Exhibit 3(i)
Amended and Restated
CERTIFICATE OF INCORPORATION
of
HSB GROUP, INC.
Hartford, Connecticut
CERTIFICATE OF INCORPORATION
of
HSB GROUP, INC.
Article I
The name of the Corporation is HSB Group, Inc.
Article II
The address of the registered office of the Corporation is One State Street,
Hartford, Connecticut, 06102-5024. The name of the registered agent at that
address is R. Kevin Price.
Article III
The nature of the business to be transacted, and the purposes to be promoted or
carried out by the Corporation, are to engage in any lawful act or activity for
which corporations may be formed under the Connecticut Business Corporation Act
or any successor statute thereto.
Article IV
A. The authorized number of shares, which may be increased from time to time
when and if authorized by the shareholders shall consist of 50,000,000
shares of common stock and 500,000 shares of preferred stock, of which
250,000 shares have been designated as "Series A Junior Participating
Preferred Stock" and 2,000 shares have been designated as "Series B
Convertible Preferred Stock".
B. The Board of Directors is authorized to fix and determine the terms,
limitations and relative rights and preferences of the preferred stock
including, without limitation, any voting rights thereof, to divide and
issue the preferred stock in series, to fix and determine the variations
among series to the extent permitted by law and to provide that shares of
the preferred stock, or any series thereof, may be convertible into the
same or a different number of shares of common stock. No shareholder shall
have any preemptive right to purchase or subscribe to any shares of any
class of stock of the Corporation, whether now or hereafter authorized, or
to any securities convertible into shares of any class of stock of the
Corporation.
C. The designations, voting powers, preferences and relative, participating,
optional and other special rights of the Series A Junior Participating
Preferred Stock, and the qualifications, limitations or restrictions
thereof are as follows:
1. Designation and Amount.
The shares of such series shall be designated as "Series A Junior
Participating Preferred Stock" and the number of shares constituting
such series shall be 250,000.
2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and
superior to the shares of Series A Junior Participating Preferred
Stock with respect to dividends, the holders of shares of Series
A Junior Participating Preferred 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 last business 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 Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $12.00 or (b) subject to the
provision for adjustment hereinafter set forth, 200 times the
aggregate per share amount of all cash dividends, and 200 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, without par value, of the Corporation (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 Junior Participating Preferred
Stock. In the event the Corporation shall at any time after
November 28, 1988 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the amount to which holders of shares of Series A
Junior Participating 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 Junior Participating Preferred Stock as provided in
Paragraph 2.(a) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable
in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $12.00 per share on the Series A Junior Participating
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 Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue
of such shares of Series A Junior Participating Preferred stock
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 Junior
Participating 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 Junior Participating Preferred Stock in an
amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on
a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior
Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date
shall be no more than 30 days prior to the date fixed for the
payment thereof.
3. Voting Rights.
The holders of shares of Series A Junior Participating Preferred Stock
shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to 200 votes on all matters submitted
to a vote of the shareholders of the Corporation. In the event
the Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common stock payable in shares
of Common Stock (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the number of votes per share
to which holders of shares of Series A Junior Participating
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 or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the
holders of shares of Common Stock shall vote together as one class
on all matters submitted to a vote of shareholders of the
Corporation.
(c (i) If at any time dividends on any Series A Junior Participating
Preferred Stock shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such contingency
shall mark the beginning of a period (herein called a "default
period") which shall extend until such time when all accrued and
unpaid dividends for all previous quarterly dividend periods and
for the current quarterly dividend period on all shares of Series
A Junior Participating Preferred Stock then outstanding shall
have been declared and paid or set apart for payment. During each
default period, all holders of Preferred Stock (including holders
of the Series A Junior Participating Preferred Stock) with
dividends in arrears in an amount equal to six (6) quarterly
dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two (2) Directors.
(ii) During any default period, such voting right of the holders of
Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph
(iii) of this Section 3.(c). or at any annual meeting of
shareholders, and thereafter at annual meetings of
shareholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock,
if any, to increase, in certain cases, the authorized number
of Directors shall be exercised unless the holders of ten
percent (10%) in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The
absence of a quorum of the holders of Common Stock shall not
affect the exercise by the holders of Preferred Stock of such
voting right. At any meeting at which the holders of Preferred
Stock shall exercise such voting right initially during an
existing default period, they shall have the right, voting as
a class, to elect Directors to fill such vacancies, if any in
the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting,
to elect two (2) Directors. If the number which may be so
elected at any special meeting does not amount to the required
number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as
shall be necessary to permit the election by them of the
required number. After the holders of the Preferred Stock
shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the
number of Directors shall not be increased or decreased except
by vote of the holders of Preferred Stock as herein provided
or pursuant to the rights of any equity securities ranking
senior to or pari passu with the Series A Junior Participating
Preferred Stock.
(iii)Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right
to elect Directors, the Board of Directors may order, or any
shareholder or shareholders owning in the aggregate not less
than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may
request, the calling of special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by
the President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting
at which holders of Preferred Stock are entitled to vote
pursuant to this paragraph 3(c)(iii) shall be given to each
holder of record of Preferred Stock by mailing a copy of such
notice to him at his last address as the same appears on the
books of the Corporation. Such meeting shall be called for a
time not earlier than 20 days and not later than 60 days after
such order or request or in default of the calling of such
meeting within 60 days after such order or request, such
meeting may be called on similar notice by any shareholder or
shareholders owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred Stock
outstanding. Notwithstanding the provisions of this paragraph
3(c)(iii), no such special meeting shall be called during the
period within 60 days immediately preceding the date fixed for
the next annual meeting of the shareholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors
until the holders of Preferred Stock shall have exercised
their right to elect two (2) Directors voting as a class,
after the exercise of which right (x) the Directors so elected
by the holders of Preferred Stock shall continue in office
until their successors shall have been elected by such holders
or until the expiration of the default period and (y) any
vacancy in the Board of Directors may (except as provided in
paragraph 3(c)(ii) of this Section) be filled by vote of a
majority of the remaining Directors theretofore elected by the
holders of the class of stock which elected the Director whose
office shall have become vacant. References in this paragraph
3.(c) to Directors elected by the holders of a particular
class of stock shall include Directors elected by such
Directors to fill vacancies as provided in clause (y) of the
foregoing sentence.
(v) Immediately upon the expiration of a default period,(x) the
right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected
by the holders of Preferred Stock as a class shall terminate
and (z) the number of Directors shall be such number as may be
provided for in the certificate of incorporation or bylaws
irrespective of any increase made pursuant to the provisions
of paragraph 3(c)(ii) (such number being subject, however, to
change thereafter in any manner provided by law or in the
certificate of incorporation or bylaws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a majority
of the remaining Directors.
(d) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating 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 Junior Participating Preferred
Stock outstanding shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Junior Participating Preferred Stock;
(ii)declare or pay dividends on 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 Junior Participating Preferred Stock, except
dividends paid ratably on the Series A Junior Participating
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 on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series A Junior Participating Preferred Stock, provided
that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity 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 Junior Participating Preferred
Stock;
(iv) purchase or otherwise acquire for consideration any shares of
Series A Junior Participating Preferred Stock, or any shares of
stock ranking on a parity with the Series A Junior
Participating 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 Junior Participating Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall
be retired and cancelled 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 to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to
the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received $200 per share, plus an
amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares
of Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to
the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 200 (as appropriately adjusted as set forth in
paragraph 6(c) below to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common
Stock) (such number in clause (ii), the "Adjustment Number").
Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of
all outstanding shares of Series A Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series A Junior
Participating Preferred Stock and holders of shares of Common
Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
(b) In the event, however that there are not sufficient assets
available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of
preferred stock if any, which rank on a parity with the Series A
Junior Participating Preferred Stock, then such remaining assets
shall be distributed ratably to the holders of such parity shares
in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to
permit payment in full of the Common Adjustment then such remaining
assets shall be distributed ratably to the holders of Common Stock.
(c) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the Adjustment Number in
effect immediately prior to such event shall be adjusted by
multiplying such Adjustment 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.
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 the shares of Series A Junior
Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 200 times the aggregate
amount of stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock
into a smaller number of shares, 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 Junior Participating 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. Optional Redemption.
(a) The Corporation shall have the option to redeem the whole or any
part of the Series A Junior Participating Preferred Stock at any
time at a redemption price equal to, subject to the provision for
adjustment hereinafter set forth, 200 times the "current per
share market price" of the Common Stock on the date of the
mailing of the notice of redemption, together with unpaid
accumulated dividends to the date of such redemption. In the
event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, (iii) combine the outstanding Common Stock into a smaller
number of shares or (iv) issue any shares by reclassification of
its shares of Common Stock, then in each such case the amount to
which holders of shares of Series A Junior Participating
Preferred Stock shall be otherwise entitled immediately prior to
such event under the immediately preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator
of which shall be the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which shall be the number of shares of Common Stock that shall
have been outstanding immediately prior to such event. The
"current per share market price" on any date shall be deemed to
be the average of the closing prices per share of such Common
Stock for the 10 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date. The closing
price for each day shall be the last sale price, regular way, or,
in case no such sale shall take place on such day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Common Stock shall not
be listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the principal national securities exchange on which the Common
Stock shall not be listed or admitted to trading or, if the
Common Stock shall not be listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
or such other system then in use or, if on any such date the
Common Stock shall not be quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock
selected by the Board of Directors of the Corporation. If on such
date no such market maker shall be making a market in the Common
Stock, the fair value of the Common Stock on such date as
determined in good faith by the Board of Directors of the
Corporation shall be used. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which
the Common Stock shall be listed or admitted to trading shall be
open for the transaction of business or, if the Common Stock
shall not be listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or
Friday on which banking institutions in the State of New York
shall not be authorized or obligated by law or executive order to
close.
(b) Notice of any such redemption shall be given by mailing to the
holders of the Series A Junior Participating Preferred Stock a
notice of such redemption, first class postage prepaid, not later
than the thirtieth day and not earlier than the sixtieth-day
before the date fixed for redemption, at their last address as
the same shall appear upon the books of the Corporation. Any
notice which shall be mailed in the manner herein provided shall
be conclusively presumed to have been duly given, whether or not
the stockholder shall have received such notice, and failure duly
to give such notice by mail, or any defect in such notice, to any
holder of Series A Junior Participating Preferred Stock shall not
affect the validity of the proceedings for the redemption of such
Series A Junior Participating Preferred Stock.
(c) If less than all the outstanding shares of the Series A Junior
Participating Preferred Stock are to be redeemed by the
Corporation, the number of shares to be redeemed shall be
determined by the Board of Directors and the shares to be
redeemed shall be determined by lot or pro rata or in such fair
and equitable other manner as may be prescribed by resolution of
the Board of Directors.
(d) The notice of redemption to each holder of Series A Junior
Participating Preferred Stock shall specify (a) the number of
shares of Series A Junior Participating Preferred Stock of such
holder to be redeemed, (b) the date fixed for redemption, (c) the
redemption price and (d) the place of payment of the redemption
price.
(e) If any such notice of redemption shall have been duly given or if
the corporation shall have given to the bank or trust company
hereinafter referred to irrevocable written authorization
promptly to give or complete such notice, and if on or before the
redemption date specified therein the funds necessary for such
redemption shall have been deposited by the Corporation with the
bank or trust company designated in such notice, doing business
in the United States of America and having a capital, surplus and
undivided profits aggregating at least $25,000,000 according to
its last published statement of condition, in trust for the
benefit of the holders of Series A Junior Participating Preferred
Stock called for redemption, then, notwithstanding that any
certificate for such shares so called for redemption shall not
have been surrendered for cancellation, from and after the time
of such deposit all such shares called for redemption shall no
longer be deemed outstanding, all rights with respect to such
shares shall no longer be deemed outstanding and all rights with
respect to such shares shall forthwith cease and terminate,
except the right of the holders thereof to receive from such bank
or trust company at any time after the time of such deposit the
funds so deposited, without interest, the right to exercise, up
to the close of business on the fifth day before the date fixed
for redemption, all privileges of conversion or exchange if any.
In case less than all the shares represented by any surrendered
certificate shall be redeemed, a new certificate shall be issued
representing the unredeemed shares. Any interest accrued on such
funds so deposited shall be paid to the Corporation from time to
time. Any funds so deposited and unclaimed at the end of six
years from such redemption date shall be repaid to the
Corporation, after which the holders of shares of Series A Junior
Participating Preferred Stock called for redemption shall look
only to the Corporation for payment thereof; provided, however,
that any funds so deposited which shall not be required for
redemption because of the exercise of any privilege of conversion
or exchange subsequent to the date of deposit shall be repaid to
the Corporation forthwith.
9. Ranking.
The Series A Junior Participating Preferred Stock shall rank junior to
all other series of the Corporation's Preferred Stock as to the payment
of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
10. Amendment.
The Articles of Incorporation of the Corporation shall not be further
amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of at least a majority of the
outstanding shares of Series A Junior Participating Preferred Stock,
voting separately as a class.
D. The designations, voting powers, preferences and relative, participating,
optional and other special rights of the Series B Convertible Preferred
Stock, and the qualifications, limitations or restrictions thereof are as
follows:
1. Number of Shares and Designations.
Two thousand (2,000) shares of the Preferred Stock, without par value,
of the Corporation are constituted as a series thereof designated as
Series B Convertible Preferred Stock (the "Series B Preferred Stock").
2. Definitions.
For purposes of the Series B Preferred Stock, the following terms shall
have the meanings indicated:
(a) "Accrued Dividends" shall have the meaning set forth in Section
4(a) below.
(b) "Articles of Incorporation" shall mean the Articles of
Incorporation of the Corporation, as amended from time to time.
(c) "Board of Directors" shall mean the board of directors of the
Corporation or any committee authorized by such board of
directors to perform any of its responsibilities with respect to
the Series B Preferred Stock.
(d) "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which state or federally chartered banking
institutions in New York, New York are not required to be open.
(e) "Call Event" shall mean the consummation of a transaction
pursuant to Section 2.2 of the Transaction Agreement.
(f) "Common Stock" shall mean the common stock of the Corporation,
without par value.
(g) "Constituent Person" shall have the meaning set forth in Section
8(e) below.
(h) "Conversion Price" shall mean the conversion price per share of
Common Stock for which the Series B Preferred Stock is
convertible, as such Conversion Price may be adjusted pursuant to
Section 8 below. The initial conversion price will be $ 50.20.
(i) "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 any day shall mean the last
reported sales price, regular way on such day, or, if no sale
takes place on such day, the average of the reported closing bid
and asked prices on such day, regular way, in either case as
reported on the New York Stock Exchange Composite Tape or, if
such security is not listed or admitted for trading on the New
York Stock Exchange ("NYSE"), on the principal national
securities exchange on which such security is listed or admitted
for trading or, if not listed or admitted for trading on any
national securities exchange, on the National Market System of
the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or, if such security is not quoted
on such National Market System, the average of the closing bid
and asked prices on such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for such security
on such day shall not have been reported through NASDAQ, the
average of the bid and asked prices on such day as furnished by
any NYSE member firm regularly making a market in such security
selected for such purpose by the Board of Directors.
(j) "Dividend Payment Date" shall mean the last business day of
January, April, July and October in each year, commencing on the
last business day of January, 1997, provided, however, that if
any Dividend Payment Date falls on any day other than a Business
Day, the dividend payment due on such Dividend Payment Date shall
be paid on the Business Day immediately following such Dividend
Payment Date.
(k) "Dividend Periods" shall mean quarterly dividend periods
commencing on the last business day of January, April, July and
October of each year and ending on and including the day
preceding the first day of the next succeeding Dividend Period
(other than the initial Dividend Period, which shall commence on
the Issue Date and end on and include January 30, 1997).
(l) "Fair Market Value" shall mean the average of the daily Current
Market Prices of a share of Common Stock during the five (5)
consecutive Trading Days selected by the Corporation commencing
not more than 20 Trading Days before, and ending not later than,
the earlier of the day in question and the day before the "ex"
date with respect to the issuance or distribution requiring such
computation. The term "'ex' date," when used with respect to any
issuance or distribution, means the first day on which the Common
Stock trades regular way, without the right to receive such
issuance or distribution, on the exchange or in the market, as
the case may be, used to determine that day's Current Market
Price.
(m) "Issue Date" shall mean the first date on which shares of Series
B Preferred Stock are issued and sold.
(n) "Junior Stock" shall mean the Common Stock, the Series A
Preferred Stock and any other class or series of shares of the
Corporation over which the Series B Preferred Stock has
preference or priority in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding
up of the Corporation.
(o) "Liquidation Preference" shall have the meaning set forth in
Section 4(a) below.
(p) "non-electing share" shall have the meaning set forth in Section
8(e) below.
(q) "Person" shall mean any individual, firm, partnership,
corporation or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(r) "Put Event" shall mean the consummation of a transaction pursuant
to Section 2.3 of the Transaction Agreement.
(s) "Redemption Date" shall have the meaning set forth in Section
5(b) below.
(t) "Rights" shall mean the rights of the Corporation which are
issuable under the Corporation's Rights Agreement dated as of
November 28, 1988, and as amended from time to time, or rights to
purchase any capital stock of the Corporation under any successor
shareholder rights plan or plans adopted in replacement of the
Corporation's Rights Agreement.
(u) "Securities" shall have the meaning set forth in Section 8(d)(3)
below.
(v) "Series A Preferred Stock" shall mean the series of Preferred
Stock of the Corporation, without par value, designated Series A
Junior Participating Preferred Stock.
(w) "Series B Preferred Stock" shall have the meaning set forth in
Section 1 above.
(x) "set apart for payment" shall be deemed to include, without any
action other than the following, the recording by the Corporation
in its accounting ledgers of any accounting or bookkeeping entry
which indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds
to be so paid on any series or class of capital stock of the
Corporation; provided, however, that if any funds for any class
or series of Junior Stock or any class or series of stock ranking
on a parity with the Series B Preferred Stock as to the payment
of dividends are placed in a separate account of the Corporation
or delivered to a disbursing, paying or other similar agent, then
"set apart for payment" with respect to the Series B Preferred
Stock shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar
agent.
(y) "Stated Value" shall have the meaning set forth in Section 4(a)
below.
(z) "Trading Day" shall mean any day on which the securities in
question are traded on the NYSE, or if such securities are not
listed or admitted for trading on the NYSE, on the principal
national securities exchange on which such securities are listed
or admitted, or if not listed or admitted for trading on any
national securities exchange, on the National Market System of
the NASDAQ, or if such securities are not quoted on such National
Market System, in the applicable securities market in which the
securities are traded.
(aa) "Transaction" shall have the meaning set forth in Section D.8(e)
hereof.
(bb) "Transaction Agreement" shall mean that certain Transaction
Agreement, dated as of December 30, 1994, by and among the
Corporation and General Reinsurance Corporation.
(cc) "Transfer Agent" means The First National Bank of Boston or such
other agent or agents of the Corporation as may be designated by
the Board of Directors as the transfer agent for the Series B
Preferred Stock.
3. Dividends.
(a) The holders of shares of the Series B Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors out of assets legally available for that purpose,
dividends payable in cash at the rate per annum of $650 per share
of Series B Preferred Stock. Such dividends shall be cumulative
from the Issue Date, whether or not in any Dividend Period or
Periods there shall be assets of the Corporation legally
available for the payment of such dividends, and shall be payable
quarterly, when, as and if declared by the Board of Directors, in
arrears on Dividend Payment Dates, commencing on January 31,
1997. Each such dividend shall be payable in arrears to the
holders of record of shares of the Series B Preferred Stock, as
they appear on the stock records of the Corporation at the close
of business on such record dates, which shall not be more than 60
days nor less than 10 days preceding the payment dates thereof,
as shall be fixed by the Board of Directors or a duly authorized
committee thereof. Accrued and unpaid dividends for any past
Dividend Periods may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record on
such date, not exceeding 45 days preceding the payment date
thereof, as may be fixed by the Board of Directors.
(b) The amount of dividends payable for each full Dividend Period for
the Series B Preferred Stock shall be computed by dividing the
annual dividend rate by four. The amount of dividends payable for
the initial Dividend Period, or any other period shorter or
longer than a full Dividend Period, on the Series B Preferred
Stock shall be computed on the basis of twelve 30-day months and
a 360-day year. Holders of shares of Series B Preferred Stock
shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of cumulative dividends, as herein
provided, on the Series B Preferred Stock. No interest, or sum of
money in lieu of interest, shall be payable in respect of any
dividend payment or payments on the Series B Preferred Stock that
may be in arrears.
(c) So long as any shares of the Series B Preferred Stock are
outstanding, no dividends, except as described in the next
succeeding sentence, shall be declared or paid or set apart
for payment on any class or series of stock of the
Corporation ranking, as to dividends and amounts
distributable upon liquidation, dissolution or winding up,
on a parity with the Series B Preferred Stock, for any
period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for such
payment on the Series B Preferred Stock for all Dividend
Periods terminating on or prior to the date of payment of
the dividend on such class or series of parity stock. When
dividends are not paid in full or a sum sufficient for such
payment is not set apart, as aforesaid, all dividends
declared upon shares of the Series B Preferred Stock and all
dividends declared upon any other class or series of stock
ranking on a parity as to dividends and amount distributable
upon liquidation, dissolution or winding up shall be
declared ratably in proportion to the respective amounts of
dividends accumulated and unpaid on the Series B Preferred
Stock and accumulated and unpaid on such parity stock.
(d) So long as any shares of the Series B Preferred Stock are
outstanding, no dividends (other than (i) the Rights and
(ii) dividends or distributions paid in shares of, or
options, warrants or rights to subscribe for or purchase
shares of, Junior Stock) shall be declared or paid or set
apart for payment or other distribution declared or made
upon Junior Stock, nor shall any Junior Stock or any series
of stock of the Corporation ranking, as to dividends and
amounts distributable upon liquidation, dissolution or
winding up, on a parity with Series B Preferred Stock be
redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of shares of
Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary) for any
consideration (or any moneys be paid to or made available
for a sinking fund for the redemption of any shares of any
such stock) by the Corporation, directly or indirectly
(except by conversion into or exchange for Junior Stock),
unless in each case the full cumulative dividends on all
outstanding shares of the Series B Preferred Stock and any
other stock of the Corporation ranking on a parity with the
Series B Preferred Stock, as to dividends and amounts
distributable upon liquidation, dissolution or winding up
shall have been paid or set apart for payment for all past
Dividend Periods with respect to the Series B Preferred
Stock and all past dividend periods with respect to such
parity stock.
4. Payments upon Liquidation.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation before any payment or distribution of the
assets of the Corporation (whether capital or surplus) shall
be made to or set apart for the holders of Junior Stock, the
holders of the shares of Series B Preferred Stock shall be
entitled to receive Ten Thousand Dollars ($10,000) per share
of Series B Preferred Stock (the "Stated Value") plus an
amount equal to all dividends (whether or not earned or
declared) accrued and unpaid thereon ("Accrued Dividends")
to the date of final distribution to such holders (the
"Liquidation Preference"); but such holders shall not be
entitled to any further payment. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of
the Corporation, or proceeds thereof, distributable among
the holders of the shares of Series B Preferred Stock shall
be insufficient to pay in full the Liquidation Preference,
and the liquidation preference on all other shares of any
class or series of stock ranking, as to dividends and
amounts distributable upon liquidation, dissolution or
winding up, on a parity with the Series B Preferred Stock,
then such assets, or the proceeds thereof, shall be
distributed among the holders of shares of Series B
Preferred Stock and any such other parity stock ratably in
accordance with the respective amounts that would be payable
on such shares of Series B Preferred Stock and any such
other stock if all amounts payable thereon were paid in
full. For the purposes of this Section 4, (i) a
consolidation or merger of the Corporation with one or more
corporations, or (ii) a sale or transfer of all or
substantially all of the Corporation's assets, shall not be
deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of shares of any series
or class or classes of stock ranking on a parity with or
prior to the Series B Preferred Stock as to dividends and
amounts distributable upon liquidation, dissolution or
winding up of the Corporation, after payment shall have been
made to the holders of the Series B Preferred Stock, as and
to the fullest extent provided in this Section 4, any other
series or class or classes of Junior Stock shall, subject to
the respective terms and provisions (if any) applying
thereto, be entitled to receive any and all assets remaining
to be paid or distributed, and the holders of the Series B
Preferred Stock shall not be entitled to share therein.
5. Redemption at the Option of the Corporation.
(a) The shares of Series B Preferred Stock shall be redeemable at the
option of the Corporation by resolution of its Board of Directors,
in whole (i) at any time on or after the fifth anniversary of the
Issue Date or (ii) if on the date of a notice pursuant to Section
5(b) below, the Current Market Price of all Common Stock which
would be issuable upon conversion of all of the 2,000 shares of
Preferred Stock originally issued, as of any date within ten
Business Days prior to such notice date, exceeded $22 million. In
either case, such redemption shall be at the Stated Value, plus
all dividends accrued and unpaid on the shares of Series B
Preferred Stock up to the date fixed for the redemption, upon
giving notice as provided hereinbelow.
(b) At least 90 days prior to the date fixed for the redemption of
shares of Series B Preferred Stock, a written notice shall be
mailed in a postage prepaid envelope to each holder of record of
the shares of Series B Preferred Stock to be redeemed, addressed
to such holder at his post office address as shown on the records
of the Corporation, notifying such holder of the election of the
corporation to redeem such shares, stating the date fixed for
redemption thereof (the "Redemption Date"), and calling upon such
holder to surrender to the Corporation, on the Redemption Date at
the place designated in such notice, his certificate or
certificates representing the number of shares specified in such
notice of redemption.
On or after the Redemption Date, each holder of shares of Series B
Preferred Stock to be redeemed shall present and surrender his
certificate or certificates for such shares to the Corporation at
the place designated in such notice and thereupon the redemption
price of such shares shall be paid to or on the order of the
person whose name appears on such certificate or certificates as
the owner thereof and each surrendered certificate shall be
canceled. In case less than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares.
From and after the Redemption Date (unless default shall be made
by the Corporation in payment of the redemption price), all
dividends on the shares of Series B Preferred Stock designated for
redemption in such notice shall cease to accrue, and all rights of
the holders thereof as stockholders of the Corporation, except the
right to receive the redemption price of such shares (including
all accrued and unpaid dividends up to the Redemption Date) upon
the surrender of certificates representing the same, shall cease
and terminate and such shares shall not thereafter be transferred
(except with the consent of the Corporation) on the books of the
Corporation, and such shares shall not be deemed to be outstanding
for any purpose whatsoever. At its election, the Corporation,
prior to the Redemption Date, may deposit the redemption price
(including all accrued and unpaid dividends up to the Redemption
Date) of shares of Series B Preferred Stock so called for
redemption in trust for the holders thereof with a bank or trust
company (having a capital surplus and undivided profits
aggregating not less than $50,000,000) in the Borough of
Manhattan, City and State of New York, or in any other city in
which the Corporation at the time shall maintain a transfer agency
with respect to such shares, in which case the aforesaid notice to
holders of shares of Series B Preferred Stock to be redeemed shall
state the date of such deposit, shall specify the office of such
bank or trust company as the place of payment of the redemption
price, and shall call upon such holders to surrender the
certificates representing such shares at such place on or after
the date fixed in such redemption notice (which shall not be later
than the Redemption Date) against payment of the redemption price
(including all accrued and unpaid dividends up to the Redemption
Date). Any interest accrued on such funds shall be paid to the
Corporation from time to time. Any moneys so deposited which shall
remain unclaimed by the holders of such shares of Series B
Preferred Stock at the end of two years after the Redemption Date
shall be returned by such bank or trust company to the
Corporation.
If a notice of redemption has been given pursuant to this Section
5 and any holder of shares of Series B Preferred Stock shall,
prior to the close of business on the day preceding the Redemption
Date, give written notice to the Corporation pursuant to Section 8
below of the conversion of any or all of the shares to be redeemed
held by such holder (accompanied by a certificate or certificates
for such shares, duly endorsed or assigned to the Corporation, and
any necessary transfer tax payment, as required by Section 8
below), then such redemption shall not become effective as to such
shares to be converted, such conversion shall become effective as
provided in Section 8 below, and any moneys set aside by the
Corporation for the redemption of such shares of converted Series
B Preferred Stock shall revert to the general funds of the
Corporation.
6. Redemption at the Option of the Holder.
The Corporation, when requested to do so in writing by a holder of
Series B Preferred Stock at any time after the earlier of (i) the
eighth anniversary of an Issue Date pursuant to a Call Event or (ii)
the fifth anniversary of an Issue Date pursuant to a Put Event, shall
purchase or redeem the share or shares of Series B Preferred Stock
identified by such holder, such purchase or redemption to occur on a
date not more than thirty days after receipt by the Corporation of such
request, at the Stated Value of the share or shares to be purchased or
redeemed, plus all dividends accrued and unpaid on such share or shares
up to the date of such purchase or redemption.
7. Shares to Be Retired.
All shares of Series B Preferred Stock which shall have been issued and
reacquired in any manner by the Corporation shall be restored to the
status of authorized but unissued shares of Preferred Stock, without
designation as to series.
8. Conversion.
Holders of shares of Series B Preferred Stock shall have the right to
convert all or a portion of such shares into shares of Common Stock, as
follows:
(a) Subject to and upon compliance with the provisions of this
Section 8, a holder of shares of Series B Preferred Stock
shall have the right, at its option, at any time after 5
Business Days after the Issue Date, to convert such shares
into the number of fully paid and nonassessable shares of
Common Stock obtained by dividing the aggregate Stated Value
of such shares by the Conversion Price (as in effect on the
date provided for in the last paragraph of Section 8(b)) by
surrendering such shares to be converted, such surrender to
be made in the manner provided in Section 8(b); provided,
however, that the right to convert shares called for
redemption pursuant to Section D.5 of this article shall
terminate at the close of business on the day preceding the
Redemption Date, unless the Corporation shall default in
making payment of the cash payable upon such redemption
under Section D.5 of this article. Certificates will be
issued for the remaining shares of Series B Preferred Stock
in any case in which fewer than all of the shares of Series
B Preferred Stock represented by a certificate are
converted.
(b) In order to exercise the conversion right, the holder of
shares of Series B Preferred Stock to be converted shall
surrender the certificate or certificates representing such
shares, duly endorsed or assigned to the Corporation or in
blank, at the office of the Transfer Agent in the Borough of
Manhattan, City of New York, accompanied by written notice
to the Corporation that the holder thereof elects to convert
Series B Preferred Stock. Unless the shares issuable on
conversion are to be issued in the same name as the name in
which such share of Series B Preferred Stock is registered,
each share surrendered for conversion shall be accompanied
by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or such holder's
duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory
to the Corporation demonstrating that such taxes have been
paid).
Holders of shares of Series B Preferred Stock at the close
of business on a dividend payment record date shall be
entitled to receive the dividend payable on such shares on
the corresponding Dividend Payment Date notwithstanding the
conversion thereof following such dividend payment record
date and prior to such Dividend Payment Date. Except as
provided above, the Corporation shall make no payment or
allowance for unpaid dividends, whether or not in arrears,
on converted shares or for dividends on the shares of Common
Stock issued upon such conversion.
As promptly as practicable after the surrender of
certificates for shares of Series B Preferred Stock as
aforesaid, the Corporation shall issue and shall deliver at
such office to such holder, or on his or her written order,
a certificate or certificates for the number of full shares
of Common Stock issuable upon the conversion of such shares
in accordance with provisions of this Section 8, and any
fractional interest in respect of a share of Common Stock
arising upon such conversion shall be settled as provided in
Section 8(c).
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on
which the certificates for shares of Series B Preferred
Stock shall have been surrendered and such notice (and if
applicable, payment of an amount equal to the dividend
payable on such shares) received by the Corporation as
aforesaid, and the person or persons in whose name or names
any certificate or certificates for shares of Common Stock
shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares
represented thereby at such time on such date and such
conversion shall be at the Conversion Price in effect at
such time on such date, unless the stock transfer books of
the Corporation shall be closed on that date, in which event
such person or persons shall be deemed to have become such
holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are
open, but such conversion shall be at the Conversion Price
in effect on the date upon which such shares shall have been
surrendered and such notice received by the Corporation.
(c) No fractional shares or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of
the Series B Preferred Stock. Instead of any fractional
interest in a share of Common Stock that would otherwise be
deliverable upon the conversion of a share of Series B
Preferred Stock, the Corporation shall pay to the holder of
such share an amount in cash based upon the Current Market
Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share
shall be surrendered for conversion at one time by the same
holder, the number of full shares of Common Stock issuable
upon conversion thereof shall be computed on the basis of
the aggregate number of shares of Series B Preferred Stock
so surrendered.
(d) The Conversion Price shall be adjusted from time to time as
follows:
(1) If the Corporation shall after the Issue Date (A) pay a
dividend or make a distribution on its capital stock in
shares of its Common Stock, (B) subdivide its outstanding
Common Stock into a greater number of shares, (C) combine
its outstanding Common Stock into a smaller number of shares
or (D) issue any shares of capital stock by reclassification
of its Common Stock, the Conversion Price in effect at the
opening of business on the day next following the date fixed
for the determination of stockholders entitled to receive
such dividend or distribution or at the opening of business
on the day next following the day on which such subdivision,
combination or reclassification becomes effective, as the
case may be, shall be adjusted so that the holder of any
share of Series B Preferred Stock thereafter surrendered for
conversion shall be entitled to receive the number of shares
of Common Stock that such holder would have owned or have
been entitled to receive after the happening of any of the
events described above had such share been converted
immediately prior to the record date in the case of a
dividend or distribution or the effective date in the case
of a subdivision, combination or reclassification. An
adjustment made pursuant to this subparagraph (a) shall
become effective immediately after the opening of business
on the day next following the record date (except as
provided in Section 8(h) below) in the case of a dividend or
distribution and shall become effective immediately after
the opening of business on the day next following the
effective date in the case of a subdivision, combination or
reclassification.
(2) If the Corporation shall issue after the Issue Date rights
or warrants (in each case, other than the Rights) to all
holders of Common Stock entitling them (for a period
expiring within 45 days after the record date mentioned
below) to subscribe for or purchase Common Stock at a price
per share less than the Fair Market Value per share of
Common Stock on the record date for the determination of
stockholders entitled to receive such rights or warrants,
then the Conversion Price in effect at the opening of
business on the day next following such record date shall be
adjusted to equal the price determined by multiplying (I)
the Conversion Price in effect immediately prior to the
opening of business on the day next following the date fixed
for such determination by (II) a fraction, the numerator of
which shall be the sum of (A) the number of shares of Common
Stock outstanding on the close of business on the date fixed
for such determination and (B) the number of shares that the
aggregate proceeds to the Corporation from the exercise of
such rights or warrants for Common Stock would purchase at
such Fair Market Value, and the denominator of which shall
be the sum of (A) the number of shares of Common Stock
outstanding on the close of business on the date fixed for
such determination and (B) the number of additional shares
of Common Stock offered for subscription or purchase
pursuant to such rights or warrants. Such adjustment shall
become effective immediately after the opening of business
on the day next following such record date (except as
provided in Section 8(h) below). In determining whether any
rights or warrants entitle the holders of Common Stock to
subscribe for or purchase shares of Common Stock at less
than such Fair Market Value, there shall be taken into
account any consideration received by the Corporation upon
issuance and upon exercise of such rights or warrants, the
value of such consideration, if other than cash, to be
determined by the Board of Directors.
(3) If the Corporation shall distribute to all holders of its
Common Stock any shares of capital stock of the Corporation
(other than Common Stock) or evidence of its indebtedness or
assets (excluding cash dividends or distributions paid from
profits or surplus of the Corporation) or rights or warrants
(in each case, other than the Rights) to subscribe for or
purchase any of its securities (excluding those rights and
warrants issued to all holders of Common Stock entitling
them for a period expiring within 45 days after the record
date referred to in subparagraph (b) above to subscribe for
or purchase Common Stock, which rights and warrants are
referred to in and treated under subparagraph (b) above (any
of the foregoing being hereinafter in this subparagraph (3)
called the "Securities"), then in each such case the
Conversion Price shall be adjusted so that it shall equal
the price determined by multiplying (I) the Conversion Price
in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to
receive such distribution by (II) a fraction, the numerator
of which shall be the Fair Market Value per share of the
Common Stock on the record date mentioned below less the
then fair market value (as determined by the Board of
Directors, whose determination shall be conclusive) of the
portion of the capital stock or assets or evidences of
indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock, and the denominator
of which shall be the Fair Market Value per share of the
Common Stock on the record date mentioned below. Such
adjustment shall become effective immediately at the opening
of business on the Business Day next following (except as
provided in Section 8(h) below) the record date for the
determination of shareholders entitled to receive such
distribution. For the purposes of this clause (c), the
distribution of a Security, which is distributed not only to
the holders of the Common Stock on the date fixed for the
determination of stockholders entitled to such distribution
of such security, but also is distributed with each share of
Common Stock delivered to a person converting a share of
Series B Preferred Stock after such determination date,
shall not require an adjustment of the Conversion Price
pursuant to this clause (c); provided that on the date, if
any, on which a Person converting a share of Series B
Preferred Stock would no longer be entitled to receive such
Security with a share of Common Stock (other than as a
result of the termination of all such Securities), a
distribution of such Securities shall be deemed to have
occurred and the Conversion Price shall be adjusted as
provided in this clause (c) (and such day shall be deemed to
be "the date fixed for the determination of the stockholders
entitled to receive such distribution" and "the record date"
within the meaning of the two preceding sentences).
(4) No adjustment in the Conversion Price shall be required
unless such adjustment would require a cumulative increase
or decrease of at least 1% in such price; provided, however,
that any adjustments that by reason of this subparagraph (4)
are not required to be made shall be carried forward and
taken into account in any subsequent adjustment until made;
and provided, further, that any adjustment shall be required
and made in accordance with the provisions of this Section 8
(other than this subparagraph (4)) not later than such time
as may be required in order to preserve the tax-free nature
of a distribution to the holders of shares of Common Stock.
Notwithstanding any other provisions of this Section 8, the
Corporation shall not be required to make any adjustment of
the Conversion Price for the issuance of any shares of
Common Stock pursuant to any plan providing for the
reinvestment of dividends on securities of the Corporation.
All calculations under this Section 8 shall be made to the
nearest cent (with $.005 being rounded upward) or to the
nearest 1/10 of a share (with .05 of a share being rounded
upward), as the case may be. Anything in this Section 8(d)
to the contrary notwithstanding, the Corporation shall be
entitled, to the extent permitted by law, to make such
reductions in the Conversion Price, in addition to those
required by this Section 8(d), as it in its discretion shall
determine to be advisable in order that any stock dividends,
subdivision of shares, reclassification or combination of
shares, distribution of rights or warrants to purchase stock
or securities, or a distribution of other assets (other than
cash dividends) hereafter made by the Corporation to its
stockholders shall not be taxable.
(e) If the Corporation shall be a party to any transaction
(including without limitation a merger, consolidation, sale
of all or substantially all of the Corporation's assets or
recapitalization of the Common Stock and excluding any
transaction as to which Section 8(d)(1) applies) (each of
the foregoing being referred to herein as a "Transaction"),
in each case as a result of which shares of Common Stock
shall be converted into the right to receive stock,
securities or other property (including cash or any
combination thereof), each share of Series B Preferred Stock
which is not converted into the right to receive stock,
securities or other property in connection with such
Transaction shall thereafter be convertible into the kind
and amount of shares of stock, securities and other property
(including cash or any combination thereof) receivable upon
the consummation of such Transaction by a holder of that
number of shares or fraction thereof of Common Stock into
which one share of Series B Preferred Stock was convertible
immediately prior to such Transaction, assuming such holder
of Common Stock (i) is not a Person with which the
Corporation consolidated or into which the Corporation
merged or which merged into the Corporation or to which such
sale or transfer was made, as the case may be ("Constituent
Person"), or an affiliate of a Constituent Person and (ii)
failed to exercise his rights of election, if any, as to the
kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction (provided
that if the kind or amount of stock, securities and other
property (including cash) receivable upon such Transaction
is not the same for each share of Common Stock of the
Corporation held immediately prior to such Transaction by
other than a Constituent Person or an affiliate thereof and
in respect of which such rights of election shall not have
been exercised ("non-electing share"), then for the purpose
of this Section 8(e) the kind and amount of stock,
securities and other property (including cash) receivable
upon such Transaction by each non-electing share shall be
deemed to be the kind and amount so receivable per share by
the plurality of the non-electing shares). The Corporation
shall not be a party to any Transaction unless the terms of
such Transaction are consistent with the provisions of this
Section 8(e) and it shall not consent or agree to the
occurrence of any Transaction until the Corporation has
entered into an agreement with the successor or purchasing
entity, as the case may be, for the benefit of the holders
of the Series B Preferred Stock that will contain provisions
enabling the holders of the Series B Preferred Stock that
remains outstanding after such Transaction to convert into
the consideration received by holders of Common Stock at the
Conversion Price in effect immediately prior to such
Transaction. The provisions of this Section 8(e) shall
similarly apply to successive Transactions.
(f) If:
(1) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock (other than in cash out
of profits or surplus and other than the Rights); or
(2) the Corporation shall authorize the granting to the
holders of the Common Stock of rights or warrants (other
than the Rights) to subscribe for or purchase any shares
of any class or any other rights or warrants (other than
the Rights); or
(3) there shall be any reclassification of the Common Stock
(other than an event to which Section 8(d)(1) applies) or
any consolidation or merger to which the Corporation is a
party and for which approval of any stockholders of the
Corporation is required, or the sale or transfer of all or
substantially all of the assets of the Corporation as an
entirety; or
(4) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation,
then the Corporation shall cause to be filed with the
Transfer Agent and shall cause to be mailed to the holders
of shares of the Series B Preferred Stock at their
addresses as shown on the stock records of the
Corporation, as promptly as possible, but at least 15 days
prior to the applicable date hereinafter specified, a
notice stating (A) the date on which a record is to be
taken for the purpose of such dividend, distribution or
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 or rights or
warrants are to be determined or (B) the date on which
such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution 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 or other property, if any, deliverable upon
such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up. Failure
to give or receive such notice or any defect therein shall
not affect the legality or validity of the proceedings
described in this Section 8.
(g) Whenever the Conversion Price is adjusted as herein provided,
the Corporation shall promptly file with the Transfer Agent an
officer's certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the
facts requiring such adjustment which certificate shall be
prima facie evidence of the correctness of such adjustment.
Promptly after delivery of such certificate, the Corporation
shall prepare a notice of such adjustment of the Conversion
Price setting forth the adjusted Conversion Price and the
effective date of such adjustment and shall mail such notice of
such adjustment of the Conversion Price to the holder of each
share of Series B Preferred Stock at such holder's last address
as shown on the stock records of the Corporation.
(h) In any case in which Section 8(d) provides that an adjustment
shall become effective on the day next following a record date
for an event, the Corporation may defer until the occurrence of
such event (A) issuing to the holder of any share of Series B
Preferred Stock converted after such record date and before the
occurrence of such event the additional shares of Common Stock
issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable
upon such conversion before giving effect to such adjustment
and (B) paying to such holder any amount in cash in lieu of any
fraction pursuant to Section 8(c).
(i) For purposes of this Section 8, the number of shares of Common
Stock at any time outstanding shall not include any shares of
Common Stock then owned or held by or for the account of the
Corporation.
(j) There shall be no adjustment of the Conversion Price in case of
the issuance of any stock of the Corporation in a
reorganization, acquisition or other similar transaction except
as specifically set forth in this Section 8. If any action or
transaction would require adjustment of the Conversion Price
pursuant to more than one paragraph of this Section 8, only one
adjustment shall be made and such adjustment shall be the
amount of adjustment that has the highest absolute value.
(k) If the Corporation shall take any action affecting the Common
Stock, other than action described in this Section 8, that in
the opinion of the Board of Directors would materially
adversely affect the conversion rights of the holders of the
shares of Series B Preferred Stock, the Conversion Price for
the Series B Preferred Stock may be adjusted, to the extent
permitted by law, in such manner, if any, and at such time, as
the Board of Directors may determine to be equitable in the
circumstances.
(l) The Corporation covenants that it will at all times reserve and
keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of Common Stock
for the purpose of effecting conversion of the Series B
Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of
Series B Preferred Stock not theretofore converted. For
purposes of this Section 8.(l)., the number of shares of Common
Stock that shall be deliverable upon the conversion of all
outstanding shares of Series B Preferred Stock shall be
computed as if at the time of computation all such outstanding
shares were held by a single holder.
The Corporation covenants that any shares of Common Stock
issued upon conversion of the Series B Preferred Stock shall be
validly issued, fully paid and non-assessable. Before taking
any action that would cause an adjustment reducing the
Conversion Price below the then-par value of the shares of
Common Stock deliverable upon conversion of the Series B
Preferred Stock, the Corporation will take any corporate action
that, in the opinion of its counsel, may be necessary in order
that the Corporation may validly and legally issue fully-paid
and nonassessable shares of Common Stock at such adjusted
Conversion Price.
(m) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue
or delivery of shares of Common Stock or other securities or
property on conversion of the Series B Preferred Stock pursuant
hereto; provided, however, that the Corporation shall not be
required to pay any tax that may be payable in respect of any
transfer involved in the issue or delivery of shares of Common
Stock or other securities or property in a name other than that
of the holder of the Series B Preferred Stock to be converted
and no such issue or delivery shall be made unless and until
the person requesting any issue or delivery has paid to the
Corporation the amount of any such tax or established, to the
reasonable satisfaction of the Corporation, that such tax has
been paid.
9. Ranking.
Any class or series of stock of the Corporation shall be deemed to
rank:
(a) prior to the Series B Preferred Stock, as to the payment of
dividends and as to distributions of assets upon liquidation,
dissolution or winding up, if the holders of such class or series
shall be entitled to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up in
preference or priority to the holders of Series B Preferred
Stock;
(b) on a parity with the Series B Preferred Stock, as to the payment
of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per
share thereof be different from those of the Series B Preferred
Stock if the holders of such class of stock or series and the
Series B Preferred Stock shall be entitled to the receipt of
dividends and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective
amounts of accrued and unpaid dividends per share or liquidation
preferences, without preference or priority one over the other;
and
(c) junior to the Series B Preferred Stock, as to the payment of
dividends or as to the distribution of assets upon liquidation,
dissolution or winding up, if such stock or series shall be
Common Stock or Series A Preferred Stock or if the holders of
Series B Preferred Stock shall be entitled to receipt of
dividends or of amounts distributable upon liquidation,
dissolution or winding up in preference or priority to the
holders of shares of such stock or series.
10. Voting.
(a) The holders of shares of Series B Preferred Stock shall have
the following voting rights:
1. Subject to the provision for adjustment hereinafter set
forth, each share of Series B Preferred Stock shall
entitle the holder thereof to 199 votes on all matters
submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any
time after the Issue Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller
number of shares, then in each such case the number of
votes per share to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a
fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such
event and the denominator of which is the number of
shares of Common Stock that were outstanding
immediately prior to such event.
2. Except as otherwise provided herein or by law, the
holders of shares of Series B Preferred Stock and the
holders of shares of Common Stock shall vote together
as one class on all matters submitted to a vote of
shareholders of the Corporation.
(b) Unless the affirmative vote or consent of the holders of a
greater number of shares shall then be required by law, the
consent of the holders of at least 66 2/3% of all of the
outstanding shares of Series B Preferred Stock (in addition
to any vote required by the terms of any other affected
series of Preferred Stock ranking on a parity with the
Series B Preferred Stock as to dividends and amounts
distributable upon liquidation, dissolution and winding up),
given in person or by proxy, either in writing or by a vote
at a meeting called for the purpose, at which the holders of
shares of Series B Preferred Stock and such other series of
Preferred Stock shall vote together as a single class
without regard to series, shall be necessary for
authorizing, effecting or validating the amendment,
alteration or repeal of any of the provisions of the
Articles of Incorporation or of any certificate amendatory
thereof or supplemental thereto (including any Certificate
of Designations, Preferences and Rights or any similar
document relating to any series of Preferred Stock) which
would materially adversely affect the preferences, rights,
powers or privileges of the Series B Preferred Stock;
provided, however, that the amendment of the provisions of
the Articles of Incorporation so as to authorize or create,
or to increase the authorized amount of, any Junior Stock or
any shares of any class ranking on a parity with the Series
B Preferred Stock shall not be deemed to materially
adversely affect the preferences, rights, powers or
privileges of Series B Preferred Stock.
(c) Unless the affirmative vote or consent of the holders of a
greater number of shares shall then be required by law, the
consent of the holders of at least 66 2/3% of all of the
outstanding shares of Series B Preferred Stock (in addition
to any vote required by the terms of any other series of
Preferred Stock ranking on a parity with the Series B
Preferred Stock as to dividends and amounts distributable
upon liquidation, dissolution or winding up), given in
person or by proxy, either in writing or by a vote at a
meeting called for the purpose at which the holders of
shares of Series B Preferred Stock and such other series of
Preferred Stock shall vote together as a single class
without regard to series, shall be necessary for
authorizing, effecting or validating the creation,
authorization or issue of any shares of any class of stock
of the Corporation ranking prior to the Series B Preferred
Stock as to dividends or upon liquidation, dissolution or
winding up, or the reclassification of any authorized stock
of the Corporation into any such prior shares, or the
creation, authorization or issuance of any obligation or
security convertible into or evidencing the right to
purchase any such prior shares.
(d) For purposes of the provisions of Sections 10(b) and 10(c),
each share of Series B Preferred Stock shall have one (1)
vote per share.
(e) Except as 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 as set forth
herein) for taking any corporate action.
11. Record Holders.
The Corporation and the Transfer Agent may deem and treat the record
holder of any shares of Series B Preferred Stock as the true and
lawful owner thereof for all purposes, and neither the Corporation nor
the Transfer Agent shall be affected by any notice to the contrary.
Article V
The corporate office shall be in Hartford or in such other town in Connecticut
as the Board of Directors may determine. The annual meeting of the shareholders
shall be held at such time and place within the state and upon such notice as
may be determined from time to time either by or in accordance with the bylaws.
At all meetings of the shareholders and subject, in the case of preferred
shareholders, to such provisions concerning voting rights as the Board of
Directors may determine pursuant to the authority granted in Article III hereof,
each shareholder shall be entitled to vote in person or by an attorney duly
authorized by a written proxy and each share of common stock represented at such
meetings shall be entitled to one vote.
Article VI
The business property and affairs of the Corporation shall be managed by or
under the direction of a Board of Directors consisting of the number of
directors fixed from time to time by resolution adopted by the affirmative vote
of a majority of the entire Board of Directors. The directors shall be divided
into three classes, designated Class I, Class II and Class III. Each class shall
consist, as nearly as may be possible, of one-third of the total number of
directors constituting the entire Board of Directors. The directors initially
elected to Class I shall serve for a term expiring at the annual meeting of
shareholders next following the end of the calendar year 1997, the directors
initially elected to Class II shall serve for a term expiring at the annual
meeting of shareholders next following the end of the calendar year 1998 and the
directors initially elected to the third class shall serve for a term expiring
at the annual meeting of shareholders next following the end of the calendar
year 1998. At each annual meeting of shareholders, successors to the class of
directors whose term expires at the annual meeting shall be elected for a
three-year term. If the number of directors is changed, any increase or decrease
shall be apportioned among the classes so as to maintain the number of directors
in each class as nearly equal as possible, and any additional director of any
class elected to fill a vacancy resulting from an increase in such class shall
hold office for a term that shall coincide with the remaining term of that
class, but in no case will a reduction of the number of directors remove any
director in office or shorten the term of any incumbent director. A director
shall hold office until the annual meeting for the year in which his term
expires and until his successor shall be elected and shall qualify, subject,
however, to prior death, resignation, removal from office or order of court
that, by reason of incompetency or any other lawful cause, he is no longer a
director in office.
Any vacancy on the Board of Directors that results from an increase in the
number of directors may be filled by the concurring vote of directors holding a
majority of the directorships, which number of directorships shall be the number
prior to the vote on the increase, and any other vacancy occurring in the Board
of Directors may be filled by concurring vote of a majority of the remaining
directors then in office, although less than a quorum, or by a sole remaining
director. Any director elected to fill a vacancy not resulting from an increase
in the number of directors shall have the same remaining term as that of his
predecessor.
Any director or the entire Board of Directors may be removed only for cause by
the affirmative vote of eighty percent (80%) of the votes entitled to be cast by
the holders of all then outstanding shares of voting stock of the Corporation,
voting together as a single class. For the purposes of this Article VI, "cause"
shall be defined as (a) a final non-appealable order of conviction of a felony
involving moral turpitude by a court of competent jurisdiction in the United
States or (b) a final non-appealable order of a court of competent jurisdiction
in the United States finding gross negligence in the performance of duties as a
director or officer of the Corporation.
Notwithstanding the foregoing, whenever the holders of any one or more classes
or series of preferred stock issued by the Corporation shall have the right,
voting separately by class or series, to elect directors at an annual or special
meeting of shareholders, the election, term of office, filling of vacancies and
other features of such directorships shall be governed by the terms of these
Articles applicable thereto, and such directors so elected shall not be divided
into classes pursuant to this Article VI unless expressly provided by such term.
Notwithstanding any other provisions of these Articles or the bylaws of the
Corporation (and notwithstanding the fact that a lesser percentage or separate
class vote may be specified by law, these Articles or the bylaws of the
Corporation) the affirmative vote of the holders of not less than eighty percent
(80%) of the votes entitled to be cast by the holders of all then outstanding
shares of voting stock of the Corporation, voting together as a single class,
shall be required to amend or repeal, or adopt any provisions inconsistent with
this Article VI; provided, however, that this paragraph shall not apply to, and
such eighty percent (80%) vote shall not be required for any amendment, repeal
or adoption recommended by three-quarters of the entire Board if all of such
directors are persons who were members of the Board at the annual meeting of
shareholders of the Corporation held prior to the proposal of any such
amendment, repeal or adoption or persons nominated by such members.
Article VII
A. In addition to any affirmative vote required by law or these Articles or
the bylaws of the Corporation, and except as otherwise expressly provided
in Section B of this Article VII, a Business Combination (as hereinafter
defined) shall require the affirmative vote of not less than eighty percent
(80%) of the votes entitled to be cast by the holders of all then
outstanding shares of Voting Stock (as hereinafter defined), voting
together as a single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage or separate class vote may be specified, by law or in any
agreement with any national securities exchange or otherwise.
B. The provisions of Section A of this Article VII shall not be applicable to
any particular Business Combination, and such Business Combination shall
require only such affirmative vote, if any, as is required by law or by any
other provision of these Articles or the bylaws of the Corporation, or any
agreement with any national securities exchange, if all of the conditions
specified in either of the following Paragraphs 1 or 2 are met:
1. The Business Combination shall have been approved by two-thirds (whether
such approval is made prior to or subsequent to the acquisition of
beneficial ownership of the Voting Stock that caused the Interested
Shareholder, as hereinafter defined to become an Interested Shareholder)
of the Continuing Directors, as hereinafter defined.
2. All of the following conditions shall have been met:
(a) The aggregate amount of cash and the Fair Market Value (as
hereinafter defined) as of the date of the consummation of the
Business Combination of consideration other than cash to be
received per share by holders of Common Stock in such Business
Combination shall be at least equal to the highest amount
determined under clauses (i), (ii), (iii) and (iv) below:
(i) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by or on behalf of the Interested Shareholder for
any share of Common Stock in connection with the acquisition by
the Interested Shareholder of beneficial ownership of shares of
Common Stock within the two-year period immediately prior to
the first public announcement of the proposed Business
Combination (the "Announcement Date");
(ii)the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested
Shareholder became an Interested Shareholder (the
"Determination Date"), whichever is higher;
(iii)(if applicable) the price per share equal to the Fair Market
Value per share of Common Stock determined pursuant to the
immediately preceding clause (ii), multiplied by the ratio of
(x) the highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid
by or on behalf of the Interested Shareholder for any share of
Common Stock in connection with the acquisition by the
Interested Shareholder of beneficial ownership of shares of
Common Stock within the two-year period immediately prior to
the Announcement Date to (y) the Fair Market Value per share
of Common Stock on the first day in such two-year period on
which the Interested Shareholder acquired beneficial ownership
of any share of Common Stock; and
(iv) The Corporation's net income per share of Common Stock for the
four full consecutive fiscal quarters immediately preceding
the Announcement Date, multiplied by the higher of the then
price/earnings multiple (if any) with respect to common stock
of such Interested Shareholder or the highest price/earnings
multiple with respect to Common Stock within the two-year
period immediately preceding the Announcement Date (such
price/earnings multiples being determined as customarily
computed and reported in the financial community);
(b) The aggregate amount of cash and the Fair Market Value as of the
date of the consummation of the Business Combination of
consideration other than cash to be received per share by holders
of shares of any class or series of outstanding Capital Stock (as
hereinafter defined), other than Common Stock, shall be at least
equal to the highest amount determined under clauses (i), (ii),
(iii) and (iv) below:
(i) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by or on behalf of the Interested Shareholder for
any share of such class or series of Capital Stock in
connection with the acquisition by the Interested Shareholder
of beneficial ownership of shares of such class or series of
Capital Stock within the two-year period immediately prior to
the Announcement Date;
(ii) the Fair Market Value per share of such class or series of
Capital Stock on the Announcement Date or on the Determination
Date, whichever is higher;
(iii) (if applicable) the price per share equal to the Fair Market
Value per share of such class or series of Capital Stock
determined pursuant to the immediately preceding clause (ii),
multiplied by the ratio of (x) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by or on behalf of the Interested
Shareholder for any share of such class or series of the Capital
Stock in connection with the acquisition by the Interested
Shareholder of beneficial ownership of shares of such class or
series of Capital Stock within the two-year period immediately
prior to the Announcement Date to (y) the Fair Market Value per
share of such class or series of Capital Stock on the first day
in such two-year period on which the Interested Shareholder
acquired beneficial ownership of any share of such class or
series of Capital Stock; and
(iv) (if applicable) the highest preferential amount per share to
which the holders of shares of such class or series of Capital
Stock would be entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, regardless of whether the Business
Combination to be consummated constitutes such an event.
The provision of this paragraph 2(b) shall be required to be met with
respect to every class or series of outstanding Capital Stock,
whether or not the Interested Shareholder has previously acquired
beneficial ownership of any shares of a particular class or series of
Capital Stock.
(c) The consideration to be received by holders of a particular class
or series of outstanding Capital Stock shall be in cash or in the
same form as previously has been paid by or on behalf of the
Interested Shareholder in connection with its direct or indirect
acquisition of beneficial ownership of shares of such class or
series of Capital Stock. If the consideration so paid for shares of
any class or series of Capital Stock varied as to form, the form of
consideration for such class or series of Capital Stock shall be
either cash or the form used to acquire beneficial ownership of the
largest number of shares of such class or series of Capital Stock
previously acquired by the Interested Shareholder.
(d) After such Interested Shareholder has become an Interested Shareholder
and prior to the consummation of such Business Combination: (i) except
as approved by two-thirds 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) payable in
accordance with the terms of any outstanding Capital Stock; (ii) there
shall have been no reduction in the annual rate of dividends paid on
the Common Stock (except as necessary to reflect any stock split,
stock dividend or subdivision of the Common Stock), except as approved
by two-thirds of the Continuing Directors; (iii) there shall have been
an increase in the annual rate of dividends paid on the Common Stock
as necessary to reflect fully any reclassification (including any
reverse stock split), recapitalization, reorganization or any similar
transaction that 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 two-thirds of the Continuing Directors; and (iv)
such Interested Shareholder shall not have become the beneficial owner
of any additional shares of Capital Stock except as part of the
transaction that results in such Interested Shareholder becoming an
Interested Shareholder and except in a transaction that, after giving
effect thereto, would not result in any increase in the Interested
Shareholder's percentage beneficial ownership of any class or series
of Capital Stock.
(e) After such Interested Shareholder has become an Interested
Shareholder, such Interested Shareholder shall not have received the
benefit, directly or indirectly (except proportionately as a
shareholder of this Corporation), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other tax
advantages provided by this Corporation, whether in anticipation of or
in connection with such Business Combination or otherwise.
(f) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder (the
"Act") (or any subsequent provisions replacing such Act, rules and
regulations) or the insurance laws and regulations of the State of
Connecticut, if applicable, shall be mailed to all shareholders of the
Corporation at least 30 days prior to the consummation of such
Business Combination (whether or not such proxy or information
statement is required by law to be mailed). The proxy or information
statement shall contain on the first page thereof, in a prominent
place, any statement as to the advisability (or inadvisability) of the
Business Combination that the Continuing Directors, or any of them,
may choose to make and, if deemed advisable by a majority of the
Continuing Directors, the opinion of an investment banking firm
selected by a majority of the Continuing Directors as to the fairness
(or not) of the terms of the Business Combination from a financial
point of view to the holders of the outstanding shares of Capital
Stock other than the Interested Shareholder and its Affiliates or
Associates (as hereinafter defined), such investment banking firm to
be paid a reasonable fee for its services by the Corporation.
(g) Such Interested Stockholder shall not have made or caused the making
of any major change in the Corporation's business or equity capital
structure without the approval of a majority of the continuing
Directors.
C. For the purposes of this Article VII:
1. The term "Business Combination" shall mean:
(a) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with (i) any Interested Shareholder or
(ii) any other corporation (whether or not itself an Interested
Shareholder) which is or after such merger or consolidation would
be an Affiliate or Associate of an Interested Shareholder; or
(b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) with
any Interested Shareholder or any Affiliate or Associate of any
Interested Shareholder involving any assets or securities of this
Corporation, any subsidiary or any Interested Shareholder or any
Affiliate or Associate of any Interested Shareholder having an
aggregate Fair Market Value of $10,000,000 or more; or
(c) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an
Interested Shareholder or any Affiliate or Associate of any
Interested Shareholder; or
(d) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or
any other transaction (whether or not with or otherwise involving
an Interested Shareholder) that has the effect, directly or
indirectly, of increasing the proportionate share of any class or
series of Capital Stock, or any securities convertible into
Capital Stock or into equity securities of any Subsidiary, that
is beneficially owned by any Interested Shareholder or any
Affiliate or Associate of any Interested Shareholder: or
(e) any agreement, contract or other arrangement providing for any
one or more of the actions specified in the foregoing clauses (a)
to (d).
2. The term "Capital Stock" shall mean all capital stock of the
Corporation authorized to be issued from time to time under Article III
of these Articles, and the term "Voting Stock" shall mean all Capital
Stock which by its terms may be voted on all matters submitted to
shareholders of the Corporation generally.
3. The term "person" shall mean any individual, firm, corporation or other
entity and shall include any group comprised of any person and any
other person with whom such person or any Affiliate or Associate of
such person has any agreement, arrangement or understanding, directly
or indirectly, for the purpose of acquiring, holding, voting or
disposing of Capital Stock.
4. The term "Interested Shareholder" shall mean any person (other than the
Corporation or any Subsidiary and other than any profit-sharing,
employee stock ownership or other employee benefit plan of the
Corporation or any Subsidiary or any trustee of or fiduciary with
respect to any such plan when acting in such capacity) who (a) is the
beneficial owner of Voting Stock representing ten percent (10%) or more
of the votes entitled to be cast by the holders of all then outstanding
shares of Voting Stock or (b) is an Affiliate or Associate of the
Corporation and at any time within the two-year period immediately
prior to the date in question was the beneficial owner of Voting Stock
representing ten percent (10%) or more of the votes entitled to be cast
by the holders of all then outstanding shares of Voting Stock.
5. A person shall be a "beneficial owner" of any Capital Stock (a) which
such person or any of its Affiliates or Associates beneficially owns,
directly or indirectly; (b) which such person or any of its Affiliates
or Associates has, directly or indirectly, (i) the right to acquire
(whether such right is exercisable immediately or subject only to the
passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, convertible
securities, exchange rights, warrants or options, or otherwise, or
(ii) the right to vote pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, convertible
securities, exchange rights, warrants or options, or otherwise, or
(ii) the right to vote pursuant to any agreement, arrangement or
understanding; or (c) which are beneficially owned, directly or
indirectly, by any other person with which such person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Capital Stock. For the purposes of
determining whether a person is an Interested Shareholder pursuant to
paragraph 4 of this Section C, the number of shares of Capital Stock
deemed to be outstanding shall include shares deemed beneficially
owned by such person through application of paragraph 5 of this
Section C, but shall not include any other shares of Capital Stock
that may be issuable pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, warrants or
options, or otherwise.
6. The terms "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 under the Act as in
effect on March 1, 1984 (the term "registrant" in said Rule 12b-2
meaning in this case the Corporation).
7. The term "Subsidiary" means any corporation of which a majority of any
class of equity security is beneficially owned by the Corporation;
provided, however, that for the purposes of the definition of
Interested Shareholder set forth in paragraph 4 of this Section C, the
term "Subsidiary" shall mean only a corporation of which a majority of
each class of equity security is beneficially owned by the Corporation.
8. The term "Continuing Director" means any member of the board of
directors of the Corporation (the "Board") while such person is a
member of the Board, who is not an Affiliate or Associate or
representative of the Interested Shareholder and was a Member of the
Board prior to the time that the Interested Shareholder became an
Interested Shareholder, and any successor of a Continuing Director,
while such successor is a member of the Board, who is not an Affiliate
or Associate or representative of the Interested Shareholder and is
recommended or elected to succeed the Continuing Director by a majority
of Continuing Directors.
9. The term "Fair Market Value" means (a) in the case of cash, the amount
of such cash; (b) in the case of stock, the highest closing sales
price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such stock is not quoted 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 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 as determined by a
majority of the Continuing Directors in good faith; and (c) in the
case of property other than cash or stock, the fair market value of
such property on the date in question as determined in good faith by a
majority of the Continuing Directors.
10. In the event of any Business Combination in which this Corporation
survives, the phrase "consideration other than cash to be received" as
used in paragraphs 2.(a) and 2.(b) of Section B of this Article VII
shall include the shares of Common Stock and/or the shares of any other
class or series of Capital Stock retained by the holders of such
shares.
D. The Board of Directors shall have the power and duty to determine for the
purposes of this Article VII on the basis of information known to them
after reasonable inquiry, (a) whether a person is an Interested
Shareholder, (b) the number of shares of Capital Stock or other securities
beneficially owned by any person, (c) whether a person is an Affiliate or
Associate of another, and (d) whether the assets that are the subject of
any Business Combination have, or the consideration to be received for the
issuance or transfer of securities by this Corporation have, or any
Subsidiary in any Business Combination has, an aggregate Fair Market Value
of $10,000,000 or more. Any such determination made in good faith shall be
binding and conclusive on all parties.
E. Nothing contained in this Article VII shall be construed to relieve any
Interested Shareholder from any fiduciary obligation imposed by law.
F. The fact that any Business Combination complies with the provisions of
Section B of this Article VII shall not be construed to impose any
fiduciary duty, obligation or responsibility on the Board, or any member
thereof, to approve such Business Combination or recommend its adoption or
approval to the shareholders of this Corporation, nor shall such compliance
limit, prohibit or otherwise restrict in any manner the Board, or any
member thereof, with respect to evaluations of or actions and responses
taken with respect to such Business Combination.
G. Notwithstanding any other provisions of these Articles or the bylaws of the
Corporation (and notwithstanding the fact that a lesser percentage or
separate class vote may be specified by law, these Articles or the bylaws
of the Corporation), the affirmative vote of the holders of not less than
eighty percent (80%) of the votes entitled to be cast by the holders of all
then outstanding shares of Voting Stock, voting together as a single class,
shall be required to amend or repeal, or adopt any provisions inconsistent
with, this Article VII; provided, however, that this Section G shall not
apply to, and such eighty percent (80%) vote shall not be required for, any
amendment, repeal or adoption unanimously recommended by the Board if all
of such directors are persons who would be eligible to serve as Continuing
Directors within the meaning of Section C, paragraph 8 of this Article VII.
Article VIII
To the full extent permitted by the Connecticut General Statutes as the same
exists or may hereafter be amended, no person who is or was a director of the
Corporation shall be personally liable to the Corporation or its shareholders
for monetary damages for breach of duty as a director in an amount that exceeds
the compensation received by the director for serving the Corporation during the
year of the violation. The limitation of liability of any person who is or was a
director provided for in this Article shall not be exclusive of any other
limitation or elimination of liability contained in, or pursuant to, the
Connecticut General Statutes, as the same exists or may hereafter be amended.
Any repeal or modification of this Article VIII by the shareholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.
Article IX
The officers and directors of the Corporation shall be indemnified by the
Corporation to the fullest extent permitted by, or pursuant to, the Connecticut
General Statutes, as the same exists or may hereafter be amended. The
Corporation may pay for or reimburse the reasonable expenses incurred by a
director who is a party to a proceeding in advance of final disposition of the
proceeding if such director is in full compliance with Section 33-773 of the
Connecticut Business Corporation Act, as the same exists or may hereafter be
amended. Any repeal or modification of this Article IX shall not adversely
affect any right or protection of a director or officer of the Corporation
existing at the time of such repeal or modification.