redeemable.
(9) Rank. The Series A Preferred Stock shall rank junior with
respect to the payment of dividends and the distribution of assets to all series
of any class of Preferred Stock or any similar stock that specifically provide
that they shall rank prior to the Series A Preferred Stock. Nothing herein shall
preclude the Board from creating any series of Preferred Stock or any similar
stock ranking on a parity with or prior to the Series A Preferred Stock as to
the payment of dividends or the distribution of assets.
(10) Amendment. The Certificate 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 A Preferred Stock so as to
affect such Series adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single series.
4B. Series B Convertible Preferred Stock
(1) Designation and Amount; Special Purpose Restricted Transfer
Issue.
(a) The shares of this series of Preferred Stock shall be designated as
"Series B Cumulative Convertible Preferred Stock" ("Series B Preferred Stock")
and the number of shares constituting such series shall be 316,822 with a par
value of $100 per share.
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(b) Shares of Series B Preferred Stock shall be issued only to a
trustee acting on behalf of an employee benefit plan of the Corporation. In the
event of any transfer of shares of Series B Preferred Stock to any person other
than any such plan trustee (including, without limitation, a transfer resulting
from a distribution to participants of an employee benefit plan), the shares of
Series B Preferred Stock so transferred, upon such transfer and without any
further action by the Corporation or the holder, shall be automatically
converted into shares of Common Stock of the Corporation, par value $1 per share
("Common Stock"), on the terms otherwise provided for the conversion of shares
of Series B Preferred Stock into shares of Common Stock pursuant to Section 5
hereof, and no such transferee shall have any of the voting powers, preferences
and relative, participating, optional or special rights ascribed to the shares
of Series B Preferred Stock hereunder but, rather, shall have only the powers
and rights pertaining to the shares of Common Stock into which such shares of
Series B Preferred Stock shall have been so converted. The transferee of the
shares of Series B Preferred Stock after such automatic conversion shall be
treated for all purposes as the record holder of the shares of Common Stock into
which such shares of Series B Preferred Stock have been automatically converted
as at the date thereof; provided, however, that the pledge of Series B Preferred
Stock by such an employee benefit plan of the Corporation shall not constitute a
transfer for the purposes of this Section 1; provided, further, however, that
any sale of, collection from or other realization upon any pledged shares of
Series B Preferred Stock by a pledgee shall constitute a transfer for the
purposes of this Section 1. Certificates representing shares of Series B
Preferred Stock shall be legended to reflect the foregoing provisions.
Notwithstanding the foregoing provisions of this paragraph (b) of Section 1,
shares of Series B Preferred Stock (i) may be converted into shares of Common
Stock as provided by Section 5 hereof and the shares of Common Stock issued upon
such conversion may be transferred by the holder thereof as permitted by law and
(ii) shall be redeemable by the Corporation upon the terms and conditions
provided by Sections 6, 7, and 8 hereof.
(2) Dividends and Distributions.
(a)(i) The holders of the shares of Series B Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors of the
Corporation out of funds legally available therefor, cumulative cash dividends
("Preferred Dividends") in an amount per share per annum equal to $8.00.
(ii) Such amounts shall be payable quarterly in arrears, one-quarter on
each of the 31st day of March, the 30th day of June, the 30th day of September
and the 31st day of December of each year (or on the next succeeding Business
Day (as defined herein) if such date is not a Business Day) (each a "Dividend
Payment Date") commencing on December 31, 1989, to holders of record at the
start of business on such Dividend Payment Date. Preferred Dividends shall begin
to accrue on outstanding shares of Series B Preferred Stock from the date of
issuance of such shares of Series B Preferred Stock. Preferred Dividends shall
accrue on a daily basis whether or not the Corporation shall have earnings or
surplus at the time, but Preferred Dividends accrued after the date of issuance
thereof on the shares of Series B Preferred Stock for any period less than a
full three-month period between Dividend Payment Dates shall be computed on the
basis of a 360-day year of 30-day months. Accumulated but unpaid Preferred
Dividends shall cumulate as of the Dividend Payment Date on which they first
become payable, but no interest shall accrue on accumulated but unpaid Preferred
Dividends.
(b) So long as any Series B Preferred Stock shall be outstanding, no
dividend shall be declared or paid or set apart for payment on any other series
of stock ranking on a parity with the Series B Preferred Stock as to dividends,
unless there shall also be or have been declared and paid or set apart for
payment on the Series B Preferred Stock like dividends for all dividend payment
periods of the Series B Preferred Stock ending on or before the dividend payment
date of such parity stock, ratably in proportion to the respective amounts of
dividends accrued and unpaid through such dividend payment period on the Series
B Preferred Stock and accrued and unpaid on such parity stock through the
dividend payment period on such parity stock next preceding such dividend
payment date. In the event that full cumulative dividends on the Series B
Preferred Stock have not been declared and paid or set apart for payment when
due, the Corporation shall not declare or pay or set apart for payment any
dividends or make any other distributions on, or make any payment on account of,
the purchase, redemption or other retirement of any other class of stock or
series thereof of the Corporation ranking, as to dividends or as to
distributions in the event of a liquidation, dissolution or winding-up of the
Corporation, junior to the Series B Preferred Stock until full cumulative
dividends on the Series B Preferred Stock shall have been paid or declared and
set apart for payment; provided, however, that the foregoing shall not apply to
(i) any dividend payable solely in any shares of any stock ranking, as to
dividends and as to distributions in the event of a liquidation, dissolution or
winding-up of the Corporation, junior to the Series B Preferred Stock, (ii) the
acquisition of shares of any stock ranking, as to dividends or as to
distributions in the event of a liquidation, dissolution or winding-up of the
Corporation, junior to the Series B Preferred Stock either (A) pursuant to any
employee or director incentive or benefit plan or arrangement (including any
employment, severance or consulting agreement) of the Corporation or any
subsidiary of the Corporation heretofore or hereafter adopted or (B) in exchange
solely for shares of any other stock ranking, as to dividends or as to
distributions in the event of a liquidation, dissolution or winding-up of the
Corporation, junior to the Series B Preferred Stock, or (iii) any payment made
in respect of any redemption or purchase of Rights, as defined in paragraph (f)
of Section 5 hereof, or any rights similar thereto.
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(3) Voting Rights. The holders of shares of Series B Preferred Stock
shall have the following voting rights:
(a) The holders of Series B Preferred Stock shall be entitled to vote
on all matters submitted to a vote of the holders of Common Stock of the
Corporation, voting together with the holders of Common Stock as one class. Each
share of Series B Preferred Stock shall be entitled to the number of votes equal
to the number of shares of Common Stock into which such share of Series B
Preferred Stock could be converted on the record date of determining the
stockholders entitled to vote, without rounding for fractional votes; it being
understood that whenever the "Conversion Price" (as defined in Section 5 hereof)
is adjusted as provided in Section 9 hereof, the voting rights of the Series B
Preferred Stock shall also be similarly adjusted.
(b) Except as otherwise required by law or set forth herein, 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 and holders of any other class or series of stock that
may similarly be entitled to vote with the shares of Common Stock) for the
taking of any corporate action. So long as any shares of Series B Preferred
Stock are outstanding, the consent of the holders of at least a majority of the
outstanding shares of Series B Preferred Stock, given in person or by proxy,
either at a regular meeting or at a special meeting called for that purpose, at
which the holders of Series B Preferred Stock shall vote separately as a series,
shall be necessary for effecting, validating or authorizing any one or more of
the following:
(i) the amendment, alteration or repeal of any of the provisions of the
Certificate of Incorporation, as amended, of the Corporation, or any amendment
thereto or any other certificate filed pursuant to law (including any such
alteration, amendment or repeal effected by any merger or consolidation to which
the Corporation is a party) that would adversely affect any of the rights,
powers or preferences of outstanding shares of Series B Preferred Stock; or
(ii) any merger or consolidation with or into, or any sale, transfer,
exchange or lease of all or substantially all of the assets of the Corporation
to, any other corporation, in either case that would adversely affect any of the
rights, powers or preferences of outstanding shares of Series B Preferred Stock.
(4) Liquidation, Dissolution or Winding-Up.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation, the holders of Series B Preferred Stock shall be
entitled to receive out of assets of the Corporation available for payment to
stockholders and subject to the rights of the holders of any stock of the
Corporation ranking senior to or on a parity with the Series B Preferred Stock
in respect of distributions upon liquidation, dissolution or winding-up of the
Corporation, before any amount shall be paid or distributed among the holders of
Common Stock or any other shares ranking junior to the Series B Preferred Stock
in respect of distributions upon liquidation, dissolution or winding-up of the
Corporation, liquidating distributions in the amount of $100 per share, plus an
amount equal to all accrued and unpaid dividends thereon to the date fixed for
distribution. If upon any liquidation, dissolution or winding-up of the
Corporation, the amounts payable with respect to the Series B Preferred Stock
and any other stock ranking as to any such distribution on a parity with the
Series B Preferred Stock are not paid in full, the holders of the Series B
Preferred Stock and such other stock shall share ratably in any distribution of
assets in proportion to the full respective preferential amounts to which they
are entitled. After payment of the full amount to which they are entitled as
provided by the foregoing provisions of this Section 4(a), the holders of shares
of Series B Preferred Stock shall not be entitled to any further right or claim
to any of the remaining assets of the Corporation.
(b) Neither the merger or consolidation of the Corporation with or into
any other corporation, nor the merger or consolidation of any other corporation
with or into the Corporation, nor the sale, transfer, exchange or lease of all
or any portion of the assets of the Corporation, shall be deemed to be a
dissolution, liquidation or winding-up of the affairs of the Corporation for
purposes of this Section 4, but the holders of Series B Preferred Stock shall
nevertheless be entitled in the event of any such merger or consolidation to the
rights provided by Section 8 hereof.
(c) Written notice of any voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, stating the payment date or dates
when, and the place or places where, the amounts distributable to holders of
Series B Preferred Stock in such circumstances shall be payable, shall be given
by first-class mail, postage prepaid, mailed not less than twenty days prior to
any payment date stated therein, to the holders of Series B Preferred Stock, at
the address shown on the books of the Corporation or the transfer agent for the
Series B Preferred Stock; provided, however, that a failure to give notice as
provided above or any defect therein shall not affect the Corporation's ability
to consummate a voluntary or involuntary liquidation, dissolution or winding-up
of the Corporation.
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(5) Conversion into Common Stock.
(a) A holder of shares of Series B Preferred Stock shall be entitled,
at any time prior to the close of business on any date fixed for redemption of
such shares pursuant to Section 6, 7, or 8 hereof (whether or not such Series B
Preferred Stock is subject to a notice of redemption), to cause any or all of
such shares to be converted into fully paid and non-assessable shares of Common
Stock, initially at a conversion ratio equal to the number derived by dividing
$100.00 by a denominator initially equal to $50.00, which denominator shall be
adjusted as provided in Section 9 hereof (such denominator, as it may be so
adjusted, the "Conversion Price"). Whenever the Conversion Price shall be
adjusted as provided in Section 9 hereof, the conversion ratio described above
shall be correspondingly adjusted. In no event shall the Conversion Price be
less than the aggregate amount necessary to constitute the par value of the
shares of Common Stock into which a share of Series B Preferred Stock is
convertible.
(b) Any holder of shares of Series B Preferred Stock desiring to
convert such shares into shares of Common Stock shall surrender the certificate
or certificates representing the shares of Series B Preferred Stock being
converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto), at the principal
executive office of the Corporation or the offices of the transfer agent for the
Series B Preferred Stock or such office or offices in the continental United
States of an agent for conversion as may from time to time be designated by
notice to the holders of the Series B Preferred Stock by the Corporation or the
transfer agent for the Series B Preferred Stock, accompanied by written notice
of conversion, on any date that is a Business Day in New York, New York. Such
notice of conversion shall specify (i) the number of shares of Series B
Preferred Stock to be converted and the name or names in which such holder
wishes the certificate or certificates for Common Stock and for any shares of
Series B Preferred Stock not to be so converted to be issued (subject to
compliance with applicable legal requirements if any of such certificates are to
be issued in a name other than the name of the holder), and (ii) the address to
which such holder wishes delivery to be made of such new certificates to be
issued upon such conversion.
(c) Upon surrender of a certificate representing a share or shares of
Series B Preferred Stock for conversion, the Corporation shall issue and send by
hand delivery (with receipt to be acknowledged) or by first-class mail, postage
prepaid, to the holder thereof, at the address designated by such holder, a
certificate or certificates representing the number of shares of Common Stock to
which such holder shall be entitled upon conversion. In the event that there
shall have been surrendered a certificate or certificates representing shares of
Series B Preferred Stock, only part of which are to be converted, the
Corporation shall issue and deliver to such holder or such holder's designee in
the manner provided in the immediately preceding sentence a new certificate or
certificates representing the number of shares of Series B Preferred Stock that
shall not have been converted.
(d) The issuance by the Corporation of shares of Common Stock upon a
conversion of shares of Series B Preferred Stock into shares of Common Stock
made at the option of the holder thereof shall be effective upon the surrender
by such holder or such holder's designee of the certificate or certificates for
the shares of Series B Preferred Stock to be converted, duly assigned or
endorsed for transfer to the Corporation (or accompanied by duly executed stock
powers relating thereto). On and after the effective date of conversion, the
person or persons entitled to receive the Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock, but no allowance or adjustment shall be made in
respect of dividends payable to holders of Common Stock of record on any date
prior to such effective date. The Corporation shall not be obligated to pay any
dividends that shall have been declared and shall be payable to holders of
shares of Series B Preferred Stock on a Dividend Payment Date if such Dividend
Payment Date for such dividend is subsequent to the effective date of conversion
of such shares.
(e) The Corporation shall not be obligated to deliver to holders of
Series B Preferred Stock any fractional shares of Common Stock issuable upon any
conversion of such shares of Series B Preferred Stock, but in lieu thereof may
make a cash payment in respect thereof in an amount equal to such fraction
multiplied by the Fair Market Value per share of Common Stock (as defined in
Section 9 hereof) at the close of business on the day of conversion, or in any
other manner permitted by law.
(f) Whenever the Corporation shall issue shares of Common Stock upon
conversion of shares of Series B Preferred Stock as contemplated by this Section
5, the Corporation shall issue, together with each such share of Common Stock,
one right to purchase Series A Junior Participating Preferred Stock of the
Corporation (or other securities in lieu thereof) pursuant to the Rights
Agreement, dated as of July 2, 1986 (the "Rights Agreement"), between the
Corporation and Chase Lincoln First Bank, N.A., as Rights Agent, as such Rights
Agreement may from time to time be amended, or any similar rights issued to
holders of Common Stock of the Corporation in addition thereto or in replacement
therefor (such rights, together with any such additional or replacement rights,
being collectively referred to as the "Rights"), whether or not such Rights
shall be exercisable at such time, but only if such rights are issued and
outstanding and held by other holders of Common Stock of the Corporation (or are
evidenced by outstanding share certificates representing Common Stock) at such
time and have not expired or been redeemed.
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(g) The Corporation shall at all times reserve and keep available out
of its authorized and unissued Common Stock, solely for issuance upon the
conversion of shares of Series B Preferred Stock as herein provided, free from
any preemptive or other similar rights, such number of shares of Common Stock as
shall from time to time be issuable upon the conversion of all the shares of
Series B Preferred Stock then outstanding. Notwithstanding the foregoing, the
Corporation shall be entitled to deliver upon conversion of shares of Series B
Preferred Stock, as herein provided, shares of Common Stock reacquired and held
in the treasury of the Corporation (in lieu of the issuance of authorized and
unissued shares of Common Stock), so long as any such treasury shares are free
and clear of all liens, charges, security interests or encumbrances. The
Corporation shall prepare and shall use its best efforts to obtain and keep in
force such governmental or regulatory permits or other authorizations as may be
required by law, and shall comply with all applicable requirements as to
registration or qualification of the Common Stock (and all requirements to list
the Common Stock issuable upon conversion of Series B Preferred Stock that are
at the time applicable), in order to enable the Corporation lawfully to issue
and deliver to each holder of record of Series B Preferred Stock such number of
shares of its Common Stock as shall from time to time be sufficient to effect
the conversion of all shares of Series B Preferred Stock then outstanding and
convertible into shares of Common Stock.
(6) Redemption at the Option of the Corporation.
(a) The Series B Preferred Stock shall be redeemable, in whole or in
part, out of funds legally available therefor, at the option of the Corporation
at any time after September 30, 1992, or on or before September 30, 1992, if
permitted by paragraph (c) or (d) of this Section 6, at the following redemption
prices per share:
During the Twelve-
Month period Price Per
Beginning October 1 Share
------------------- ---------
1989................................................ $108.00
1990................................................ $107.00
1991................................................ $106.00
1992................................................ $105.00
1993................................................ $104.00
1994................................................ $103.00
1995................................................ $102.00
1996................................................ $101.00
and thereafter at $100 per share, plus, in each case, an amount equal to all
accrued and unpaid dividends thereon to and thereafter at $100 per share, plus,
in each case, an amount equal to all accrued and unpaid dividends thereon to the
date fixed for redemption. Payment of the redemption price shall be made by the
Corporation in cash or shares of Common Stock, or a combination thereof, as
permitted by paragraph (e) of this Section 6. From and after the date fixed for
redemption, dividends on shares of Series B Preferred Stock called for
redemption will cease to accrue, such shares will no longer be deemed to be
outstanding and all rights in respect of such shares of the Corporation shall
cease, except the right to receive the redemption price, provided that shares of
Series B Preferred Stock may be converted pursuant to Section 5 hereof at any
time prior to the close of business on the date fixed for redemption of such
shares pursuant to Sections 6, 7 or 8 hereof. If less than all of the
outstanding shares of Series B Preferred Stock are to be redeemed, the
Corporation shall either redeem a portion of the shares of each holder
determined pro rata based on the number of shares held by each holder or shall
select the shares to be redeemed by lot, as may be determined by the Board of
Directors of the Corporation.
(b) Unless otherwise required by law, notice of redemption will be sent
to the holders of Series B Preferred Stock at the address shown on the books of
the Corporation or any transfer agent for the Series B Preferred Stock by
first-class mail, postage prepaid, mailed not less than twenty, nor more than
sixty days prior to the redemption date. Each such notice shall state: (i) the
redemption date; (ii) the total number of shares of Series B Preferred Stock to
be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; (v) that dividends on
the shares to be redeemed will cease to accrue on such redemption date; and (vi)
the conversion rights of the shares to be redeemed, the period within which
conversion rights may be exercised, and the Conversion Price and number of
shares of Common Stock issuable upon conversion of a share of Series B Preferred
Stock on the date such notice is sent. Upon surrender of the certificates for
any shares so called for redemption and not previously converted (properly
endorsed or assigned for transfer, if the Board of Directors of the Corporation
shall so require and the notice shall so state), such shares shall be redeemed
by the Corporation at the date fixed for redemption and at the redemption price
set forth in this Section 6.
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(c) In the event (i) the Corporation terminates an employee benefit
plan that holds Series B Preferred Stock as a result of the failure of the plan
to obtain the approval of the Internal Revenue Service as a "qualified plan"
under Section 401 of the Internal Revenue Code of 1986, as amended (the "Code"),
under circumstances permitting a return of employer contributions under Section
403(c)(2)(B) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or (ii) the Corporation, in good faith after consultation with
counsel to the Corporation, determines that the voting provisions contained
herein are not in compliance with Rule 19c-4 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (the "Exchange
Act"), the Corporation may, in its sole discretion and notwithstanding anything
to the contrary herein, elect to redeem any or all of the shares of Series B
Preferred Stock, out of funds legally available therefor, for the amount of $100
per share plus an amount equal to all accrued and unpaid dividends thereon to
the date fixed for redemption, and otherwise on the terms and conditions set
forth in paragraphs (a) and (b) of this Section 6.
(d) Notwithstanding anything to the contrary in paragraph (a) of this
Section 6, the Corporation may, in its sole discretion, elect to redeem any or
all of the shares of Series B Preferred Stock at any time on or prior to
September 30, 1992 on the terms and conditions set forth in paragraphs (a) and
(b) of this Section 6, out of funds legally available therefor, if the last
reported sales price, regular way, of a share of Common Stock, as reported on
the New York Stock Exchange Composite Tape or, if the Common Stock is not listed
or admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which such stock is listed or admitted to trading or, if
the Common Stock is not listed or admitted to trading on any national securities
exchange, on the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or, if the Common
Stock is not quoted on such National Market System, the average of the closing
bid and asked prices in the over-the-counter market as reported by NASDAQ, for
at least twenty trading days within a period of thirty consecutive trading days
ending within five days of the notice of redemption, equals or exceeds one
hundred fifty percent of the Conversion Price (after giving effect in making
such calculation to any adjustments required by Section 9 hereof).
(e) The Corporation, at its option, may make payment of the redemption
price required upon redemption of shares of Series B Preferred Stock in cash or
in shares of Common Stock, or in any combination of such shares and cash, with
any such shares to be valued for such purpose at their Fair Market Value (as
defined in paragraph (g) of Section 9 hereof; provided, however, that in
calculating their Fair Market Value, the Adjustment Period shall be deemed to be
the five consecutive trading days preceding the date of redemption), except that
any payment required to be made under paragraph (c) of Section 8 hereof shall be
made in cash.
(7) Other Redemption Rights.
Shares of Series B Preferred Stock shall be redeemed by the Corporation
for cash or, if the Corporation so elects, in shares of Common Stock, or a
combination of cash and such shares, with any such shares of Common Stock to be
valued for such purpose as provided by paragraph (e) of Section 6 hereof, out of
funds legally available therefor, at a redemption price of $100 per share, plus
an amount equal to all accrued and unpaid dividends thereon to the date fixed
for redemption, at the option of the holder, at any time and from time to time
upon notice to the Corporation given not less than five business days prior to
the date fixed by the holder in such notice for such redemption, when and to the
extent necessary (i) for such holder to provide for distributions required to be
made to participants under, or to satisfy an investment election provided to
participants in accordance with, the provisions of an employee benefit plan of
the Corporation pursuant to which the Series B Preferred Stock to be redeemed is
held or (ii) for such holder to make payment of principal, interest or premium
due and payable (whether as scheduled or upon acceleration) on indebtedness of
the trust under such plan or any indebtedness incurred by the holder for the
benefit of such plan (but only if necessary to remedy or prevent a default
thereunder).
(8) Consolidation, Merger, etc.
(a) In the event that the Corporation shall consummate any
consolidation, merger, reclassification or similar transaction, pursuant to
which the outstanding shares of Common Stock are by operation of law exchanged
solely for or changed, reclassified or converted solely into stock of any
successor or resulting company (including stock of the Corporation) that
constitutes "qualifying employer securities" with respect to a holder of Series
B Preferred Stock within the meaning of Section 407(d)(5) of ERISA, or any
successor provisions of law, and, if applicable, for a cash payment in lieu of
fractional shares, the shares of Series B Preferred Stock of such holder shall,
in connection with such consolidation, merger, reclassification or similar
transaction, be assumed by and shall become validly issued and authorized
preferred stock of such successor or resulting company, having in respect of
such company insofar as reasonably practicable the same powers, preferences and
relative, participating, optional or other special rights (including the
redemption rights provided by Sections 6, 7 and 8 hereof), and the
qualifications, limitations or restrictions thereon, that the Series B Preferred
Stock had immediately prior to such transaction, except that after such
transaction each share of Series B Preferred Stock shall be convertible,
otherwise on the same terms and conditions provided by Section 5 hereof, into
the number and kind of qualifying employer securities so receivable by a holder
of the number of shares of Common Stock into which such shares of Series B
Preferred Stock could have been converted immediately prior to such transaction
if such holder of Common Stock failed to exercise any rights of
63
election to receive any kind or amount of stock, securities, cash or other
property (other than such qualifying employer securities and a cash payment, if
applicable, in lieu of fractional shares) receivable upon such transaction
(provided that, if the kind or amount of qualifying employer securities
receivable upon such transaction is not the same for each non-electing share,
then the kind and amount of qualifying employer securities receivable upon such
transaction for each non-electing share shall be the kind and amount so
receivable per share by a plurality of the non-electing shares). The rights of
the Series B Preferred Stock as preferred stock of such successor or resulting
company shall successively be subject to adjustments pursuant to Section 9
hereof after any such transaction as nearly equivalent as reasonably practicable
to the adjustments provided for by such section prior to such transaction. The
Corporation shall not consummate any such merger, consolidation,
reclassification or similar transaction unless all then outstanding shares of
Series B Preferred Stock shall become validly issued and authorized by the
successor or resulting company as aforesaid.
(b) In the event that the Corporation shall consummate any
consolidation, merger, reclassification or similar transaction, pursuant to
which the outstanding shares of Common Stock are by operation of law exchanged
for or changed, reclassified or converted into other stock, securities or cash
or any other property, or any combination thereof, other than any such
consideration that is constituted solely of qualifying employer securities (as
referred to in paragraph (a) of this Section 8) and cash payments, if
applicable, in lieu of fractional shares, outstanding shares of Series B
preferred Stock shall, without any action on the part of the Corporation or any
holder thereof (but subject to paragraph (c) of this Section 8), be
automatically converted by virtue of such merger, consolidation,
reclassification or similar transaction immediately prior to the consummation
thereof into the number of shares of Common Stock into which such shares of
Series B Preferred Stock could have been converted at such time so that each
share of Series B Preferred Stock shall, by virtue of such transaction and on
the same terms as apply to the holders of Common Stock, be converted into or
exchanged for the aggregate amount of stock, securities, cash or other property
(payable in like kind) receivable by a holder of the number of shares of Common
Stock into which such shares of Series B Preferred Stock could have been
converted immediately prior to such transaction if such holder of Common Stock
failed to exercise any rights of election as to the kind or amount of stock,
securities, cash or other property receivable upon such transaction (provided
that, if the kind or amount of stock, securities, cash or other property
receivable upon such transaction is not the same for each non-electing share,
then the kind and amount of stock, securities, cash or other property receivable
upon such transaction for each non-electing share shall be the kind and amount
so receivable per share by a plurality of the non-electing shares).
(c) In the event that the Corporation shall enter into any agreement
providing for any consolidation, merger, reclassification or similar transaction
described in paragraph (b) of this Section 8, then the Corporation shall, as
soon as practicable thereafter (and in any event at least ten Business Days
before consummation of such transaction), give notice of such agreement and the
material terms thereof to each holder of Series B Preferred Stock and each such
holder shall have the right to elect, by written notice to the Corporation, to
receive, upon consummation of such transaction (if and when such transaction is
consummated), from the Corporation or the successor of the Corporation, out of
funds legally available therefor, in redemption and retirement of such Series B
Preferred Stock and in lieu of what would otherwise result under paragraph (b)
of this Section 8, a cash payment equal to the amount of $100 per share plus an
amount equal to all accrued and unpaid dividends thereon to the date fixed for
redemption. No such notice of redemption shall be effective unless given to the
Corporation prior to the close of business on the fifth Business Day prior to
consummation of such transaction, unless the Corporation or the successor of the
Corporation shall waive such prior notice, but any notice of redemption so given
prior to such time may be withdrawn by notice of withdrawal given to the
Corporation prior to the close of business on the fifth Business Day prior to
consummation of such transaction.
(9) Anti-dilution Adjustments.
(a) In the event the Corporation shall, at any time or from time to
time, while any of the shares of the Series B Preferred Stock are outstanding,
(i) pay a dividend or make a distribution in respect of the Common Stock, to the
extent that such dividend or distribution consists of shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, in each case
whether by reclassification of shares, recapitalization of the Corporation
(excluding a recapitalization effected by a merger or consolidation to which
Section 8 hereof applies) or otherwise, the Conversion Price in effect
immediately prior to such action shall be adjusted by multiplying such
Conversion Price by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event. An adjustment made pursuant to this paragraph 9(a)
shall be given effect, upon payment of such a dividend or distribution, as of
the record date for the determination of stockholders entitled to receive such
dividend or distribution (on a retroactive basis) and in the case of a
subdivision or combination shall become effective immediately as of the
effective date thereof.
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(b) In the event that the Corporation shall, at any time or from time
to time while any of the shares of Series B Preferred Stock are outstanding,
issue to holders of shares of Common Stock as a dividend or distribution,
including by way of a reclassification of shares or a recapitalization of the
Corporation, any right or warrant to purchase shares of Common Stock (but not
including as such a right or warrant any Rights (as defined in paragraph (f) of
Section 5 hereof) or any security convertible into or exchangeable for shares of
Common Stock), such right or warrant by its terms enabling the holder thereof to
acquire shares of Common Stock at a purchase price per share less than the Fair
Market Value (as hereinafter defined) of a share of Common Stock on the date of
issuance of such right or warrant, then, subject to the provisions of paragraphs
(e) and (f) of this Section 9, the Conversion Price shall be adjusted by
multiplying such Conversion Price by a fraction the numerator of which shall be
the number of shares of Common Stock outstanding immediately before such
issuance of rights or warrants plus the number of shares of Common Stock that
could be purchased at the Fair Market Value of a share of Common Stock at the
time of such issuance for the maximum aggregate consideration payable upon
exercise in full of all such rights or warrants and the denominator of which
shall be the number of shares of Common Stock outstanding immediately before
such issuance of rights or warrants plus the maximum number of shares of Common
Stock that could be acquired upon exercise in full of all such rights and
warrants.
(c) In the event the Corporation shall, at any time or from time to
time while any of the shares of Series B Preferred Stock are outstanding, issue,
sell or exchange shares of Common Stock (other than pursuant to the Rights
Agreement or any other right or warrant to purchase or acquire shares of Common
Stock (including as such a right or warrant any security convertible into or
exchangeable for shares of Common Stock) and other than pursuant to any employee
or director incentive or benefit plan or arrangement, including any employment,
severance or consulting agreement, of the Corporation or any subsidiary of the
Corporation heretofore or hereafter adopted) for a consideration having a Fair
Market Value on the date of such issuance, sale or exchange less than the Fair
Market Value of such shares on the date of such issuance, sale or exchange,
then, subject to the provisions of paragraphs (e) and (f) of this Section 9, the
Conversion Price shall be adjusted by multiplying such Conversion Price by a
fraction the numerator of which shall be the sum of (i) the Fair Market Value of
all the shares of Common Stock outstanding on the day immediately preceding the
first public announcement of such issuance, sale or exchange plus (ii) the Fair
Market Value of the consideration received by the Corporation in respect of such
issuance, sale or exchange of shares of Common Stock, and the denominator of
which shall be the product of (a) the Fair Market Value of a share of Common
Stock on the day immediately preceding the first public announcement of such
issuance, sale or exchange multiplied by (b) the sum of the number of shares of
Common Stock outstanding on such day plus the number of shares of Common Stock
so issued, sold or exchanged by the Corporation. In the event the Corporation
shall, at any time or from time to time, while any shares of Series B Preferred
Stock are outstanding, issue, sell or exchange any right or warrant to purchase
or acquire shares of Common Stock (including as such a right or warrant any
security convertible into or exchangeable for shares of Common Stock), other
than any Rights, any such issuance to holders of shares of Common Stock as a
dividend or distribution (including by way of a reclassification of shares or a
recapitalization of the Corporation) and other than pursuant to any employee or
director incentive or benefit plan or arrangement (including any employment,
severance or consulting agreement) of the Corporation or any subsidiary of the
Corporation heretofore or hereafter adopted, such right or warrant being issued
for a consideration having a Fair Market Value, on the date of such issuance,
sale or exchange, less than the Non-dilutive Amount (as hereinafter defined),
then, subject to the provisions of paragraphs (e) and (f) of this Section 9, the
Conversion Price shall be adjusted by multiplying such Conversion Price by a
fraction, the numerator of which shall be the sum of (i) the Fair Market Value
of all the shares of Common Stock outstanding on the day immediately preceding
the first public announcement of such issuance, sale or exchange plus (ii) the
Fair Market Value of the consideration received by the Corporation in respect of
such issuance, sale or exchange of such right or warrant plus (iii) the Fair
Market Value at the time of such issuance of the consideration that the
Corporation would receive upon exercise in full of all such rights or warrants,
and the denominator of which shall be the product of (a) the Fair Market Value
of a share of Common Stock on the day immediately preceding the first public
announcement of such issuance, sale or exchange multiplied by (b) the sum of the
number of shares of Common Stock outstanding on such day plus the maximum number
of shares of Common Stock that could be acquired pursuant to such rights or
warrants at the time of issuance, sale or exchange of such rights or warrants
(assuming shares of Common Stock could be acquired pursuant to such rights or
warrants at such time).
(d) In the event the Corporation shall, at any time or from time to
time, while any of the shares of Series B Preferred Stock are outstanding, make
an Extraordinary Distribution (as hereinafter defined) in respect of the Common
Stock, whether by dividend, distribution, reclassification of shares or
recapitalization of the Corporation (excluding a recapitalization or
reclassification effected by a merger or consolidation to which Section 8 hereof
applies) or effect a Pro Rata Repurchase (as hereinafter defined) of Common
Stock, the Conversion Price in effect immediately prior to such Extraordinary
Distribution or Pro Rata Repurchase shall, subject to paragraphs (e) and (f) of
this Section 9, be adjusted by multiplying such Conversion Price by a fraction
the numerator of which is the difference between (i) the product of (x) the
number of shares of Common Stock outstanding immediately preceding such
Extraordinary Distribution or Pro Rata Repurchase multiplied by (y) the Fair
Market Value of a share of Common Stock on the record date with respect to an
Extraordinary Distribution, or on the applicable expiration date (including all
extensions thereof) of any tender offer or exchange offer that is a Pro Rata
Repurchase, or on the date of purchase with respect to any Pro Rata Repurchase
that is not a tender offer or exchange offer, as the case may be, minus (ii) the
Fair Market Value of the Extraordinary Distribution or the aggregate purchase
price of the Pro Rata Repurchase, as the case may be, and the denominator of
which shall be the product of (a) the number of shares of Common Stock
outstanding immediately preceding such Extraordinary Dividend or Pro Rata
Repurchase minus, in the case
65
of a Pro Rata Repurchase, the number of shares of Common Stock repurchased by
the Corporation multiplied by (b) the Fair Market Value of a share of Common
Stock on the record date with respect to an Extraordinary Distribution or on the
applicable expiration date (including all extensions thereof) of any tender
offer or exchange offer that is a Pro Rata Repurchase or on the date of purchase
with respect to any Pro Rata Repurchase that is not a tender offer or exchange
offer, as the case may be. The Corporation shall send each holder of Series B
Preferred Stock (i) notice of its intent to make any dividend or distribution
and (ii) notice of any offer by the Corporation to make a Pro Rata Repurchase,
in each case at the same time as, or as soon as practicable after, such offer is
first communicated (including by announcement of a record date in accordance
with the rules of any stock exchange on which the Common Stock is listed or
admitted to trading) to holders of Common Stock. Such notice shall indicate the
intended record date and the amount and nature of such dividend or distribution,
or the number of shares subject to such offer for a Pro Rata Repurchase and the
purchase price payable by the Corporation pursuant to such offer, as well as the
Conversion Price and the number of shares of Common Stock into which a share of
Series B Preferred Stock may be converted at such time.
(e) Notwithstanding any other provisions of this Section 9, the
Corporation shall not be required to make any adjustment to the Conversion Price
unless and until such adjustment would require an increase or decrease of at
least two percent in the Conversion Price. Any lesser adjustment shall be
carried forward and shall be made no later than the time of, and together with,
the next subsequent adjustment that, together with any adjustment or adjustments
so carried forward, shall amount to an increase or decrease of at least one
percent in the Conversion Price. All adjustments shall be made to the nearest
one hundredth of a share and the nearest cent.
(f) If the Corporation shall pay any dividend or make any distribution
on the Common Stock or issue any Common Stock, other capital stock or other
security of the Corporation or any rights or warrants to purchase or acquire any
such security, which transaction does not result in an adjustment to the
Conversion Price pursuant to the foregoing provisions of this Section 9, the
Board of Directors of the Corporation may consider, but shall be under no legal
obligation to consider, whether such action is of such a nature that an
adjustment to the Conversion Price should equitably be made in respect of such
transaction. If in such case the Board of Directors of the Corporation
determines that an adjustment to the Conversion Price should be made, the Board
of Directors shall take such action as it deems appropriate. The determination
of the Board of Directors of the Corporation as to whether an adjustment to the
Conversion Price should be made pursuant to the foregoing provisions of this
paragraph (f) of Section 9, and, if so, as to what adjustment should be made and
when, shall be final and binding on the Corporation and all stockholders of the
Corporation. Without limiting the foregoing, the Corporation shall be entitled
to make such additional adjustments in the Conversion Price, in addition to any
made pursuant to the foregoing provisions of this Section 9, as shall be
necessary in order that any dividend or distribution in shares of capital stock
of the Corporation, any subdivision, reclassification or combination of shares
of stock of the Corporation or any recapitalization of the Corporation or other
event shall not be taxable to holders of Common Stock.
(g) For purposes of this paragraph 4B, the following definitions shall
apply:
"Business Day" shall mean each day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York, New
York are authorized or required to be closed.
"Extraordinary Distribution" shall mean any dividend or other
distribution to the holders of Common Stock (effected while any of the shares of
Series B Preferred Stock are outstanding) (i) of cash, where the aggregate
amount of such cash dividend or distribution, together with the amount of all
cash dividends and distributions made during the preceding period of 12 months,
when combined with the aggregate amount of all Pro Rata Repurchases (for this
purpose, including only that portion of the aggregate purchase price of such pro
Rata Repurchase that is in excess of the Fair Market Value of the Common Stock
repurchased as determined on the applicable expiration date (including all
extensions thereof) of any tender offer or exchange offer that is a Pro Rata
Purchase, or the date of purchase with respect to any other Pro Rata Repurchase
that is not a tender offer or exchange offer made during such period), exceeds
12-1/2 percent of the aggregate Fair Market Value of all shares of Common Stock
outstanding on the record date for determining the stockholders entitled to
receive such Extraordinary Distribution and (ii) of any shares of capital stock
of the Corporation (other than shares of Common Stock), other securities of the
Corporation (other than securities of the type referred to in paragraph (b) or
(c) of this Section 9), evidences of indebtedness of the Corporation or any
other person or any other property (including shares of any subsidiary of the
Corporation), or any combination thereof. The Fair Market Value of an
Extraordinary Distribution for purposes of paragraph (d) of this Section 9 shall
be equal to the sum of the Fair Market Value of such Extraordinary Distribution
plus the amount of any cash dividends that are not Extraordinary Distributions
made during such twelve month period and not previously included in the
calculation of any adjustment pursuant to paragraph (d) of this Section 9.
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"Fair Market Value" shall mean, as to shares of Common Stock or any
other class of capital stock or securities of the Corporation or any other
issuer that are publicly traded, the average of the Current Market Prices (as
hereinafter defined) of such shares or securities for each day of the Adjustment
Period (as hereinafter defined). "Current Market Price" of publicly traded
shares of Common Stock or any other class of capital stock or other security of
the Corporation or any other issuer for a given day shall mean the last reported
sales price, regular way, or, in case no sale takes place on such day, the
average of the reported closing bid and asked prices, regular way, in either
case as reported on the New York Stock Exchange Composite Tape or, if such
security is not listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which such security is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the NASDAQ National Market System or, if such security
is not quoted on such National Market System, the average of the closing bid and
asked price on such day in the over-the counter market as reported by NASDAQ or,
if bid and asked prices for such security on each such day shall not have been
reported through NASDAQ, the average of the bid and asked prices for such day as
furnished by any New York Stock Exchange member firm regularly making a market
in such security selected for such purpose by the Board of Directors of the
Corporation or a committee thereof on each trading day during the Adjustment
Period. "Adjustment Period" shall mean the period of five consecutive trading
days, selected by the Board of Directors of the Corporation or a committee
thereof, during the 20 days preceding, and including, the date as of which the
Fair Market Value of a security is to be determined. The "Fair Market Value" of
any security that is not publicly traded or any other property shall mean the
fair value thereof as determined by an independent investment banking or
appraisal firm experienced in the valuation of such securities or property
selected in good faith by the Board of Directors of the Corporation or a
committee thereof, or, if no such investment banking or appraisal firm is, in
the good faith judgment of the Board of Directors or such committee, available
to make such determination, as determined in good faith by the Board of
Directors of the Corporation or such committee.
"Non-dilutive Amount" in respect of an issuance, sale or exchange by
the Corporation of any right or warrant to purchase or acquire shares of Common
Stock (including any security convertible into or exchangeable for shares of
Common Stock) shall mean the difference between (i) the product of the Fair
Market Value of a share of Common Stock on the day preceding the first public
announcement (whether by the Corporation or otherwise) of such issuance, sale or
exchange multiplied by the maximum number of shares of Common Stock that could
be acquired on such date upon the exercise in full of such rights and warrants
(including upon the conversion or exchange of all such convertible or
exchangeable securities), whether or not exercisable (or convertible or
exchangeable) at such date, minus (ii) the aggregate amount payable to the
Corporation pursuant to such right or warrant to purchase or acquire such
maximum number of shares of Common Stock; provided, however, that in no event
shall the Non-dilutive Amount be less than zero. For purposes of the foregoing
sentence, in the case of a security convertible into or exchangeable for shares
of Common Stock, the amount payable pursuant to a right or warrant to purchase
or acquire shares of Common Stock shall be the Fair Market Value of such
security on the date of the issuance, sale or exchange of such security by the
Corporation.
"Pro Rata Repurchase" shall mean any purchase of shares of Common Stock
by the Corporation or any subsidiary thereof, whether for cash, shares of
capital stock of the Corporation, other securities of the Corporation, evidences
of indebtedness of the Corporation or any other person or any other property
(including shares of a subsidiary of the Corporation), or any combination
thereof, effected while any of the shares of Series B Preferred Stock are
outstanding pursuant to any tender offer or exchange offer subject to Section
13(e) of the Exchange Act or any successor provision of law, or pursuant to any
other offer available to substantially all holders of Common Stock; provided,
however, that no purchase of shares by the Corporation or any subsidiary thereof
made in open market transactions shall be deemed a Pro Rata Repurchase. For
purposes of this paragraph 9(g), shares shall be deemed to have been purchased
by the Corporation or any subsidiary thereof "in open market transactions" if
they have been purchased substantially in accordance with the requirements of
Rule 10b-18 promulgated by the Securities and Exchange Commission under the
Exchange Act, on the date shares of the Series B Preferred Stock are initially
issued by the Corporation or on such other terms and conditions as the Board of
Directors of the Corporation or a committee thereof shall have determined are
reasonably designed to prevent such purchases from having a material effect on
the trading market for Common Stock.
(h) Whenever an adjustment to the Conversion Price and the related
voting rights of the Series B Preferred Stock is required pursuant to this
paragraph 4B, the Corporation shall forthwith place on file with the transfer
agent for the Common Stock and the Series B Preferred Stock, if there be one,
and with the Secretary of the Corporation, a statement signed by two officers of
the Corporation, stating the adjusted Conversion Price determined as provided
herein and the resulting conversion ratio, and the voting rights (as
appropriately adjusted) of the Series B Preferred Stock. Such statement shall
set forth in reasonable detail such facts as shall be necessary to show the
reason and the manner of computing such adjustment, including any determination
of Fair Market Value involved in such computation. Promptly after each
adjustment to the Conversion Price and the related voting rights of the Series B
Preferred Stock, the Corporation shall mail a notice thereof and of the
then-prevailing Conversion Price (and the resulting conversion ratio) to each
holder of shares of the Series B Preferred Stock.
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(10) Ranking; Attributable Capital and Adequacy of Surplus; Retirement
of Shares.
(a) The Series B Preferred Stock shall rank senior to the Common Stock
and to the Series A Junior Participating Preferred Stock, par value $100 per
share, of the Corporation as to the payment of dividends and the distribution of
assets on liquidation, dissolution and winding-up of the Corporation. The
ranking of any subsequent series of Preferred Stock, par value $100 per share,
issued by the Corporation as compared to the Series B Preferred Stock as to the
payment of dividends and the distribution of assets on liquidation, dissolution
or winding-up of the Corporation shall be as specified in the Certificate of
Incorporation, as amended, of the Corporation and, if appropriate, shall also be
subject to the provisions of paragraph (b) of Section 3 hereof.
(b) The capital of the Corporation allocable to the Series B Preferred
Stock for purposes of the New York Business Corporation Law (the "BCL") shall be
$100 per share. In addition to any vote of stockholders required by law, the
vote of the holders of a majority of the outstanding shares of Series B
Preferred Stock shall be required to increase the par value of the Common Stock
or otherwise increase the capital of the Corporation allocable to the Common
Stock for the purpose of the BCL if, as a result thereof, the surplus of the
Corporation available for the declaration and payment of dividends for purposes
of the BCL would be less than the amount of Preferred Dividends that would
accrue on the then outstanding shares of Series B Preferred Stock during the
following three years.
(c) Any shares of Series B Preferred Stock acquired by the Corporation
by reason of the conversion or redemption of such shares as provided by this
paragraph 4B, or otherwise acquired, shall be retired as shares of Series B
Preferred Stock and restored to the status of authorized but unissued shares of
Preferred Stock, par value $100 per share, of the Corporation, undesignated as
to series, and may thereafter be reissued as part of a new series of such
Preferred Stock as permitted by law.
(11) Miscellaneous.
(a) All notices referred to herein shall be in writing, and all notices
hereunder shall be deemed to have been given upon the earlier of receipt thereof
or three business days after mailing thereof if sent by registered or certified
mail (unless first-class mail shall be specifically permitted for such notice
under the terms of this paragraph 4B) with postage prepaid, addressed: (i) if to
the Corporation, to its office at Corning, New York 14831 (Attention: the
Secretary) or to the transfer agent for the Series B Preferred Stock, or other
agent of the Corporation designated as permitted by this paragraph 4B or (ii) if
to any holder of the Series B Preferred Stock or Common Stock, as the case may
be, to such holder at the address of such holder as listed in the stock record
books of the Corporation (which may include the records of any transfer agent
for the Series B Preferred Stock or Common Stock, as the case may be) or (iii)
to such other address as the Corporation or any such holder, as the case may be,
shall have designated by notice similarly given.
(b) The term "Common Stock" as used in this paragraph 4B means the
Corporation's Common Stock, par value $1 per share, as the same exists at the
date of filing of a Certificate of Amendment to the Certificate of Incorporation
of the Corporation relating to the Series B Preferred Stock or any other class
of stock resulting from successive changes or reclassifications of such Common
Stock consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. In the event that, at any time as a
result of an adjustment made pursuant to Section 9 hereof, the holder of any
share of the Series B Preferred Stock, upon thereafter surrendering such share
for conversion, shall become entitled to receive any shares of other securities
of the Corporation other than shares of Common Stock, the Conversion Price in
respect of such other shares or securities so receivable upon conversion of
shares of Series B Preferred Stock shall thereafter be adjusted, and shall be
subject to further adjustment from time to time, in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to Common Stock
contained in Section 9 hereof, and the provisions of Sections 1 through 8 and 10
and 11 hereof with respect to the Common Stock shall apply on like or similar
terms to any such other shares or securities.
(c) The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance or
delivery of shares of Series B Preferred Stock or shares of Common Stock or
other securities issued on account of Series B Preferred Stock pursuant hereto
or certificates representing such shares or securities. The Corporation shall
not, however, be required to pay any such tax that may be payable in respect of
any transfer involved in the issuance or delivery of shares of Series B
Preferred Stock or Common Stock or other securities in a name other than that in
which the shares of Series B Preferred Stock with respect to which such shares
or other securities are issued or delivered were registered, or in respect of
any payment to any person with respect to any such shares or securities other
than a payment to the registered holder thereof, and shall not be required to
make any such issuance, delivery or payment unless and until the person
otherwise entitled to such issuance, delivery or payment has paid to the
Corporation the amount of any such tax or has established, to the satisfaction
of Corporation, that such tax has been paid or is not payable.
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(d) In the event that a holder of shares of Series B Preferred Stock
shall not by written notice designate the name in which shares of Common Stock
to be issued upon conversion of such shares should be registered or to whom
payment upon redemption of shares of Series B Preferred Stock should be made or
the address to which the certificate or certificates representing such shares,
or such payment, should be sent, the Corporation shall be entitled to register
such shares, and make such payment, in the name of the holder of such Series B
Preferred Stock as shown on the records of the Corporation and to send the
certificate or certificates representing such shares, or such payment, to the
address of such holder shown on the records of the Corporation.
(e) Unless otherwise provided in the Certificate of Incorporation, as
amended, of the Corporation, all payments in the form of dividends,
distributions on voluntary or involuntary dissolution, liquidation or winding-up
or otherwise made upon the shares of Series B Preferred Stock and any other
stock ranking on a parity with the Series B Preferred Stock with respect to such
dividend or distribution shall be made pro rata, so that amounts paid per share
on the Series B Preferred Stock and such other stock shall in all cases bear to
each other the same ratio that the required dividends, distributions or
payments, as the case may be, then payable per share on the shares of the Series
B Preferred Stock and such other stock bear to each other.
(f) The Corporation may appoint, and from time to time discharge and
change, a transfer agent for the Series B Preferred Stock. Upon any such
appointment or discharge of a transfer agent, the Corporation shall send notice
thereof by first-class mail, postage prepaid, to each holder of record of Series
B Preferred Stock.
4C. Series C 6% Cumulative Convertible Preferred Stock
(1) Designation and Amount; Special Purpose; Restriction on Senior
Series.
(a) The shares of this series of Preferred Stock shall be designated as
"Series C 6% Cumulative Convertible Preferred Stock" (the "Series C Preferred
Stock") and the number of shares constituting such series shall be 4,683,710
with a par value of $100 per share.
(b) Shares of Series C Preferred Stock shall be issued only upon
exchange of all of the 6% convertible subordinated debentures due July 21, 2024
of the Corporation (the "Subordinated Debentures") by Corning Delaware, L.P., a
Delaware limited partnership ("Corning Delaware"), pursuant to a valid exchange
election (the "Exchange Election") by the holders of a majority of the aggregate
liquidation preference of preferred securities, liquidation preference of $50
per security, of Corning Delaware (the "Corning Delaware Preferred Securities")
then outstanding.
(c) So long as any Corning Delaware Preferred Securities are
outstanding, the Corporation shall not issue any other class or series of
capital stock ranking senior as to the payment of dividends or amounts upon
liquidation, dissolution or winding-up to the Series C Preferred Stock without
the approval of the holders of not less than 66 2/3% of the aggregate
liquidation preference of the Corning Delaware Preferred Securities then
outstanding.
(2) Dividends and Distributions.
(a)(i) The holders of shares of Series C Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors of the
Corporation out of funds legally available therefor, cumulative cash dividends
in an amount per share per annum equal to $6.00 (equivalent to a rate per annum
of 6% of the stated liquidation preference of $100 per share of Series C
Preferred Stock), calculated on the basis of a 360-day year consisting of 12
months of 30 days each, and for any period shorter than a full monthly dividend
period, dividends will be computed on the basis of the actual number of days
elapsed in such period, and payable in United States dollars monthly in arrears
on the last day of each calendar month of each year.
(ii) Dividends, when, as and if declared by the Board of Directors of
the Corporation out of funds legally available therefor, must be paid on the
last day of each month. Such dividends will accrue and be cumulative whether or
not they have been earned or declared and whether or not there are funds of the
Corporation legally available for the payment of dividends. Dividends on the
Series C Preferred Stock shall be cumulative from the date of the Exchange
Election. Accrued but unpaid interest on the Subordinated Debentures, if any, on
the date of the issuance of the Series C Preferred Stock in exchange for such
Subordinated Debentures shall constitute, and be treated as, accumulated and
unpaid dividends on the Series C Preferred Stock; provided, however, that the
amount which shall constitute such accumulated and unpaid dividends on the
Corning Series C Preferred Stock shall be neither less than nor greater than the
amount of accumulated and unpaid dividends (including Additional Dividends), if
any, on the Preferred Securities on the date of such Exchange Election. The
record date for each dividend payment date shall be the Business Day (as defined
below) immediately preceding such dividend payment date. In the event that any
date on which dividends are payable on the Series C Preferred Stock is not a day
other than a day on which banking institutions in the City of New York or
Chicago are authorized or required by law to close (a "Business Day"), then
payment of the dividend payable on such date will be made on the next succeeding
69
day that is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
(b) In the event that full cumulative dividends on the Series C
Preferred Stock have not been declared and paid or set apart for payment when
due, then the Corporation shall not, and shall not permit any majority-owned
subsidiary to, declare or pay any dividend on, or redeem, purchase, acquire for
value or make a liquidation payment with respect to, any Junior Stock (other
than as a result of a reclassification of Junior Stock or the exchange or
conversion of one class or series of Junior Stock for another class or series of
Junior Stock), or make any guarantee payments with respect to the foregoing
(other than payments under the Guarantee or dividends or guarantee payments to
Corning).
When dividends are not paid in full, all dividends declared upon the
Series C Preferred Stock and all dividends declared upon any Pari Passu Stock
(as defined herein) shall be declared ratably in proportion to the respective
amounts of dividends accumulated and unpaid on the Series C Preferred Stock and
accumulated and unpaid on such Pari Passu Stock. "Pari Passu Stock" means the
Corporation's Series B Cumulative Convertible Preferred Stock, par value $100
per share (the "Series B Preferred Stock"), and any preference stock or
preferred stock of the Corporation, or any guarantee now or hereafter entered
into by the Corporation in respect of any preferred or preference stock of any
affiliate of the Corporation, ranking, in such case, as to the payment of
dividends and amounts upon liquidation, dissolution and winding-up on a parity
with the Series B Preferred Stock. "Junior Stock" means Common Stock, the Series
A Preferred Stock, par value $100 per share, of the Corporation and any other
class or series of capital stock of the Corporation or any of its affiliates
which by its express terms ranks junior in the payment of dividends or amounts
upon liquidation, dissolution or winding-up to the Series C Preferred Stock.
(3) Voting Rights.
(a) In the event that full cumulative dividends on the Series C
Preferred Stock have not been paid for 18 monthly dividend periods, the number
of directors of the Corporation constituting the entire Board of Directors shall
be increased by two persons and the holders of the Series C Preferred Stock
shall have the right to elect such persons to fill such positions at any annual
meeting of shareholders or special meeting held in place thereof, or at a
special meeting of the holders of the Series C Preferred Stock called as
hereinafter provided. Whenever all arrears in dividends on the Series C
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current monthly period shall have been paid or declared and set apart for
payment, then the right of the holders of the Series C Preferred Stock to elect
such additional two directors shall cease (but subject always to the same
provisions for the vesting of such voting rights in the case of any similar
future arrearages in dividends), and the terms of office of all persons elected
as directors by the holders of the Series C Preferred Stock shall forthwith
terminate and the number of directors of the Corporation constituting the entire
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in the holders of shares of the Series C
Preferred Stock, the Secretary of the Corporation may, and upon the written
request of any holder of Series C Preferred Stock (addressed to the Secretary at
the principal office of the Corporation) shall, call a special meeting of the
Series C Preferred Stock for the election of the two directors to be elected by
them as herein provided, such call to be made by notice similar to that provided
in the by-laws for a special meeting of the shareholders or as required by law.
If any such special meeting required to be called as above provided shall not be
called by the Secretary within 20 days after receipt of any such request, then
any holder of Series C Preferred Stock may call such meeting, upon the notice
above provided, and for that purpose shall have access to the stock books and
records of the Corporation. The directors elected at any such special meeting
shall hold office until the next annual meeting of the shareholders or special
meeting held in place thereof if such office shall not have previously
terminated as above provided. In case any vacancy shall occur among the
directors elected by the holders of the Series C Preferred Stock, a successor
shall be elected by the Board of Directors to serve until the next annual
meeting of the shareholders or special meeting held in place thereof upon the
nomination of the then remaining director elected by the holders of the Series C
Preferred Stock or the successor of such remaining director.
(b) Except as otherwise required by law or set forth herein, holders of
Series C Preferred Stock shall have no special voting rights and their consent
shall not be required for the taking of any corporate action. So long as any
shares of Series C Preferred Stock are outstanding, the consent of the holders
of not less than 66 2/3% of the outstanding shares of Series C Preferred Stock,
given in person or by proxy either at a regular meeting or at a special meeting
called for that purpose, at which the holders of Series C Preferred Stock shall
vote separately as a series, shall be necessary for effecting, validating or
authorizing any one or more of the following:
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(i) the amendment, alteration or repeal of any of the provisions of the
Certificate of Incorporation, as amended, of the Corporation, or any amendment
thereto or any other certificate filed pursuant to law (including any such
amendment, alteration, or repeal effected by any merger or consolidation to
which the Corporation is a party) that would adversely affect any of the rights,
powers or preferences of outstanding shares of Series C Preferred Stock;
provided, however, that the amendment of the provisions of the Certificate of
Incorporation so as to authorize or create, or increase the authorized amount
of, any Junior Stock or Pari Passu Stock shall not be deemed to affect adversely
the voting powers, rights or preferences of the holders of the Series C
Preferred Stock;
(ii) the creation of any shares of any class or series or any security
convertible into shares of any class or series of capital stock ranking prior to
the Series C Preferred Stock in the distribution of assets on any liquidation,
dissolution or winding-up of the Corporation or in the payment of dividends; or
(iii) any merger or consolidation with or into, or any sale, transfer,
exchange or lease of all or substantially all of the assets of the Corporation
to, any other corporation, in either case that would adversely affect any of the
rights, powers or preferences of outstanding shares of Series C Preferred Stock.
(4) Redemption.
(a) The shares of Series C Preferred Stock are redeemable, at the
option of the Corporation, in whole or in part from time to time, on or after
August 5, 1998 during the twelve-month periods beginning on August 5 in each of
the following years, at the following redemption prices (expressed as a
percentage of liquidation preference), plus accumulated and unpaid dividends,
whether or not earned or declared, to the date of redemption (the "Redemption
Price"):
Date Redemption Price
---- ----------------
August 5, 1998 103.6%
August 5, 1999 103.0%
August 5, 2000 102.4%
August 5, 2001 101.8%
August 5, 2002 101.2%
August 5, 2003 100.6%
August 5, 2004 and thereafter 100.0%
From and after the date fixed for redemption, dividends on shares of Series C
Preferred Stock called for redemption will cease to accrue, such shares will no
longer be deemed to be outstanding and all rights in respect of such shares of
the Corporation shall cease, except the right to receive the Redemption Price,
provided that shares of Series C Preferred Stock may be converted pursuant to
Section 6 hereof at any time prior to the close of business on the date fixed
for redemption of such shares. If less than all of the outstanding shares of
Series C Preferred Stock are to be redeemed, the Corporation shall either redeem
a portion of the shares held by each holder or shall select the shares to be
redeemed by lot, as may be determined by the Board of Directors of the
Corporation.
(b) Unless otherwise required by law, notice of redemption will be sent
to the holders of Series C Preferred Stock by first-class mail, postage prepaid,
mailed not less than thirty, nor more than sixty days prior to the redemption
date. Each such notice shall state: (i) the redemption date; (ii) the total
number of shares of Series C Preferred Stock to be redeemed and, if fewer than
all the shares held by such holder are to be redeemed, the number of shares to
be redeemed from such holder; (iii) the Redemption Price; (iv) the place or
places where certificates for such shares are to be surrendered for payment of
the Redemption Price; (v) that dividends on the shares to be redeemed will cease
to accrue on such redemption date; and (vi) the conversion rights of the shares
to be redeemed, the period within which conversion rights may be exercised, and
the conversion price of a share of Series C Preferred Stock on the date such
notice is sent. Upon surrender of the certificates for any shares so called for
redemption and not previously converted (properly endorsed or assigned for
transfer, if the Board of Directors of the Corporation shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation on the
date fixed for redemption and at the Redemption Price set forth in this Section
4.
(5) Liquidation, Dissolution or Winding-Up.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding-up or termination of the Corporation, the holders of Series C Preferred
Stock at the time outstanding will be entitled to receive out of the net assets
of the Corporation available for payment to stockholders and subject to the
rights of the holders of any stock of the Corporation ranking senior to or on a
parity with the Series C Preferred Stock in respect of distributions upon
liquidation, dissolution or winding-up or termination of the Corporation, before
any amount shall be paid or distributed with respect to any Junior Stock
liquidating distributions in the amount of $100 per share plus an amount equal
to all accrued and unpaid dividends thereon (whether or not earned or declared)
to the date fixed for distribution. If, upon any liquidation, dissolution or
winding-up or termination of the Corporation, the amounts payable with respect
to the Series C Preferred Stock and any Pari Passu Stock are not paid in full,
the holders of the Series C Preferred Stock and such Pari
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Passu Stock shall share ratably in any distribution of assets based on the
proportion of their full respective liquidation preference to the entire amount
of unpaid liquidation preference. After payment of the full amount to which they
are entitled as provided by the foregoing provisions of this Section 5(a), the
holders of shares of Series C Preferred Stock and Pari Passu Stock shall not be
entitled to any further right or claim to any of the remaining assets of the
Corporation.
(b) Neither the merger or consolidation of the Corporation with or into
any other corporation, nor the merger or consolidation of any other corporation
with or into the Corporation, nor the sale, transfer, exchange or lease of all
or any portion of the assets of the Corporation, shall be deemed to be a
dissolution, liquidation or winding-up of the affairs of the Corporation for
purposes of this Section 5.
(c) Written notice of any voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, stating the payment date or dates
when, and the place or places where, the amounts distributable to holders of
Series C Preferred Stock in such circumstances shall be payable, shall be given
by first-class mail, postage prepaid, mailed not less than twenty days prior to
any payment date stated therein, to the holders of Series C Preferred Stock, at
the address shown on the books of the Corporation or the transfer agent for the
Series C Preferred Stock; provided, however, that a failure to give notice as
provided above or any defect therein shall not affect the Corporation's ability
to consummate a voluntary or involuntary liquidation, dissolution or winding-up
of the Corporation.
(6) Conversion Rights of Series C Preferred Stock.
(a) The shares of Series C Preferred Stock are convertible at any time
at the option of the holder thereof into shares of Common Stock at the initial
conversion price of $39.00, subject to adjustment as provided in Section 7. For
this purpose, each share of Series C Preferred Stock shall be taken at $100.00.
(b) Holders of record of Series C Preferred Stock at the close of
business on a dividend payment record date will be entitled to receive the
dividend payable on such shares of Series C Preferred Stock on the corresponding
dividend payment date notwithstanding the conversion thereof following such
dividend payment record date. Except as provided in the immediately preceding
sentence, the Corporation will make no payment or allowance for accumulated and
unpaid dividends, whether or not in arrears, on converted shares of Series C
Preferred Stock.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, the Corporation shall pay a cash adjustment in
an amount equal to the same fraction of the Closing Price (as hereinafter
defined) on the date on which the certificate or certificates for such shares
were duly surrendered for conversion, or, if such date is not a Trading Day (as
hereinafter defined), on the next Trading Day.
(d) Shares of Series C Preferred Stock that have been called for
redemption will not be convertible after the close of business on the second
calendar day preceding the date fixed for redemption, unless the Corporation
defaults in making payment of the amount payable upon such redemption.
(e) Any holder of shares of Series C Preferred Stock desiring to
convert such shares into shares of Common Stock shall surrender the certificate
or certificates representing the shares of Series C Preferred Stock being
converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto), at the principal
executive office of the Corporation or the offices of the transfer agent for the
Series C Preferred Stock or such office or offices in the continental United
States of an agent for conversion as may from time to time be designated by
notice to the holders of the Series C Preferred Stock by the Corporation or the
transfer agent for the Series C Preferred Stock, accompanied by written notice
of conversion, on any day that is a Business Day in The City of New York. Such
notice of conversion shall specify (i) the number of shares of Series C
Preferred Stock to be converted and the name or names in which such holder
desires the certificate or certificates for Common Stock and for any shares of
Series C Preferred Stock not to be so converted to be issued (subject to
compliance with applicable legal requirements if any of such certificates are to
be issued in a name other than the name of the holder), and (ii) the address to
which such holder wishes delivery to be made of such new certificates to be
issued upon such conversion.
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(f) Upon surrender of a certificate representing a share or shares of
Series C Preferred Stock for conversion, the Corporation shall issue and send by
hand delivery (with receipt to be acknowledged) or by first-class mail, postage
prepaid, to the holder thereof, at the address designated by such holder, a
certificate or certificates representing the number of shares of Common Stock to
which such holder shall be entitled upon conversion. In the event that there
shall have been surrendered a certificate or certificates representing shares of
Series C Preferred Stock, only part of which are to be converted, the
Corporation shall issue and deliver to such holder or such holder's designee in
the manner provided in the immediately preceding sentence a new certificate or
certificates representing the number of shares of Series C Preferred Stock that
shall not have been converted.
(g) The issuance by the Corporation of shares of Common Stock upon a
conversion of shares of Series C Preferred Stock into shares of Common Stock
made at the option of the holder thereof shall be effective upon the surrender
by such holder or such holder's designee of the certificate or certificates for
the shares of Series C Preferred Stock to be converted, duly assigned or
endorsed for transfer to the Corporation (or accompanied by duly executed stock
powers relating thereto). The person or persons entitled to receive the Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock as of the close of
business on the effective date of the conversion. No allowance or adjustment
shall be made in respect of dividends payable to holders of Common Stock of
record as of any date prior to such effective date.
(h) Whenever the Corporation shall issue shares of Common Stock upon
conversion of shares of Series C Preferred Stock as contemplated by this Section
6, the Corporation shall issue, together with each such share of Common Stock,
one right to purchase Series A Junior Participating Preferred Stock of the
Corporation (or other securities in lieu thereof) pursuant to the Amended Rights
Agreement, dated as of October 4, 1989 (the "Rights Agreement"), between the
Corporation and Harris Trust and Savings Bank, as Rights Agent, as such Rights
Agreement may from time to time be amended, or any similar rights issued to
holders of Common Stock of the Corporation in addition thereto or in replacement
therefor (such rights, together with any additional or replacement rights, being
collectively referred to as the "Rights"), whether or not such Rights shall be
exercisable at such time, but only if such Rights are issued and outstanding and
held by other holders of Common Stock of the Corporation (or are evidenced by
outstanding share certificates representing Common Stock) at such time and have
not expired or been redeemed.
(i) The Corporation shall at all times reserve and keep available out
of its authorized and unissued Common Stock, solely for issuance upon the
conversion of shares of Series C Preferred Stock as herein provided, free from
any preemptive or other similar rights, such number of shares of Common Stock as
shall from time to time be issuable upon the conversion of all the shares of
Series C Preferred Stock then outstanding. Notwithstanding the foregoing, the
Corporation shall be entitled to deliver upon conversion of shares of Series C
Preferred Stock, as herein provided, shares of Common Stock reacquired and held
in the treasury of the Corporation (in lieu of the issuance of authorized and
unissued shares of Common Stock), so long as any such treasury shares are free
and clear of all liens, charges, security interests or encumbrances. All shares
of Common Stock delivered upon conversion of the Series C Preferred Stock shall
be duly authorized, validly issued, fully paid and non-assessable, free and
clear of all liens, claims, security interests and other encumbrances. The
Corporation shall prepare and shall use its best efforts to obtain and keep in
force such governmental or regulatory permits or other authorizations as may be
required by law, and shall comply with all applicable requirements as to
registration or qualification of the Common Stock (and all requirements to list
the Common Stock issuable upon conversion of Series C Preferred Stock that are
at the time applicable), in order to enable the Corporation lawfully to issue
and deliver to each holder of record of Series C Preferred Stock such number of
shares of its Common Stock as shall from time to time be sufficient to effect
the conversion of all shares of Series C Preferred Stock then outstanding and
convertible into shares of Common Stock.
(7) Adjustment of Conversion Price.
(a) Adjustment of Conversion Price. The conversion price at which a
share of Series C Preferred Stock is convertible into Common Stock shall be
subject to adjustment from time to time as follows:
(i) In case the Corporation shall pay or make a dividend or other
distribution on any class or series of capital stock of the Corporation
exclusively in Common Stock, the conversion price in effect at the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution shall be
reduced by multiplying such conversion price by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination and the denominator shall
be the sum of such number of shares and the total number of shares constituting
such dividend or other distribution or exchange, such reduction to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this subparagraph (i),
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation. The Corporation shall not pay
any dividend or make any distribution on shares of any class or series of
capital stock of the Corporation exclusively in Common Stock held in the
treasury of the Corporation.
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(ii) In case the Corporation shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall otherwise
issue to all holders of its Common Stock, rights or warrants entitling the
holders thereof to subscribe for or purchase shares of Common Stock at a price
per share less than the current market price per share (determined as provided
in subparagraph (vii) of this Section 7(a)) of the Common Stock on the date
fixed for the determination of stockholders entitled to receive such rights or
warrants, the conversion price in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by multiplying
such conversion price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such current market price
and the denominator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination plus the number
of shares of Common Stock so offered for subscription or purchase, such
reduction to become effective immediately after the opening of business on the
day following the date fixed for such determination. For the purposes of this
subparagraph (ii), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Corporation. The
Corporation shall not issue any rights or warrants in respect of shares of
Common Stock held in the treasury of the Corporation. In case any rights or
warrants referred to in this subparagraph (ii) in respect of which an adjustment
shall have been made shall expire unexercised within 45 days after the same
shall have been distributed or issued by the Corporation, the conversion price
shall be readjusted at the time of such expiration to the conversion price that
would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
(iii) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the conversion price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and conversely,
in case outstanding shares of Common Stock shall each be combined into a smaller
number of shares of Common Stock, the conversion price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(iv) Subject to the last sentence of this subparagraph (iv), in case
the Corporation shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness, shares of any class or series of
capital stock, cash or assets (including securities, but excluding any rights or
warrants referred to in subparagraph (ii) of this Section 7(a), any dividend or
distribution paid exclusively in cash and any dividend or distribution referred
to in subparagraph (i) of this Section 7(a)), the conversion price shall be
reduced so that the same shall equal the price determined by multiplying the
conversion price in effect immediately prior to the effectiveness of the
conversion price reduction contemplated by this subparagraph (iv) by a fraction
of which the numerator shall be the current market price per share (determined
as provided in subparagraph (vii) of this Section 7a)) of the Common Stock on
the date fixed for the payment of such distribution (the "Reference Date") less
the fair market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a resolution of the
Board of Directors), on the Reference Date, of the portion of the evidences of
indebtedness, shares of capital stock, cash and assets so distributed applicable
to one share of Common Stock and the denominator shall be such current market
price per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following the Reference
Date. If the Board of Directors determines the fair market value of any
distribution for purposes of this subparagraph (iv) by reference to the actual
or when issued trading market for any securities comprising such distribution,
it must in doing so consider the prices in such market over the same period used
in computing the current market price per share of Common Stock pursuant to
subparagraph (vii) of this Section 7(a). For purposes of this subparagraph (iv),
any dividend or distribution that includes shares of Common Stock or rights or
warrants to subscribe for or purchase shares of Common Stock shall be deemed
instead to be (1) a dividend or distribution of the evidences of indebtedness,
shares of capital stock, cash or assets other than such shares of Common Stock
or such rights or warrants (making any conversion price reduction required by
this subparagraph (iv)) immediately followed by (2) a dividend or distribution
of such shares of Common Stock or such rights or warrants (making any further
conversion price reduction required by subparagraph (i) or (ii) of this Section
7 (a), except (A) the Reference Date of such dividend or distribution as defined
in this subparagraph (iv) shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution," "the date fixed for the determination of stockholders entitled to
receive such rights or warrants" and "the date fixed for such determination"
within the meaning of subparagraphs (i) and (ii) of this Section 7(a) and (B)
any shares of Common Stock included in such dividend or distribution shall not
be deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of subparagraph (i) of this Section 7(a).
74
(v) In case the Corporation shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding, in the case of
any regular cash dividend on the Common Stock, the portion thereof that does not
exceed the per share amount of the next preceding regular cash dividend on the
Common Stock (as adjusted to appropriately reflect any of the events referred to
in subparagraphs (i), (ii), (iii), (iv), (v) and (vi) of this Section 7(a), or
all of such regular cash dividend if the annualized amount thereof per share of
Common Stock does not exceed 15% of the current market price per share
(determined as provided in subparagraph (vii) of this Section 7(a)) of the
Common Stock on the Trading Day (as defined in Section 7(e)) next preceding the
date of declaration of such dividend), the conversion price shall be reduced so
that the same shall equal the price determined by multiplying the conversion
price in effect immediately prior to the effectiveness of the conversion price
reduction contemplated by this subparagraph (v) by a fraction of which the
numerator shall be the current market price per share (determined as provided in
subparagraph (vii) of this section 7(a)) of the Common Stock on the date fixed
for the payment of such distribution less the amount of cash so distributed and
not excluded as provided above applicable to one share of Common Stock and the
denominator shall be such current market price per share of the Common Stock,
such reduction to become effective immediately prior to the opening of business
on the day following the date fixed for payment of such distribution.
(vi) In case a tender or exchange offer made by the Corporation or any
subsidiary of the Corporation for all or any portion of the Corporation's Common
Stock shall expire and such tender or exchange offer shall involve the payment
by the Corporation or such subsidiary of consideration per share of Common Stock
having a fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors) at the last time (the "Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it shall
have been amended) that exceeds 10% of the current market price per share
(determined as provided in subparagraph (vii) of this Section 7(a)) of the
Common Stock on the Trading Day next succeeding the Expiration Time, the
conversion price shall be reduced so that the same shall equal the price
determined by multiplying the conversion price in effect immediately prior to
the effectiveness of the conversion price reduction contemplated by this
subparagraph (vi) by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged shares)
at the Expiration Time multiplied by the current market price per share
(determined as provided in subparagraph (vii) of this Section 7(a)) of the
Common Stock on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the current market price per share (determined as provided in
subparagraph (vii) of this Section 7(a)) of the Common Stock on the Trading Day
next succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the Expiration
Time. Notwithstanding anything contained in this Section 7(a)(vi) to the
contrary, no adjustment shall be made to the conversion price in the case of a
tender offer that complies with Rule 13e-4(h)(5) under the Exchange Act, or any
successor rule thereto.
(vii) For the purpose of any computation under subparagraphs (ii),
(iv), (v) and (vi) of this Section 7(a), the current market price per share of
Common Stock on any date in question shall be deemed to be the average of the
daily Closing Prices (as defined in Section 7(e)) for the five consecutive
Trading Days selected by the Company commencing not more than 20 Trading Days
before, and ending not later than, the earlier of the day in question and, if
applicable, the day before the "ex" date with respect to the issuance or
distribution requiring such computation; provided, however, that in each event
another event occurs that would require an adjustment pursuant to subparagraph
(i) through (vi), inclusive, the Board of Directors may make such adjustments to
the Closing Prices during such five Trading Day period as it deems appropriate
to effectuate the intent of the adjustments in this Section 7(a), any such
determination by the Board of Directors shall be set forth in a Board Resolution
and shall be conclusive. For purposes of this paragraph, the term "ex" date, (1)
when used with respect to any issuance or distribution, means the first date on
which the Common Stock trades regular way on the relevant exchange or in the
relevant market from which the Closing Price was obtained without the right to
receive such issuance or distribution, and (2) when used with respect to any
tender or exchange offer means the first date on which the Common Stock trades
regular way on such exchange or in such market after the Expiration Time of such
offer.
75
(viii) The Corporation may make such reductions in the conversion
price, in addition to those required by subparagraphs (i) , (ii), (iii), (iv),
(v) and (vi) of this Section 7(a), as it considers to be advisable to avoid or
diminish any income tax holders of Common Stock or rights to purchase Common
Stock resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes. The
Corporation from time to time may reduce the conversion price by any amount for
any period of time if the period is at least twenty days, the reduction is
irrevocable during the period, and the Board of Directors of the Corporation
shall have made a determination that such reduction would be in the best
interest of the Corporation, which determination shall be conclusive. Whenever
the conversion price is reduced pursuant to the preceding sentence, the
Corporation shall mail to holders of record of the Series C Preferred Stock a
notice of the reduction at least fifteen days prior to the date the reduced
conversion price takes effect, and such notice shall state the reduced
conversion price and the period it will be in effect.
(ix) No adjustment in the conversion price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
conversion price; provided, however, that any adjustments which by reason of
this subparagraph (ix) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
(x) Whenever the conversion price is adjusted as herein provided:
(1) the Corporation shall compute the adjusted conversion price and
shall prepare a certificate signed by the Treasurer of the Corporation setting
forth the adjusted conversion price and showing in reasonable detail the facts
upon which such adjustment is based, and such certificate shall forthwith be
filed with the transfer agent for the Series C Preferred Stock; and
(2) a notice stating the conversion price has been adjusted and setting
forth the adjusted conversion price shall forthwith be required, and as soon as
practicable after it is required such notice shall be mailed by the Corporation
to all record holders of shares of Series C Preferred Stock at their last
addresses as they shall appear upon the stock transfer books of the Corporation.
(b) Reclassification, Consolidation, Merger or Sale of Assets. In the
event that the Corporation shall be a party to any transaction (including
without limitation any recapitalization or reclassification of the Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination of the
Common Stock), any consolidation of the Corporation with, or merger of the
Corporation into, any other person, any merger of another person into the
Corporation (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Corporation), any sale or transfer of all or substantially all of the assets
of the Corporation or any compulsory share exchange (pursuant to which the
Common Stock is converted into the right to receive other securities, cash or
other property), then lawful provisions shall be made as part of the terms of
such transaction whereby the holder of each share of Series C Preferred Stock
then outstanding shall have the right thereafter to convert such share only into
(i) in the case of any such transaction other than a Common Stock Fundamental
Change (as defined in Section 7(e)), the kind and amount of securities, cash and
other property receivable upon such transaction by a holder of the number of
shares of Common Stock of the Corporation into which such share of Series C
Preferred Stock could have been converted immediately prior to such transaction,
after giving effect, in the case of any Non-Stock Fundamental Change, to any
adjustment in the conversion price required by the provisions of Section 7(d),
and (ii) in the case of a Common Stock Fundamental Change, common stock of the
kind received by holders of Common Stock as a result of such Common Stock
Fundamental Change, common stock of the kind received by holders of Common Stock
as a result of such Common Stock Fundamental Change in an amount determined
pursuant to the provisions of Section 7(d). The Corporation or the person formed
by such consolidation or resulting from such merger or which acquires such
assets or which acquires the Corporation's shares, as the case may be, shall
make provisions in its certificate or articles of incorporation or other
constituent document to establish such right. Such certificate or articles of
incorporation or other constituent document shall provide for adjustments which,
for events subsequent to the effective date of such certificate or articles of
incorporation or other constituent document, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 7. The above
provisions shall similarly apply to successive transactions of the foregoing
type.
(c) Prior Notice of Certain Events. In case:
(i) the Corporation shall (1) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in shares
of Common Stock or (B) a dividend that would not require an adjustment pursuant
to Section 7(a)(iv) or (v) or (2) authorize a tender or exchange offer that
would require an adjustment pursuant to Section 7(a)(vi); or
(ii) the Corporation shall authorize the granting to all holders of
Common Stock of rights or warrants to subscribe for or purchase any shares of
stock of any class or series or of any other rights or warrants; or
(iii) of any reclassification of Common Stock (other than a subdivision
or combination of the outstanding Common Stock, or a change in par value, or
from par value to no par value, or from no par value to par value), or of any
consolidation or merger
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to which the Corporation is a party and for which approval of any stockholders
of the Corporation shall be required, or of the sale or transfer of all or
substantially all of the assets of the Corporation or of any compulsory share
exchange whereby the Common Stock is converted into other securities, cash or
other property; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation; then the Corporation shall cause to be filed with
the transfer agent for the Series C Preferred Stock, and shall cause to be
mailed to the holders of record of the Series C Preferred Stock, at their last
addresses as they shall appear upon the stock transfer books of the Corporation,
at least fifteen days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record (if any)
is to be taken for the purpose of such dividend, distribution, redemption,
repurchase, rights or warrants or, if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such dividend,
distribution, redemption, repurchase, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding-up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding-up (but no failure to mail such notice or any defect therein or in
the mailing thereof shall affect the validity of the corporate action required
to be specified in such notice).
(d) Adjustments in Case of Fundamental Changes. Notwithstanding any
other provision in this Section 7 to the contrary, if any Fundamental Change (as
defined in Section 7(e)) occurs, then the conversion price in effect will be
adjusted immediately after such Fundamental Change as described below. In
addition, in the event of a Common Stock Fundamental Change (as defined in
Section 7(e)), each share of Series C Preferred Stock shall be convertible
solely into common stock of the kind and amount received by holders of Common
Stock as the result of such Common Stock Fundamental Change as more specifically
provided in the following clauses (d)(i) and (d)(ii).
For purposes of calculating any adjustment to be made pursuant to this
Section 7(d) in the event of a Fundamental Change, immediately after such
Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change (as defined in
Section 7(e)), the conversion price of the Series C Preferred Stock shall
thereupon become the lower of (A) the conversion price in effect immediately
prior to such Non-Stock Fundamental Change, but after giving effect to any other
prior adjustments effected pursuant to this Section 7, and (B) the result
obtained by multiplying the greater of the Applicable Price (as defined in
Section 7(e)) or the then applicable Reference Market Price (as defined in
Section 7(e)) by a fraction of which the numerator shall be $50.00 and the
denominator shall be (x) the then-current Redemption Price per share of Series C
Preferred Stock or (y) for any Non-Stock Fundamental Change that occurs before
the Series C Preferred Stock becomes redeemable by the Corporation pursuant to
Section 4, the applicable price per share set forth for the date of such
Non-Stock Fundamental Change in the following table:
Date of Non-Stock Fundamental Change Price
------------------------------------ -----
After date of original issuance of Series C Preferred Stock and $53.00
on or before August 5, 1995
After August 5, 1995, and on or before August 5, 1996 52.70
After August 5, 1996, and on or before August 5, 1997 52.40
After August 5, 1997, and on or before August 5, 1998 52.10
plus, in any case referred to in this clause (y), an amount equal to all
dividends on the Series C Preferred Stock accrued and unpaid thereon, whether or
not earned or declared, to but excluding the date of such Non-Stock Fundamental
Change; and
(ii) in the case of a Common Stock Fundamental Change, the conversion
price of the Series C Preferred Stock in effect immediately prior to such Common
Stock Fundamental Change, but after giving effect to any other prior adjustments
effected pursuant to this Section 7, shall thereupon be adjusted by multiplying
such conversion price by a fraction of which the numerator shall be the
Purchaser Stock Price (as defined in Section 7(e)) and the denominator shall be
the Applicable Price; provided, however, that in the event of a Common Stock
Fundamental Change in which (A) 100% by value of the consideration received by a
holder of Common Stock is common stock of the successor, acquiror or
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other third party (and cash, if any, is paid with respect to any fractional
interests in such common stock resulting from such Common Stock Fundamental
Change) and (B) all of the Common Stock shall have been exchanged for, converted
into or acquired for common stock (and cash with respect to fractional
interests) of the successor, acquiror or other third party, the conversion price
of the Series C Preferred Stock in effect immediately prior to such Common Stock
Fundamental Change shall thereupon be adjusted by multiplying such conversion
price by a fraction of which the numerator shall be one (1) and the denominator
shall be the number of shares of common stock of the successor, acquiror, or
other third party received by a stockholder for one share of Common Stock as a
result of such Common Stock Fundamental Change.
(e) Definitions. The following definitions shall apply to terms used in
this Section 7:
(i) "Applicable Price" shall mean (A) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only cash,
the amount of cash received by a stockholder for one share of Common Stock and
(B) in the event of any other Non-Stock Fundamental Change or any Common Stock
Fundamental Change, the average of the daily Closing Prices of the Common Stock
for the ten consecutive Trading Days prior to and including the record date for
the determination of the holders of Common Stock entitled to receive securities,
cash or other property in connection with such Non-Stock Fundamental Change or
Common Stock Fundamental Change, or, if there is no such record date, the date
upon which the holders of the Common Stock shall have the right to receive such
securities, cash or other property, in each case, as adjusted in good faith by
the Board of Directors of the Corporation to appropriately reflect any of the
events referred to in subparagraphs (i), (ii), (iii), (iv), (v) and (vi) of
Section 7(a).
(ii) "Closing Price" of any common stock on any day shall mean the last
reported sale price regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices regular
way of the common stock in each case on the principal national securities
exchange on which the Common Stock is traded, or if the Common Stock is not
listed or traded on any national securities exchange, on the National Market
System of the National Association of Securities Dealers, Inc., or, if the
common stock is not quoted or admitted to trading on such quotation system, on
the quotation system on which the common stock is listed or admitted to trading
or quoted, or, if not listed or admitted to trading or quoted on any national
securities exchange or quotation system, the average of the closing bid and
asked prices of the common stock in the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a
similarly generally accepted reporting service, or, if not so available in such
manner, as furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors of the Corporation for that purpose or,
if not so available in such manner, as otherwise determined in good faith by the
Board of Directors.
(iii) "Common Stock Fundamental Change" shall mean any Fundamental
Change in which more than 50% by value (as determined in good faith by the Board
of Directors of the Corporation) of the consideration received by holders of
Common Stock consists of common stock that for each of the ten consecutive
Trading Days referred to with respect to such Fundamental Change in Section
7(e)(1) above has been admitted for listing or admitted for listing subject to
notice of issuance on a national securities exchange or quoted on the National
Market System of the National Association of Securities Dealers, Inc.; provided,
however, that a Fundamental Change shall not be a Common Stock Fundamental
Change unless either (A) the Corporation continues to exist after the occurrence
of such Fundamental Change and the outstanding shares of Series C Preferred
Stock continue to exist as outstanding shares of Series C Preferred Stock, or
(B) not later than the occurrence of such Fundamental Change, the outstanding
shares of Series C Preferred Stock are converted into or exchanged for shares of
convertible preferred stock of a corporation succeeding to the business of the
Corporation, which convertible preferred stock has powers, preferences and
relative, participating, optional or other rights, and qualifications,
limitations and restrictions, substantially similar to those of the Series C
Preferred Stock.
(iv) "Fundamental Change" shall mean the occurrence of any transaction
or event in connection with a plan pursuant to which all or substantially all of
the Common Stock shall be exchanged for, converted into, acquired for or
constitute solely the right to receive securities, cash or other property
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of a plan involving more than one
such transaction or event, for purposes of adjustment of the conversion price,
such Fundamental Change shall be deemed to have occurred when substantially all
of the Common Stock of the Corporation shall be exchanged for, converted into,
or acquired for or constitute solely the right to receive securities, cash or
other property, but the adjustment shall be based upon the highest weighted
average of consideration per share which a holder of Common Stock could have
received in such transactions or events as a result of which more than 50% of
the Common Stock of the Corporation shall have been exchanged for, converted
into, or acquired for or constitute solely the right to receive securities, cash
or other property.
(v) "Non-Stock Fundamental Change" shall mean any Fundamental Change
other than a Common Stock Fundamental Change.
(vi) "Purchaser Stock Price" shall mean, with respect to any Common
Stock Fundamental Change, the average of the daily Closing Prices of the Common
Stock received in such Common Stock Fundamental Change for the ten consecutive
Trading Days prior to and including the record date for the determination of the
holders of Common Stock entitled to receive such common stock, or, if there is
no such record date, the date upon which the holders of the Common Stock shall
have the right to receive such Common
78
Stock, in each case, as adjusted in good faith by the Board of Directors of the
Corporation to appropriately reflect any of the events referred to in
subparagraphs (i), (ii), (iii), (iv), (v) and (vi) of Section 7(a);
(vii) "Reference Market Price" shall initially mean $21.42 and in the
event of any adjustment to the conversion price other than as a result of a
Non-Stock Fundamental Change, the Reference Market Price shall also be adjusted
so that the ratio of the Reference Market Price to the conversion price after
giving effect to any such adjustment shall always be the same as the ratio of
$21.42 to the initial conversion price per share.
(viii) "Trading Day" shall mean a day on which securities are traded on
the national securities exchange or quotation system or in the over-the-counter
market used to determine the Closing Price.
(f) Dividend or Interest Reinvestment Plans. Notwithstanding the
foregoing provisions, the issuance of any shares of Common Stock pursuant to any
present or future plan providing for the reinvestment of dividends or interest
payable on securities of the Corporation and the investment of additional
optional amounts in shares of Common Stock under any such plan, and the issuance
of any shares of Common Stock or options or rights to purchase such shares
pursuant to any present or future employee benefit plan or program of the
Corporation or pursuant to any option, warrant, right or exercisable,
exchangeable or convertible security outstanding as of the date the Subordinated
Debentures were first issued, shall not be deemed to constitute an issuance of
Common Stock or exercisable, exchangeable or convertible securities by the
Corporation to which any of the adjustment provisions described above applies.
There shall also be no adjustment of the conversion price in case of the
issuance of any stock (or securities convertible into or exchangeable for stock)
of the Corporation except as specifically described in this Section 7. If any
action would require adjustment of the conversion price pursuant to more than
one of the provisions described above, only one adjustment shall be made and
such adjustment shall be the amount of adjustment which has the highest absolute
value to holders of Series C Preferred Stock.
(g) Certain Additional Rights. In case the Corporation shall, by
dividend or otherwise, declare or make a distribution on its Common Stock
referred to in Section 7(a)(iv) or 7(a)(v) (including, without limitation,
dividends or distributions referred to in the last sentence of Section
7(a)(iv)), the holder of each share of Series C Preferred Stock, upon the
conversion thereof subsequent to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution and prior to
the effectiveness of the conversion price adjustment in respect of such
distribution, shall also be entitled to receive for each share of Common Stock
into which such share of Series C Preferred Stock is converted, the portion of
the shares of Common Stock, rights, warrants, evidences of indebtedness, shares
of capital stock, cash and assets so distributed applicable to one share of
Common Stock; provided, however, that, at the election of the Corporation (whose
election shall be evidenced by a resolution of the Board of Directors) with
respect to all holders so converting, the Corporation may, in lieu of
distributing to such holder any portion of such distribution not consisting of
cash or securities of the Corporation, pay such holder an amount in cash equal
to the fair market value thereof (as determined in good faith by the Board of
Directors). If any conversion of a share of Series C Preferred Stock described
in the immediately preceding sentence occurs prior to the payment date for a
distribution to holders of Common Stock which the holder of the share of Series
C Preferred Stock so converted is entitled to receive in accordance with the
immediately preceding sentence, the Corporation may elect (such election to be
evidenced by a resolution of the Board of Directors) to distribute to such
holder a due bill for the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets to which such holder is so
entitled, provided that such due bill (i) meets any applicable requirements of
the principal national securities exchange or other market on which the Common
Stock is then traded and (ii) requires payment or delivery of such shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets no later than the date of payment or delivery thereof to
holders of shares of Common Stock receiving such distribution.
(8) Ranking; Attributable Capital and Adequacy of Surplus; Retirement
of Shares.
(a) The Series C Preferred Stock shall rank senior to all shares of
Junior Stock and pari passu with the Pari Passu Stock of the Corporation as to
the payment of dividends and the amounts upon the liquidation, dissolution and
winding-up of the Corporation. The ranking of any subsequent series of Preferred
Stock, par value $100 per share, issued by the Corporation as compared to the
Series C Preferred Stock as to the payment of dividends and amounts upon the
liquidation, dissolution or winding-up of the Corporation shall be as specified
in the Certificate of Incorporation, as amended, of the Corporation and, if
appropriate, shall also be subject to the provisions of Paragraph (b) of Section
2 hereof.
(b) The capital of the Corporation allocable to the Series C Preferred
Stock for purposes of the New York Business Corporation Law (the "BCL") shall be
$100 per share.
(c) Any shares of Series C Preferred Stock acquired by the Corporation
by reason of the conversion or redemption of such shares, or otherwise so
acquired, shall be retired as shares of Series C Preferred Stock and restored to
the status of authorized but
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unissued shares of Preferred Stock, par value $100 per share, of the
Corporation, undesignated as to series, and may thereafter be reissued as part
of a new series of such Preferred Stock as permitted by law.
(9) Miscellaneous.
(a) All notices referred to herein shall be in writing, and all notices
hereunder shall be deemed to have been given upon the earlier of receipt thereof
or three business days after the mailing thereof if sent by registered or
certified mail (unless first-class mail shall be specifically permitted for such
notice under the terms of this paragraph 4C) with postage prepaid, addressed:
(i) if to the Corporation, to its office at Corning, New York 14831 (Attention:
the Secretary) or to the transfer agent for the Series C Preferred Stock, or
other agent of the Corporation designated as permitted by this paragraph 4C or
(ii) if to any holder of the Series C Preferred Stock or Common Stock, as the
case may be, to such holder at the address of such holder as listed in the stock
record books of the Corporation (which may include the records of any transfer
agent for the Series C Preferred Stock or Common Stock, as the case may be), or
(iii) to such other address as the Corporation or any such holder, as the case
may be, shall have designated by notice similarly given.
(b) The term "Common Stock" as used in this paragraph 4C means the
Corporation's Common Stock, par value $0.50 per share, as the same exists at the
date of filing of a Certificate of Amendment to the Certificate of Incorporation
of the Corporation relating to the Series C Preferred Stock or any other class
of stock resulting from successive changes or reclassifications of such Common
Stock consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. However, subject to the provisions of
Section 7(b), shares of Common Stock issuable on conversion of shares of Series
C Preferred Stock shall include only shares of the class designated as Common
Stock of the Corporation at the date of the filing of this instrument with the
State of New York or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation and which
are not subject to redemption by the Corporation; provided that if at any time
there shall be more than one such resulting class, the shares of each such class
then so issuable shall be substantially in the proportion which the total number
of shares of such class resulting from all such reclassifications bears to the
total number of shares of such classes resulting from all such
reclassifications.
(c) The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance or
delivery of shares of Series C Preferred Stock or shares of Common Stock or
other securities issued on account of Series C Preferred Stock pursuant hereto
or certificates representing such shares or securities. The Corporation shall
not, however, be required to pay any such tax that may be payable in respect of
any transfer involved in the issuance or delivery of shares of Series C
Preferred Stock or Common Stock or other securities in a name other than that in
which the shares of Series C Preferred Stock with respect to which such shares
or other securities are issued or delivered were registered, or in respect of
any payment to any person or securities other than a payment to the registered
holder thereof, and shall not be required to make any such issuance, delivery or
payment unless and until the person otherwise entitled to such issuance,
delivery or payment has paid to the Corporation the amount of any such tax or
has established, to the satisfaction of the Corporation, that such tax has been
paid or is not payable.
(d) In the event that a holder of shares of Series C Preferred Stock
shall not by written notice designate the name in which shares of Common Stock
to be issued upon conversion of such shares should be registered or to whom
payment upon redemption of shares of Series C Preferred Stock should be made or
the address to which the certificate or certificates representing such shares,
or such payment, should be sent, the Corporation shall be entitled to register
such shares, and make such payment, in the name of the holder of such Series C
Preferred Stock as shown on the records of the Corporation and to send the
certificate or certificates representing such shares, or such payment, to the
address of such holder shown on the records of the Corporation.
(e) The Corporation may appoint, and from time to time discharge and
change, a transfer agent for the Series C Preferred Stock. Upon any such
appointment or discharge of a transfer agent, the Corporation shall send notice
thereof by first-class mail, postage prepaid, to each holder of record of Series
C Preferred Stock.
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5. (a) The business and affairs of the Corporation shall be managed by
a Board of Directors consisting of not less than nine nor more than twenty-four
persons. The exact number of directors within the minimum and maximum
limitations specified in the preceding sentence shall be fixed from time to time
by the Board of Directors pursuant to a resolution adopted by the affirmative
vote of a majority of the entire Board of Directors; and such exact number shall
be twenty-one unless otherwise determined by a resolution so adopted by a
majority of the entire Board of Directors. As used in this Certificate of
Incorporation, the term "entire Board of Directors" means the total authorized
number of directors which the Corporation would have if there were no vacancies.
At the 1985 Annual Meeting of Stockholders, the directors shall be
divided into three classes, as nearly equal in number as possible, with the term
of office of the first class to expire at the 1986 Annual Meeting of
Stockholders, the term of office of the second class to expire at the 1987
Annual Meeting of Stockholders and the terms of office of the third class to
expire at the 1988 Annual Meeting of Stockholders. Commencing with the 1986
Annual Meeting of the Stockholders, directors elected to succeed those directors
whose terms have thereupon expired shall be elected for a term of office to
expire at the third succeeding Annual Meeting of Stockholders after their
election. If the number of directors is changed, any increase or decrease shall
be apportioned among the classes so as to maintain or attain, if possible, the
equality of the number of directors in each class, but in no case will a
decrease in the number of directors shorten the term of any incumbent director.
If such equality is not possible, the increase or decrease shall be apportioned
among the classes in such a way that the difference in the number of directors
in any two classes shall not exceed one.
(b) Subject to the rights of the holders of any series of Preferred
Stock or any other class of capital stock of the Corporation (other than the
Common Stock) then outstanding, vacancies in any class of directors resulting
from death, resignation, retirement, disqualification, removal from office or
other cause shall, if occurring prior to the expiration of the term of office of
such class, be filled only by the affirmative vote of a majority of the
remaining directors of the entire Board of Directors then in office, although
less than a quorum, or by the sole remaining director. Any director so elected
shall hold office until the next Annual Meeting of Stockholders and until his
successor is elected and qualified.
(c) Whenever the holders of any one or more series of Preferred Stock
issued by the Corporation shall have the right, voting separately by series, to
elect directors at an annual or special meeting of stockholders, the election,
term of office, filling of vacancies and other features of such directorships
shall be governed by this paragraph 5 unless expressly otherwise provided by the
resolution or resolutions providing for the creation of such series.
(d) Subject to the rights of the holders of any series of Preferred
Stock or any other class of capital stock of the Corporation (other than the
Common Stock) then outstanding, (i) any director, or the entire Board of
Directors, may be removed by the stockholders from office at any time prior to
the expiration of his term of office, but only for cause, and only by the
affirmative vote of the holders of record of outstanding shares representing a
majority of the voting power of all of the outstanding shares of capital stock
of the Corporation entitled to vote generally in the election of directors, and
(ii) any director may be removed from office by the affirmative vote of a
majority of the entire Board of Directors, at any time prior to the expiration
of his term of office, but only for cause.
(e) Notwithstanding any other provision of the Certificate of
Incorporation and subject to the other provisions of this paragraph 5, the Board
of Directors shall determine the rules and procedures that shall affect the
directors' power to manage and direct the business and affairs of the
Corporation. Without limiting the foregoing, the Board of Directors shall
designate and empower committees of the Board of Directors, shall elect and
empower the officers of the Corporation, may appoint and empower other officers
and agents of the Corporation, and shall determine the time and place of, and
the notice requirements for, Board meetings, as well as quorum and voting
requirements for, and the manner of taking, Board actions.
(f) The affirmative vote of the holders of record of outstanding shares
representing at least eighty percent (80%) of the voting power of all the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors shall be required to amend, alter or
repeal, or adopt any provision or provisions inconsistent with, any provision of
this paragraph 5 including this paragraph (f); provided, however, that this
paragraph (f) shall not apply to, and such eighty percent (80%) vote shall not
be required for, any amendment, alteration, repeal, or adoption of any
inconsistent provision or provisions, declared advisable by the Board of
Directors by the affirmative vote of two-thirds of the entire Board of
Directors.
6. (1) Certain Definitions.
For the purposes of this paragraph 6:
(a) "Business Combination" shall mean:
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(i) any merger or consolidation of the Corporation or any Subsidiary
with (A) an Interested Stockholder or (B) any other corporation (whether or not
itself an Interested Stockholder) which is, or after such merger or
consolidation would be, an Affiliate or Associate of an Interested Stockholder;
or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with an
Interested Stockholder or an Affiliate or Associate of an Interested Stockholder
of any assets of the Corporation or any Subsidiary having an aggregate Fair
Market Value of $20,000,000 or more; or
(iii) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to an Interested Stockholder or an Affiliate or
Associate of an Interested Stockholder in exchange for cash, securities or other
property (or a combination thereof) having an aggregate Fair Market Value of
$20,000,000 or more; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or an Affiliate or Associate of an Interested Stockholder; or
(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 Subsidiary or any other transaction (whether or not
with or into or otherwise involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the percentage of the outstanding
shares of (A) any class of equity securities of the Corporation or any
Subsidiary or (B) any class of securities of the Corporation or any Subsidiary
convertible into equity securities of the Corporation or any Subsidiary,
represented by securities of such class which are directly or indirectly owned
by an Interested Stockholder and all of its Affiliates and Associates; or
(vi) any agreement, contract or other arrangement providing for any one
or more of the actions specified in clauses (i) through (v) of this Section
1(a).
(b) "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on January 1, 1985.
(c) "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as in
effect on January 1, 1985.
(d) "Continuing Director" shall mean (i) any member of the Board of
Directors of the Corporation who (a) is neither the Interested Stockholder
involved in the Business Combination as to which a vote of Continuing Directors
is provided hereunder, nor an Affiliate, Associate, employee, agent or nominee
of such Interested Stockholder, or the relative of any of the foregoing, and (b)
was a member of the Board of Directors of the Corporation prior to the time that
such Interested Stockholder became an Interested Stockholder, (ii) any successor
of a Continuing Director described in clause (i) who is recommended or elected
to succeed a Continuing Director by the affirmative vote of a majority of
Continuing Directors then on the Board of Directors of the Corporation, and
(iii) any person who is elected to the Board of Directors of the Corporation at
the 1985 Annual Meeting of Stockholders and any successor thereto who is
recommended or elected by the affirmative vote of a majority of the Continuing
Directors then on the Board of Directors of the Corporation.
(e) "Fair Market Value" shall mean: (i) in the case of stock, the
highest closing sale price during the 30-day period immediately preceding the
date in question of a share of such stock on the Composite Tape for the New York
Stock Exchange--Listed Stocks, or, if such stock is not reported on the
Composite Tape, on the New York Stock Exchange, or, if such stock is not listed
on such Exchange, on the principal United States securities exchange registered
under the Exchange Act on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing bid quotation with respect to a
share of such stock during the 30-day period preceding the date in question on
the National Association of Securities Dealers, Inc., Automated Quotations
System or any similar inter-dealer quotation system then in use, or if no such
quotation is available, the fair market value on the date in question of a share
of such stock as determined by a majority of the Continuing Directors in good
faith; and (ii) in the case of property other than cash or stock, the fair
market value of such property on the date in question as determined by a
majority of the continuing Directors in good faith.
(f) "Interested Stockholder" shall mean any Person (other than the
Corporation or any Subsidiary) who or which:
(i) is, or was at any time within the two-year period immediately prior
to the date in question, the Beneficial Owner of 10% or more of the voting power
of the then outstanding Voting Stock of the Corporation; or
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(ii) is an assignee of, or has otherwise succeeded to, any shares of
Voting Stock of the Corporation of which an Interested Stockholder was the
Beneficial Owner at any time within the two-year period immediately prior to the
date in question, if such assignment or succession shall have occurred in the
course of a transaction, or series of transactions, not involving a public
offering within the meaning of the Securities Act of 1933, as amended.
For the purpose of determining whether a Person is an Interested
Stockholder, the outstanding Voting Stock of the Corporation shall include
unissued shares of Voting Stock of the Corporation of which the Interested
Stockholder is the Beneficial Owner but shall not include any other shares of
Voting Stock of the Corporation which may be issuable pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion rights,
warrants or options, or otherwise, to any Person who is not the Interested
Stockholder.
(g) A "Person" shall mean any individual, partnership, firm,
corporation, association, trust, unincorporated organization or other entity, as
well as any syndicate or group deemed to be a person under Section 14(d) (2) of
the Exchange Act.
(h) "Subsidiary" shall mean any corporation of which the Corporation
owns, directly or indirectly, (i) a majority of the outstanding shares of equity
securities of such corporation, or (ii) shares having a majority of the voting
power represented by all of the outstanding shares of Voting Stock of such
corporation. For the purpose of determining whether a corporation is a
Subsidiary, the outstanding Voting Stock and shares of equity securities thereof
shall include unissued shares of which the Corporation is the Beneficial Owner
but, except for the purposes of Section 1(f), shall not include any other shares
which may be issuable pursuant to any agreement, arrangement or understanding,
or upon the exercise of conversion rights, warrants or options, or otherwise, to
any Person who is not the Corporation.
(i) "Voting Stock" shall mean outstanding shares of capital stock of
the relevant corporation entitled to vote generally in the election of
directors.
(2) Higher Vote for Business Combinations.
In addition to any affirmative vote required by law or by this
Certificate of Incorporation, and except as otherwise expressly provided in
Section 3 of this paragraph 6, any Business Combination shall require the
affirmative vote of the holders of record of outstanding shares representing at
least eighty percent (80%) of the voting power of the then outstanding shares of
Voting Stock of the Corporation, voting together as a single class, it being
understood that, for purposes of this paragraph 6, each share of the Voting
Stock of the Corporation shall have the number of votes granted to it pursuant
to paragraph 4 of this Certificate of Incorporation. Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that a
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(3) When Higher Vote is Not Required.
The provisions of Section 2 of this paragraph 6 shall not be applicable
to any particular Business Combination, and such Business Combination shall
require only such affirmative vote, if any, of the stockholders as is required
by law and any other provision of this Certificate of Incorporation, if the
conditions specified in either of the following paragraphs (a) and (b) are met:
(a) Approval by Continuing Directors. The Business Combination shall
have been approved by the affirmative vote of a majority of the Continuing
Directors, even if the Continuing Directors do not constitute a quorum of the
entire Board of Directors.
(b) Form of Consideration, Price and Procedure Requirements. All of the
following conditions shall have been met:
(i) With respect to each share of each class of Voting Stock of the
Corporation (including Common Stock), the holder thereof shall be entitled to
receive on or before the date of the consummation of the Business Combination
(the "Consummation Date"), consideration, in the form specified in Section 3 (b)
(ii) hereof, with an aggregate Fair Market Value as of the Consummation Date at
least equal to the highest of the following:
(a) the highest per share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by the Interested Stockholder
to which the Business Combination relates, or by any Affiliate or Associate of
such Interested Stockholder, for any shares of such class of Voting Stock
acquired by it (1) within the two-year period immediately prior to the first
public announcement of the proposal of the Business Combination (the
"Announcement Date") or (2) in the transaction in which it became an Interested
Stockholder, whichever is higher;
(b) the Fair Market Value per share of such class of Voting Stock of
the Corporation on the Announcement Date; and
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(c) the highest preferential amount per share, if any, to which the
holders of shares of such class of Voting Stock of the Corporation are entitled
in the event of any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation.
(ii) The consideration to be received by holders of a particular class
of outstanding Voting Stock of the Corporation (including Common Stock) as
described in Section 3(b)(i) hereof shall be in cash or if the consideration
previously paid by or on behalf of the Interested Stockholder in connection with
its acquisition of beneficial ownership of shares of such class of Voting Stock
consisted in whole or in part of consideration other than cash, then in the same
form as such consideration. If such payment for shares of any class of Voting
Stock of the Corporation has been made with varying forms of consideration, the
form of consideration for such class of Voting Stock shall be either cash or the
form used to acquire the beneficial ownership of the largest number of shares of
such class of Voting Stock previously acquired by the Interested Stockholder.
(iii) After such Interested Stockholder has become an Interested
Stockholder and prior to the Consummation Date of such Business Combination: (a)
except as approved by the affirmative vote of a majority of the Continuing
Directors, there shall have been no failure to declare and pay at the regular
date therefor any full quarterly dividends (whether or not cumulative) on the
outstanding preferred stock of the Corporation, if any; (b) there shall have
been (1) no reduction in the annual rate of dividends paid on the Common Stock
of the Corporation (except as necessary to reflect any subdivision of the Common
Stock ) except as approved by the affirmative vote of a majority of the
Continuing Directors, and (2) an increase in such annual rate of dividends as
necessary to reflect any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which has the effect
of reducing the number of outstanding shares of Common Stock, unless the failure
so to increase such annual rate is approved by the affirmative vote of a
majority of the Continuing Directors; and (c) such Interested Stockholder shall
not have become the Beneficial Owner of any additional shares of Voting Stock of
the Corporation except as part of the transaction which results in such an
Interested Stockholder becoming an Interested Stockholder.
(iv) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the benefit,
directly or indirectly (except proportionately as a stockholder of the
Corporation), of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages provided by the
Corporation.
(v) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Exchange Act and the
General Rules and Regulations thereunder (or any subsequent provisions replacing
such Act, rules or regulations) shall be mailed to the stockholders of the
Corporation at least 45 days prior to the consummation of such Business
Combination (whether or not such proxy or information statement is required to
be mailed pursuant to such Act or subsequent provisions thereof).
(4) Powers of Continuing Directors.
A majority of the Continuing Directors shall have the power and duty to
determine, on the basis of information known to them after reasonable inquiry,
all facts necessary to determine compliance with this paragraph 6, including,
without limitation, (A) whether a person is an Interested Stockholder, (B) the
number of shares of Voting Stock of the Corporation beneficially owned by any
person, (C) whether a person is an Affiliate or Associate of another, (D)
whether the requirements of paragraph B of Section 3 have been met with respect
to any Business Combination, and (E) whether the assets which are the subject of
any Business Combination have, or the consideration to be received for the
issuance or transfer of securities by the Corporation or any Subsidiary in any
Business Combination has, an aggregate Fair Market Value of $20,000,000 or more;
and the good faith determination of a majority of the Continuing Directors on
such matters shall be conclusive and binding for all the purposes of this
paragraph 6.
(5) No Effect on Fiduciary Obligations.
(a) Nothing contained in this paragraph 6 shall be construed to relieve
the members of the Board of Directors or an Interested Stockholder from any
fiduciary obligation imposed by law.
(b) The fact that any Business Combination complies with the provisions
of Section 3 of this paragraph 6 shall not be construed to impose any fiduciary
duty, obligation or responsibility on the Board of Directors, or any member
thereof, to approve such Business Combination or recommend its adoption or
approval to the stockholders 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 Business Combination.
(6) Amendment or Repeal.
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The affirmative vote of the holders of record of outstanding shares
representing at least eighty percent (80%) of the voting power of all the
outstanding Voting Stock of the Corporation shall be required to amend, alter or
repeal, or adopt any provision or provisions inconsistent with, any provision of
this paragraph 6; provided, however, that this Section 6 shall not apply to, and
such eighty percent (80%) vote shall not be required for, any amendment,
alteration, repeal or adoption of any inconsistent provision or provisions,
declared advisable by the Board of Directors by the affirmative vote of
two-thirds of the entire Board of Directors and a majority of the Continuing
Directors.
7. A director of the Corporation shall not be liable to the Corporation
or its stockholders for damages for any breach of duty as a director, except to
the extent that such exemption from liability or limitation thereof is not
permitted under the Business Corporation Law as the same exists or may hereafter
be amended. Any repeal or modification of this paragraph 7 by the stockholders
of the Corporation shall not affect adversely any right or protection of a
director of the Corporation existing at the time of such repeal or modification.
8. The office of the Corporation shall be located in the City of
Corning, Steuben County, New York, and the address within the State to which the
Secretary of State shall mail a copy of process in any action or proceeding
against the Corporation which may be served upon him is Administration
Headquarters, Houghton Park, Corning, New York, Attention of the Secretary.
9. The Secretary of State of the State of New York is designated as the
agent of the Corporation upon whom process in any action or proceeding against
it may be served.
FOURTH: This restatement of the Certificate of Incorporation of the
Corporation was authorized by resolutions duly adopted by the Board of Directors
of the Corporation at a meeting thereof duly called and held on April 24, 1997
at which a quorum was present and acting throughout.
IN WITNESS WHEREOF, we have signed this Certificate this 9 day of
November, 1998.
ROGER G. ACKERMAN
Chairman
A. JOHN PECK, JR.
Secretary
85
STATE OF NEW YORK
ss:
COUNTY OF STEUBEN
ROGER G. ACKERMAN and A. JOHN PECK, JR., being severally duly sworn, say,
and each for himself says, that the said Roger G. Ackerman is the Chairman and
the said A. John Peck, Jr. is the Secretary of Corning Incorporated, which is a
corporation organized under the laws of the State of New York and is the
corporation described in the foregoing Certificate; that they have read the said
Certificate and know the contents thereof and that the same is true to their own
knowledge.
ROGER G. ACKERMAN
Chairman
A. JOHN PECK, JR.
Secretary
Subscribed and sworn to before
me this 9th day of November, 1998
MARIA A. FELDMAN
Maria A. Feldman
Notary Public, State of New York
Qualified in Chemung County No. 01FE4999311
My Commission Expires May 11, 2000
86
Item 14(c) Exhibit #12
Corning Incorporated and Subsidiary Companies
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred
Dividends:
(Dollars in millions, except ratios)
Fiscal Year Ended
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Dec. 31, Dec. 31, Dec. 31, Dec. 31, Jan. 1,
1998 1997 1996 1995 1995
---- ---- ---- ---- ----
Income from continuing operations before taxes on income $ 439.6 $ 629.2 $ 455.9 $ 389.4 $ 286.3
Adjustments:
Share of earnings (losses) before taxes of 50% owned companies 173.3 111.5 130.3 95.2 89.0
Earnings (losses) before taxes of greater than 50% owned
unconsolidated subsidiary 0.7 (3.1) (4.0)
Distributed income of less than 50% owned companies
and share of loss if debt is guaranteed (1.1) 2.1
Amortization of capitalized interest 14.4 16.6 11.8 9.6 13.3
Fixed charges net of capitalized interest 126.8 141.9 105.9 82.6 128.8
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Earnings before taxes and fixed charges as adjusted $ 753.0 $ 899.2 $ 704.6 $ 573.7 $ 515.5
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Fixed charges:
Interest incurred $ 103.5 $ 96.7 $ 73.6 $ 65.4 $ 64.9
Share of interest incurred of 50% owned companies and interest
on guaranteed debt of less than 50% owned companies 45.4 51.0 38.7 10.2 60.8
Interest incurred by greater than 50% owned unconsolidated
subsidiary 0.7 0.8
Portion of rent expense which represents interest factor 18.0 15.9 12.1 13.3 10.8
Share of portion of rent expense which represents interest
factor for 50% owned companies 5.0 3.8 1.4 2.7 9.4
Portion of rent expense which represents interest factor for
greater than 50% owned unconsolidated subsidiary 0.1
Amortization of debt costs 2.9 1.6 2.2 (0.1) 0.6
-------- ------- ------- ------- --------
Total fixed charges 174.8 169.0 128.0 92.2 147.4
Capitalized interest (48.0) (27.1) (22.1) (9.6) (18.6)
-------- ------- ------- ------- --------
Total fixed charges net of capitalized interest $ 126.8 $ 141.9 $ 105.9 $ 82.6 $ 128.8
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Preferred dividends:
Preferred dividend requirements $ 15.3 $ 15.3 $ 15.7 $ 15.7 $ 8.2
Ratio of pre-tax income to income before minority interest
and equity earnings 1.4 1.5 1.5 1.4 1.4
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Pre-tax preferred dividend requirement 21.4 23.0 23.6 22.0 11.5
Total fixed charges 174.8 169.0 128.0 92.2 147.4
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Fixed charges and pre-tax preferred dividend requirement $ 196.2 $ 192.0 $ 151.6 $ 114.2 $ 158.9
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Ratio of earnings to combined fixed charges and preferred
dividends 3.8x 4.7x 4.7x 5.0x 3.2x
======== ======= ======= ======= ========
87