BOWATER INCORPORATED
CERTIFICATE OF DESIGNATIONS
OF THE
8.40% SERIES C CUMULATIVE PREFERRED STOCK
__________________
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
___________________
BOWATER INCORPORATED, a corporation organized and
existing under the laws of the State of Delaware (the
"Corporation"), hereby certifies that the following
resolution was duly adopted by the Board of Directors of the
Corporation (the "Board of Directors") at a meeting duly
called and held on January 26, 1994, at which meeting a
quorum of the members of the Board of Directors was present
and acting throughout, and was duly amended and supplemented
by the action of the Pricing Committee (the "Pricing
Committee") of the Board of Directors, acting pursuant to
authority delegated to the Pricing Committee by the Board of
Directors on October 27, 1993, and January 26, 1994, at a
meeting duly called and held on February 1, 1994, at which
meeting a quorum of the members of the Pricing Committee was
present and acting throughout.
RESOLVED that, pursuant to authority expressly
vested in the Board of Directors by the provisions of the
Restated Certificate of Incorporation of the Corporation
(the "Certificate"), the Board of Directors hereby provides
for the issuance of a series of serial preferred stock of
the Corporation, par value $1.00 per share (all series of
serial preferred stock of the Corporation being hereinafter
referred to collectively as the "Preferred Stock"), to
consist of 850,000 shares, and hereby fixes the powers,
designation, preferences and relative, participating,
optional and other rights of such series of Preferred Stock,
and the qualifications, limitations and restrictions
thereof, as follows:
1. Designation; Ranking. (a) The designation of
the series of Preferred Stock created by this resolution
shall be "8.40% Series C Cumulative Preferred Stock"
(hereinafter called the "Cumulative Preferred Stock"), and
the number of shares constituting the Cumulative Preferred
Stock is 850,000.
(b) Any shares of the Cumulative Preferred Stock
that at any time have been redeemed, purchased or otherwise
acquired by the Corporation shall, after such redemption,
purchase or other acquisition, resume the status of
authorized and unissued shares of Preferred Stock without
designation as to series until such shares are once more
designated as part of a particular series by the Board of
Directors.
(c) The shares of Cumulative Preferred Stock will
rank on a parity, both as to payment of dividends and
distribution of assets upon liquidation, with the
Corporation's LIBOR Preferred Stock, Series A, and its 7%
PRIDES, Series B Convertible Preferred Stock, as well as any
Preferred Stock issued in the future by the Corporation that
by its terms ranks pari passu with the shares of Cumulative
Preferred Stock.
2. Dividends. The holders of record of the
shares of Cumulative Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors
out of funds legally available therefor, cash dividends
("Preferred Dividends") from the date of the initial
issuance of the shares of Cumulative Preferred Stock at the
rate of 8.40 percent of the $100 liquidation preference per
annum, payable quarterly in arrears on the 15th day of
January, April, July and October or, if any such date is not
a business day (as defined in paragraph 7 hereof), the
Preferred Dividend due on such date shall be payable on the
next succeeding business day (each a "Dividend Payment
Date"). The first dividend period will be from the date of
initial issuance of the shares of Cumulative Preferred Stock
to but excluding April 15, 1994 and will be payable on
April 15, 1994. Preferred Dividends will cease to accrue in
respect of the shares of Cumulative Preferred Stock on the
date of their redemption. Preferred Dividends will be
payable to holders of record of the Cumulative Preferred
Stock as they appear on the stock register of the
Corporation on such record dates, not less than 15 nor more
than 60 days preceding the payment date thereof, as shall be
fixed by the Board of Directors. Preferred Dividends
payable on shares of Cumulative Preferred Stock for any
period less than a full quarterly dividend period (or, in
the case of the first Preferred Dividend, from the date of
initial issuance of the shares of Cumulative Preferred Stock
to the first Dividend Payment Date) shall be computed on the
basis of a 360-day year of twelve 30-day months and the
actual number of days elapsed in any period less than
one month. Preferred Dividends shall accrue on a daily
basis (computed as set forth in the immediately preceding
sentence) whether or not there are funds of the Corporation
legally available for the payment of such dividends and
whether or not such Preferred Dividends are declared.
Accrued 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.
As long as shares of Cumulative Preferred Stock
are outstanding, no dividends (other than dividends payable
in shares of, or warrants, rights or options exercisable for
or convertible into shares of, any capital stock of the
Corporation, including without limitation the Corporation's
common stock, $1.00 par value per share ("Common Stock"),
ranking junior to the shares of Cumulative Preferred Stock
as to the payment of dividends and the distribution of
assets upon liquidation (collectively, "Junior Stock") and
cash in lieu of fractional shares in connection with any
such dividend) will be paid or declared in cash or
otherwise, nor will any other distribution be made (other
than a distribution payable in Junior Stock and cash in lieu
of fractional shares in connection with any such
distribution), on any Junior Stock unless (i) full dividends
on Preferred Stock that does not constitute Junior Stock
("Parity Preferred Stock") have been paid, or declared and
set aside for payment, for all dividend periods terminating
on or prior to the date of such Junior Stock dividend or
distribution payment to the extent such dividends are
cumulative; (ii) dividends in full for the current quarterly
dividend period have been paid, or declared and set aside
for payment, on all Parity Preferred Stock to the extent
such dividends are cumulative; (iii) the Corporation has
paid or set aside all amounts, if any, then or theretofore
required to be paid or set aside for all purchase,
retirement, and sinking funds, if any, for any Parity
Preferred Stock; and (iv) the Corporation is not in default
on any of its obligations to redeem any Parity Preferred
Stock.
As long as any shares of Cumulative Preferred
Stock are outstanding, no shares of Junior Stock may be
purchased, redeemed, or otherwise acquired by the
Corporation or any of its subsidiaries (except in connection
with a reclassification or exchange of any Junior Stock
through the issuance of other Junior Stock (and cash in lieu
of fractional shares in connection therewith) or the
purchase, redemption, or other acquisition of any Junior
Stock with any Junior Stock (and cash in lieu of fractional
shares in connection therewith)) nor may any funds be set
aside or made available for any sinking fund for the
purchase, redemption or acquisition of any Junior Stock
unless: (i) full dividends on Parity Preferred Stock have
been paid, or declared and set aside for payment, for all
dividend periods terminating on or prior to the date of such
purchase, redemption, acquisition, setting aside or making
available to the extent such dividends are cumulative; (ii)
dividends in full for the current quarterly dividend period
have been paid, or declared and set aside for payment, on
all Parity Preferred Stock to the extent such dividends are
cumulative; (iii) the Corporation has paid or set aside all
amounts, if any, then or theretofore required to be paid or
set aside for all purchase, retirement, and sinking funds,
if any, for any Parity Preferred Stock; and (iv) the
Corporation is not in default on any of its obligations to
redeem any Parity Preferred Stock.
As long as any shares of Cumulative Preferred
Stock are outstanding, dividends or other distributions may
not be declared or paid on any Parity Preferred Stock (other
than dividends or other distributions payable in Junior
Stock and cash in lieu of fractional shares in connection
therewith) and the Corporation may not purchase, redeem or
otherwise acquire any Parity Preferred Stock (except with
any Junior Stock and cash in lieu of fractional shares in
connection therewith and except with the right, subject to
clause (b) of this paragraph and any similar requirement of
any other Certificate of Designations for Preferred Stock,
to receive accrued and unpaid dividends), unless
either: (a)(i) full dividends on Parity Preferred Stock
have been paid, or declared and set aside for payment, for
all dividend periods terminating on or prior to the date of
such Parity Preferred Stock dividend, distribution,
redemption, purchase or acquisition payment to the extent
such dividends are cumulative; (ii) dividends in full for
the current quarterly dividend period have been paid, or
declared and set aside for payment, on all Parity Preferred
Stock to the extent such dividends are cumulative; (iii) the
Corporation has paid or set aside all amounts, if any, then
or theretofore required to be paid or set aside for all
purchase, retirement, and sinking funds, if any, for any
Parity Preferred Stock; and (iv) the Corporation is not in
default on any of its obligations to redeem any Parity
Preferred Stock; or (b) with respect to the declaration and
payment of dividends only, any such dividends are declared
and paid pro rata so that the amounts of any dividends
declared and paid per share of Cumulative Preferred Stock
and each other share of Parity Preferred Stock will in all
cases bear to each other the same ratio that accrued and
unpaid dividends (including any accumulation with respect to
unpaid dividends for prior dividend periods, if such
dividends are cumulative) per share of Cumulative Preferred
Stock and such other share of Parity Preferred Stock bear to
each other.
3. Redemption. The shares of Cumulative
Preferred Stock are not redeemable by the Corporation prior
to February 8, 1999. At any time and from time to time on
or after that date the Corporation will have the right to
redeem, in whole or in part, outstanding shares of
Cumulative Preferred Stock for $100 per share, plus accrued
and unpaid dividends (whether or not declared) to, but not
including, the date fixed for redemption (other than
previously declared dividends payable to a holder of record
as of a prior date). Preferred Dividends will cease to
accrue on the shares of Cumulative Preferred Stock on the
date fixed for their redemption (unless the Corporation
defaults on the payment of the redemption price). If fewer
than all of the outstanding shares of Cumulative Preferred
Stock are to be called for redemption, shares of Cumulative
Preferred Stock to be called for redemption will be selected
by the Corporation from outstanding shares of Cumulative
Preferred Stock not previously called by lot or pro rata (as
nearly as may be) or by any other method determined by the
Board of Directors in its sole discretion to be equitable.
The Corporation will provide notice of any call for
redemption of shares of Cumulative Preferred Stock to
holders of record of the shares of Cumulative Preferred
Stock to be called for redemption not less than 30 nor more
than 60 days prior to the date fixed for redemption. Any
such notice will be provided by mail, sent to the holders of
record of the shares of Cumulative Preferred Stock to be
called for redemption at such holder's address as it appears
on the stock register of the Corporation, first class
postage prepaid; provided, however, that failure to give
such notice or any defect therein shall not affect the
validity of the proceeding for the redemption of any shares
of Cumulative Preferred Stock to be redeemed except as to
the holder to whom the Corporation has failed to give said
notice or whose notice was defective. On and after the
redemption date, all rights of the holders of the shares of
Cumulative Preferred Stock called for redemption shall
terminate except the right to receive the redemption price
(unless the Corporation defaults on the payment of the
redemption price). A public announcement of any call for
redemption will be made by the Corporation prior to, or at
the time of, the mailing of such notice of redemption. Each
such notice shall state, as appropriate, the following and
may contain such other information as the Corporation deems
advisable:
(A) the redemption date;
(B) that all outstanding shares of Cumulative
Preferred Stock are to be redeemed or, in the case of a
redemption of fewer than all outstanding shares of
Cumulative Preferred Stock, the number of such shares
held by such holder to be redeemed;
(C) the place or places where certificates for
such shares of Cumulative Preferred Stock are to be
surrendered for redemption; and
(D) that dividends on the shares of Cumulative
Preferred Stock to be redeemed shall cease to accrue on
and after such redemption date (except as otherwise
provided herein).
The Corporation's obligation to provide funds upon
redemption in accordance with this paragraph 3 shall be
deemed fulfilled if, on or before a redemption date, the
Corporation shall deposit, with a bank or trust company, or
an affiliate of a bank or trust company, having an office or
agency in New York, New York and having a capital and
surplus of at least $50,000,000 according to its last
published statement of condition, the redemption price for
the shares of Cumulative Preferred Stock to be redeemed as
required by this paragraph 3, in trust for the account of
the holders of such shares of Cumulative Preferred Stock to
be redeemed (and so as to be and continue to be available
therefor), with irrevocable instructions and authority to
such bank or trust company, or affiliate thereof, to deliver
such funds upon redemption of the shares of Cumulative
Preferred Stock so called for redemption. Any interest
accrued on such funds shall be paid to the Corporation from
time to time. Any funds so deposited and unclaimed at the
end of three years from such redemption date shall be repaid
and released to the Corporation, after which, subject to
applicable law, the holder or holders of such shares of
Cumulative Preferred Stock so called for redemption shall
look only to the Corporation for payment of the funds due in
connection with the redemption of such shares of Cumulative
Preferred Stock.
Each holder of shares of Cumulative Preferred
Stock called for redemption must surrender the certificates
evidencing such shares (properly endorsed or assigned for
transfer, if the Board of Directors shall so require and the
notice shall so state) to the Corporation at the place
designated in the notice of such redemption and will
thereupon be entitled to receive any funds payable pursuant
to this paragraph 3, without interest, following such
surrender and on or following the date of such redemption.
In case fewer than all the shares represented by any such
surrendered certificate are called for redemption, a new
certificate shall be issued at the expense of the
Corporation representing the unredeemed shares. If such
notice of redemption shall have been given, and funds equal
to the redemption price of all redeemed shares of Cumulative
Preferred Stock shall have been irrevocably either (A) set
aside by the Corporation separate and apart from its other
funds or assets in trust for the account of the holders of
the shares to be redeemed (and so as to be and continue to
be available therefor) or (B) deposited with a bank or trust
company or an affiliate thereof as provided herein or the
Corporation shall have made other reasonable provision
therefor, then notwithstanding that the certificates
evidencing any shares of Cumulative Preferred Stock so
called for redemption shall not have been surrendered, the
shares represented thereby so called for redemption shall be
deemed no longer outstanding, Preferred Dividends with
respect to the shares so called for redemption shall cease
to accrue on the date fixed for redemption and all rights
with respect to the shares so called for redemption shall
forthwith after such date cease and terminate, except for
the rights of the holders to funds, if any, payable pursuant
to this paragraph 3 without interest upon surrender of their
certificates therefor and except that holders of shares of
Cumulative Preferred Stock at the close of business on a
record date (preceding the redemption date) for any payment
of Preferred Dividends shall be entitled to receive the
Preferred Dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding the
redemption of such shares following such record date and
prior to such Dividend Payment Date.
4. Conversion. The holders of shares of
Cumulative Preferred Stock shall not have any rights to
convert such shares into shares of any other class or series
of capital stock of the Corporation.
5. Liquidation Rights. In the event of any
voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, and subject to the rights of the
holders of any other series of Preferred Stock, the holders
of outstanding shares of Cumulative Preferred Stock are
entitled to receive the sum of $100 per share, plus an
amount equal to any accrued and unpaid dividends thereon,
out of the assets of the Company available for distribution
to stockholders, before any distribution of assets is made
to holders of Junior Stock upon liquidation, dissolution, or
winding up. If upon any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation,
the assets of the Corporation are insufficient to permit the
payment of the full preferential amounts payable with
respect to shares of Cumulative Preferred Stock and all
other series of Parity Preferred Stock, the holders of
shares of Cumulative Preferred Stock and of all other series
of Parity Preferred Stock will share ratably in any
distribution of assets of the Corporation in proportion to
the full respective preferential amounts to which they are
entitled. After payment of the full amount of the
liquidating distribution to which they are entitled, the
holders of shares of Cumulative Preferred Stock will not be
entitled to any further participation in any distribution of
assets by the Corporation. A consolidation or merger of the
Corporation with one or more corporations or a sale or
transfer of substantially all of the assets of the
Corporation shall not be deemed to be a liquidation,
dissolution, or winding up of the Corporation.
6. Voting Rights. In the event that dividends on
the shares of Cumulative Preferred Stock or any other series
of Preferred Stock shall be in arrears and unpaid for six
quarterly dividend periods, or if any other series of
Preferred Stock shall be entitled for any other reason to
exercise voting rights, separate from the Common Stock, to
elect any Directors of the Corporation ("Preferred Stock
Directors"), the holders of the shares of Cumulative
Preferred Stock (voting separately as a class with holders
of all other series of Preferred Stock upon which like
voting rights have been conferred and are exercisable), with
each share of Cumulative Preferred Stock entitled to one
vote on this and other matters in which Preferred Stock
votes as a group, will be entitled to vote for the election
of two Preferred Stock Directors, such Directors to be in
addition to the number of Directors constituting the Board
of Directors immediately prior to the accrual of such right.
Such right, when vested, shall continue until all dividends
in arrears on the shares of Cumulative Preferred Stock and
such other series of Preferred Stock shall have been paid in
full and the right of any other series of Preferred Stock to
exercise voting rights, separate from the Common Stock, to
elect any Preferred Stock Directors shall terminate or have
terminated, and, when so paid and such termination occurs or
has occurred, such right of the holders of the shares of
Cumulative Preferred Stock shall cease. Upon any
termination of the aforesaid voting right, subject to the
requirements of the Delaware corporation law and the
Certificate, such Preferred Stock Directors shall cease to
be Directors of the Corporation and shall resign.
The Corporation will not, without the approval of
the holders of at least 66-2/3% of all the Cumulative
Preferred Stock then outstanding: (i) amend, alter, or
repeal any of the provisions of the Certificate or the By-
laws of the Corporation so as to affect adversely the
powers, preferences, or rights of the holders of the
Cumulative Preferred Stock then outstanding or reduce the
minimum time required for any notice to which only the
holders of the Cumulative Preferred Stock then outstanding
may be entitled (an amendment of the Certificate to
authorize or create, or to increase the authorized amount
of, Junior Stock, Preferred Stock or any stock of any class
ranking on a parity with the Cumulative Preferred Stock
shall be deemed not to affect adversely the powers,
preferences, or rights of the holders of the Cumulative
Preferred Stock); (ii) create any series of Preferred Stock
ranking prior to the shares of Cumulative Preferred Stock as
to payment of dividends or the distribution of assets upon
liquidation; (iii) authorize or create, or increase the
authorized amount of, any capital stock, or any security
convertible into capital stock, of any class ranking prior
to the Cumulative Preferred Stock as to payment of dividends
or the distribution of assets upon liquidation; or
(iv) merge or consolidate with or into any other
corporation, unless each holder of the Cumulative Preferred
Stock immediately preceding such merger or consolidation
shall receive or continue to hold in the resulting
corporation the same number of shares, with substantially
the same rights and preferences, as correspond to the
Cumulative Preferred Stock so held.
As long as any shares of Cumulative Preferred
Stock are outstanding, the Corporation will not, without the
approval of the holders of at least a majority of the shares
of Parity Preferred Stock then outstanding: (i) increase
the authorized amount of the Preferred Stock or (ii) create
any class or classes of capital stock ranking on a parity
with the Parity Preferred Stock, either as to payment of
dividends or the distribution of assets upon liquidation,
and not existing on the date of this Certificate of
Designations, or create any stock, or other security,
convertible into or exchangeable for or evidencing the right
to purchase any stock of such other class of capital stock
ranking on a parity with the Parity Preferred Stock, or
increase the authorized number of shares of any such other
class of capital stock or amount of such other stock or
security.
Notwithstanding the provisions set forth in the
preceding two paragraphs, however, no such approval
described therein of the holders of the shares of Cumulative
Preferred Stock shall be required if, at or prior to the
time when such amendment, alteration, or repeal is to take
effect or when the authorization, creation or increase of
any such prior or parity stock or such other stock or
security is to be made, or when such consolidation or merger
is to take effect, as the case may be, provision is made for
the redemption of all shares of Cumulative Preferred Stock
at the time outstanding.
7. Definitions. As used in this Certificate of
Designations:
(i) the term "business day" shall mean any day
other than a Saturday, a Sunday or a day on which
commercial banking institutions in the City of New
York, New York, or Atlanta, Georgia, are authorized or
obligated by law or executive order to close; and
(ii) the term "record date" shall be such date as
is from time to time fixed by the Board of Directors
with respect to the receipt of dividends, the receipt
of a redemption price upon redemption or the taking of
any action or exercise of any voting rights permitted
hereby.
8. Severability of Provisions. Whenever
possible, each provision hereof shall be interpreted in a
manner as to be effective and valid under applicable law,
but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or
invalidity, without invalidating or otherwise adversely
affecting the remaining provisions hereof. If a court of
competent jurisdiction should determine that a provision
hereof would be valid or enforceable if a period of time
were extended or shortened or a particular percentage were
increased or decreased, then such court may make such change
as shall be necessary to render the provision in question
effective and valid under applicable law.
IN WITNESS WHEREOF, Bowater Incorporated has
caused this Certificate of Designations to be signed by
David G. Maffucci, its Vice President-Treasurer and attested
by Wendy C. Shiba, its Secretary and Assistant General
Counsel, this ____ day of February, 1994.
BOWATER INCORPORATED,
by /s/ David G. Maffucci
__________________________
[CORPORATE SEAL]
ATTEST:
by /s/ Wendy C. Shiba
_______________________