1
CERTIFICATE OF DESIGNATION
of
SERIES A JUNIOR PARTICIPATING
PREFERRED STOCK
of
FEDERATED DEPARTMENT STORES, INC.
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
Federated Department Stores, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (formerly
known as R. H. Macy & Co., Inc. and hereinafter called the "Company"), DOES
HEREBY CERTIFY:
That, pursuant to authority vested in the Board of Directors of the
Company by its Certificate of Incorporation, and pursuant to the provisions of
Section 151 of the General Corporation Law, the Board of Directors of the
Company has adopted the following resolution providing for the issuance of a
series of Preferred Stock:
RESOLVED, that pursuant to the authority expressly vested in the Board
of Directors of the Company (hereinafter called the "Board of Directors" or the
"Board") by the Certificate of Incorporation of the Company, a series of
Preferred Stock, par value $.01 per share (the "Preferred Stock"), of the
Company be, and it hereby is, created, and that the designation and amount
thereof and the powers, designations, preferences, and relative, participating,
optional, and other special rights of the shares of such series, and the
qualifications, limitations, or restrictions thereof are as follows:
I. Designation and Amount
----------------------
The shares of such series will be designated as Series A Junior
Participating Preferred Stock (the "Series A Preferred") and the number of
shares constituting the Series A Preferred is 5,000,000. Such number of shares
may be increased or decreased by resolution of the Board; PROVIDED, HOWEVER,
that no decrease will reduce the number of shares of Series A Preferred to a
number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights,
or warrants or upon the conversion
2
of any outstanding securities issued by the Company convertible into Series A
Preferred.
II. Dividends and Distributions.
---------------------------
(a) Subject to the rights of the holders of any shares of
any series of Preferred Stock ranking prior to the Series A Preferred with
respect to dividends, the holders of shares of Series A Preferred, in
preference to the holders of Common Stock, par value $.01 per share (the
"Common Stock"), of the Company, and of any other junior stock, will be
entitled to receive, when, as, and if declared by the Board out of funds
legally available for the purpose, quarterly dividends payable in cash on such
dates as are from time to time established for the payment of quarterly cash
dividends on the Common Stock (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 (the "First Quarterly Dividend Payment Date"), in an amount
per share (rounded to the nearest cent) equal to the greater of (i) $1.00 or
(ii) subject to the provision for adjustment hereinafter set forth, one hundred
times the aggregate per share amount of all cash dividends, and one hundred
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. In the event that the Company at
any time (i) declares a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivides the outstanding shares of
Common Stock, (iii) combines the outstanding shares of Common Stock into a
smaller number of shares, or (iv) issues any shares of its capital stock in a
reclassification of the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such case
and regardless of whether any shares of Series A Preferred are then issued or
outstanding, the amount to which holders of shares of Series A Preferred would
otherwise be entitled immediately prior to such event under clause (ii) of the
preceding sentence will 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 Company will declare a dividend or distribution
on the Series A Preferred as provided in the immediately preceding paragraph
immediately after it declares a dividend or distribution on the Common Stock
(other than a
2
3
dividend payable in shares of Common Stock); PROVIDED, HOWEVER, that, in the
event no dividend or distribution has 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 $1.00 per share on the Series A
Preferred will nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(c) Dividends will accrue on outstanding shares of Series
A Preferred from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless (i) 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 will accrue from the date of the first issuance of a
share of Series A Preferred or (ii) 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 entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends will accrue from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends will cumulate from the applicable Quarterly
Dividend Payment Date but will not bear interest. Dividends paid on the shares
of Series A Preferred in an amount less than the total amount of such dividends
at the time accrued and payable on such shares will be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
may fix a record date for the determination of holders of shares of Series A
Preferred entitled to receive payment of a dividend or distribution declared
thereon, which record date will be not more than 60 calendar days prior to the
date fixed for the payment thereof.
III. Voting Rights
-------------
The holders of shares of Series A Preferred will have the following
voting rights:
(a) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred will entitle the holder
thereof to one hundred votes on all matters submitted to a vote of the
stockholders of the Company. In the event the Company at any time (i)
declares a dividend on the outstanding shares of Common Stock payable
in shares of Common Stock, (ii) subdivides the outstanding shares of
Common Stock, (iii) combines the outstanding shares of Common Stock
into a smaller number of shares, or (iv) issues any shares of its
capital stock in a reclassification of the outstanding shares of
Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), then, in each such case and regardless of
whether any shares of Series A Preferred are then issued or
outstanding, the number of votes per share to which holders of shares
of Series A
3
4
Preferred would otherwise be entitled immediately prior to such event
will 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
Preferred Stock Designation creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series A
Preferred and the holders of shares of Common Stock and any other
capital stock of the Company having general voting rights will vote
together as one class on all matters submitted to a vote of
stockholders of the Company.
(c) Except as set forth herein, or as otherwise provided
by law, holders of Series A Preferred will have no voting rights.
IV. Certain Restrictions
--------------------
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred outstanding have been paid in full,
the Company will 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;
(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, except dividends paid
ratably on the Series A Preferred 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, 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; PROVIDED, HOWEVER, that the Company may
at any time redeem, purchase, or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the
Company ranking junior (either as to dividends or upon
dissolution, liquidation, or winding up) to the Series A
Preferred; or
4
5
(iv) Redeem, purchase, or otherwise acquire for
consideration any shares of Series A Preferred, or any shares of
stock ranking on a parity with the Series A Preferred, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board) to all holders of such
shares upon such terms as the Board, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, may determine
in good faith will result in fair and equitable treatment among
the respective series or classes.
(b) The Company will not permit any majority-owned
subsidiary of the Company to purchase or otherwise acquire for consideration
any shares of stock of the Company unless the Company could, under paragraph
(a) of this Section 4, purchase or otherwise acquire such shares at such time
and in such manner.
V. Reacquired Shares
-----------------
Any shares of Series A Preferred purchased or otherwise acquired by
the Company in any manner whatsoever will be retired and canceled promptly
after the acquisition thereof. All such shares will 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
of the Company, or in any other Preferred Stock Designation creating a series
of Preferred Stock or any similar stock or as otherwise required by law.
VI. Liquidation, Dissolution, or Winding Up
---------------------------------------
Upon any liquidation, dissolution, or winding up of the Company, no
distribution will be made (a) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution, or winding up) to the
Series A Preferred unless, prior thereto, the holders of shares of Series A
Preferred 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, HOWEVER, that the holders of shares of Series A
Preferred will be entitled to receive an aggregate amount per share, subject to
the provision for adjustment hereinafter set forth, equal to one hundred times
the aggregate amount to be distributed per share to holders of shares of Common
Stock or (b) 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, except distributions made ratably on the Series A Preferred and all
such parity stock in proportion to the total amounts to which the holders of
all such shares are entitled upon such liquidation, dissolution, or winding up.
In the event the Company at any time (i) declares a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock,
5
6
(ii) subdivides the outstanding shares of Common Stock, (iii) combines the
outstanding shares of Common Stock into a smaller number of shares, or (iv)
issues any shares of its capital stock in a reclassification of the outstanding
shares of Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing or surviving
corporation), then, in each such case and regardless of whether any shares of
Series A Preferred are then issued or outstanding, the aggregate amount to
which each holder of shares of Series A Preferred would otherwise be entitled
immediately prior to such event under the proviso in clause (a) of the
preceding sentence will 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.
VII. Consolidation, Merger, Etc.
---------------------------
In the event that the Company enters 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 each such case, each share of Series A Preferred will at the
same time be similarly exchanged for or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to one
hundred times the aggregate amount of stock, securities, cash, and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Company at any
time (a) declares a dividend on the outstanding shares of Common Stock payable
in shares of Common Stock, (b) subdivides the outstanding shares of Common
Stock, (c) combines the outstanding shares of Common Stock in a smaller number
of shares, or (d) issues any shares of its capital stock in a reclassification
of the outstanding shares of Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), then, in each such case and regardless of
whether any shares of Series A Preferred are then issued or outstanding, the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred will 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.
VIII. Redemption
----------
The shares of Series A Preferred are not redeemable.
6
7
IX. Rank
----
The Series A Preferred rank, with respect to the payment of dividends
and the distribution of assets, junior to all other series of the Company's
Preferred stock.
X. Amendment
---------
Notwithstanding anything contained in the Certificate of Incorporation
of the Company to the contrary and in addition to any other vote required by
applicable law, the Certificate of Incorporation of the Company may not be
amended in any manner that would materially alter or change the powers,
preferences, or special rights of the Series A Preferred so as to affect them
adversely without the affirmative vote of the holders of at least 80% of the
outstanding shares of Series A Preferred, voting together as a single series.
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Company by its Vice Chairman and attested by its Secretary this
19th day of December, 1994.
/s/ Ronald W. Tysoe
---------------------------------------
Ronald W. Tysoe
Vice Chairman
Attest:
/s/ Dennis J. Broderick
- - ----------------------------------
Dennis J. Broderick
Secretary
7