Registration No. 333-11471
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT No. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
on
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
TIME WARNER INC.
(FORMERLY NAMED TW INC.)
(Exact name of registrant as specified in its charter)
DELAWARE 13-3527249
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
75 Rockefeller Plaza
New York, New York 10019
(Address of Principal Executive Offices) (Zip Code)
Time Warner 1986 Stock Option Plan
Time Warner Inc. 1988 Stock Incentive Plan
Time Warner 1989 Stock Incentive Plan
Time Warner Cable Television Group Stock Incentive Plan
Time Warner Corporate Group Stock Incentive Plan
Time Warner Filmed Entertainment Group Stock Incentive Plan
Time Warner Music Group Stock Incentive Plan
Time Warner Programming Group Stock Incentive Plan
Time Warner Publishing Group Stock Incentive Plan
Time Warner Inc. 1993 Stock Option Plan
Time Warner Inc. 1994 Stock Option Plan
Time Warner 1989 WCI Replacement Stock Option Plan
Time Warner 1996 Stock Option Plan for Non-Employee Directors
(Full title of the Plans)
<PAGE>
Peter R. Haje, Esq.
Executive Vice President and General Counsel
Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
(Name and Address of agent for service)
(212) 484-8000
(Telephone number, including area code, of agent for service)
This Post-Effective Amendment No. 1 covers 85,822,033 shares of the
Registrant's Common Stock, par value $.01 per share, originally
registered on a Registration Statement on Form S-4 to which this is an
amendment. The registration fees in respect of such Common Stock
(totaling $961,726.21) were paid at the time of the original filing of
the Registration Statement on Form S-4 relating to such Common Stock.
This Registration Statement also pertains to (a) an indeterminate
number of additional shares of Common Stock pursuant to anti-dilution
and adjustment provisions of the above referenced plans and (b) Rights
to Purchase Series A Participating Cumulative Preferred Stock
("Rights") of the Registrant. Upon the occurrence of certain
prescribed events, one Right will be issued for each share of Common
Stock. Until the occurrence of such events, the Rights are not
exercisable, will be evidenced by the certificates for the Common
Stock and will be transferred along with and only with the Common
Stock.
<PAGE>
INTRODUCTORY STATEMENT
Time Warner Inc. (formerly named TW Inc.) (the "Registrant")
hereby amends its Registration Statement on Form S-4 (No. 333-11471),
effective September 6, 1996 (the "S-4 Registration Statement"), by
filing this Post-Effective Amendment on Form S-8 relating to its
Common Stock, par value $.01 per share, and associated Rights to
Purchase Series A Participating Cumulative Preferred Stock, par value
$.10 per share (collectively, the "Common Stock"), issuable upon the
exercise of options and stock appreciation rights (collectively,
"Options") granted or to be granted under the Time Warner 1986 Stock
Option Plan, the Time Warner Inc. 1988 Stock Incentive Plan, the Time
Warner 1989 Stock Incentive Plan, the Time Warner Cable Television
Group Stock Incentive Plan, the Time Warner Corporate Group Stock
Incentive Plan, the Time Warner Filmed Entertainment Group Stock
Incentive Plan, the Time Warner Music Group Stock Incentive Plan, the
Time Warner Programming Group Stock Incentive Plan, the Time Warner
Publishing Group Stock Incentive Plan, the Time Warner Inc. 1993 Stock
Option Plan, the Time Warner Inc. 1994 Stock Option Plan, the Time
Warner 1989 WCI Replacement Stock Option Plan and the Time Warner 1996
Stock Option Plan for Non-Employee Directors (collectively, the
"Option Plans").
On October 10, 1996, pursuant to an Amended and Restated
Agreement and Plan of Merger (the "Merger Agreement") dated as of
September 22, 1995, as amended, between Time Warner Companies, Inc.
(formerly named Time Warner Inc.) ("Old Time Warner"), the Registrant
(formerly a wholly owned subsidiary of Old Time Warner), Time Warner
Acquisition Corp., formerly a Delaware corporation and a wholly owned
subsidiary of the Registrant ("Delaware Sub"), TW Acquisition Corp.,
formerly a Georgia corporation and a wholly owned subsidiary of the
Registrant ("Georgia Sub"), and Turner Broadcasting System, Inc.
("TBS"), among other things: (a) Delaware Sub was merged into Old Time
Warner, (b) each outstanding share of Common Stock, par value $1.00
per share, of Old Time Warner ("Old Time Warner Common Stock"), other
than shares held directly or indirectly by Old Time Warner was
converted into one share of Common Stock, par value $.01 per share, of
the Registrant, (c) Georgia Sub was merged into TBS (collectively,
with (a), the "Mergers"), (d) the outstanding capital stock of TBS,
other than shares held directly or indirectly by Old Time Warner or
the Registrant or in the treasury of TBS and shares with respect to
which dissenters' rights were properly exercised, were converted into
the right to receive the Registrant's Common Stock, (e) each of Old
Time Warner and TBS became a wholly owned subsidiary of the Registrant
and (f) the Registrant was renamed "Time Warner Inc."
Prior to the Mergers, Options were exercisable to purchase Old
Time Warner Common Stock that was registered by Old Time Warner under
Registration Statements or Post-Effective Amendments to Registration
Statements on Form S-8, Registration Nos. 33-11031, 33-29247,
33-33076, 33-35317, 33-40859, 33-48382, 33-62774, 33-51015, 33-53213,
33-57667, 333-02383 and 333-04493.
<PAGE>
As a result of the Mergers, each Option to purchase Old Time
Warner Common Stock outstanding immediately prior to the effective
time of the Mergers became an Option to acquire (on the same terms and
conditions as were applicable under such Option to purchase Old Time
Warner Common Stock) an equal amount of Common Stock of the
Registrant. Upon exercise of the Options, holders are entitled to
receive Common Stock of the Registrant. This Post-Effective Amendment
relates only to the Common Stock of the Registrant issuable upon
exercise of such Options under the Option Plans.
<PAGE>
PART II
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and
Exchange Commission (the "Commission") by the Registrant (File No.
1-12259) or by Old Time Warner (File No. 1-8637) pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
as otherwise indicated, are hereby incorporated by reference in this
Post-Effective Amendment No. 1 to the S-4 Registration Statement:
1. Old Time Warner's Annual Report on Form 10-K for the
year ended December 31, 1995, as amended by Old Time
Warner's Form 10-K/A dated June 27, 1996 (the "1995
Form 10-K");
2. Old Time Warner's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1996 and June 30, 1996;
3. Old Time Warner's Current Reports on Form 8-K dated
January 4, 1996, March 22, 1996, March 25, 1996, April
2, 1996, April 4, 1996, April 11, 1996, May 15, 1996,
August 6, 1996, August 14, 1996, September 6, 1996 and
September 12, 1996;
4. The Joint Proxy Statement/Prospectus dated September 6,
1996 filed by the Registrant as part of its S-4
Registration Statement, as filed with the Commission on
September 6, 1996 pursuant to the Securities Act of
1933, as amended; and
5. The description of the Registrant's Common Stock and
Rights to purchase Series A Participating Cumulative
Preferred Stock, par value $.10 per share, contained in
Item 4 of its Registration Statement on Form 8-B, as
filed with the Commission on October 2, 1996, pursuant
to Section 12(b) of the Exchange Act.
All documents and reports subsequently filed by the
Registrant pursuant to Sections 13(a) and (c), 14 or 15(d) of the
Exchange Act after the date of this post-effective amendment to the
S-4 Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all
securities offered hereby have been sold, or which deregisters all
such securities remaining unsold, shall be deemed to be incorporated
by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents or reports. Any statement
contained in a document incorporated or deemed to be incorporated by
reference herein and to be a part hereof shall be deemed to be
modified or superseded for purposes of this Registration Statement to
the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any
<PAGE>
such statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The consolidated financial statements and schedules of Old
Time Warner and Time Warner Entertainment Company, L.P. appearing in
the 1995 Form 10-K, the combined financial statements of the Time
Warner Service Partnerships incorporated by reference therein, and the
consolidated financial statements and schedule of Cablevision
Industries Corporation as of December 31, 1995, and for the year then
ended, which are incorporated herein and in the Prospectuses relating
hereto by reference to the Joint Proxy Statement/Prospectus included
as part of the S-4 Registration Statement, have been audited by Ernst
& Young LLP, independent auditors, as set forth in their reports
thereon included therein and incorporated herein by reference. Such
financial statements and schedules are incorporated herein by
reference in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.
The financial statements of Newhouse Broadcasting Cable
Division of Newhouse Broadcasting Corporation and Subsidiaries as of
July 31, 1994 and 1993, and for each of the three years in the period
ended July 31, 1994, and the financial statements of Vision Cable
Division of Vision Cable Communications, Inc. and Subsidiaries as of
December 31, 1994 and 1993, and for each of the three years in the
period ended December 31, 1994, which are incorporated herein and in
the Prospectuses relating hereto by reference to the Joint Proxy
Statement/Prospectus included as part of the S-4 Registration
Statement, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon included therein and
incorporated herein by reference. Such financial statements are
incorporated herein by reference in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.
The financial statements of Paragon Communications as of
December 31, 1994 and 1993, and for each of the three years in the
period ended December 31, 1994, which are incorporated herein and in
the Prospectuses relating hereto by reference to the 1995 Form 10-K,
and the consolidated financial statements of Turner Broadcasting
System, Inc. as of December 31, 1995 and 1994, and for the three years
in the period ended December 31, 1995, which are incorporated herein
and in the Prospectuses relating hereto by reference to the Joint
Proxy Statement/Prospectus included as part of the S-4 Registration
Statement, have been audited by Price Waterhouse LLP, independent
accountants, as stated in their reports thereon included therein and
incorporated herein by reference. Such financial statements are
incorporated herein by reference in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.
<PAGE>
The consolidated financial statements of Cablevision
Industries Corporation as of December 31, 1994, and for each of the
two years in the period ended December 31, 1994, which are
incorporated herein and in the Prospectuses relating hereto by
reference to the Joint Proxy Statement/Prospectus included as part of
the S-4 Registration Statement, have been audited by Arthur Andersen
LLP, Independent Public Accountants, as set forth in their report
thereon included therein and incorporated herein by reference. Such
financial statements have been incorporated herein by reference in
reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
<PAGE>
The consolidated financial statements of KBLCOM Incorporated
as of December 31, 1994 and 1993, and for each of the three years in
the period ended December 31, 1994, which are incorporated herein and
in the Prospectuses relating hereto by reference to the Joint Proxy
Statement/Prospectus included as part of the S-4 Registration Statement,
have been audited by Deloitte & Touche LLP, Independent Auditors, as
set forth in their report thereon included therein and incorporated
herein by reference. Such financial statements have been incorporated
herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
Legal matters in connection with the Common Stock offered
hereby have been passed upon for the Registrant by Cravath, Swaine &
Moore, 825 Eighth Avenue, New York, NY 10019.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the
"DGCL") provides that a corporation may indemnify directors and
officers as well as other employees and individuals against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement in connection with specified actions, suits or proceedings,
whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation--a "derivative
action"), if they acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings,
had no reasonable cause to believe their conduct was unlawful. A
similar standard is applicable in the case of derivative actions,
except that indemnification only extends to expenses (including
attorneys' fees) actually and reasonably incurred in connection with
the defense or settlement of such action, and the statute requires
court approval before there can be any indemnification where the
person seeking indemnification has been found liable to the
corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-
laws, disinterested director vote, stockholder vote, agreement or
otherwise.
Article VI of the Registrant's By-laws requires
indemnification to the fullest extent permitted under Delaware law of
any person who is or was a director or officer of the Registrant who
is or was involved or threatened to be made so involved in any action,
suit or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that such person is or was
serving as a director, officer or employee of the Registrant or any
predecessor of the Registrant or was serving at the request of the
Registrant as a director, officer or employee of any other enterprise.
Section 102(b)(7) of the DGCL permits a provision in the
certificate of incorporation of each corporation organized thereunder,
such as the Registrant, eliminating or limiting, with certain
exceptions, the personal liability of a director to the corporation or
its
<PAGE>
stockholders for monetary damages for breach of fiduciary duty as a
director. Section 1, Article X of the Restated Certificate of
Incorporation of the Registrant eliminates the liability of directors
to the extent permitted by Section 102(b)(7).
The foregoing statements are subject to the detailed
provisions of Sections 145 and 102(b)(7) of the DGCL, Article VI of
such By-laws and Section 1, Article X of such Restated Certificate of
Incorporation, as applicable.
The Registrant's Directors' and Officers' Liability and
Reimbursement Insurance Policy is designed to reimburse the Registrant
for any payments made by it pursuant to the foregoing indemnification.
Such policy has coverage of $50,000,000.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The exhibits listed on the accompanying Exhibit Index are
filed or incorporated by reference as part of this Registration
Statement.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this
Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b)
<PAGE>
if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change
in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in
the effective Registration Statement.
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the Registration Statement
is on Form S-3, Form S-8, or Form F-3 and the
information required to be included in a post-effective
amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by
the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the Registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant
to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the
<PAGE>
payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly
caused this registration statement to be signed on its behalf by the
undersigned thereunto duly authorized, in the City and State of New
York, on October 10, 1996.
TIME WARNER INC.
By /s/ Richard J. Bressler
---------------------------
Name: Richard J. Bressler
Title: Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons
on October 10, 1996 in the capacities indicated.
Signature Title
(i) Principal Executive Officer:
Director, Chairman of the
- --------------------------------- Board and Chief Executive
(Gerald M. Levin) Officer
(ii) Principal Financial Officer:
/s/ Richard J. Bressler Senior Vice President and
- --------------------------------- Chief Financial Officer
(Richard J. Bressler)
(iii) Principal Accounting Officer:
/s/ John A. LaBarca Vice President and Controller
- ----------------------------------
(John A. LaBarca)
<PAGE>
(iv) Directors:
*
- ----------------------------
(Merv Adelson)
*
- ----------------------------
(Lawrence B. Buttenwieser)
*
- ----------------------------
(Beverly Sills Greenough)
*
- ----------------------------
(Carla A. Hills)
*
- ----------------------------
(David T. Kearns)
*
- ----------------------------
(Reuben Mark)
*
- ----------------------------
(Michael A. Miles)
*
- ----------------------------
(J. Richard Munro)
*
- ----------------------------
(Richard D. Parsons)
*
- ----------------------------
(Donald S. Perkins)
*
- ----------------------------
(R. E. Turner)
*
- ----------------------------
(Raymond S. Troubh)
*
- ----------------------------
(Francis T. Vincent, Jr.)
<PAGE>
Constituting a majority of the Board of Directors
*By /s/ Peter R. Haje
---------------------
(Peter R. Haje)
(Attorney-in-Fact)
*Pursuant to Powers of Attorney
dated as of October 10, 1996
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page
4.1 Amended and Restated Agreement and Plan
of Merger (the "Merger Agreement"),
dated as of September 22, 1995, among
Time Warner Companies, Inc. (formerly
named Time Warner Inc. ("Old Time
Warner")), the Registrant, Time Warner
Acquisition Corp., TW Acquisition Corp.
and TBS (incorporated by reference to
Appendix A-1(a) to the Joint Proxy
Statement/Prospectus included as part of
the Registrant's Registration Statement
on Form S-4 (Registration No. 333-11471)
(the "S-4 Registration Statement");
Exhibits A-1, A-2, B, C-1 and C-2 to the *
Merger Agreement are incorporated by
reference to Exhibit 2(a) to the Current
Report on Form 8-K dated November 16,
1995 of Old Time Warner (File No.
1-8637)).
4.2 Amendment No. 1 dated as of August 8,
1996 to the Merger Agreement
(incorporated by reference to Appendix
A-1(b) to the Joint Proxy
Statement/Prospectus included as part of
the S-4 Registration Statement). *
4.3 Restated Certificate of Incorporation of
the Registrant
4.4 Certificate of Amendment of Restated
Certificate of Incorporation of the
Registrant.
4.5 Certificate of the Voting Powers,
Designations, Preferences and Relative,
Participating, Optional or Other Special
Rights, and Qualifications, Limitations
or Restrictions Thereof, of Series LMC
Common Stock of the Registrant.
4.6 Certificate of the Voting Powers,
Designations, Preferences and Relative,
Participating, Optional or Other Special
Rights, and Qualifications, Limitations
or Restrictions Thereof, of Series
LMCN-V Common Stock of the Registrant.
<PAGE>
Exhibit
Number Description Page
4.7 Certificate of the Voting Powers,
Designations, Preferences and Relative,
Participating, Optional or Other Special
Rights, and Qualifications, Limitations
or Restrictions Thereof, of Series A
Participating Cumulative Preferred Stock
of the Registrant .
4.8 Certificate of the Voting Powers,
Designations, Preferences and Relative,
Participating, Optional or Other Special
Rights, and Qualifications, Limitations
or Restrictions Thereof, of Series D
Convertible Preferred Stock of the
Registrant.
4.9 Certificate of the Voting Powers,
Designations, Preferences and Relative,
Participating, Optional or Other Special
Rights, and Qualifications, Limitations
or Restrictions Thereof, of Series E
Convertible Preferred Stock of the
Registrant.
4.10 Certificate of the Voting Powers,
Designations, Preferences and Relative,
Participating, Optional or Other Special
Rights, and Qualifications, Limitations
or Restrictions Thereof, of Series F
Convertible Preferred Stock of the
Registrant.
4.11 Certificate of the Voting Powers,
Designations, Preferences and Relative,
Participating, Optional or Other Special
Rights, and Qualifications, Limitations
or Restrictions Thereof, of Series G
Convertible Preferred Stock of the
Registrant.
4.12 Certificate of the Voting Powers,
Designations, Preferences and Relative,
Participating, Optional or Other Special
Rights, and Qualifications, Limitations
or Restrictions Thereof, of Series H
Convertible Preferred Stock of the
Registrant.
<PAGE>
Exhibit
Number Description Page
4.13 Certificate of the Voting Powers,
Designations, Preferences and Relative,
Participating, Optional or Other Special
Rights, and Qualifications, Limitations
or Restrictions Thereof, of Series I
Convertible Preferred Stock of the
Registrant.
4.14 Certificate of the Voting Powers,
Designations, Preferences and Relative,
Participating, Optional or Other Special
Rights, and Qualifications, Limitations
or Restrictions Thereof, of Series J
Convertible Preferred Stock of the
Registrant.
4.15 Certificate of the Voting Powers,
Designations, Preferences and Relative,
Participating, Optional or Other Special
Rights, and Qualifications, Limitations
or Restrictions Thereof, of 10-1/4%
Series M Exchangeable Preferred Stock of
the Registrant.
4.16 By-laws of the Registrant.
4.17 Rights Agreement, between the Registrant
and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent.
4.18 Shareholder's Agreement (the
"Shareholders' Agreement"), dated as of
September 22, 1995, among Old Time
Warner, R.E. Turner and certain
associates and affiliates of R. E.
Turner (incorporated by reference to
Appendix A-3 to the Joint Proxy
Statement/Prospectus included as part of
the S-4 Registration Statement;
Schedule 1 to the Shareholders'
Agreement is incorporated by reference
to Exhibit 10(a) to the Current Report
on Form 8-K dated September 22, 1995 of
Old Time Warner (File No. 1-8637)). *
5. Opinion of Cravath, Swaine & Moore
regarding the legality of the securities
being registered (incorporated by
reference to Exhibit 5 to the S-4
Registration Statement). *
23.1 Consent of Ernst & Young LLP,
independent auditors.
<PAGE>
Exhibit
Number Description Page
23.2 Consent of Price Warehouse LLP,
independent accountants, with respect to
Paragon Communications.
23.3 Consent of Price Warehouse LLP,
independent accountants, with respect to
Turner Broadcasting System, Inc.
23.4 Consent of Arthur Andersen, LLP,
Independent Public Accountants.
23.5 Consent of Deloitte & Touche, LLP,
Independent Auditors.
23.6 Consent of Cravath, Swaine & Moore
(incorporated by reference to Exhibit 5
to the S-4 Registration Statement). *
24 Powers of Attorney dated as of October
10, 1996.
*Incorporated by reference
RESTATED CERTIFICATE OF INCORPORATION
OF
TW INC.
TW INC., a corporation organized and existing under the laws of the
State of Delaware, DOES HEREBY CERTIFY AS FOLLOWS:
1. The name of the corporation is TW INC. and the name under
which the corporation was originally incorporated is TPS ACQUISITION
INC. The original Certificate of Incorporation was filed with the
Secretary of State of the State of Delaware on June 12, 1989.
2. This Restated Certificate of Incorporation, having been duly
adopted in accordance with Sections 228, 242 and 245 of the General
Corporation Law of the State of Delaware and by the written consent of
the sole stockholder of TW Inc., restates and integrates and further
amends the provisions of the Certificate of Incorporation as amended
or supplemented heretofore. As so restated and integrated and further
amended, the Restated Certificate of Incorporation (hereinafter, this
"Certificate of Incorporation") reads as follows:
ARTICLE I
The name of the corporation (hereinafter called the "Corporation") is
TW Inc.
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, Wilmington, County of New Castle, Delaware
19801. The name of the Corporation's registered agent at such address is
The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
ARTICLE IV
SECTION 1. The total number of shares of all classes of stock which
the Corporation shall have authority to issue is 2.45 billion shares,
consisting of (1) 250 million shares of Preferred Stock, par value $0.10
per share ("Preferred Stock"), (2) 2.0 billion shares of Common Stock, par
value $0.01 per share ("Common Stock"), and (3) 200 million shares of
Series Common Stock, par value $0.01 per share ("Series Common Stock"). The
number of authorized shares of any of the Preferred Stock, the Common Stock
or the Series Common Stock may be
<PAGE>
increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority in voting
power of the stock of the Corporation entitled to vote thereon irrespective
of the provisions of Section 242(b)(2) of the General Corporation Law of
the State of Delaware (or any successor provision thereto), and no vote of
the holders of any of the Preferred Stock, the Common Stock or the Series
Common Stock voting separately as a class shall be required therefor.
SECTION 2. The Board of Directors is hereby expressly authorized, by
resolution or resolutions, to provide, out of the unissued shares of
Preferred Stock, for series of Preferred Stock and, with respect to each
such series, to fix the number of shares constituting such series and the
designation of such series, the voting powers (if any) of the shares of
such series, and the preferences and relative, participating, optional or
other special rights, if any, and any qualifications, limitations or
restrictions thereof, of the shares of such series. The powers, preferences
and relative, participating, optional and other special rights of each
series of Preferred Stock, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other
series at any time outstanding.
SECTION 3. The Board of Directors is hereby expressly authorized, by
resolution or resolutions, to provide, out of the unissued shares of Series
Common Stock, for series of Series Common Stock and, with respect to each
such series, to fix the number of shares constituting such series and the
designation of such series, the voting powers (if any) of the shares of
such series, and the preferences and relative, participating, optional or
other special rights, if any, and any qualifications, limitations or
restrictions thereof, of the shares of such series. The powers, preferences
and relative, participating, optional and other special rights of each
series of Series Common Stock, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other
series at any time outstanding.
SECTION 4. (a) Each holder of Common Stock, as such, shall be entitled
to one vote for each share of Common Stock held of record by such holder on
all matters on which stockholders generally are entitled to vote; provided,
however, that, except as otherwise required by law, holders of Common
Stock, as such, shall not be entitled to vote on any amendment to this
Certificate of Incorporation (including any Certificate of Designation
relating to any series of Preferred Stock or Series Common Stock) that
relates solely to the terms of one or more outstanding series of Preferred
Stock or Series Common Stock if the holders of such affected series are
entitled, either separately or together with the holders of one or more
other such series, to vote thereon pursuant to this Certificate of
Incorporation (including any Certificate of Designation relating to any
series of Preferred Stock or Series Common Stock) or pursuant to the
General Corporation Law of the State of Delaware.
(b) Except as otherwise required by law, holders of a series of
Preferred Stock or Series Common Stock, as such, shall be entitled only to
such voting rights, if any, as shall expressly be granted thereto by this
Certificate of Incorporation (including any Certificate of Designation
relating to such series).
(c) Subject to applicable law and the rights, if any, of the holders
of any outstanding series of Preferred Stock or Series Common Stock or any
class or series of stock having a preference over or the right to
participate with the Common Stock with respect to the payment of dividends,
dividends may be declared and paid on the Common Stock at such times and in
such amounts as the Board of Directors in its discretion shall determine.
(d) Upon the dissolution, liquidation or winding up of the
Corporation, subject to the rights, if any, of the holders of any
outstanding series of Preferred Stock or Series Common Stock or any class
or series of stock having a preference over or the right to participate
with the Common Stock with respect to the distribution of assets of the
Corporation upon such dissolution, liquidation or winding up of the
Corporation, the holders of the Common Stock,
<PAGE>
as such, shall be entitled to receive the assets of the Corporation
available for distribution to its stockholders ratably in proportion to the
number of shares held by them.
SECTION 5. Notwithstanding any other provision of this Certificate of
Incorporation to the contrary, but subject to the provisions of any
resolution or resolutions of the Board of Directors adopted pursuant to
this Article IV creating (i) any series of Preferred Stock, (ii) any series
of any other class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation or (iii) any series of Series
Common Stock, outstanding shares of Common Stock, Series Common Stock,
Preferred Stock or any other class or series of stock of the Corporation
shall always be subject to redemption by the Corporation, by action of the
Board of Directors, if in the judgment of the Board of Directors such
action should be taken, pursuant to Section 151(b) of the General
Corporation Law of the State of Delaware (or by any other applicable
provision of law), to the extent necessary to prevent the loss or secure
the reinstatement of any license or franchise from any governmental agency
held by the Corporation or any Subsidiary to conduct any portion of the
business of the Corporation or such Subsidiary, which license or franchise
is conditioned upon some or all of the holders of the Corporation's stock
of any class or series possessing prescribed qualifications. The terms and
conditions of such redemption shall be as follows:
(a) the redemption price of the shares to be redeemed pursuant to
this Section 5 shall be equal to the Fair Market Value of such shares;
(b) the redemption price of such shares may be paid in cash,
Redemption Securities or any combination thereof;
(c) if less than all the shares held by Disqualified Holders are
to be redeemed, the shares to be redeemed shall be selected in such
manner as shall be determined by the Board of Directors, which may
include selection first of the most recently purchased shares thereof,
selection by lot or selection in any other manner determined by the
Board of Directors;
(d) at least 30 days' written notice of the Redemption Date shall
be given to the record holders of the shares selected to be redeemed
(unless waived in writing by such holder), provided that the
Redemption Date may be the date on which written notice shall be given
to record holders if the cash or Redemption Securities necessary to
effect the redemption shall have been deposited in trust for the
benefit of such record holders and subject to immediate withdrawal by
them upon surrender of the stock certificates for their shares to be
redeemed;
(e) from and after the Redemption Date, any and all rights of
whatever nature, which may be held by the owners of shares selected
for redemption (including without limitation any rights to vote or
participate in dividends declared on stock of the same class or series
as such shares), shall cease and terminate and they shall thenceforth
be entitled only to receive the cash or Redemption Securities payable
upon redemption; and
(f) such other terms and conditions as the Board shall determine.
For purposes of this Section 5:
(i) "Disqualified Holder" shall mean any holder of shares of
stock of the Corporation of any class or series whose holding of such
stock may result in the loss of any license or franchise from any
governmental agency held by the Corporation or any Subsidiary to
conduct any portion of the business of the Corporation or any
Subsidiary.
<PAGE>
(ii) "Fair Market Value" of a share of the Corporation's stock of
any class or series shall mean the average (unweighted) Closing Price
for such a share for each of the 45 most recent days on which shares
of stock of such class or series shall have been traded preceding the
day on which notice of redemption shall be given pursuant to paragraph
(d) of this Section 5; provided, however, that if shares of stock of
such class or series are not traded on any securities exchange or in
the over-the-counter market, "Fair Market Value" shall be determined
by the Board of Directors in good faith; and provided further,
however, that "Fair Market Value" as to any stockholder who purchased
his stock within 120 days of a Redemption Date need not (unless
otherwise determined by the Board of Directors) exceed the purchase
price paid by him. "Closing Price" on any day means the reported last
sales price regular way or, in case no such sale takes place, the
average of the reported closing bid and asked prices regular way on
the New York Stock Exchange Composite Tape, or, if stock of the class
or series in question is not quoted on such Composite Tape, on the New
York Stock Exchange, or, if such stock is not listed on such exchange,
on the principal United States registered securities exchange on which
such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing sales price or bid quotation for such
stock on The Nasdaq Stock Market or any system then in use, or if no
such prices or quotations are available, the fair market value on the
day in question as determined by the Board of Directors in good faith.
(iii) "Redemption Date" shall mean the date fixed by the Board of
Directors for the redemption of any shares of stock of the Corporation
pursuant to this Section 5.
(iv) "Redemption Securities" shall mean any debt or equity
securities of the Corporation, any Subsidiary or any other
corporation, or any combination thereof, having such terms and
conditions as shall be approved by the Board of Directors and which,
together with any cash to be paid as part of the redemption price, in
the opinion of any nationally recognized investment banking firm
selected by the Board of Directors (which may be a firm which provides
other investment banking, brokerage or other services to the
Corporation), has a value, at the time notice of redemption is given
pursuant to paragraph (d) of this Section 5, at least equal to the
Fair Market Value of the shares to be redeemed pursuant to this
Section 5 (assuming, in the case of Redemption Securities to be
publicly traded, such Redemption Securities were fully distributed and
subject only to normal trading activity).
(v) "Subsidiary" shall mean any corporation more than 50% of
whose outstanding stock having ordinary voting power in the election
of directors is owned by the Corporation, by a Subsidiary or by the
Corporation and one or more Subsidiaries.
ARTICLE V
Subject to Section 253 of the General Corporation Law of the State of
Delaware, the vote of stockholders of the Corporation required to approve
Business Combinations (as hereinafter defined) shall be as set forth in
this Article V.
SECTION 1. In addition to any affirmative vote required by law or by
this Certificate of Incorporation or any resolution or resolutions of the
Board of Directors adopted pursuant to Article IV of this Certificate of
Incorporation, and except as otherwise expressly provided in Section 3 of
this Article V:
<PAGE>
(a) any merger or consolidation of the Corporation with (i) any
Interested Stockholder or (ii) any other corporation (whether or not
itself an Interested Stockholder) which is, or after such merger or
consolidation would be, an Affiliate or Associate of an Interested
Stockholder; or
(b) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to
or with any Interested Stockholder or any Affiliate or Associate of
any Interested Stockholder of (i) all or substantially all the assets
of the Corporation or (ii) assets of the Corporation or any of its
Subsidiaries representing in the aggregate more than 75% of the total
value of the assets of the Corporation and its consolidated
Subsidiaries as reflected on the most recent consolidated balance
sheet of the Corporation and its consolidated Subsidiaries prepared in
accordance with generally accepted accounting principles then in
effect; or
(c) (i) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to
or with any Interested Stockholder or any Affiliate or Associate of
any Interested Stockholder of any assets of the Corporation or of any
Subsidiary having an aggregate Fair Market Value of $100,000,000 or
more, but less than the amount referred to in clause (ii) of paragraph
(b) of this Section 1, or (ii) any merger or consolidation of any
Subsidiary of the Corporation having assets with an aggregate Fair
Market Value of $100,000,000 or more in a transaction not covered by
paragraph (b) of this Section 1 with (x) any Interested Stockholder or
(y) any other corporation (whether or not itself an Interested
Stockholder) which is, or after such merger or consolidation would be,
an Affiliate or Associate of an Interested Stockholder; or
(d) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of transactions) to any Interested
Stockholder or any Affiliate or Associate of any Interested
Stockholder of any securities of the Corporation or any Subsidiary in
exchange for cash, securities or other property (or a combination
thereof) having an aggregate Fair Market Value of $100,000,000 or
more, other than the issuance of securities upon the conversion of
convertible securities of the Corporation or any Subsidiary which were
not acquired by such Interested Stockholder (or such Affiliate or
Associate) from the Corporation or a Subsidiary; or
(e) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any
Interested Stockholder or any Affiliate or Associate of any Interested
Stockholder; or
(f) 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 into or otherwise involving
any Interested Stockholder), which in any such case has the effect,
directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class or series of stock or securities
convertible into stock of the Corporation or any Subsidiary which is
directly or indirectly beneficially owned by any Interested
Stockholder or any Affiliate or Associate of any Interested
Stockholder;
shall not be consummated without (i) (x) the affirmative vote of the
holders of at least 80% of the combined voting power of the shares of stock
of all classes and series of the Corporation entitled to vote generally in
the election of directors ("Voting Stock") outstanding at the time of
approval and (y) the affirmative vote of a majority of the combined voting
power of the shares of Voting Stock held by Disinterested Stockholders
outstanding at the time of approval, in each case voting together as a
single class, or (ii) the affirmative vote of the holders of all the shares
of stock of all classes and series of the Corporation outstanding at the
time of approval. Such affirmative vote shall
<PAGE>
be required notwithstanding the fact that no vote may be required, or that
a lesser percentage may be specified, by law or by this Certificate of
Incorporation or any resolution or resolutions of the Board of Directors
adopted pursuant to Article IV of this Certificate of Incorporation or in
any agreement with any national securities exchange or otherwise.
SECTION 2. The term "Business Combination" as used in this Article V
shall mean any transaction which is referred to in any one or more of
paragraphs (a) through (f) of Section 1 of this Article V.
SECTION 3. The provisions of Section 1 of this Article V shall not be
applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by law
and any other provision of this Certificate of Incorporation and any
resolution or resolutions of the Board of Directors adopted pursuant to
Article IV of this Certificate of Incorporation, if all the conditions
specified in any of the following paragraphs (a), (b), (c) or (d) are met:
(a) (i) such Business Combination shall have been approved by a
majority of the Disinterested Directors and (ii) the Interested
Stockholder involved in such Business Combination (x) acquired such
status as an Interested Stockholder in a manner substantially
consistent with an agreement or memorandum of understanding approved
by the Board of Directors prior to the time such Interested
Stockholder became an Interested Stockholder and (y) has complied with
all requirements imposed by such agreement or memorandum of
understanding; or
(b) in the case of any Business Combination described in
paragraph (a) or (f) of Section 1 of this Article V, (i) such Business
Combination shall have been approved by a majority of the
Disinterested Directors, (ii) such Business Combination shall not have
resulted, directly or indirectly, in an increase of more than 10% in
the total amount of shares of any class or series of stock or
securities convertible into stock of the Corporation or any Subsidiary
which was directly or indirectly beneficially owned by an Interested
Stockholder and all Affiliates and Associates of such Interested
Stockholder at the time of the approval of such Business Combination
by a majority of the Disinterested Directors, and (iii) such Business
Combination shall not have been consummated within a period of two
years after the consummation of any other Business Combination
described in paragraph (a), (b), (c), (d), (e) or (f) of Section 1 of
this Article V (whether or not such other Business Combination shall
have been approved by a majority of the Disinterested Directors) which
had the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class or series
of stock or securities convertible into stock of the Corporation or
any Subsidiary which was directly or indirectly beneficially owned by
such Interested Stockholder or any Affiliate or Associate of such
Interested Stockholder; or
(c) in the case of any Business Combination described in
paragraph (c) or (d) of Section 1 of this Article V, such Business
Combination shall have been approved by a majority of the
Disinterested Directors; or
(d) all of the six conditions specified in the following clauses
(i) through (vi) shall have been met:
(i) The transaction constituting the Business Combination shall
provide for a consideration to be received by holders of Common Stock
in exchange for all their shares of Common Stock, and the aggregate
amount of the cash and the Fair Market Value as of the date of the
consummation of the Business Combination of any 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 of the
following:
<PAGE>
(A) (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting dealers'
fee) paid in order to acquire any shares of Common Stock
beneficially owned by the Interested Stockholder which were
acquired (i) within the two-year period immediately prior to the
Announcement Date or (ii) in the transaction in which it became
an Interested Stockholder, whichever is higher; and
(B) the Fair Market Value per share of Common Stock on the
Announcement Date or on the Determination Date, whichever is
higher; and
(ii) if the transaction constituting the Business Combination
shall provide for a consideration to be received by holders of any
class or series of outstanding Voting Stock other than Common Stock,
the aggregate amount of the cash and the Fair Market Value as of the
date of the consummation of the Business Combination of any
consideration other than cash to be received per share by holders of
shares of such Voting Stock shall be at least equal to the highest of
the following (it being intended that the requirements of this clause
(d) (ii) shall be required to be met with respect to every class and
series of such outstanding Voting Stock, whether or not the Interested
Stockholder beneficially owns any shares of a particular class or
series of Voting Stock):
(A) (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid in order to acquire any shares of such class or series
of Voting Stock beneficially owned by the Interested Stockholder
which were acquired (i) within the two-year period immediately
prior to the Announcement Date or (ii) in the transaction in
which it became an Interested Stockholder, whichever is higher;
(B) (if applicable) the highest preferential amount per
share to which the holders of shares of such class or series of
Voting Stock are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation; and
(C) the Fair Market Value per share of such class or series
of Voting Stock on the Announcement Date or on the Determination
Date, whichever is higher; and
(iii) the consideration to be received by holders of a particular
class or series of outstanding Voting Stock (including Common Stock)
shall be in cash or in the same form as was previously paid in order
to acquire shares of such class or series of Voting Stock which are
beneficially owned by the Interested Stockholder and, if the
Interested Stockholder beneficially owns shares of any class or series
of Voting Stock which were acquired with varying forms of
consideration, the form of consideration to be received by holders of
such class or series of Voting Stock shall be either cash or the form
used to acquire the largest number of shares of such class or series
of Voting Stock beneficially owned by it; and
(iv) after such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business
Combination:
(A) except as approved by a majority of the Disinterested
Directors, there shall have been no failure to declare and pay at
the regular dates therefor the full amount of any dividends
(whether or not cumulative) payable on the Preferred Stock or any
class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation;
<PAGE>
(B) there shall have been (x) no reduction in the annual
rate of dividends paid on the Common Stock (except as necessary
to reflect any subdivision of the Common Stock), except as
approved by a majority of the Disinterested Directors, and (y) an
increase in such annual rate of dividends (as necessary to
prevent any such reduction) in the event of any reclassification
(including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect of
reducing the number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate is approved by
a majority of the Disinterested Directors; and
(C) such Interested Stockholder shall not have become the
beneficial owner of any additional shares of Voting Stock except
as part of the transaction in which it became an Interested
Stockholder; and
(v) after such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the
benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other
financial assistance provided by the Corporation, whether in
anticipation of or in connection with such Business Combination or
otherwise; and
(vi) 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 (or any subsequent provisions replacing such Act, rules or
regulations) shall be mailed to public stockholders 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 to be mailed pursuant to such Act or subsequent provisions).
SECTION 4. For the purposes of this Article V:
(a) A "person" shall mean any individual, firm, corporation,
partnership, trust or other entity.
(b) "Interested Stockholder" shall mean any person (other than
the Corporation or any Subsidiary) who or which:
(1) is the beneficial owner, directly or indirectly, of 20%
or more of the combined voting power of the then outstanding
shares of Voting Stock; or
(2) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of 20%
or more of the combined voting power of the then outstanding
shares of Voting Stock; or
(3) is an assignee of or has otherwise succeeded to the
beneficial ownership of any shares of Voting Stock which were at
any time within the two-year period immediately prior to the date
in question beneficially owned by any Interested Stockholder, if
such assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(c) "Disinterested Stockholder" shall mean a stockholder of the
Corporation who is not an Interested Stockholder or an Affiliate or an
Associate of an Interested Stockholder.
<PAGE>
(d) A person shall be a "beneficial owner" of any Voting Stock:
(1) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(2) which such person or any of its Affiliates or Associates
has (a) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise (excluding pursuant to any rights associated generally
with the Common Stock), or (b) the right to vote or to direct the
vote pursuant to any agreement, arrangement or understanding; or
(3) 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 Voting Stock.
(e) For the purposes of determining whether a person is an
Interested Stockholder pursuant to paragraph (b) of this Section 4,
the number of shares of Voting Stock deemed to be outstanding shall
include shares deemed owned by such person through application of
paragraph (d) of this Section 4 but shall not include any other shares
of Voting Stock which may be issuable to other persons pursuant to any
agreement, arrangement or understanding, or upon exercise of
conversion rights, exchange rights, warrants or options, or otherwise.
(f) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on
January 1, 1983.
(g) "Subsidiary" shall have the meaning set forth in Section 5 of
Article IV of this Certificate of Incorporation; provided, however,
that for the purposes of the definition of Interested Stockholder set
forth in paragraph (b) of this Section 4, the term "Subsidiary" shall
mean only a corporation of which a majority of each class of equity
security is owned by the Corporation, by a Subsidiary or by the
Corporation and one or more Subsidiaries.
(h) "Disinterested Director" means any member of the Board of
Directors of the Corporation who is unaffiliated with, and not a
nominee of, the Interested Stockholder and was a member of the Board
of Directors prior to the time that the Interested Stockholder became
an Interested Stockholder, and any successor of a Disinterested
Director who is unaffiliated with, and not a nominee of, the
Interested Stockholder and who is recommended to succeed a
Disinterested Director by a majority of Disinterested Directors then
on the Board of Directors.
(i) "Fair Market Value" means: (1) in the case of stock, the
highest closing sale price during the 30-day period immediately
preceding the date in question of a share of such stock on the New
York Stock Exchange Composite Tape, 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 Securities Exchange Act of
1934 on which such stock is listed, or, if such stock is not listed on
any such exchange, the highest closing sales price or bid quotation
with respect to a share of such stock during the 30-day period
preceding the date in question on The Nasdaq Stock Market or any
system then in use, or, if no such quotations are available, the fair
market value on the date in question of a share of such stock as
determined by a majority of the Disinterested Directors in good faith;
and (2) in the case of stock of any class
<PAGE>
or series which is not traded on any securities exchange or in the
over-the-counter market or in the case of property other than cash or
stock, the fair market value of such stock or property, as the case
may be, on the date in question as determined by a majority of the
Disinterested Directors in good faith.
(j) "Announcement Date" means the date of first public
announcement of the proposed Business Combination.
(k) "Determination Date" means the date on which the Interested
Stockholder became an Interested Stockholder.
SECTION 5. A majority of the Disinterested Directors of the
Corporation shall have the power and duty to determine, on the basis of
information known to them after reasonable inquiry, all facts necessary to
determine compliance with this Article V, including, without limitation,
(a) whether a person is an Interested Stockholder, (b) the number of shares
of Voting Stock beneficially owned by any person, (c) whether a person is
an Affiliate or Associate of another person, (d) whether the requirements
of Section 3 of this Article V have been met with respect to any Business
Combination and (e) whether the assets which are the subject of any
Business Combination have, or the consideration to be received for the
issuance or transfer of securities by the Corporation or any Subsidiary in
any Business Combination has, (i) an aggregate Fair Market Value of
$100,000,000 or more or (ii) represent in the aggregate more than 75% of
the total value of the assets of the Corporation and its consolidated
Subsidiaries prepared in accordance with generally accepted accounting
principles then in effect; and the good faith determination of a majority
of the Disinterested Directors on such matters shall be conclusive and
binding for all purposes of this Article V.
SECTION 6. Nothing contained in this Article V shall be construed to
relieve an Interested Stockholder from any fiduciary obligation imposed by
law.
ARTICLE VI
SECTION 1. Except as otherwise fixed by or pursuant to the provisions
of Article IV of this Certificate of Incorporation relating to the rights
of the holders of any series of Preferred Stock or Series Common Stock or
any class or series of stock having a preference over the Common Stock as
to dividends or upon liquidation, the number of the directors of the
Corporation shall be fixed from time to time by or pursuant to the By-laws
of the Corporation. The directors, other than those who may be elected by
the holders of any series of Preferred Stock or Series Common Stock or any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation pursuant to the terms of this Certificate of
Incorporation or any resolution or resolutions providing for the issue of
such class or series of stock adopted by the Board of Directors, shall be
classified, with respect to the time for which they severally hold office,
into three classes, as nearly equal in number as possible, one class to be
originally elected for a term expiring at the annual meeting of
stockholders to be held in 1997, another class to be originally elected for
a term expiring at the annual meeting of stockholders to be held in 1998,
and another class to be originally elected for a term expiring at the
annual meeting of stockholders to be held in 1999, with each class to hold
office until its successors are elected and qualified. At each annual
meeting of the stockholders of the Corporation, the date of which shall be
fixed by or pursuant to the By-laws of the Corporation, the successors of
the class of directors whose term expires at that meeting shall be elected
to hold office for a term expiring at the third succeeding annual meeting
of stockholders. The election of directors need not be by written ballot.
No decrease in the number of directors constituting the Board of Directors
shall shorten the term of any incumbent director.
<PAGE>
SECTION 2. Advance notice of nominations for the election of directors
shall be given in the manner and to the extent provided in the By-laws of
the Corporation.
SECTION 3. Except as otherwise provided for or fixed by or pursuant to
the provisions of Article IV of this Certificate of Incorporation relating
to the rights of the holders of any series of Preferred Stock or Series
Common Stock or any class or series of stock having a preference over the
Common Stock as to dividends or upon liquidation, newly created
directorships resulting from any increase in the number of directors may be
filled by the Board of Directors, or as otherwise provided in the By-laws,
and any vacancies on the Board of Directors resulting from death,
resignation, removal or other cause shall only be filled by the affirmative
vote of a majority of the remaining directors then in office, even though
less than a quorum of the Board of Directors, or by a sole remaining
director, or as otherwise provided in the By-laws. Any director elected in
accordance with the preceding sentence of this Section 3 shall hold office
for the remainder of the full term of the class of directors in which the
new directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified.
SECTION 4. Subject to the rights of the holders of any series of
Preferred Stock or Series Common Stock or any class or series of stock
having a preference over the Common Stock as to dividends or upon
liquidation, any director may be removed from office only for cause and
only by the affirmative vote of the holders of a majority of the combined
voting power of the then outstanding shares of Voting Stock, voting
together as a single class. For purposes of this Section 4, "cause" shall
mean the wilful and continuous failure of a director to substantially
perform such director's duties to the Corporation (other than any such
failure resulting from incapacity due to physical or mental illness) or the
wilful engaging by a director in gross misconduct materially and
demonstrably injurious to the Corporation.
ARTICLE VII
Subject to the rights of the holders of any series of Preferred Stock
or Series Common Stock or any class or series of stock having a preference
over the Common Stock as to dividends or upon liquidation, any action
required or permitted to be taken by the stockholders of the Corporation
must be effected at a duly called annual or special meeting of stockholders
of the Corporation and may not be effected by any consent in writing by
such stockholders. Except as otherwise required by law and subject to the
rights of the holders of any series of Preferred Stock or Series Common
Stock or any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, special meetings of stockholders
of the Corporation may be called only by the Board of Directors pursuant to
a resolution approved by a majority of the entire Board of Directors or as
otherwise provided in the By-laws of the Corporation.
ARTICLE VIII
In furtherance and not in limitation of the powers conferred upon it
by law, the Board of Directors is expressly authorized to adopt, repeal,
alter or amend the By-laws of the Corporation by the vote of a majority of
the entire Board of Directors. In addition to any requirements of law and
any other provision of this Certificate of Incorporation or any resolution
or resolutions of the Board of Directors adopted pursuant to Article IV of
this Certificate of Incorporation (and notwithstanding the fact that a
lesser percentage may be specified by law, this Certificate of
Incorporation or any such resolution or resolutions), the affirmative vote
of the holders of 80% or
<PAGE>
more of the combined voting power of the then outstanding shares of Voting
Stock, voting together as a single class, shall be required for
stockholders to adopt, amend, alter or repeal any provision of the By-laws.
ARTICLE IX
In addition to any requirements of law and any other provisions of
this Certificate of Incorporation or any resolution or resolutions of the
Board of Directors adopted pursuant to Article IV of this Certificate of
Incorporation (and notwithstanding the fact that a lesser percentage may be
specified by law, this Certificate of Incorporation or any such resolution
or resolutions), the affirmative vote of the holders of 80% or more of the
combined voting power of the then outstanding shares of Voting Stock,
voting together as a single class, shall be required to amend, alter or
repeal, or adopt any provision inconsistent with, this Article IX or
Articles V, VI, VII or VIII, or Section 5 of Article IV, of this
Certificate of Incorporation; provided, however, that the affirmative vote
of a majority of the combined voting power of the then outstanding shares
of Voting Stock held by the Disinterested Stockholders (as defined in
Section 4 of Article V of this Certificate of Incorporation), voting
together as a single class, shall also be required to amend, alter or
repeal, or adopt any provision inconsistent with, Article V of this
Certificate of Incorporation or the requirements of this proviso. Subject
to the foregoing provisions of this Article IX, the Corporation reserves
the right to amend, alter or repeal any provision contained in this
Certificate of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are subject to
this reservation.
ARTICLE X
SECTION 1. To the fullest extent that the General Corporation Law of
the State of Delaware or any other law of the State of Delaware as it
exists or as it may hereafter be amended permits the limitation or
elimination of the liability of directors, no director of the Corporation
shall be liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director. No amendment to or repeal of
this Article X shall apply to or have any effect on the liability or
alleged liability of any director of the Corporation for or with respect to
any acts or omissions of such director occurring prior to such amendment or
repeal.
SECTION 2. In addition to any requirements of law and any other
provisions of this Certificate of Incorporation or any resolution or
resolutions of the Board of Directors adopted pursuant to Article IV of
this Certificate of Incorporation (and notwithstanding the fact that a
lesser percentage may be specified by law, this Certificate of
Incorporation or any such resolution or resolutions), the affirmative vote
of the holders of 80% or more of the
<PAGE>
combined voting power of the then outstanding shares of Voting Stock,
voting together as a single class, shall be required to amend, alter or
repeal, or adopt any provision inconsistent with, this Article X.
IN WITNESS WHEREOF, I, Gerald M. Levin, Chairman of the Board of
Directors and Chief Executive Officer of TW INC., have executed this
Restated Certificate of Incorporation as of the 10th day of October, 1996,
and DO HEREBY CERTIFY under the penalties of perjury that the facts stated
in this Restated Certificate of Incorporation are true.
/s/ Gerald M. Levin
-------------------------
Gerald M. Levin
Chairman of the Board of
Directors and
Chief Executive Officer
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
TW INC.
TW INC., a corporation organized and existing under the laws of the
State of Delaware (the "Corporation"), does hereby certify as follows:
1. Article I of the Restated Certificate of Incorporation of the
Corporation is hereby amended to read in its entirety as follows:
"The name of the corporation (hereinafter called the
"Corporation") is TIME WARNER INC."
2. The foregoing amendment to the Restated Certificate of
Incorporation of the Corporation was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
3. This Certificate of Amendment of Restated Certificate of
Incorporation, and the amendment to the Restated Certificate of
Incorporation of the Corporation provided for herein, shall not become
effective until and shall become effective at 6:00 p.m. (local time in
Dover, Delaware) on October 10, 1996.
IN WITNESS WHEREOF, TW Inc. has caused this Certificate of Amendment
of Restated Certificate of Incorporation to be signed by Thomas W.
McEnerney, its authorized officer, as of this 10th day of October, 1996.
TW INC.,
by /s/ Thomas W. McEnerney
-------------------------
Name: Thomas W. McEnerney
Title: Vice President
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS, AND QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS THEREOF, OF
SERIES LMC COMMON STOCK
OF
TW INC.
--------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
--------------------
TW INC., hereafter to be renamed "Time Warner Inc." (the
"Corporation"), a corporation organized and existing by virtue of the
General Corporation Law of the State of Delaware (the "DGCL"), does
hereby certify that the following resolution was duly adopted by action
of the Board of Directors of the Corporation (the "Board of Directors")
at a meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly granted to
and vested in the Board of Directors by the provisions of Section 3 of
Article IV of the Restated Certificate of Incorporation of the
Corporation (the "Certificate of Incorporation") and Section 151(g) of
the DGCL, the Board of Directors hereby creates, from the authorized
shares of Series Common Stock, par value $.01 per share (the "Series
Common Stock"), of the Corporation authorized to be issued pursuant to
the Certificate of Incorporation, a series of Series Common Stock, and
hereby fixes the voting powers, designations, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, of the shares of such series as
follows:
The series of Series Common Stock hereby established shall
consist of 60,000,000 shares designated as Series LMC Common Stock. The
number of shares constituting such series may be increased or decreased
(but not below the number of shares then outstanding) from time to time
by a
<PAGE>
resolution or resolutions of the Board of Directors. The terms of such
series shall be as follows:
1. Definitions. As used herein, the following terms shall have
the indicated meanings:
1.1 "Board of Directors" shall mean the Board of
Directors of the Corporation or, with respect to any action to be taken
by the Board of Directors, any committee of the Board of Directors
duly authorized to take such action.
1.2 "Capital Stock" shall mean any and all shares of
corporate stock of a Person (however designated and whether representing
rights to vote, rights to participate in dividends or distributions upon
liquidation or otherwise with respect to such Person, or any division or
subsidiary thereof, or any joint venture, partnership, corporation or
other entity).
1.3 "Certificate" shall mean the Certificate of the
Voting Powers, Designations, Preferences and Relative, Participating,
Optional or Other Special Rights, and Qualifications, Limitations or
Restrictions Thereof, of Series LMC Common Stock filed with the
Secretary of State of the State of Delaware pursuant to Section 151 of
the DGCL.
1.4 "Closing Price" of the Common Stock shall mean the
last reported sale price of the Common Stock (regular way) as shown on
the Composite Tape of the NYSE, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices on the NYSE,
or, if the Common Stock is not listed or admitted to trading on the
NYSE, on the principal national securities exchange on which such stock
is listed or admitted to trading, or, if it is not listed or admitted to
trading on any national securities exchange, the last reported sale
price of the Common Stock, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, in either case as
reported by NASDAQ.
1.5 "Common Stock" shall mean the class of Common Stock,
par value $.01 per share, of the Corporation authorized at the date of
the Certificate, or any other class of stock resulting from (x)
successive changes or reclassifications of such Common Stock consisting
of changes in par value, or from par value to no par value, (y) a sub-
division or combination or (z) any other changes for which
<PAGE>
an adjustment is made under Section 2.4(a), and in any such case
including any shares thereof authorized after the date of the
Certificate, together with any rights associated generally with the
shares of Common Stock.
1.6 "Communications Laws" shall mean the Communications
Act of 1934 (as amended and supplemented from time to time and any
successor statute or statutes regulating telecommunications companies)
and the rules and regulations (and interpretations thereof and
determinations with respect thereto) promulgated, issued or adopted from
time to time by the Federal Communications Commission (the "FCC"). All
references herein to Communications Laws shall include as of any
relevant date in question the Communications Laws as then in effect
(including any Communications Law or part thereof the effectiveness of
which is then stayed or promulgated with a delayed effective date).
1.7 "Conversion Date" shall have the meaning set forth in
Section 3.5.
1.8 "Corporation" shall mean TW Inc., a Delaware
corporation, and any of its successors by operation of law, including by
merger or consolidation.
1.9 "DGCL" shall mean the General Corporation Law of the
State of Delaware, as amended from time to time.
1.10 "Dividend Payment Date" shall have the meaning set
forth in Section 2.1.
1.11 "Formula Number" shall have the meaning set forth in
Section 2.1.
1.12 "LMC Agreement" shall mean the Second Amended and
Restated LMC Agreement dated as of September 22, 1995, among a Delaware
corporation known on such date as "Time Warner Inc.", the Corporation,
Liberty Media Corporation, a Delaware corporation ("LMC Parent"), and
certain subsidiaries of LMC Parent listed under "Subsidiaries of LMC
Parent" on the signature pages thereto, as amended from time to time.
1.13 "NASDAQ" shall mean The Nasdaq Stock Market.
<PAGE>
1.14 "NYSE" shall mean the New York Stock Exchange, Inc.
1.15 "Parity Stock" shall mean shares of Common Stock and
shares of any other class or series of Capital Stock of the Corporation
that, by the terms of the Certificate of Incorporation or of the
instrument by which the Board of Directors, acting pursuant to authority
granted in the Certificate of Incorporation, shall fix the relative
rights, preferences and limitations thereof, shall, in the event that
the stated dividends thereon are not paid in full, be entitled to share
ratably with the shares of this Series in the payment of dividends in
accordance with the sums that would be payable on such shares if all
dividends were declared and paid in full, or shall, in the event that
the amounts payable thereon in liquidation are not paid in full, be
entitled to share ratably with the shares of this Series in any
distribution of assets other than by way of dividends in accordance with
the sums that would be payable in such distribution if all sums payable
were discharged in full.
1.16 "Permitted Transferee" shall mean any Liberty Party
or any SpinCo Party, as such terms are defined in the LMC Agreement.
1.17 "Person" shall mean an individual, corporation,
partnership, limited liability company, joint venture, association,
trust, unincorporated organization or other entity.
1.18 "Preferred Stock" shall mean the class of Preferred
Stock, par value $.10 per share, of the Corporation authorized at the
date of the Certificate, including any shares thereof authorized after
the date of the Certificate.
1.19 "Record Date" shall have the meaning set forth in
Section 2.1.
1.20 "Senior Stock" shall mean shares of any class or
series of Capital Stock of the Corporation that, by the terms of the
Certificate of Incorporation or of the instrument by which the Board of
Directors, acting pursuant to authority granted in the Certificate of
Incorporation, shall fix the relative rights, preferences and
limitations thereof, shall be senior to the shares of this Series in
respect of the right to receive dividends or to participate
<PAGE>
in any distribution of assets other than by way of dividends.
1.21 "Series Common Stock" shall mean the class of Series
Common Stock, par value $.01 per share, of the Corporation authorized at
the date of the Certificate, including any shares thereof authorized
after the date of the Certificate.
1.22 "Series LMC Common Stock" and "this Series" shall
mean the series of Series Common Stock authorized and designated as
Series LMC Common Stock at the date of the Certificate, including any
shares thereof authorized and designated after the date of the
Certificate.
1.23 "Series LMCN-V Common Stock" shall mean the series
of Series Common Stock authorized and designated as Series LMCN-V Common
Stock at the date of the Certificate, including any shares thereof
authorized and designated after the date of the Certificate.
1.24 "Trading Day" shall mean, so long as the Common
Stock is listed or admitted to trading on the NYSE, a day on which the
NYSE is open for the transaction of business, or, if the Common Stock is
not listed or admitted to trading on the NYSE, a day on which the
principal national securities exchange on which the Common Stock is
listed is open for the transaction of business, or, if the Common Stock
is not so listed or admitted for trading on any national securities
exchange, a day on which the National Market System of NASDAQ is open
for the transaction of business.
2. Dividends.
2.1 The holders of shares of this Series shall be
entitled to receive dividends, out of funds legally available therefor,
payable on such dates as may be set by the Board of Directors for
payment of cash dividends on the Common Stock (each such date being
referred to herein as a "Dividend Payment Date"), in cash, in an amount
per share equal to the product of (i) the Formula Number in effect as of
such Dividend Payment Date multiplied by (ii) the amount of the
regularly scheduled cash dividend to be paid on one share of Common
Stock on such Dividend Payment Date; provided, however, dividends on the
shares of this Series
<PAGE>
shall be payable pursuant to this Section 2.1 only to the extent that
regularly scheduled cash dividends are declared and paid on the Common
Stock. As used herein, the "Formula Number" shall initially be 1.0000,
which shall be adjusted from time to time pursuant to Section 2.4. The
dividends payable on any Dividend Payment Date shall be paid to the
holders of record of shares of this Series at the close of business on
the record date for the related regularly scheduled cash dividend on the
Common Stock (each such date being referred to herein as a "Record
Date"). The amount of dividends that are paid to each holder of record
on any Dividend Payment Date shall be rounded to the nearest cent.
2.2 In case the Corporation shall at any time distribute
(other than a distribution in liquidation of the Corporation and other
than a distribution of Common Stock as a result of which an adjustment
to the Formula Number is made pursuant to Section 2.4) to the holders of
its shares of Common Stock any assets or property, including evidences
of indebtedness or securities of the Corporation or of any other Person
(including common stock of such Person) or cash (but excluding regularly
scheduled cash dividends payable on shares of Common Stock), or in case
the Corporation shall at any time distribute (other than a distribution
in liquidation of the Corporation) to such holders rights, options or
warrants to subscribe for or purchase shares of Common Stock (including
shares held in the treasury of the Corporation), or rights, options or
warrants to subscribe for or purchase any other security or rights,
options or warrants to subscribe for or purchase any assets or property
(in each case, whether of the Corporation or otherwise, but other than
any distribution of rights to purchase securities of the Corporation if
the holder of shares of this Series would otherwise be entitled to
receive such rights upon conversion of shares of this Series for Common
Stock pursuant to Section 3, provided, however, that if such rights are
subsequently redeemed by the Corporation, such redemption shall be
treated for purposes of this Section 2.2 as a cash dividend (but not a
regularly scheduled cash dividend) on the Common Stock), the Corporation
shall simultaneously distribute such assets, property, securities,
rights, options or warrants to the holders of shares of this Series on
the record date fixed for determining the holders of Common Stock
entitled to participate in such distribution (or, if no such record date
shall be established, the effective time thereof) in an amount per share
of this Series equal to the amount that a holder of one share of this
Series would have been entitled
<PAGE>
to receive had such share of this Series been converted into Common
Stock immediately prior to such record date (or effective time). In the
event of a distribution to holders of shares of this Series pursuant to
this Section 2.2, such holders shall be entitled to receive fractional
shares or interests only to the extent that holders of Common Stock are
entitled to receive the same. The holders of shares of this Series on
the applicable record date (or effective time) shall be entitled to
receive in lieu of such fractional shares or interests the same
consideration as is payable to holders of Common Stock with respect
thereto. If there are no fractional shares or interests payable to
holders of Common Stock, the holders of shares of this Series on the
applicable record date (or effective time) shall receive in lieu of such
fractional shares or interests the fair value thereof as determined by
the Board of Directors.
2.3 In the event that the holders of Common Stock are
entitled to make any election with respect to the kind or amount of
securities or other property receivable by them in any distribution that
is subject to Section 2.2, the kind and amount of securities or other
property that shall be distributable to the holders of shares of this
Series shall be based on (i) the election, if any, made by the holder of
record (as of the date used for determining the holders of Common Stock
entitled to make such election) of the largest number of shares of this
Series in writing to the Corporation on or prior to the last date on
which a holder of Common Stock may make such an election or (ii) if no
such election is timely made, an assumption that such holder failed to
exercise any such rights (provided that if the kind or amount of
securities or other property is not the same for each nonelecting
holder, then the kind and amount of securities or other property
receivable by holders of shares of this Series shall be based on the
kind or amount of securities or other property receivable by a plurality
of the shares held by the nonelecting holders of Common Stock).
Concurrently with the mailing to holders of Common Stock of any document
pursuant to which such holders may make an election of the type referred
to in this Section 2.3, the Corporation shall mail a copy thereof to the
holders of record of shares of this Series as of the date used for
determining the holders of record of Common Stock entitled to such
mailing, which document shall be used by the holders of record of shares
of this Series to make such an election.
<PAGE>
2.4 The Formula Number shall be adjusted from time to
time as follows, whether or not any shares of this Series have been
issued by the Corporation, for events occurring after October 10, 1996:
(a) In case the Corporation shall (i) pay a dividend in
shares of its Common Stock, (ii) combine its outstanding shares of
Common Stock into a smaller number of shares, (iii) subdivide its
outstanding shares of Common Stock or (iv) reclassify (other than
by way of a merger or consolidation that is subject to Section 3.6)
its shares of Common Stock, then the Formula Number in effect
immediately before such event shall be appropriately adjusted so
that immediately following such event the holders of shares of this
Series shall be entitled to receive upon conversion thereof the
kind and amount of shares of Capital Stock of the Corporation that
they would have owned or been entitled to receive upon or by reason
of such event if such shares of this Series had been converted
immediately before the record date (or, if no record date, the
effective date) for such event (it being understood that any
distribution of cash or Capital Stock (other than Common Stock)
that shall accompany a reclassification of the Common Stock, shall
be subject to Section 2.2 rather than this Section 2.4(a)). An
adjustment made pursuant to this Section 2.4(a) shall become
effective retroactively immediately after the record date in the
case of a dividend or distribution and shall become effective
retroactively immediately after the effective date in the case of a
subdivision, combination or reclassification. For the purposes of
this Section 2.4(a), in the event that the holders of Common Stock
are entitled to make any election with respect to the kind or
amount of securities receivable by them in any transaction that is
subject to this Section 2.4(a) (including any election that would
result in all or a portion of the transaction becoming subject to
Section 2.2), the kind and amount of securities that shall be
distributable to the holders of shares of this Series shall be
based on (i) the election, if any, made by the holder of record (as
of the date used for determining the holders of Common Stock
entitled to make such election) of the largest number of shares of
this Series in writing to the Corporation on or prior to the last
date on which a holder of Common Stock may make such an election or
(ii) if no such election is timely made, an assumption
<PAGE>
that such holder failed to exercise any such rights (provided that
if the kind or amount of securities is not the same for each
nonelecting holder, then the kind and amount of securities
receivable shall be based on the kind or amount of securities
receivable by a plurality of nonelecting holders of Common Stock).
Concurrently with the mailing to holders of Common Stock of any
document pursuant to which such holders may make an election of the
type referred to in this Section 2.4(a), the Corporation shall mail
a copy thereof to the holders of record of shares of this Series as
of the date used for determining the holders of record of Common
Stock entitled to such mailing, which document shall be used by the
holders of record of shares of this Series to make such an
election.
(b) The Corporation shall be entitled to make such
additional adjustments in the Formula Number, in addition to those
required by Section 2.4(a) as shall be necessary in order that any
dividend or distribution in Common Stock or any subdivision,
reclassification or combination of shares of Common Stock referred
to above, shall not be taxable to the holders of Common Stock for
United States Federal income tax purposes, so long as such
additional adjustments pursuant to this Section 2.4(b) do not
decrease the Formula Number.
(c) All calculations under this Section 2 and Section 3
shall be made to the nearest cent, one-hundredth of a share or, in
the case of the Formula Number, one hundred-thousandth.
Notwithstanding any other provision of this Section 2.4, the
Corporation shall not be required to make any adjustment of the
Formula Number unless such adjustment would require an increase or
decrease of at least one percent (1%) of the Formula Number. Any
lesser adjustment shall be carried forward and shall be made at the
time of and together with the next subsequent adjustment that,
together with any adjustment or adjustments so carried forward,
shall amount to an increase or decrease of at least one percent
(1%) of the Formula Number. Any adjustments under this Section 2.4
shall be made successively whenever an event requiring such an
adjustment occurs.
(d) Promptly after an adjustment in the Formula Number is
required, the Corporation shall
<PAGE>
provide written notice to each of the holders of shares of this
Series, which notice shall state the adjusted Formula Number.
(e) If a distribution is made in accordance with the
provisions of Section 2.2, anything in this Section 2.4 to the
contrary notwithstanding, no adjustment pursuant to this Section
2.4 shall be effected by reason of the distribution of such assets,
property, securities, rights, options or warrants or the subsequent
modification, exercise, expiration or termination of such
securities, rights, options or warrants.
3. Conversion at the Option of the Holder.
3.1 Each holder of a share of this Series shall have the
right at any time to convert such share of this Series into either: (i)
a number of shares of Common Stock per share of this Series equal to the
Formula Number in effect on the Conversion Date or (ii) one share of
Series LMCN-V Common Stock per share of this Series; provided, however,
that such holder may convert shares of this Series only to the extent
that the ownership by such holder or its designee of the shares of
Common Stock or Series LMCN-V Common Stock issuable upon such conversion
would not violate the Communications Laws.
3.2 No adjustments in respect of payments of dividends on
shares of this Series surrendered for conversion or any dividend on the
Common Stock or Series LMCN-V Common Stock issued upon conversion shall
be made upon the conversion of any shares of this Series (it being
understood that if the Conversion Date for shares of this Series occurs
after the Record Date and prior to the Dividend Payment Date of any such
dividend, the holders of record of shares of this Series on such Record
Date shall be entitled to receive the dividend payable with respect to
such shares on the related Dividend Payment Date pursuant to Section
2.1).
3.3 The Corporation may, but shall not be required to, in
connection with any conversion of shares of this Series into shares of
Common Stock, issue a fraction of a share of Common Stock, and if the
Corporation shall determine not to issue any such fraction, the
Corporation shall make a cash payment (rounded to the nearest cent)
<PAGE>
equal to such fraction multiplied by the Closing Price of the Common
Stock on the last Trading Day prior to the Conversion Date. The
Corporation shall issue a fraction of a share of Series LMCN-V Common
Stock in order to effect a conversion of a fraction of a share of this
Series into Series LMCN-V Common Stock.
3.4 Any holder of shares of this Series electing to
convert such shares into Common Stock or Series LMCN-V Common Stock
shall surrender the certificate or certificates for such shares at the
principal executive office of the Corporation (or at such other place as
the Corporation may designate by notice to the holders of shares of this
Series) during regular business hours, duly endorsed to the Corporation
or in blank, or accompanied by instruments of transfer to the
Corporation or in blank, or in form satisfactory to the Corporation, and
shall give written notice to the Corporation at such office that such
holder elects to convert such shares of this Series, which notice shall
state whether the shares of this Series delivered for conversion shall
be converted into shares of Common Stock or shares of Series LMCN-V
Common Stock. If any such certificate or certificates shall have been
lost, stolen or destroyed, the holder shall, in lieu of delivering such
certificate or certificates, deliver to the Corporation (or such other
place) an indemnification agreement and bond satisfactory to the
Corporation. The Corporation shall, as soon as practicable (subject to
Section 3.8) after such deposit of certificates for shares of this
Series or delivery of the indemnification agreement and bond,
accompanied by the written notice above prescribed, issue and deliver at
such office (or such other place) to the holder for whose account such
shares were surrendered, or a designee of such holder, certificates
representing either (i) the number of shares of Common Stock and the
cash, if any, or (ii) the number of shares of Series LMCN-V Common
Stock, as the case may be, to which such holder is entitled upon such
conversion. Each share of Common Stock delivered to a holder or its
designee as a result of conversion of shares of this Series pursuant to
this Section 3 shall be accompanied by any rights associated generally
with each other share of Common Stock outstanding as of the Conversion
Date.
3.5 Conversion shall be deemed to have been made as of
the date (the "Conversion Date") that the certificate or certificates
for the shares of this Series to be converted and the written notice
prescribed in
<PAGE>
Section 3.4 are received by the Corporation; and the Person entitled to
receive the Common Stock or Series LMCN-V Common Stock issuable upon
such conversion shall be treated for all purposes as the holder of
record of such Common Stock or Series LMCN-V Common Stock, as the case
may be, on such date. The Corporation shall not be required to deliver
certificates for shares of Common Stock or Series LMCN-V Common Stock
while the stock transfer books for such stock or for this Series are
duly closed for any purpose, but certificates for shares of Common Stock
or Series LMCN-V Common Stock, as the case may be, shall be delivered as
soon as practicable after the opening of such books.
3.6 In the event that after October 10, 1996, whether or
not any shares of this Series have been issued by the Corporation,
either (a) any consolidation or merger to which the Corporation is a
party, other than a merger or consolidation in which the Corporation is
the surviving or continuing corporation and that does not result in
any reclassification of, or change (other than a change in par value or
from par value to no par value or from no par value to par value, or as
a result of a subdivision or combination) in, outstanding shares of
Common Stock or (b) any sale or conveyance of all or substantially all
of the property and assets of the Corporation, then lawful provision
shall be made as part of the terms of such transaction whereby the
holder of each share of this Series shall have the right thereafter,
during the period such share shall be convertible, to convert such share
into the kind and amount of shares of stock or other securities and
property receivable upon such consolidation, merger, sale or conveyance
by a holder of the number of shares of Common Stock into which such
shares of this Series could have been converted immediately prior to
such consolidation, merger, sale or conveyance, subject to adjustment
that shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section 2.4 and this Section 3 (based on (i)
the election, if any, made in writing to the Corporation by the holder
of record (as of the date used for determining holders of Common Stock
entitled to make such election) of the largest number of shares of this
Series on or prior to the last date on which a holder of Common Stock
may make an election regarding the kind or amount of securities or other
property receivable by such holder in such transaction or (ii) if no
such election is timely made, an assumption that such holder failed to
exercise any such rights (provided that if the kind or amount of
securities or other property is not the same for each nonelecting
holder,
<PAGE>
then the kind and amount of securities or other property receivable
shall be based upon the kind and amount of securities or other property
receivable by a plurality of the nonelecting holders of Common Stock)).
In the event that any of the transactions referred to in clause (a) or
(b) of the first sentence of this Section 3.6 involves the distribution
of cash or property (other than equity securities) to a holder of Common
Stock, lawful provision shall be made as part of the terms of the
transaction whereby the holder of each share of this Series on the
record date fixed for determining holders of Common Stock entitled to
receive such cash or property (or if no such record date is established,
the effective date of such transaction) shall be entitled to receive the
amount of cash or property that such holder would have been entitled to
receive had such holder converted his shares of this Series into Common
Stock immediately prior to such record date (or effective date) (based
on the election or nonelection made by the holder of record of the
largest number of shares of this Series, as provided above).
Concurrently with the mailing to holders of Common Stock of any document
pursuant to which such holders may make an election regarding the kind
or amount of securities or other property that will be receivable by
such holders in any transaction described in clause (a) or (b) of the
first sentence of this Section 3.6, the Corporation shall mail a copy
thereof to the holders of record of the shares of this Series as of the
date used for determining the holders of record of Common Stock entitled
to such mailing, which document shall be used by the holders of shares
of this Series to make such an election. The Corporation shall not enter
into any of the transactions referred to in clause (a) or (b) of the
first sentence of this Section 3.6 unless effective provision shall be
made in the certificate or articles of incorporation or other
constituent documents of the Corporation or the entity surviving the
consolidation or merger, if other than the Corporation, or the entity
acquiring the Corporation's assets, as the case may be, so as to give
effect to the provisions set forth in this Section 3.6. The provisions
of this Section 3.6 shall apply similarly to successive consolidations,
mergers, sales or conveyances. For purposes of this Section 3.6, the
term "Corporation" shall refer to the Corporation as constituted
immediately prior to the merger, consolidation or other transaction
referred to in this Section 3.6.
3.7 The Corporation shall at all times
reserve and keep available, free from preemptive rights, out
<PAGE>
of its authorized but unissued stock, for the purpose of effecting the
conversion of the shares of this Series, such number of its duly
authorized shares of Common Stock and Series LMCN-V Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of this Series into shares of Common Stock or Series
LMCN-V Common Stock at any time (assuming that, at the time of the
computation of such number of shares, all such Common Stock or Series
LMCN-V Common Stock would be held by a single holder); provided,
however, that nothing contained herein shall preclude the Corporation
from satisfying its obligations in respect of the conversion of the
shares by delivery of purchased shares of Common Stock or Series LMCN-V
Common Stock that are held in the treasury of the Corporation. All
shares of Common Stock or Series LMCN-V Common Stock that shall be
deliverable upon conversion of the shares of this Series shall be duly
and validly issued, fully paid and nonassessable. For purposes of this
Section 3, any shares of this Series at any time outstanding shall not
include shares held in the treasury of the Corporation.
3.8 In any case in which Section 2.4 shall require that
any adjustment be made effective as of or retroactively immediately
following a record date, the Corporation may elect to defer (but only
for five (5) Trading Days following the occurrence of the event that
necessitates the notice referred to in Section 2.4(d)) issuing to the
holder of any shares of this Series converted after such record date (i)
the shares of Common Stock issuable upon such conversion over and
above (ii) the shares of Common Stock issuable upon such conversion on
the basis of the Formula Number prior to adjustment; provided, however,
that the Corporation shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
3.9 If any shares of Common Stock or Series LMCN-V Common
Stock that would be issuable upon conversion pursuant to this Section 3
require registration with or approval of any governmental authority
before such shares may be issued upon conversion (other than any such
registration or approval required to avoid a violation of the
Communications Laws), the Corporation will in good faith and as
expeditiously as possible cause such shares to be duly registered or
approved, as the case may be. The Corporation will use commercially
reasonable efforts to list
<PAGE>
the shares of (or depositary shares representing fractional interests
in) Common Stock required to be delivered upon conversion of shares of
this Series prior to such delivery upon the principal national
securities exchange, if any, upon which the outstanding Common Stock is
listed at the time of such delivery.
3.10 The Corporation shall pay any and all issue or other
taxes that may be payable in respect of any issue or delivery of shares
of Common Stock or Series LMCN-V Common Stock on conversion of shares of
this Series pursuant hereto. The Corporation shall not, however, be
required to pay any tax that is payable in respect of any transfer
involved in the issue or delivery of Common Stock or Series LMCN-V
Common Stock in a name other than that in which the shares of this
Series so converted were registered, and no such issue or delivery shall
be made unless and until the Person requesting such issue has paid to
the Corporation the amount of such tax, or has established, to the
satisfaction of the Corporation, that such tax has been paid.
3.11 In case of (i) the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation or (ii) any
action triggering an adjustment to the Formula Number pursuant to
Section 2.4 or Section 3.6, then, in each case, the Corporation shall
cause to be mailed, first-class postage prepaid, to the holders of
record of the outstanding shares of this Series, at least fifteen (15)
days prior to the applicable record date for any such transaction (or if
no record date will be established, the effective date thereof), a
notice stating (x) the date, if any, on which a record is to be taken
for the purpose of any such transaction (or, if no record date will be
established, the date as of which holders of record of Common Stock
entitled to participate in such transaction are determined), and (y) the
expected effective date thereof. Failure to give such notice or any
defect therein shall not affect the legality or validity of the
proceedings described in this Section 3.11.
4. Voting.
4.1 The shares of this Series shall have no voting rights
except as expressly provided in this Section 4 or as required by law.
<PAGE>
4.2 Except as otherwise required by law, each share of
this Series shall be entitled to vote together as one class with the
holders of shares of Common Stock upon all matters upon which the
holders of shares of Common Stock are entitled to vote. In any such
vote, the holders of shares of this Series shall be entitled to a number
of votes per share of this Series equal to the product of (i) the
Formula Number then in effect multiplied by (ii) the maximum number of
votes per share of Common Stock that any holder of shares of Common
Stock generally then has with respect to such matter.
4.3 So long as any shares of this Series remain
outstanding, unless a greater percentage shall then be required by law,
the Corporation shall not, without the affirmative vote of the holders
of shares of this Series representing at least 66-2/3% of the aggregate
voting power of shares of this Series then outstanding, amend, alter or
repeal any of the provisions of the Certificate or the Certificate of
Incorporation so as, in any such case, as applicable, to (i) amend,
alter or repeal any of the powers, preferences or rights of the Series
Common Stock or (ii) adversely affect the voting powers, designations,
preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof, of the
shares of this Series or the Series LMCN-V Common Stock; provided,
however, that no affirmative vote of any shares of this Series shall be
required to amend, alter or repeal any of the powers, preferences or
rights of any series of Series Common Stock other than this Series and
the Series LMCN-V Common Stock.
4.4 So long as any shares of this Series remain
outstanding, the Corporation shall not, without the affirmative vote of
the holders of shares of this Series representing 100% of the aggregate
voting power of shares of this Series then outstanding, amend, alter or
repeal the provisions of Section 7.7.
4.5 No consent of holders of shares of this Series shall
be required for (i) the creation of any indebtedness of any kind of
the Corporation, (ii) the authorization or issuance of any class or
series of Parity Stock or Senior Stock, (iii) the approval of any
amendment to the Certificate of Incorporation that would increase or
decrease the aggregate number of authorized shares of Series Common
Stock or Common Stock or (iv) the authorization of any increase or
decrease in the number of shares
<PAGE>
constituting this Series; provided, however, that the number of shares
constituting this Series shall not be decreased below the number of such
shares then outstanding.
5. Liquidation Rights.
5.1 Upon the liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the holders of shares
of this Series shall be entitled to receive, contemporaneously with any
distribution to holders of shares of Common Stock upon such liquidation,
dissolution or winding up, an aggregate amount per share equal to the
product of the Formula Number then in effect multiplied by the aggregate
amount to be distributed per share to holders of Common Stock.
5.2 Neither the sale, exchange or other conveyance (for
cash, shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation nor the
merger or consolidation of the Corporation into or with any other
corporation, or the merger or consolidation of any other corporation
into or with the Corporation, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the purposes of
this Section 5.
6. Transfer Restrictions.
6.1 Without the prior written consent of the Corporation,
no holder of shares of this Series shall offer, sell, transfer, pledge,
encumber or otherwise dispose of, or agree to offer, sell, transfer,
pledge, encumber or otherwise dispose of, any shares of this Series or
interests in any shares of this Series except to a Permitted Transferee
that shall agree that, prior to such Permitted Transferee ceasing to be
a Permitted Transferee, such Permitted Transferee must transfer
ownership of any shares of this Series, and all interests therein, held
by such Permitted Transferee to any Permitted Transferee. For the
avoidance of doubt, the preceding sentence is not intended to prohibit a
holder of shares of this Series from entering into, or offering to enter
into, (a) any arrangement under which such holder agrees to promptly
convert shares of this Series and sell, transfer or otherwise dispose of
the Common Stock issuable upon such conversion or (b) any pledge or
encumbrance of shares of this Series; provided, however,
<PAGE>
that the terms of any such pledge or encumbrance must require that, in
the event of any sale or foreclosure with respect to shares of this
Series, such shares must be delivered immediately to the Corporation for
conversion into Common Stock. The provisions of this Section 6.1 shall
continue to be in effect with respect to any shares of this Series
received by any holder by virtue of merger, consolidation, operation of
law or otherwise.
6.2 Certificates for shares of this Series shall bear
such legends as the Corporation shall from time to time deem
appropriate.
7. Other Provisions.
7.1 All notices from the Corporation to the holders of
shares of this Series shall be given by one of the methods specified in
Section 7.2. With respect to any notice to a holder of shares of this
Series required to be provided hereunder, neither failure to give such
notice, nor any defect therein or in the transmission thereof, to any
particular holder shall affect the sufficiency of the notice or the
validity of the proceedings referred to in such notice with respect to
the other holders or affect the legality or validity of any
distribution, right, warrant, reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the
vote upon any such action. Any notice that was mailed in the manner
herein provided shall be conclusively presumed to have been duly given
whether or not the holder receives the notice.
7.2 All notices and other communications hereunder shall
be deemed given (i) on the first Trading Day following the date
received, if delivered personally, (ii) on the Trading Day following
timely deposit with an overnight courier service, if sent by overnight
courier specifying next day delivery and (iii) on the first Trading Day
that is at least five days following deposit in the mails, if sent by
first class mail to (x) a holder at its last address as it appears on
the transfer records or registry for the shares of this Series and (y)
the Corporation at the following address (or at such other address as
the Corporation shall specify in a notice pursuant to this Section 7.2):
TW Inc., 75 Rockefeller Plaza, New York, New York 10019, Attention:
General Counsel.
<PAGE>
7.3 Any shares of this Series that have been converted or
otherwise acquired by the Corporation shall, after such conversion or
acquisition, as the case may be, be retired and promptly cancelled and
shall become authorized but unissued shares of this Series, unless the
Board of Directors determines otherwise.
7.4 The Corporation shall be entitled to recognize the
exclusive right of a Person registered on its records as the holder of
shares of this Series, and such holder of record shall be deemed the
holder of such shares for all purposes.
7.5 All notice periods referred to in the Certificate
shall commence on the date of the mailing of the applicable notice.
7.6 Any registered holder of shares of this Series may
proceed to protect and enforce its rights by any available remedy by
proceeding at law or in equity to protect and enforce any such rights,
whether for the specific enforcement of any provision in the Certificate
or in aid of the exercise of any power granted herein, or to enforce any
other proper remedy.
7.7 The shares of this Series shall not be subject to
redemption at the option of the Corporation, including pursuant to
Section 5 of Article IV of the Certificate of Incorporation (or any
equivalent provision in any further amendment to or restatement of the
Certificate of Incorporation).
IN WITNESS WHEREOF, TW Inc. has caused this certificate
to be signed this 10th day of October, 1996.
TW INC.,
by /s/ Thomas W. McEnerney
---------------------------
Name: Thomas W. McEnerney
Title: Vice President
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS, AND QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS THEREOF, OF
SERIES LMCN-V COMMON STOCK
OF
TW INC.
--------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
--------------------
TW INC., hereafter to be renamed "Time Warner Inc." (the
"Corporation"), a corporation organized and existing by virtue of the
General Corporation Law of the State of Delaware (the "DGCL"), does
hereby certify that the following resolution was duly adopted by action
of the Board of Directors of the Corporation (the "Board of Directors")
at a meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly granted
to and vested in the Board of Directors by the provisions of Section 3
of Article IV of the Restated Certificate of Incorporation of the
Corporation (the "Certificate of Incorporation") and Section 151(g) of
the DGCL, the Board of Directors hereby creates, from the authorized
shares of Series Common Stock, par value $.01 per share (the "Series
Common Stock"), of the Corporation authorized to be issued pursuant to
the Certificate of Incorporation, a series of Series Common Stock, and
hereby fixes the voting powers, designations, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, of the shares of such series as
follows:
The series of Series Common Stock hereby established
shall consist of 60,000,000 shares designated as Series LMCN-V Common
Stock. The number of shares constituting such series may be increased or
decreased (but not below the number of shares then outstanding) from
time
<PAGE>
to time by a resolution or resolutions of the Board of
Directors. The terms of such series shall be as follows:
1. Definitions. As used herein, the following terms shall have
the indicated meanings:
1.1 "Board of Directors" shall mean the Board of
Directors of the Corporation or, with respect to any action to be taken
by the Board of Directors, any committee of the Board of Directors
duly authorized to take such action.
1.2 "Capital Stock" shall mean any and all shares of
corporate stock of a Person (however designated and whether representing
rights to vote, rights to participate in dividends or distributions upon
liquidation or otherwise with respect to such Person, or any division or
subsidiary thereof, or any joint venture, partnership, corporation or
other entity).
1.3 "Certificate" shall mean the Certificate of the
Voting Powers, Designations, Preferences and Relative, Participating,
Optional or Other Special Rights, and Qualifications, Limitations or
Restrictions Thereof, of Series LMCN-V Common Stock filed with the
Secretary of State of the State of Delaware pursuant to Section 151 of
the DGCL.
1.4 "Closing Price" of the Common Stock shall mean the
last reported sale price of the Common Stock (regular way) as shown on
the Composite Tape of the NYSE, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices on the NYSE,
or, if the Common Stock is not listed or admitted to trading on the
NYSE, on the principal national securities exchange on which such stock
is listed or admitted to trading, or, if it is not listed or admitted to
trading on any national securities exchange, the last reported sale
price of the Common Stock, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, in either case as
reported by NASDAQ.
1.5 "Common Stock" shall mean the class of Common Stock,
par value $.01 per share, of the Corporation authorized at the date of
the Certificate, or any other class of stock resulting from (x)
successive changes or reclassifications of such Common Stock consisting
of changes in par value, or from par value to no par value, (y) a sub-
<PAGE>
division or combination or (z) any other changes for which an adjustment
is made under Section 2.4(a), and in any such case including any shares
thereof authorized after the date of the Certificate, together with any
rights associated generally with the shares of Common Stock.
1.6 "Communications Laws" shall mean the Communications
Act of 1934 (as amended and supplemented from time to time and any
successor statute or statutes regulating telecommunications companies)
and the rules and regulations (and interpretations thereof and
determinations with respect thereto) promulgated, issued or adopted from
time to time by the Federal Communications Commission (the "FCC"). All
references herein to Communications Laws shall include as of any
relevant date in question the Communications Laws as then in effect
(including any Communications Law or part thereof the effectiveness of
which is then stayed or promulgated with a delayed effective date).
1.7 "Conversion Date" shall have the meaning set forth in
Section 3.5.
1.8 "Corporation" shall mean TW Inc., a Delaware
corporation, and any of its successors by operation of law, including by
merger or consolidation.
1.9 "DGCL" shall mean the General Corporation Law of the
State of Delaware, as amended from time to time.
1.10 "Dividend Payment Date" shall have the meaning set
forth in Section 2.1.
1.11 "Formula Number" shall have the meaning set forth in
Section 2.1.
1.12 "LMC Agreement" shall mean the Second Amended and
Restated LMC Agreement dated as of September 22, 1995, among a Delaware
corporation known on such date as "Time Warner Inc.", the Corporation,
Liberty Media Corporation, a Delaware corporation ("LMC Parent"), and
certain subsidiaries of LMC Parent listed under "Subsidiaries of LMC
Parent" on the signature pages thereto, as amended from time to time.
1.13 "NASDAQ" shall mean The Nasdaq Stock Market.
<PAGE>
1.14 "NYSE" shall mean the New York Stock Exchange, Inc.
1.15 "Parity Stock" shall mean shares of Common Stock and
shares of any other class or series of Capital Stock of the Corporation
that, by the terms of the Certificate of Incorporation or of the
instrument by which the Board of Directors, acting pursuant to authority
granted in the Certificate of Incorporation, shall fix the relative
rights, preferences and limitations thereof, shall, in the event that
the stated dividends thereon are not paid in full, be entitled to share
ratably with the shares of this Series in the payment of dividends in
accordance with the sums that would be payable on such shares if all
dividends were declared and paid in full, or shall, in the event that
the amounts payable thereon in liquidation are not paid in full, be
entitled to share ratably with the shares of this Series in any
distribution of assets other than by way of dividends in accordance with
the sums that would be payable in such distribution if all sums payable
were discharged in full.
1.16 "Permitted Transferee" shall mean any Liberty Party
or any SpinCo Party, as such terms are defined in the LMC Agreement.
1.17 "Person" shall mean an individual, corporation,
partnership, limited liability company, joint venture, association,
trust, unincorporated organization or other entity.
1.18 "Preferred Stock" shall mean the class of Preferred
Stock, par value $.10 per share, of the Corporation authorized at the
date of the Certificate, including any shares thereof authorized after
the date of the Certificate.
1.19 "Record Date" shall have the meaning set forth in
Section 2.1.
1.20 "Senior Stock" shall mean shares of any class or
series of Capital Stock of the Corporation that, by the terms of the
Certificate of Incorporation or of the instrument by which the Board of
Directors, acting pursuant to authority granted in the Certificate of
Incorporation, shall fix the relative rights, preferences and
limitations thereof, shall be senior to the shares of this Series in
respect of the right to receive dividends or to participate
<PAGE>
in any distribution of assets other than by way of dividends.
1.21 "Series Common Stock" shall mean the class of Series
Common Stock, par value $.01 per share, of the Corporation authorized at
the date of the Certificate, including any shares thereof authorized
after the date of the Certificate.
1.22 "Series LMC Common Stock" shall mean the series of
Series Common Stock authorized and designated as Series LMC Common Stock
at the date of the Certificate, including any shares thereof authorized
and designated after the date of the Certificate.
1.23 "Series LMCN-V Common Stock" and "this Series" shall
mean the series of Series Common Stock authorized and designated as
Series LMCN-V Common Stock at the date of the Certificate, including any
shares thereof authorized and designated after the date of the
Certificate.
1.24 "Trading Day" shall mean, so long as the Common Stock
is listed or admitted to trading on the NYSE, a day on which the NYSE
is open for the transaction of business, or, if the Common Stock is
not listed or admitted to trading on the NYSE, a day on which the
principal national securities exchange on which the Common Stock is
listed is open for the transaction of business, or, if the Common
Stock is not so listed or admitted for trading on any national
securities exchange, a day on which the National Market System of
NASDAQ is open for the transaction of business.
2. Dividends.
2.1 The holders of shares of this Series shall be
entitled to receive dividends, out of funds legally available therefor,
payable on such dates as may be set by the Board of Directors for
payment of cash dividends on the Common Stock (each such date being
referred to herein as a "Dividend Payment Date"), in cash, in an amount
per share equal to the product of (i) the Formula Number in effect as of
such Dividend Payment Date multiplied by (ii) the amount of the
regularly scheduled cash dividend to be paid on one share of Common
Stock on such Dividend Payment Date; provided, however, dividends on the
shares of this Series
<PAGE>
shall be payable pursuant to this Section 2.1 only to the extent that
regularly scheduled cash dividends are declared and paid on the Common
Stock. As used herein, the "Formula Number" shall initially be 1.0000,
which shall be adjusted from time to time pursuant to Section 2.4. The
dividends payable on any Dividend Payment Date shall be paid to the
holders of record of shares of this Series at the close of business on
the record date for the related regularly scheduled cash dividend on the
Common Stock (each such date being referred to herein as a "Record
Date"). The amount of dividends that are paid to each holder of record
on any Dividend Payment Date shall be rounded to the nearest cent.
2.2 In case the Corporation shall at any time distribute
(other than a distribution in liquidation of the Corporation and other
than a distribution of Common Stock as a result of which an adjustment
to the Formula Number is made pursuant to Section 2.4) to the holders of
its shares of Common Stock any assets or property, including evidences
of indebtedness or securities of the Corporation or of any other Person
(including common stock of such Person) or cash (but excluding regularly
scheduled cash dividends payable on shares of Common Stock), or in case
the Corporation shall at any time distribute (other than a distribution
in liquidation of the Corporation) to such holders rights, options or
warrants to subscribe for or purchase shares of Common Stock (including
shares held in the treasury of the Corporation), or rights, options or
warrants to subscribe for or purchase any other security or rights,
options or warrants to subscribe for or purchase any assets or property
(in each case, whether of the Corporation or otherwise, but other than
any distribution of rights to purchase securities of the Corporation if
the holder of shares of this Series would otherwise be entitled to
receive such rights upon conversion of shares of this Series for Common
Stock pursuant to Section 3, provided, however, that if such rights are
subsequently redeemed by the Corporation, such redemption shall be
treated for purposes of this Section 2.2 as a cash dividend (but not a
regularly scheduled cash dividend) on the Common Stock), the Corporation
shall simultaneously distribute such assets, property, securities,
rights, options or warrants to the holders of shares of this Series on
the record date fixed for determining the holders of Common Stock
entitled to participate in such distribution (or, if no such record date
shall be established, the effective time thereof) in an amount per share
of this Series equal to the amount that a holder of one share of this
Series would have been entitled
<PAGE>
to receive had such share of this Series been converted into Common
Stock immediately prior to such record date (or effective time). In the
event of a distribution to holders of shares of this Series pursuant to
this Section 2.2, such holders shall be entitled to receive fractional
shares or interests only to the extent that holders of Common Stock are
entitled to receive the same. The holders of shares of this Series on
the applicable record date (or effective time) shall be entitled to
receive in lieu of such fractional shares or interests the same
consideration as is payable to holders of Common Stock with respect
thereto. If there are no fractional shares or interests payable to
holders of Common Stock, the holders of shares of this Series on the
applicable record date (or effective time) shall receive in lieu of such
fractional shares or interests the fair value thereof as determined by
the Board of Directors.
2.3 In the event that the holders of Common Stock are
entitled to make any election with respect to the kind or amount of
securities or other property receivable by them in any distribution that
is subject to Section 2.2, the kind and amount of securities or other
property that shall be distributable to the holders of shares of this
Series shall be based on (i) the election, if any, made by the holder of
record (as of the date used for determining the holders of Common Stock
entitled to make such election) of the largest number of shares of this
Series in writing to the Corporation on or prior to the last date on
which a holder of Common Stock may make such an election or (ii) if no
such election is timely made, an assumption that such holder failed to
exercise any such rights (provided that if the kind or amount of
securities or other property is not the same for each nonelecting
holder, then the kind and amount of securities or other property
receivable by holders of shares of this Series shall be based on the
kind or amount of securities or other property receivable by a plurality
of the shares held by the nonelecting holders of Common Stock).
Concurrently with the mailing to holders of Common Stock of any document
pursuant to which such holders may make an election of the type referred
to in this Section 2.3, the Corporation shall mail a copy thereof to the
holders of record of shares of this Series as of the date used for
determining the holders of record of Common Stock entitled to such
mailing, which document shall be used by the holders of record of shares
of this Series to make such an election.
<PAGE>
2.4 The Formula Number shall be adjusted from time to
time as follows, whether or not any shares of this Series have been
issued by the Corporation, for events occurring after October 10, 1996:
(a) In case the Corporation shall (i) pay a dividend in
shares of its Common Stock, (ii) combine its outstanding shares of
Common Stock into a smaller number of shares, (iii) subdivide its
outstanding shares of Common Stock or (iv) reclassify (other than
by way of a merger or consolidation that is subject to Section 3.6)
its shares of Common Stock, then the Formula Number in effect
immediately before such event shall be appropriately adjusted so
that immediately following such event the holders of shares of this
Series shall be entitled to receive upon conversion thereof the
kind and amount of shares of Capital Stock of the Corporation that
they would have owned or been entitled to receive upon or by reason
of such event if such shares of this Series had been converted
immediately before the record date (or, if no record date, the
effective date) for such event (it being understood that any
distribution of cash or Capital Stock (other than Common Stock)
that shall accompany a reclassification of the Common Stock, shall
be subject to Section 2.2 rather than this Section 2.4(a)). An
adjustment made pursuant to this Section 2.4(a) shall become
effective retroactively immediately after the record date in the
case of a dividend or distribution and shall become effective
retroactively immediately after the effective date in the case of a
subdivision, combination or reclassification. For the purposes of
this Section 2.4(a), in the event that the holders of Common Stock
are entitled to make any election with respect to the kind or
amount of securities receivable by them in any transaction that is
subject to this Section 2.4(a) (including any election that would
result in all or a portion of the transaction becoming subject to
Section 2.2), the kind and amount of securities that shall be
distributable to the holders of shares of this Series shall be
based on (i) the election, if any, made by the holder of record (as
of the date used for determining the holders of Common Stock
entitled to make such election) of the largest number of shares of
this Series in writing to the Corporation on or prior to the last
date on which a holder of Common Stock may make such an election or
(ii) if no such election is timely made, an assumption
<PAGE>
that such holder failed to exercise any such rights (provided that
if the kind or amount of securities is not the same for each
nonelecting holder, then the kind and amount of securities
receivable shall be based on the kind or amount of securities
receivable by a plurality of nonelecting holders of Common Stock).
Concurrently with the mailing to holders of Common Stock of any
document pursuant to which such holders may make an election of the
type referred to in this Section 2.4(a), the Corporation shall mail
a copy thereof to the holders of record of shares of this Series as
of the date used for determining the holders of record of Common
Stock entitled to such mailing, which document shall be used by the
holders of record of shares of this Series to make such an
election.
(b) The Corporation shall be entitled to make such
additional adjustments in the Formula Number, in addition to those
required by Section 2.4(a) as shall be necessary in order that any
dividend or distribution in Common Stock or any subdivision,
reclassification or combination of shares of Common Stock referred
to above, shall not be taxable to the holders of Common Stock for
United States Federal income tax purposes, so long as such
additional adjustments pursuant to this Section 2.4(b) do not
decrease the Formula Number.
(c) All calculations under this Section 2 and Section 3
shall be made to the nearest cent, one-hundredth of a share or, in
the case of the Formula Number, one hundred-thousandth.
Notwithstanding any other provision of this Section 2.4, the
Corporation shall not be required to make any adjustment of the
Formula Number unless such adjustment would require an increase or
decrease of at least one percent (1%) of the Formula Number. Any
lesser adjustment shall be carried forward and shall be made at the
time of and together with the next subsequent adjustment that,
together with any adjustment or adjustments so carried forward,
shall amount to an increase or decrease of at least one percent
(1%) of the Formula Number. Any adjustments under this Section 2.4
shall be made successively whenever an event requiring such an
adjustment occurs.
(d) Promptly after an adjustment in the Formula Number is
required, the Corporation shall
<PAGE>
provide written notice to each of the holders of shares of this
Series, which notice shall state the adjusted Formula Number.
(e) If a distribution is made in accordance with the
provisions of Section 2.2, anything in this Section 2.4 to the
contrary notwithstanding, no adjustment pursuant to this Section
2.4 shall be effected by reason of the distribution of such assets,
property, securities, rights, options or warrants or the subsequent
modification, exercise, expiration or termination of such
securities, rights, options or warrants.
3. Conversion at the Option of the Holder.
3.1 Each holder of a share of this Series shall have the
right at any time to convert such share of this Series into either: (i)
a number of shares of Common Stock per share of this Series equal to the
Formula Number in effect on the Conversion Date or (ii) one share of
Series LMC Common Stock per share of this Series; provided, however,
that such holder may convert shares of this Series only to the extent
that the ownership by such holder or its designee of the shares of
Common Stock or Series LMC Common Stock issuable upon such conversion
would not violate the Communications Laws.
3.2 No adjustments in respect of payments of dividends on
shares of this Series surrendered for conversion or any dividend on the
Common Stock or Series LMC Common Stock issued upon conversion shall be
made upon the conversion of any shares of this Series (it being
understood that if the Conversion Date for shares of this Series occurs
after the Record Date and prior to the Dividend Payment Date of any such
dividend, the holders of record of shares of this Series on such Record
Date shall be entitled to receive the dividend payable with respect to
such shares on the related Dividend Payment Date pursuant to Section
2.1).
3.3 The Corporation may, but shall not be required to, in
connection with any conversion of shares of this Series into shares of
Common Stock, issue a fraction of a share of Common Stock, and if the
Corporation shall determine not to issue any such fraction, the
Corporation shall make a cash payment (rounded to the nearest cent)
equal to such fraction multiplied by the Closing Price of
<PAGE>
the Common Stock on the last Trading Day prior to the Conversion Date.
The Corporation shall issue a fraction of a share of Series LMC Common
Stock in order to effect a conversion of a fraction of a share of this
Series into Series LMC Common Stock.
3.4 Any holder of shares of this Series electing to
convert such shares into Common Stock or Series LMC Common Stock shall
surrender the certificate or certificates for such shares at the
principal executive office of the Corporation (or at such other place as
the Corporation may designate by notice to the holders of shares of this
Series) during regular business hours, duly endorsed to the Corporation
or in blank, or accompanied by instruments of transfer to the
Corporation or in blank, or in form satisfactory to the Corporation, and
shall give written notice to the Corporation at such office that such
holder elects to convert such shares of this Series, which notice shall
state whether the shares of this Series delivered for conversion shall
be converted into shares of Common Stock or shares of Series LMC Common
Stock. If any such certificate or certificates shall have been lost,
stolen or destroyed, the holder shall, in lieu of delivering such
certificate or certificates, deliver to the Corporation (or such other
place) an indemnification agreement and bond satisfactory to the
Corporation. The Corporation shall, as soon as practicable (subject to
Section 3.8) after such deposit of certificates for shares of this
Series or delivery of the indemnification agreement and bond,
accompanied by the written notice above prescribed, issue and deliver at
such office (or such other place) to the holder for whose account such
shares were surrendered, or a designee of such holder, certificates
representing either (i) the number of shares of Common Stock and the
cash, if any, or (ii) the number of shares of Series LMC Common Stock,
as the case may be, to which such holder is entitled upon such
conversion. Each share of Common Stock delivered to a holder or its
designee as a result of conversion of shares of this Series pursuant to
this Section 3 shall be accompanied by any rights associated generally
with each other share of Common Stock outstanding as of the Conversion
Date.
3.5 Conversion shall be deemed to have been made as of
the date (the "Conversion Date") that the certificate or certificates
for the shares of this Series to be converted and the written notice
prescribed in Section 3.4 are received by the Corporation; and the
Person
<PAGE>
entitled to receive the Common Stock or Series LMC Common Stock issuable
upon such conversion shall be treated for all purposes as the holder of
record of such Common Stock or Series LMC Common Stock, as the case may
be, on such date. The Corporation shall not be required to deliver
certificates for shares of Common Stock or Series LMC Common Stock while
the stock transfer books for such stock or for this Series are duly
closed for any purpose, but certificates for shares of Common Stock or
Series LMC Common Stock, as the case may be, shall be delivered as soon
as practicable after the opening of such books.
3.6 In the event that after October 10, 1996, whether or
not any shares of this Series have been issued by the Corporation,
either (a) any consolidation or merger to which the Corporation is a
party, other than a merger or consolidation in which the Corporation is
the surviving or continuing corporation and that does not result in
any reclassification of, or change (other than a change in par value or
from par value to no par value or from no par value to par value, or as
a result of a subdivision or combination) in, outstanding shares of
Common Stock or (b) any sale or conveyance of all or substantially all
of the property and assets of the Corporation, then lawful provision
shall be made as part of the terms of such transaction whereby the
holder of each share of this Series shall have the right thereafter,
during the period such share shall be convertible, to convert such share
into the kind and amount of shares of stock or other securities and
property receivable upon such consolidation, merger, sale or conveyance
by a holder of the number of shares of Common Stock into which such
shares of this Series could have been converted immediately prior to
such consolidation, merger, sale or conveyance, subject to adjustment
that shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section 2.4 and this Section 3 (based on (i)
the election, if any, made in writing to the Corporation by the holder
of record (as of the date used for determining holders of Common Stock
entitled to make such election) of the largest number of shares of this
Series on or prior to the last date on which a holder of Common Stock
may make an election regarding the kind or amount of securities or other
property receivable by such holder in such transaction or (ii) if no
such election is timely made, an assumption that such holder failed to
exercise any such rights (provided that if the kind or amount of
securities or other property is not the same for each nonelecting
holder, then the kind and amount of securities or other property
<PAGE>
receivable shall be based upon the kind and amount of securities or
other property receivable by a plurality of the nonelecting holders of
Common Stock)). In the event that any of the transactions referred to in
clause (a) or (b) of the first sentence of this Section 3.6 involves the
distribution of cash or property (other than equity securities) to a
holder of Common Stock, lawful provision shall be made as part of the
terms of the transaction whereby the holder of each share of this Series
on the record date fixed for determining holders of Common Stock
entitled to receive such cash or property (or if no such record date is
established, the effective date of such transaction) shall be entitled
to receive the amount of cash or property that such holder would have
been entitled to receive had such holder converted his shares of this
Series into Common Stock immediately prior to such record date (or
effective date) (based on the election or nonelection made by the holder
of record of the largest number of shares of this Series, as provided
above). Concurrently with the mailing to holders of Common Stock of any
document pursuant to which such holders may make an election regarding
the kind or amount of securities or other property that will be
receivable by such holders in any transaction described in clause (a) or
(b) of the first sentence of this Section 3.6, the Corporation shall
mail a copy thereof to the holders of record of the shares of this
Series as of the date used for determining the holders of record of
Common Stock entitled to such mailing, which document shall be used by
the holders of shares of this Series to make such an election. The
Corporation shall not enter into any of the transactions referred to in
clause (a) or (b) of the first sentence of this Section 3.6 unless
effective provision shall be made in the certificate or articles of
incorporation or other constituent documents of the Corporation or the
entity surviving the consolidation or merger, if other than the
Corporation, or the entity acquiring the Corporation's assets, as the
case may be, so as to give effect to the provisions set forth in this
Section 3.6. The provisions of this Section 3.6 shall apply similarly to
successive consolidations, mergers, sales or conveyances. For purposes
of this Section 3.6, the term "Corporation" shall refer to the
Corporation as constituted immediately prior to the merger,
consolidation or other transaction referred to in this Section 3.6.
3.7 The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but
unissued stock, for the purpose of
<PAGE>
effecting the conversion of the shares of this Series, such number of
its duly authorized shares of Common Stock and Series LMC Common Stock
as shall from time to time be sufficient to effect the conversion of all
outstanding shares of this Series into shares of Common Stock or Series
LMC Common Stock at any time (assuming that, at the time of the
computation of such number of shares, all such Common Stock or Series
LMC Common Stock would be held by a single holder); provided, however,
that nothing contained herein shall preclude the Corporation from
satisfying its obligations in respect of the conversion of the shares by
delivery of purchased shares of Common Stock or Series LMC Common Stock
that are held in the treasury of the Corporation. All shares of Common
Stock or Series LMC Common Stock that shall be deliverable upon
conversion of the shares of this Series shall be duly and validly
issued, fully paid and nonassessable. For purposes of this Section 3,
any shares of this Series at any time outstanding shall not include
shares held in the treasury of the Corporation.
3.8 In any case in which Section 2.4 shall require that
any adjustment be made effective as of or retroactively immediately
following a record date, the Corporation may elect to defer (but only
for five (5) Trading Days following the occurrence of the event that
necessitates the notice referred to in Section 2.4(d)) issuing to the
holder of any shares of this Series converted after such record date (i)
the shares of Common Stock issuable upon such conversion over and
above (ii) the shares of Common Stock issuable upon such conversion on
the basis of the Formula Number prior to adjustment; provided, however,
that the Corporation shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
3.9 If any shares of Common Stock or Series LMC Common
Stock that would be issuable upon conversion pursuant to this Section 3
require registration with or approval of any governmental authority
before such shares may be issued upon conversion (other than any such
registration or approval required to avoid a violation of the
Communications Laws), the Corporation will in good faith and as
expeditiously as possible cause such shares to be duly registered or
approved, as the case may be. The Corporation will use commercially
reasonable efforts to list the shares of (or depositary shares
representing fractional
<PAGE>
interests in) Common Stock required to be delivered upon conversion of
shares of this Series prior to such delivery upon the principal national
securities exchange, if any, upon which the outstanding Common Stock is
listed at the time of such delivery.
3.10 The Corporation shall pay any and all issue or other
taxes that may be payable in respect of any issue or delivery of shares
of Common Stock or Series LMC Common Stock on conversion of shares of
this Series pursuant hereto. The Corporation shall not, however, be
required to pay any tax that is payable in respect of any transfer
involved in the issue or delivery of Common Stock or Series LMC Common
Stock in a name other than that in which the shares of this Series so
converted were registered, and no such issue or delivery shall be made
unless and until the Person requesting such issue has paid to the
Corporation the amount of such tax, or has established, to the
satisfaction of the Corporation, that such tax has been paid.
3.11 In case of (i) the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation or (ii) any
action triggering an adjustment to the Formula Number pursuant to
Section 2.4 or Section 3.6, then, in each case, the Corporation shall
cause to be mailed, first-class postage prepaid, to the holders of
record of the outstanding shares of this Series, at least fifteen (15)
days prior to the applicable record date for any such transaction (or if
no record date will be established, the effective date thereof), a
notice stating (x) the date, if any, on which a record is to be taken
for the purpose of any such transaction (or, if no record date will be
established, the date as of which holders of record of Common Stock
entitled to participate in such transaction are determined), and (y) the
expected effective date thereof. Failure to give such notice or any
defect therein shall not affect the legality or validity of the
proceedings described in this Section 3.11.
4. Voting.
4.1 The shares of this Series shall have no voting rights
except as expressly provided in this Section 4 or as required by law.
4.2 Each share of this Series shall be entitled to vote
together as one class with the holders of
<PAGE>
shares of Common Stock upon the election of the directors of the
Corporation. In any such vote, the holders of shares of this Series
shall be entitled to a number of votes per share of this Series equal to
the product of (i) the Formula Number then in effect multiplied by (ii)
the maximum number of votes per share of Common Stock that any holder of
shares of Common Stock generally then has with respect to such matter
divided by (iii) 100.
4.3 So long as any shares of this Series remain
outstanding, unless a greater percentage shall then be required by law,
the Corporation shall not, without the affirmative vote of the holders
of shares of this Series representing at least 66-2/3% of the aggregate
voting power of shares of this Series then outstanding, amend, alter or
repeal any of the provisions of the Certificate or the Certificate of
Incorporation so as, in any such case, as applicable, to (i) amend,
alter or repeal any of the powers, preferences or rights of the Series
Common Stock or (ii) adversely affect the voting powers, designations,
preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof, of the
shares of this Series or the Series LMC Common Stock; provided, however,
that no affirmative vote of any shares of this Series shall be required
to amend, alter or repeal any of the powers, preferences or rights of
any series of Series Common Stock other than this Series and the Series
LMC Common Stock.
4.4 So long as any shares of this Series remain
outstanding, the Corporation shall not, without the affirmative vote of
the holders of shares of this Series representing 100% of the aggregate
voting power of shares of this Series then outstanding, amend, alter or
repeal the provisions of Section 7.7.
4.5 No consent of holders of shares of this Series shall
be required for (i) the creation of any indebtedness of any kind of
the Corporation, (ii) the authorization or issuance of any class or
series of Parity Stock or Senior Stock, (iii) the approval of any
amendment to the Certificate of Incorporation that would increase or
decrease the aggregate number of authorized shares of Series Common
Stock or Common Stock or (iv) the authorization of any increase or
decrease in the number of shares constituting this Series; provided,
however, that the number of shares constituting this Series shall not be
decreased below the number of such shares then outstanding.
<PAGE>
5. Liquidation Rights.
5.1 Upon the liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the holders of shares
of this Series shall be entitled to receive, contemporaneously with any
distribution to holders of shares of Common Stock upon such liquidation,
dissolution or winding up, an aggregate amount per share equal to the
product of the Formula Number then in effect multiplied by the aggregate
amount to be distributed per share to holders of Common Stock.
5.2 Neither the sale, exchange or other conveyance (for
cash, shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation nor the
merger or consolidation of the Corporation into or with any other
corporation, or the merger or consolidation of any other corporation
into or with the Corporation, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the purposes of
this Section 5.
6. Transfer Restrictions.
6.1 Without the prior written consent of the Corporation,
no holder of shares of this Series shall offer, sell, transfer, pledge,
encumber or otherwise dispose of, or agree to offer, sell, transfer,
pledge, encumber or otherwise dispose of, any shares of this Series or
interests in any shares of this Series except to a Permitted Transferee
that shall agree that, prior to such Permitted Transferee ceasing to be
a Permitted Transferee, such Permitted Transferee must transfer
ownership of any shares of this Series, and all interests therein, held
by such Permitted Transferee to any Permitted Transferee. For the
avoidance of doubt, the preceding sentence is not intended to prohibit a
holder of shares of this Series from entering into, or offering to enter
into, (a) any arrangement under which such holder agrees to promptly
convert shares of this Series and sell, transfer or otherwise dispose of
the Common Stock issuable upon such conversion or (b) any pledge or
encumbrance of shares of this Series; provided, however, that the terms
of any such pledge or encumbrance must require that, in the event of any
sale or foreclosure with respect to shares of this Series, such shares
must be delivered immediately to the Corporation for conversion into
<PAGE>
Common Stock. The provisions of this Section 6.1 shall continue to be in
effect with respect to any shares of this Series received by any holder
by virtue of merger, consolidation, operation of law or otherwise.
6.2 Certificates for shares of this Series shall bear
such legends as the Corporation shall from time to time deem
appropriate.
7. Other Provisions.
7.1 All notices from the Corporation to the holders of
shares of this Series shall be given by one of the methods specified in
Section 7.2. With respect to any notice to a holder of shares of this
Series required to be provided hereunder, neither failure to give such
notice, nor any defect therein or in the transmission thereof, to any
particular holder shall affect the sufficiency of the notice or the
validity of the proceedings referred to in such notice with respect to
the other holders or affect the legality or validity of any
distribution, right, warrant, reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the
vote upon any such action. Any notice that was mailed in the manner
herein provided shall be conclusively presumed to have been duly given
whether or not the holder receives the notice.
7.2 All notices and other communications hereunder shall
be deemed given (i) on the first Trading Day following the date
received, if delivered personally, (ii) on the Trading Day following
timely deposit with an overnight courier service, if sent by overnight
courier specifying next day delivery and (iii) on the first Trading Day
that is at least five days following deposit in the mails, if sent by
first class mail to (x) a holder at its last address as it appears on
the transfer records or registry for the shares of this Series and (y)
the Corporation at the following address (or at such other address as
the Corporation shall specify in a notice pursuant to this Section 7.2):
TW Inc., 75 Rockefeller Plaza, New York, New York 10019, Attention:
General Counsel.
7.3 Any shares of this Series that have been converted or
otherwise acquired by the Corporation shall, after such conversion or
acquisition, as the case may be, be
<PAGE>
retired and promptly cancelled and shall become authorized but unissued
shares of this Series, unless the Board of Directors determines
otherwise.
7.4 The Corporation shall be entitled to recognize the
exclusive right of a Person registered on its records as the holder of
shares of this Series, and such holder of record shall be deemed the
holder of such shares for all purposes.
7.5 All notice periods referred to in the Certificate
shall commence on the date of the mailing of the applicable notice.
7.6 Any registered holder of shares of this Series may
proceed to protect and enforce its rights by any available remedy by
proceeding at law or in equity to protect and enforce any such rights,
whether for the specific enforcement of any provision in the Certificate
or in aid of the exercise of any power granted herein, or to enforce any
other proper remedy.
7.7 The shares of this Series shall not be subject to
redemption at the option of the Corporation, including pursuant to
Section 5 of Article IV of the Certificate of Incorporation (or any
equivalent provision in any further amendment to or restatement of the
Certificate of Incorporation).
IN WITNESS WHEREOF, TW Inc. has caused this certificate
to be signed this 10th day of October, 1996.
TW INC.,
by /s/ Thomas W. McEnerney
---------------------------
Name: Thomas W. McEnerney
Title: Vice President
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS, AND QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS THEREOF, OF SERIES A
PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
TW INC.
--------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
--------------------
TW INC., hereafter to be renamed "Time Warner Inc." (the
"Corporation"), a corporation organized and existing by virtue of the
General Corporation Law of the State of Delaware (the "DGCL"), does hereby
certify that the following resolution was duly adopted by action of the
Board of Directors of the Corporation (the "Board of Directors") at a
meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly granted to and
vested in the Board of Directors by the provisions of Section 2 of Article
IV of the Restated Certificate of Incorporation of the Corporation, as
amended from time to time (the "Certificate of Incorporation"), and Section
151(g) of the DGCL, the Board of Directors hereby creates, from the
authorized shares of Preferred Stock, par value $.10 per share ("Preferred
Stock"), of the Corporation authorized to be issued pursuant to the
Certificate of Incorporation, a series of Preferred Stock, and hereby fixes
the voting powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of the shares of such series as follows:
SECTION 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series A Participating Cumulative Preferred
Stock" ("Series A Stock"). The number of shares initially constituting the
Series A Stock shall be 8,000,000; provided, however, that,
<PAGE>
if more than a total of 8,000,000 shares of Series A Stock shall be
issuable upon the exercise of Rights (the "Rights") issued pursuant to the
Rights Agreement dated as of October 10, 1996, between the Corporation and
ChaseMellon Shareholder Services L.L.C., as Rights Agent (the "Rights
Agreement"), the Board of Directors, pursuant to Section 151(g) of the
DGCL, shall direct by resolution or resolutions that a certificate be
properly executed, acknowledged, filed and recorded, in accordance with the
provisions of Section 103 thereof, providing for the total number of shares
of Series A Stock authorized to be issued to be increased (to the extent
that the Certificate of Incorporation then permits) to the largest number
of whole shares (rounded up to the nearest whole number) issuable upon
exercise of such Rights.
SECTION 2. Dividends or Distributions. (a) Subject to the prior
and superior rights of the holders of shares of any other series of
Preferred Stock or other class of capital stock of the Corporation ranking
prior and superior to the shares of Series A Stock with respect to
dividends, the holders of shares of the Series A Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out of the
assets of the Corporation legally available therefor, (1) quarterly
dividends payable in cash on the last day of each fiscal quarter in each
year, or such other dates as the Board of Directors shall approve (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 a fraction of a share of Series A Stock, in the
amount of $.01 per whole share (rounded to the nearest cent) less the
amount of all cash dividends declared on the Series A Stock pursuant to the
following clause (2) 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
Stock (the total of which shall not, in any event, be less than zero) and
(2) dividends payable in cash on the payment date for each cash dividend
declared on the common stock, par value $.01 per share ("Common Stock"), of
the Corporation in an amount per whole share (rounded to the nearest cent)
equal to the Formula Number (as hereinafter defined) then in effect times
the cash dividends then to be paid on each share of Common Stock. In
addition, if the Corporation shall pay any dividend or make any
distribution on the Common Stock payable in assets, securities or other
forms of noncash consideration (other than dividends or
<PAGE>
distributions solely in shares of Common Stock), then, in each such case,
the Corporation shall simultaneously pay or make on each outstanding whole
share of Series A Stock a dividend or distribution in like kind equal to
the Formula Number then in effect times such dividend or distribution on
each share of the Common Stock. As used herein, the "Formula Number" shall
be 1,000; provided, however, that, if at any time after the date of this
Certificate, the Corporation shall (i) declare or pay any dividend on the
Common Stock payable in shares of Common Stock or make any distribution on
the Common Stock in shares of Common Stock, (ii) subdivide (by a stock
split or otherwise) the outstanding shares of Common Stock into a larger
number of shares of Common Stock or (iii) combine (by a reverse stock split
or otherwise) the outstanding shares of Common Stock into a smaller number
of shares of Common Stock, then in each such event the Formula Number shall
be adjusted to a number determined by multiplying the Formula Number in
effect immediately prior to such event by a fraction, the numerator of
which is the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that are outstanding immediately prior to such event
(and rounding the result to the nearest whole number); and provided
further, that, if at any time after the date of this Certificate, the
Corporation shall issue any shares of its capital stock in a merger,
reclassification, or change of the outstanding shares of Common Stock, then
in each such event the Formula Number shall be appropriately adjusted to
reflect such merger, reclassification or change so that each share of
Series A Stock continues to be the economic equivalent of a Formula Number
of shares of Common Stock prior to such merger, reclassification or change.
(b) The Corporation shall declare a dividend or distribution on
the Series A Stock as provided in Section 2(a) immediately prior to or at
the same time it declares a dividend or distribution on the Common Stock
(other than a dividend or distribution solely in shares of Common Stock);
provided, however, that, in the event no dividend or distribution (other
than a dividend or distribution in shares of Common Stock) 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 $.01 per share on the Series A Stock shall nevertheless
be payable on such subsequent Quarterly Dividend Payment Date. The Board of
Directors may fix a record date for the determination of
<PAGE>
holders of shares of Series A Stock entitled to receive a dividend or
distribution declared thereon, which record date shall be the same as the
record date for any corresponding dividend or distribution on the Common
Stock.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Stock from and after the Quarterly Dividend
Payment Date next preceding the date of original issue of such shares of
Series A Stock; provided, however, that dividends on such shares that are
originally issued after the record date for the determination of holders of
shares of Series A Stock entitled to receive a quarterly dividend and on or
prior to the next succeeding Quarterly Dividend Payment Date shall begin to
accrue and be cumulative from and after such Quarterly Dividend Payment
Date. Notwithstanding the foregoing, dividends on shares of Series A Stock
that are originally issued prior to the record date for the determination
of holders of shares of Series A Stock entitled to receive a quarterly
dividend on the first Quarterly Dividend Payment Date shall be calculated
as if cumulative from and after the last day of the fiscal quarter next
preceding the date of original issuance of such shares. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
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.
(d) So long as any shares of the Series A Stock are outstanding,
no dividends or other distributions shall be declared, paid or distributed,
or set aside for payment or distribution, on the Common Stock unless, in
each case, the dividend required by this Section 2 to be declared on the
Series A Stock shall have been declared.
(e) The holders of the shares of Series A Stock shall not be
entitled to receive any dividends or other distributions except as provided
herein.
SECTION 3. Voting Rights. The holders of shares of Series A Stock
shall have the following voting rights:
(a) Each holder of Series A Stock shall be entitled to a number
of votes equal to the Formula Number then in effect, for each share of
Series A Stock held of record on each matter on which holders of the Common
Stock
<PAGE>
or stockholders generally are entitled to vote, multiplied by the maximum
number of votes per share that any holder of the Common Stock then has with
respect to such matter (assuming any holding period or other requirement to
vote a greater number of shares is satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series A Stock and the holders of shares of Common
Stock shall vote together as one class for the election of directors and on
all other matters submitted to a vote of stockholders.
(c) If, at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether
or not consecutive) payable on any share or shares of Series A Stock are in
default, the number of directors constituting the Board of Directors shall
be increased by two. In addition to voting together with the holders of
Common Stock for the election of other directors, the holders of record of
the Series A Stock, voting separately as a class to the exclusion of the
holders of Common Stock, shall be entitled at said meeting of stockholders
(and at each subsequent annual meeting of stockholders), unless all
dividends in arrears have been paid or declared and set apart for payment
prior thereto, to vote for the election of two directors, the holders of
any Series A Stock being entitled to cast a number of votes per share of
Series A Stock equal to the Formula Number. Until the default in payments
of all dividends that permitted the election of said directors shall cease
to exist, any director who shall have been so elected pursuant to the next
preceding sentence may be removed at any time, either with or without
cause, only by the affirmative vote of the holders of the shares of Series
A Stock at the time entitled to cast a majority of the votes entitled to be
cast for the election of any such director at a special meeting of such
holders called for that purpose, and any vacancy thereby created may be
filled by the vote of such holders. If and when such default shall cease to
exist, the holders of the Series A Stock shall be divested of the foregoing
special voting rights, subject to revesting in the event of each and every
subsequent like default in payments of dividends. Upon the termination of
the foregoing special voting rights, the terms of office of all persons who
may have been elected directors pursuant to said special voting rights
shall forthwith terminate, and the number of directors constituting the
Board of Directors shall be reduced by two. The voting rights granted by
this Section 3(c) shall be in
<PAGE>
addition to any other voting rights granted to the holders of the Series A
Stock in this Section 3.
(d) Except as provided herein, in Section 11 or by applicable
law, holders of Series A 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 authorizing
or taking any corporate action.
SECTION 4. Certain Restrictions. (a) Whenever quarterly dividends
or other dividends or distributions payable on the Series A 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 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 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 Stock,
except dividends paid ratably on the Series A 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 Stock;
provided, however, 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 Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Stock, or any shares of stock ranking on a parity with the
Series A Stock, except in accordance with a purchase offer made
<PAGE>
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.
SECTION 5. Liquidation Rights. Upon the liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, no
distribution shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series A Stock unless, prior thereto, the holders of shares of
Series A Stock shall have received an amount equal to the accrued and
unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment, plus an amount equal to the greater of (x) $.01 per
whole share or (y) an aggregate amount per share equal to the Formula
Number then in effect times the aggregate amount to be distributed per
share to holders of Common Stock or (2) to the holders of stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Stock, except distributions made ratably on
the Series A Stock and all other such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up.
SECTION 6. 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 or any other property, then in
any such case the then outstanding shares of Series A Stock shall at the
same time be similarly exchanged or changed into an amount per share equal
to the Formula Number then in effect times the aggregate amount of stock,
securities, cash or any other property (payable in kind), as the case may
be,
<PAGE>
into which or for which each share of Common Stock is exchanged or changed.
In the event both this Section 6 and Section 2 appear to apply to a
transaction, this Section 6 will control.
SECTION 7. No Redemption; No Sinking Fund. (a) The shares of
Series A Stock shall not be subject to redemption by the Corporation or at
the option of any holder of Series A Stock except as set forth in Section 5
of Article IV of the Certificate of Incorporation; provided, however, that
the Corporation may purchase or otherwise acquire outstanding shares of
Series A Stock in the open market or by offer to any holder or holders of
shares of Series A Stock.
(b) The shares of Series A Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.
SECTION 8. Ranking. The Series A Stock shall rank junior to all
other series of Preferred Stock, unless the Board of Directors shall
specifically determine otherwise in fixing the powers, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations and restrictions thereof.
SECTION 9. Fractional Shares. The Series A Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights
Agreement in whole shares or in any fraction of a share that is one
one-thousandths (1/1,000ths) of a share or any integral multiple of such
fraction that shall entitle the holder, in proportion to such holder's
fractional shares, to receive dividends, exercise voting rights,
participate in distributions and to have the benefit of all other rights of
holders of Series A Stock. In lieu of fractional shares, the Corporation,
prior to the first issuance of a share or a fraction of a share of Series A
Stock, may elect (1) to make a cash payment as provided in the Rights
Agreement for fractions of a share other than one one-thousandths
(1/1,000ths) of a share or any integral multiple thereof or (2) to issue
depository receipts evidencing such authorized fraction of a share of
Series A Stock pursuant to an appropriate agreement between the Corporation
and a depository selected by the Corporation; provided, however, that such
agreement shall provide that the holders of such depository receipts shall
have all the rights, privileges and preferences to which they are entitled
as holders of the Series A Stock.
<PAGE>
SECTION 10. Reacquired Shares. Any shares of Series A Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All
such shares shall upon their retirement become authorized but unissued
shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the Board
of Directors pursuant to the provisions of Section 2 of Article IV of the
Certificate of Incorporation.
SECTION 11. Amendment. None of the powers, preferences and
relative, participating, optional or other special rights of the Series A
Stock as provided herein or in the Certificate of Incorporation shall be
amended in any manner that would alter or change the powers, preferences,
rights or privileges of the holders of Series A Stock so as to affect them
adversely without the affirmative vote of the holders of at least 66-2/3%
of the outstanding shares of Series A Stock, voting as a separate class;
provided, however, that no such amendment approved by the holders of at
least 66-2/3% of the outstanding shares of Series A Stock shall be deemed
to apply to the powers, preferences, rights or privileges of any holder of
shares of Series A Stock originally issued upon exercise of the Rights
after the time of such approval without the approval of such holder.
IN WITNESS WHEREOF, TW INC. has caused this Certificate to be
duly executed in its corporate name on this 10th day of October, 1996.
TW INC.,
by /s/ Thomas W. McEnerney
--------------------------
Name: Thomas W. McEnerney
Title: Vice President
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF SERIES D CONVERTIBLE
PREFERRED STOCK
OF
TW INC.
--------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
--------------------
TW INC., hereafter to be renamed "Time Warner Inc." (the
"Corporation"), a corporation organized and existing by virtue of the
General Corporation Law of the State of Delaware (the "DGCL"), does hereby
certify that the following resolution was duly adopted by action of the
Board of Directors of the Corporation (the "Board of Directors") at a
meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly granted to and
vested in the Board of Directors by the provisions of Section 2 of Article
IV of the Restated Certificate of Incorporation of the Corporation, as
amended from time to time (the "Certificate of Incorporation"), and Section
151(g) of the DGCL, the Board of Directors hereby creates, from the
authorized shares of Preferred Stock, par value $.10 per share ("Preferred
Stock"), of the Corporation authorized to be issued pursuant to the
Certificate of Incorporation, a series of Preferred Stock, and hereby fixes
the voting powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of the shares of such series as follows:
The series of Preferred Stock hereby established shall consist of
11,000,000 shares designated as Series D Convertible Preferred Stock. The
rights, preferences and limitations of such series shall be as follows:
<PAGE>
1. Definitions. As used herein, the following terms shall have
the indicated meanings:
1.1 "Accrued Dividend Amount" shall mean the aggregate
amount of accrued and unpaid dividends on a share of Series D Stock to and
including the Conversion Date, except that if the Conversion Date shall
occur after a Record Date and prior to a related Dividend Payment Date, the
Accrued Dividend Amount shall not include any accrued and unpaid dividends
for the period from and after the most recent Dividend Payment Date.
1.2 "Board of Directors" shall mean the Board of Directors
of the Corporation or, with respect to any action to be taken by the Board
of Directors, any committee of the Board of Directors duly authorized to
take such action.
1.3 "Capital Stock" shall mean any and all shares of
corporate stock of a Person (however designated and whether representing
rights to vote, rights to participate in dividends or distributions upon
liquidation or otherwise with respect to such Person, or any division or
subsidiary thereof, or any joint venture, partnership, corporation or other
entity).
1.4 "Certificate" shall mean the certificate of the voting
powers, designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions
thereof, of Series D Convertible Preferred Stock filed with respect to this
resolution with the Secretary of State of the State of Delaware pursuant to
Section 151 of the DGCL.
1.5 "Change of Control" and "Change of Control Date" shall
have the following meanings: "Change of Control" shall mean the occurrence
of one or both of the following events: (a) individuals who would
constitute a majority of the members of the Board of Directors elected at
any meeting of stockholders or by written consent (without regard to any
members of the Board of Directors elected pursuant to the terms of any
series of Preferred Stock) shall be elected to the Board of Directors and
the election or the nomination for election by the stockholders of such
directors was not approved by a vote of at least a majority of the
directors in office immediately prior to such election (in which event
"Change of Control Date" shall mean the date of such election) or (b) a
Person or group of
<PAGE>
Persons acting in concert as a partnership, limited partnership, syndicate
or other group within the meaning of Rule 13d-3 under the Exchange Act (the
"Acquiring Person") shall, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases, share repurchases or
redemptions or otherwise, have become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of 40% or more of the
outstanding shares of Common Stock (in which event "Change of Control Date"
shall mean the date of the event resulting in such 40% ownership).
1.6 "Closing Price" of the Common Stock shall mean the last
reported sale price of the Common Stock (regular way) as shown on the
Composite Tape of the NYSE, or, in the event that no such sale takes place
on such day, the average of the closing bid and asked prices on the NYSE,
or, if the Common Stock is not listed or admitted to trading on the NYSE,
on the principal national securities exchange on which such stock is listed
or admitted to trading, or, if it is not listed or admitted to trading on
any national securities exchange, the last reported sale price of the
Common Stock, or, in the event that no such sale takes place on such day,
the average of the closing bid and asked prices, in either case as reported
by NASDAQ.
1.7 "Common Dividend Deficiency" shall be applicable in the
event that a Conversion Date shall fall after a record date and prior to
the related payment date for a regularly scheduled cash dividend on the
Common Stock (the "Common Dividend Payment Date"), and in such event shall
mean the product of (i) the Conversion Rate, (ii) the amount per share of
Common Stock of the regularly scheduled cash dividend for which the record
date has been set but a payment date has not yet occurred and (ii) a
fraction (A) the numerator of which is the number of calendar days from and
excluding the Conversion Date (or in the event the Conversion Date falls
after a Record Date and on or prior to a related Dividend Payment Date,
from and excluding the Dividend Payment Date) to and including the Common
Dividend Payment Date and (B) the denominator of which is 91 (provided that
such fraction shall not be greater than one (1)).
1.8 "Common Dividend Excess" shall be applicable in all
circumstances where a Common Dividend Deficiency is not applicable, and in
such event shall mean the product of (i) the Conversion Rate, (ii) the
regular quarterly cash dividend per share, if any, paid by the
<PAGE>
Corporation on the Common Stock (the "Historical Dividend") on the most
recent dividend payment date for the Common Stock (the "Prior Dividend
Payment Date") occurring during the four months immediately preceding the
Conversion Date and (iii) a fraction (A) the numerator of which is the
number of calendar days from and excluding (1) the Prior Dividend Payment
Date to and including (2) the Conversion Date (or in the event the
Conversion Date falls after a Record Date and on or prior to a related
Dividend Payment Date, to and including the Dividend Payment Date) and (B)
the denominator of which is 91 days (provided that in no event shall the
fraction be greater than one (1)).
1.9 "Common Stock" shall mean the class of Common Stock, par
value $.01 per share, of the Corporation authorized at the date of the
Certificate, or any other class of stock resulting from (x) successive
changes or reclassifications of such Common Stock consisting of changes in
par value, or from par value to no par value, (y) a subdivision or
combination or (z) any other changes for which an adjustment is made under
Section 3.6(a), and in any such case including any shares thereof
authorized after the date of the Certificate, together with any associated
rights to purchase other securities of the Corporation that are at the time
represented by the certificates representing such shares of Common Stock.
1.10 "Conversion Date" shall have the meaning set forth in
Section 3.5 hereof.
1.11 "Conversion Price" at any time shall mean the
Liquidation Value per share divided by the Conversion Rate in effect at
such time (rounded to the nearest one hundredth of a cent).
1.12 "Conversion Rate" shall have the meaning set forth in
Section 3.1 hereof.
1.13 "Converting Holder" shall have the meaning set forth in
Section 3.5 hereof.
1.14 "Corporation" shall mean TW Inc., a Delaware
corporation, and any of its successors by operation of law, including by
merger, consolidation or sale or conveyance of all or substantially all of
its property and assets.
<PAGE>
1.15 "Current Market Price" of the Common Stock on any date
shall mean the average of the daily Closing Prices per share of the Common
Stock for the five (5) consecutive Trading Days ending on the Trading Day
immediately preceding the applicable record date, conversion date,
redemption date or exchange date referred to in Section 3 or Section 4.
1.16 "DGCL" shall mean the General Corporation Law of the
State of Delaware.
1.17 "Dividend Payment Date" shall have the meaning set
forth in Section 2.1 hereof.
1.18 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
1.19 "Exchange Price" shall have the meaning set forth in
Section 4.1 hereof.
1.20 "Junior Stock" shall mean the Common Stock, the Series
A Stock, the Series LMC Stock, the Series LMCN-V Stock and the shares of
any other class or series of Capital Stock of the Corporation that, by the
terms of the Certificate of Incorporation or of the instrument by which the
Board of Directors, acting pursuant to authority granted in the Certificate
of Incorporation, shall fix the relative rights, preferences and
limitations thereof, shall be junior to the Series D Stock in respect of
the right to receive dividends or to participate in any distribution of
assets other than by way of dividends.
1.21 "Liquidation Value" shall have the meaning set forth in
Section 7.1 hereof.
1.22 "NASDAQ" shall mean the Nasdaq Stock Market.
1.23 "Net Dividend Amount" shall have the meaning set forth
in Section 3.1 hereof.
1.24 "NYSE" shall mean the New York Stock Exchange, Inc.
1.25 "Parity Stock" shall mean the Series E Stock, the
Series F Stock, the Series G Stock, the Series H Stock, the Series I Stock,
the Series J Stock, the Series L Stock, the Series M Stock and the shares
of any other class
<PAGE>
or series of Capital Stock of the Corporation that, by the terms of the
Certificate of Incorporation or of the instrument by which the Board of
Directors, acting pursuant to authority granted in the Certificate of
Incorporation, shall fix the relative rights, preferences and limitations
thereof, shall, in the event that the stated dividends thereon are not paid
in full, be entitled to share ratably with the Series D Stock in the
payment of dividends, including accumulations, if any, in accordance with
the sums that would be payable on such shares if all dividends were
declared and paid in full, or shall, in the event that the amounts payable
thereon on liquidation are not paid in full, be entitled to share ratably
with the Series D Stock in any distribution of assets other than by way of
dividends in accordance with the sums that would be payable in such
distribution if all sums payable were discharged in full; provided,
however, that the term "Parity Stock" shall be deemed to refer (i) in
Section 2.2 hereof, to any stock that is Parity Stock in respect of
dividend rights; (ii) in Section 7 hereof, to any stock that is Parity
Stock in respect of the distribution of assets; and (iii) in Sections 6.2
and 6.3 hereof, to any stock that is Parity Stock in respect of either
dividend rights or the distribution of assets and that, pursuant to the
Certificate of Incorporation or any instrument in which the Board of
Directors, acting pursuant to authority granted in the Certificate of
Incorporation, shall so designate, is entitled to vote with the holders of
Series D Stock.
1.26 "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization
or other entity.
1.27 "Preferred Stock" shall mean the class of Preferred
Stock, par value $.10 per share, of the Corporation authorized at the date
of the Certificate, including any shares thereof authorized after the date
of the Certificate.
1.28 "Pro Rata Portion" shall have the meaning set forth in
Section 5.6 hereof.
1.29 "Pro Rata Repurchase" shall mean the purchase of shares
of Common Stock by the Corporation or by any of its subsidiaries, whether
for cash or other property or securities of the Corporation, which purchase
is subject to Section 13(e) of the Exchange Act or is made pursuant to an
offer made available to all holders of Common Stock, but
<PAGE>
excluding any purchase made in open market transactions that satisfies the
conditions of clause (b) of Rule 10b-18 under the Exchange Act or has been
designed (as reasonably determined by the Board of Directors) to prevent
such purchase from having a material effect on the trading market of the
Common Stock. The "Effective Date" of a Pro Rata Repurchase shall mean the
applicable expiration date (including all extensions thereof) of any tender
or exchange offer that is a Pro Rata Repurchase or the date of purchase
with respect to any Pro Rata Repurchase that is not a tender or exchange
offer.
1.30 "Record Date" shall have the meaning set forth in
Section 2.1 hereof.
1.31 "Redemption Price" shall have the meaning set forth in
Section 4.1 hereof.
1.32 "Redemption Rescission Event" shall mean the occurrence
of (a) any general suspension of trading in, or limitation on prices for,
securities on the principal national securities exchange on which shares of
Common Stock are registered and listed for trading (or, if shares of Common
Stock are not registered and listed for trading on any such exchange, in
the over-the-counter market) for more than six-and-one-half (6-1/2)
consecutive trading hours, (b) any decline in either the Dow Jones
Industrial Average or the Standard & Poor's Index of 400 Industrial
Companies (or any successor index published by Dow Jones & Company, Inc. or
Standard & Poor's Corporation) by either (i) an amount in excess of 10%,
measured from the close of business on any Trading Day to the close of
business on the next succeeding Trading Day during the period commencing on
the Trading Day preceding the day notice of any redemption of shares of
this Series is given (or, if such notice is given after the close of
business on a Trading Day, commencing on such Trading Day) and ending at
the earlier of (x) the time and date fixed for redemption in such notice
and (y) the time and date at which the Corporation shall have irrevocably
deposited funds with a designated bank or trust company pursuant to Section
4.4 or (ii) an amount in excess of 15% (or, if the time and date fixed for
redemption is more than 15 days following the date on which notice of
redemption is given, 20%), measured from the close of business on the
Trading Day preceding the day notice of such redemption is given (or, if
such notice is given after the close of business on a Trading Day, from
such Trading Day) to the close of business on any Trading Day on or prior
to
<PAGE>
the earlier of the dates specified in clauses (x) and (y) above, (c) a
declaration of a banking moratorium or any suspension of payments in
respect of banks by Federal or state authorities in the United States or
(d) the commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States
that in the reasonable judgment of the Corporation could have a material
adverse effect on the market for the Common Stock.
1.33 "Rescission Date" shall have the meaning set forth in
Section 4.5 hereof.
1.34 "Senior Stock" shall mean the shares of any class or
series of Capital Stock of the Corporation that, by the terms of the
Certificate of Incorporation or of the instrument by which the Board of
Directors, acting pursuant to authority granted in the Certificate of
Incorporation, shall fix the relative rights, preferences and limitations
thereof, shall be senior to the Series D Stock in respect of the right to
receive dividends or to participate in any distribution of assets other
than by way of dividends.
1.35 "Series A Stock" shall mean the series of Preferred
Stock authorized and designated as Series A Participating Preferred Stock
at the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.36 "Series D Stock" and "this Series" shall mean the
series of Preferred Stock authorized and designated as the Series D
Convertible Preferred Stock, including any shares thereof authorized and
designated after the date of the Certificate.
1.37 "Series E Stock" shall mean the series of Preferred
Stock authorized and designated as Series E Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.38 "Series F Stock" shall mean the series of Preferred
Stock authorized and designated as Series F Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
<PAGE>
1.39 "Series G Stock" shall mean the series of Preferred
Stock authorized and designated as Series G Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.40 "Series H Stock" shall mean the series of Preferred
Stock authorized and designated as Series H Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.41 "Series I Stock" shall mean the series of Preferred
Stock authorized and designated as Series I Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.42 "Series J Stock" shall mean the series of Preferred
Stock authorized and designated as Series J Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.43 "Series L Stock" shall mean the series of Preferred
Stock authorized and designated as 10-1/4% Series L Exchangeable Preferred
Stock at the date of the Certificate, including any shares thereof
authorized and designated after the date of the Certificate.
1.44 "Series LMC Stock" shall mean the series of Series
Common Stock authorized and designated as Series LMC Common Stock at the
date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.45 "Series LMCN-V Stock" shall mean the series of Series
Common Stock authorized and designated as Series LMCN-V Common Stock at the
date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.46 "Series M Stock" shall mean the series of Preferred
Stock authorized and designated as 10-1/4% Series M Exchangeable Preferred
Stock at the date of the Certificate, including any shares thereof
authorized and designated after the date of the Certificate.
<PAGE>
1.47 "Surrendered Shares" shall have the meaning set forth
in Section 3.5 hereof.
1.48 "Trading Day" shall mean, so long as the Common Stock
is listed or admitted to trading on the NYSE, a day on which the NYSE is
open for the transaction of business, or, if the Common Stock is not listed
or admitted to trading on the NYSE, a day on which the principal national
securities exchange on which the Common Stock is listed is open for the
transaction of business, or, if the Common Stock is not so listed or
admitted for trading on any national securities exchange, a day on which
NASDAQ is open for the transaction of business.
2. Cash Dividends.
2.1 The holders of the outstanding Series D Stock shall be
entitled to receive quarter-annual dividends, as and when declared by the
Board of Directors out of funds legally available therefor. Each
quarter-annual dividend shall be an amount per share equal to (i) in the
case of each Dividend Payment Date (as defined below) occurring on or prior
to July 6, 1999, the greater of (A) $.9375 per $100 of Liquidation Value of
Series D Stock (which is equivalent to $3.75 per annum), and (B) an amount
per $100 of Liquidation Value of Series D Stock equal to the product of (1)
the Conversion Rate and (2) the aggregate per share amount of regularly
scheduled dividends paid in cash on the Common Stock during the period from
but excluding the immediately preceding Dividend Payment Date to and
including such Dividend Payment Date (the "Preferred Dividend Amount"), and
(ii) in the case of each Dividend Payment Date occurring thereafter, an
amount per $100 of Liquidation Value of Series D Stock equal to the product
of (1) the Conversion Rate and (2) the aggregate per share amount of
regularly scheduled dividends paid in cash on the Common Stock during the
period from but excluding the immediately preceding Dividend Payment Date
to and including such Dividend Payment Date. All dividends shall be payable
in cash on or about the first day of January, April, July and October in
each year, as fixed by the Board of Directors, or such other dates as are
fixed by the Board of Directors (provided that July 6, 1999, shall be a
Dividend Payment Date) (each a "Dividend Payment Date"), to the holders of
record of Series D Stock at the close of business on or about the Trading
Day next preceding such first day of January, April, July or October (or
July 6, 1999) as the case may be, as fixed by the Board of Directors, or
such
<PAGE>
other dates as are fixed by the Board of Directors (each a "Record Date").
Subject to the next sentence, in the case of dividends payable in respect
of periods prior to July 6, 1999, (i) such dividends shall accrue on each
share on a daily basis, whether or not there are unrestricted funds legally
available for the payment of such dividends and whether or not earned or
declared and (ii) any such dividends that become payable for any partial
dividend period shall be computed on the basis of the actual days elapsed
in such period. Notwithstanding the preceding sentence, the amount accruing
and payable in respect of the first dividend on the Series D Stock payable
after the date of the Certificate shall equal the Preferred Dividend
Amount. From and after July 6, 1999, dividends on the Series D Stock
(determined as to amount as provided herein) shall accrue to the extent,
but only to the extent, that regularly scheduled cash dividends are
declared by the Board of Directors on the Common Stock with a payment date
after July 6, 1999 (or, in the case of Series D Stock originally issued
after July 6, 1999, after the Dividend Payment Date next preceding such
date of original issuance). All dividends that accrue in accordance with
the foregoing provisions shall be cumulative from and after the day
immediately succeeding the date of issuance. The amount payable to each
holder of record on any Dividend Payment Date shall be rounded to the
nearest cent.
2.2 Except as hereinafter provided in this Section 2.2,
unless all dividends on the outstanding shares of Series D Stock and any
Parity Stock that shall have accrued and become payable as of any date
shall have been paid, or declared and funds set apart for payment thereof,
no dividend or other distribution (payable other than in shares of Junior
Stock) shall be paid to the holders of Junior Stock or Parity Stock, and no
shares of Series D Stock, Parity Stock or Junior Stock shall be purchased,
redeemed or otherwise acquired by the Corporation or any of its
subsidiaries (except by conversion into or exchange for Junior Stock), nor
shall any monies be paid or made available for a purchase, redemption or
sinking fund for the purchase or redemption of any Series D Stock, Junior
Stock or Parity Stock. When dividends are not paid in full upon the shares
of this Series and any Parity Stock, all dividends declared upon shares of
this Series and all Parity Stock shall be declared pro rata so that the
amount of dividends declared per share on this Series and all such Parity
Stock shall in all cases bear to each other the same ratio that accrued
dividends per share on the shares of this
<PAGE>
Series and all such Parity Stock bear to each other. No interest, or sum of
money in lieu of interest, shall be payable in respect of any dividend
payment or payments on this Series that may be in arrears.
2.3 In the event that the Corporation shall at any time
distribute (other than a distribution in liquidation of the Corporation) to
the holders of its shares of Common Stock any assets or property, including
debt or equity securities of the Corporation (other than Common Stock
subject to a distribution or reclassification covered by Section 3.6(a)) or
of any other Person (including common stock of such Person) or cash (but
excluding regularly scheduled cash dividends payable on shares of Common
Stock), or in the event that the Corporation shall at any time distribute
(other than a distribution in liquidation of the Corporation) to such
holders rights, options or warrants to subscribe for or purchase shares of
Common Stock (including shares held in the treasury of the Corporation), or
rights, options or warrants to subscribe for or purchase any other security
or rights, options or warrants to subscribe for or purchase any assets or
property (in each case, whether of the Corporation or otherwise, but other
than any distribution of rights to purchase securities of the Corporation
if the holder of shares of this Series would otherwise be entitled to
receive such rights upon conversion of shares of this Series for Common
Stock; provided, however, that if such rights are subsequently redeemed by
the Corporation, such redemption shall be treated for purposes of this
Section 2.3 as a cash dividend (but not a regularly scheduled cash
dividend) on the Common Stock), the Corporation shall simultaneously
distribute such assets, property, securities, rights, options or warrants
pro rata to the holders of Series D Stock on the record date fixed for
determining holders of Common Stock entitled to participate in such
distribution (or, if no such record date shall be established, the
effective time thereof) in an amount equal to the amount that such holders
of Series D Stock would have been entitled to receive had their shares of
Series D Stock been converted into Common Stock immediately prior to such
record date (or effective time). In the event of a distribution to holders
of Series D Stock pursuant to this Section 2.3, such holders shall be
entitled to receive fractional shares or interests only to the extent that
holders of Common Stock are entitled to receive the same. The holders of
Series D Stock on the applicable record date (or effective time) shall be
entitled to receive in lieu of such fractional shares or interests the same
<PAGE>
consideration as is payable to holders of Common Stock with respect
thereto. If there are no fractional shares or interests payable to holders
of Common Stock, the holders of Series D Stock on the applicable record
date (or effective time) shall receive in lieu of such fractional shares or
interests the fair value thereof as determined by the Board of Directors.
2.4 If a distribution is made in accordance with the
provisions of Section 2.3, anything in Section 3 to the contrary
notwithstanding, no adjustment pursuant to Section 3 shall be effected by
reason of the distribution of such assets, property, securities, rights,
options or warrants or the subsequent modification, exercise, expiration or
termination of such securities, rights, options or warrants.
2.5 In the event that the holders of Common Stock are
entitled to make any election with respect to the kind or amount of
securities or other property receivable by them in any distribution that is
subject to Section 2.3, the kind and amount of securities or other property
that shall be distributable to the holders of the Series D Stock shall be
based on (i) the election, if any, made by the record holder (as of the
date used for determining the holders of Common Stock entitled to make such
election) of the largest number of shares of Series D Stock in writing to
the Corporation on or prior to the last date on which a holder of Common
Stock may make such an election or (ii) if no such election is timely made,
an assumption that such holder failed to exercise any such rights (provided
that if the kind or amount of securities or other property is not the same
for each nonelecting holder, then the kind and amount of securities or
other property receivable by holders of the Series D Stock shall be based
on the kind or amount of securities or other property receivable by a
plurality of shares held by the nonelecting holders of Common Stock).
Concurrently with the mailing to holders of Common Stock of any document
pursuant to which such holders may make an election of the type referred to
in this Section, the Corporation shall mail a copy thereof to the record
holders of the Series D Stock as of the date used for determining the
holders of record of Common Stock entitled to such mailing.
<PAGE>
3. Conversion Rights.
3.1 Each holder of a share of this Series shall have the
right at any time or as to any share of this Series called for redemption
or exchange, at any time prior to the close of business on the date fixed
for redemption or exchange (unless the Corporation defaults in the payment
of the Redemption Price or fails to exchange the shares of this Series for
the applicable number of shares of Common Stock and any cash portion of the
Exchange Price or exercises its right to rescind such redemption pursuant
to Section 4.5, in which case such right shall not terminate at the close
of business on such date), to convert such share into (i) a number of
shares of Common Stock equal to 2.08264 shares of Common Stock for each
share of this Series, subject to adjustment as provided in this Section 3
(such rate, as so adjusted from time to time, is herein called the
"Conversion Rate") plus (ii) a number of shares of Common Stock equal to:
(A)(1) the Accrued Dividend Amount minus (2) the Common Dividend
Excess, if applicable, or plus (3) the Common Dividend Deficiency, if
applicable (the "Net Dividend Amount"), divided by
(B) the Closing Price of the Common Stock on the last Trading Day
prior to the Conversion Date;
provided, however, that in the event that the Net Dividend Amount is a
negative number, the number of shares deliverable upon conversion of a
share of Series D Stock shall be equal to:
(I) the number of shares determined pursuant to clause (i) minus
(II) a number of shares equal to (x) the absolute value of the
Net Dividend Amount divided by (y) the Closing Price of the Common
Stock on the last Trading Day prior to the Conversion Date;
and, provided further, that, in the event that the Net Dividend Amount is a
positive number, the Corporation shall have the right to deliver cash equal
to the Net Dividend Amount or any portion thereof, in which case its
obligation to deliver shares of Common Stock pursuant to clause (ii) shall
be reduced by a number of shares equal to (x) the aggregate amount of cash
so delivered divided by (y) the
<PAGE>
Closing Price of the Common Stock on the last Trading Day prior to the
Conversion Date, unless the Corporation shall deliver cash equal to the
entire Net Dividend Amount, in which case its entire obligation under
clause (ii) shall be discharged. The obligations of the Corporation to
issue the Common Stock or make the cash payments provided by this Section
3.1 shall be absolute whether or not any accrued dividend by which such
issuance or payment is measured has been declared by the Board of Directors
and whether or not the Corporation would have adequate surplus or net
profits to pay such dividend if declared or is otherwise restricted from
making such dividend.
3.2 Except as provided in this Section 3, no adjustments in
respect of payments of dividends on shares surrendered for conversion or
any dividend on the Common Stock issued upon conversion shall be made upon
the conversion of any shares of this Series (it being understood that if
the Conversion Date for shares of Series D Stock occurs after a Record Date
and on or prior to a Dividend Payment Date, the holder of record on such
Record Date shall be entitled to receive the dividend payable with respect
to such shares on the related Dividend Payment Date pursuant to Section 2.1
hereof).
3.3 The Corporation may, but shall not be required to, in
connection with any conversion of shares of this Series, issue a fraction
of a share of Common Stock, and if the Corporation shall determine not to
issue any such fraction, the Corporation shall, subject to Section 3.6(c),
make a cash payment (rounded to the nearest cent) equal to such fraction
multiplied by the Closing Price of the Common Stock on the last Trading Day
prior to the Conversion Date.
3.4 Any holder of shares of this Series electing to convert
such shares into Common Stock shall surrender the certificate or
certificates for such shares at the office of the transfer agent or agents
therefor (or at such other place as the Corporation may designate by notice
to the holders of shares of this Series) during regular business hours,
duly endorsed to the Corporation or in blank, or accompanied by instruments
of transfer to the Corporation or in blank, or in form satisfactory to the
Corporation, and shall give written notice to the Corporation at such
office that such holder elects to convert such shares of this Series. The
Corporation shall, as soon as practicable (subject to Section 3.6(d)) after
such deposit of certificates for shares of this Series,
<PAGE>
accompanied by the written notice above prescribed, issue and deliver at
such office to the holder for whose account such shares were surrendered,
or to his nominee, certificates representing the number of shares of Common
Stock and the cash, if any, to which such holder is entitled upon such
conversion.
3.5 Conversion shall be deemed to have been made as of the
date (the "Conversion Date") that certificates for the shares of this
Series to be converted, and the written notice prescribed in Section 3.4
are received by the transfer agent or agents for this Series; and the
Person entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder of such Common Stock
on such date. Notwithstanding anything to the contrary contained herein, in
the event the Corporation shall have rescinded a redemption of shares of
this Series pursuant to Section 4.5, any holder of shares of this Series
that shall have surrendered shares of this Series for conversion following
the day on which notice of the subsequently rescinded redemption shall have
been given but prior to the close of business on the later of (a) the
Trading Day next succeeding the date on which public announcement of the
rescission of such redemption shall have been made and (b) the Trading Day
on which the notice of rescission required by Section 4.5 is deemed given
pursuant to Section 8.2 (a "Converting Holder"), may rescind the conversion
of such shares surrendered for conversion by (i) properly completing a form
prescribed by the Corporation and mailed to holders of shares of this
Series (including Converting Holders) with the Corporation's notice of
rescission, which form shall provide for the certification by any
Converting Holder rescinding a conversion on behalf of any beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of shares of this
Series that the beneficial ownership (within the meaning of such Rule) of
such shares shall not have changed from the date on which such shares were
surrendered for conversion to the date of such certification and (ii)
delivering such form to the Corporation no later than the close of business
on that date which is ten (10) Trading Days following the date on which the
Corporation's notice of rescission is deemed given pursuant to Section 8.2.
The delivery of such form by a Converting Holder shall be accompanied by
(x) any certificates representing shares of Common Stock issued to such
Converting Holder upon a conversion of shares of this Series that shall be
rescinded by the proper delivery of such form (the "Surrendered
<PAGE>
Shares"), (y) any securities, evidences of indebtedness or assets (other
than cash) distributed by the Corporation to such Converting Holder by
reason of such Converting Holder's being a record holder of Surrendered
Shares and (z) payment in New York Clearing House funds or other funds
acceptable to the Corporation of an amount equal to the sum of (I) any cash
such Converting Holder may have received in lieu of the issuance of
fractional shares upon conversion and (II) any cash paid or payable by the
Corporation to such Converting Holder by reason of such Converting Holder
being a record holder of Surrendered Shares. Upon receipt by the
Corporation of any such form properly completed by a Converting Holder and
any certificates, securities, evidences of indebtedness, assets or cash
payments required to be returned or made by such Converting Holder to the
Corporation as set forth above, the Corporation shall instruct the transfer
agent or agents for shares of Common Stock and shares of this Series to
cancel any certificates representing Surrendered Shares (which Surrendered
Shares shall be deposited in the treasury of the Corporation) and reissue
certificates representing shares of this Series to such Converting Holder
(which shares of this Series shall be deemed to have been outstanding at
all times during the period following their surrender for conversion). The
Corporation shall, as promptly as practicable, and in no event more than
five (5) Trading Days, following the receipt of any such properly completed
form and any such certificates, securities, evidences of indebtedness,
assets or cash payments required to be so returned or made, pay to the
Converting Holder or as otherwise directed by such Converting Holder any
dividend or other payment made on such shares during the period from the
time such shares shall have been surrendered for conversion to the
rescission of such conversion. All questions as to the validity, form,
eligibility (including time or receipt) and acceptance of any form
submitted to the Corporation to rescind the conversion of shares of this
Series, including questions as to the proper completion or execution of any
such form or any certification contained therein, shall be resolved by the
Corporation, whose determination shall be final and binding. The
Corporation shall not be required to deliver certificates for shares of
Common Stock while the stock transfer books for such stock or for this
Series are duly closed for any purpose or during any period commencing at a
Redemption Rescission Event and ending at either (i) the time and date at
which the Corporation's right of rescission shall expire pursuant to
Section 4.5 if the Corporation shall not have exercised such right or (ii)
the close of
<PAGE>
business on that day which is ten (10) Trading Days following the date on
which notice of rescission pursuant to Section 4.4 is deemed given pursuant
to Section 8.2 if the Corporation shall have exercised such right of
rescission, but certificates for shares of Common Stock shall be delivered
as soon as practicable after the opening of such books or the expiration of
such period.
3.6 The Conversion Rate shall be adjusted from time to time
as follows for events occurring after the date of the Certificate:
(a) In the event that the Corporation shall, at any
time or from time to time while any of the Series D Stock is
outstanding, (i) pay a dividend in shares of its Common Stock,
(ii) combine its outstanding shares of Common Stock into a
smaller number of shares, (iii) subdivide its outstanding shares
of Common Stock or (iv) reclassify (other than by way of a merger
that is subject to Section 3.7) its shares of Common Stock, then
the Conversion Rate in effect immediately before such action
shall be adjusted so that immediately following such event the
holders of the Series D Stock shall be entitled to receive upon
conversion or exchange thereof the kind and amount of shares of
Capital Stock of the Corporation that they would have owned or
been entitled to receive upon or by reason of such event if such
shares of Series D Stock had been converted or exchanged
immediately before the record date (or, if no record date, the
effective date) for such event (it being understood that any
distribution of cash or of Capital Stock (other than Common
Stock), including any distribution of Capital Stock that shall
accompany a reclassification of the Common Stock, shall be
subject to Section 2.3 rather than this Section 3.6(a)). An
adjustment made pursuant to this Section 3.6(a) shall become
effective retroactively immediately after the record date in the
case of a dividend or distribution and shall become effective
retroactively immediately after the effective date in the case of
a subdivision, combination or reclassification. For the purposes
of this Section 3.6(a), in the event that the holders of Common
Stock are entitled to make any election with respect to the kind
or amount of securities receivable by them in any transaction
that is subject to this Section 3.6(a) (including any election
that would result in all or a portion of the transaction becoming
subject to
<PAGE>
Section 2.3), the kind and amount of securities that shall be
distributable to the holders of the Series D Stock shall be based
on (i) the election, if any, made by the record holder (as of the
date used for determining the holders of Common Stock entitled to
make such election) of the largest number of shares of Series D
Stock in writing to the Corporation on or prior to the last date
on which a holder of Common Stock may make such an election or
(ii) if no such election is timely made, an assumption that such
holder failed to exercise any such rights (provided that if the
kind or amount of securities is not the same for each nonelecting
holder, then the kind and amount of securities receivable shall
be based on the kind or amount of securities receivable by a
plurality of nonelecting holders of Common Stock). Concurrently
with the mailing to holders of Common Stock of any document
pursuant to which such holders may make an election of the type
referred to in this Section, the Corporation shall mail a copy
thereof to the record holders of the Series D Stock as of the
date used for determining the holders of record of Common Stock
entitled to such mailing.
(b) In the event that a Change of Control shall occur,
the Conversion Rate in effect immediately prior to the Change of
Control Date shall be increased (but not decreased) by
multiplying such rate by a fraction as follows: (i) in the case
of a Change of Control specified in Section 1.5(a), a fraction in
which the numerator is the Conversion Price prior to adjustment
pursuant hereto and the denominator is the Current Market Price
of the Common Stock at the Change of Control Date, (ii) in the
case of a Change of Control specified in Section 1.5(b), the
greater of the following fractions: (x) a fraction the numerator
of which is the highest price per share of Common Stock paid by
the Acquiring Person in connection with the transaction giving
rise to the Change of Control or in any transaction within six
months prior to or after the Change of Control Date (the "Highest
Price"), and the denominator of which is the Current Market Price
of the Common Stock as of the date (but not earlier than six
months prior to the Change of Control Date) on which the first
public announcement is made by the Acquiring Person that it
intends to acquire or that it has acquired 40% or more of the
outstanding shares of Common Stock (the "Announcement Date") or
(y) a
<PAGE>
fraction the numerator of which is the Conversion Price prior to
adjustment pursuant hereto and the denominator of which is the
Current Market Price of the Common Stock on the Announcement Date
and (iii) in the case where there co-exists a Change of Control
specified in both Section 1.5(a) and Section 1.5(b), the greatest
of the fractions determined pursuant to clauses (i) and (ii).
Such adjustment shall become effective immediately after the
Change of Control Date and shall be made, in the case of clauses
(ii) and (iii) above, successively for six months thereafter in
the event and at the time of any increase in the Highest Price
after the Change of Control Date; provided, however, that no such
successive adjustment shall be made with respect to the
Conversion Rate of the shares of this Series in respect of any
event occurring after the Conversion Date.
(c) The Corporation shall be entitled to make such
additional adjustments in the Conversion Rate, in addition to
those required by subsections 3.6(a) and 3.6(b), as shall be
necessary in order that any dividend or distribution in Common
Stock or any subdivision, reclassification or combination of
shares of Common Stock referred to above, shall not be taxable to
the holders of Common Stock for United States Federal income tax
purposes so long as such additional adjustments pursuant to this
Section 3.6(c) do not decrease the Conversion Rate.
(d) In any case in which this Section 3.6 shall require
that any adjustment be made effective as of or retroactively
immediately following a record date, the Corporation may elect to
defer (but only for five (5) Trading Days following the
occurrence of the event that necessitates the filing of the
statement referred to in Section 3.6(f)) issuing to the holder of
any shares of this Series converted after such record date (i)
the shares of Common Stock and other Capital Stock of the
Corporation issuable upon such conversion over and above (ii) the
shares of Common Stock and other Capital Stock of the Corporation
issuable upon such conversion on the basis of the Conversion Rate
prior to adjustment; provided, however, that the Corporation
shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
<PAGE>
(e) All calculations under this Section 3 shall be made
to the nearest cent, one-hundredth of a share or, in the case of
the Conversion Rate, one hundred-thousandth. Notwithstanding any
other provision of this Section 3, the Corporation shall not be
required to make any adjustment of the Conversion Rate unless
such adjustment would require an increase or decrease of at least
1.00000% of such Conversion Rate. Any lesser adjustment shall be
carried forward and shall be made at the time of and together
with the next subsequent adjustment that, together with any
adjustment or adjustments so carried forward, shall amount to an
increase or decrease of at least 1.00000% in such rate. Any
adjustments under this Section 3 shall be made successively
whenever an event requiring such an adjustment occurs.
(f) Whenever an adjustment in the Conversion Rate is
required, the Corporation shall forthwith place on file with its
transfer agent or agents for this Series a statement signed by a
duly authorized officer of the Corporation, stating the adjusted
Conversion Rate determined as provided herein. Such statements
shall set forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustment. Promptly after the adjustment of the Conversion Rate,
the Corporation shall mail a notice thereof to each holder of
shares of this Series.
(g) In the event that at any time as a result of an
adjustment made pursuant to this Section 3, the holder of any
share of this Series thereafter surrendered for conversion shall
become entitled to receive any shares of Capital Stock of the
Corporation other than shares of Common Stock, the conversion
rate of such other shares so receivable upon conversion of any
such share of this Series shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock
contained in subparagraphs (a) through (f) and (h) of this
Section 3.6, and the provisions of Section 3.1 through 3.5 and
3.7 through 3.10 shall apply on like or similar terms to any such
other shares and the determination of the Board of Directors as
to any such adjustment shall be conclusive.
<PAGE>
(h) No adjustment shall be made pursuant to this
Section 3.6 (i) if the effect thereof would be to reduce the
Conversion Price below the par value of the Common Stock or (ii)
subject to Section 3.6(c) hereof, with respect to any share of
Series D Stock that is converted, prior to the time such
adjustment otherwise would be made.
3.7 In the event that after the date of the Certificate (a)
any consolidation or merger to which the Corporation is a party, other than
a merger or consolidation in which the Corporation is the surviving or
continuing corporation and that does not result in any reclassification of,
or change (other than a change in par value or from par value to no par
value or from no par value to par value, or as a result of a subdivision or
combination) in, outstanding shares of Common Stock or (b) any sale or
conveyance of all or substantially all of the property and assets of the
Corporation, then lawful provision shall be made as part of the terms of
such transaction whereby the holder of each share of Series D Stock shall
have the right thereafter, during the period such share shall be
convertible or exchangeable, to convert such share into or have such share
exchanged for the kind and amount of shares of stock or other securities
and property receivable upon such consolidation, merger, sale or conveyance
by a holder of the number of shares of Common Stock into which such shares
of this Series could have been converted or exchanged immediately prior to
such consolidation, merger, sale or conveyance, subject to adjustment that
shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 3 (based on (i) the election, if any, made in
writing to the Corporation by the record holder (as of the date used for
determining holders of Common Stock entitled to make such election) of the
largest number of shares of Series D Stock on or prior to the last date on
which a holder of Common Stock may make an election regarding the kind or
amount of securities or other property receivable by such holder in such
transaction or (ii) if no such election is timely made, an assumption that
such holder failed to exercise any such rights (provided that if the kind
or amount of securities or other property is not the same for each
nonelecting holder, then the kind and amount of securities or other
property receivable shall be based upon the kind and amount of securities
or other property receivable by a plurality of the nonelecting holders of
Common Stock)). In the event that any of the transactions referred to in
clauses (a) or (b) involves the distribution
<PAGE>
of cash (or property other than equity securities) to a holder of Common
Stock, lawful provision shall be made as part of the terms of the
transaction whereby the holder of each share of Series D Stock on the
record date fixed for determining holders of Common Stock entitled to
receive such cash or property (or if no such record date is established,
the effective date of such transaction) shall be entitled to receive the
amount of cash or property that such holder would have been entitled to
receive had such holder converted his shares of Series D Stock into Common
Stock immediately prior to such record date (or effective date) (based on
the election or nonelection made by the record holder of the largest number
of shares of Series D Stock, as provided above). Concurrently with the
mailing to holders of Common Stock of any document pursuant to which such
holders may make an election regarding the kind or amount of securities or
other property that will be receivable by such holder in any transaction
described in clause (a) or (b) of the first sentence of this Section 3.7,
the Corporation shall mail a copy thereof to the holders of the Series D
Stock as of the date used for determining the holders of record of Common
Stock entitled to such mailing. The Corporation shall not enter into any of
the transactions referred to in clauses (a) or (b) of the preceding
sentence unless effective provision shall be made in the certificate or
articles of incorporation or other constituent documents of the Corporation
or the entity surviving the consolidation or merger, if other than the
Corporation, or the entity acquiring the Corporation's assets, as the case
may be, so as to give effect to the provisions set forth in this Section
3.7. The provisions of this Section 3.7 shall apply similarly to successive
consolidations, mergers, sales or conveyances. For purposes of this Section
3.7 the term "Corporation" shall refer to the Corporation (as defined in
Section 1.14) as constituted immediately prior to the merger, consolidation
or other transaction referred to in this Section.
3.8 The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
stock, for the purpose of effecting the conversion of the shares of this
Series, such number of its duly authorized shares of Common Stock (or, if
applicable, any other shares of Capital Stock of the Corporation) as shall
from time to time be sufficient to effect the conversion of all outstanding
shares of this Series into such Common Stock (or such other shares of
Capital Stock) at any time (assuming that, at the time of
<PAGE>
the computation of such number of shares, all such Common Stock (or such
other shares of Capital Stock) would be held by a single holder); provided,
however, that nothing contained herein shall preclude the Corporation from
satisfying its obligations in respect of the conversion of the shares by
delivery of purchased shares of Common Stock (or such other shares of
Capital Stock) that are held in the treasury of the Corporation. All shares
of Common Stock (or such other shares of Capital Stock of the Corporation)
that shall be deliverable upon conversion of the shares of this Series
shall be duly and validly issued, fully paid and nonassessable. For
purposes of this Section 3, any shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Corporation.
3.9 If any shares of Common Stock or other shares of Capital
Stock of the Corporation that would be issuable upon conversion of shares
of this Series hereunder require registration with or approval of any
governmental authority before such shares may be issued upon conversion,
the Corporation will in good faith and as expeditiously as possible cause
such shares to be duly registered or approved, as the case may be. The
Corporation will use commercially reasonable efforts to list the shares of
(or depositary shares representing fractional interests in) Common Stock or
other shares of Capital Stock of the Corporation required to be delivered
upon conversion of shares of this Series prior to such delivery upon the
principal national securities exchange upon which the outstanding Common
Stock or such other shares of Capital Stock is listed at the time of such
delivery.
3.10 The Corporation shall pay any and all issue or other
taxes that may be payable in respect of any issue or delivery of shares of
Common Stock or other shares of Capital Stock of the Corporation on
conversion of shares of this Series pursuant hereto. The Corporation shall
not, however, be required to pay any tax that is payable in respect of any
transfer involved in the issue or delivery of Common Stock or such other
shares of Capital Stock in a name other than that in which the shares of
this Series so converted were registered, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to
the Corporation the amount of such tax, or has established, to the
satisfaction of the Corporation, that such tax has been paid.
<PAGE>
3.11 In the event of (i) the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, (ii) any Pro
Rata Repurchase or (iii) any action triggering an adjustment to the
Conversion Rate pursuant to this Section 3, then, in each case, the
Corporation shall cause to be filed with the transfer agent or agents for
the Series D Stock, and shall cause to be mailed, first-class postage
prepaid, to the holders of record of the outstanding shares of Series D
Stock, at least fifteen (15) days prior to the applicable record date for
any such transaction (or if no record date will be established, the
effective date thereof), a notice stating (x) the date, if any, on which a
record is to be taken for the purpose of any such transaction (or, if no
record date will be established, the date as of which holders of record of
Common Stock entitled to participate in such transaction are determined),
and (y) the expected effective date thereof. Failure to give such notice or
any defect therein shall not affect the legality or validity of the
proceedings described in this Section 3.11.
4. Redemption or Exchange.
4.1 (a) The Corporation may, at its sole option, subject to
Section 2.2 hereof, from time to time on and after July 6, 2000, in the
case of clause (i) or (iii) of Section 4.1(b), and on and after July 6,
1999, in the case of clause (ii) of Section 4.1(b), redeem, out of funds
legally available therefor, or, as provided below, exchange shares of
Common Stock for, all (or in the case of Section 4.1(b)(i), any part) of
the outstanding shares of this Series. The redemption price for each share
of this Series called for redemption pursuant to clause (i) of Section
4.1(b) shall be the Liquidation Value together with an amount equal to the
accrued and unpaid dividends to the date fixed for redemption (hereinafter
collectively referred to as the "Redemption Price"). The exchange price for
each share of this Series called for exchange pursuant to clause (ii) of
Section 4.1(b) shall be a number of shares of Common Stock equal to the
Conversion Rate, together with, at the option of the Corporation, either
(x) cash or (y) a number of shares of Common Stock, valued at the Closing
Price on the Trading Day immediately preceding the date fixed for exchange,
equal, in either case, to the aggregate amount of accrued and unpaid
dividends on the Series D Stock to the date fixed for exchange (provided
that any dividends
<PAGE>
that are in arrears must be paid in cash) (hereinafter collectively
referred to as the "Exchange Price").
(b) On the date fixed for redemption or exchange the
Corporation shall, at its option, effect either
(i) a redemption of the shares of this Series to be
redeemed by way of payment, out of funds legally available
therefor, of cash equal to the aggregate Redemption Price for the
shares of this Series then being redeemed;
(ii) an exchange of the shares of this Series for the
Exchange Price in shares of Common Stock (provided that the
Corporation (A) shall be entitled to deliver cash (1) in lieu of
any fractional share of Common Stock (determined in a manner
consistent with Section 3.3) and (2) equal to accrued and unpaid
dividends to the date fixed for exchange in lieu of shares of
Common Stock and (B) shall be required to deliver cash in respect
of any dividends that are in arrears); or
(iii) any combination thereof with respect to each
share of this Series called for redemption or exchange.
(c) Notwithstanding clauses (ii) and (iii) of Section
4.1(b), the Corporation shall be entitled to effect an exchange of shares
of Series D Stock for Common Stock or other shares of Capital Stock of the
Corporation only to the extent that duly and validly issued, fully paid and
nonassessable shares of Common Stock (or such other shares of Capital
Stock) shall be available for issuance (including delivery of previously
issued shares of Common Stock held in the Corporation's treasury on the
date fixed for exchange). The Corporation shall comply with Section 3.9 and
3.10 with respect to shares of Common Stock or other shares of Capital
Stock of the Corporation that would be issuable upon exchange of shares of
this Series. Certificates for shares of Common Stock issued in exchange for
surrendered shares of this Series pursuant to this Section 4.1 shall be
made available by the Corporation not later than the fifth Trading Day
following the date for exchange.
4.2 In the event that fewer than all the outstanding shares
of this Series are to be redeemed pursuant to Section 4.1(b)(i), the number
of shares to be
<PAGE>
redeemed from each holder of shares of this Series shall be determined by
the Corporation by lot or pro rata or by any other method as may be
determined by the Board of Directors in its sole discretion to be
equitable, and the certificate of the Corporation's Secretary or an
Assistant Secretary filed with the transfer agent or transfer agents for
this Series in respect of such determination by the Board of Directors
shall be conclusive.
4.3 In the event the Corporation shall redeem or exchange
shares of this Series pursuant to Section 4.1, notice of such redemption or
exchange shall be given by first class mail, postage prepaid, mailed not
less than fifteen (15) nor more than sixty (60) days prior to the date
fixed for redemption or exchange, as the case may be, to each record holder
of the shares to be redeemed or exchanged, at such holder's address as the
same appears on the books of the Corporation. Each such notice shall state:
(i) whether the shares of this Series are to be redeemed or exchanged; (ii)
the time and date as of which the redemption or exchange shall occur; (iii)
the total number of shares of this Series to be redeemed or exchanged and,
if fewer than all the shares held by such holder are to be redeemed, the
number of such shares to be redeemed from such holder; (iv) the Redemption
Price or the Exchange Price, as the case may be; (v) that shares of this
Series called for redemption or exchange may be converted at any time prior
to the time and date fixed for redemption or exchange (unless the
Corporation shall, in the case of a redemption, default in payment of the
Redemption Price or, in the case of an exchange, fail to exchange the
shares of this Series for the applicable number of shares of Common Stock
and any cash portion of the Exchange Price or shall exercise its right to
rescind such redemption pursuant to Section 4.5, in which case such right
of conversion shall not terminate at such time and date); (vi) the
applicable Conversion Price and Conversion Rate; (vii) the place or places
where certificates for such shares are to be surrendered for payment of the
Redemption Price, in the case of redemption, or for delivery of
certificates representing the shares of Common Stock and the payment of any
cash portion of the Exchange Price, in the case of exchange; and (viii)
that dividends on the shares of this Series to be redeemed or exchanged
will cease to accrue on such redemption or exchange date.
4.4 If notice of redemption or exchange shall have been
given by the Corporation as provided in
<PAGE>
Section 4.3, dividends on the shares of this Series so called for
redemption or exchange shall cease to accrue, such shares shall no longer
be deemed to be outstanding, and all rights of the holders thereof as
stockholders with respect to shares so called for redemption or exchange
(except (i) in the case of redemption, the right to receive from the
Corporation the Redemption Price without interest and in the case of
exchange, the right to receive from the Corporation the Exchange Price
without interest and (ii) the right to convert such shares in accordance
with Section 3) shall cease (including any right to receive dividends
otherwise payable on any Dividend Payment Date that would have occurred
after the time and date of redemption or exchange) either (i) in the case
of a redemption or exchange pursuant to Section 4.1, from and after the
time and date fixed in the notice of redemption or exchange as the time and
date of redemption or exchange (unless the Corporation shall (x) in the
case of a redemption, default in the payment of the Redemption Price, (y)
in the case of an exchange, fail to exchange the applicable number of
shares of Common Stock and any cash portion of the Exchange Price or (z)
exercise its right to rescind such redemption pursuant to Section 4.5, in
which case such rights shall not terminate at such time and date) or (ii)
if the Corporation shall so elect and state in the notice of redemption or
exchange, from and after the time and date (which date shall be the date
fixed for redemption or exchange or an earlier date not less than fifteen
(15) days after the date of mailing of the redemption or exchange notice)
on which the Corporation shall irrevocably deposit with a designated bank
or trust company doing business in the Borough of Manhattan, City and State
of New York, as paying agent, money sufficient to pay at the office of such
paying agent, on the redemption date, the Redemption Price, in the case of
redemption, or certificates representing the shares of Common Stock to be
so exchanged and any cash portion of the Exchange Price, in the case of an
exchange. Any money or certificates so deposited with any such paying agent
that shall not be required for such redemption or exchange because of the
exercise of any right of conversion or otherwise shall be returned to the
Corporation forthwith. Upon surrender (in accordance with the notice of
redemption or exchange) of the certificate or certificates for any shares
of this Series to be so redeemed or exchanged (properly endorsed or
assigned for transfer, if the Corporation shall so require and the notice
of redemption or exchange shall so state), such shares shall be redeemed or
exchanged by the Corporation at the Redemption Price or the
<PAGE>
Exchange Price, as applicable, as set forth in Section 4.1 (unless the
Corporation shall have exercised its right to rescind such redemption
pursuant to Section 4.5). In the event that fewer than all the shares
represented by any such certificate are to be redeemed, a new certificate
shall be issued representing the unredeemed shares (or fractions thereof as
provided in Section 8.4), without cost to the holder thereof, together with
the amount of cash, if any, in lieu of fractional shares other than those
issuable in accordance with Section 8.4. Subject to applicable escheat
laws, any moneys so set aside by the Corporation in the case of redemption
and unclaimed at the end of one year from the redemption date shall revert
to the general funds of the Corporation, after which reversion the holders
of such shares so called for redemption or exchange shall look only to the
general funds of the Corporation for the payment of the Redemption Price or
the Exchange Price, as applicable, without interest. Any interest accrued
on funds so deposited shall be paid to the Corporation from time to time.
4.5 In the event that a Redemption Rescission Event shall
occur following any day on which a notice of redemption shall have been
given pursuant to Section 4.3 but at or prior to the earlier of (a) the
time and date fixed for redemption as set forth in such notice of
redemption and (b) the time and date at which the Corporation shall have
irrevocably deposited funds or certificates with a designated bank or trust
company pursuant to Section 4.4, the Corporation may, at its sole option,
at any time prior to the earliest of (i) the close of business on that day
which is two (2) Trading Days following such Redemption Rescission Event,
(ii) the time and date fixed for redemption as set forth in such notice and
(iii) the time and date on which the Corporation shall have irrevocably
deposited such funds with a designated bank or trust company, rescind the
redemption under Section 4.1(b)(i) to which such notice of redemption shall
have related by making a public announcement of such rescission (the date
on which such public announcement shall have been made being hereinafter
referred to as the "Rescission Date"). The Corporation shall be deemed to
have made such announcement if it shall issue a release to the Dow Jones
News Service, Reuters Information Services or any successor news wire
service. From and after the making of such announcement, the Corporation
shall have no obligation to redeem shares of this Series called for
redemption pursuant to such notice of redemption or to pay the
<PAGE>
redemption price therefor and all rights of holders of shares of this
Series shall be restored as if such notice of redemption had not been
given. The Corporation shall give notice of any such rescission by one of
the means specified in Section 8.2 as promptly as practicable, but in no
event later than the close of business on that date which is five (5)
Trading Days following the Rescission Date to each record holder of shares
of this Series at the close of business on the Rescission Date and to any
other Person or entity that was a record holder of shares of this Series
and that shall have surrendered shares of this Series for conversion
following the giving of notice of the subsequently rescinded redemption.
Each notice of rescission shall (w) state that the redemption described in
the notice of redemption has been rescinded, (x) state that any Converting
Holder shall be entitled to rescind the conversion of shares of this Series
surrendered for conversion following the day on which notice of redemption
was given but prior to the close of business on the later of (1) the
Trading Day next succeeding the date on which public announcement of the
rescission of such redemption shall have been made and (2) the Trading Day
on which the Corporation's notice of rescission is deemed given pursuant to
Section 8.2, (y) be accompanied by a form prescribed by the Corporation to
be used by any Converting Holder rescinding the conversion of shares so
surrendered for conversion (and instructions for the completion and
delivery of such form, including instructions with respect to payments that
may be required to accompany such delivery shall be in accordance with
Section 3.5) and (z) state that such form must be properly completed and
received by the Corporation no later than the close of business on a date
that shall be ten (10) Trading Days following the date of the mailing of
such notice of rescission is deemed given pursuant to Section 8.2.
4.6 The shares of this Series shall not be subject to the
provisions of Section 5 of Article IV of the Certificate of Incorporation.
5. Pro Rata Repurchase.
5.1 Upon a Pro Rata Repurchase, each holder of shares of
this Series shall have the right to require that the Corporation
repurchase, out of funds legally available therefor, a Pro Rata Portion (as
defined below) of the shares of such holder, or any lesser number requested
by the holder, at a price per share equal to the highest price
<PAGE>
per share of Common Stock paid in the Pro Rata Repurchase multiplied by the
Conversion Rate then in effect plus an amount equal to the accrued but
unpaid dividends on such shares to the date of repurchase.
5.2 At any time prior to or within thirty (30) days
following any Pro Rata Repurchase, the Corporation shall mail a notice to
each holder of shares of this Series stating:
(a) that a Pro Rata Repurchase will occur or has
occurred and that such holder will have (upon such Pro Rata
Repurchase) or has the right to require the Corporation to
repurchase such holder's shares in an amount not in excess of the
Pro Rata Portion at a repurchase price in cash determined as set
forth above plus an amount equal to accrued and unpaid dividends,
if any, to the date of repurchase;
(b) the repurchase date for the Series D Stock (which
shall be no earlier than fifteen (15) days nor later than sixty
(60) days from the date such notice is mailed); and
(c) the instructions determined by the Corporation,
consistent with this Section, that a holder must follow in order
to have its shares repurchased.
5.3 Holders electing to have any shares repurchased will be
required to surrender such shares, with an appropriate form duly completed,
to the Corporation at the address specified in the notice at least five (5)
days prior to the repurchase date. Holders will be entitled to withdraw
their election if the Corporation receives, not later than three (3) days
prior to the repurchase date, a telegram, telex, facsimile transmission or
letter setting forth the name of the holder, the certificate numbers of the
shares delivered for purchase by the holder and a statement that such
holder is withdrawing his election to have such shares repurchased. Holders
will have such additional withdrawal and other rights as may be required
pursuant to applicable law.
5.4 On the repurchase date, the Corporation shall (i) pay
the repurchase price plus an amount equal to accrued and unpaid dividends
as provided in Section 5.1, if any, to the holders entitled thereto and
(ii) issue to such
<PAGE>
holders any equity securities of the Corporation (other than Common Stock)
that would at the time be issuable upon conversion of the shares of Series
D Stock that are then being repurchased pursuant hereto.
5.5 The Board of Directors will not approve any tender or
exchange offer by the Corporation or a third party for shares of Common
Stock or recommend that the holders of Common Stock accept any offer or
tender their shares into any offer unless a Pro Rata Portion of the shares
of this Series of all holders are entitled to be tendered into such offer
at a price not less than the price per share for shares of Common Stock
pursuant to such offer multiplied by the Conversion Rate then in effect
plus an amount equal to accrued but unpaid dividends on such shares to the
date of payment for such shares in such tender or exchange offer.
5.6 For purposes hereof, "Pro Rata Portion" with respect to
the shares of this Series held by any holder shall mean all the shares of
this Series then owned by such holder times a fraction, the numerator of
which is the number of outstanding shares of Common Stock (a) purchased in
the applicable Pro Rata Repurchase or (b) for which a tender or exchange
offer referred to in Section 5.5 is made, as the case may be, and the
denominator of which is the number of outstanding shares of Common Stock
immediately prior to such Pro Rata Repurchase or the commencement of such
tender or exchange offer, as the case may be.
6. Voting. The shares of this Series shall have no voting rights
except as required by law or as set forth below.
6.1 Each share of this Series shall be entitled to vote
together with holders of the shares of Common Stock (and any other class or
series that may similarly be entitled to vote with the shares of Common
Stock) as a single class upon all matters upon which holders of Common
Stock are entitled to vote. In any such vote, the holders of this Series
shall be entitled to two (2) votes per $100 of Liquidation Value of Series
D Stock, subject to adjustment at the same time and in the same manner as
each adjustment of the Conversion Rate pursuant to Section 3, so that the
holders of this Series shall be entitled following such adjustment to the
number of votes equal to the number of votes such holders were entitled to
under this Section 6.1 immediately prior to such adjustment multiplied
<PAGE>
by a fraction (x) the numerator of which is the Conversion Rate as adjusted
pursuant to Section 3 and (y) the denominator of which is the Conversion
Rate immediately prior to such adjustment.
6.2(a) So long as any shares of this Series remain
outstanding, unless a greater percentage shall then be required by law, the
Corporation shall not, without the affirmative vote at a meeting or the
written consent with or without a meeting of the holders of shares of this
Series representing at least 66-2/3% of the aggregate voting power of
shares of this Series then outstanding (i) authorize any Senior Stock or
reclassify (by merger, consolidation or otherwise) any Junior Stock or
Parity Stock as Senior Stock, (ii) merge into or consolidate with any
Person where the surviving or continuing corporation will have any
authorized Senior Stock (other than capital stock corresponding to shares
of Senior Stock existing immediately before such merger or consolidation)
or (iii) amend, alter or repeal (by operation of law or otherwise) any of
the provisions of the Certificate or the Certificate of Incorporation, so
as in any such case to adversely affect the voting powers, designations,
preferences and relative, participating, optional or other special rights,
and qualifications, limitations or restrictions of the shares of this
Series.
(b) No consent of holders of shares of this Series shall be
required for (i) the creation of any indebtedness of any kind of the
Corporation, (ii) the authorization or issuance of any class of Junior
Stock or Parity Stock, (iii) the authorization, designation or issuance of
additional shares of Series D Stock or (iv) subject to Section 6.2(a), the
authorization or issuance of any other shares of Preferred Stock.
6.3(a) If and whenever at any time or times dividends
payable on shares of this Series shall have been in arrears and unpaid in
an aggregate amount equal to or exceeding the amount of dividends payable
thereon for six quarterly dividend periods, then the number of directors
constituting the Board of Directors shall be increased by two and the
holders of shares of this Series, together with the holders of any shares
of any Parity Stock as to which in each case dividends are in arrears and
unpaid in an aggregate amount equal to or exceeding the amount of dividends
payable thereon for six quarterly dividend periods, shall have the
exclusive right, voting separately
<PAGE>
as a class with such other series, to elect two directors of the
Corporation.
(b) Such voting right may be exercised initially either by
written consent or at a special meeting of the holders of the Preferred
Stock having such voting right, called as hereinafter provided, or at any
annual meeting of stockholders held for the purpose of electing directors,
and thereafter at each such annual meeting until such time as all dividends
in arrears on the shares of this Series shall have been paid in full and
all dividends payable on the shares of this Series on four subsequent
consecutive Dividend Payment Dates shall have been paid in full on such
dates or funds shall have been set aside for the payment thereof, at which
time such voting right and the term of the directors elected pursuant to
Section 6.3(a) shall terminate.
(c) At any time when such voting right shall have vested in
holders of shares of such series of Preferred Stock described in Section
6.3(a), and if such right shall not already have been exercised by written
consent, a proper officer of the Corporation may call, and, upon the
written request, addressed to the Secretary of the Corporation, of the
record holders of shares representing ten percent (10%) of the voting power
of the shares then outstanding of such Preferred Stock having such voting
right, shall call, a special meeting of the holders of such Preferred Stock
having such voting right. Such meeting shall be held at the earliest
practicable date upon the notice required for annual meetings of
stockholders at the place for holding annual meetings of stockholders, or,
if none, at a place designated by the Board of Directors. Notwithstanding
the provisions of this Section 6.3(c), no such special meeting shall be
called during a period within 60 days immediately preceding the date fixed
for the next annual meeting of stockholders.
(d) At any meeting held for the purpose of electing
directors at which the holders of such Preferred Stock shall have the right
to elect directors as provided herein, the presence in Person or by proxy
of the holders of shares representing more than fifty percent (50%) in
voting power of the then outstanding shares of such Preferred Stock having
such right shall be required and shall be sufficient to constitute a quorum
of such class for the election of directors by such class.
<PAGE>
(e) Any director elected by holders of Preferred Stock
pursuant to the voting right created under this Section 6.3 shall hold
office until the next annual meeting of stockholders (unless such term has
previously terminated pursuant to Section 6.3(b)) and any vacancy in
respect of any such director shall be filled only by vote of the remaining
director so elected, or if there be no such remaining director, by the
holders of such Preferred Stock entitled to elect such director or
directors by written consent or at a special meeting called in accordance
with the procedures set forth in Section 6.3(c), or, if no special meeting
is called or written consent executed, at the next annual meeting of
stockholders. Upon any termination of such voting right, subject to
applicable law, the term of office of all directors elected by holders of
such Preferred Stock voting separately as a class pursuant to this Section
6.3 shall terminate.
(f) In exercising the voting rights set forth in this
Section 6.3, each share of this Series shall have a number of votes equal
to its Liquidation Value.
7. Liquidation Rights.
7.1 Upon the dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, the holders of the shares of
this Series shall be entitled to receive out of the assets of the
Corporation available for distribution to stockholders, in preference to
the holders of, and before any payment or distribution shall be made on,
Junior Stock, the amount of $100 per share (the "Liquidation Value"), plus
an amount equal to all accrued and unpaid dividends to the date of final
distribution.
7.2 Neither the sale, exchange or other conveyance (for
cash, shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation nor the merger
or consolidation of the Corporation into or with any other corporation, or
the merger or consolidation of any other corporation into or with the
Corporation, shall be deemed to be a dissolution, liquidation or winding
up, voluntary or involuntary, for the purposes of this Section 7.
7.3 After the payment to the holders of the shares of this
Series of full preferential amounts provided for in this Section 7, the
holders of this Series as such
<PAGE>
shall have no right or claim to any of the remaining assets of the
Corporation.
7.4 In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to Section 7.1, no such distribution shall be
made on account of any shares of any Parity Stock upon such dissolution,
liquidation or winding up unless proportionate distributive amounts shall
be paid on account of the shares of this Series, ratably, in proportion to
the full distributable amounts for which holders of all Parity Stock are
entitled upon such dissolution, liquidation or winding up.
8. Other Provisions.
8.1 All notices from the Corporation to the holders shall be
given by one of the methods specified in Section 8.2. With respect to any
notice to a holder of shares of this Series required to be provided
hereunder, neither failure to give such notice, nor any defect therein or
in the transmission thereof, to any particular holder shall affect the
sufficiency of the notice or the validity of the proceedings referred to in
such notice with respect to the other holders or affect the legality or
validity of any distribution, right, warrant, reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up, or the vote upon any such action. Any notice that was mailed in
the manner herein provided shall be conclusively presumed to have been duly
given whether or not the holder receives the notice.
8.2 All notices and other communications hereunder shall be
deemed given (i) on the first Trading Day following the date received, if
delivered personally, (ii) on the Trading Day following timely deposit with
an overnight courier service, if sent by overnight courier specifying next
day delivery and (iii) on the first Trading Day that is at least five days
following deposit in the mails, if sent by first class mail to (x) a holder
at its last address as it appears on the transfer records or registry for
the Series D Stock and (y) the Corporation at the following address (or at
such other address as the Corporation shall specify in a notice pursuant to
this
<PAGE>
Section): TW Inc., 75 Rockefeller Plaza, New York, New York 10019,
Attention: General Counsel.
8.3 Any shares of this Series that have been converted,
redeemed, exchanged or otherwise acquired by the Corporation shall, after
such conversion, redemption, exchange or acquisition, as the case may be,
be retired and promptly cancelled and the Corporation shall take all
appropriate action to cause such shares to obtain the status of authorized
but unissued shares of Preferred Stock, without designation as to series,
until such shares are once more designated as part of a particular series
by the Board of Directors. The Corporation may cause a certificate setting
forth a resolution adopted by the Board of Directors that none of the
authorized shares of this Series are outstanding to be filed with the
Secretary of State of the State of Delaware. When such certificate becomes
effective, all matters set forth in the Certificate with respect to the
Series D Stock shall be eliminated from the Certificate of Incorporation
and the shares of Preferred Stock designated hereby as Series D Stock shall
have the status of authorized and unissued shares of Preferred Stock and
may be reissued as part of any new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors.
8.4 The shares of this Series shall be issuable in whole
shares or, if authorized by the Board of Directors, in any fraction of a
whole share so authorized or any integral multiple of such fraction.
8.5 The Corporation shall be entitled to recognize the
exclusive right of a Person registered on its records as the holder of
shares of this Series, and such record holder shall be deemed the holder of
such shares for all purposes.
8.6 All notice periods referred to in the Certificate shall
commence on the date of the mailing of the applicable notice.
<PAGE>
8.7 Certificates for shares of this Series shall bear such
legends as the Corporation shall from time to time deem appropriate.
IN WITNESS WHEREOF, TW INC. has caused this certificate to
be signed this 10th day of October, 1996.
TW INC.,
by /s/ Thomas W. McEnerney
--------------------------
Name: Thomas W. McEnerney
Title: Vice President
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF SERIES E CONVERTIBLE
PREFERRED STOCK
OF
TW INC.
--------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
---------------------
TW INC., hereafter to be renamed "Time Warner Inc." (the
"Corporation"), a corporation organized and existing by virtue of the
General Corporation Law of the State of Delaware (the "DGCL"), does hereby
certify that the following resolution was duly adopted by action of the
Board of Directors of the Corporation (the "Board of Directors") at a
meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly granted to and
vested in the Board of Directors by the provisions of Section 2 of Article
IV of the Restated Certificate of Incorporation of the Corporation, as
amended from time to time (the "Certificate of Incorporation"), and Section
151(g) of the DGCL, the Board of Directors hereby creates, from the
authorized shares of Preferred Stock, par value $.10 per share ("Preferred
Stock"), of the Corporation authorized to be issued pursuant to the
Certificate of Incorporation, a series of Preferred Stock, and hereby fixes
the voting powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of the shares of such series as follows:
The series of Preferred Stock hereby established shall consist of
3,250,000 shares designated as Series E
<PAGE>
Convertible Preferred Stock. The rights, preferences and limitations of
such series shall be as follows:
1. Definitions. As used herein, the following terms shall have
the indicated meanings:
1.1 "Accrued Dividend Amount" shall have the meaning set
forth in Section 3.1 thereof.
1.2 "Board of Directors" shall mean the Board of Directors
of the Corporation or, with respect to any action to be taken by the Board
of Directors, any committee of the Board of Directors duly authorized to
take such action.
1.3 "Capital Stock" shall mean any and all shares of
corporate stock of a Person (however designated and whether representing
rights to vote, rights to participate in dividends or distributions upon
liquidation or otherwise with respect to such Person, any division or
subsidiary thereof, or any joint venture, partnership, corporation or other
entity).
1.4 "Certificate" shall mean the certificate of the voting
powers, designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions
thereof, of Series E Convertible Preferred Stock filed with respect to this
resolution with the Secretary of State of the State of Delaware pursuant to
Section 151 of the DGCL.
1.5 "Change of Control" and "Change of Control Date" shall
have the following meanings: "Change of Control" shall mean the occurrence
of one or both of the following events: (a) individuals who would
constitute a majority of the members of the Board of Directors elected at
any meeting of stockholders or by written consent (without regard to any
members of the Board of Directors elected pursuant to the terms of any
series of Preferred Stock) shall be elected to the Board of Directors and
the election or the nomination for election by the stockholders of such
directors was not approved by a vote of at least a majority of the
directors in office immediately prior to such election (in which event
"Change of Control Date" shall mean the date of such election) or (b) a
Person or group of Persons acting in concert as a partnership, limited
partnership, syndicate or other group within the meaning of Rule 13d-3
under the Exchange Act (the "Acquiring Person")
<PAGE>
shall, as a result of a tender or exchange offer, open market purchases,
privately negotiated purchases, share repurchases, redemptions or
otherwise, have become the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act) of 40% or more of the outstanding shares of
Common Stock (in which event "Change of Control Date" shall mean the date
of the event resulting in such 40% ownership).
1.6 "Closing Price" of the Common Stock shall mean the last
reported sale price of the Common Stock (regular way) as shown on the
Composite Tape of the NYSE, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices on the NYSE, or, if
the Common Stock is not listed or admitted to trading on the NYSE, on the
principal national securities exchange on which such stock is listed or
admitted to trading, or, if it is not listed or admitted to trading on any
national securities exchange, the last reported sale price of the Common
Stock, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, in either case as reported by NASDAQ.
1.7 "Common Stock" shall mean the class of Common Stock, par
value $.01 per share, of the Corporation authorized at the date of the
Certificate, or any other class of stock resulting from (x) successive
changes or reclassifications of such Common Stock consisting of changes in
par value, or from par value to no par value, (y) a subdivision or
combination or (z) any other changes for which an adjustment is made under
Section 3.6(a), and in any such case including any shares thereof
authorized after the date of the Certificate, together with any associated
rights to purchase other securities of the Corporation that are at the time
represented by the certificates representing such shares of Common Stock.
1.8 "Conversion Date" shall have the meaning set forth in
Section 3.5 hereof.
1.9 "Conversion Price" shall have the meaning set forth in
Section 3.1 hereof.
1.10 "Conversion Rate" shall have the meaning set forth in
Section 3.1 hereof.
1.11 "Converting Holder" shall have the meaning set forth in
Section 3.5 hereof.
<PAGE>
1.12 "Corporation" shall mean TW Inc., a Delaware
corporation, and any of its successors by operation of law, including by
merger, consolidation or sale or conveyance of all or substantially all of
its property and assets.
1.13 "Current Market Price" of the Common Stock on any date
shall mean the average of the daily Closing Prices per share of the Common
Stock for the five (5) consecutive Trading Days ending on the Trading Day
immediately preceding the applicable record date, conversion date,
redemption date or exchange date referred to in Section 3 or Section 4.
1.14 "DGCL" shall mean the General Corporation Law of the
State of Delaware.
1.15 "Dividend Payment Date" shall have the meaning set
forth in Section 2.1 hereof.
1.16 "Exchange Price" shall have the meaning set forth in
Section 4.1 hereof.
1.17 "Junior Stock" shall mean the Common Stock, the Series
A Stock, the Series LMC Stock, the Series LMCN-V Stock and the shares of
any other class or series of Capital Stock of the Corporation that, by the
terms of the Certificate of Incorporation or of the instrument by which the
Board of Directors, acting pursuant to authority granted in the Certificate
of Incorporation, shall fix the relative rights, preferences and
limitations thereof, shall be junior to the Series E Stock in respect of
the right to receive dividends or to participate in any distribution of
assets other than by way of dividends.
1.18 "Liquidation Value" shall have the meaning set forth in
Section 7.1 hereof.
1.19 "NASDAQ" shall mean the Nasdaq Stock Market.
1.20 "NYSE" shall mean the New York Stock Exchange, Inc.
1.21 "Parity Stock" shall mean the Series D Stock, the
Series F Stock, the Series G Stock, the Series H Stock, the Series I Stock,
the Series J Stock, the Series L Stock, the Series M Stock and the shares
of any other class
<PAGE>
or series of Capital Stock of the Corporation that, by the terms of the
Certificate of Incorporation or of the instrument by which the Board of
Directors, acting pursuant to authority granted in the Certificate of
Incorporation, shall fix the relative rights, preferences and limitations
thereof, shall, in the event that the stated dividends thereon are not paid
in full, be entitled to share ratably with the Series E Stock in the
payment of dividends, including accumulations, if any, in accordance with
the sums that would be payable on such shares if all dividends were
declared and paid in full, or shall, in the event that the amounts payable
thereon on liquidation are not paid in full, be entitled to share ratably
with the Series E Stock in any distribution of assets other than by way of
dividends in accordance with the sums that would be payable in such
distribution if all sums payable were discharged in full; provided,
however, that the term "Parity Stock" shall be deemed to refer (i) in
Section 2.2 hereof, to any stock that is Parity Stock in respect of
dividend rights; (ii) in Section 6 hereof, to any stock that is Parity
Stock in respect of the distribution of assets; and (iii) in Sections 5.2
and 5.3 hereof, to any stock that is Parity Stock in respect of either
dividend rights or the distribution of assets and that, pursuant to the
Certificate of Incorporation or any instrument in which the Board of
Directors, acting pursuant to authority granted in the Certificate of
Incorporation, shall so designate, is entitled to vote with the holders of
Series E Stock.
1.22 "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization
or other entity.
1.23 "Preferred Stock" shall mean the class of Preferred
Stock, par value $.10 per share, of the Corporation authorized at the date
of the Certificate, including any shares thereof authorized after the date
of the Certificate.
1.24 "Pro Rata Repurchase" shall mean the purchase of shares
of Common Stock by the Corporation or by any of its subsidiaries, whether
for cash or other property or securities of the Corporation, which purchase
is subject to Section 13(e) of the Exchange Act or is made pursuant to an
offer made available to all holders of Common Stock, but excluding any
purchase made in open market transactions that satisfies the conditions of
clause (b) of Rule 10b-18 under the Exchange Act or has been designed (as
reasonably
<PAGE>
determined by the Board of Directors) to prevent such purchase from having
a material effect on the trading market of the Common Stock. The "Effective
Date" of a Pro Rata Repurchase shall mean the applicable expiration date
(including all extensions thereof) of any tender or exchange offer that is
a Pro Rata Repurchase or the date of purchase with respect to any Pro Rata
Repurchase that is not a tender or exchange offer.
1.25 "Record Date" shall have the meaning set forth in
Section 2.1 hereof.
1.26 "Redemption Price" shall have the meaning set forth in
Section 4.1 hereof.
1.27 "Redemption Rescission Event" shall mean the occurrence
of (a) any general suspension of trading in, or limitation on prices for,
securities on the principal national securities exchange on which shares of
Common Stock are registered and listed for trading (or, if shares of Common
Stock are not registered and listed for trading on any such exchange, in
the over-the-counter market) for more than six-and-one-half (6-1/2)
consecutive trading hours, (b) any decline in either the Dow Jones
Industrial Average or the Standard & Poor's Index of 400 Industrial
Companies (or any successor index published by Dow Jones & Company, Inc. or
Standard & Poor's Corporation) by either (i) an amount in excess of 10%,
measured from the close of business on any Trading Day to the close of
business on the next succeeding Trading Day during the period commencing on
the Trading Day preceding the day notice of any redemption of shares of
this Series is given (or, if such notice is given after the close of
business on a Trading Day, commencing on such Trading Day) and ending at
the earlier of (x) the time and date fixed for redemption in such notice
and (y) the time and date at which the Corporation shall have irrevocably
deposited funds with a designated bank or trust company pursuant to Section
4.4 or (ii) an amount in excess of 15% (or, if the time and date fixed for
redemption is more than 15 days following the date on which notice of
redemption is given, 20%), measured from the close of business on the
Trading Day preceding the day notice of such redemption is given (or, if
such notice is given after the close of business on a Trading Day, from
such Trading Day) to the close of business on any Trading Day on or prior
to the earlier of the dates specified in clauses (x) and (y) above, (c) a
declaration of a banking moratorium or any suspension of payments in
respect of banks by Federal or
<PAGE>
state authorities in the United States or (d) the commencement of a war or
armed hostilities or other national or international calamity directly or
indirectly involving the United States that in the reasonable judgment of
the Corporation could have a material adverse effect on the market for the
Common Stock.
1.28 "Rescission Date" shall have the meaning set forth in
Section 4.5 hereof.
1.29 "Senior Stock" shall mean the shares of any class or
series of Capital Stock of the Corporation that, by the terms of the
Certificate of Incorporation or of the instrument by which the Board of
Directors, acting pursuant to authority granted in the Certificate of
Incorporation, shall fix the relative rights, preferences and limitations
thereof, shall be senior to the Series E Stock in respect of the right to
receive dividends or to participate in any distribution of assets other
than by way of dividends.
1.30 "Series A Stock" shall mean the series of Preferred
Stock authorized and designated as Series A Participating Preferred Stock
at the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.31 "Series D Stock" shall mean the series of Preferred
Stock authorized and designated as Series D Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.32 "Series E Stock" and "this Series" shall mean the
series of Preferred Stock authorized and designated as the Series E
Convertible Preferred Stock, including any shares thereof authorized and
designated after the date of the Certificate.
1.33 "Series F Stock" shall mean the series of Preferred
Stock authorized and designated as Series F Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.34 "Series G Stock" shall mean the series of Preferred
Stock authorized and designated as Series G Convertible Preferred Stock at
the date of the Certificate,
<PAGE>
including any shares thereof authorized and designated after the date of
the Certificate.
1.35 "Series H Stock" shall mean the series of Preferred
Stock authorized and designated as Series H Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.36 "Series I Stock" shall mean the series of Preferred
Stock authorized and designated as Series I Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.37 "Series J Stock" shall mean the series of Preferred
Stock authorized and designated as Series J Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.38 "Series L Stock" shall mean the series of Preferred
Stock authorized and designated as 10-1/4% Series L Exchangeable Preferred
Stock at the date of the Certificate, including any shares thereof
authorized and designated after the date of the Certificate.
1.39 "Series LMC Stock" shall mean the series of Series
Common Stock authorized and designated as Series LMC Common Stock at the
date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.40 "Series LMCN-V Stock" shall mean the series of Series
Common Stock authorized and designated as Series LMCN-V Common Stock at the
date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.41 "Series M Stock" shall mean the series of Preferred
Stock authorized and designated as 10-1/4% Series M Exchangeable Preferred
Stock at the date of the Certificate, including any shares thereof
authorized and designated after the date of the Certificate.
1.42 "Surrendered Shares" shall have the meaning set forth
in Section 3.5 hereof.
<PAGE>
1.43 "Trading Day" shall mean, so long as the Common Stock
is listed or admitted to trading on the NYSE, a day on which the NYSE is
open for the transaction of business, or, if the Common Stock is not listed
or admitted to trading on the NYSE, a day on which the principal national
securities exchange on which the Common Stock is listed is open for the
transaction of business, or, if the Common Stock is not so listed or
admitted for trading on any national securities exchange, a day on which
NASDAQ is open for the transaction of business.
2. Cash Dividends.
2.1 The holders of the outstanding Series E Stock shall be
entitled to receive quarter-annual dividends, as and when declared by the
Board of Directors out of funds legally available therefor. Each
quarter-annual dividend shall be an amount per share equal to (i) in the
case of each Dividend Payment Date (as defined below) occurring on or prior
to January 4, 2001, the greater of (A) $.9375 per $100 of Liquidation Value
of Series E Stock (which is equivalent to $3.75 per annum), and (B) an
amount per $100 of Liquidation Value of Series E Stock equal to the product
of (1) the Conversion Rate and (2) the aggregate per share amount of
regularly scheduled dividends paid in cash on the Common Stock during the
period from but excluding the immediately preceding Dividend Payment Date
to and including such Dividend Payment Date (the "Preferred Dividend
Amount"), and (ii) in the case of each Dividend Payment Date occurring
thereafter, an amount per share of Series E Stock equal to the product of
(1) the Conversion Rate and (2) the aggregate per share amount of regularly
scheduled dividends paid in cash on the Common Stock during the period from
but excluding the immediately preceding Dividend Payment Date to and
including such Dividend Payment Date. All dividends shall be payable in
cash on or about the first day of January, April, July and October in each
year, as fixed by the Board of Directors, or such other dates as are fixed
by the Board of Directors (provided that January 4, 2001, shall be a
Dividend Payment Date) (each a "Dividend Payment Date"), to the holders of
record of Series E Stock at the close of business on or about the Trading
Day next preceding such first day of January, April, July or October (or
January 4, 2001) as the case may be, as fixed by the Board of Directors, or
such other dates as are fixed by the Board of Directors (each a "Record
Date"). Subject to the next sentence, in the case of dividends payable in
respect of periods prior to January 4, 2001, (i) such dividends shall
<PAGE>
accrue on each share on a daily basis, whether or not there are
unrestricted funds legally available for the payment of such dividends and
whether or not declared and (ii) any such dividends that become payable for
any partial dividend period shall be computed on the basis of the actual
days elapsed in such period. Notwithstanding the preceding sentence, the
amount accruing and payable in respect of the first dividend on the Series
E Stock payable after the date of the Certificate shall equal the Preferred
Dividend Amount. From and after January 4, 2001, dividends on the Series E
Stock (determined as to amount as provided herein) shall accrue to the
extent, but only to the extent, that regularly scheduled cash dividends are
declared by the Board of Directors on the Common Stock with a payment date
after January 4, 2001 (or, in the case of Series E Stock originally issued
after January 4, 2001, after the Dividend Payment Date next preceding such
date of original issuance). All dividends that accrue in accordance with
the foregoing provisions shall be cumulative from and after the day
immediately succeeding the date of issuance. The amount payable to each
holder of record on any Dividend Payment Date shall be rounded to the
nearest cent.
2.2 Except as hereinafter provided in this Section 2.2,
unless all dividends on the outstanding shares of Series E Stock and any
Parity Stock that shall have accrued and become payable as of any date
shall have been paid, or declared and funds set apart for payment thereof,
no dividend or other distribution (payable other than in shares of Junior
Stock) shall be paid to the holders of Junior Stock or Parity Stock, and no
shares of Series E Stock, Parity Stock or Junior Stock shall be purchased,
redeemed or otherwise acquired by the Corporation or any of its
subsidiaries (except by conversion into or exchange for Junior Stock), nor
shall any monies be paid or made available for a purchase, redemption or
sinking fund for the purchase or redemption of any Series E Stock, Junior
Stock or Parity Stock. When dividends are not paid in full upon the shares
of this Series and any Parity Stock, all dividends declared upon shares of
this Series and all Parity Stock shall be declared pro rata so that the
amount of dividends declared per share on this Series and all such Parity
Stock shall in all cases bear to each other the same ratio that accrued
dividends per share on the shares of this Series and all such Parity Stock
bear to each other. No interest, or sum of money in lieu of interest, shall
be payable in respect of any dividend payment or payments on this Series
that may be in arrears.
<PAGE>
2.3 In case the Corporation shall at any time distribute
(other than a distribution in liquidation of the Corporation) to the
holders of its shares of Common Stock any assets or property, including
evidences of indebtedness or securities of the Corporation (other than
Common Stock subject to a distribution or reclassification covered by
Section 3.6(a)) or of any other Person (including common stock of such
Person) or cash (but excluding regularly scheduled cash dividends payable
on shares of Common Stock) or in case the Corporation shall at any time
distribute (other than a distribution in liquidation of the Corporation) to
such holders rights, options or warrants to subscribe for or purchase
shares of Common Stock (including shares held in the treasury of the
Corporation), or rights, options or warrants to subscribe for or purchase
any other security or rights, options or warrants to subscribe for or
purchase any assets or property (in each case, whether of the Corporation
or otherwise, but other than any distribution of rights to purchase
securities of the Corporation if the holder of shares of this Series would
otherwise be entitled to receive such rights upon conversion of shares of
this Series for Common Stock; provided, however, that if such rights are
subsequently redeemed by the Corporation, such redemption shall be treated
for purposes of this Section 2.3 as a cash dividend (but not a regularly
scheduled cash dividend) on the Common Stock), the Corporation shall
simultaneously distribute such assets, property, securities, rights,
options or warrants pro rata to the holders of Series E Stock on the record
date fixed for determining holders of Common Stock entitled to participate
in such distribution (or, if no such record date shall be established, the
effective time thereof) in an amount equal to the amount that such holders
of Series E Stock would have been entitled to receive had their shares of
Series E Stock been converted into Common Stock immediately prior to such
record date (or effective time). In the event of a distribution to holders
of Series E Stock pursuant to this Section 2.3, such holders shall be
entitled to receive fractional shares or interests only to the extent that
holders of Common Stock are entitled to receive the same. The holders of
Series E Stock on the applicable record date (or effective time) shall be
entitled to receive in lieu of such fractional shares or interests the same
consideration as is payable to holders of Common Stock with respect
thereto. If there are no fractional shares or interests payable to holders
of Common Stock, the holders of Series E Stock on the applicable record
date (or effective time) shall receive in lieu of such fractional shares or
<PAGE>
interests the fair value thereof as determined by the Board of Directors.
2.4 If a distribution is made in accordance with the
provisions of Section 2.3, anything in Section 3 to the contrary
notwithstanding, no adjustment pursuant to Section 3 shall be effected by
reason of the distribution of such assets, property, securities, rights,
options or warrants or the subsequent modification, exercise, expiration or
termination of such securities, rights, options or warrants.
2.5 In the event that the holders of Common Stock are
entitled to make any election with respect to the kind or amount of
securities or other property receivable by them in any distribution that is
subject to Section 2.3, the kind and amount of securities or other property
that shall be distributable to the holders of the Series E Stock shall be
based on (i) the election, if any, made by the record holder (as of the
date used for determining the holders of Common Stock entitled to make such
election) of the largest number of shares of Series E Stock in writing to
the Corporation on or prior to the last date on which a holder of Common
Stock may make such an election or (ii) if no such election is timely made,
an assumption that such holder failed to exercise any such rights (provided
that if the kind or amount of securities or other property is not the same
for each nonelecting holder, then the kind and amount of securities or
other property receivable by holders of the Series E Stock shall be based
on the kind or amount of securities or other property receivable by a
plurality of the shares held by the nonelecting holders of Common Stock).
Concurrently with the mailing to holders of Common Stock of any document
pursuant to which such holders may make an election of the type referred to
in this Section, the Corporation shall mail a copy thereof to the record
holders on the date of mailing of the largest number of shares of the
Series E Stock as of the date used for determining the holders of record of
Common Stock entitled to such mailing.
3. Conversion Rights.
3.1 Each holder of a share of this Series shall have the
right at any time or as to any share of this Series called for redemption
or exchange, at any time prior to the close of business on the date fixed
for redemption or exchange (unless the Corporation defaults in the payment
of the Redemption Price or fails to exchange the shares of this
<PAGE>
Series for the applicable number of shares of Common Stock and any cash
portion of the Exchange Price or exercises its right to rescind such
redemption pursuant to Section 4.5, in which case such right shall not
terminate at the close of business on such date), to convert such share
into (i) a number of shares of Common Stock equal to 2.08264 shares of
Common Stock for each share of this Series, subject to appropriate
adjustment in the event of a split or combination of shares of this Series
and subject to further adjustment as provided in this Section 3 (such rate,
as so adjusted from time to time, is herein called the "Conversion Rate";
and the "Conversion Price" at any time shall mean the Liquidation Value per
share divided by the Conversion Rate in effect at such time (rounded to the
nearest one hundredth of a cent)) plus (ii) in the event there shall be any
dividends on shares of this Series that shall be accrued and unpaid as of
the immediately preceding Dividend Payment Date, a number of shares of
Common Stock equal to:
(A) the aggregate amount of accrued and unpaid dividends on such
share of Series E Stock to and including the most recent scheduled
Dividend Payment Date (whether or not such dividends were declared and
whether or not there are unrestricted funds legally available for the
payment thereof) (the "Accrued Dividend Amount") divided by
(B) the Closing Price of the Common Stock on the last Trading Day
prior to the Conversion Date;
provided, however, that the Corporation shall have the right to deliver
cash equal to the Accrued Dividend Amount or any portion thereof, in which
case its obligation to deliver shares of Common Stock pursuant to this
clause (ii) shall be reduced by a number of shares equal to (x) the
aggregate amount of cash so delivered divided by (y) the Closing Price of
the Common Stock on the last Trading Day prior to the Conversion Date,
unless the Corporation shall deliver cash equal to the entire Accrued
Dividend Amount, in which case its entire obligation under this clause (ii)
shall be discharged. The obligations of the Corporation to issue the Common
Stock (or its option to make cash payments) provided by this Section 3.1
shall be absolute whether or not any accrued dividend by which such
issuance (or payment) is measured has been declared by the Board of
Directors and whether or not the Corporation would have adequate surplus or
net profits to pay such dividend if declared or is otherwise restricted
from paying such dividend.
<PAGE>
3.2 Except as provided in this Section 3, no adjustments in
respect of payments of dividends on shares surrendered for conversion or
any dividend on the Common Stock issued upon conversion shall be made upon
the conversion of any shares of this Series (it being understood that if
the Conversion Date for shares of Series E Stock occurs after a Record Date
and on or prior to a Dividend Payment Date, the holder of record on such
Record Date shall be entitled to receive the dividend payable with respect
to such shares on the related Dividend Payment Date pursuant to Section 2.1
hereof).
3.3 The Corporation may, but shall not be required to, in
connection with any conversion of shares of this Series, issue a fraction
of a share of Common Stock, and if the Corporation shall determine not to
issue any such fraction, the Corporation shall, subject to Section 3.6(d),
make a cash payment (rounded to the nearest cent) equal to such fraction
multiplied by the Closing Price of the Common Stock on the last Trading Day
prior to the Conversion Date.
3.4 Any holder of shares of this Series electing to convert
such shares into Common Stock shall surrender the certificate or
certificates for such shares at the office of the transfer agent or agents
therefor (or at such other place as the Corporation may designate by notice
to the holders of shares of this Series) during regular business hours,
duly endorsed to the Corporation or in blank, or accompanied by instruments
of transfer to the Corporation or in blank, or in form satisfactory to the
Corporation, and shall give written notice to the Corporation at such
office that such holder elects to convert such shares of this Series. If
any such certificate or certificates shall have been lost, stolen or
destroyed, the holder shall, in lieu of delivering such certificate or
certificates, deliver to the transfer agent or agents therefor (or such
other place) an indemnification agreement and bond satisfactory to the
Corporation. The Corporation shall, as soon as practicable (subject to
Section 3.6(e)) after such deposit of certificates for shares of this
Series or delivery of the indemnification agreement and bond, accompanied
by the written notice above prescribed, issue and deliver at such office to
the holder for whose account such shares were surrendered, or to his
nominee, certificates representing the number of shares of Common Stock and
the cash, if any, to which such holder is entitled upon such conversion.
<PAGE>
3.5 Conversion shall be deemed to have been made as of the
date (the "Conversion Date") that certificates for the shares of this
Series to be converted, and the written notice prescribed in Section 3.4
are received by the transfer agent or agents for this Series; and the
Person entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder of such Common Stock
on such date. Notwithstanding anything to the contrary contained herein, in
the event the Corporation shall have rescinded a redemption of shares of
this Series pursuant to Section 4.5, any holder of shares of this Series
that shall have surrendered shares of this Series for conversion following
the day on which notice of the subsequently rescinded redemption shall have
been given but prior to the close of business on the later of (a) the
Trading Day next succeeding the date on which public announcement of the
rescission of such redemption shall have been made and (b) the Trading Day
on which the notice of rescission required by Section 4.5 is deemed given
pursuant to Section 7.2 (a "Converting Holder") may rescind the conversion
of such shares surrendered for conversion by (i) properly completing a form
prescribed by the Corporation and mailed to holders of shares of this
Series (including Converting Holders) with the Corporation's notice of
rescission, which form shall provide for the certification by any
Converting Holder rescinding a conversion on behalf of any beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of shares of this
Series that the beneficial ownership (within the meaning of such Rule) of
such shares shall not have changed from the date on which such shares were
surrendered for conversion to the date of such certification and (ii)
delivering such form to the Corporation no later than the close of business
on that date which is ten (10) Trading Days following the date on which the
Corporation's notice of rescission is deemed given pursuant to Section 7.2.
The delivery of such form by a Converting Holder shall be accompanied by
(x) any certificates representing shares of Common Stock issued to such
Converting Holder upon a conversion of shares of this Series that shall be
rescinded by the proper delivery of such form (the "Surrendered Shares"),
(y) any securities, evidences of indebtedness or assets (other than cash)
distributed by the Corporation to such Converting Holder by reason of such
Converting Holder's being a record holder of Surrendered Shares and (z)
payment in New York Clearing House funds or other funds acceptable to the
Corporation of an amount equal to the sum of (I) any cash such Converting
Holder may have received in lieu of the
<PAGE>
issuance of fractional shares upon conversion and (II) any cash paid or
payable by the Corporation to such Converting Holder by reason of such
Converting Holder being a record holder of Surrendered Shares. Upon receipt
by the Corporation of any such form properly completed by a Converting
Holder and any certificates, securities, evidences of indebtedness, assets
or cash payments required to be returned or made by such Converting Holder
to the Corporation as set forth above, the Corporation shall instruct the
transfer agent or agents for shares of Common Stock and shares of this
Series to cancel any certificates representing Surrendered Shares (which
Surrendered Shares shall be deposited in the treasury of the Corporation)
and reissue certificates representing shares of this Series to such
Converting Holder (which shares of this Series shall be deemed to have been
outstanding at all times during the period following their surrender for
conversion). The Corporation shall, as promptly as practicable, and in no
event more than five (5) Trading Days, following the receipt of any such
properly completed form and any such certificates, securities, evidences of
indebtedness, assets or cash payments required to be so returned or made,
pay to the Converting Holder or as otherwise directed by such Converting
Holder any dividend or other payment made on such shares during the period
from the time such shares shall have been surrendered for conversion to the
rescission of such conversion. All questions as to the validity, form,
eligibility (including time or receipt) and acceptance of any form
submitted to the Corporation to rescind the conversion of shares of this
Series, including questions as to the proper completion or execution of any
such form or any certification contained therein, shall be resolved by the
Corporation, whose determination shall be final and binding. The
Corporation shall not be required to deliver certificates for shares of
Common Stock while the stock transfer books for such stock or for this
Series are duly closed for any purpose or during any period commencing at a
Redemption Rescission Event and ending at either (i) the time and date at
which the Corporation's right of rescission shall expire pursuant to
Section 4.5 if the Corporation shall not have exercised such right or (ii)
the close of business on that day which is ten (10) Trading Days following
the date on which the Corporation's notice of rescission pursuant to
Section 4.4 is deemed given pursuant to Section 7.2 if the Corporation
shall have exercised such right of rescission, but certificates for shares
of Common Stock shall be delivered as soon as practicable after the opening
of such books or the expiration of such period.
<PAGE>
3.6 The Conversion Rate shall be adjusted from time to time
as follows for events occurring on or after the date of the Certificate:
(a) In case the Corporation shall (i) pay a dividend in
shares of its Common Stock, (ii) combine its outstanding shares
of Common Stock into a smaller number of shares, (iii) subdivide
its outstanding shares of Common Stock or (iv) reclassify (other
than by way of a merger or consolidation that is subject to
Section 3.7) its shares of Common Stock, then the Conversion Rate
in effect immediately before such action shall be adjusted so
that immediately following such event the holders of the Series E
Stock shall be entitled to receive upon conversion or exchange
thereof the kind and amount of shares of Capital Stock of the
Corporation that they would have owned or been entitled to
receive upon or by reason of such event if such shares of Series
E Stock had been converted immediately before the record date
(or, if no record date, the effective date) for such event (it
being understood that any distribution of cash or Capital Stock
(other than Common Stock), including any distribution of Capital
Stock (other than Common Stock) that shall accompany a
reclassification of the Common Stock, shall be subject to Section
2.3 rather than this Section 3.6(a)). An adjustment made pursuant
to this Section 3.6(a) shall become effective retroactively
immediately after the record date in the case of a dividend or
distribution and shall become effective retroactively immediately
after the effective date in the case of a subdivision,
combination or reclassification. For the purposes of this Section
3.6(a), in the event that the holders of Common Stock are
entitled to make any election with respect to the kind or amount
of securities receivable by them in any transaction that is
subject to this Section 3.6(a) (including any election that would
result in all or a portion of the transaction becoming subject to
Section 2.3), the kind and amount of securities that shall be
distributable to the holders of the Series E Stock shall be based
on (i) the election, if any, made by the record holder (as of the
date used for determining the holders of Common Stock entitled to
make such election) of the largest number of shares of Series E
Stock in writing to the Corporation on or prior to the last date
on which a holder of Common Stock may make such an election or
(ii) if no such
<PAGE>
election is timely made, an assumption that such holder failed to
exercise any such rights (provided that if the kind or amount of
securities is not the same for each nonelecting holder, then the
kind and amount of securities receivable shall be based on the
kind or amount of securities receivable by a plurality of
nonelecting holders of Common Stock). Concurrently with the
mailing to holders of Common Stock of any document pursuant to
which such holders may make an election of the type referred to
in this Section, the Corporation shall mail a copy thereof to the
record holders of the Series E Stock as of the date used for
determining the holders of record of Common Stock entitled to
such mailing.
(b) In case a Change of Control shall occur, the
Conversion Rate in effect immediately prior to the Change of
Control Date shall be increased (but not decreased) by
multiplying such rate by a fraction as follows: (i) in the case
of a Change of Control specified in Section 1.5(a), a fraction in
which the numerator is the Conversion Price prior to adjustment
pursuant hereto and the denominator is the Current Market Price
of the Common Stock at the Change of Control Date, (ii) in the
case of a Change of Control specified in Section 1.5(b), the
greater of the following fractions: (x) a fraction the numerator
of which is the highest price per share of Common Stock paid by
the Acquiring Person in connection with the transaction giving
rise to the Change of Control or in any transaction within six
months prior to or after the Change of Control Date (the "Highest
Price"), and the denominator of which is the Current Market Price
of the Common Stock as of the date (but not earlier than six
months prior to the Change of Control Date) on which the first
public announcement is made by the Acquiring Person that it
intends to acquire or that it has acquired 40% or more of the
outstanding shares of Common Stock (the "Announcement Date") or
(y) a fraction the numerator of which is the Conversion Price
prior to adjustment pursuant hereto and the denominator of which
is the Current Market Price of the Common Stock on the
Announcement Date and (iii) in the case where there co-exists a
Change of Control specified in both Section 1.5(a) and Section
1.5(b), the greatest of the fractions determined pursuant to
clauses (i) and (ii). Such adjustment shall become effective
immediately after the Change of Control Date and shall
<PAGE>
be made, in the case of clauses (ii) and (iii) above,
successively for six months thereafter in the event and at the
time of any increase in the Highest Price after the Change of
Control Date; provided, however, that no such successive
adjustment shall be made with respect to the Conversion Rate of
the shares of this Series in respect of any event occurring after
the Conversion Date.
(c) In case the Corporation or any subsidiary thereof
shall make a Pro Rata Repurchase, the Conversion Rate in effect
immediately prior to such action shall be adjusted (but shall not
be decreased) by multiplying such Conversion Rate by a fraction,
the numerator of which shall be the product of (i) the number of
shares of Common Stock outstanding immediately before such Pro
Rata Repurchase minus the number of shares of Common Stock
repurchased by the Corporation or any subsidiary thereof in such
Pro Rata Repurchase and (ii) the Current Market Price of the
Common Stock as of the day immediately preceding the first public
announcement by the Corporation of the intent to effect such Pro
Rata Repurchase, and the denominator of which shall be (i) the
product of (x) the number of shares of Common Stock outstanding
immediately before such Pro Rata Repurchase and (y) the Current
Market Price of the Common Stock as of the day immediately
preceding the first public announcement by the Corporation of the
intent to effect such Pro Rata Repurchase minus (ii) the
aggregate purchase price of the Pro Rata Repurchase (provided
that such denominator shall never be less than 1). Such
adjustment shall become effective immediately after the Effective
Date of such Pro Rata Repurchase.
(d) The Corporation shall be entitled to make such
additional adjustments in the Conversion Rate, in addition to
those required by subsections 3.6(a), 3.6(b) and 3.6(c) as shall
be necessary in order that any dividend or distribution in Common
Stock or any subdivision, reclassification or combination of
shares of Common Stock referred to above, shall not be taxable to
the holders of Common Stock for United States Federal income tax
purposes, so long as such additional adjustments pursuant to this
Section 3.6(d) do not decrease the Conversion Rate.
<PAGE>
(e) In any case in which this Section 3.6 shall require
that any adjustment be made effective as of or retroactively
immediately following a record date, the Corporation may elect to
defer (but only for five (5) Trading Days following the
occurrence of the event that necessitates the filing of the
statement referred to in Section 3.6(g)) issuing to the holder of
any shares of this Series converted after such record date (i)
the shares of Common Stock and other Capital Stock of the
Corporation issuable upon such conversion over and above (ii) the
shares of Common Stock and other Capital Stock of the Corporation
issuable upon such conversion on the basis of the Conversion Rate
prior to adjustment; provided, however, that the Corporation
shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
(f) All calculations under this Section 3 shall be made
to the nearest cent, one-hundredth of a share or, in the case of
the Conversion Rate, one hundred-thousandth. Notwithstanding any
other provision of this Section 3, the Corporation shall not be
required to make any adjustment of the Conversion Rate unless
such adjustment would require an increase or decrease of at least
1.00000% of such Conversion Rate. Any lesser adjustment shall be
carried forward and shall be made at the time of and together
with the next subsequent adjustment that, together with any
adjustment or adjustments so carried forward, shall amount to an
increase or decrease of at least 1.00000% in such rate. Any
adjustments under this Section 3 shall be made successively
whenever an event requiring such an adjustment occurs.
(g) Whenever an adjustment in the Conversion Rate is
required, the Corporation shall forthwith place on file with its
transfer agent or agents for this Series a statement signed by a
duly authorized officer of the Corporation, stating the adjusted
Conversion Rate determined as provided herein. Such statements
shall set forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustment. Promptly after the adjustment of the Conversion Rate,
the Corporation shall mail a notice thereof to each holder of
shares of this Series.
<PAGE>
(h) In the event that on or at any time as a result of
an adjustment made pursuant to this Section 3, the holder of any
share of this Series thereafter surrendered for conversion shall
become entitled to receive any shares of Capital Stock of the
Corporation other than shares of Common Stock, the conversion
rate of such other shares so receivable upon conversion of any
such share of this Series shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock
contained in subparagraphs (a) through (g) and (i) of this
Section 3.6, and the provisions of Section 3.1 through 3.5 and
3.7 through 3.10 shall apply on like or similar terms to any such
other shares and the determination of the Board of Directors as
to any such adjustment shall be conclusive.
(i) No adjustment shall be made pursuant to this
Section 3.6 (i) if the effect thereof would be to reduce the
Conversion Price below the par value of the Common Stock or (ii)
subject to Section 3.6(d) hereof, with respect to any share of
Series E Stock that is converted, prior to the time such
adjustment otherwise would be made.
3.7 In the event that on or after the date of the
Certificate, either (a) any consolidation or merger to which the
Corporation is a party, other than a merger or consolidation in which the
Corporation is the surviving or continuing corporation and that does not
result in any reclassification of, or change (other than a change in par
value or from par value to no par value or from no par value to par value,
or as a result of a subdivision or combination) in, outstanding shares of
Common Stock or (b) any sale or conveyance of all or substantially all of
the property and assets of the Corporation, then lawful provision shall be
made as part of the terms of such transaction whereby the holder of each
share of Series E Stock shall have the right thereafter, during the period
such share shall be convertible or exchangeable, to convert such share into
or have such shares exchanged for the kind and amount of shares of stock or
other securities and property receivable upon such consolidation, merger,
sale or conveyance by a holder of the number of shares of Common Stock into
which such shares of this Series could have been converted or exchanged
immediately prior to such consolidation, merger, sale or conveyance,
subject to
<PAGE>
adjustment that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3 (based on (i) the election, if
any, made in writing to the Corporation by the record holder (as of the
date used for determining holders of Common Stock entitled to make such
election) of the largest number of shares of Series E Stock on or prior to
the last date on which a holder of Common Stock may make an election
regarding the kind or amount of securities or other property receivable by
such holder in such transaction or (ii) if no such election is timely made,
an assumption that such holder failed to exercise any such rights (provided
that if the kind or amount of securities or other property is not the same
for each nonelecting holder, then the kind and amount of securities or
other property receivable shall be based upon the kind and amount of
securities or other property receivable by a plurality of the nonelecting
holders of Common Stock)). In the event that any of the transactions
referred to in clauses (a) or (b) involves the distribution of cash or
property (other than equity securities) to a holder of Common Stock, lawful
provision shall be made as part of the terms of the transaction whereby the
holder of each share of Series E Stock on the record date fixed for
determining holders of Common Stock entitled to receive such cash or
property (or if no such record date is established, the effective date of
such transaction) shall be entitled to receive the amount of cash or
property that such holder would have been entitled to receive had such
holder converted his shares of Series E Stock into Common Stock immediately
prior to such record date (or effective date) (based on the election or
nonelection made by the record holder of the largest number of shares of
Series E Stock, as provided above). Concurrently with the mailing to
holders of Common Stock of any document pursuant to which such holders may
make an election regarding the kind or amount of securities or other
property that will be receivable by such holder in any transaction
described in clause (a) or (b) of the first sentence of this Section 3.7,
the Corporation shall mail a copy thereof to the record holders of the
Series E Stock as of the date used for determining the holders of record of
Common Stock entitled to such mailing. The Corporation shall not enter into
any of the transactions referred to in clauses (a) or (b) of the preceding
sentence unless effective provision shall be made in the certificate or
articles of incorporation or other constituent documents of the Corporation
or the entity surviving the consolidation or merger, if other than the
Corporation, or the entity acquiring the Corporation's assets, as the case
may be, so
<PAGE>
as to give effect to the provisions set forth in this Section 3.7. The
provisions of this Section 3.7 shall apply similarly to successive
consolidations, mergers, sales or conveyances. For purposes of this Section
3.7, the term "Corporation" shall refer to the Corporation (as defined in
Section 1.12) as constituted immediately prior to the merger, consolidation
or other transaction referred to in this Section.
3.8 The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
stock, for the purpose of effecting the conversion of the shares of this
Series, such number of its duly authorized shares of Common Stock (or, if
applicable, any other shares of Capital Stock of the Corporation) as shall
from time to time be sufficient to effect the conversion of all outstanding
shares of this Series into such Common Stock (or such other shares of
Capital Stock) at any time (assuming that, at the time of the computation
of such number of shares, all such Common Stock (or such other shares of
Capital Stock) would be held by a single holder); provided, however, that
nothing contained herein shall preclude the Corporation from satisfying its
obligations in respect of the conversion of the shares by delivery of
purchased shares of Common Stock (or such other shares of Capital Stock)
that are held in the treasury of the Corporation. All shares of Common
Stock (or such other shares of Capital Stock of the Corporation) that shall
be deliverable upon conversion of the shares of this Series shall be duly
and validly issued, fully paid and nonassessable. For purposes of this
Section 3, any shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Corporation.
3.9 If any shares of Common Stock that would be issuable
upon conversion (or pursuant to redemption or exchange) of shares of this
Series hereunder require registration with or approval of any governmental
authority before such shares may be issued upon conversion, the Corporation
will in good faith and as expeditiously as possible cause such shares to be
duly registered or approved, as the case may be. The Corporation will use
commercially reasonable efforts to list the shares of (or depositary shares
representing fractional interests in) Common Stock or other shares of
Capital Stock required to be delivered upon conversion of shares of this
Series prior to such delivery upon the principal national securities
exchange upon which the outstanding Common Stock (or other
<PAGE>
shares of Capital Stock) is listed at the time of such delivery.
3.10 The Corporation shall pay any and all issue or other
taxes that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion (or pursuant to redemption or exchange) of
shares of this Series pursuant hereto. The Corporation shall not, however,
be required to pay any tax that is payable in respect of any transfer
involved in the issue or delivery of Common Stock or such other shares of
Capital Stock in a name other than that in which the shares of this Series
so converted were registered, and no such issue or delivery shall be made
unless and until the Person requesting such issue has paid to the
Corporation the amount of such tax, or has established, to the satisfaction
of the Corporation, that such tax has been paid.
3.11 In case of (i) the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, (ii) any Pro
Rata Repurchase or (iii) any action triggering an adjustment to the
Conversion Rate pursuant to this Section 3, then, in each case, the
Corporation shall cause to be filed with the transfer agent or agents for
the Series E Stock, and shall cause to be mailed, first-class postage
prepaid, to the holders of record of the outstanding shares of Series E
Stock, at least fifteen (15) days prior to the applicable record date for
any such transaction (or if no record date will be established, the
effective date thereof), a notice stating (x) the date, if any, on which a
record is to be taken for the purpose of any such transaction (or, if no
record date will be established, the date as of which holders or record of
Common Stock entitled to participate in such transaction are determined),
and (y) the expected effective date thereof. Failure to give such notice or
any defect therein shall not affect the legality or validity of the
proceedings described in this Section 3.11.
4. Redemption or Exchange.
4.1 (a) The Corporation may, at its sole option, subject to
Section 2.2 hereof, from time to time on and after January 4, 2001, redeem,
out of funds legally available therefor, or, as provided below, exchange
shares of Common Stock for, all (or in the case of Section 4.1(b)(i), any
part) of the outstanding shares of this Series. The redemption price for
each share of this Series
<PAGE>
called for redemption pursuant to clause (i) of Section 4.1(b) shall be the
Liquidation Value together with an amount equal to the accrued and unpaid
dividends to the date fixed for redemption (hereinafter collectively
referred to as the "Redemption Price"). The exchange price for each share
of this Series called for exchange pursuant to clause (ii) of Section
4.1(b) shall be a number of shares of Common Stock equal to the Conversion
Rate, together with, at the option of the Corporation, either (x) cash or
(y) a number of shares of Common Stock, valued at the Closing Price on the
Trading Day immediately preceding the date fixed for exchange, equal, in
either case, to the aggregate amount of accrued and unpaid dividends on the
Series E Stock to the date fixed for exchange (hereinafter collectively
referred to as the "Exchange Price").
(b) On the date fixed for redemption or exchange the
Corporation shall, at its option, effect either
(i) a redemption of the shares of this Series to be
redeemed by way of payment, out of funds legally available
therefor, of cash equal to the aggregate Redemption Price for the
shares of this Series then being redeemed;
(ii) an exchange of the shares of this Series for the
Exchange Price in shares of Common Stock (provided that the
Corporation shall be entitled to deliver cash (A) in lieu of any
fractional share of Common Stock (determined in a manner
consistent with Section 3.3) and (B) equal to accrued and unpaid
dividends to the date fixed for exchange in lieu of shares of
Common Stock); or
(iii) any combination thereof with respect to each
share of this Series called for redemption or exchange.
(c) Notwithstanding clauses (ii) and (iii) of Section
4.1(b), the Corporation shall be entitled to effect an exchange of shares
of Series E Stock for Common Stock (or other shares of Capital Stock) only
to the extent Common Stock (or other shares of Capital Stock) shall be
available for issuance (including delivery of previously issued shares of
Common Stock held in the Corporation's treasury on the date fixed for
exchange), which shares shall be duly and validly issued, fully paid and
non-assessable. Certificates for shares of Common Stock issued in exchange
for
<PAGE>
surrendered shares of this Series pursuant to this Section 4.1 shall be
made available by the Corporation not later than the fifth Trading Day
following the date for exchange.
4.2 In the event that fewer than all the outstanding shares
of this Series are to be redeemed pursuant to Section 4.1(b)(i), the number
of shares to be redeemed from each holder of shares of this Series shall be
determined by the Corporation by lot or pro rata or by any other method as
may be determined by the Board of Directors in its sole discretion to be
equitable, and the certificate of the Corporation's Secretary or an
Assistant Secretary filed with the transfer agent or transfer agents for
this Series in respect of such determination by the Board of Directors
shall be conclusive.
4.3 In the event the Corporation shall redeem or exchange
shares of this Series pursuant to Section 4.1, notice of such redemption or
exchange shall be given by first class mail, postage prepaid, mailed not
less than fifteen (15) nor more than sixty (60) days prior to the date
fixed for redemption or exchange, as the case may be, to each record holder
of the shares to be redeemed or exchanged, at such holder's address as the
same appears on the books of the Corporation. Each such notice shall state:
(i) whether the shares of this Series are to be redeemed or exchanged; (ii)
the time and date as of which the redemption or exchange shall occur; (iii)
the total number of shares of this Series to be redeemed or exchanged and,
if fewer than all the shares held by such holder are to be redeemed, the
number of such shares to be redeemed from such holder; (iv) the Redemption
Price or the Exchange Price, as the case may be; (v) that shares of this
Series called for redemption or exchange may be converted at any time prior
to the time and date fixed for redemption or exchange (unless the
Corporation shall, in the case of a redemption, default in payment of the
Redemption Price or, in the case of an exchange, fail to exchange the
shares of this Series for the applicable number of shares of Common Stock
and any cash portion of the Exchange Price or shall exercise its right to
rescind such redemption pursuant to Section 4.5, in which case such right
of conversion shall not terminate at such time and date); (vi) the
applicable Conversion Price and Conversion Rate; (vii) the place or places
where certificates for such shares are to be surrendered for payment of the
Redemption Price, in the case of redemption, or for delivery of
certificates representing the shares of
<PAGE>
Common Stock and the payment of any cash portion of the Exchange Price, in
the case of exchange; and (viii) that, subject to Section 4.4 of this
Certificate, dividends on the shares of this Series to be redeemed or
exchanged will cease to accrue on such redemption or exchange date.
4.4 If notice of redemption or exchange shall have been
given by the Corporation as provided in Section 4.3, dividends on the
shares of this Series so called for redemption or exchange shall cease to
accrue, such shares shall no longer be deemed to be outstanding, and all
rights of the holders thereof as stockholders with respect to shares so
called for redemption or exchange (except (i) in the case of redemption,
the right to receive from the Corporation the Redemption Price without
interest and in the case of exchange, the right to receive from the
Corporation the Exchange Price without interest and (ii) the right to
convert such shares in accordance with Section 3) shall cease (including
any right to receive dividends otherwise payable on any Dividend Payment
Date that would have occurred after the time and date of redemption or
exchange) either (i) in the case of a redemption or exchange pursuant to
Section 4.1, from and after the time and date fixed in the notice of
redemption or exchange as the time and date of redemption or exchange
(unless the Corporation shall (x) in the case of a redemption, default in
the payment of the Redemption Price, (y) in the case of an exchange, fail
to exchange the applicable number of shares of Common Stock and any cash
portion of the Exchange Price or (z) exercise its right to rescind such
redemption pursuant to Section 4.5, in which case such rights shall not
terminate at such time and date) or (ii) if the Corporation shall so elect
and state in the notice of redemption or exchange, from and after the time
and date (which date shall be the date fixed for redemption or exchange or
an earlier date not less than fifteen (15) days after the date of mailing
of the redemption or exchange notice) on which the Corporation shall
irrevocably deposit with a designated bank or trust company doing business
in the Borough of Manhattan, City and State of New York, as paying agent,
money sufficient to pay at the office of such paying agent, on the
redemption date, the Redemption Price, in the case of redemption, or
certificates representing the shares of Common Stock to be so exchanged and
any cash portion of the Exchange Price, in the case of an exchange. Any
money or certificates so deposited with any such paying agent that shall
not be required for such redemption or exchange because of the exercise of
any right of conversion or
<PAGE>
otherwise shall be returned to the Corporation forthwith. Upon surrender
(in accordance with the notice of redemption or exchange) of the
certificate or certificates for any shares of this Series to be so redeemed
or exchanged (properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice of redemption or exchange shall
so state), such shares shall be redeemed or exchanged by the Corporation at
the Redemption Price or the Exchange Price, as applicable, as set forth in
Section 4.1 (unless the Corporation shall have exercised its right to
rescind such redemption pursuant to Section 4.5). In case fewer than all
the shares represented by any such certificate are to be redeemed, a new
certificate shall be issued representing the unredeemed shares (or
fractions thereof as provided in Section 7.4), without cost to the holder
thereof, together with the amount of cash, if any, in lieu of fractional
shares other than those issuable in accordance with Section 7.4. Subject to
applicable escheat laws, any moneys so set aside by the Corporation in the
case of redemption and unclaimed at the end of one year from the redemption
date shall revert to the general funds of the Corporation, after which
reversion the holders of such shares so called for redemption or exchange
shall look only to the general funds of the Corporation for the payment of
the Redemption Price or the Exchange Price, as applicable, without
interest. Any interest accrued on funds so deposited shall be paid to the
Corporation from time to time.
4.5 In the event that a Redemption Rescission Event shall
occur following any day on which a notice of redemption shall have been
given pursuant to Section 4.3 but at or prior to the earlier of (a) the
time and date fixed for redemption as set forth in such notice of
redemption and (b) the time and date at which the Corporation shall have
irrevocably deposited funds or certificates with a designated bank or trust
company pursuant to Section 4.4, the Corporation may, at its sole option,
at any time prior to the earliest of (i) the close of business on that day
which is two (2) Trading Days following such Redemption Rescission Event,
(ii) the time and date fixed for redemption as set forth in such notice and
(iii) the time and date on which the Corporation shall have irrevocably
deposited such funds with a designated bank or trust company, rescind the
redemption under Section 4.1(b)(i) to which such notice of redemption shall
have related by making a public announcement of such rescission (the date
on which such public announcement shall
<PAGE>
have been made being hereinafter referred to as the "Rescission Date"). The
Corporation shall be deemed to have made such announcement if it shall
issue a release to the Dow Jones News Service, Reuters Information Services
or any successor news wire service. From and after the making of such
announcement, the Corporation shall have no obligation to redeem shares of
this Series called for redemption pursuant to such notice of redemption or
to pay the redemption price therefor and all rights of holders of shares of
this Series shall be restored as if such notice of redemption had not been
given. The Corporation shall give notice of any such rescission by one of
the means specified in Section 7.2 as promptly as practicable, but in no
event later than the close of business on that date which is five (5)
Trading Days following the Rescission Date to each record holder of shares
of this Series at the close of business on the Rescission Date and to any
other Person or entity that was a record holder of shares of this Series
and that shall have surrendered shares of this Series for conversion
following the giving of notice of the subsequently rescinded redemption.
Each notice of rescission shall (w) state that the redemption described in
the notice of redemption has been rescinded, (x) state that any Converting
Holder shall be entitled to rescind the conversion of shares of this Series
surrendered for conversion following the day on which notice of redemption
was given but prior to the close of business on the later of (1) the
Trading Day next succeeding the date on which public announcement of the
rescission of such redemption shall have been made and (2) the Trading Day
on which the Corporation's notice of rescission is deemed given pursuant to
Section 7.2, (y) be accompanied by a form prescribed by the Corporation to
be used by any Converting Holder rescinding the conversion of shares so
surrendered for conversion (and instructions for the completion and
delivery of such form, including instructions with respect to payments that
may be required to accompany such delivery shall be in accordance with
Section 3.5) and (z) state that such form must be properly completed and
received by the Corporation no later than the close of business on a date
that shall be ten (10) Trading Days following the date such notice of
rescission is deemed given pursuant to Section 7.2.
4.6 The shares of this Series shall not be subject to the
provisions of Section 5 of Article IV of the Certificate of Incorporation.
<PAGE>
5. Voting. The shares of this Series shall have no voting rights
except as required by law or as set forth below.
5.1 Each share of this Series shall be entitled to vote
together with holders of the shares of Common Stock (and any other class or
series that may similarly be entitled to vote with the shares of Common
Stock) as a single class upon all matters upon which holders of Common
Stock are entitled to vote. In any such vote, the holders of this Series
shall be entitled to two (2) votes per $100 of Liquidation Value of Series
E Stock, subject to adjustment at the same time and in the same manner as
each adjustment of the Conversion Rate pursuant to Section 3, so that the
holders of this Series shall be entitled following such adjustment to the
number of votes equal to the number of votes such holders were entitled to
under this Section 5.1 immediately prior to such adjustment multiplied by a
fraction (x) the numerator of which is the Conversion Rate as adjusted
pursuant to Section 3 and (y) the denominator of which is the Conversion
Rate immediately prior to such adjustment.
5.2(a) So long as any shares of this Series remain
outstanding, unless a greater percentage shall then be required by law, the
Corporation shall not, without the affirmative vote at a meeting or the
written consent with or without a meeting of the holders of shares of this
Series representing at least 66-2/3% of the aggregate voting power of
shares of this Series then outstanding (i) authorize any Senior Stock or
reclassify (by merger, consolidation or otherwise) any Junior Stock or
Parity Stock as Senior Stock, (ii) merge into or consolidate with any
Person where the surviving or continuing corporation will have any
authorized Senior Stock other than Capital Stock corresponding to shares of
Senior Stock existing immediately before such merger or consolidation) or
(iii) amend, alter or repeal any of the provisions of the Certificate or
the Certificate of Incorporation, so as in any such case to adversely
affect the voting powers, designations, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of the shares of this Series.
(b) No consent of holders of shares of this Series shall be
required for (i) the creation of any indebtedness of any kind of the
Corporation, (ii) the authorization or issuance of any class of Junior
Stock or
<PAGE>
Parity Stock, (iii) the authorization, designation or issuance of
additional shares of Series E Stock (to the extent provided in the
Agreement and Plan of Merger dated as of February 6, 1995, among
Cablevision Industries Corporation, Alan Gerry, a Delaware corporation
known on such date as "Time Warner Inc." and TW CVI Acquisition Corp.)
or (iv) subject to Section 5.2(a), the authorization or issuance of
any other shares of Preferred Stock.
5.3(a) If and whenever at any time or times dividends
payable on shares of this Series shall have been in arrears and unpaid in
an aggregate amount equal to or exceeding the amount of dividends payable
thereon for six quarterly dividend periods, then the number of directors
constituting the Board of Directors shall be increased by two and the
holders of shares of this Series, together with the holders of any shares
of any Parity Stock as to which in each case dividends are in arrears and
unpaid in an aggregate amount equal to or exceeding the amount of dividends
payable thereon for six quarterly dividend periods, shall have the
exclusive right, voting separately as a class with such other series, to
elect two directors of the Corporation.
(b) Such voting right may be exercised initially either by
written consent or at a special meeting of the holders of the Preferred
Stock having such voting right, called as hereinafter provided, or at any
annual meeting of stockholders held for the purpose of electing directors,
and thereafter at each such annual meeting until such time as all dividends
in arrears on the shares of this Series shall have been paid in full and
all dividends payable on the shares of this Series on four subsequent
consecutive Dividend Payment Dates shall have been paid in full on such
dates or funds shall have been set aside for the payment thereof, at which
time such voting right and the term of the directors elected pursuant to
Section 5.3(a) shall terminate.
(c) At any time when such voting right shall have vested in
holders of shares of such series of Preferred Stock described in Section
5.3(a), and if such right shall not already have been exercised by written
consent, a proper officer of the Corporation may call, and, upon the
written request, addressed to the Secretary of the Corporation, of the
record holders of shares representing twenty-five percent (25%) of the
voting power of the shares then outstanding of such Preferred Stock having
such voting right, shall call, a special meeting of the holders of such
Preferred Stock having such voting right. Such meeting shall be held at the
earliest practicable date upon the notice required for annual meetings of
stockholders at the
<PAGE>
place for holding annual meetings of stockholders, or, if none, at a place
designated by the Board of Directors. Notwithstanding the provisions of
this Section 5.3(c), no such special meeting shall be called during a
period within 60 days immediately preceding the date fixed for the next
annual meeting of stockholders.
(d) At any meeting held for the purpose of electing
directors at which the holders of such Preferred Stock shall have the right
to elect directors as provided herein, the presence in person or by proxy
of the holders of shares representing more than fifty percent (50%) in
voting power of the then outstanding shares of such Preferred Stock having
such right shall be required and shall be sufficient to constitute a quorum
of such class for the election of directors by such class.
(e) Any director elected by holders of Preferred Stock
pursuant to the voting right created under this Section 5.3 shall hold
office until the next annual meeting of stockholders (unless such term has
previously terminated pursuant to Section 5.3(b)) and any vacancy in
respect of any such director shall be filled only by vote of the remaining
director so elected, or if there be no such remaining director, by the
holders of such Preferred Stock entitled to elect such director or
directors by written consent or at a special meeting called in accordance
with the procedures set forth in Section 5.3(c), or, if no special meeting
is called or written consent executed, at the next annual meeting of
stockholders. Upon any termination of such voting right, subject to
applicable law, the term of office of all directors elected by holders of
such Preferred Stock voting separately as a class pursuant to this Section
5.3 shall terminate.
(f) In exercising the voting rights set forth in this
Section 5.3, each share of this Series shall have a number of votes equal
to its Liquidation Value.
6. Liquidation Rights.
6.1 Upon the dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, the holders of the shares of
this Series shall be entitled to receive out of the assets of the
Corporation available for distribution to stockholders, in preference to
the holders of, and before any payment or distribution shall be made on,
Junior Stock, the amount of $100 per share (the
<PAGE>
"Liquidation Value") plus an amount equal to all accrued and unpaid
dividends to the date of final distribution. The Liquidation Value shall be
subject to adjustment from time to time to appropriately give effect to any
split or combination of the shares of this Series.
6.2 Neither the sale, exchange or other conveyance (for
cash, shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation nor the merger
or consolidation of the Corporation into or with any other corporation, or
the merger or consolidation of any other corporation into or with the
Corporation, shall be deemed to be a dissolution, liquidation or winding
up, voluntary or involuntary, for the purposes of this Section 6.
6.3 After the payment to the holders of the shares of this
Series of full preferential amounts provided for in this Section 6, the
holders of this Series as such shall have no right or claim to any of the
remaining assets of the Corporation.
6.4 In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to Section 6.1, no such distribution shall be
made on account of any shares of any Parity Stock upon such dissolution,
liquidation or winding up unless proportionate distributive amounts shall
be paid on account of the shares of this Series, ratably, in proportion to
the full distributable amounts for which holders of all Parity Stock are
entitled upon such dissolution, liquidation or winding up.
7. Other Provisions.
7.1 All notices from the Corporation to the holders shall be
given by one of the methods specified in Section 7.2. With respect to any
notice to a holder of shares of this Series required to be provided
hereunder, neither failure to give such notice, nor any defect therein or
in the transmission thereof, to any particular holder shall affect the
sufficiency of the notice or the validity of the proceedings referred to in
such notice with respect to the other holders or affect the legality or
validity of any distribution, right, warrant, reclassification,
<PAGE>
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up, or the vote upon any such action. Any notice that was mailed in
the manner herein provided shall be conclusively presumed to have been duly
given whether or not the holder receives the notice.
7.2 All notices and other communications hereunder shall be
deemed given (i) on the first Trading Day following the date received, if
delivered personally, (ii) on the Trading Day following timely deposit with
an overnight courier service, if sent by overnight courier specifying next
day delivery and (iii) on the first Trading Day that is at least five days
following deposit in the mails, if sent by first class mail to (x) a holder
at its last address as it appears on the transfer records or registry for
the Series E Stock and (y) the Corporation at the following address (or at
such other address as the Corporation shall specify in a notice pursuant to
this Section 7.2): TW Inc., 75 Rockefeller Plaza, New York, New York 10019,
Attention: General Counsel.
7.3 Any shares of this Series that have been converted,
redeemed, exchanged or otherwise acquired by the Corporation shall, after
such conversion, redemption, exchange or acquisition, as the case may be,
be retired and promptly cancelled and the Corporation shall take all
appropriate action to cause such shares to obtain the status of authorized
but unissued shares of Preferred Stock, without designation as to series,
until such shares are once more designated as part of a particular series
by the Board of Directors. The Corporation may cause a certificate setting
forth a resolution adopted by the Board of Directors that none of the
authorized shares of this Series are outstanding to be filed with the
Secretary of State of the State of Delaware. When such certificate becomes
effective, all matters set forth in the Certificate with respect to the
Series E Stock shall be eliminated from the Certificate of Incorporation
and the shares of Preferred Stock designated hereby as Series E Stock shall
have the status of authorized and unissued shares of Preferred Stock and
may be reissued as part of any new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors.
7.4 The shares of this Series shall be issuable in whole
shares or, if authorized by the Board of Directors, in any fraction of a
whole share so authorized or any integral multiple of such fraction.
<PAGE>
7.5 The Corporation shall be entitled to recognize the
exclusive right of a Person registered on its records as the holder of
shares of this Series, and such record holder shall be deemed the holder of
such shares for all purposes.
7.6 All notice periods referred to in the Certificate shall
commence on the date of the mailing of the applicable notice.
7.7 Any registered holder of Series E Stock may proceed to
protect and enforce its rights by any available remedy by proceeding at law
or in equity to protect and enforce any such rights, whether for the
specific enforcement of any provision in this Certificate or in aid of the
exercise of any power granted herein, or to enforce any other proper
remedy.
IN WITNESS WHEREOF, TW Inc. has caused this certificate to
be signed this 10th day of October, 1996.
TW INC.,
by /s/ Thomas W. McEnerney
--------------------------
Name: Thomas W. McEnerney
Title: Vice President
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF SERIES F CONVERTIBLE
PREFERRED STOCK
OF
TW INC.
--------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
--------------------
TW INC., hereafter to be renamed "Time Warner Inc." (the
"Corporation"), a corporation organized and existing by virtue of the
General Corporation Law of the State of Delaware (the "DGCL"), does hereby
certify that the following resolution was duly adopted by action of the
Board of Directors of the Corporation (the "Board of Directors") at a
meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly granted to and
vested in the Board of Directors by the provisions of Section 2 of Article
IV of the Restated Certificate of Incorporation of the Corporation, as
amended from time to time (the "Certificate of Incorporation"), and Section
151(g) of the DGCL, the Board of Directors hereby creates, from the
authorized shares of Preferred Stock, par value $.10 per share ("Preferred
Stock"), of the Corporation authorized to be issued pursuant to the
Certificate of Incorporation, a series of Preferred Stock, and hereby fixes
the voting powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of the shares of such series as follows:
The series of Preferred Stock hereby established shall consist of
3,100,000 shares designated as Series F Convertible Preferred Stock. The
rights, preferences and limitations of such series shall be as follows:
<PAGE>
1. Definitions. As used herein, the following terms shall have
the indicated meanings:
1.1 "Accrued Dividend Amount" shall have the meaning set
forth in Section 3.1 thereof.
1.2 "Board of Directors" shall mean the Board of Directors
of the Corporation or, with respect to any action to be taken by the Board
of Directors, any committee of the Board of Directors duly authorized to
take such action.
1.3 "Capital Stock" shall mean any and all shares of
corporate stock of a Person (however designated and whether representing
rights to vote, rights to participate in dividends or distributions upon
liquidation or otherwise with respect to such Person, any division or
subsidiary thereof, or any joint venture, partnership, corporation or other
entity).
1.4 "Certificate" shall mean the certificate of the voting
powers, designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions
thereof, of Series F Convertible Preferred Stock filed with respect to this
resolution with the Secretary of State of the State of Delaware pursuant to
Section 151 of the DGCL.
1.5 "Change of Control" and "Change of Control Date" shall
have the following meanings: "Change of Control" shall mean the occurrence
of one or both of the following events: (a) individuals who would
constitute a majority of the members of the Board of Directors elected at
any meeting of stockholders or by written consent (without regard to any
members of the Board of Directors elected pursuant to the terms of any
series of Preferred Stock) shall be elected to the Board of Directors and
the election or the nomination for election by the stockholders of such
directors was not approved by a vote of at least a majority of the
directors in office immediately prior to such election (in which event
"Change of Control Date" shall mean the date of such election) or (b) a
Person or group of Persons acting in concert as a partnership, limited
partnership, syndicate or other group within the meaning of Rule 13d-3
under the Exchange Act (the "Acquiring Person") shall, as a result of a
tender or exchange offer, open market purchases, privately negotiated
purchases, share repurchases, redemptions or otherwise, have become the
<PAGE>
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
of 40% or more of the outstanding shares of Common Stock (in which event
"Change of Control Date" shall mean the date of the event resulting in such
40% ownership).
1.6 "Closing Price" of the Common Stock shall mean the last
reported sale price of the Common Stock (regular way) as shown on the
Composite Tape of the NYSE, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices on the NYSE, or, if
the Common Stock is not listed or admitted to trading on the NYSE, on the
principal national securities exchange on which such stock is listed or
admitted to trading, or, if it is not listed or admitted to trading on any
national securities exchange, the last reported sale price of the Common
Stock, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, in either case as reported by NASDAQ.
1.7 "Common Stock" shall mean the class of Common Stock, par
value $.01 per share, of the Corporation authorized at the date of the
Certificate, or any other class of stock resulting from (x) successive
changes or reclassifications of such Common Stock consisting of changes in
par value, or from par value to no par value, (y) a subdivision or
combination or (z) any other changes for which an adjustment is made under
Section 3.6(a), and in any such case including any shares thereof
authorized after the date of the Certificate, together with any associated
rights to purchase other securities of the Corporation that are at the time
represented by the certificates representing such shares of Common Stock.
1.8 "Conversion Date" shall have the meaning set forth in
Section 3.5 hereof.
1.9 "Conversion Price" shall have the meaning set forth in
Section 3.1 hereof.
1.10 "Conversion Rate" shall have the meaning set forth in
Section 3.1 hereof.
1.11 "Converting Holder" shall have the meaning set forth in
Section 3.5 hereof.
1.12 "Corporation" shall mean TW Inc., a Delaware
corporation, and any of its successors by operation of law, including by
merger, consolidation or sale or
<PAGE>
conveyance of all or substantially all of its property and assets.
1.13 "Current Market Price" of the Common Stock on any date
shall mean the average of the daily Closing Prices per share of the Common
Stock for the five (5) consecutive Trading Days ending on the Trading Day
immediately preceding the applicable record date, conversion date,
redemption date or exchange date referred to in Section 3 or Section 4.
1.14 "DGCL" shall mean the General Corporation Law of the
State of Delaware.
1.15 "Dividend Payment Date" shall have the meaning set
forth in Section 2.1 hereof.
1.16 "Exchange Price" shall have the meaning set forth in
Section 4.1 hereof.
1.17 "Junior Stock" shall mean the Common Stock, the Series
A Stock, the Series LMC Stock, the Series LMCN-V Stock and the shares of
any other class or series of Capital Stock of the Corporation that, by the
terms of the Certificate of Incorporation or of the instrument by which the
Board of Directors, acting pursuant to authority granted in the Certificate
of Incorporation, shall fix the relative rights, preferences and
limitations thereof, shall be junior to the Series F Stock in respect of
the right to receive dividends or to participate in any distribution of
assets other than by way of dividends.
1.18 "Liquidation Value" shall have the meaning set forth in
Section 7.1 hereof.
1.19 "NASDAQ" shall mean the Nasdaq Stock Market.
1.20 "NYSE" shall mean the New York Stock Exchange, Inc.
1.21 "Parity Stock" shall mean the Series D Stock, the
Series E Stock, the Series G Stock, the Series H Stock, the Series I Stock,
the Series J Stock, the Series L Stock, the Series M Stock and the shares
of any other class or series of Capital Stock of the Corporation that, by
the terms of the Certificate of Incorporation or of the instrument by which
the Board of Directors, acting pursuant
<PAGE>
to authority granted in the Certificate of Incorporation, shall fix the
relative rights, preferences and limitations thereof, shall, in the event
that the stated dividends thereon are not paid in full, be entitled to
share ratably with the Series F Stock in the payment of dividends,
including accumulations, if any, in accordance with the sums that would be
payable on such shares if all dividends were declared and paid in full, or
shall, in the event that the amounts payable thereon on liquidation are not
paid in full, be entitled to share ratably with the Series F Stock in any
distribution of assets other than by way of dividends in accordance with
the sums that would be payable in such distribution if all sums payable
were discharged in full; provided, however, that the term "Parity Stock"
shall be deemed to refer (i) in Section 2.2 hereof, to any stock that is
Parity Stock in respect of dividend rights; (ii) in Section 6 hereof, to
any stock that is Parity Stock in respect of the distribution of assets;
and (iii) in Sections 5.2 and 5.3 hereof, to any stock that is Parity Stock
in respect of either dividend rights or the distribution of assets and
that, pursuant to the Certificate of Incorporation or any instrument in
which the Board of Directors, acting pursuant to authority granted in the
Certificate of Incorporation, shall so designate, is entitled to vote with
the holders of Series F Stock.
1.22 "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization
or other entity.
1.23 "Preferred Stock" shall mean the class of Preferred
Stock, par value $.10 per share, of the Corporation authorized at the date
of the Certificate, including any shares thereof authorized after the date
of the Certificate.
1.24 "Pro Rata Repurchase" shall mean the purchase of shares
of Common Stock by the Corporation or by any of its subsidiaries, whether
for cash or other property or securities of the Corporation, which purchase
is subject to Section 13(e) of the Exchange Act or is made pursuant to an
offer made available to all holders of Common Stock, but excluding any
purchase made in open market transactions that satisfies the conditions of
clause (b) of Rule 10b-18 under the Exchange Act or has been designed (as
reasonably determined by the Board of Directors) to prevent such purchase
from having a material effect on the trading market of the Common Stock.
The "Effective Date" of a Pro Rata
<PAGE>
Repurchase shall mean the applicable expiration date (including all
extensions thereof) of any tender or exchange offer that is a Pro Rata
Repurchase or the date of purchase with respect to any Pro Rata Repurchase
that is not a tender or exchange offer.
1.25 "Record Date" shall have the meaning set forth in
Section 2.1 hereof.
1.26 "Redemption Price" shall have the meaning set forth in
Section 4.1 hereof.
1.27 "Redemption Rescission Event" shall mean the occurrence
of (a) any general suspension of trading in, or limitation on prices for,
securities on the principal national securities exchange on which shares of
Common Stock are registered and listed for trading (or, if shares of Common
Stock are not registered and listed for trading on any such exchange, in
the over-the-counter market) for more than six-and-one-half (6-1/2)
consecutive trading hours, (b) any decline in either the Dow Jones
Industrial Average or the Standard & Poor's Index of 400 Industrial
Companies (or any successor index published by Dow Jones & Company, Inc. or
Standard & Poor's Corporation) by either (i) an amount in excess of 10%,
measured from the close of business on any Trading Day to the close of
business on the next succeeding Trading Day during the period commencing on
the Trading Day preceding the day notice of any redemption of shares of
this Series is given (or, if such notice is given after the close of
business on a Trading Day, commencing on such Trading Day) and ending at
the earlier of (x) the time and date fixed for redemption in such notice
and (y) the time and date at which the Corporation shall have irrevocably
deposited funds with a designated bank or trust company pursuant to Section
4.4 or (ii) an amount in excess of 15% (or, if the time and date fixed for
redemption is more than 15 days following the date on which notice of
redemption is given, 20%), measured from the close of business on the
Trading Day preceding the day notice of such redemption is given (or, if
such notice is given after the close of business on a Trading Day, from
such Trading Day) to the close of business on any Trading Day on or prior
to the earlier of the dates specified in clauses (x) and (y) above, (c) a
declaration of a banking moratorium or any suspension of payments in
respect of banks by Federal or state authorities in the United States or
(d) the commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving
<PAGE>
the United States that in the reasonable judgment of the Corporation could
have a material adverse effect on the market for the Common Stock.
1.28 "Rescission Date" shall have the meaning set forth in
Section 4.5 hereof.
1.29 "Senior Stock" shall mean the shares of any class or
series of Capital Stock of the Corporation that, by the terms of the
Certificate of Incorporation or of the instrument by which the Board of
Directors, acting pursuant to authority granted in the Certificate of
Incorporation, shall fix the relative rights, preferences and limitations
thereof, shall be senior to the Series F Stock in respect of the right to
receive dividends or to participate in any distribution of assets other
than by way of dividends.
1.30 "Series A Stock" shall mean the series of Preferred
Stock authorized and designated as Series A Participating Preferred Stock
at the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.31 "Series D Stock" shall mean the series of Preferred
Stock authorized and designated as Series D Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.32 "Series E Stock" shall mean the series of Preferred
Stock authorized and designated as Series E Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.33 "Series F Stock" and "this Series" shall mean the
series of Preferred Stock authorized and designated as the Series F
Convertible Preferred Stock, including any shares thereof authorized and
designated after the date of the Certificate.
1.34 "Series G Stock" shall mean the series of Preferred
Stock authorized and designated as Series G Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
<PAGE>
1.35 "Series H Stock" shall mean the series of Preferred
Stock authorized and designated as Series H Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.36 "Series I Stock" shall mean the series of Preferred
Stock authorized and designated as Series I Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.37 "Series J Stock" shall mean the series of Preferred
Stock authorized and designated as Series J Convertible Preferred Stock at
the date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.38 "Series L Stock" shall mean the series of Preferred
Stock authorized and designated as 10-1/4% Series L Exchangeable Preferred
Stock at the date of the Certificate, including any shares thereof
authorized and designated after the date of the Certificate.
1.39 "Series LMC Stock" shall mean the series of Series
Common Stock authorized and designated as Series LMC Common Stock at the
date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.40 "Series LMCN-V Stock" shall mean the series of Series
Common Stock authorized and designated as Series LMCN-V Common Stock at the
date of the Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.41 "Series M Stock" shall mean the series of Preferred
Stock authorized and designated as 10-1/4% Series M Exchangeable Preferred
Stock at the date of the Certificate, including any shares thereof
authorized and designated after the date of the Certificate.
1.42 "Surrendered Shares" shall have the meaning set forth
in Section 3.5 hereof.
1.43 "Trading Day" shall mean, so long as the Common Stock
is listed or admitted to trading on the NYSE, a day on which the NYSE is
open for the transaction of
<PAGE>
business, or, if the Common Stock is not listed or admitted to trading on
the NYSE, a day on which the principal national securities exchange on
which the Common Stock is listed is open for the transaction of business,
or, if the Common Stock is not so listed or admitted for trading on any
national securities exchange, a day on which NASDAQ is open for the
transaction of business.
2. Cash Dividends.
2.1 The holders of the outstanding Series F Stock shall be
entitled to receive quarter-annual dividends, as and when declared by the
Board of Directors out of funds legally available therefor. Each
quarter-annual dividend shall be an amount per share equal to (i) in the
case of each Dividend Payment Date (as defined below) occurring on or prior
to January 4, 2000, the greater of (A) $.9375 per $100 of Liquidation Value
of Series F Stock (which is equivalent to $3.75 per annum), and (B) an
amount per $100 of Liquidation Value of Series F Stock equal to the product
of (1) the Conversion Rate and (2) the aggregate per share amount of
regularly scheduled dividends paid in cash on the Common Stock during the
period from but excluding the immediately preceding Dividend Payment Date
to and including such Dividend Payment Date (the "Preferred Dividend
Amount"), and (ii) in the case of each Dividend Payment Date occurring
thereafter, an amount per share of Series F Stock equal to the product of
(1) the Conversion Rate and (2) the aggregate per share amount of regularly
scheduled dividends paid in cash on the Common Stock during the period from
but excluding the immediately preceding Dividend Payment Date to and
including such Dividend Payment Date. All dividends shall be payable in
cash on or about the first day of January, April, July and October in each
year, as fixed by the Board of Directors, or such other dates as are fixed
by the Board of Directors (provided that January 4, 2000, shall be a
Dividend Payment Date) (each a "Dividend Payment Date"), to the holders of
record of Series F Stock at the close of business on or about the Trading
Day next preceding such first day of January, April, July or October (or
January 4, 2000) as the case may be, as fixed by the Board of Directors, or
such other dates as are fixed by the Board of Directors (each a "Record
Date"). Subject to the next sentence, in the case of dividends payable in
respect of periods prior to January 4, 2000, (i) such dividends shall
accrue on each share on a daily basis, whether or not there are
unrestricted funds legally available for the payment of such dividends and
whether or not declared and (ii) any such
<PAGE>
dividends that become payable for any partial dividend period shall be
computed on the basis of the actual days elapsed in such period.
Notwithstanding the preceding sentence, the amount accruing and payable in
respect of the first dividend on the Series F Stock payable after the date
of the Certificate shall equal the Preferred Dividend Amount. From and
after January 4, 2000, dividends on the Series F Stock (determined as to
amount as provided herein) shall accrue to the extent, but only to the
extent, that regularly scheduled cash dividends are declared by the Board
of Directors on the Common Stock with a payment date after January 4, 2000
(or, in the case of Series F Stock originally issued after January 4, 2000,
after the Dividend Payment Date next preceding such date of original
issuance). All dividends that accrue in accordance with the foregoing
provisions shall be cumulative from and after the day immediately
succeeding the date of issuance. The amount payable to each holder of
record on any Dividend Payment Date shall be rounded to the nearest cent.
2.2 Except as hereinafter provided in this Section 2.2,
unless all dividends on the outstanding shares of Series F Stock and any
Parity Stock that shall have accrued and become payable as of any date
shall have been paid, or declared and funds set apart for payment thereof,
no dividend or other distribution (payable other than in shares of Junior
Stock) shall be paid to the holders of Junior Stock or Parity Stock, and no
shares of Series F Stock, Parity Stock or Junior Stock shall be purchased,
redeemed or otherwise acquired by the Corporation or any of its
subsidiaries (except by conversion into or exchange for Junior Stock), nor
shall any monies be paid or made available for a purchase, redemption or
sinking fund for the purchase or redemption of any Series F Stock, Junior
Stock or Parity Stock. When dividends are not paid in full upon the shares
of this Series and any Parity Stock, all dividends declared upon shares of
this Series and all Parity Stock shall be declared pro rata so that the
amount of dividends declared per share on this Series and all such Parity
Stock shall in all cases bear to each other the same ratio that accrued
dividends per share on the shares of this Series and all such Parity Stock
bear to each other. No interest, or sum of money in lieu of interest, shall
be payable in respect of any dividend payment or payments on this Series
that may be in arrears.
2.3 In case the Corporation shall at any time distribute
(other than a distribution in liquidation of
<PAGE>
the Corporation) to the holders of its shares of Common Stock any assets or
property, including evidences of indebtedness or securities of the
Corporation (other than Common Stock subject to a distribution or
reclassification covered by Section 3.6(a)) or of any other Person
(including common stock of such Person) or cash (but excluding regularly
scheduled cash dividends payable on shares of Common Stock) or in case the
Corporation shall at any time distribute (other than a distribution in
liquidation of the Corporation) to such holders rights, options or warrants
to subscribe for or purchase shares of Common Stock (including shares held
in the treasury of the Corporation), or rights, options or warrants to
subscribe for or purchase any other security or rights, options or warrants
to subscribe for or purchase any assets or property (in each case, whether
of the Corporation or otherwise, but other than any distribution of rights
to purchase securities of the Corporation if the holder of shares of this
Series would otherwise be entitled to receive such rights upon conversion
of shares of this Series for Common Stock; provided, however, that if such
rights are subsequently redeemed by the Corporation, such redemption shall
be treated for purposes of this Section 2.3 as a cash dividend (but not a
regularly scheduled cash dividend) on the Common Stock), the Corporation
shall simultaneously distribute such assets, property, securities, rights,
options or warrants pro rata to the holders of Series F Stock on the record
date fixed for determining holders of Common Stock entitled to participate
in such distribution (or, if no such record date shall be established, the
effective time thereof) in an amount equal to the amount that such holders
of Series F Stock would have been entitled to receive had their shares of
Series F Stock been converted into Common Stock immediately prior to such
record date (or effective time). In the event of a distribution to holders
of Series F Stock pursuant to this Section 2.3, such holders shall be
entitled to receive fractional shares or interests only to the extent that
holders of Common Stock are entitled to receive the same. The holders of
Series F Stock on the applicable record date (or effective time) shall be
entitled to receive in lieu of such fractional shares or interests the same
consideration as is payable to holders of Common Stock with respect
thereto. If there are no fractional shares or interests payable to holders
of Common Stock, the holders of Series F Stock on the applicable record
date (or effective time) shall receive in lieu of such fractional shares or
interests the fair value thereof as determined by the Board of Directors.
<PAGE>
2.4 If a distribution is made in accordance with the
provisions of Section 2.3, anything in Section 3 to the contrary
notwithstanding, no adjustment pursuant to Section 3 shall be effected by
reason of the distribution of such assets, property, securities, rights,
options or warrants or the subsequent modification, exercise, expiration or
termination of such securities, rights, options or warrants.
2.5 In the event that the holders of Common Stock are
entitled to make any election with respect to the kind or amount of
securities or other property receivable by them in any distribution that is
subject to Section 2.3, the kind and amount of securities or other property
that shall be distributable to the holders of the Series F Stock shall be
based on (i) the election, if any, made by the record holder (as of the
date used for determining the holders of Common Stock entitled to make such
election) of the largest number of shares of Series F Stock in writing to
the Corporation on or prior to the last date on which a holder of Common
Stock may make such an election or (ii) if no such election is timely made,
an assumption that such holder failed to exercise any such rights (provided
that if the kind or amount of securities or other property is not the same
for each nonelecting holder, then the kind and amount of securities or
other property receivable by holders of the Series F Stock shall be based
on the kind or amount of securities or other property receivable by a
plurality of the shares held by the nonelecting holders of Common Stock).
Concurrently with the mailing to holders of Common Stock of any document
pursuant to which such holders may make an election of the type referred to
in this Section, the Corporation shall mail a copy thereof to the record
holders on the date of mailing of the largest number of shares of the
Series F Stock as of the date used for determining the holders of record of
Common Stock entitled to such mailing.
3. Conversion Rights.
3.1 Each holder of a share of this Series shall have the
right at any time or as to any share of this Series called for redemption
or exchange, at any time prior to the close of business on the date fixed
for redemption or exchange (unless the Corporation defaults in the payment
of the Redemption Price or fails to exchange the shares of this Series for
the applicable number of shares of Common Stock and any cash portion of the
Exchange Price or exercises its right to rescind such redemption pursuant
to Section 4.5, in
<PAGE>
which case such right shall not terminate at the close of business on such
date), to convert such share into (i) a number of shares of Common Stock
equal to 2.08264 shares of Common Stock for each share of this Series,
subject to appropriate adjustment in the event of a split or combination of
shares of this Series and subject to further adjustment as provided in this
Section 3 (such rate, as so adjusted from time to time, is herein called
the "Conversion Rate"; and the "Conversion Price" at any time shall mean
the Liquidation Value per share divided by the Conversion Rate in effect at
such time (rounded to the nearest one hundredth of a cent)) plus (ii) in
the event there shall be any dividends on shares of this Series that shall
be accrued and unpaid as of the immediately preceding Dividend Payment
Date, a number of shares of Common Stock equal to:
(A) the aggregate amount of accrued and unpaid dividends on such
share of Series F Stock to and including the most recent scheduled
Dividend Payment Date (whether or not such dividends were declared and
whether or not there are unrestricted funds legally available for the
payment thereof) (the "Accrued Dividend Amount") divided by
(B) the Closing Price of the Common Stock on the last Trading Day
prior to the Conversion Date;
provided, however, that the Corporation shall have the right to deliver
cash equal to the Accrued Dividend Amount or any portion thereof, in which
case its obligation to deliver shares of Common Stock pursuant to this
clause (ii) shall be reduced by a number of shares equal to (x) the
aggregate amount of cash so delivered divided by (y) the Closing Price of
the Common Stock on the last Trading Day prior to the Conversion Date,
unless the Corporation shall deliver cash equal to the entire Accrued
Dividend Amount, in which case its entire obligation under this clause (ii)
shall be discharged. The obligations of the Corporation to issue the Common
Stock (or its option to make cash payments) provided by this Section 3.1
shall be absolute whether or not any accrued dividend by which such
issuance (or payment) is measured has been declared by the Board of
Directors and whether or not the Corporation would have adequate surplus or
net profits to pay such dividend if declared or is otherwise restricted
from paying such dividend.
3.2 Except as provided in this Section 3, no adjustments in
respect of payments of dividends on shares
<PAGE>
surrendered for conversion or any dividend on the Common Stock issued upon
conversion shall be made upon the conversion of any shares of this Series
(it being understood that if the Conversion Date for shares of Series F
Stock occurs after a Record Date and on or prior to a Dividend Payment
Date, the holder of record on such Record Date shall be entitled to receive
the dividend payable with respect to such shares on the related Dividend
Payment Date pursuant to Section 2.1 hereof).
3.3 The Corporation may, but shall not be required to, in
connection with any conversion of shares of this Series, issue a fraction
of a share of Common Stock, and if the Corporation shall determine not to
issue any such fraction, the Corporation shall, subject to Section 3.6(d),
make a cash payment (rounded to the nearest cent) equal to such fraction
multiplied by the Closing Price of the Common Stock on the last Trading Day
prior to the Conversion Date.
3.4 Any holder of shares of this Series electing to convert
such shares into Common Stock shall surrender the certificate or
certificates for such shares at the office of the transfer agent or agents
therefor (or at such other place as the Corporation may designate by notice
to the holders of shares of this Series) during regular business hours,
duly endorsed to the Corporation or in blank, or accompanied by instruments
of transfer to the Corporation or in blank, or in form satisfactory to the
Corporation, and shall give written notice to the Corporation at such
office that such holder elects to convert such shares of this Series. If
any such certificate or certificates shall have been lost, stolen or
destroyed, the holder shall, in lieu of delivering such certificate or
certificates, deliver to the transfer agent or agents therefor (or such
other place) an indemnification agreement and bond satisfactory to the
Corporation. The Corporation shall, as soon as practicable (subject to
Section 3.6(e)) after such deposit of certificates for shares of this
Series or delivery of the indemnification agreement and bond, accompanied
by the written notice above prescribed, issue and deliver at such office to
the holder for whose account such shares were surrendered, or to his
nominee, certificates representing the number of shares of Common Stock and
the cash, if any, to which such holder is entitled upon such conversion.
3.5 Conversion shall be deemed to have been made as of the
date (the "Conversion Date") that
<PAGE>
certificates for the shares of this Series to be converted, and the written
notice prescribed in Section 3.4 are received by the transfer agent or
agents for this Series; and the Person entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the
record holder of such Common Stock on such date. Notwithstanding anything
to the contrary contained herein, in the event the Corporation shall have
rescinded a redemption of shares of this Series pursuant to Section 4.5,
any holder of shares of this Series that shall have surrendered shares of
this Series for conversion following the day on which notice of the
subsequently rescinded redemption shall have been given but prior to the
close of business on the later of (a) the Trading Day next succeeding the
date on which public announcement of the rescission of such redemption
shall have been made and (b) the Trading Day on which the notice of
rescission required by Section 4.5 is deemed given pursuant to Section 7.2
(a "Converting Holder") may rescind the conversion of such shares
surrendered for conversion by (i) properly completing a form prescribed by
the Corporation and mailed to holders of shares of this Series (including
Converting Holders) with the Corporation's notice of rescission, which form
shall provide for the certification by any Converting Holder rescinding a
conversion on behalf of any beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act) of shares of this Series that the beneficial
ownership (within the meaning of such Rule) of such shares shall not have
changed from the date on which such shares were surrendered for conversion
to the date of such certification and (ii) delivering such form to the
Corporation no later than the close of business on that date which is ten
(10) Trading Days following the date on which the Corporation's notice of
rescission is deemed given pursuant to Section 7.2. The delivery of such
form by a Converting Holder shall be accompanied by (x) any certificates
representing shares of Common Stock issued to such Converting Holder upon a
conversion of shares of this Series that shall be rescinded by the proper
delivery of such form (the "Surrendered Shares"), (y) any securities,
evidences of indebtedness or assets (other than cash) distributed by the
Corporation to such Converting Holder by reason of such Converting Holder's
being a record holder of Surrendered Shares and (z) payment in New York
Clearing House funds or other funds acceptable to the Corporation of an
amount equal to the sum of (I) any cash such Converting Holder may have
received in lieu of the issuance of fractional shares upon conversion and
(II) any cash paid or payable by the Corporation to such Converting
<PAGE>
Holder by reason of such Converting Holder being a record holder of
Surrendered Shares. Upon receipt by the Corporation of any such form
properly completed by a Converting Holder and any certificates, securities,
evidences of indebtedness, assets or cash payments required to be returned
or made by such Converting Holder to the Corporation as set forth above,
the Corporation shall instruct the transfer agent or agents for shares of
Common Stock and shares of this Series to cancel any certificates
representing Surrendered Shares (which Surrendered Shares shall be
deposited in the treasury of the Corporation) and reissue certificates
representing shares of this Series to such Converting Holder (which shares
of this Series shall be deemed to have been outstanding at all times during
the period following their surrender for conversion). The Corporation
shall, as promptly as practicable, and in no event more than five (5)
Trading Days, following the receipt of any such properly completed form and
any such certificates, securities, evidences of indebtedness, assets or
cash payments required to be so returned or made, pay to the Converting
Holder or as otherwise directed by such Converting Holder any dividend or
other payment made on such shares during the period from the time such
shares shall have been surrendered for conversion to the rescission of such
conversion. All questions as to the validity, form, eligibility (including
time or receipt) and acceptance of any form submitted to the Corporation to
rescind the conversion of shares of this Series, including questions as to
the proper completion or execution of any such form or any certification
contained therein, shall be resolved by the Corporation, whose
determination shall be final and binding. The Corporation shall not be
required to deliver certificates for shares of Common Stock while the stock
transfer books for such stock or for this Series are duly closed for any
purpose or during any period commencing at a Redemption Rescission Event
and ending at either (i) the time and date at which the Corporation's right
of rescission shall expire pursuant to Section 4.5 if the Corporation shall
not have exercised such right or (ii) the close of business on that day
which is ten (10) Trading Days following the date on which the
Corporation's notice of rescission pursuant to Section 4.4 is deemed given
pursuant to Section 7.2 if the Corporation shall have exercised such right
of rescission, but certificates for shares of Common Stock shall be
delivered as soon as practicable after the opening of such books or the
expiration of such period.
<PAGE>
3.6 The Conversion Rate shall be adjusted from time to time
as follows for events occurring on or after the date of the Certificate:
(a) In case the Corporation shall (i) pay a dividend in
shares of its Common Stock, (ii) combine its outstanding shares
of Common Stock into a smaller number of shares, (iii) subdivide
its outstanding shares of Common Stock or (iv) reclassify (other
than by way of a merger or consolidation that is subject to
Section 3.7) its shares of Common Stock, then the Conversion Rate
in effect immediately before such action shall be adjusted so
that immediately following such event the holders of the Series F
Stock shall be entitled to receive upon conversion or exchange
thereof the kind and amount of shares of Capital Stock of the
Corporation that they would have owned or been entitled to
receive upon or by reason of such event if such shares of Series
F Stock had been converted immediately before the record date
(or, if no record date, the effective date) for such event (it
being understood that any distribution of cash or Capital Stock
(other than Common Stock), including any distribution of Capital
Stock (other than Common Stock) that shall accompany a
reclassification of the Common Stock, shall be subject to Section
2.3 rather than this Section 3.6(a)). An adjustment made pursuant
to this Section 3.6(a) shall become effective retroactively
immediately after the record date in the case of a dividend or
distribution and shall become effective retroactively immediately
after the effective date in the case of a subdivision,
combination or reclassification. For the purposes of this Section
3.6(a), in the event that the holders of Common Stock are
entitled to make any election with respect to the kind or amount
of securities receivable by them in any transaction that is
subject to this Section 3.6(a) (including any election that would
result in all or a portion of the transaction becoming subject to
Section 2.3), the kind and amount of securities that shall be
distributable to the holders of the Series F Stock shall be based
on (i) the election, if any, made by the record holder (as of the
date used for determining the holders of Common Stock entitled to
make such election) of the largest number of shares of Series F
Stock in writing to the Corporation on or prior to the last date
on which a holder of Common Stock may make such an election or
(ii) if no such
<PAGE>
election is timely made, an assumption that such holder failed to
exercise any such rights (provided that if the kind or amount of
securities is not the same for each nonelecting holder, then the
kind and amount of securities receivable shall be based on the
kind or amount of securities receivable by a plurality of
nonelecting holders of Common Stock). Concurrently with the
mailing to holders of Common Stock of any document pursuant to
which such holders may make an election of the type referred to
in this Section, the Corporation shall mail a copy thereof to the
record holders of the Series F Stock as of the date used for
determining the holders of record of Common Stock entitled to
such mailing.
(b) In case a Change of Control shall occur, the
Conversion Rate in effect immediately prior to the Change of
Control Date shall be increased (but not decreased) by
multiplying such rate by a fraction as follows: (i) in the case
of a Change of Control specified in Section 1.5(a), a fraction in
which the numerator is the Conversion Price prior to adjustment
pursuant hereto and the denominator is the Current Market Price
of the Common Stock at the Change of Control Date, (ii) in the
case of a Change of Control specified in Section 1.5(b), the
greater of the following fractions: (x) a fraction the numerator
of which is the highest price per share of Common Stock paid by
the Acquiring Person in connection with the transaction giving
rise to the Change of Control or in any transaction within six
months prior to or after the Change of Control Date (the "Highest
Price"), and the denominator of which is the Current Market Price
of the Common Stock as of the date (but not earlier than six
months prior to the Change of Control Date) on which the first
public announcement is made by the Acquiring Person that it
intends to acquire or that it has acquired 40% or more of the
outstanding shares of Common Stock (the "Announcement Date") or
(y) a fraction the numerator of which is the Conversion Price
prior to adjustment pursuant hereto and the denominator of which
is the Current Market Price of the Common Stock on the
Announcement Date and (iii) in the case where there co-exists a
Change of Control specified in both Section 1.5(a) and Section
1.5(b), the greatest of the fractions determined pursuant to
clauses (i) and (ii). Such adjustment shall become effective
immediately after the Change of Control Date and shall
<PAGE>
be made, in the case of clauses (ii) and (iii) above,
successively for six months thereafter in the event and at the
time of any increase in the Highest Price after the Change of
Control Date; provided, however, that no such successive
adjustment shall be made with respect to the Conversion Rate of
the shares of this Series in respect of any event occurring after
the Conversion Date.
(c) In case the Corporation or any subsidiary thereof
shall make a Pro Rata Repurchase, the Conversion Rate in effect
immediately prior to such action shall be adjusted (but shall not
be decreased) by multiplying such Conversion Rate by a fraction,
the numerator of which shall be the product of (i) the number of
shares of Common Stock outstanding immediately before such Pro
Rata Repurchase minus the number of shares of Common Stock
repurchased by the Corporation or any subsidiary thereof in such
Pro Rata Repurchase and (ii) the Current Market Price of the
Common Stock as of the day immediately preceding the first public
announcement by the Corporation of the intent to effect such Pro
Rata Repurchase, and the denominator of which shall be (i) the
product of (x) the number of shares of Common Stock outstanding
immediately before such Pro Rata Repurchase and (y) the Current
Market Price of the Common Stock as of the day immediately
preceding the first public announcement by the Corporation of the
intent to effect such Pro Rata Repurchase minus (ii) the
aggregate purchase price of the Pro Rata Repurchase (provided
that such denominator shall never be less than 1). Such
adjustment shall become effective immediately after the Effective
Date of such Pro Rata Repurchase.
(d) The Corporation shall be entitled to make such
additional adjustments in the Conversion Rate, in addition to
those required by subsections 3.6(a), 3.6(b) and 3.6(c) as shall
be necessary in order that any dividend or distribution in Common
Stock or any subdivision, reclassification or combination of
shares of Common Stock referred to above, shall not be taxable to
the holders of Common Stock for United States Federal income tax
purposes, so long as such additional adjustments pursuant to this
Section 3.6(d) do not decrease the Conversion Rate.
<PAGE>
(e) In any case in which this Section 3.6 shall require
that any adjustment be made effective as of or retroactively
immediately following a record date, the Corporation may elect to
defer (but only for five (5) Trading Days following the
occurrence of the event that necessitates the filing of the
statement referred to in Section 3.6(g)) issuing to the holder of
any shares of this Series converted after such record date (i)
the shares of Common Stock and other Capital Stock of the
Corporation issuable upon such conversion over and above (ii) the
shares of Common Stock and other Capital Stock of the Corporation
issuable upon such conversion on the basis of the Conversion Rate
prior to adjustment; provided, however, that the Corporation
shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
(f) All calculations under this Section 3 shall be made
to the nearest cent, one-hundredth of a share or, in the case of
the Conversion Rate, one hundred-thousandth. Notwithstanding any
other provision of this Section 3, the Corporation shall not be
required to make any adjustment of the Conversion Rate unless
such adjustment would require an increase or decrease of at least
1.00000% of such Conversion Rate. Any lesser adjustment shall be
carried forward and shall be made at the time of and together
with the next subsequent adjustment that, together with any
adjustment or adjustments so carried forward, shall amount to an
increase or decrease of at least 1.00000% in such rate. Any
adjustments under this Section 3 shall be made successively
whenever an event requiring such an adjustment occurs.
(g) Whenever an adjustment in the Conversion Rate is
required, the Corporation shall forthwith place on file with its
transfer agent or agents for this Series a statement signed by a
duly authorized officer of the Corporation, stating the adjusted
Conversion Rate determined as provided herein. Such statements
shall set forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustment. Promptly after the adjustment of the Conversion Rate,
the Corporation shall mail a notice thereof to each holder of
shares of this Series.
<PAGE>
(h) In the event that on or at any time as a result of
an adjustment made pursuant to this Section 3, the holder of any
share of this Series thereafter surrendered for conversion shall
become entitled to receive any shares of Capital Stock of the
Corporation other than shares of Common Stock, the conversion
rate of such other shares so receivable upon conversion of any
such share of this Series shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock
contained in subparagraphs (a) through (g) and (i) of this
Section 3.6, and the provisions of Section 3.1 through 3.5 and
3.7 through 3.10 shall apply on like or similar terms to any such
other shares and the determination of the Board of Directors as
to any such adjustment shall be conclusive.
(i) No adjustment shall be made pursuant to this
Section 3.6 (i) if the effect thereof would be to reduce the
Conversion Price below the par value of the Common Stock or (ii)
subject to Section 3.6(d) hereof, with respect to any share of
Series F Stock that is converted, prior to the time such
adjustment otherwise would be made.
3.7 In the event that on or after the date of the
Certificate, either (a) any consolidation or merger to which the
Corporation is a party, other than a merger or consolidation in which the
Corporation is the surviving or continuing corporation and that does not
result in any reclassification of, or change (other than a change in par
value or from par value to no par value or from no par value to par value,
or as a result of a subdivision or combination) in, outstanding shares of
Common Stock or (b) any sale or conveyance of all or substantially all of
the property and assets of the Corporation, then lawful provision shall be
made as part of the terms of such transaction whereby the holder of each
share of Series F Stock shall have the right thereafter, during the period
such share shall be convertible or exchangeable, to convert such share into
or have such shares exchanged for the kind and amount of shares of stock or
other securities and property receivable upon such consolidation, merger,
sale or conveyance by a holder of the number of shares of Common Stock into
which such shares of this Series could have been converted or exchanged
immediately prior to such consolidation, merger, sale or conveyance,
subject to
<PAGE>
adjustment that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3 (based on (i) the election, if
any, made in writing to the Corporation by the record holder (as of the
date used for determining holders of Common Stock entitled to make such
election) of the largest number of shares of Series F Stock on or prior to
the last date on which a holder of Common Stock may make an election
regarding the kind or amount of securities or other property receivable by
such holder in such transaction or (ii) if no such election is timely made,
an assumption that such holder failed to exercise any such rights (provided
that if the kind or amount of securities or other property is not the same
for each nonelecting holder, then the kind and amount of securities or
other property receivable shall be based upon the kind and amount of
securities or other property receivable by a plurality of the nonelecting
holders of Common Stock)). In the event that any of the transactions
referred to in clauses (a) or (b) involves the distribution of cash or
property (other than equity securities) to a holder of Common Stock, lawful
provision shall be made as part of the terms of the transaction whereby the
holder of each share of Series F Stock on the record date fixed for
determining holders of Common Stock entitled to receive such cash or
property (or if no such record date is established, the effective date of
such transaction) shall be entitled to receive the amount of cash or
property that such holder would have been entitled to receive had such
holder converted his shares of Series F Stock into Common Stock immediately
prior to such record date (or effective date) (based on the election or
nonelection made by the record holder of the largest number of shares of
Series F Stock, as provided above). Concurrently with the mailing to
holders of Common Stock of any document pursuant to which such holders may
make an election regarding the kind or amount of securities or other
property that will be receivable by such holder in any transaction
described in clause (a) or (b) of the first sentence of this Section 3.7,
the Corporation shall mail a copy thereof to the record holders of the
Series F Stock as of the date used for determining the holders of record of
Common Stock entitled to such mailing. The Corporation shall not enter into
any of the transactions referred to in clauses (a) or (b) of the preceding
sentence unless effective provision shall be made in the certificate or
articles of incorporation or other constituent documents of the Corporation
or the entity surviving the consolidation or merger, if other than the
Corporation, or the entity acquiring the Corporation's assets, as the case
may be, so
<PAGE>
as to give effect to the provisions set forth in this Section 3.7. The
provisions of this Section 3.7 shall apply similarly to successive
consolidations, mergers, sales or conveyances. For purposes of this Section
3.7, the term "Corporation" shall refer to the Corporation (as defined in
Section 1.12) as constituted immediately prior to the merger, consolidation
or other transaction referred to in this Section.
3.8 The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
stock, for the purpose of effecting the conversion of the shares of this
Series, such number of its duly authorized shares of Common Stock (or, if
applicable, any other shares of Capital Stock of the Corporation) as shall
from time to time be sufficient to effect the conversion of all outstanding
shares of this Series into such Common Stock (or such other shares of
Capital Stock) at any time (assuming that, at the time of the computation
of such number of shares, all such Common Stock (or such other shares of
Capital Stock) would be held by a single holder); provided, however, that
nothing contained herein shall preclude the Corporation from satisfying its
obligations in respect of the conversion of the shares by delivery of
purchased shares of Common Stock (or such other shares of Capital Stock)
that are held in the treasury of the Corporation. All shares of Common
Stock (or such other shares of Capital Stock of the Corporation) that shall
be deliverable upon conversion of the shares of this Series shall be duly
and validly issued, fully paid and nonassessable. For purposes of this
Section 3, any shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Corporation.
3.9 If any shares of Common Stock that would be issuable
upon conversion (or pursuant to redemption or exchange) of shares of this
Series hereunder require registration with or approval of any governmental
authority before such shares may be issued upon conversion, the Corporation
will in good faith and as expeditiously as possible cause such shares to be
duly registered or approved, as the case may be. The Corporation will use
commercially reasonable efforts to list the shares of (or depositary shares
representing fractional interests in) Common Stock or other shares of
Capital Stock required to be delivered upon conversion of shares of this
Series prior to such delivery upon the principal national securities
exchange upon which the outstanding Common Stock (or other
<PAGE>
shares of Capital Stock) is listed at the time of such delivery.
3.10 The Corporation shall pay any and all issue or other
taxes that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion (or pursuant to redemption or exchange) of
shares of this Series pursuant hereto. The Corporation shall not, however,
be required to pay any tax that is payable in respect of any transfer
involved in the issue or delivery of Common Stock or such other shares of
Capital Stock in a name other than that in which the shares of this Series
so converted were registered, and no such issue or delivery shall be made
unless and until the Person requesting such issue has paid to the
Corporation the amount of such tax, or has established, to the satisfaction
of the Corporation, that such tax has been paid.
3.11 In case of (i) the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, (ii) any Pro
Rata Repurchase or (iii) any action triggering an adjustment to the
Conversion Rate pursuant to this Section 3, then, in each case, the
Corporation shall cause to be filed with the transfer agent or agents for
the Series F Stock, and shall cause to be mailed, first-class postage
prepaid, to the holders of record of the outstanding shares of Series F
Stock, at least fifteen (15) days prior to the applicable record date for
any such transaction (or if no record date will be established, the
effective date thereof), a notice stating (x) the date, if any, on which a
record is to be taken for the purpose of any such transaction (or, if no
record date will be established, the date as of which holders or record of
Common Stock entitled to participate in such transaction are determined),
and (y) the expected effective date thereof. Failure to give such notice or
any defect therein shall not affect the legality or validity of the
proceedings described in this Section 3.11.
4. Redemption or Exchange.
4.1 (a) The Corporation may, at its sole option, subject to
Section 2.2 hereof, from time to time on and after January 4, 2001, in the
case of clause (i) or (iii) of Section 4.1(b), and on and after January 4,
2000, in the case of clause (ii) of Section 4.1(b), redeem, out of funds
legally available therefor, or, as provided below, exchange shares of
Common Stock for, all (or in the case of
<PAGE>
Section 4.1(b)(i), any part) of the outstanding shares of this Series. The
redemption price for each share of this Series called for redemption
pursuant to clause (i) of Section 4.1(b) shall be the Liquidation Value
together with an amount equal to the accrued and unpaid dividends to the
date fixed for redemption (hereinafter collectively referred to as the
"Redemption Price"). The exchange price for each share of this Series
called for exchange pursuant to clause (ii) of Section 4.1(b) shall be a
number of shares of Common Stock equal to the Conversion Rate, together
with, at the option of the Corporation, either (x) cash or (y) a number of
shares of Common Stock, valued at the Closing Price on the Trading Day
immediately preceding the date fixed for exchange, equal, in either case,
to the aggregate amount of accrued and unpaid dividends on the Series F
Stock to the date fixed for exchange (hereinafter collectively referred to
as the "Exchange Price").
(b) On the date fixed for redemption or exchange the Corporation
shall, at its option, effect either
(i) a redemption of the shares of this Series to be
redeemed by way of payment, out of funds legally available
therefor, of cash equal to the aggregate Redemption Price for the
shares of this Series then being redeemed;
(ii) an exchange of the shares of this Series for the
Exchange Price in shares of Common Stock (provided that the
Corporation shall be entitled to deliver cash (A) in lieu of any
fractional share of Common Stock (determined in a manner
consistent with Section 3.3) and (B) equal to accrued and unpaid
dividends to the date fixed for exchange in lieu of shares of
Common Stock); or
(iii) any combination thereof with respect to each
share of this Series called for redemption or exchange.
(c) Notwithstanding clauses (ii) and (iii) of Section 4.1(b), the
Corporation shall be entitled to effect an exchange of shares of Series F
Stock for Common Stock (or other shares of Capital Stock) only to the
extent Common Stock (or other shares of Capital Stock) shall be available
for issuance (including delivery of previously issued shares of Common
Stock held in the Corporation's treasury on the date fixed for exchange),
which shares shall be duly and
<PAGE>
validly issued, fully paid and non-assessable. Certificates for shares of
Common Stock issued in exchange for surrendered shares of this Series
pursuant to this Section 4.1 shall be made available by the Corporation not
later than the fifth Trading Day following the date for exchange.
4.2 In the event that fewer than all the outstanding shares
of this Series are to be redeemed pursuant to Section 4.1(b)(i), the number
of shares to be redeemed from each holder of shares of this Series shall be
determined by the Corporation by lot or pro rata or by any other method as
may be determined by the Board of Directors in its sole discretion to be
equitable, and the certificate of the Corporation's Secretary or an
Assistant Secretary filed with the transfer agent or transfer agents for
this Series in respect of such determination by the Board of Directors
shall be conclusive.
4.3 In the event the Corporation shall redeem or exchange
shares of this Series pursuant to Section 4.1, notice of such redemption or
exchange shall be given by first class mail, postage prepaid, mailed not
less than fifteen (15) nor more than sixty (60) days prior to the date
fixed for redemption or exchange, as the case may be, to each record holder
of the shares to be redeemed or exchanged, at such holder's address as the
same appears on the books of the Corporation. Each such notice shall state:
(i) whether the shares of this Series are to be redeemed or exchanged; (ii)
the time and date as of which the redemption or exchange shall occur; (iii)
the total number of shares of this Series to be redeemed or exchanged and,
if fewer than all the shares held by such holder are to be redeemed, the
number of such shares to be redeemed from such holder; (iv) the Redemption
Price or the Exchange Price, as the case may be; (v) that shares of this
Series called for redemption or exchange may be converted at any time prior
to the time and date fixed for redemption or exchange (unless the
Corporation shall, in the case of a redemption, default in payment of the
Redemption Price or, in the case of an exchange, fail to exchange the
shares of this Series for the applicable number of shares of Common Stock
and any cash portion of the Exchange Price or shall exercise its right to
rescind such redemption pursuant to Section 4.5, in which case such right
of conversion shall not terminate at such time and date); (vi) the
applicable Conversion Price and Conversion Rate; (vii) the place or places
where certificates for such shares are to be surrendered for
<PAGE>
payment of the Redemption Price, in the case of redemption, or for delivery
of certificates representing the shares of Common Stock and the payment of
any cash portion of the Exchange Price, in the case of exchange; and (viii)
that, subject to Section 4.4 of this Certificate, dividends on the shares
of this Series to be redeemed or exchanged will cease to accrue on such
redemption or exchange date.
4.4 If notice of redemption or exchange shall have been
given by the Corporation as provided in Section 4.3, dividends on the
shares of this Series so called for redemption or exchange shall cease to
accrue, such shares shall no longer be deemed to be outstanding, and all
rights of the holders thereof as stockholders with respect to shares so
called for redemption or exchange (except (i) in the case of redemption,
the right to receive from the Corporation the Redemption Price without
interest and in the case of exchange, the right to receive from the
Corporation the Exchange Price without interest and (ii) the right to
convert such shares in accordance with Section 3) shall cease (including
any right to receive dividends otherwise payable on any Dividend Payment
Date that would have occurred after the time and date of redemption or
exchange) either (i) in the case of a redemption or exchange pursuant to
Section 4.1, from and after the time and date fixed in the notice of
redemption or exchange as the time and date of redemption or exchange
(unless the Corporation shall (x) in the case of a redemption, default in
the payment of the Redemption Price, (y) in the case of an exchange, fail
to exchange the applicable number of shares of Common Stock and any cash
portion of the Exchange Price or (z) exercise its right to rescind such
redemption pursuant to Section 4.5, in which case such rights shall not
terminate at such time and date) or (ii) if the Corporation shall so elect
and state in the notice of redemption or exchange, from and after the time
and date (which date shall be the date fixed for redemption or exchange or
an earlier date not less than fifteen (15) days after the date of mailing
of the redemption or exchange notice) on which the Corporation shall
irrevocably deposit with a designated bank or trust company doing business
in the Borough of Manhattan, City and State of New York, as paying agent,
money sufficient to pay at the office of such paying agent, on the
redemption date, the Redemption Price, in the case of redemption, or
certificates representing the shares of Common Stock to be so exchanged and
any cash portion of the Exchange Price, in the case of an exchange. Any
money or certificates so deposited with any such paying agent that
<PAGE>
shall not be required for such redemption or exchange because of the
exercise of any right of conversion or otherwise shall be returned to the
Corporation forthwith. Upon surrender (in accordance with the notice of
redemption or exchange) of the certificate or certificates for any shares
of this Series to be so redeemed or exchanged (properly endorsed or
assigned for transfer, if the Corporation shall so require and the notice
of redemption or exchange shall so state), such shares shall be redeemed or
exchanged by the Corporation at the Redemption Price or the Exchange Price,
as applicable, as set forth in Section 4.1 (unless the Corporation shall
have exercised its right to rescind such redemption pursuant to Section
4.5). In case fewer than all the shares represented by any such certificate
are to be redeemed, a new certificate shall be issued representing the
unredeemed shares (or fractions thereof as provided in Section 7.4),
without cost to the holder thereof, together with the amount of cash, if
any, in lieu of fractional shares other than those issuable in accordance
with Section 7.4. Subject to applicable escheat laws, any moneys so set
aside by the Corporation in the case of redemption and unclaimed at the end
of one year from the redemption date shall revert to the general funds of
the Corporation, after which reversion the holders of such shares so called
for redemption or exchange shall look only to the general funds of the
Corporation for the payment of the Redemption Price or the Exchange Price,
as applicable, without interest. Any interest accrued on funds so deposited
shall be paid to the Corporation from time to time.
4.5 In the event that a Redemption Rescission Event shall
occur following any day on which a notice of redemption shall have been
given pursuant to Section 4.3 but at or prior to the earlier of (a) the
time and date fixed for redemption as set forth in such notice of
redemption and (b) the time and date at which the Corporation shall have
irrevocably deposited funds or certificates with a designated bank or trust
company pursuant to Section 4.4, the Corporation may, at its sole option,
at any time prior to the earliest of (i) the close of business on that day
which is two (2) Trading Days following such Redemption Rescission Event,
(ii) the time and date fixed for redemption as set forth in such notice and
(iii) the time and date on which the Corporation shall have irrevocably
deposited such funds with a designated bank or trust company, rescind the
redemption under Section 4.1(b)(i) to which such notice of redemption shall
<PAGE>
have related by making a public announcement of such rescission (the date
on which such public announcement shall have been made being hereinafter
referred to as the "Rescission Date"). The Corporation shall be deemed to
have made such announcement if it shall issue a release to the Dow Jones
News Service, Reuters Information Services or any successor news wire
service. From and after the making of such announcement, the Corporation
shall have no obligation to redeem shares of this Series called for
redemption pursuant to such notice of redemption or to pay the redemption
price therefor and all rights of holders of shares of this Series shall be
restored as if such notice of redemption had not been given. The
Corporation shall give notice of any such rescission by one of the means
specified in Section 7.2 as promptly as practicable, but in no event later
than the close of business on that date which is five (5) Trading Days
following the Rescission Date to each record holder of shares of this
Series at the close of business on the Rescission Date and to any other
Person or entity that was a record holder of shares of this Series and that
shall have surrendered shares of this Series for conversion following the
giving of notice of the subsequently rescinded redemption. Each notice of
rescission shall (w) state that the redemption described in the notice of
redemption has been rescinded, (x) state that any Converting Holder shall
be entitled to rescind the conversion of shares of this Series surrendered
for conversion following the day on which notice of redemption was given
but prior to the close of business on the later of (1) the Trading Day next
succeeding the date on which public announcement of the rescission of such
redemption shall have been made and (2) the Trading Day on which the
Corporation's notice of rescission is deemed given pursuant to Section 7.2,
(y) be accompanied by a form prescribed by the Corporation to be used by
any Converting Holder rescinding the conversion of shares so surrendered
for conversion (and instructions for the completion and delivery of such
form, including instructions with respect to payments that may be required
to accompany such delivery shall be in accordance with Section 3.5) and (z)
state that such form must be properly completed and received by the
Corporation no later than the close of business on a date that shall be ten
(10) Trading Days following the date such notice of rescission is deemed
given pursuant to Section 7.2.
4.6 The shares of this Series shall not be subject to the
provisions of Section 5 of Article IV of the Certificate of Incorporation.
<PAGE>
5. Voting. The shares of this Series shall have no voting rights
except as required by law or as set forth below.
5.1 Each share of this Series shall be entitled to vote
together with holders of the shares of Common Stock (and any other class or
series that may similarly be entitled to vote with the shares of Common
Stock) as a single class upon all matters upon which holders of Common
Stock are entitled to vote. In any such vote, the holders of this Series
shall be entitled to two (2) votes per $100 of Liquidation Value of Series
F Stock, subject to adjustment at the same time and in the same manner as
each adjustment of the Conversion Rate pursuant to Section 3, so that the
holders of this Series shall be entitled following such adjustment to the
number of votes equal to the number of votes such holders were entitled to
under this Section 5.1 immediately prior to such adjustment multiplied by a
fraction (x) the numerator of which is the Conversion Rate as adjusted
pursuant to Section 3 and (y) the denominator of which is the Conversion
Rate immediately prior to such adjustment.
5.2(a) So long as any shares of this Series remain
outstanding, unless a greater percentage shall then be required by law, the
Corporation shall not, without the affirmative vote at a meeting or the
written consent with or without a meeting of the holders of shares of this
Series representing at least 66-2/3% of the aggregate voting power of
shares of this Series then outstanding (i) authorize any Senior Stock or
reclassify (by merger, consolidation or otherwise) any Junior Stock or
Parity Stock as Senior Stock, (ii) merge into or consolidate with any
Person where the surviving or continuing corporation will have any
authorized Senior Stock other than Capital Stock corresponding to shares of
Senior Stock existing immediately before such merger or consolidation) or
(iii) amend, alter or repeal any of the provisions of the Certificate or
the Certificate of Incorporation, so as in any such case to adversely
affect the voting powers, designations, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of the shares of this Series.
(b) No consent of holders of shares of this Series shall be
required for (i) the creation of any indebtedness of any kind of the
Corporation, (ii) the authorization or issuance of any class of Junior
Stock or
<PAGE>
Parity Stock, (iii) the authorization, designation or issuance of
additional shares of Series F Stock (to the extent provided in the
Agreement and Plan of Merger dated as of February 6, 1995, among
Cablevision Industries Corporation, Alan Gerry, a Delaware corporation
known on such date as "Time Warner Inc." and TW CVI Acquisition Corp.)
or (iv) subject to Section 5.2(a), the authorization or issuance of
any other shares of Preferred Stock.
5.3(a) If and whenever at any time or times dividends
payable on shares of this Series shall have been in arrears and unpaid in
an aggregate amount equal to or exceeding the amount of dividends payable
thereon for six quarterly dividend periods, then the number of directors
constituting the Board of Directors shall be increased by two and the
holders of shares of this Series, together with the holders of any shares
of any Parity Stock as to which in each case dividends are in arrears and
unpaid in an aggregate amount equal to or exceeding the amount of dividends
payable thereon for six quarterly dividend periods, shall have the
exclusive right, voting separately as a class with such other series, to
elect two directors of the Corporation.
(b) Such voting right may be exercised initially either by
written consent or at a special meeting of the holders of the Preferred
Stock having such voting right, called as hereinafter provided, or at any
annual meeting of stockholders held for the purpose of electing directors,
and thereafter at each such annual meeting until such time as all dividends
in arrears on the shares of this Series shall have been paid in full and
all dividends payable on the shares of this Series on four subsequent
consecutive Dividend Payment Dates shall have been paid in full on such
dates or funds shall have been set aside for the payment thereof, at which
time such voting right and the term of the directors elected pursuant to
Section 5.3(a) shall terminate.
(c) At any time when such voting right shall have vested in
holders of shares of such series of Preferred Stock described in Section
5.3(a), and if such right shall not already have been exercised by written
consent, a proper officer of the Corporation may call, and, upon the
written request, addressed to the Secretary of the Corporation, of the
record holders of shares representing twenty-five percent (25%) of the
voting power of the shares then outstanding of such Preferred Stock having
such voting right, shall call, a special meeting of the holders of such
Preferred Stock having such voting right. Such meeting shall be held at the
earliest practicable date upon the notice required for annual meetings of
stockholders at the
<PAGE>
place for holding annual meetings of stockholders, or, if none, at a place
designated by the Board of Directors. Notwithstanding the provisions of
this Section 5.3(c), no such special meeting shall be called during a
period within 60 days immediately preceding the date fixed for the next
annual meeting of stockholders.
(d) At any meeting held for the purpose of electing
directors at which the holders of such Preferred Stock shall have the right
to elect directors as provided herein, the presence in person or by proxy
of the holders of shares representing more than fifty percent (50%) in
voting power of the then outstanding shares of such Preferred Stock having
such right shall be required and shall be sufficient to constitute a quorum
of such class for the election of directors by such class.
(e) Any director elected by holders of Preferred Stock
pursuant to the voting right created under this Section 5.3 shall hold
office until the next annual meeting of stockholders (unless such term has
previously terminated pursuant to Section 5.3(b)) and any vacancy in
respect of any such director shall be filled only by vote of the remaining
director so elected, or if there be no such remaining director, by the
holders of such Preferred Stock entitled to elect such director or
directors by written consent or at a special meeting called in accordance
with the procedures set forth in Section 5.3(c), or, if no special meeting
is called or written consent executed, at the next annual meeting of
stockholders. Upon any termination of such voting right, subject to
applicable law, the term of office of all directors elected by holders of
such Preferred Stock voting separately as a class pursuant to this Section
5.3 shall terminate.
(f) In exercising the voting rights set forth in this
Section 5.3, each share of this Series shall have a number of votes equal
to its Liquidation Value.
6. Liquidation Rights.
6.1 Upon the dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, the holders of the shares of
this Series shall be entitled to receive out of the assets of the
Corporation available for distribution to stockholders, in preference to
the holders of, and before any payment or distribution shall be made on,
Junior Stock, the amount of $100 per share (the
<PAGE>
"Liquidation Value") plus an amount equal to all accrued and unpaid
dividends to the date of final distribution. The Liquidation Value shall be
subject to adjustment from time to time to appropriately give effect to any
split or combination of the shares of this Series.
6.2 Neither the sale, exchange or other conveyance (for
cash, shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation nor the merger
or consolidation of the Corporation into or with any other corporation, or
the merger or consolidation of any other corporation into or with the
Corporation, shall be deemed to be a dissolution, liquidation or winding
up, voluntary or involuntary, for the purposes of this Section 6.
6.3 After the payment to the holders of the shares of this
Series of full preferential amounts provided for in this Section 6, the
holders of this Series as such shall have no right or claim to any of the
remaining assets of the Corporation.
6.4 In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to Section 6.1, no such distribution shall be
made on account of any shares of any Parity Stock upon such dissolution,
liquidation or winding up unless proportionate distributive amounts shall
be paid on account of the shares of this Series, ratably, in proportion to
the full distributable amounts for which holders of all Parity Stock are
entitled upon such dissolution, liquidation or winding up.
7. Other Provisions.
7.1 All notices from the Corporation to the holders shall be
given by one of the methods specified in Section 7.2. With respect to any
notice to a holder of shares of this Series required to be provided
hereunder, neither failure to give such notice, nor any defect therein or
in the transmission thereof, to any particular holder shall affect the
sufficiency of the notice or the validity of the proceedings referred to in
such notice with respect to the other holders or affect the legality or
validity of any distribution, right, warrant, reclassification,
<PAGE>
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up, or the vote upon any such action. Any notice that was mailed in
the manner herein provided shall be conclusively presumed to have been duly
given whether or not the holder receives the notice.
7.2 All notices and other communications hereunder shall be
deemed given (i) on the first Trading Day following the date received, if
delivered personally, (ii) on the Trading Day following timely deposit with
an overnight courier service, if sent by overnight courier specifying next
day delivery and (iii) on the first Trading Day that is at least five days
following deposit in the mails, if sent by first class mail to (x) a holder
at its last address as it appears on the transfer records or registry for
the Series F Stock and (y) the Corporation at the following address (or at
such other address as the Corporation shall specify in a notice pursuant to
this Section 7.2): TW Inc., 75 Rockefeller Plaza, New York, New York 10019,
Attention: General Counsel.
7.3 Any shares of this Series that have been converted,
redeemed, exchanged or otherwise acquired by the Corporation shall, after
such conversion, redemption, exchange or acquisition, as the case may be,
be retired and promptly cancelled and the Corporation shall take all
appropriate action to cause such shares to obtain the status of authorized
but unissued shares of Preferred Stock, without designation as to series,
until such shares are once more designated as part of a particular series
by the Board of Directors. The Corporation may cause a certificate setting
forth a resolution adopted by the Board of Directors that none of the
authorized shares of this Series are outstanding to be filed with the
Secretary of State of the State of Delaware. When such certificate becomes
effective, all matters set forth in the Certificate with respect to the
Series F Stock shall be eliminated from the Certificate of Incorporation
and the shares of Preferred Stock designated hereby as Series F Stock shall
have the status of authorized and unissued shares of Preferred Stock and
may be reissued as part of any new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors.
7.4 The shares of this Series shall be issuable in whole
shares or, if authorized by the Board of Directors, in any fraction of a
whole share so authorized or any integral multiple of such fraction.
<PAGE>
7.5 The Corporation shall be entitled to recognize the
exclusive right of a Person registered on its records as the holder of
shares of this Series, and such record holder shall be deemed the holder of
such shares for all purposes.
7.6 All notice periods referred to in the Certificate shall
commence on the date of the mailing of the applicable notice.
7.7 Any registered holder of Series F Stock may proceed to
protect and enforce its rights by any available remedy by proceeding at law
or in equity to protect and enforce any such rights, whether for the
specific enforcement of any provision in this Certificate or in aid of the
exercise of any power granted herein, or to enforce any other proper
remedy.
IN WITNESS WHEREOF, TW Inc. has caused this certificate to
be signed this 10th day of October, 1996.
TW INC.,
by /s/ Thomas W. McEnerney
--------------------------
Name: Thomas W. McEnerney
Title: Vice President
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF SERIES G CONVERTIBLE
PREFERRED STOCK
OF
TW INC.
-------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
-------------------
TW INC., hereafter to be renamed "Time Warner Inc." (the
"Corporation"), a corporation organized and existing by virtue of the
General Corporation Law of the State of Delaware (the "DGCL"), does
hereby certify that the following resolution was duly adopted by
action of the Board of Directors of the Corporation (the "Board of
Directors") at a meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly granted to
and vested in the Board of Directors by the provisions of Section 2 of
Article IV of the Restated Certificate of Incorporation of the
Corporation, as amended from time to time (the "Certificate of
Incorporation"), and Section 151(g) of the DGCL, the Board of
Directors hereby creates, from the authorized shares of Preferred
Stock, par value $.10 per share ("Preferred Stock"), of the
Corporation authorized to be issued pursuant to the Certificate of
Incorporation, a series of Preferred Stock, and hereby fixes the
voting powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of the shares of such series as follows:
The series of Preferred Stock hereby established shall
consist of 6,200,000 shares designated as Series G Convertible
Preferred Stock. The rights, preferences and limitations of such
series shall be as follows:
<PAGE>
1. Definitions. As used herein, the following terms shall
have the indicated meanings:
1.1 "Accrued Dividend Amount" shall mean the aggregate
amount of accrued and unpaid dividends on a share of Series G Stock to
and including the Conversion Date, except that if the Conversion Date
shall occur after a Record Date and prior to a related Dividend
Payment Date, the Accrued Dividend Amount shall not include any
accrued and unpaid dividends for the period from and after the most
recent Dividend Payment Date.
1.2 "Board of Directors" shall mean the Board of
Directors of the Corporation or, with respect to any action to be
taken by the Board of Directors, any committee of the Board of
Directors duly authorized to take such action.
1.3 "Capital Stock" shall mean any and all shares of
corporate stock of a Person (however designated and whether
representing rights to vote, rights to participate in dividends or
distributions upon liquidation or otherwise with respect to such
Person, or any division or subsidiary thereof, or any joint venture,
partnership, corporation or other entity).
1.4 "Certificate" shall mean the certificate of the
voting powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of Series G Convertible Preferred Stock filed
with respect to this resolution with the Secretary of State of the
State of Delaware pursuant to Section 151 of the DGCL.
1.5 "Change of Control" and "Change of Control Date"
shall have the following meanings: "Change of Control" shall mean the
occurrence of one or both of the following events: (a) individuals who
would constitute a majority of the members of the Board of Directors
elected at any meeting of stockholders or by written consent (without
regard to any members of the Board of Directors elected pursuant to
the terms of any series of Preferred Stock) shall be elected to the
Board of Directors and the election or the nomination for election by
the Corporation's stockholders of such directors was not approved by a
vote of at least a majority of the directors in office immediately
prior to such election (in which event "Change of Control Date" shall
mean the date of such election) or (b) a Person
<PAGE>
or group of Persons acting in concert as a partnership, limited
partnership, syndicate or other group within the meaning of Rule 13d-3
under the Exchange Act (the "Acquiring Person") shall, as a result of
a tender or exchange offer, open market purchases, privately
negotiated purchases, share repurchases or redemptions or otherwise,
have become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of 40% or more of the outstanding shares of
Common Stock (in which event "Change of Control Date" shall mean the
date of the event resulting in such 40% ownership).
1.6 "Closing Price" of the Common Stock shall mean the
last reported sale price of the Common Stock (regular way) as shown on
the Composite Tape of the NYSE, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices on the
NYSE, or, if the Common Stock is not listed or admitted to trading on
the NYSE, on the principal national securities exchange on which such
stock is listed or admitted to trading, or, if it is not listed or
admitted to trading on any national securities exchange, the last
reported sale price of the Common Stock, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, in either case as reported by NASDAQ.
1.7 "Common Dividend Deficiency" shall be applicable in
the event that a Conversion Date shall fall after a record date and
prior to the related payment date for a regularly scheduled cash
dividend on the Common Stock (the "Common Dividend Payment Date"), and
in such event shall mean the product of (i) the Conversion Rate, (ii)
the amount per share of Common Stock of the regularly scheduled cash
dividend for which the record date has been set but a payment date has
not yet occurred and (ii) a fraction (A) the numerator of which is the
number of calendar days from and excluding the Conversion Date (or in
the event the Conversion Date falls after a Record Date and on or
prior to a related Dividend Payment Date, from and excluding the
Dividend Payment Date) to and including the Common Dividend Payment
Date and (B) the denominator of which is 91 (provided that such
fraction shall not be greater than one (1)).
1.8 "Common Dividend Excess" shall be applicable in all
circumstances where a Common Dividend Deficiency is not applicable,
and in such event shall mean the product of (i) the Conversion Rate,
(ii) the regular quarterly cash dividend per share, if any, paid by
the
<PAGE>
Corporation on the Common Stock (the "Historical Dividend") on the
most recent dividend payment date for the Common Stock (the "Prior
Dividend Payment Date") occurring during the four months immediately
preceding the Conversion Date and (iii) a fraction (A) the numerator
of which is the number of calendar days from and excluding (1) the
Prior Dividend Payment Date to and including (2) the Conversion Date
(or in the event the Conversion Date falls after a Record Date and on
or prior to a related Dividend Payment Date, to and including the
Dividend Payment Date) and (B) the denominator of which is 91 days
(provided that in no event shall the fraction be greater than one
(1)).
1.9 "Common Stock" shall mean the class of Common
Stock, par value $.01 per share, of the Corporation authorized at the
date of the Certificate, or any other class of stock resulting from
(x) successive changes or reclassifications of such Common Stock
consisting of changes in par value, or from par value to no par value,
(y) a subdivision or combination or (z) any other changes for which an
adjustment is made under Section 3.6(a), and in any such case
including any shares thereof authorized after the date of the
Certificate, together with any associated rights to purchase other
securities of the Corporation that are at the time represented by the
certificates representing such shares of Common Stock.
1.10 "Conversion Date" shall have the meaning set forth
in Section 3.5 hereof.
1.11 "Conversion Price" at any time shall mean the
Liquidation Value per share divided by the Conversion Rate in effect
at such time (rounded to the nearest one hundredth of a cent).
1.12 "Conversion Rate" shall have the meaning set forth
in Section 3.1 hereof.
1.13 "Converting Holder" shall have the meaning set
forth in Section 3.5 hereof.
1.14 "Corporation" shall mean TW Inc., a Delaware
corporation, and any of its successors by operation of law, including
by merger, consolidation or sale or conveyance of all or substantially
all of its property and assets.
<PAGE>
1.15 "Current Market Price" of the Common Stock on any
date shall mean the average of the daily Closing Prices per share of
the Common Stock for the five (5) consecutive Trading Days ending on
the Trading Day immediately preceding the applicable record date,
conversion date, redemption date or exchange date referred to in
Section 3 or Section 4.
1.16 "Dividend Payment Date" shall have the meaning set
forth in Section 2.1 hereof.
1.17 "DGCL" shall mean the General Corporation Law of
the State of Delaware.
1.18 "Exchange Act" shall mean Securities Exchange Act
of 1934, as amended.
1.19 "Exchange Price" shall have the meaning set forth
in Section 4.1 hereof.
1.20 "Junior Stock" shall mean the Common Stock, the
Series A Stock, the Series LMC Stock, the Series LMCN-V Stock and the
shares of any other class or series of Capital Stock of the
Corporation that, by the terms of the Certificate of Incorporation or
of the instrument by which the Board of Directors, acting pursuant to
authority granted in the Certificate of Incorporation, shall fix the
relative rights, preferences and limitations thereof, shall be junior
to the Series G Stock in respect of the right to receive dividends or
to participate in any distribution of assets other than by way of
dividends.
1.21 "Liquidation Value" shall have the meaning set
forth in Section 7.1 hereof.
1.22 "NASDAQ" shall mean the Nasdaq Stock Market.
1.23 "Net Dividend Amount" shall have the meaning set
forth in Section 3.1 hereof.
1.24 "NYSE" shall mean the New York Stock Exchange, Inc.
1.25 "Parity Stock" shall mean the Series D Stock, the
Series E Stock, the Series F Stock, the Series H Stock, the Series I
Stock, the Series J Stock, the Series L Stock, the Series M Stock and
the shares of any other class
<PAGE>
or series of Capital Stock of the Corporation that, by the terms of
the Certificate of Incorporation or of the instrument by which the
Board of Directors, acting pursuant to authority granted in the
Certificate of Incorporation, shall fix the relative rights,
preferences and limitations thereof, shall, in the event that the
stated dividends thereon are not paid in full, be entitled to share
ratably with the Series G Stock in the payment of dividends, including
accumulations, if any, in accordance with the sums that would be
payable on such shares if all dividends were declared and paid in
full, or shall, in the event that the amounts payable thereon on
liquidation are not paid in full, be entitled to share ratably with
the Series G Stock in any distribution of assets other than by way of
dividends in accordance with the sums that would be payable in such
distribution if all sums payable were discharged in full; provided,
however, that the term "Parity Stock" shall be deemed to refer (i) in
Section 2.2 hereof, to any stock that is Parity Stock in respect of
dividend rights; (ii) in Section 7 hereof, to any stock that is Parity
Stock in respect of the distribution of assets; and (iii) in Sections
6.2 and 6.3 hereof, to any stock that is Parity Stock in respect of
either dividend rights or the distribution of assets and that,
pursuant to the Certificate of Incorporation or any instrument in
which the Board of Directors, acting pursuant to authority granted in
the Certificate of Incorporation, shall so designate, is entitled to
vote with the holders of Series G Stock.
1.26 "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
1.27 "Preferred Stock" shall mean the class of
Preferred Stock, par value $.10 per share, of the Corporation
authorized at the date of the Certificate, including any shares
thereof authorized after the date of the Certificate.
1.28 "Pro Rata Portion" shall have the meaning set forth
in Section 5.6 hereof.
1.29 "Pro Rata Repurchase" shall mean the purchase of
shares of Common Stock by the Corporation or by any of its
subsidiaries, whether for cash or other property or securities of the
Corporation, which purchase is subject to Section 13(e) of the
Exchange Act or is made pursuant to an offer made available to all
holders of Common Stock, but
<PAGE>
excluding any purchase made in open market transactions that satisfies
the conditions of clause (b) of Rule 10b-18 under the Exchange Act or
has been designed (as reasonably determined by the Board of Directors)
to prevent such purchase from having a material effect on the trading
market of the Common Stock. The "Effective Date" of a Pro Rata
Repurchase shall mean the applicable expiration date (including all
extensions thereof) of any tender or exchange offer that is a Pro Rata
Repurchase or the date of purchase with respect to any Pro Rata
Repurchase that is not a tender or exchange offer.
1.30 "Record Date" shall have the meaning set forth in
Section 2.1 hereof.
1.31 "Redemption Price" shall have the meaning set forth
in Section 4.1 hereof.
1.32 "Redemption Rescission Event" shall mean the
occurrence of (a) any general suspension of trading in, or limitation
on prices for, securities on the principal national securities
exchange on which shares of Common Stock are registered and listed for
trading (or, if shares of Common Stock are not registered and listed
for trading on any such exchange, in the over-the-counter market) for
more than six-and-one-half (6-1/2) consecutive trading hours, (b) any
decline in either the Dow Jones Industrial Average or the Standard &
Poor's Index of 400 Industrial Companies (or any successor index
published by Dow Jones & Company, Inc. or Standard & Poor's
Corporation) by either (i) an amount in excess of 10%, measured from
the close of business on any Trading Day to the close of business on
the next succeeding Trading Day during the period commencing on the
Trading Day preceding the day notice of any redemption of shares of
this Series is given (or, if such notice is given after the close of
business on a Trading Day, commencing on such Trading Day) and ending
at the earlier of (x) the time and date fixed for redemption in such
notice and (y) the time and date at which the Corporation shall have
irrevocably deposited funds with a designated bank or trust company
pursuant to Section 4.4 or (ii) an amount in excess of 15% (or, if the
time and date fixed for redemption is more than 15 days following the
date on which notice of redemption is given, 20%), measured from the
close of business on the Trading Day preceding the day notice of such
redemption is given (or, if such notice is given after the close of
business on a Trading Day, from such Trading Day) to the close of
business on any Trading Day on or prior to
<PAGE>
the earlier of the dates specified in clauses (x) and (y) above, (c) a
declaration of a banking moratorium or any suspension of payments in
respect of banks by Federal or state authorities in the United States
or (d) the commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving
the United States that in the reasonable judgment of the Corporation
could have a material adverse effect on the market for the Common
Stock.
1.33 "Rescission Date" shall have the meaning set forth
in Section 4.5 hereof.
1.34 "Senior Stock" shall mean the shares of any class
or series of Capital Stock of the Corporation that, by the terms of
the Certificate of Incorporation or of the instrument by which the
Board of Directors, acting pursuant to authority granted in the
Certificate of Incorporation, shall fix the relative rights,
preferences and limitations thereof, shall be senior to the Series G
Stock in respect of the right to receive dividends or to participate
in any distribution of assets other than by way of dividends.
1.35 "Series A Stock" shall mean the series of
Preferred Stock authorized and designated as Series A Participating
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.36 "Series D Stock" shall mean the series of
Preferred Stock authorized and designated as Series D Convertible
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.37 "Series E Stock" shall mean the series of
Preferred Stock authorized and designated as Series E Convertible
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.38 "Series F Stock" shall mean the series of
Preferred Stock authorized and designated as Series F Convertible
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
<PAGE>
1.39 "Series G Stock" and "this Series" shall mean the
series of Preferred Stock authorized and designated as the Series G
Convertible Preferred Stock, including any shares thereof authorized
and designated after the date of the Certificate.
1.40 "Series H Stock" shall mean the series of
Preferred Stock authorized and designated as Series H Convertible
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.41 "Series I Stock" shall mean the series of
Preferred Stock authorized and designated as Series I Convertible
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.42 "Series J Stock" shall mean the series of
Preferred Stock authorized and designated as Series J Convertible
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.43 "Series L Stock" shall mean the series of
Preferred Stock authorized and designated as 10-1/4% Series L
Exchangeable Preferred Stock at the date of the Certificate, including
any shares thereof authorized and designated after the date of the
Certificate.
1.44 "Series LMC Stock" shall mean the series of Series
Common Stock authorized and designated as Series LMC Common Stock at
the date of the Certificate, including any shares thereof authorized
and designated after the date of the Certificate.
1.45 "Series LMCN-V Stock" shall mean the series of
Series Common Stock authorized and designated as Series LMCN-V Common
Stock at the date of the Certificate, including any shares thereof
authorized and designated after the date of the Certificate.
1.46 "Series M Stock" shall mean the series of
Preferred Stock authorized and designated as 10-1/4% Series M
Exchangeable Preferred Stock at the date of the Certificate, including
any shares thereof authorized and designated after the date of the
Certificate.
<PAGE>
1.47 "Surrendered Shares" shall have the meaning set
forth in Section 3.5 hereof.
1.48 "Trading Day" shall mean, so long as the Common
Stock is listed or admitted to trading on the NYSE, a day on which the
NYSE is open for the transaction of business, or, if the Common Stock
is not listed or admitted to trading on the NYSE, a day on which the
principal national securities exchange on which the Common Stock is
listed is open for the transaction of business, or, if the Common
Stock is not so listed or admitted for trading on any national
securities exchange, a day on which NASDAQ is open for the transaction
of business.
2. Cash Dividends.
2.1 The holders of the outstanding Series G Stock shall
be entitled to receive quarter-annual dividends, as and when declared
by the Board of Directors out of funds legally available therefor.
Each quarter-annual dividend shall be an amount per share equal to (i)
in the case of each Dividend Payment Date (as defined below) occurring
on or prior to September 5, 1999, the greater of (A) $.9375 per $100
of Liquidation Value of Series G Stock (which is equivalent to $3.75
per annum), and (B) an amount per $100 of Liquidation Value of Series
G Stock equal to the product of (1) the Conversion Rate and (2) the
aggregate per share amount of regularly scheduled dividends paid in
cash on the Common Stock during the period from but excluding the
immediately preceding Dividend Payment Date to and including such
Dividend Payment Date (the "Preferred Dividend Amount"), and (ii) in
the case of each Dividend Payment Date occurring thereafter, an amount
per $100 of Liquidation Value of Series G Stock equal to the product
of (1) the Conversion Rate and (2) the aggregate per share amount of
regularly scheduled dividends paid in cash on the Common Stock during
the period from but excluding the immediately preceding Dividend
Payment Date to and including such Dividend Payment Date. All
dividends shall be payable in cash on or about the first day of March,
June, September and December in each year, beginning on the first such
date that is more than 15 days after the date of issuance of the
relevant shares of Series G Stock, as fixed by the Board of Directors,
or such other dates as are fixed by the Board of Directors (provided
that September 5, 1999, shall be a Dividend Payment Date) (each a
"Dividend Payment Date"), to the holders of record of Series G Stock
at the close of business on or about the Trading Day next preceding
such
<PAGE>
first day of March, June, September and December (or September 5,
1999) as the case may be, as fixed by the Board of Directors, or such
other dates as are fixed by the Board of Directors (each a "Record
Date"). Subject to the next sentence, in the case of dividends payable
in respect of periods prior to September 5, 1999, (i) such dividends
shall accrue on each share on a daily basis, whether or not there are
unrestricted funds legally available for the payment of such dividends
and whether or not earned or declared, and (ii) any such dividends
that become payable for any partial dividend period shall be computed
on the basis of the actual days elapsed in such period.
Notwithstanding the preceding sentence, the amount accruing and
payable in respect of the first dividend on the Series G Stock payable
after the date of the Certificate shall equal the Preferred Dividend
Amount. From and after September 5, 1999, dividends on the Series G
Stock (determined as to amount as provided herein) shall accrue to the
extent, but only to the extent, that regularly scheduled cash
dividends are declared by the Board of Directors on the Common Stock
with a payment date after September 5, 1999 (or, in the case of Series
G Stock originally issued after September 5, 1999, after the Dividend
Payment Date next preceding such date of original issuance). All
dividends that accrue in accordance with the foregoing provisions
shall be cumulative from and after the day immediately succeeding the
date of issuance of the relevant shares of Series G Stock. The amount
payable to each holder of record on any Dividend Payment Date shall be
rounded to the nearest cent.
2.2 Except as hereinafter provided in this Section 2.2,
unless all dividends on the outstanding shares of Series G Stock and
any Parity Stock that shall have accrued and become payable as of any
date shall have been paid, or declared and funds set apart for payment
thereof, no dividend or other distribution (payable other than in
shares of Junior Stock) shall be paid to the holders of Junior Stock
or Parity Stock, and no shares of Series G Stock, Parity Stock or
Junior Stock shall be purchased, redeemed or otherwise acquired by the
Corporation or any of its subsidiaries (except by conversion into or
exchange for Junior Stock), nor shall any monies be paid or made
available for a purchase, redemption or sinking fund for the purchase
or redemption of any Series G Stock, Junior Stock or Parity Stock.
When dividends are not paid in full upon the shares of this Series and
any Parity Stock, all dividends declared upon shares of this Series
and all Parity Stock shall be declared pro rata so that the amount of
<PAGE>
dividends declared per share on this Series and all such Parity Stock
shall in all cases bear to each other the same ratio that accrued
dividends per share on the shares of this Series and all such Parity
Stock bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or
payments on this Series that may be in arrears.
2.3 In case the Corporation shall at any time
distribute (other than a distribution in liquidation of the
Corporation) to the holders of its shares of Common Stock any assets
or property, including debt or equity securities of the Corporation
(other than Common Stock subject to a distribution or reclassification
covered by Section 3.6(a)) or of any other Person (including common
stock of such Person) or cash (but excluding regularly scheduled cash
dividends payable on shares of Common Stock), or in case the
Corporation shall at any time distribute (other than a distribution in
liquidation of the Corporation) to such holders rights, options or
warrants to subscribe for or purchase shares of Common Stock
(including shares held in the treasury of the Corporation), or rights,
options or warrants to subscribe for or purchase any other security or
rights, options or warrants to subscribe for or purchase any assets or
property (in each case, whether of the Corporation or otherwise, but
other than any distribution of rights to purchase securities of the
Corporation if the holder of shares of this Series would otherwise be
entitled to receive such rights upon conversion of shares of this
Series for Common Stock; provided, however, that if such rights are
subsequently redeemed by the Corporation, such redemption shall be
treated for purposes of this Section 2.3 as a cash dividend (but not a
regularly scheduled cash dividend) on the Common Stock), the
Corporation shall simultaneously distribute such assets, property,
securities, rights, options or warrants pro rata to the holders of
Series G Stock on the record date fixed for determining holders of
Common Stock entitled to participate in such distribution (or, if no
such record date shall be established, the effective time thereof) in
an amount equal to the amount that such holders of Series G Stock
would have been entitled to receive had their shares of Series G Stock
been converted into Common Stock immediately prior to such record date
(or effective time). In the event of a distribution to holders of
Series G Stock pursuant to this Section 2.3, such holders shall be
entitled to receive fractional shares or interests only to the extent
that holders of Common Stock are entitled to receive the
<PAGE>
same. The holders of Series G Stock on the applicable record date (or
effective time) shall be entitled to receive in lieu of such fractional
shares or interests the same consideration as is payable to holders of
Common Stock with respect thereto. If there are no fractional shares or
interests payable to holders of Common Stock, the holders of Series G
Stock on the applicable record date (or effective time) shall receive in
lieu of such fractional shares or interests the fair value thereof as
determined by the Board of Directors.
2.4 If a distribution is made in accordance with the
provisions of Section 2.3, anything in Section 3 to the contrary
notwithstanding, no adjustment pursuant to Section 3 shall be effected
by reason of the distribution of such assets, property, securities,
rights, options or warrants or the subsequent modification, exercise,
expiration or termination of such securities, rights, options or
warrants.
2.5 In the event that the holders of Common Stock are
entitled to make any election with respect to the kind or amount of
securities or other property receivable by them in any distribution
that is subject to Section 2.3, the kind and amount of securities or
other property that shall be distributable to the holders of the
Series G Stock shall be based on (i) the election, if any, made by the
record holder (as of the date used for determining the holders of
Common Stock entitled to make such election) of the largest number of
shares of Series G Stock in writing to the Corporation on or prior to
the last date on which a holder of Common Stock may make such an
election or (ii) if no such election is timely made, an assumption
that such holder failed to exercise any such rights (provided that if
the kind or amount of securities or other property is not the same for
each nonelecting holder, then the kind and amount of securities or
other property receivable by holders of the Series G Stock shall be
based on the kind or amount of securities or other property receivable
by a plurality of shares held by the nonelecting holders of Common
Stock). Concurrently with the mailing to holders of Common Stock of
any document pursuant to which such holders may make an election of
the type referred to in this Section, the Corporation shall mail a
copy thereof to the record holders of the Series G Stock as of the
date used for determining the holders of record of Common Stock
entitled to such mailing.
<PAGE>
3. Conversion Rights.
3.1 Each holder of a share of this Series shall have
the right at any time or as to any share of this Series called for
redemption or exchange, at any time prior to the close of business on
the date fixed for redemption or exchange (unless the Corporation
defaults in the payment of the Redemption Price or fails to exchange
the shares of this Series for the applicable number of shares of
Common Stock and any cash portion of the Exchange Price or exercises
its right to rescind such redemption pursuant to Section 4.5, in which
case such right shall not terminate at the close of business on such
date), to convert such share into (i) a number of shares of Common
Stock equal to 2.08264 shares of Common Stock for each share of this
Series, subject to adjustment as provided in this Section 3 (such
rate, as so adjusted from time to time, is herein called the
"Conversion Rate") plus (ii) a number of shares of Common Stock equal
to
(A) (1) the Accrued Dividend Amount minus (2) the Common
Dividend Excess, if applicable, or plus (3) the Common Dividend
Deficiency, if applicable (the "Net Dividend Amount"), divided by
(B) the Closing Price of the Common Stock on the last
Trading Day prior to the Conversion Date;
provided, however, that in the event that the Net Dividend Amount is a
negative number, the number of shares deliverable upon conversion of a
share of Series G Stock shall be equal to
(I) the number of shares determined pursuant to clause
(i) minus
(II) a number of shares equal to (x) the absolute value
of the Net Dividend Amount divided by (y) the Closing Price of the
Common Stock on the last Trading Day prior to the Conversion Date;
and provided further that, in the event that the Net Dividend Amount is
a positive number, the Corporation shall have the right to deliver cash
equal to the Net Dividend Amount or any portion thereof, in which case
its obligation to deliver shares of Common Stock pursuant to clause (ii)
shall be reduced by a number of shares equal to (x) the aggregate amount
of cash so delivered divided by (y) the
<PAGE>
Closing Price of the Common Stock on the last Trading Day prior to the
Conversion Date, unless the Corporation shall deliver cash equal to
the entire Net Dividend Amount, in which case its entire obligation
under clause (ii) shall be discharged. The obligations of the
Corporation to issue the Common Stock or make the cash payments
provided by this Section 3.1 shall be absolute whether or not any
accrued dividend by which such issuance or payment is measured has
been declared by the Board of Directors and whether or not the
Corporation would have adequate surplus or net profits to pay such
dividend if declared or is otherwise restricted from making such
dividend.
3.2 Except as provided in this Section 3, no
adjustments in respect of payments of dividends on shares surrendered
for conversion or any dividend on the Common Stock issued upon
conversion shall be made upon the conversion of any shares of this
Series (it being understood that if the Conversion Date for shares of
Series G Stock occurs after a Record Date and on or prior to a
Dividend Payment Date, the holder of record on such Record Date shall
be entitled to receive the dividend payable with respect to such
shares on the related Dividend Payment Date pursuant to Section 2.1
hereof).
3.3 The Corporation may, but shall not be required to,
in connection with any conversion of shares of this Series, issue a
fraction of a share of Common Stock, and if the Corporation shall
determine not to issue any such fraction, the Corporation shall,
subject to Section 3.6(c), make a cash payment (rounded to the nearest
cent) equal to such fraction multiplied by the Closing Price of the
Common Stock on the last Trading Day prior to the Conversion Date.
3.4 Any holder of shares of this Series electing to
convert such shares into Common Stock shall surrender the certificate
or certificates for such shares at the office of the transfer agent or
agents therefor (or at such other place as the Corporation may
designate by notice to the holders of shares of this Series) during
regular business hours, duly endorsed to the Corporation or in blank,
or accompanied by instruments of transfer to the Corporation or in
blank, or in form satisfactory to the Corporation, and shall give
written notice to the Corporation at such office that such holder
elects to convert such shares of this Series. The Corporation shall,
as soon as practicable (subject to Section 3.6(d)) after such deposit
of certificates for shares of this Series,
<PAGE>
accompanied by the written notice above prescribed, issue and deliver
at such office to the holder for whose account such shares were
surrendered, or to his nominee, certificates representing the number
of shares of Common Stock and the cash, if any, to which such holder
is entitled upon such conversion.
3.5 Conversion shall be deemed to have been made as of
the date (the "Conversion Date") that certificates for the shares of
this Series to be converted, and the written notice prescribed in
Section 3.4 are received by the transfer agent or agents for this
Series; and the Person entitled to receive the Common Stock issuable
upon such conversion shall be treated for all purposes as the record
holder of such Common Stock on such date. Notwithstanding anything to
the contrary contained herein, in the event the Corporation shall have
rescinded a redemption of shares of this Series pursuant to Section
4.5, any holder of shares of this Series that shall have surrendered
shares of this Series for conversion following the day on which notice
of the subsequently rescinded redemption shall have been given but
prior to the close of business on the later of (a) the Trading Day
next succeeding the date on which public announcement of the
rescission of such redemption shall have been made and (b) the Trading
Day on which the notice of rescission required by Section 4.5 is
deemed given pursuant to Section 8.2 (a "Converting Holder"), may
rescind the conversion of such shares surrendered for conversion by
(i) properly completing a form prescribed by the Corporation and
mailed to holders of shares of this Series (including Converting
Holders) with the Corporation's notice of rescission, which form shall
provide for the certification by any Converting Holder rescinding a
conversion on behalf of any beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) of shares of this Series that the
beneficial ownership (within the meaning of such Rule) of such shares
shall not have changed from the date on which such shares were
surrendered for conversion to the date of such certification and (ii)
delivering such form to the Corporation no later than the close of
business on that date which is ten (10) Trading Days following the
date on which the Corporation's notice of rescission is deemed given
pursuant to Section 8.2. The delivery of such form by a Converting
Holder shall be accompanied by (x) any certificates representing
shares of Common Stock issued to such Converting Holder upon a
conversion of shares of this Series that shall be rescinded by the
proper delivery of such form (the "Surrendered
<PAGE>
Shares"), (y) any securities, evidences of indebtedness or assets
(other than cash) distributed by the Corporation to such Converting
Holder by reason of such Converting Holder's being a record holder of
Surrendered Shares and (z) payment in New York Clearing House funds or
other funds acceptable to the Corporation of an amount equal to the
sum of (I) any cash such Converting Holder may have received in lieu
of the issuance of fractional shares upon conversion and (II) any cash
paid or payable by the Corporation to such Converting Holder by reason
of such Converting Holder being a record holder of Surrendered Shares.
Upon receipt by the Corporation of any such form properly completed by
a Converting Holder and any certificates, securities, evidences of
indebtedness, assets or cash payments required to be returned or made
by such Converting Holder to the Corporation as set forth above, the
Corporation shall instruct the transfer agent or agents for shares of
Common Stock and shares of this Series to cancel any certificates
representing Surrendered Shares (which Surrendered Shares shall be
deposited in the treasury of the Corporation) and reissue certificates
representing shares of this Series to such Converting Holder (which
shares of this Series shall be deemed to have been outstanding at all
times during the period following their surrender for conversion). The
Corporation shall, as promptly as practicable, and in no event more
than five (5) Trading Days, following the receipt of any such properly
completed form and any such certificates, securities, evidences of
indebtedness, assets or cash payments required to be so returned or
made, pay to the Converting Holder or as otherwise directed by such
Converting Holder any dividend or other payment made on such shares
during the period from the time such shares shall have been
surrendered for conversion to the rescission of such conversion. All
questions as to the validity, form, eligibility (including time or
receipt) and acceptance of any form submitted to the Corporation to
rescind the conversion of shares of this Series, including questions
as to the proper completion or execution of any such form or any
certification contained therein, shall be resolved by the Corporation,
whose determination shall be final and binding. The Corporation shall
not be required to deliver certificates for shares of Common Stock
while the stock transfer books for such stock or for this Series are
duly closed for any purpose or during any period commencing at a
Redemption Rescission Event and ending at either (i) the time and date
at which the Corporation's right of rescission shall expire pursuant
to Section 4.5 if the Corporation shall not have exercised such right
or (ii) the close of
<PAGE>
business on that day which is ten (10) Trading Days following the date
on which notice of rescission pursuant to Section 4.4 is deemed given
pursuant to Section 8.2 if the Corporation shall have exercised such
right of rescission, but certificates for shares of Common Stock shall
be delivered as soon as practicable after the opening of such books or
the expiration of such period.
3.6 The Conversion Rate shall be adjusted from time to
time as follows for events occurring after the date of the
Certificate:
(a) In case the Corporation shall, at any time or
from time to time while any of the Series G Stock is outstanding,
(i) pay a dividend in shares of its Common Stock, (ii) combine
its outstanding shares of Common Stock into a smaller number of
shares, (iii) subdivide its outstanding shares of Common Stock or
(iv) reclassify (other than by way of a merger that is subject to
Section 3.7) its shares of Common Stock, then the Conversion Rate
in effect immediately before such action shall be adjusted so
that immediately following such event the holders of the Series G
Stock shall be entitled to receive upon conversion or exchange
thereof the kind and amount of shares of Capital Stock of the
Corporation that they would have owned or been entitled to
receive upon or by reason of such event if such shares of Series
G Stock had been converted or exchanged immediately before the
record date (or, if no record date, the effective date) for such
event (it being understood that any distribution of cash or of
Capital Stock (other than Common Stock), including any
distribution of Capital Stock (other than Common Stock) that
shall accompany a reclassification of the Common Stock, shall be
subject to Section 2.3 rather than this Section 3.6(a)). An
adjustment made pursuant to this Section 3.6(a) shall become
effective retroactively immediately after the record date in the
case of a dividend or distribution and shall become effective
retroactively immediately after the effective date in the case of
a subdivision, combination or reclassification. For the purposes
of this Section 3.6(a), in the event that the holders of Common
Stock are entitled to make any election with respect to the kind
or amount of securities receivable by them in any transaction
that is subject to this Section 3.6(a) (including any election
that would result in all or a portion of the transaction becoming
subject to
<PAGE>
Section 2.3), the kind and amount of securities that shall be
distributable to the holders of the Series G Stock shall be based
on (i) the election, if any, made by the record holder (as of the
date used for determining the holders of Common Stock entitled to
make such election) of the largest number of shares of Series G
Stock in writing to the Corporation on or prior to the last date
on which a holder of Common Stock may make such an election or
(ii) if no such election is timely made, an assumption that such
holder failed to exercise any such rights (provided that if the
kind or amount of securities is not the same for each nonelecting
holder, then the kind and amount of securities receivable shall
be based on the kind or amount of securities receivable by a
plurality of nonelecting holders of Common Stock). Concurrently
with the mailing to holders of Common Stock of any document
pursuant to which such holders may make an election of the type
referred to in this Section, the Corporation shall mail a copy
thereof to the record holders of the Series G Stock as of the
date used for determining the holders of record of Common Stock
entitled to such mailing.
(b) In case a Change of Control shall occur, the
Conversion Rate in effect immediately prior to the Change of
Control Date shall be increased (but not decreased) by
multiplying such rate by a fraction as follows: (i) in the case
of a Change of Control specified in Section 1.5(a), a fraction in
which the numerator is the Conversion Price prior to adjustment
pursuant hereto and the denominator is the Current Market Price
of the Common Stock at the Change of Control Date, (ii) in the
case of a Change of Control specified in Section 1.5(b), the
greater of the following fractions: (x) a fraction the numerator
of which is the highest price per share of Common Stock paid by
the Acquiring Person in connection with the transaction giving
rise to the Change of Control or in any transaction within six
months prior to or after the Change of Control Date (the "Highest
Price"), and the denominator of which is the Current Market Price
of the Common Stock as of the date (but not earlier than six
months prior to the Change of Control Date) on which the first
public announcement is made by the Acquiring Person that it
intends to acquire or that it has acquired 40% or more of the
outstanding shares of Common Stock (the "Announcement Date") or
(y) a
<PAGE>
fraction the numerator of which is the Conversion Price prior to
adjustment pursuant hereto and the denominator of which is the
Current Market Price of the Common Stock on the Announcement Date
and (iii) in the case where there co-exists a Change of Control
specified in both Section 1.5(a) and Section 1.5(b), the greatest
of the fractions determined pursuant to clauses (i) and (ii).
Such adjustment shall become effective immediately after the
Change of Control Date and shall be made, in the case of clauses
(ii) and (iii) above, successively for six months thereafter in
the event and at the time of any increase in the Highest Price
after the Change of Control Date; provided, however, that no such
successive adjustment shall be made with respect to the
Conversion Rate of the shares of this Series in respect of any
event occurring after the Conversion Date.
(c) The Corporation shall be entitled to make such
additional adjustments in the Conversion Rate, in addition to
those required by subsec- tions 3.6(a) and 3.6(b), as shall be
necessary in order that any dividend or distribution in Common
Stock or any subdivision, reclassification or combination of
shares of Common Stock referred to above, shall not be taxable to
the holders of Common Stock for United States Federal income tax
purposes so long as such additional adjustments pursuant to this
Section 3.6(c) do not decrease the Conversion Rate.
(d) In any case in which this Section 3.6 shall
require that any adjustment be made effective as of or
retroactively immediately following a record date, the
Corporation may elect to defer (but only for five (5) Trading
Days following the occurrence of the event that necessitates the
filing of the statement referred to in Section 3.6(f)) issuing to
the holder of any shares of this Series converted after such
record date (i) the shares of Common Stock and other Capital
Stock of the Corporation issuable upon such conversion over and
above (ii) the shares of Common Stock and other Capital Stock of
the Corporation issuable upon such conversion on the basis of the
Conversion Rate prior to adjustment; provided, however, that the
Corporation shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive
such additional shares upon the occurrence of the event requiring
such adjustment.
<PAGE>
(e) All calculations under this Section 3 shall be
made to the nearest cent, one-hundredth of a share or, in the
case of the Conversion Rate, one hundred-thousandth.
Notwithstanding any other provision of this Section 3, the
Corporation shall not be required to make any adjustment of the
Conversion Rate unless such adjustment would require an increase
or decrease of at least 1.00000% of such Conversion Rate. Any
lesser adjustment shall be carried forward and shall be made at
the time of and together with the next subsequent adjustment
that, together with any adjustment or adjustments so carried
forward, shall amount to an increase or decrease of at least
1.00000% in such rate. Any adjustments under this Section 3 shall
be made successively whenever an event requiring such an
adjustment occurs.
(f) Whenever an adjustment in the Conversion Rate
is required, the Corporation shall forthwith place on file with
its transfer agent or agents for this Series a statement signed
by a duly authorized officer of the Corporation, stating the
adjusted Conversion Rate determined as provided herein. Such
statements shall set forth in reasonable detail such facts as
shall be necessary to show the reason for and the manner of
computing such adjustment. Promptly after the adjustment of the
Conversion Rate, the Corporation shall mail a notice thereof to
each holder of shares of this Series.
(g) In the event that at any time as a result of
an adjustment made pursuant to this Section 3, the holder of any
share of this Series thereafter surrendered for conversion shall
become entitled to receive any shares of Capital Stock of the
Corporation other than shares of Common Stock, the conversion
rate of such other shares so receivable upon conversion of any
such share of this Series shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock
contained in subparagraphs (a) through (f) and (h) of this
Section 3.6, and the provisions of Section 3.1 through 3.5 and
3.7 through 3.10 shall apply on like or similar terms to any such
other shares and the determination of the Board of Directors as
to any such adjustment shall be conclusive.
<PAGE>
(h) No adjustment shall be made pursuant to this
Section 3.6 (i) if the effect thereof would be to reduce the
Conversion Price below the par value of the Common Stock or (ii)
subject to Section 3.6(c) hereof, with respect to any share of
Series G Stock that is converted, prior to the time such
adjustment otherwise would be made.
3.7 In case after the date of the Certificate (a) any
consolidation or merger to which the Corporation is a party, other
than a merger or consolidation in which the Corporation is the
surviving or continuing corporation and that does not result in any
reclassification of, or change (other than a change in par value or
from par value to no par value or from no par value to par value, or
as a result of a subdivision or combination) in, outstanding shares of
Common Stock or (b) any sale or conveyance of all or substantially all
of the property and assets of the Corporation, then lawful provision
shall be made as part of the terms of such transaction whereby the
holder of each share of Series G Stock shall have the right
thereafter, during the period such share shall be convertible or
exchangeable, to convert such share into or have such share exchanged
for the kind and amount of shares of stock or other securities and
property receivable upon such consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock into
which such shares of this Series could have been converted or
exchanged immediately prior to such consolidation, merger, sale or
conveyance, subject to adjustment that shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section
3 (based on (i) the election, if any, made in writing to the
Corporation by the record holder (as of the date used for determining
holders of Common Stock entitled to make such election) of the largest
number of shares of Series G Stock on or prior to the last date on
which a holder of Common Stock may make an election regarding the kind
or amount of securities or other property receivable by such holder in
such transaction or (ii) if no such election is timely made, an
assumption that such holder failed to exercise any such rights
(provided that if the kind or amount of securities or other property
is not the same for each nonelecting holder, then the kind and amount
of securities or other property receivable shall be based upon the
kind and amount of securities or other property receivable by a
plurality of the nonelecting holders of Common Stock)). In the event
that any of the transactions referred to in clauses (a) or (b)
involves the distribution
<PAGE>
of cash (or property other than equity securities) to a holder of
Common Stock, lawful provision shall be made as part of the terms of
the transaction whereby the holder of each share of Series G Stock on
the record date fixed for determining holders of Common Stock entitled
to receive such cash or property (or if no such record date is
established, the effective date of such transaction) shall be entitled
to receive the amount of cash or property that such holder would have
been entitled to receive had such holder converted his shares of
Series G Stock into Common Stock immediately prior to such record date
(or effective date) (based on the election or nonelection made by the
record holder of the largest number of shares of Series G Stock, as
provided above). Concurrently with the mailing to holders of Common
Stock of any document pursuant to which such holders may make an
election regarding the kind or amount of securities or other property
that will be receivable by such holder in any transaction described in
clause (a) or (b) of the first sentence of this Section 3.7, the
Corporation shall mail a copy thereof to the holders of the Series G
Stock as of the date used for determining the holders of record of
Common Stock entitled to such mailing. The Corporation shall not enter
into any of the transactions referred to in clauses (a) or (b) of the
preceding sentence unless effective provision shall be made in the
certificate or articles of incorporation or other constituent
documents of the Corporation or the entity surviving the consolidation
or merger, if other than the Corporation, or the entity acquiring the
Corporation's assets, as the case may be, so as to give effect to the
provisions set forth in this Section 3.7. The provisions of this
Section 3.7 shall apply similarly to successive consolidations,
mergers, sales or conveyances. For purposes of this Section 3.7 the
term "Corporation" shall refer to the Corporation (as defined in
Section 1.14) as constituted immediately prior to the merger,
consolidation or other transaction referred to in this Section.
3.8 The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but
unissued stock, for the purpose of effecting the conversion of the
shares of this Series, such number of its duly authorized shares of
Common Stock (or, if applicable, any other shares of Capital Stock of
the Corporation) as shall from time to time be sufficient to effect
the conversion of all outstanding shares of this Series into such
Common Stock (or such other shares of Capital Stock) at any time
(assuming that, at the time of
<PAGE>
the computation of such number of shares, all such Common Stock (or
such other shares of Capital Stock) would be held by a single holder);
provided, however, that nothing contained herein shall preclude the
Corporation from satisfying its obligations in respect of the
conversion of the shares by delivery of purchased shares of Common
Stock (or such other shares of Capital Stock) that are held in the
treasury of the Corporation. All shares of Common Stock (or such other
shares of Capital Stock of the Corporation) that shall be deliverable
upon conversion of the shares of this Series shall be duly and validly
issued, fully paid and nonassessable. For purposes of this Section 3,
any shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation.
3.9 If any shares of Common Stock or other shares of
Capital Stock of the Corporation that would be issuable upon
conversion of shares of this Series hereunder require registration
with or approval of any governmental authority before such shares may
be issued upon conversion, the Corporation will in good faith and as
expeditiously as possible cause such shares to be duly registered or
approved, as the case may be. The Corporation will use commercially
reasonable efforts to list the shares of (or depositary shares
representing fractional interests in) Common Stock or other shares of
Capital Stock of the Corporation required to be delivered upon
conversion of shares of this Series prior to such delivery upon the
principal national securities exchange upon which the outstanding
Common Stock or such other shares of Capital Stock is listed at the
time of such delivery.
3.10 The Corporation shall pay any and all issue or
other taxes that may be payable in respect of any issue or delivery of
shares of Common Stock or other shares of Capital Stock of the
Corporation on conversion of shares of this Series pursuant hereto.
The Corporation shall not, however, be required to pay any tax that is
payable in respect of any transfer involved in the issue or delivery
of Common Stock or such other shares of Capital Stock in a name other
than that in which the shares of this Series so converted were
registered, and no such issue or delivery shall be made unless and
until the Person requesting such issue has paid to the Corporation the
amount of such tax, or has established, to the satisfaction of the
Corporation, that such tax has been paid.
<PAGE>
3.11 In case of (i) the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, (ii) any
Pro Rata Repurchase or (iii) any action triggering an adjustment to
the Conversion Rate pursuant to this Section 3, then, in each case,
the Corporation shall cause to be filed with the transfer agent or
agents for the Series G Stock, and shall cause to be mailed,
first-class postage prepaid, to the holders of record of the
outstanding shares of Series G Stock, at least fifteen (15) days prior
to the applicable record date for any such transaction (or if no
record date will be established, the effective date thereof), a notice
stating (x) the date, if any, on which a record is to be taken for the
purpose of any such transaction (or if no record date will be
established, the date as of which holders of record of Common Stock
entitled to participate in such transaction are determined), and (y)
the expected effective date thereof. Failure to give such notice or
any defect therein shall not affect the legality or validity of the
proceedings described in this Section 3.11.
4. Redemption or Exchange.
4.1 (a) The Corporation may, at its sole option,
subject to Section 2.2 hereof, from time to time on and after
September 5, 1999, redeem, out of funds legally available therefor,
or, as provided below, exchange shares of Common Stock for, all or (in
the case of Section 4.1(b)(i), any part) of the outstanding shares of
this Series. The redemption price for each share of this Series called
for redemption pursuant to clause (i) of Section 4.1(b) shall be the
Liquidation Value together with an amount equal to the accrued and
unpaid dividends to the date fixed for redemption (hereinafter
collectively referred to as the "Redemption Price"). The exchange
price for each share of this Series called for exchange pursuant to
clause (ii) of Section 4.1(b) shall be a number of shares of Common
Stock equal to the Conversion Rate, together with, at the option of
the Corporation, either (x) cash or (y) a number of shares of Common
Stock, valued at the Closing Price on the Trading Day immediately
preceding the date fixed for exchange, equal, in either case, to the
aggregate amount of accrued and unpaid dividends on the Series G Stock
to the date fixed for exchange (provided that any dividends that are
in arrears must be paid in cash) (hereinafter collectively referred to
as the "Exchange Price").
<PAGE>
(b) On the date fixed for redemption or exchange the
Corporation shall, at its option, effect either
(i) a redemption of the shares of this Series to be
redeemed by way of payment, out of funds legally available
therefor, of cash equal to the aggregate Redemption Price for the
shares of this Series then being redeemed;
(ii) an exchange of the shares of this Series for
the Exchange Price in shares of Common Stock (provided that the
Corporation (A) shall be entitled to deliver cash (1) in lieu of
any fractional share of Common Stock (determined in a manner
consistent with Section 3.3) and (2) equal to accrued and unpaid
dividends to the date fixed for exchange in lieu of shares of
Common Stock and (B) shall be required to deliver cash in respect
of any dividends that are in arrears); or
(iii) any combination thereof with respect to each
share of this Series called for redemption or exchange.
(c) Notwithstanding clauses (ii) and of Section 4.1(b),
the Corporation shall be entitled to effect an exchange of shares of
Series G Stock for Common Stock or other shares of Capital Stock of
the Corporation only to the extent that duly and validly issued, fully
paid and nonassessable shares of Common Stock (or such other shares of
Capital Stock) shall be available for issuance (including delivery of
previously issued shares of Common Stock held in the Corporation's
treasury on the date fixed for exchange). The Corporation shall comply
with Sections 3.9 and 3.10 with respect to shares of Common Stock or
other shares of Capital Stock of the Corporation that would be
issuable upon exchange of shares of this Series. Certificates for
shares of Common Stock issued in exchange for surrendered shares of
this Series pursuant to this Section 4.1 shall be made available by
the Corporation not later than the fifth Trading Day following the
date for exchange.
4.2 In the event that fewer than all the outstanding
shares of this Series are to be redeemed pursuant to Section
4.1(b)(i), the number of shares to be redeemed from each holder of
shares of this Series shall be determined by the Corporation by lot or
pro rata or by any other method as may be determined by the Board of
Directors
<PAGE>
in its sole discretion to be equitable, and the certificate of the
Corporation's Secretary or an Assistant Secretary filed with the
transfer agent or transfer agents for this Series in respect of such
determination by the Board of Directors shall be conclusive.
4.3 In the event the Corporation shall redeem or
exchange shares of this Series pursuant to Section 4.1, notice of such
redemption or exchange shall be given by first class mail, postage
prepaid, mailed not less than fifteen (15) nor more than sixty (60)
days prior to the date fixed for redemption or exchange, as the case
may be, to each record holder of the shares to be redeemed or
exchanged, at such holder's address as the same appears on the books
of the Corporation. Each such notice shall state: (i) whether the
shares of this Series are to be redeemed or exchanged; (ii) the time
and date as of which the redemption or exchange shall occur; (iii) the
total number of shares of this Series to be redeemed or exchanged and,
if fewer than all the shares held by such holder are to be redeemed,
the number of such shares to be redeemed from such holder; (iv) the
Redemption Price or the Exchange Price, as the case may be; (v) that
shares of this Series called for redemption or exchange may be
converted at any time prior to the time and date fixed for redemption
or exchange (unless the Corporation shall, in the case of a
redemption, default in payment of the Redemption Price or, in the case
of an exchange, fail to exchange the shares of this Series for the
applicable number of shares of Common Stock and any cash portion of
the Exchange Price or shall exercise its right to rescind such
redemption pursuant to Section 4.5, in which case such right of
conversion shall not terminate at such time and date); (vi) the
applicable Conversion Price and Conversion Rate; (vii) the place or
places where certificates for such shares are to be surrendered for
payment of the Redemption Price, in the case of redemption, or for
delivery of certificates representing the shares of Common Stock and
the payment of any cash portion of the Exchange Price, in the case of
exchange; and (viii) that dividends on the shares of this Series to be
redeemed or exchanged will cease to accrue on such redemption or
exchange date.
4.4 If notice of redemption or exchange shall have been
given by the Corporation as provided in Section 4.3, dividends on the
shares of this Series so called for redemption or exchange shall cease
to accrue, such shares shall no longer be deemed to be outstanding,
and
<PAGE>
all rights of the holders thereof as stockholders with respect to
shares so called for redemption or exchange (except (i) in the case of
redemption, the right to receive from the Corporation the Redemption
Price without interest and in the case of exchange, the right to
receive from the Corporation the Exchange Price without interest and
(ii) the right to convert such shares in accordance with Section 3)
shall cease (including any right to receive dividends otherwise
payable on any Dividend Payment Date that would have occurred after
the time and date of redemption or exchange) either (i) in the case of
a redemption or exchange pursuant to Section 4.1, from and after the
time and date fixed in the notice of redemption or exchange as the
time and date of redemption or exchange (unless the Corporation shall
(x) in the case of a redemption, default in the payment of the
Redemption Price, (y) in the case of an exchange, fail to exchange the
applicable number of shares of Common Stock and any cash portion of
the Exchange Price or (z) exercise its right to rescind such
redemption pursuant to Section 4.5, in which case such rights shall
not terminate at such time and date) or (ii) if the Corporation shall
so elect and state in the notice of redemption or exchange, from and
after the time and date (which date shall be the date fixed for
redemption or exchange or an earlier date not less than fifteen (15)
days after the date of mailing of the redemption or exchange notice)
on which the Corporation shall irrevocably deposit with a designated
bank or trust company doing business in the Borough of Manhattan, City
and State of New York, as paying agent, money sufficient to pay at the
office of such paying agent, on the redemption date, the Redemption
Price, in the case of redemption, or certificates representing the
shares of Common Stock to be so exchanged and any cash portion of the
Exchange Price, in the case of an exchange. Any money or certificates
so deposited with any such paying agent that shall not be required for
such redemption or exchange because of the exercise of any right of
conversion or otherwise shall be returned to the Corporation
forthwith. Upon surrender (in accordance with the notice of redemption
or exchange) of the certificate or certificates for any shares of this
Series to be so redeemed or exchanged (properly endorsed or assigned
for transfer, if the Corporation shall so require and the notice of
redemption or exchange shall so state), such shares shall be redeemed
or exchanged by the Corporation at the Redemption Price or the
Exchange Price, as applicable, as set forth in Section 4.1 (unless the
Corporation shall have exercised its right to rescind such redemption
pursuant to Section 4.5). In case
<PAGE>
fewer than all the shares represented by any such certificate are to
be redeemed, a new certificate shall be issued representing the
unredeemed shares (or fractions thereof as provided in Section 8.4),
without cost to the holder thereof, together with the amount of cash,
if any, in lieu of fractional shares other than those issuable in
accordance with Section 8.4. Subject to applicable escheat laws, any
moneys so set aside by the Corporation in the case of redemption and
unclaimed at the end of one year from the redemption date shall revert
to the general funds of the Corporation, after which reversion the
holders of such shares so called for redemption or exchange shall look
only to the general funds of the Corporation for the payment of the
Redemption Price or the Exchange Price, as applicable, without
interest. Any interest accrued on funds so deposited shall be paid to
the Corporation from time to time.
4.5 In the event that a Redemption Rescission Event
shall occur following any day on which a notice of redemption shall
have been given pursuant to Section 4.3 but at or prior to the earlier
of (a) the time and date fixed for redemption as set forth in such
notice of redemption and (b) the time and date at which the
Corporation shall have irrevocably deposited funds or certificates
with a designated bank or trust company pursuant to Section 4.4, the
Corporation may, at its sole option, at any time prior to the earliest
of (i) the close of business on that day which is two (2) Trading Days
following such Redemption Rescission Event, (ii) the time and date
fixed for redemption as set forth in such notice and (iii) the time
and date on which the Corporation shall have irrevocably deposited
such funds with a designated bank or trust company, rescind the
redemption to which such notice of redemption shall have related by
making a public announcement of such rescission (the date on which
such public announcement shall have been made being hereinafter
referred to as the "Rescission Date"). The Corporation shall be deemed
to have made such announcement if it shall issue a release to the Dow
Jones News Service, Reuters Information Services or any successor news
wire service. From and after the making of such announcement, the
Corporation shall have no obligation to redeem shares of this Series
called for redemption pursuant to such notice of redemption or to pay
the redemption price therefor and all rights of holders of shares of
this Series shall be restored as if such notice of redemption had not
been given. The Corporation shall give notice of any such rescission
by one
<PAGE>
of the means specified in Section 8.2 as promptly as practicable, but
in no event later than the close of business on that date which is
five (5) Trading Days following the Rescission Date to each record
holder of shares of this Series at the close of business on the
Rescission Date and to any other Person or entity that was a record
holder of shares of this Series and that shall have surrendered shares
of this Series for conversion following the giving of notice of the
subsequently rescinded redemption. Each notice of rescission shall (w)
state that the redemption described in the notice of redemption has
been rescinded, (x) state that any Converting Holder shall be entitled
to rescind the conversion of shares of this Series surrendered for
conversion following the day on which notice of redemption was given
but prior to the close of business on the later of (1) the Trading Day
next succeeding the date on which public announcement of the
rescission of such redemption shall have been made and (2) the Trading
Day on which the Corporation's notice of rescission is deemed given
pursuant to Section 8.2, (y) be accompanied by a form prescribed by
the Corporation to be used by any Converting Holder rescinding the
conversion of shares so surrendered for conversion (and instructions
for the completion and delivery of such form, including instructions
with respect to payments that may be required to accompany such
delivery shall be in accordance with Section 3.5) and (z) state that
such form must be properly completed and received by the Corporation
no later than the close of business on a date that shall be ten (10)
Trading Days following the date of the mailing of such notice of
rescission is deemed given pursuant to Section 8.2.
4.6 The shares of this Series shall not be subject to
the provisions of Section 5 of Article IV of the Certificate of
Incorporation.
5. Pro Rata Repurchase.
5.1 Upon a Pro Rata Repurchase, each holder of shares
of this Series shall have the right to require that the Corporation
repurchase, out of funds legally available therefor, a Pro Rata
Portion (as defined below) of the shares of such holder, or any lesser
number requested by the holder, at a price per share equal to the
highest price per share of Common Stock paid in the Pro Rata
Repurchase multiplied by the Conversion Rate then in effect plus an
amount equal to the accrued but unpaid dividends on such shares to the
date of repurchase.
<PAGE>
5.2 At any time prior to or within thirty (30) days
following any Pro Rata Repurchase, the Corporation shall mail a notice
to each holder of shares of this Series stating:
(a) that a Pro Rata Repurchase will occur or has
occurred and that such holder will have (upon such Pro Rata
Repurchase) or has the right to require the Corporation to
repurchase such holder's shares in an amount not in excess of the
Pro Rata Portion at a repurchase price in cash determined as set
forth above plus an amount equal to accrued and unpaid dividends,
if any, to the date of repurchase;
(b) the repurchase date for the Series G Stock
(which shall be no earlier than fifteen (15) days nor later than
sixty (60) days from the date such notice is mailed); and
(c) the instructions determined by the
Corporation, consistent with this Section, that a holder must
follow in order to have its shares repurchased.
5.3 Holders electing to have any shares repurchased
will be required to surrender such shares, with an appropriate form
duly completed, to the Corporation at the address specified in the
notice at least five (5) days prior to the repurchase date. Holders
will be entitled to withdraw their election if the Corporation
receives, not later than three (3) days prior to the repurchase date,
a telegram, telex, facsimile transmission or letter setting forth the
name of the holder, the certificate numbers of the shares delivered
for purchase by the holder and a statement that such holder is
withdrawing his election to have such shares repurchased. Holders will
have such additional withdrawal and other rights as may be required
pursuant to applicable law.
5.4 On the repurchase date, the Corporation shall (i)
pay the repurchase price plus an amount equal to accrued and unpaid
dividends as provided in Section 5.1, if any, to the holders entitled
thereto and (ii) issue to such holders any equity securities of the
Corporation (other than Common Stock) that would at the time be
issuable upon conversion of the shares of Series G Stock that are then
being repurchased pursuant hereto.
<PAGE>
5.5 The Board of Directors will not approve any tender
or exchange offer by the Corporation or a third party for shares of
Common Stock or recommend that the holders of Common Stock accept any
offer or tender their shares into any offer unless a Pro Rata Portion
of the shares of this Series of all holders are entitled to be
tendered into such offer at a price not less than the price per share
for shares of Common Stock pursuant to such offer multiplied by the
Conversion Rate then in effect plus an amount equal to accrued but
unpaid dividends on such shares to the date of payment for such shares
in such tender or exchange offer.
5.6 For purposes hereof, "Pro Rata Portion" with
respect to the shares of this Series held by any holder shall mean all
the shares of this Series then owned by such holder times a fraction,
the numerator of which is the number of outstanding shares of Common
Stock (a) purchased in the applicable Pro Rata Repurchase or (b) for
which a tender or exchange offer referred to in Section 5.5 is made,
as the case may be, and the denominator of which is the number of
outstanding shares of Common Stock immediately prior to such Pro Rata
Repurchase or the commencement of such tender or exchange offer, as
the case may be.
6. Voting. The shares of this Series shall have no voting
rights except as required by law or as set forth below.
6.1 Each share of this Series shall be entitled to vote
together with holders of the shares of Common Stock (and any other
class or series that may similarly be entitled to vote with the shares
of Common Stock) as a single class upon all matters upon which holders
of Common Stock are entitled to vote. In any such vote, the holders of
this Series shall be entitled to two (2) votes per $100 of Liquidation
Value of Series G Stock, subject to adjustment at the same time and in
the same manner as each adjustment of the Conversion Rate pursuant to
Section 3, so that the holders of this Series shall be entitled
following such adjustment to the number of votes equal to the number
of votes such holders were entitled to under this Section 6.1
immediately prior to such adjustment multiplied by a fraction (x) the
numerator of which is the Conversion Rate as adjusted pursuant to
Section 3 and (y) the denominator of which is the Conversion Rate
immediately prior to such adjustment.
<PAGE>
6.2 (a) So long as any shares of this Series remain
outstanding, unless a greater percentage shall then be required by
law, the Corporation shall not, without the affirmative vote at a
meeting or the written consent with or without a meeting of the
holders of shares of this Series representing at least 66-2/3% of the
aggregate voting power of shares of this Series then outstanding (i)
authorize any Senior Stock or reclassify (by merger, consolidation or
otherwise) any Junior Stock or Parity Stock as Senior Stock, (ii)
merge into or consolidate with any Person where the surviving or
continuing corporation will have any authorized Senior Stock other
than capital stock corresponding to shares of Senior Stock existing
immediately before such merger or consolidation) or (iii) amend, alter
or repeal (by operation of law or otherwise) any of the provisions of
the Certificate or the Certificate of Incorporation, so as in any such
case to adversely affect the voting powers, designations, preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions of the shares of this
Series.
(b) No consent of holders of shares of this Series
shall be required for (i) the creation of any indebtedness of any kind
of the Corporation, (ii) the authorization or issuance of any class of
Junior Stock or Parity Stock, (iii) the authorization, designation or
issuance of additional shares of Series G Stock or (iv) subject to
Section 6.2(a), the authorization or issuance of any other shares of
Preferred Stock.
6.3 (a) If and whenever at any time or times dividends
payable on shares of this Series shall have been in arrears and unpaid
in an aggregate amount equal to or exceeding the amount of dividends
payable thereon for six quarterly dividend periods, then the number of
directors constituting the Board of Directors shall be increased by
two and the holders of shares of this Series, together with the
holders of any shares of any Parity Stock as to which in each case
dividends are in arrears and unpaid in an aggregate amount equal to or
exceeding the amount of dividends payable thereon for six quarterly
dividend periods, shall have the exclusive right, voting separately
as a class with such other series, to elect two directors of the
Corporation.
(b) Such voting right may be exercised initially either
by written consent or at a special meeting
<PAGE>
of the holders of the Preferred Stock having such voting right, called
as hereinafter provided, or at any annual meeting of stockholders held
for the purpose of electing directors, and thereafter at each such
annual meeting until such time as all dividends in arrears on the
shares of this Series shall have been paid in full and all dividends
payable on the shares of this Series on four subsequent consecutive
Dividend Payment Dates shall have been paid in full on such dates or
funds shall have been set aside for the payment thereof, at which time
such voting right and the term of the directors elected pursuant to
Section 6.3(a) shall terminate.
(c) At any time when such voting right shall have
vested in holders of shares of such series of Preferred Stock
described in Section 6.3(a), and if such right shall not already have
been exercised by written consent, a proper officer of the Corporation
may call, and, upon the written request, addressed to the Secretary of
the Corporation, of the record holders of shares representing ten
percent (10%) of the voting power of the shares then outstanding of
such Preferred Stock having such voting right, shall call, a special
meeting of the holders of such Preferred Stock having such voting
right. Such meeting shall be held at the earliest practicable date
upon the notice required for annual meetings of stockholders at the
place for holding annual meetings of stockholders, or, if none, at a
place designated by the Board of Directors. Notwithstanding the
provisions of this Section 6.3(c), no such special meeting shall be
called during a period within 60 days immediately preceding the date
fixed for the next annual meeting of stockholders.
(d) At any meeting held for the purpose of electing
directors at which the holders of such Preferred Stock shall have the
right to elect directors as provided herein, the presence in Person or
by proxy of the holders of shares representing more than fifty percent
(50%) in voting power of the then outstanding shares of such Preferred
Stock having such right shall be required and shall be sufficient to
constitute a quorum of such class for the election of directors by
such class.
(e) Any director elected by holders of Preferred Stock
pursuant to the voting right created under this Section 6.3 shall hold
office until the next annual meeting of stockholders (unless such term
has previously terminated pursuant to Section 6.3(b)) and any vacancy
in
<PAGE>
respect of any such director shall be filled only by vote of the
remaining director so elected, or if there be no such remaining
director, by the holders of such Preferred Stock, entitled to elect
such director or directors by written consent or at a special meeting
called in accordance with the procedures set forth in Section 6.3(c),
or, if no special meeting is called or written consent executed, at
the next annual meeting of stockholders. Upon any termination of such
voting right, subject to applicable law, the term of office of all
directors elected by holders of such Preferred Stock voting separately
as a class pursuant to this Section 6.3 shall terminate.
(f) In exercising the voting rights set forth in this
Section 6.3, each share of this Series shall have a number of votes
equal to its Liquidation Value.
7. Liquidation Rights.
7.1 Upon the dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, the holders of the
shares of this Series shall be entitled to receive out of the assets
of the Corporation available for distribution to stockholders, in
preference to the holders of, and before any payment or distribution
shall be made on, Junior Stock, the amount of $100 per share (the
"Liquidation Value"), plus an amount equal to all accrued and unpaid
dividends to the date of final distribution.
7.2 Neither the sale, exchange or other conveyance (for
cash, shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation nor the
merger or consolidation of the Corporation into or with any other
corporation, or the merger or consolidation of any other corporation
into or with the Corporation, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the purposes
of this Section 7.
7.3 After the payment to the holders of the shares of
this Series of full preferential amounts provided for in this Section
7, the holders of this Series as such shall have no right or claim to
any of the remaining assets of the Corporation.
7.4 In the event the assets of the Corporation available
for distribution to the holders of shares of this Series upon any
dissolution, liquidation or
<PAGE>
winding up of the Corporation, whether voluntary or involuntary, shall
be insufficient to pay in full all amounts to which such holders are
entitled pursuant to Section 7.1, no such distribution shall be made
on account of any shares of any Parity Stock upon such dissolution,
liquidation or winding up unless proportionate distributive amounts
shall be paid on account of the shares of this Series, ratably, in
proportion to the full distributable amounts for which holders of all
Parity Stock are entitled upon such dissolution, liquidation or
winding up.
8. Other Provisions.
8.1 All notices from the Corporation to the holders
shall be given by one of the methods specified in Section 8.2. With
respect to any notice to a holder of shares of this Series required to
be provided hereunder, neither failure to give such notice, nor any
defect therein or in the transmission thereof, to any particular
holder shall affect the sufficiency of the notice or the validity of
the proceedings referred to in such notice with respect to the other
holders or affect the legality or validity of any distribution, right,
warrant, reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any
such action. Any notice that was mailed in the manner herein provided
shall be conclusively presumed to have been duly given whether or not
the holder receives the notice.
8.2 All notices and other communications hereunder
shall be deemed given (i) on the first Trading Day following the date
received, if delivered personally, (ii) on the Trading Day following
timely deposit with an overnight courier service, if sent by overnight
courier specifying next day delivery and (iii) on the first Trading
Day that is at least five days following deposit in the mails, if sent
by first class mail to (x) a holder at its last address as it appears
on the transfer records or registry for the Series G Stock and (y) the
Corporation at the following address (or at such other address as the
Corporation shall specify in a notice pursuant to this Section): TW
Inc., 75 Rockefeller Plaza, New York, New York 10019, Attention:
General Counsel.
8.3 Any shares of this Series that have been converted,
redeemed, exchanged or otherwise acquired by the Corporation shall,
after such conversion, redemption, exchange or acquisition, as the
case may be, be retired and
<PAGE>
promptly cancelled and the Corporation shall take all appropriate
action to cause such shares to obtain the status of authorized but
unissued shares of Preferred Stock, without designation as to series,
until such shares are once more designated as part of a particular
series by the Board of Directors. The Corporation may cause a
certificate setting forth a resolution adopted by the Board of
Directors that none of the authorized shares of this Series are
outstanding to be filed with the Secretary of State of the State of
Delaware. When such certificate becomes effective, all matters set
forth in the Certificate with respect to the Series G Stock shall be
eliminated from the Certificate of Incorporation and the shares of
Preferred Stock designated hereby as Series G Stock shall have the
status of authorized and unissued shares of Preferred Stock and may be
reissued as part of any new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors.
8.4 The shares of this Series shall be issuable in
whole shares or, if authorized by the Board of Directors, in any
fraction of a whole share so authorized or any integral multiple of
such fraction.
8.5 The Corporation shall be entitled to recognize the
exclusive right of a Person registered on its records as the holder of
shares of this Series, and such record holder shall be deemed the
holder of such shares for all purposes.
8.6 All notice periods referred to in the Certificate
shall commence on the date of the mailing of the applicable notice.
8.7 Certificates for shares of this Series shall bear
such legends as the Corporation shall from time to time deem
appropriate.
IN WITNESS WHEREOF, TW INC. has caused this certificate
to be signed this 10th day of October, 1996.
TW INC.,
By:/s/ Thomas W. McEnerney
--------------------------
Name: Thomas W. McEnerney
Title: Vice President
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF SERIES H CONVERTIBLE
PREFERRED STOCK
OF
TW INC.
-------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
-------------------
TW INC., hereafter to be renamed "Time Warner
Inc." (the "Corporation"), a corporation organized and
existing by virtue of the General Corporation Law of the
State of Delaware (the "DGCL"), does hereby certify that the
following resolution was duly adopted by action of the Board
of Directors of the Corporation (the "Board of Directors")
at a meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly
granted to and vested in the Board of Directors by the
provisions of Section 2 of Article IV of the Restated
Certificate of Incorporation of the Corporation, as amended
from time to time (the "Certificate of Incorporation"), and
Section 151(g) of the DGCL, the Board of Directors hereby
creates, from the authorized shares of Preferred Stock, par
value $.10 per share ("Preferred Stock"), of the Corporation
authorized to be issued pursuant to the Certificate of
Incorporation, a series of Preferred Stock, and hereby fixes
the voting powers, designations, preferences and relative,
participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, of the
shares of such series as follows:
The series of Preferred Stock hereby established
shall consist of 1,800,000 shares designated as Series H
Convertible Preferred Stock. The rights, preferences and
limitations of such series shall be as follows:
<PAGE>
1. Definitions. As used herein, the following
terms shall have the indicated meanings:
1.1 "Accrued Dividend Amount" shall mean the
aggregate amount of accrued and unpaid dividends on a share
of Series H Stock to and including the Conversion Date,
except that if the Conversion Date shall occur after a
Record Date and prior to a related Dividend Payment Date,
the Accrued Dividend Amount shall not include any accrued
and unpaid dividends for the period from and after the most
recent Dividend Payment Date.
1.2 "Board of Directors" shall mean the Board
of Directors of the Corporation or, with respect to any
action to be taken by the Board of Directors, any committee
of the Board of Directors duly authorized to take such
action.
1.3 "Capital Stock" shall mean any and all
shares of corporate stock of a Person (however designated
and whether representing rights to vote, rights to
participate in dividends or distributions upon liquidation
or otherwise with respect to such Person, or any division or
subsidiary thereof, or any joint venture, partnership,
corporation or other entity).
1.4 "Certificate" shall mean the certificate
of the voting powers, designations, preferences and
relative, participating, optional or other special rights,
and qualifications, limitations or restrictions thereof, of
Series H Convertible Preferred Stock filed with respect to
this resolution with the Secretary of State of the State of
Delaware pursuant to Section 151 of the DGCL.
1.5 "Change of Control" and "Change of
Control Date" shall have the following meanings: "Change of
Control" shall mean the occurrence of one or both of the
following events: (a) individuals who would constitute a
majority of the members of the Board of Directors elected at
any meeting of stockholders or by written consent (without
regard to any members of the Board of Directors elected
pursuant to the terms of any series of Preferred Stock)
shall be elected to the Board of Directors and the election
or the nomination for election by the Corporation's
stockholders of such directors was not approved by a vote of
at least a majority of the directors in office immediately
prior to such election (in which event "Change of Control
Date" shall mean the date of such election) or (b) a Person
<PAGE>
or group of Persons acting in concert as a partnership,
limited partnership, syndicate or other group within the
meaning of Rule 13d-3 under the Exchange Act (the "Acquiring
Person") shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases, share
repurchases or redemptions or otherwise, have become the
beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of 40% or more of the outstanding shares of
Common Stock (in which event "Change of Control Date" shall
mean the date of the event resulting in such 40% ownership).
1.6 "Closing Price" of the Common Stock shall
mean the last reported sale price of the Common Stock
(regular way) as shown on the Composite Tape of the NYSE,
or, in case no such sale takes place on such day, the
average of the closing bid and asked prices on the NYSE, or,
if the Common Stock is not listed or admitted to trading on
the NYSE, on the principal national securities exchange on
which such stock is listed or admitted to trading, or, if it
is not listed or admitted to trading on any national
securities exchange, the last reported sale price of the
Common Stock, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, in
either case as reported by NASDAQ.
1.7 "Common Dividend Deficiency" shall be
applicable in the event that a Conversion Date shall fall
after a record date and prior to the related payment date
for a regularly scheduled cash dividend on the Common Stock
(the "Common Dividend Payment Date"), and in such event
shall mean the product of (i) the Conversion Rate, (ii) the
amount per share of Common Stock of the regularly scheduled
cash dividend for which the record date has been set but a
payment date has not yet occurred and (ii) a fraction (A)
the numerator of which is the number of calendar days from
and excluding the Conversion Date (or in the event the
Conversion Date falls after a Record Date and on or prior to
a related Dividend Payment Date, from and excluding the
Dividend Payment Date) to and including the Common Dividend
Payment Date and (B) the denominator of which is 91
(provided that such fraction shall not be greater than one
(1)).
1.8 "Common Dividend Excess" shall be
applicable in all circumstances where a Common Dividend
Deficiency is not applicable, and in such event shall mean
the product of (i) the Conversion Rate, (ii) the regular
quarterly cash dividend per share, if any, paid by the
<PAGE>
Corporation on the Common Stock (the "Historical Dividend")
on the most recent dividend payment date for the Common
Stock (the "Prior Dividend Payment Date") occurring during
the four months immediately preceding the Conversion Date
and (iii) a fraction (A) the numerator of which is the
number of calendar days from and excluding (1) the Prior
Dividend Payment Date to and including (2) the Conversion
Date (or in the event the Conversion Date falls after a
Record Date and on or prior to a related Dividend Payment
Date, to and including the Dividend Payment Date) and (B)
the denominator of which is 91 days (provided that in no
event shall the fraction be greater than one (1)).
1.9 "Common Stock" shall mean the class of
Common Stock, par value $.01 per share, of the Corporation
authorized at the date of the Certificate, or any other
class of stock resulting from (x) successive changes or
reclassifications of such Common Stock consisting of changes
in par value, or from par value to no par value, (y) a
subdivision or combination or (z) any other changes for
which an adjustment is made under Section 3.6(a), and in any
such case including any shares thereof authorized after the
date of the Certificate, together with any associated rights
to purchase other securities of the Corporation that are at
the time represented by the certificates representing such
shares of Common Stock.
1.10 "Conversion Date" shall have the meaning
set forth in Section 3.5 hereof.
1.11 "Conversion Period" shall mean (i) the
period commencing on September 5, 2000, and (ii) any period
prior to September 5, 2000, (A) during which there shall
remain open (within the meaning of Rule 14e-l(a) under the
Exchange Act) a tender or exchange offer for 40% or more of
the outstanding shares of Common Stock; provided that TWX
shall have filed a Schedule 14D-9 with respect to such
tender or exchange offer and such tender or exchange offer
shall not have been opposed by the board of directors of TWX
or (B) immediately prior to the effective time of any
consolidation or merger to which the Corporation is a party,
other than a merger or consolidation in which the
Corporation is the surviving or continuing corporation and
that does not result in any reclassification of, or change
(other than a change in par value or as a result of a
division or combination) in outstanding shares of Common
Stock.
<PAGE>
1.12 "Conversion Price" at any time shall
mean the Liquidation Value per share divided by the
Conversion Rate in effect at such time (rounded to the
nearest one hundredth of a cent).
1.13 "Conversion Rate" shall have the meaning
set forth in Section 3.1 hereof.
1.14 "Converting Holder" shall have the
meaning set forth in Section 3.5 hereof.
1.15 "Corporation" shall mean TW Inc., a
Delaware corporation, and any of its successors by operation
of law, including by merger, consolidation or sale or
conveyance of all or substantially all of its property and
assets.
1.16 "Current Market Price" of the Common
Stock on any date shall mean the average of the daily
Closing Prices per share of the Common Stock for the five
(5) consecutive Trading Days ending on the Trading Day
immediately preceding the applicable record date, conversion
date, redemption date or exchange date referred to in
Section 3 or Section 4.
1.17 "Dividend Payment Date" shall have the
meaning set forth in Section 2.1 hereof.
1.18 "DGCL" shall mean the General
Corporation Law of the State of Delaware.
1.19 "Exchange Act" shall mean Securities
Exchange Act of 1934, as amended.
1.20 "Exchange Price" shall have the meaning
set forth in Section 4.1 hereof.
1.21 "Junior Stock" shall mean the Common
Stock, the Series A Stock, the Series LMC Stock, the Series
LMCN-V Stock and the shares of any other class or series of
Capital Stock of the Corporation that, by the terms of the
Certificate of Incorporation or of the instrument by which
the Board of Directors, acting pursuant to authority granted
in the Certificate of Incorporation, shall fix the relative
rights, preferences and limitations thereof, shall be junior
to the Series H Stock in respect of the right to receive
dividends or to participate in any distribution of assets
other than by way of dividends.
<PAGE>
1.22 "Liquidation Value" shall have the
meaning set forth in Section 7.1 hereof.
1.23 "NASDAQ" shall mean the Nasdaq Stock
Market.
1.24 "Net Dividend Amount" shall have the
meaning set forth in Section 3.1 hereof.
1.25 "NYSE" shall mean the New York Stock
Exchange, Inc.
1.26 "Parity Stock" shall mean the Series D
Stock, the Series E Stock, the Series F Stock, the Series G
Stock, the Series I Stock, the Series J Stock, the Series L
Stock, the Series M Stock and the shares of any other class
or series of Capital Stock of the Corporation that, by the
terms of the Certificate of Incorporation or of the
instrument by which the Board of Directors, acting pursuant
to authority granted in the Certificate of Incorporation,
shall fix the relative rights, preferences and limitations
thereof, shall, in the event that the stated dividends
thereon are not paid in full, be entitled to share ratably
with the Series H Stock in the payment of dividends,
including accumulations, if any, in accordance with the sums
that would be payable on such shares if all dividends were
declared and paid in full, or shall, in the event that the
amounts payable thereon on liquidation are not paid in full,
be entitled to share ratably with the Series H Stock in any
distribution of assets other than by way of dividends in
accordance with the sums that would be payable in such
distribution if all sums payable were discharged in full;
provided, however, that the term "Parity Stock" shall be
deemed to refer (i) in Section 2.2 hereof, to any stock that
is Parity Stock in respect of dividend rights; (ii) in
Section 7 hereof, to any stock that is Parity Stock in
respect of the distribution of assets; and (iii) in Sections
6.2 and 6.3 hereof, to any stock that is Parity Stock in
respect of either dividend rights or the distribution of
assets and that, pursuant to the Certificate of
Incorporation or any instrument in which the Board of
Directors, acting pursuant to authority granted in the
Certificate of Incorporation, shall so designate, is
entitled to vote with the holders of Series H Stock.
1.27 "Person" shall mean an individual
corporation, partnership, joint venture, association, trust,
unincorporated organization or other entity.
<PAGE>
1.28 "Preferred Stock" shall mean the class
of Preferred Stock, par value $.10 per share, of the
Corporation authorized at the date of the Certificate,
including any shares thereof authorized after the date of
the Certificate.
1.29 "Pro Rata Portion" shall have the
meaning set forth in Section 5.6 hereof.
1.30 "Pro Rata Repurchase" shall mean the
purchase of shares of Common Stock by the Corporation or by
any of its subsidiaries, whether for cash or other property
or securities of the Corporation, which purchase is subject
to Section 13(e) of the Exchange Act or is made pursuant to
an offer made available to all holders of Common Stock, but
excluding any purchase made in open market transactions that
satisfies the conditions of clause (b) of Rule 10b-18 under
the Exchange Act or has been designed (as reasonably
determined by the Board of Directors) to prevent such
purchase from having a material effect on the trading market
of the Common Stock. The "Effective Date" of a Pro Rata
Repurchase shall mean the applicable expiration date
(including all extensions thereof) of any tender or exchange
offer that is a Pro Rata Repurchase or the date of purchase
with respect to any Pro Rata Repurchase that is not a tender
or exchange offer.
1.31 "Record Date" shall have the meaning set
forth in Section 2.1 hereof.
1.32 "Redemption Price" shall have the
meaning set forth in Section 4.1 hereof.
1.33 "Redemption Rescission Event" shall mean
the occurrence of (a) any general suspension of trading in,
or limitation on prices for, securities on the principal
national securities exchange on which shares of Common Stock
are registered and listed for trading (or, if shares of
Common Stock are not registered and listed for trading on
any such exchange, in the over-the-counter market) for more
than six-and-one-half (6-1/2) consecutive trading hours,
(b) any decline in either the Dow Jones Industrial Average
or the Standard & Poor's Index of 400 Industrial Companies
(or any successor index published by Dow Jones & Company,
Inc. or Standard & Poor's Corporation) by either (i) an
amount in excess of 10%, measured from the close of business
on any Trading Day to the close of business on the next
succeeding Trading Day during the period commencing on the
<PAGE>
Trading Day preceding the day notice of any redemption of
shares of this Series is given (or, if such notice is given
after the close of business on a Trading Day, commencing on
such Trading Day) and ending at the earlier of (x) the time
and date fixed for redemption in such notice and (y) the
time and date at which the Corporation shall have
irrevocably deposited funds with a designated bank or trust
company pursuant to Section 4.4 or (ii) an amount in excess
of 15% (or, if the time and date fixed for redemption is
more than 15 days following the date on which notice of
redemption is given, 20%), measured from the close of
business on the Trading Day preceding the day notice of such
redemption is given (or, if such notice is given after the
close of business on a Trading Day, from such Trading Day)
to the close of business on any Trading Day on or prior to
the earlier of the dates specified in clauses (x) and (y)
above, (c) a declaration of a banking moratorium or any
suspension of payments in respect of banks by Federal or
state authorities in the United States or (d) the
commencement of a war or armed hostilities or other national
or international calamity directly or indirectly involving
the United States that in the reasonable judgment of the
Corporation could have a material adverse effect on the
market for the Common Stock.
1.34 "Rescission Date" shall have the meaning
set forth in Section 4.5 hereof.
1.35 "Senior Stock" shall mean the shares of
any class or series of Capital Stock of the Corporation
that, by the terms of the Certificate of Incorporation or of
the instrument by which the Board of Directors, acting
pursuant to authority granted in the Certificate of
Incorporation, shall fix the relative rights, preferences
and limitations thereof, shall be senior to the Series H
Stock in respect of the right to receive dividends or to
participate in any distribution of assets other than by way
of dividends.
1.36 "Series A Stock" shall mean the series
of Preferred Stock authorized and designated as Series A
Participating Preferred Stock at the date of the
Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.37 "Series D Stock" shall mean the series
of Preferred Stock authorized and designated as Series D
Convertible Preferred Stock at the date of the Certificate,
<PAGE>
including any shares thereof authorized and designated after
the date of the Certificate.
1.38 "Series E Stock" shall mean the series
of Preferred Stock authorized and designated as Series E
Convertible Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after
the date of the Certificate.
1.39 "Series F Stock" shall mean the series
of Preferred Stock authorized and designated as Series F
Convertible Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after
the date of the Certificate.
1.40 "Series G Stock" shall mean the series
of Preferred Stock authorized and designated as Series G
Convertible Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after
the date of the Certificate.
1.41 "Series H Stock" and "this Series" shall
mean the series of Preferred Stock authorized and designated
as the Series H Convertible Preferred Stock, including any
shares thereof authorized and designated after the date of
the Certificate.
1.42 "Series I Stock" shall mean the series
of Preferred Stock authorized and designated as Series I
Convertible Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after
the date of the Certificate.
1.43 "Series J Stock" shall mean the series
of Preferred Stock authorized and designated as Series J
Convertible Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after
the date of the Certificate.
1.45 "Series L Stock" shall mean the series
of Preferred Stock authorized and designated as 10-1/4%
Series L Exchangeable Preferred Stock at the date of the
Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.46 "Series LMC Stock" shall mean the series
of Series Common Stock authorized and designated as
Series LMC Common Stock at the date of the Certificate,
<PAGE>
including any shares thereof authorized and designated after
the date of the Certificate.
1.47 "Series LMCN-V Stock" shall mean the
series of Series Common Stock authorized and designated as
Series LMCN-V Common Stock at the date of the Certificate,
including any shares thereof authorized and designated after
the date of the Certificate.
1.48 "Series M Stock" shall mean the series
of Preferred Stock authorized and designated as 10-1/4%
Series M Exchangeable Preferred Stock at the date of the
Certificate, including any shares thereof authorized and
designated after the date of the Certificate.
1.49 "Surrendered Shares" shall have the
meaning set forth in Section 3.5 hereof.
1.50 "Trading Day" shall mean, so long as the
Common Stock is listed or admitted to trading on the NYSE, a
day on which the NYSE is open for the transaction of
business, or, if the Common Stock is not listed or admitted
to trading on the NYSE, a day on which the principal
national securities exchange on which the Common Stock is
listed is open for the transaction of business, or, if the
Common Stock is not so listed or admitted for trading on any
national securities exchange, a day on which NASDAQ is open
for the transaction of business.
2. Cash Dividends.
2.1 The holders of the outstanding Series H
Stock shall be entitled to receive quarter-annual dividends,
as and when declared by the Board of Directors out of funds
legally available therefor. Each quarter-annual dividend
shall be an amount per share equal to (i) in the case of
each Dividend Payment Date (as defined below) occurring on
or prior to September 5, 1999, the greater of (A) $.9375 per
$100 of Liquidation Value of Series H Stock (which is
equivalent to $3.75 per annum), and (B) an amount per $100
of Liquidation Value of Series H Stock equal to the product
of (1) the Conversion Rate and (2) the aggregate per share
amount of regularly scheduled dividends paid in cash on the
Common Stock during the period from but excluding the
immediately preceding Dividend Payment Date to and including
such Dividend Payment Date (the "Preferred Dividend
Amount"), and (ii) in the case of each Dividend Payment Date
occurring thereafter, an amount per $100 of Liquidation
<PAGE>
Value of Series H Stock equal to the product of (1) the
Conversion Rate and (2) the aggregate per share amount of
regularly scheduled dividends paid in cash on the Common
Stock during the period from but excluding the immediately
preceding Dividend Payment Date to and including such
Dividend Payment Date. All dividends shall be payable in
cash on or about the first day of March, June, September and
December in each year, as fixed by the Board of Directors,
or such other dates as are fixed by the Board of Directors
(provided that September 5, 1999, shall be a Dividend
Payment Date) (each a "Dividend Payment Date"), to the
holders of record of Series H Stock at the close of business
on or about the Trading Day next preceding such first day of
March, June, September and December (or September 5, 1999)
as the case may be, as fixed by the Board of Directors, or
such other dates as are fixed by the Board of Directors
(each a "Record Date"). Subject to the next sentence, in the
case of dividends payable in respect of periods prior to
September 5, 1999, (i) such dividends shall accrue on each
share on a daily basis, whether or not there are
unrestricted funds legally available for the payment of such
dividends and whether or not earned or declared, and (ii)
any such dividends that become payable for any partial
dividend period shall be computed on the basis of the actual
days elapsed in such period. Notwithstanding the preceding
sentence, the amount accruing and payable in respect of the
first dividend on the Series H Stock payable after the date
of the Certificate shall equal the Preferred Dividend
Amount. From and after September 5, 1999, dividends on the
Series H Stock (determined as to amount as provided herein)
shall accrue to the extent, but only to the extent, that
regularly scheduled cash dividends are declared by the Board
of Directors on the Common Stock with a payment date after
September 5, 1999 (or, in the case of Series H Stock
originally issued after September 5, 1999, after the
Dividend Payment Date next preceding such date of original
issuance). All dividends that accrue in accordance with the
foregoing provisions shall be cumulative from and after the
day immediately succeeding the date of issuance of the
relevant shares of Series H Stock. The amount payable to
each holder of record on any Dividend Payment Date shall be
rounded to the nearest cent.
2.2 Except as hereinafter provided in this
Section 2.2, unless all dividends on the outstanding shares
of Series H Stock and any Parity Stock that shall have
accrued and become payable as of any date shall have been
paid, or declared and funds set apart for payment thereof,
<PAGE>
no dividend or other distribution (payable other than in
shares of Junior Stock) shall be paid to the holders of
Junior Stock or Parity Stock, and no shares of Series H
Stock, Parity Stock or Junior Stock shall be purchased,
redeemed or otherwise acquired by the Corporation or any of
its subsidiaries (except by conversion into or exchange for
Junior Stock), nor shall any monies be paid or made
available for a purchase, redemption or sinking fund for the
purchase or redemption of any Series H Stock, Junior Stock
or Parity Stock. When dividends are not paid in full upon
the shares of this Series and any Parity Stock, all
dividends declared upon shares of this Series and all Parity
Stock shall be declared pro rata so that the amount of
dividends declared per share on this Series and all such
Parity Stock shall in all cases bear to each other the same
ratio that accrued dividends per share on the shares of this
Series and all such Parity Stock bear to each other. No
interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on
this Series that may be in arrears.
2.3 In case the Corporation shall at any
time distribute (other than a distribution in liquidation
of the Corporation) to the holders of its shares of Common
Stock any assets or property, including debt or equity
securities of the Corporation (other than Common Stock
subject to a distribution or reclassification covered by
Section 3.6(a)) or of any other Person (including common
stock of such Person) or cash (but excluding regularly
scheduled cash dividends payable on shares of Common Stock),
or in case the Corporation shall at any time distribute
(other than a distribution in liquidation of the
Corporation) to such holders rights, options or warrants to
subscribe for or purchase shares of Common Stock (including
shares held in the treasury of the Corporation), or rights,
options or warrants to subscribe for or purchase any other
security or rights, options or warrants to subscribe for or
purchase any assets or property (in each case, whether of
the Corporation or otherwise, but other than any
distribution of rights to purchase securities of the
Corporation if the holder of shares of this Series would
otherwise be entitled to receive such rights upon conversion
of shares of this Series for Common Stock; provided,
however, that if such rights are subsequently redeemed by
the Corporation, such redemption shall be treated for
purposes of this Section 2.3 as a cash dividend (but not a
regularly scheduled cash dividend) on the Common Stock), the
Corporation shall simultaneously distribute such assets,
<PAGE>
property, securities, rights, options or warrants pro rata
to the holders of Series H Stock on the record date fixed
for determining holders of Common Stock entitled to
participate in such distribution (or, if no such record date
shall be established, the effective time thereof) in an
amount equal to the amount that such holders of Series H
Stock would have been entitled to receive had their shares
of Series H Stock been converted into Common Stock
immediately prior to such record date (or effective time).
In the event of a distribution to holders of Series H Stock
pursuant to this Section 2.3, such holders shall be entitled
to receive fractional shares or interests only to the extent
that holders of Common Stock are entitled to receive the
same. The holders of Series H Stock on the applicable record
date (or effective time) shall be entitled to receive in
lieu of such fractional shares or interests the same
consideration as is payable to holders of Common Stock with
respect thereto. If there are no fractional shares or
interests payable to holders of Common Stock, the holders of
Series H Stock on the applicable record date (or effective
time) shall receive in lieu of such fractional shares or
interests the fair value thereof as determined by the Board
of Directors.
2.4 If a distribution is made in accordance
with the provisions of Section 2.3, anything in Section 3 to
the contrary notwithstanding, no adjustment pursuant to
Section 3 shall be effected by reason of the distribution of
such assets, property, securities, rights, options or
warrants or the subsequent modification, exercise,
expiration or termination of such securities, rights,
options or warrants.
2.5 In the event that the holders of Common
Stock are entitled to make any election with respect to the
kind or amount of securities or other property receivable by
them in any distribution that is subject to Section 2.3, the
kind and amount of securities or other property that shall
be distributable to the holders of the Series H Stock shall
be based on (i) the election, if any, made by the record
holder (as of the date used for determining the holders of
Common Stock entitled to make such election) of the largest
number of shares of Series H Stock in writing to the
Corporation on or prior to the last date on which a holder
of Common Stock may make such an election or (ii) if no such
election is timely made, an assumption that such holder
failed to exercise any such rights (provided that if the
kind or amount of securities or other property is not the
<PAGE>
same for each nonelecting holder, then the kind and amount
of securities or other property receivable by holders of the
Series H Stock shall be based on the kind or amount of
securities or other property receivable by a plurality of
shares held by the nonelecting holders of Common Stock).
Concurrently with the mailing to holders of Common Stock of
any document pursuant to which such holders may make an
election of the type referred to in this Section, the
Corporation shall mail a copy thereof to the record holders
of the Series H Stock as of the date used for determining
the holders of record of Common Stock entitled to such
mailing.
3. Conversion Rights.
3.1 Each holder of a share of this Series
shall have the right at any time during the Conversion
Period or as to any share of this Series called for
redemption or exchange, at any time prior to the close of
business on the date fixed for redemption or exchange
(unless the Corporation defaults in the payment of the
Redemption Price or fails to exchange the shares of this
Series for the applicable number of shares of Common Stock
and any cash portion of the Exchange Price or exercises its
right to rescind such redemption pursuant to Section 4.5, in
which case such right shall not terminate at the close of
business on such date), to convert such share into (i) a
number of shares of Common Stock equal to 2.08264 shares of
Common Stock for each share of this Series, subject to
adjustment as provided in this Section 3 (such rate, as so
adjusted from time to time, is herein called the "Conversion
Rate") plus (ii) a number of shares of Common Stock equal to
(A) (1) the Accrued Dividend Amount
minus (2) the Common Dividend Excess, if applicable, or
plus (3) the Common Dividend Deficiency, if applicable
(the "Net Dividend Amount"), divided by
(B) the Closing Price of the Common
Stock on the last Trading Day prior to the Conversion
Date;
provided, however, that in the event that the Net Dividend
Amount is a negative number, the number of shares
deliverable upon conversion of a share of Series H Stock
shall be equal to
<PAGE>
(I) the number of shares determined
pursuant to clause (i) minus
(II) a number of shares equal to (x) the
absolute value of the Net Dividend Amount divided by
(y) the Closing Price of the Common Stock on the last
Trading Day prior to the Conversion Date;
and provided further that, in the event that the Net
Dividend Amount is a positive number, the Corporation shall
have the right to deliver cash equal to the Net Dividend
Amount or any portion thereof, in which case its obligation
to deliver shares of Common Stock pursuant to clause (ii)
shall be reduced by a number of shares equal to (x) the
aggregate amount of cash so delivered divided by (y) the
Closing Price of the Common Stock on the last Trading Day
prior to the Conversion Date, unless the Corporation shall
deliver cash equal to the entire Net Dividend Amount, in
which case its entire obligation under clause (ii) shall be
discharged. The obligations of the Corporation to issue the
Common Stock or make the cash payments provided by this
Section 3.1 shall be absolute whether or not any accrued
dividend by which such issuance or payment is measured has
been declared by the Board of Directors and whether or not
the Corporation would have adequate surplus or net profits
to pay such dividend if declared or is otherwise restricted
from making such dividend.
3.2 Except as provided in this Section 3, no
adjustments in respect of payments of dividends on shares
surrendered for conversion or any dividend on the Common
Stock issued upon conversion shall be made upon the
conversion of any shares of this Series (it being understood
that if the Conversion Date for shares of Series H Stock
occurs after a Record Date and on or prior to a Dividend
Payment Date, the holder of record on such Record Date shall
be entitled to receive the dividend payable with respect to
such shares on the related Dividend Payment Date pursuant to
Section 2.1 hereof).
3.3 The Corporation may, but shall not be
required to, in connection with any conversion of shares of
this Series, issue a fraction of a share of Common Stock,
and if the Corporation shall determine not to issue any such
fraction, the Corporation shall, subject to Section 3.6(c),
make a cash payment (rounded to the nearest cent) equal to
such fraction multiplied by the Closing Price of the Common
Stock on the last Trading Day prior to the Conversion Date.
<PAGE>
3.4 Any holder of shares of this Series
electing to convert such shares into Common Stock shall
surrender the certificate or certificates for such shares at
the office of the transfer agent or agents therefor (or at
such other place as the Corporation may designate by notice
to the holders of shares of this Series) during regular
business hours, duly endorsed to the Corporation or in
blank, or accompanied by instruments of transfer to the
Corporation or in blank, or in form satisfactory to the
Corporation, and shall give written notice to the
Corporation at such office that such holder elects to
convert such shares of this Series. The Corporation shall,
as soon as practicable (subject to Section 3.6(d)) after
such deposit of certificates for shares of this Series,
accompanied by the written notice above prescribed, issue
and deliver at such office to the holder for whose account
such shares were surrendered, or to his nominee,
certificates representing the number of shares of Common
Stock and the cash, if any, to which such holder is entitled
upon such conversion.
3.5 Conversion shall be deemed to have been
made as of the date (the "Conversion Date") that
certificates for the shares of this Series to be converted,
and the written notice prescribed in Section 3.4 are
received by the transfer agent or agents for this Series;
and the Person entitled to receive the Common Stock issuable
upon such conversion shall be treated for all purposes as
the record holder of such Common Stock on such date.
Notwithstanding anything to the contrary contained herein,
in the event the Corporation shall have rescinded a
redemption of shares of this Series pursuant to Section 4.5,
any holder of shares of this Series that shall have
surrendered shares of this Series for conversion following
the day on which notice of the subsequently rescinded
redemption shall have been given but prior to the close of
business on the later of (a) the Trading Day next succeeding
the date on which public announcement of the rescission of
such redemption shall have been made and (b) the Trading Day
on which the notice of rescission required by Section 4.5 is
deemed given pursuant to Section 8.2 (a "Converting
Holder"), may rescind the conversion of such shares
surrendered for conversion by (i) properly completing a form
prescribed by the Corporation and mailed to holders of
shares of this Series (including Converting Holders) with
the Corporation's notice of rescission, which form shall
provide for the certification by any Converting Holder
rescinding a conversion on behalf of any beneficial owner
<PAGE>
(within the meaning of Rule 13d-3 under the Exchange Act) of
shares of this Series that the beneficial ownership (within
the meaning of such Rule) of such shares shall not have
changed from the date on which such shares were surrendered
for conversion to the date of such certification and (ii)
delivering such form to the Corporation no later than the
close of business on that date which is ten (10) Trading
Days following the date on which the Corporation's notice of
rescission is deemed given pursuant to Section 8.2. The
delivery of such form by a Converting Holder shall be
accompanied by (x) any certificates representing shares of
Common Stock issued to such Converting Holder upon a
conversion of shares of this Series that shall be rescinded
by the proper delivery of such form (the "Surrendered
Shares"), (y) any securities, evidences of indebtedness or
assets (other than cash) distributed by the Corporation to
such Converting Holder by reason of such Converting Holder's
being a record holder of Surrendered Shares and (z) payment
in New York Clearing House funds or other funds acceptable
to the Corporation of an amount equal to the sum of (I) any
cash such Converting Holder may have received in lieu of the
issuance of fractional shares upon conversion and (II) any
cash paid or payable by the Corporation to such Converting
Holder by reason of such Converting Holder being a record
holder of Surrendered Shares. Upon receipt by the
Corporation of any such form properly completed by a
Converting Holder and any certificates, securities,
evidences of indebtedness, assets or cash payments required
to be returned or made by such Converting Holder to the
Corporation as set forth above, the Corporation shall
instruct the transfer agent or agents for shares of Common
Stock and shares of this Series to cancel any certificates
representing Surrendered Shares (which Surrendered Shares
shall be deposited in the treasury of the Corporation) and
reissue certificates representing shares of this Series to
such Converting Holder (which shares of this Series shall be
deemed to have been outstanding at all times during the
period following their surrender for conversion). The
Corporation shall, as promptly as practicable, and in no
event more than five (5) Trading Days, following the receipt
of any such properly completed form and any such certifi-
cates, securities, evidences of indebtedness, assets or cash
payments required to be so returned or made, pay to the
Converting Holder or as otherwise directed by such
Converting Holder any dividend or other payment made on such
shares during the period from the time such shares shall
have been surrendered for conversion to the rescission of
such conversion. All questions as to the validity, form,
<PAGE>
eligibility (including time or receipt) and acceptance of
any form submitted to the Corporation to rescind the
conversion of shares of this Series, including questions as
to the proper completion or execution of any such form or
any certification contained therein, shall be resolved by
the Corporation, whose determination shall be final and
binding. The Corporation shall not be required to deliver
certificates for shares of Common Stock while the stock
transfer books for such stock or for this Series are duly
closed for any purpose or during any period commencing at a
Redemption Rescission Event and ending at either (i) the
time and date at which the Corporation's right of rescission
shall expire pursuant to Section 4.5 if the Corporation
shall not have exercised such right or (ii) the close of
business on that day which is ten (10) Trading Days
following the date on which notice of rescission pursuant to
Section 4.4 is deemed given pursuant to Section 8.2 if the
Corporation shall have exercised such right of rescission,
but certificates for shares of Common Stock shall be
delivered as soon as practicable after the opening of such
books or the expiration of such period.
3.6 The Conversion Rate shall be adjusted
from time to time as follows for events occurring after the
date of the Certificate:
(a) In case the Corporation shall, at
any time or from time to time while any of the Series H
Stock is outstanding, (i) pay a dividend in shares of
its Common Stock, (ii) combine its outstanding shares
of Common Stock into a smaller number of shares,
(iii) subdivide its outstanding shares of Common Stock
or (iv) reclassify (other than by way of a merger that
is subject to Section 3.7) its shares of Common Stock,
then the Conversion Rate in effect immediately before
such action shall be adjusted so that immediately
following such event the holders of the Series H Stock
shall be entitled to receive upon conversion or
exchange thereof the kind and amount of shares of
Capital Stock of the Corporation that they would have
owned or been entitled to receive upon or by reason of
such event if such shares of Series H Stock had been
converted or exchanged immediately before the record
date (or, if no record date, the effective date) for
such event (it being understood that any distribution
of cash or of Capital Stock (other than Common Stock),
including any distribution of Capital Stock (other than
Common Stock) that shall accompany a reclassification
<PAGE>
of the Common Stock, shall be subject to Section 2.3
rather than this Section 3.6(a)). An adjustment made
pursuant to this Section 3.6(a) shall become effective
retroactively immediately after the record date in the
case of a dividend or distribution and shall become
effective retroactively immediately after the effective
date in the case of a subdivision, combination or
reclassification. For the purposes of this Section
3.6(a), in the event that the holders of Common Stock
are entitled to make any election with respect to the
kind or amount of securities receivable by them in any
transaction that is subject to this Section 3.6(a)
(including any election that would result in all or a
portion of the transaction becoming subject to Section
2.3), the kind and amount of securities that shall be
distributable to the holders of the Series H Stock
shall be based on (i) the election, if any, made by the
record holder (as of the date used for determining the
holders of Common Stock entitled to make such election)
of the largest number of shares of Series H Stock in
writing to the Corporation on or prior to the last date
on which a holder of Common Stock may make such an
election or (ii) if no such election is timely made, an
assumption that such holder failed to exercise any such
rights (provided that if the kind or amount of
securities is not the same for each nonelecting holder,
then the kind and amount of securities receivable shall
be based on the kind or amount of securities receivable
by a plurality of nonelecting holders of Common Stock).
Concurrently with the mailing to holders of Common
Stock of any document pursuant to which such holders
may make an election of the type referred to in this
Section, the Corporation shall mail a copy thereof to
the record holders of the Series H Stock as of the date
used for determining the holders of record of Common
Stock entitled to such mailing.
(b) In case a Change of Control shall
occur, the Conversion Rate in effect immediately prior
to the Change of Control Date shall be increased (but
not decreased) by multiplying such rate by a fraction
as follows: (i) in the case of a Change of Control
specified in Section 1.5(a), a fraction in which the
numerator is the Conversion Price prior to adjustment
pursuant hereto and the denominator is the Current
Market Price of the Common Stock at the Change of
Control Date, (ii) in the case of a Change of Control
<PAGE>
specified in Section 1.5(b), the greater of the
following fractions: (x) a fraction the numerator of
which is the highest price per share of Common Stock
paid by the Acquiring Person in connection with the
transaction giving rise to the Change of Control or in
any transaction within six months prior to or after the
Change of Control Date (the "Highest Price"), and the
denominator of which is the Current Market Price of the
Common Stock as of the date (but not earlier than six
months prior to the Change of Control Date) on which
the first public announcement is made by the Acquiring
Person that it intends to acquire or that it has
acquired 40% or more of the outstanding shares of
Common Stock (the "Announcement Date") or (y) a
fraction the numerator of which is the Conversion Price
prior to adjustment pursuant hereto and the denominator
of which is the Current Market Price of the Common
Stock on the Announcement Date and (iii) in the case
where there co-exists a Change of Control specified in
both Section 1.5(a) and Section 1.5(b), the greatest of
the fractions determined pursuant to clauses (i) and
(ii). Such adjustment shall become effective
immediately after the Change of Control Date and shall
be made, in the case of clauses (ii) and (iii) above,
successively for six months thereafter in the event and
at the time of any increase in the Highest Price after
the Change of Control Date; provided, however, that no
such successive adjustment shall be made with respect
to the Conversion Rate of the shares of this Series in
respect of any event occurring after the Conversion
Date.
(c) The Corporation shall be entitled to
make such additional adjustments in the Conversion
Rate, in addition to those required by subsections
3.6(a) and 3.6(b), as shall be necessary in order that
any dividend or distribution in Common Stock or any
subdivision, reclassification or combination of shares
of Common Stock referred to above, shall not be taxable
to the holders of Common Stock for United States
Federal income tax purposes so long as such additional
adjustments pursuant to this Section 3.6(c) do not
decrease the Conversion Rate.
(d) In any case in which this
Section 3.6 shall require that any adjustment be made
effective as of or retroactively immediately following
a record date, the Corporation may elect to defer (but
<PAGE>
only for five (5) Trading Days following the occurrence
of the event that necessitates the filing of the
statement referred to in Section 3.6(f)) issuing to the
holder of any shares of this Series converted after
such record date (i) the shares of Common Stock and
other Capital Stock of the Corporation issuable upon
such conversion over and above (ii) the shares of
Common Stock and other Capital Stock of the Corporation
issuable upon such conversion on the basis of the
Conversion Rate prior to adjustment; provided, however,
that the Corporation shall deliver to such holder a due
bill or other appropriate instrument evidencing such
holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(e) All calculations under this Section
3 shall be made to the nearest cent, one-hundredth of a
share or, in the case of the Conversion Rate, one
hundred-thousandth. Notwithstanding any other provision
of this Section 3, the Corporation shall not be
required to make any adjustment of the Conversion Rate
unless such adjustment would require an increase or
decrease of at least 1.00000% of such Conversion Rate.
Any lesser adjustment shall be carried forward and
shall be made at the time of and together with the next
subsequent adjustment that, together with any
adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1.00000%
in such rate. Any adjustments under this Section 3
shall be made successively whenever an event requiring
such an adjustment occurs.
(f) Whenever an adjustment in the
Conversion Rate is required, the Corporation shall
forthwith place on file with its transfer agent or
agents for this Series a statement signed by a duly
authorized officer of the Corporation, stating the
adjusted Conversion Rate determined as provided herein.
Such statements shall set forth in reasonable detail
such facts as shall be necessary to show the reason for
and the manner of computing such adjustment. Promptly
after the adjustment of the Conversion Rate, the
Corporation shall mail a notice thereof to each holder
of shares of this Series.
(g) In the event that at any time as a
result of an adjustment made pursuant to this
<PAGE>
Section 3, the holder of any share of this Series
thereafter surrendered for conversion shall become
entitled to receive any shares of Capital Stock of the
Corporation other than shares of Common Stock, the
conversion rate of such other shares so receivable upon
conversion of any such share of this Series shall be
subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the
provisions with respect to Common Stock contained in
subparagraphs (a) through (f) and (h) of this Section
3.6, and the provisions of Section 3.1 through 3.5 and
3.7 through 3.10 shall apply on like or similar terms
to any such other shares and the determination of the
Board of Directors as to any such adjustment shall be
conclusive.
(h) No adjustment shall be made pursuant
to this Section 3.6 (i) if the effect thereof would be
to reduce the Conversion Price below the par value of
the Common Stock or (ii) subject to Section 3.6(c)
hereof, with respect to any share of Series H Stock
that is converted, prior to the time such adjustment
otherwise would be made.
3.7 In case after the date of the Certificate
(a) any consolidation or merger to which the Corporation is
a party, other than a merger or consolidation in which the
Corporation is the surviving or continuing corporation and
that does not result in any reclassification of, or change
(other than a change in par value or from par value to no
par value or from no par value to par value, or as a result
of a subdivision or combination) in, outstanding shares of
Common Stock or (b) any sale or conveyance of all or
substantially all of the property and assets of the
Corporation, then lawful provision shall be made as part of
the terms of such transaction whereby the holder of each
share of Series H Stock shall have the right thereafter,
during the period such share shall be convertible or
exchangeable, to convert such share into or have such share
exchanged for the kind and amount of shares of stock or
other securities and property receivable upon such
consolidation, merger, sale or conveyance by a holder of the
number of shares of Common Stock into which such shares of
this Series could have been converted or exchanged
immediately prior to such consolidation, merger, sale or
conveyance, subject to adjustment that shall be as nearly
equivalent as may be practicable to the adjustments provided
for in this Section 3 (based on (i) the election, if any,
<PAGE>
made in writing to the Corporation by the record holder (as
of the date used for determining holders of Common Stock
entitled to make such election) of the largest number of
shares of Series H Stock on or prior to the last date on
which a holder of Common Stock may make an election
regarding the kind or amount of securities or other property
receivable by such holder in such transaction or (ii) if no
such election is timely made, an assumption that such holder
failed to exercise any such rights (provided that if the
kind or amount of securities or other property is not the
same for each nonelecting holder, then the kind and amount
of securities or other property receivable shall be based
upon the kind and amount of securities or other property
receivable by a plurality of the nonelecting holders of
Common Stock)). In the event that any of the transactions
referred to in clauses (a) or (b) involves the distribution
of cash (or property other than equity securities) to a
holder of Common Stock, lawful provision shall be made as
part of the terms of the transaction whereby the holder of
each share of Series H Stock on the record date fixed for
determining holders of Common Stock entitled to receive such
cash or property (or if no such record date is established,
the effective date of such transaction) shall be entitled to
receive the amount of cash or property that such holder
would have been entitled to receive had such holder
converted his shares of Series H Stock into Common Stock
immediately prior to such record date (or effective date)
(based on the election or nonelection made by the record
holder of the largest number of shares of Series H Stock, as
provided above). Concurrently with the mailing to holders of
Common Stock of any document pursuant to which such holders
may make an election regarding the kind or amount of
securities or other property that will be receivable by such
holder in any transaction described in clause (a) or (b) of
the first sentence of this Section 3.7, the Corporation
shall mail a copy thereof to the holders of the Series H
Stock as of the date used for determining the holders of
record of Common Stock entitled to such mailing. The
Corporation shall not enter into any of the transactions
referred to in clauses (a) or (b) of the preceding sentence
unless effective provision shall be made in the certificate
or articles of incorporation or other constituent documents
of the Corporation or the entity surviving the consolidation
or merger, if other than the Corporation, or the entity
acquiring the Corporation's assets, as the case may be, so
as to give effect to the provisions set forth in this
Section 3.7. The provisions of this Section 3.7 shall apply
similarly to successive consolidations, mergers, sales or
<PAGE>
conveyances. For purposes of this Section 3.7 the term
"Corporation" shall refer to the Corporation (as defined in
Section 1.15) as constituted immediately prior to the
merger, consolidation or other transaction referred to in
this Section.
3.8 The Corporation shall at all times
reserve and keep available, free from preemptive rights, out
of its authorized but unissued stock, for the purpose of
effecting the conversion of the shares of this Series, such
number of its duly authorized shares of Common Stock (or, if
applicable, any other shares of Capital Stock of the
Corporation) as shall from time to time be sufficient to
effect the conversion of all outstanding shares of this
Series into such Common Stock (or such other shares of
Capital Stock) at any time (assuming that, at the time of
the computation of such number of shares, all such Common
Stock (or such other shares of Capital Stock) would be held
by a single holder); provided, however, that nothing
contained herein shall preclude the Corporation from
satisfying its obligations in respect of the conversion of
the shares by delivery of purchased shares of Common Stock
(or such other shares of Capital Stock) that are held in the
treasury of the Corporation. All shares of Common Stock (or
such other shares of Capital Stock of the Corporation) that
shall be deliverable upon conversion of the shares of this
Series shall be duly and validly issued, fully paid and
nonassessable. For purposes of this Section 3, any shares of
Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation.
3.9 If any shares of Common Stock or other
shares of Capital Stock of the Corporation that would be
issuable upon conversion of shares of this Series hereunder
require registration with or approval of any governmental
authority before such shares may be issued upon conversion,
the Corporation will in good faith and as expeditiously as
possible cause such shares to be duly registered or
approved, as the case may be. The Corporation will use
commercially reasonable efforts to list the shares of (or
depositary shares representing fractional interests in)
Common Stock or other shares of Capital Stock of the
Corporation required to be delivered upon conversion of
shares of this Series prior to such delivery upon the
principal national securities exchange upon which the
outstanding Common Stock or such other shares of Capital
Stock is listed at the time of such delivery.
<PAGE>
3.10 The Corporation shall pay any and all
issue or other taxes that may be payable in respect of any
issue or delivery of shares of Common Stock or other shares
of Capital Stock of the Corporation on conversion of shares
of this Series pursuant hereto. The Corporation shall not,
however, be required to pay any tax that is payable in
respect of any transfer involved in the issue or delivery of
Common Stock or such other shares of Capital Stock in a name
other than that in which the shares of this Series so
converted were registered, and no such issue or delivery
shall be made unless and until the Person requesting such
issue has paid to the Corporation the amount of such tax, or
has established, to the satisfaction of the Corporation,
that such tax has been paid.
3.11 In case of (i) the voluntary or
involuntary dissolution, liquidation or winding up of the
Corporation, (ii) any Pro Rata Repurchase or (iii) any
action triggering an adjustment to the Conversion Rate
pursuant to this Section 3, then, in each case, the
Corporation shall cause to be filed with the transfer agent
or agents for the Series H Stock, and shall cause to be
mailed, first-class postage prepaid, to the holders of
record of the outstanding shares of Series H Stock, at least
fifteen (15) days prior to the applicable record date for
any such transaction (or if no record date will be
established, the effective date thereof), a notice stating
(x) the date, if any, on which a record is to be taken for
the purpose of any such transaction (or if no record date
will be established, the date as of which holders of record
of Common Stock entitled to participate in such transaction
are determined), and (y) the expected effective date
thereof. Failure to give such notice or any defect therein
shall not affect the legality or validity of the proceedings
described in this Section 3.11.
4. Redemption or Exchange.
4.1 (a) The Corporation may, at its sole
option, subject to Section 2.2 hereof, from time to time on
and after September 5, 1999, in the case of clause (i) of
Section 4.1(b), and on and after September 5, 2000, in the
case of clause (ii) or (iii) of Section 4.1(b), redeem, out
of funds legally available therefor, or, as provided below,
exchange shares of Common Stock for, all or (in the case of
Section 4.1(b)(i), any part) of the outstanding shares of
this Series. The redemption price for each share of this
Series called for redemption pursuant to clause (i) of
<PAGE>
Section 4.1(b) shall be the Liquidation Value together with
an amount equal to the accrued and unpaid dividends to the
date fixed for redemption (hereinafter collectively referred
to as the "Redemption Price"). The exchange price for each
share of this Series called for exchange pursuant to clause
(ii) of Section 4.1(b) shall be a number of shares of Common
Stock equal to the Conversion Rate, together with, at the
option of the Corporation, either (x) cash or (y) a number
of shares of Common Stock, valued at the Closing Price on
the Trading Day immediately preceding the date fixed for
exchange, equal, in either case, to the aggregate amount of
accrued and unpaid dividends on the Series H Stock to the
date fixed for exchange (provided that any dividends that
are in arrears must be paid in cash) (hereinafter
collectively referred to as the "Exchange Price").
(b) On the date fixed for redemption or
exchange the Corporation shall, at its option, effect either
(i) a redemption of the shares of this
Series to be redeemed by way of payment, out of funds
legally available therefor, of cash equal to the
aggregate Redemption Price for the shares of this Series
then being redeemed;
(ii) an exchange of the shares of this
Series for the Exchange Price in shares of Common Stock
(provided that the Corporation (A) shall be entitled to
deliver cash (1) in lieu of any fractional share of
Common Stock (determined in a manner consistent with
Section 3.3) and (2) equal to accrued and unpaid
dividends to the date fixed for exchange in lieu of
shares of Common Stock and (B) shall be required to
deliver cash in respect of any dividends that are in
arrears); or
(iii) any combination thereof with respect
to each share of this Series called for redemption or
exchange.
(c) Notwithstanding clauses (ii) and (iii)
of Section 4.1(b), the Corporation shall be entitled to
effect an exchange of shares of Series H Stock for Common
Stock or other shares of Capital Stock of the Corporation
only to the extent that duly and validly issued, fully paid
and nonassessable shares of Common Stock (or such other
shares of Capital Stock) shall be available for issuance
(including delivery of previously issued shares of Common
<PAGE>
Stock held in the Corporation's treasury on the date fixed
for exchange). The Corporation shall comply with Sections
3.9 and 3.10 with respect to shares of Common Stock or
other shares of Capital Stock of the Corporation that would
be issuable upon exchange of shares of this Series.
Certificates for shares of Common Stock issued in exchange
for surrendered shares of this Series pursuant to this
Section 4.1 shall be made available by the Corporation not
later than the fifth Trading Day following the date for
exchange.
4.2 In the event that fewer than all the
outstanding shares of this Series are to be redeemed
pursuant to Section 4.1(b)(i), the number of shares to be
redeemed from each holder of shares of this Series shall be
determined by the Corporation by lot or pro rata or by any
other method as may be determined by the Board of Directors
in its sole discretion to be equitable, and the certificate
of the Corporation's Secretary or an Assistant Secretary
filed with the transfer agent or transfer agents for this
Series in respect of such determination by the Board of
Directors shall be conclusive.
4.3 In the event the Corporation shall
redeem or exchange shares of this Series pursuant to
Section 4.1, notice of such redemption or exchange shall be
given by first class mail, postage prepaid, mailed not less
than fifteen (15) nor more than sixty (60) days prior to the
date fixed for redemption or exchange, as the case may be,
to each record holder of the shares to be redeemed or
exchanged, at such holder's address as the same appears on
the books of the Corporation. Each such notice shall state:
(i) whether the shares of this Series are to be redeemed or
exchanged; (ii) the time and date as of which the redemption
or exchange shall occur; (iii) the total number of shares of
this Series to be redeemed or exchanged and, if fewer than
all the shares held by such holder are to be redeemed, the
number of such shares to be redeemed from such holder;
(iv) the Redemption Price or the Exchange Price, as the case
may be; (v) that shares of this Series called for redemption
or exchange may be converted at any time prior to the time
and date fixed for redemption or exchange (unless the
Corporation shall, in the case of a redemption, default in
payment of the Redemption Price or, in the case of an
exchange, fail to exchange the shares of this Series for the
applicable number of shares of Common Stock and any cash
portion of the Exchange Price or shall exercise its right to
rescind such redemption pursuant to Section 4.5, in which
<PAGE>
case such right of conversion shall not terminate at such
time and date); (vi) the applicable Conversion Price and
Conversion Rate; (vii) the place or places where
certificates for such shares are to be surrendered for
payment of the Redemption Price, in the case of redemption,
or for delivery of certificates representing the shares of
Common Stock and the payment of any cash portion of the
Exchange Price, in the case of exchange; and (viii) that
dividends on the shares of this Series to be redeemed or
exchanged will cease to accrue on such redemption or
exchange date.
4.4 If notice of redemption or exchange
shall have been given by the Corporation as provided in
Section 4.3, dividends on the shares of this Series so
called for redemption or exchange shall cease to accrue,
such shares shall no longer be deemed to be outstanding, and
all rights of the holders thereof as stockholders with
respect to shares so called for redemption or exchange
(except (i) in the case of redemption, the right to receive
from the Corporation the Redemption Price without interest
and in the case of exchange, the right to receive from the
Corporation the Exchange Price without interest and (ii) the
right to convert such shares in accordance with Section 3)
shall cease (including any right to receive dividends
otherwise payable on any Dividend Payment Date that would
have occurred after the time and date of redemption or
exchange) either (i) in the case of a redemption or exchange
pursuant to Section 4.1, from and after the time and date
fixed in the notice of redemption or exchange as the time
and date of redemption or exchange (unless the Corporation
shall (x) in the case of a redemption, default in the
payment of the Redemption Price, (y) in the case of an
exchange, fail to exchange the applicable number of shares
of Common Stock and any cash portion of the Exchange Price
or (z) exercise its right to rescind such redemption
pursuant to Section 4.5, in which case such rights shall not
terminate at such time and date) or (ii) if the Corporation
shall so elect and state in the notice of redemption or
exchange, from and after the time and date (which date shall
be the date fixed for redemption or exchange or an earlier
date not less than fifteen (15) days after the date of
mailing of the redemption or exchange notice) on which the
Corporation shall irrevocably deposit with a designated bank
or trust company doing business in the Borough of Manhattan,
City and State of New York, as paying agent, money suffi-
cient to pay at the office of such paying agent, on the
redemption date, the Redemption Price, in the case of
<PAGE>
redemption, or certificates representing the shares of
Common Stock to be so exchanged and any cash portion of the
Exchange Price, in the case of an exchange. Any money or
certificates so deposited with any such paying agent that
shall not be required for such redemption or exchange
because of the exercise of any right of conversion or
otherwise shall be returned to the Corporation forthwith.
Upon surrender (in accordance with the notice of redemption
or exchange) of the certificate or certificates for any
shares of this Series to be so redeemed or exchanged
(properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice of redemption
or exchange shall so state), such shares shall be redeemed
or exchanged by the Corporation at the Redemption Price or
the Exchange Price, as applicable, as set forth in Section
4.1 (unless the Corporation shall have exercised its right
to rescind such redemption pursuant to Section 4.5). In
case fewer than all the shares represented by any such
certificate are to be redeemed, a new certificate shall
be issued representing the unredeemed shares (or fractions
thereof as provided in Section 8.4), without cost to the
holder thereof, together with the amount of cash, if any,
in lieu of fractional shares other than those issuable in
accordance with Section 8.4. Subject to applicable escheat
laws, any moneys so set aside by the Corporation in the
case of redemption and unclaimed at the end of one year
from the redemption date shall revert to the general funds
of the Corporation, after which reversion the holders of
such shares so called for redemption or exchange shall look
only to the general funds of the Corporation for the
payment of the Redemption Price or the Exchange Price, as
applicable, without interest. Any interest accrued on funds
so deposited shall be paid to the Corporation from time to
time.
4.5 In the event that a Redemption Rescission
Event shall occur following any day on which a notice of
redemption shall have been given pursuant to Section 4.3
but at or prior to the earlier of (a) the time and date
fixed for redemption as set forth in such notice of
redemption and (b) the time and date at which the
Corporation shall have irrevocably deposited funds or
certificates with a designated bank or trust company
pursuant to Section 4.4, the Corporation may, at its sole
option, at any time prior to the earliest of (i) the close
of business on that day which is two (2) Trading Days
following such Redemption Rescission Event, (ii) the time
and date fixed for redemption as set forth in such notice
<PAGE>
and (iii) the time and date on which the Corporation shall
have irrevocably deposited such funds with a designated
bank or trust company, rescind the redemption to which such
notice of redemption shall have related by making a public
announcement of such rescission (the date on which such
public announcement shall have been made being hereinafter
referred to as the "Rescission Date"). The Corporation
shall be deemed to have made such announcement if it shall
issue a release to the Dow Jones News Service, Reuters
Information Services or any successor news wire service.
From and after the making of such announcement, the
Corporation shall have no obligation to redeem shares of
this Series called for redemption pursuant to such notice
of redemption or to pay the redemption price therefor and
all rights of holders of shares of this Series shall be
restored as if such notice of redemption had not been
given. The Corporation shall give notice of any such
rescission by one of the means specified in Section 8.2 as
promptly as practicable, but in no event later than the
close of business on that date which is five (5) Trading
Days following the Rescission Date to each record holder of
shares of this Series at the close of business on the
Rescission Date and to any other Person or entity that was
a record holder of shares of this Series and that shall
have surrendered shares of this Series for conversion
following the giving of notice of the subsequently
rescinded redemption. Each notice of rescission shall (w)
state that the redemption described in the notice of
redemption has been rescinded, (x) state that any
Converting Holder shall be entitled to rescind the
conversion of shares of this Series surrendered for
conversion following the day on which notice of redemption
was given but prior to the close of business on the later
of (1) the Trading Day next succeeding the date on which
public announcement of the rescission of such redemption
shall have been made and (2) the Trading Day on which the
Corporation's notice of rescission is deemed given pursuant
to Section 8.2, (y) be accompanied by a form prescribed by
the Corporation to be used by any Converting Holder
rescinding the conversion of shares so surrendered for
conversion (and instructions for the completion and
delivery of such form, including instructions with respect
to payments that may be required to accompany such delivery
shall be in accordance with Section 3.5) and (z) state that
such form must be properly completed and received by the
Corporation no later than the close of business on a date
that shall be ten (10) Trading Days following the date of
the mailing of such notice of rescission is deemed given
pursuant to Section 8.2.
<PAGE>
4.6 The shares of this Series shall not be
subject to the provisions of Section 5 of Article IV of the
Certificate of Incorporation.
5. Pro Rata Repurchase.
5.1 Upon a Pro Rata Repurchase, each holder
of shares of this Series shall have the right to require
that the Corporation repurchase, out of funds legally
available therefor, a Pro Rata Portion (as defined below)
of the shares of such holder, or any lesser number
requested by the holder, at a price per share equal to the
highest price per share of Common Stock paid in the Pro
Rata Repurchase multiplied by the Conversion Rate then in
effect plus an amount equal to the accrued but unpaid
dividends on such shares to the date of repurchase.
5.2 At any time prior to or within thirty
(30) days following any Pro Rata Repurchase, the
Corporation shall mail a notice to each holder of shares of
this Series stating:
(a) that a Pro Rata Repurchase will
occur or has occurred and that such holder will have
(upon such Pro Rata Repurchase) or has the right to
require the Corporation to repurchase such holder's
shares in an amount not in excess of the Pro Rata
Portion at a repurchase price in cash determined as
set forth above plus an amount equal to accrued and
unpaid dividends, if any, to the date of repurchase;
(b) the repurchase date for the Series
H Stock (which shall be no earlier than fifteen (15)
days nor later than sixty (60) days from the date such
notice is mailed); and
(c) the instructions determined by the
Corporation, consistent with this Section, that a
holder must follow in order to have its shares
repurchased.
5.3 Holders electing to have any shares
repurchased will be required to surrender such shares, with
an appropriate form duly completed, to the Corporation at
the address specified in the notice at least five (5) days
prior to the repurchase date. Holders will be entitled to
withdraw their election if the Corporation receives, not
later than three (3) days prior to the repurchase date, a
<PAGE>
telegram, telex, facsimile transmission or letter setting
forth the name of the holder, the certificate numbers of
the shares delivered for purchase by the holder and a
statement that such holder is withdrawing his election to
have such shares repurchased. Holders will have such
additional withdrawal and other rights as may be required
pursuant to applicable law.
5.4 On the repurchase date, the Corporation
shall (i) pay the repurchase price plus an amount equal to
accrued and unpaid dividends as provided in Section 5.1, if
any, to the holders entitled thereto and (ii) issue to such
holders any equity securities of the Corporation (other
than Common Stock) that would at the time be issuable upon
conversion of the shares of Series H Stock that are then
being repurchased pursuant hereto.
5.5 The Board of Directors will not approve
any tender or exchange offer by the Corporation or a third
party for shares of Common Stock or recommend that the
holders of Common Stock accept any offer or tender their
shares into any offer unless a Pro Rata Portion of the
shares of this Series of all holders are entitled to be
tendered into such offer at a price not less than the price
per share for shares of Common Stock pursuant to such offer
multiplied by the Conversion Rate then in effect plus an
amount equal to accrued but unpaid dividends on such shares
to the date of payment for such shares in such tender or
exchange offer.
5.6 For purposes hereof, "Pro Rata Portion"
with respect to the shares of this Series held by any holder
shall mean all the shares of this Series then owned by such
holder times a fraction, the numerator of which is the
number of outstanding shares of Common Stock (a) purchased
in the applicable Pro Rata Repurchase or (b) for which a
tender or exchange offer referred to in Section 5.5 is made,
as the case may be, and the denominator of which is the
number of outstanding shares of Common Stock immediately
prior to such Pro Rata Repurchase or the commencement of
such tender or exchange offer, as the case may be.
<PAGE>
6. Voting. The shares of this Series shall have
no voting rights except as required by law or as set forth
below.
6.1 (a) So long as any shares of this Series
remain outstanding, unless a greater percentage shall then
be required by law, the Corporation shall not, without the
affirmative vote at a meeting or the written consent with
or without a meeting of the holders of shares of this
Series representing at least 66-2/3% of the aggregate
voting power of shares of this Series then outstanding (i)
authorize any Senior Stock or reclassify (by merger,
consolidation or otherwise) any Junior Stock or Parity
Stock as Senior Stock, (ii) merge into or consolidate with
any Person where the surviving or continuing corporation
will have any authorized Senior Stock other than capital
stock corresponding to shares of Senior Stock existing
immediately before such merger or consolidation) or (iii)
amend, alter or repeal (by operation of law or otherwise)
any of the provisions of the Certificate or the Certificate
of Incorporation, so as in any such case to adversely
affect the voting powers, designations, preferences and
relative, participating, optional or other special rights,
and qualifications, limitations or restrictions of the
shares of this Series.
(b) No consent of holders of shares of
this Series shall be required for (i) the creation of any
indebtedness of any kind of the Corporation, (ii) the
authorization or issuance of any class of Junior Stock or
Parity Stock, (iii) the authorization, designation or
issuance of additional shares of Series H Stock or (iv)
subject to Section 6.1(a), the authorization or issuance of
any other shares of Preferred Stock.
6.2 (a) If and whenever at any time or times
dividends payable on shares of this Series shall have been
in arrears and unpaid in an aggregate amount equal to or
exceeding the amount of dividends payable thereon for six
quarterly dividend periods, then the number of directors
constituting the Board of Directors shall be increased by
two and the holders of shares of this Series, together with
the holders of any shares of any Parity Stock as to which
in each case dividends are in arrears and unpaid in an
aggregate amount equal to or exceeding the amount of
dividends payable thereon for six quarterly dividend
periods, shall have the exclusive right, voting separately
<PAGE>
as a class with such other series, to elect two directors
of the Corporation.
(b) Such voting right may be exercised
initially either by written consent or at a special meeting
of the holders of the Preferred Stock having such voting
right, called as hereinafter provided, or at any annual
meeting of stockholders held for the purpose of electing
directors, and thereafter at each such annual meeting until
such time as all dividends in arrears on the shares of this
Series shall have been paid in full and all dividends
payable on the shares of this Series on four subsequent
consecutive Dividend Payment Dates shall have been paid in
full on such dates or funds shall have been set aside for
the payment thereof, at which time such voting right and
the term of the directors elected pursuant to Section
6.2(a) shall terminate.
(c) At any time when such voting right
shall have vested in holders of shares of such series of
Preferred Stock described in Section 6.2(a), and if such
right shall not already have been exercised by written
consent, a proper officer of the Corporation may call, and,
upon the written request, addressed to the Secretary of the
Corporation, of the record holders of shares representing
ten percent (10%) of the voting power of the shares then
outstanding of such Preferred Stock having such voting
right, shall call, a special meeting of the holders of such
Preferred Stock having such voting right. Such meeting
shall be held at the earliest practicable date upon the
notice required for annual meetings of stockholders at the
place for holding annual meetings of stockholders, or, if
none, at a place designated by the Board of Directors.
Notwithstanding the provisions of this Section 6.2(c), no
such special meeting shall be called during a period within
60 days immediately preceding the date fixed for the next
annual meeting of stockholders.
(d) At any meeting held for the purpose
of electing directors at which the holders of such
Preferred Stock shall have the right to elect directors as
provided herein, the presence in Person or by proxy of the
holders of shares representing more than fifty percent
(50%) in voting power of the then outstanding shares of
such Preferred Stock having such right shall be required
and shall be sufficient to constitute a quorum of such
class for the election of directors by such class.
<PAGE>
(e) Any director elected by holders of
Preferred Stock pursuant to the voting right created under
this Section 6.2 shall hold office until the next annual
meeting of stockholders (unless such term has previously
terminated pursuant to Section 6.2(b)) and any vacancy in
respect of any such director shall be filled only by vote
of the remaining director so elected, or if there be no
such remaining director, by the holders of such Preferred
Stock, entitled to elect such director or directors by
written consent or at a special meeting called in
accordance with the procedures set forth in Section 6.2(c),
or, if no special meeting is called or written consent
executed, at the next annual meeting of stockholders. Upon
any termination of such voting right, subject to applicable
law, the term of office of all directors elected by holders
of such Preferred Stock voting separately as a class
pursuant to this Section 6.2 shall terminate.
(f) In exercising the voting rights set
forth in this Section 6.2, each share of this Series shall
have a number of votes equal to its Liquidation Value.
7. Liquidation Rights.
7.1 Upon the dissolution, liquidation or
winding up of the Corporation, whether voluntary or
involuntary, the holders of the shares of this Series shall
be entitled to receive out of the assets of the Corporation
available for distribution to stockholders, in preference
to the holders of, and before any payment or distribution
shall be made on, Junior Stock, the amount of $100 per
share (the "Liquidation Value"), plus an amount equal to
all accrued and unpaid dividends to the date of final
distribution.
7.2 Neither the sale, exchange or other
conveyance (for cash, shares of stock, securities or other
consideration) of all or substantially all the property and
assets of the Corporation nor the merger or consolidation
of the Corporation into or with any other corporation, or
the merger or consolidation of any other corporation into
or with the Corporation, shall be deemed to be a
dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section 7.
7.3 After the payment to the holders of the
shares of this Series of full preferential amounts provided
for in this Section 7, the holders of this Series as such
<PAGE>
shall have no right or claim to any of the remaining assets
of the Corporation.
7.4 In the event the assets of the
Corporation available for distribution to the holders of
shares of this Series upon any dissolution, liquidation or
winding up of the Corporation, whether voluntary or
involuntary, shall be insufficient to pay in full all
amounts to which such holders are entitled pursuant to
Section 7.1, no such distribution shall be made on account
of any shares of any Parity Stock upon such dissolution,
liquidation or winding up unless proportionate distributive
amounts shall be paid on account of the shares of this
Series, ratably, in proportion to the full distributable
amounts for which holders of all Parity Stock are entitled
upon such dissolution, liquidation or winding up.
8. Other Provisions.
8.1 All notices from the Corporation to the
holders shall be given by one of the methods specified in
Section 8.2. With respect to any notice to a holder of
shares of this Series required to be provided hereunder,
neither failure to give such notice, nor any defect therein
or in the transmission thereof, to any particular holder
shall affect the sufficiency of the notice or the validity
of the proceedings referred to in such notice with respect
to the other holders or affect the legality or validity of
any distribution, right, warrant, reclassification,
consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up, or the vote upon any such
action. Any notice that was mailed in the manner herein
provided shall be conclusively presumed to have been duly
given whether or not the holder receives the notice.
8.2 All notices and other communications
hereunder shall be deemed given (i) on the first Trading Day
following the date received, if delivered personally,
(ii) on the Trading Day following timely deposit with an
overnight courier service, if sent by overnight courier
specifying next day delivery and (iii) on the first Trading
Day that is at least five days following deposit in the
mails, if sent by first class mail to (x) a holder at its
last address as it appears on the transfer records or
registry for the Series H Stock and (y) the Corporation at
the following address (or at such other address as the
Corporation shall specify in a notice pursuant to this
<PAGE>
Section): TW Inc., 75 Rockefeller Plaza, New York, New York
10019, Attention: General Counsel.
8.3 Any shares of this Series that have been
converted, redeemed, exchanged or otherwise acquired by the
Corporation shall, after such conversion, redemption,
exchange or acquisition, as the case may be, be retired and
promptly cancelled and the Corporation shall take all
appropriate action to cause such shares to obtain the status
of authorized but unissued shares of Preferred Stock,
without designation as to series, until such shares are once
more designated as part of a particular series by the Board
of Directors. The Corporation may cause a certificate
setting forth a resolution adopted by the Board of Directors
that none of the authorized shares of this Series are
outstanding to be filed with the Secretary of State of the
State of Delaware. When such certificate becomes effective,
all matters set forth in the Certificate with respect to the
Series H Stock shall be eliminated from the Certificate of
Incorporation and the shares of Preferred Stock designated
hereby as Series H Stock shall have the status of authorized
and unissued shares of Preferred Stock and may be reissued
as part of any new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors.
8.4 The shares of this Series shall be
issuable in whole shares or, if authorized by the Board of
Directors, in any fraction of a whole share so authorized or
any integral multiple of such fraction.
8.5 The Corporation shall be entitled to
recognize the exclusive right of a Person registered on its
records as the holder of shares of this Series, and such
record holder shall be deemed the holder of such shares for
all purposes.
8.6 All notice periods referred to in the
Certificate shall commence on the date of the mailing of the
applicable notice.
<PAGE>
8.7 Certificates for shares of this Series
shall bear such legends as the Corporation shall from time
to time deem appropriate.
IN WITNESS WHEREOF, TW INC. has caused this
certificate to be signed this 10th day of October, 1996.
TW INC.,
By:/s/ Thomas W. McEnerney
---------------------------
Name: Thomas W. McEnerney
Title: Vice President
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF SERIES I
CONVERTIBLE PREFERRED STOCK
OF
TW INC.
-------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
-------------------
TW INC., hereafter to be renamed "Time Warner Inc." (the
"Corporation"), a corporation organized and existing by virtue of the
General Corporation Law of the State of Delaware (the "DGCL"), does
hereby certify that the following resolution was duly adopted by
action of the Board of Directors of the Corporation (the "Board of
Directors") at a meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly granted to
and vested in the Board of Directors by the provisions of Section 2 of
Article IV of the Restated Certificate of Incorporation of the
Corporation, as amended from time to time (the "Certificate of
Incorporation"), and Section 151(g) of the DGCL, the Board of
Directors hereby creates, from the authorized shares of Preferred
Stock, par value $.10 per share ("Preferred Stock"), of the
Corporation authorized to be issued pursuant to the Certificate of
Incorporation, a series of Preferred Stock, and hereby fixes the
voting powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of the shares of such series as follows:
The series of Preferred Stock hereby established shall
consist of 7,000,000 shares designated as Series I
<PAGE>
Convertible Preferred Stock. The rights, preferences and limitations
of such series shall be as follows:
1. Definitions. As used herein, the following terms shall
have the indicated meanings:
1.1 "Accrued Dividend Amount" shall mean the aggregate
amount of accrued and unpaid dividends on a share of Series I Stock to
and including the Conversion Date, except that if the Conversion Date
shall occur after a Record Date and prior to a related Dividend
Payment Date, the Accrued Dividend Amount shall not include any
accrued and unpaid dividends for the period from and after the most
recent Dividend Payment Date.
1.2 "Board of Directors" shall mean the Board of
Directors of the Corporation or, with respect to any action to be
taken by the Board of Directors, any committee of the Board of
Directors duly authorized to take such action.
1.3 "Capital Stock" shall mean any and all shares of
corporate stock of a Person (however designated and whether
representing rights to vote, rights to participate in dividends or
distributions upon liquidation or otherwise with respect to such
Person, or any division or subsidiary thereof, or any joint venture,
partnership, corporation or other entity).
1.4 "Certificate" shall mean the certificate of the
voting powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of Series I Convertible Preferred Stock filed
with respect to this resolution with the Secretary of State of the
State of Delaware pursuant to Section 151 of the DGCL.
1.5 "Change of Control" and "Change of Control Date"
shall have the following meanings: "Change of Control" shall mean the
occurrence of one or both of the following events: (a) individuals who
would constitute a majority of the members of the Board of Directors
elected at any meeting of stockholders or by written consent (without
regard to any members of the Board of Directors elected pursuant to
the terms of any series of Preferred Stock) shall be elected to the
Board of Directors and the election or the nomination for election by
the Corporation's stockholders of such directors was not approved by a
vote of
<PAGE>
at least a majority of the directors in office immediately prior to
such election (in which event "Change of Control Date" shall mean the
date of such election) or (b) a Person or group of Persons acting in
concert as a partnership, limited partnership, syndicate or other
group within the meaning of Rule 13d-3 under the Exchange Act (the
"Acquiring Person") shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases, share
repurchases or redemptions or otherwise, have become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of 40%
or more of the outstanding shares of Common Stock (in which event
"Change of Control Date" shall mean the date of the event resulting in
such 40% ownership).
1.6 "Closing Price" of the Common Stock shall mean the
last reported sale price of the Common Stock (regular way) as shown on
the Composite Tape of the NYSE, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices on the
NYSE, or, if the Common Stock is not listed or admitted to trading on
the NYSE, on the principal national securities exchange on which such
stock is listed or admitted to trading, or, if it is not listed or
admitted to trading on any national securities exchange, the last
reported sale price of the Common Stock, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, in either case as reported by NASDAQ.
1.7 "Common Dividend Deficiency" shall be applicable in
the event that a Conversion Date shall fall after a record date and
prior to the related payment date for a regularly scheduled cash
dividend on the Common Stock (the "Common Dividend Payment Date"), and
in such event shall mean the product of (i) the Conversion Rate, (ii)
the amount per share of Common Stock of the regularly scheduled cash
dividend for which the record date has been set but a payment date has
not yet occurred and (ii) a fraction (A) the numerator of which is the
number of calendar days from and excluding the Conversion Date (or in
the event the Conversion Date falls after a Record Date and on or
prior to a related Dividend Payment Date, from and excluding the
Dividend Payment Date) to and including the Common Dividend Payment
Date and (B) the denominator of which is 91 (provided that such
fraction shall not be greater than one (1)).
1.8 "Common Dividend Excess" shall be applicable in all
circumstances where a Common Dividend
<PAGE>
Deficiency is not applicable, and in such event shall mean the product
of (i) the Conversion Rate, (ii) the regular quarterly cash dividend
per share, if any, paid by the Corporation on the Common Stock (the
"Historical Dividend") on the most recent dividend payment date for
the Common Stock (the "Prior Dividend Payment Date") occurring during
the four months immediately preceding the Conversion Date and (iii) a
fraction (A) the numerator of which is the number of calendar days
from and excluding (1) the Prior Dividend Payment Date to and
including (2) the Conversion Date (or in the event the Conversion Date
falls after a Record Date and on or prior to a related Dividend
Payment Date, to and including the Dividend Payment Date) and (B) the
denominator of which is 91 days (provided that in no event shall the
fraction be greater than one (1)).
1.9 "Common Stock" shall mean the class of Common
Stock, par value $.01 per share, of the Corporation authorized at the
date of the Certificate, or any other class of stock resulting from
(x) successive changes or reclassifications of such Common Stock
consisting of changes in par value, or from par value to no par value,
(y) a subdivision or combination or (z) any other changes for which an
adjustment is made under Section 3.6(a), and in any such case
including any shares thereof authorized after the date of the
Certificate, together with any associated rights to purchase other
securities of the Corporation that are at the time represented by the
certificates representing such shares of Common Stock.
1.10 "Conversion Date" shall have the meaning set forth
in Section 3.5 hereof.
1.11 "Conversion Price" at any time shall mean the
Liquidation Value per share divided by the Conversion Rate in effect
at such time (rounded to the nearest one hundredth of a cent).
1.12 "Conversion Rate" shall have the meaning set forth
in Section 3.1 hereof.
1.13 "Converting Holder" shall have the meaning set
forth in Section 3.5 hereof.
1.14 "Corporation" shall mean TW Inc., a Delaware
corporation, and any of its successors by operation of law, including
by merger, consolidation or sale or
<PAGE>
conveyance of all or substantially all of its property and assets.
1.15 "Current Market Price" of the Common Stock on any
date shall mean the average of the daily Closing Prices per share of
the Common Stock for the five (5) consecutive Trading Days ending on
the Trading Day immediately preceding the applicable record date,
conversion date, redemption date or exchange date referred to in
Section 3 or Section 4.
1.16 "Dividend Payment Date" shall have the meaning set
forth in Section 2.1 hereof.
1.17 "DGCL" shall mean the General Corporation Law of
the State of Delaware.
1.18 "Exchange Act" shall mean Securities Exchange Act
of 1934, as amended.
1.19 "Exchange Price" shall have the meaning set forth
in Section 4.1 hereof.
1.20 "Junior Stock" shall mean the Common Stock, the
Series A Stock, the Series LMC Stock, the Series LMCN-V Stock and the
shares of any other class or series of Capital Stock of the
Corporation that, by the terms of the Certificate of Incorporation or
of the instrument by which the Board of Directors, acting pursuant to
authority granted in the Certificate of Incorporation, shall fix the
relative rights, preferences and limitations thereof, shall be junior
to the Series I Stock in respect of the right to receive dividends or
to participate in any distribution of assets other than by way of
dividends.
1.21 "Liquidation Value" shall have the meaning set
forth in Section 7.1 hereof.
1.22 "NASDAQ" shall mean the Nasdaq Stock Market.
1.23 "Net Dividend Amount" shall have the meaning set
forth in Section 3.1 hereof.
1.24 "NYSE" shall mean the New York Stock Exchange,
Inc.
<PAGE>
1.25 "Parity Stock" shall mean the Series D Stock, the
Series E Stock, the Series F Stock, the Series G Stock, the Series H
Stock, the Series J Stock, the Series L Stock, the Series M Stock and
the shares of any other class or series of Capital Stock of the
Corporation that, by the terms of the Certificate of Incorporation or
of the instrument by which the Board of Directors, acting pursuant to
authority granted in the Certificate of Incorporation, shall fix the
relative rights, preferences and limitations thereof, shall, in the
event that the stated dividends thereon are not paid in full, be
entitled to share ratably with the Series I Stock in the payment of
dividends, including accumulations, if any, in accordance with the
sums that would be payable on such shares if all dividends were
declared and paid in full, or shall, in the event that the amounts
payable thereon on liquidation are not paid in full, be entitled to
share ratably with the Series I Stock in any distribution of assets
other than by way of dividends in accordance with the sums that would
be payable in such distribution if all sums payable were discharged in
full; provided, however, that the term "Parity Stock" shall be deemed
to refer (i) in Section 2.2 hereof, to any stock that is Parity Stock
in respect of dividend rights; (ii) in Section 7 hereof, to any stock
that is Parity Stock in respect of the distribution of assets; and
(iii) in Sections 6.2 and 6.3 hereof, to any stock that is Parity
Stock in respect of either dividend rights or the distribution of
assets and that, pursuant to the Certificate of Incorporation or any
instrument in which the Board of Directors, acting pursuant to
authority granted in the Certificate of Incorporation, shall so
designate, is entitled to vote with the holders of Series I Stock.
1.26 "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
1.27 "Preferred Stock" shall mean the class of
Preferred Stock, par value $.10 per share, of the Corporation
authorized at the date of the Certificate, including any shares
thereof authorized after the date of the Certificate.
1.28 "Pro Rata Portion" shall have the meaning set
forth in Section 5.6 hereof.
1.29 "Pro Rata Repurchase" shall mean the purchase of
shares of Common Stock by the Corporation or by
<PAGE>
any of its subsidiaries, whether for cash or other property or
securities of the Corporation, which purchase is subject to Section
13(e) of the Exchange Act or is made pursuant to an offer made
available to all holders of Common Stock, but excluding any purchase
made in open market transactions that satisfies the conditions of
clause (b) of Rule 10b-18 under the Exchange Act or has been designed
(as reasonably determined by the Board of Directors) to prevent such
purchase from having a material effect on the trading market of the
Common Stock. The "Effective Date" of a Pro Rata Repurchase shall mean
the applicable expiration date (including all extensions thereof) of
any tender or exchange offer that is a Pro Rata Repurchase or the date
of purchase with respect to any Pro Rata Repurchase that is not a
tender or exchange offer.
1.30 "Record Date" shall have the meaning set forth in
Section 2.1 hereof.
1.31 "Redemption Price" shall have the meaning set
forth in Section 4.1 hereof.
1.32 "Redemption Rescission Event" shall mean the
occurrence of (a) any general suspension of trading in, or limitation
on prices for, securities on the principal national securities
exchange on which shares of Common Stock are registered and listed for
trading (or, if shares of Common Stock are not registered and listed
for trading on any such exchange, in the over-the-counter market) for
more than six-and-one-half (6-1/2) consecutive trading hours, (b) any
decline in either the Dow Jones Industrial Average or the Standard &
Poor's Index of 400 Industrial Companies (or any successor index
published by Dow Jones & Company, Inc. or Standard & Poor's
Corporation) by either (i) an amount in excess of 10%, measured from
the close of business on any Trading Day to the close of business on
the next succeeding Trading Day during the period commencing on the
Trading Day preceding the day notice of any redemption of shares of
this Series is given (or, if such notice is given after the close of
business on a Trading Day, commencing on such Trading Day) and ending
at the earlier of (x) the time and date fixed for redemption in such
notice and (y) the time and date at which the Corporation shall have
irrevocably deposited funds with a designated bank or trust company
pursuant to Section 4.4 or (ii) an amount in excess of 15% (or, if the
time and date fixed for redemption is more than 15 days following the
date on which notice of redemption is given, 20%), measured from the
close of
<PAGE>
business on the Trading Day preceding the day notice of such
redemption is given (or, if such notice is given after the close of
business on a Trading Day, from such Trading Day) to the close of
business on any Trading Day on or prior to the earlier of the dates
specified in clauses (x) and (y) above, (c) a declaration of a banking
moratorium or any suspension of payments in respect of banks by
Federal or state authorities in the United States or (d) the
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United
States that in the reasonable judgment of the Corporation could have a
material adverse effect on the market for the Common Stock.
1.33 "Rescission Date" shall have the meaning set forth
in Section 4.5 hereof.
1.34 "Senior Stock" shall mean the shares of any class
or series of Capital Stock of the Corporation that, by the terms of
the Certificate of Incorporation or of the instrument by which the
Board of Directors, acting pursuant to authority granted in the
Certificate of Incorporation, shall fix the relative rights,
preferences and limitations thereof, shall be senior to the Series I
Stock in respect of the right to receive dividends or to participate
in any distribution of assets other than by way of dividends.
1.35 "Series A Stock" shall mean the series of
Preferred Stock authorized and designated as Series A Participating
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.36 "Series D Stock" shall mean the series of
Preferred Stock authorized and designated as Series D Convertible
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.37 "Series E Stock" shall mean the series of
Preferred Stock authorized and designated as Series E Convertible
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.38 "Series F Stock" shall mean the series of
Preferred Stock authorized and designated as Series F
<PAGE>
Convertible Preferred Stock at the date of the Certificate, including
any shares thereof authorized and designated after the date of the
Certificate.
1.39 "Series G Stock" shall mean the series of
Preferred Stock authorized and designated as Series G Convertible
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.40 "Series H Stock" shall mean the series of
Preferred Stock authorized and designated as Series H Convertible
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.41 "Series I Stock" and "this Series" shall mean the
series of Preferred Stock authorized and designated as the Series I
Convertible Preferred Stock, including any shares thereof authorized
and designated after the date of the Certificate
1.42 "Series J Stock" shall mean the series of
Preferred Stock authorized and designated as Series J Convertible
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.43 "Series L Stock" shall mean the series of
Preferred Stock authorized and designated as 10-1/4% Series L
Exchangeable Preferred Stock at the date of the Certificate, including
any shares thereof authorized and designated after the date of the
Certificate.
1.44 "Series LMC Stock" shall mean the series of Series
Common Stock authorized and designated as Series LMC Common Stock at
the date of the Certificate, including any shares thereof authorized
and designated after the date of the Certificate.
1.45 "Series LMCN-V Stock" shall mean the series of
Series Common Stock authorized and designated as Series LMCN-V Common
Stock at the date of the Certificate, including any shares thereof
authorized and designated after the date of the Certificate.
1.46 "Series M Stock" shall mean the series of
Preferred Stock authorized and designated as 10-1/4%
<PAGE>
Series M Exchangeable Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after the date
of the Certificate.
1.47 "Surrendered Shares" shall have the meaning set
forth in Section 3.5 hereof.
1.48 "Trading Day" shall mean, so long as the Common
Stock is listed or admitted to trading on the NYSE, a day on which the
NYSE is open for the transaction of business, or, if the Common Stock
is not listed or admitted to trading on the NYSE, a day on which the
principal national securities exchange on which the Common Stock is
listed is open for the transaction of business, or, if the Common
Stock is not so listed or admitted for trading on any national
securities exchange, a day on which NASDAQ is open for the transaction
of business.
2. Cash Dividends.
2.1 The holders of the outstanding Series I Stock shall
be entitled to receive quarter-annual dividends, as and when declared
by the Board of Directors out of funds legally available therefor.
Each quarter-annual dividend shall be an amount per share equal to (i)
in the case of each Dividend Payment Date (as defined below) occurring
on or prior to October 2, 1999, the greater of (A) $.9375 per $100 of
Liquidation Value of Series I Stock (which is equivalent to $3.75 per
annum), and (B) an amount per $100 of Liquidation Value of Series I
Stock equal to the product of (1) the Conversion Rate and (2) the
aggregate per share amount of regularly scheduled dividends paid in
cash on the Common Stock during the period from but excluding the
immediately preceding Dividend Payment Date to and including such
Dividend Payment Date (the "Preferred Dividend Amount"), and (ii) in
the case of each Dividend Payment Date occurring thereafter, an amount
per $100 of Liquidation Value of Series I Stock equal to the product
of (1) the Conversion Rate and (2) the aggregate per share amount of
regularly scheduled dividends paid in cash on the Common Stock during
the period from but excluding the immediately preceding Dividend
Payment Date to and including such Dividend Payment Date. All
dividends shall be payable in cash on or about the first day of March,
June, September and December in each year, beginning on the first such
date that is more than 15 days after the date of issuance of the
relevant shares of Series I Stock, as fixed by the Board of Directors,
or such other dates as are fixed by the Board of
<PAGE>
Directors (provided that October 2, 1999, shall be a Dividend Payment
Date) (each a "Dividend Payment Date"), to the holders of record of
Series I Stock at the close of business on or about the Trading Day
next preceding such first day of March, June, September and December
(or October 2, 1999) as the case may be, as fixed by the Board of
Directors, or such other dates as are fixed by the Board of Directors
(each a "Record Date"). Subject to the next sentence, in the case of
dividends payable in respect of periods prior to October 2, 1999, (i)
such dividends shall accrue on each share on a daily basis, whether or
not there are unrestricted funds legally available for the payment of
such dividends and whether or not earned or declared, and (ii) any
such dividends that become payable for any partial dividend period
shall be computed on the basis of the actual days elapsed in such
period. Notwithstanding the preceding sentence, the amount accruing
and payable in respect of the first dividend on the Series I Stock
payable after the date of the Certificate shall equal the Preferred
Dividend Amount. From and after October 2, 1999, dividends on the
Series I Stock (determined as to amount as provided herein) shall
accrue to the extent, but only to the extent, that regularly scheduled
cash dividends are declared by the Board of Directors on the Common
Stock with a payment date after October 2, 1999 (or, in the case of
Series I Stock originally issued after October 2, 1999, after the
Dividend Payment Date next preceding such date of original issuance).
All dividends that accrue in accordance with the foregoing provisions
shall be cumulative from and after the day immediately succeeding the
date of issuance of the relevant shares of Series I Stock. The amount
payable to each holder of record on any Dividend Payment Date shall be
rounded to the nearest cent.
2.2 Except as hereinafter provided in this Section 2.2,
unless all dividends on the outstanding shares of Series I Stock and
any Parity Stock that shall have accrued and become payable as of any
date shall have been paid, or declared and funds set apart for payment
thereof, no dividend or other distribution (payable other than in
shares of Junior Stock) shall be paid to the holders of Junior Stock
or Parity Stock, and no shares of Series I Stock, Parity Stock or
Junior Stock shall be purchased, redeemed or otherwise acquired by the
Corporation or any of its subsidiaries (except by conversion into or
exchange for Junior Stock), nor shall any monies be paid or made
available for a purchase, redemption or sinking fund for the purchase
or redemption of any Series I Stock, Junior Stock
<PAGE>
or Parity Stock. When dividends are not paid in full upon the shares
of this Series and any Parity Stock, all dividends declared upon
shares of this Series and all Parity Stock shall be declared pro rata
so that the amount of dividends declared per share on this Series and
all such Parity Stock shall in all cases bear to each other the same
ratio that accrued dividends per share on the shares of this Series
and all such Parity Stock bear to each other. No interest, or sum of
money in lieu of interest, shall be payable in respect of any dividend
payment or payments on this Series that may be in arrears.
2.3 In case the Corporation shall at any time
distribute (other than a distribution in liquidation of the
Corporation) to the holders of its shares of Common Stock any assets
or property, including debt or equity securities of the Corporation
(other than Common Stock subject to a distribution or reclassification
covered by Section 3.6(a)) or of any other Person (including common
stock of such Person) or cash (but excluding regularly scheduled cash
dividends payable on shares of Common Stock), or in case the
Corporation shall at any time distribute (other than a distribution in
liquidation of the Corporation) to such holders rights, options or
warrants to subscribe for or purchase shares of Common Stock
(including shares held in the treasury of the Corporation), or rights,
options or warrants to subscribe for or purchase any other security or
rights, options or warrants to subscribe for or purchase any assets or
property (in each case, whether of the Corporation or otherwise, but
other than any distribution of rights to purchase securities of the
Corporation if the holder of shares of this Series would otherwise be
entitled to receive such rights upon conversion of shares of this
Series for Common Stock; provided, however, that if such rights are
subsequently redeemed by the Corporation, such redemption shall be
treated for purposes of this Section 2.3 as a cash dividend (but not a
regularly scheduled cash dividend) on the Common Stock), the
Corporation shall simultaneously distribute such assets, property,
securities, rights, options or warrants pro rata to the holders of
Series I Stock on the record date fixed for determining holders of
Common Stock entitled to participate in such distribution (or, if no
such record date shall be established, the effective time thereof) in
an amount equal to the amount that such holders of Series I Stock
would have been entitled to receive had their shares of Series I Stock
been converted into Common Stock immediately prior to such record date
(or effective time).
<PAGE>
In the event of a distribution to holders of Series I Stock pursuant
to this Section 2.3, such holders shall be entitled to receive
fractional shares or interests only to the extent that holders of
Common Stock are entitled to receive the same. The holders of Series I
Stock on the applicable record date (or effective time) shall be
entitled to receive in lieu of such fractional shares or interests the
same consideration as is payable to holders of Common Stock with
respect thereto. If there are no fractional shares or interests
payable to holders of Common Stock, the holders of Series I Stock on
the applicable record date (or effective time) shall receive in lieu
of such fractional shares or interests the fair value thereof as
determined by the Board of Directors.
2.4 If a distribution is made in accordance with the
provisions of Section 2.3, anything in Section 3 to the contrary
notwithstanding, no adjustment pursuant to Section 3 shall be effected
by reason of the distribution of such assets, property, securities,
rights, options or warrants or the subsequent modification, exercise,
expiration or termination of such securities, rights, options or
warrants.
2.5 In the event that the holders of Common Stock are
entitled to make any election with respect to the kind or amount of
securities or other property receivable by them in any distribution
that is subject to Section 2.3, the kind and amount of securities or
other property that shall be distributable to the holders of the
Series I Stock shall be based on (i) the election, if any, made by the
record holder (as of the date used for determining the holders of
Common Stock entitled to make such election) of the largest number of
shares of Series I Stock in writing to the Corporation on or prior to
the last date on which a holder of Common Stock may make such an
election or (ii) if no such election is timely made, an assumption
that such holder failed to exercise any such rights (provided that if
the kind or amount of securities or other property is not the same for
each nonelecting holder, then the kind and amount of securities or
other property receivable by holders of the Series I Stock shall be
based on the kind or amount of securities or other property receivable
by a plurality of shares held by the nonelecting holders of Common
Stock). Concurrently with the mailing to holders of Common Stock of
any document pursuant to which such holders may make an election of
the type referred to in this Section, the Corporation shall mail a
copy thereof to the record holders
<PAGE>
of the Series I Stock as of the date used for determining the holders
of record of Common Stock entitled to such mailing.
3. Conversion Rights.
3.1 Each holder of a share of this Series shall have
the right at any time or as to any share of this Series called for
redemption or exchange, at any time prior to the close of business on
the date fixed for redemption or exchange (unless the Corporation
defaults in the payment of the Redemption Price or fails to exchange
the shares of this Series for the applicable number of shares of
Common Stock and any cash portion of the Exchange Price or exercises
its right to rescind such redemption pursuant to Section 4.5, in which
case such right shall not terminate at the close of business on such
date), to convert such share into (i) a number of shares of Common
Stock equal to 2.08264 shares of Common Stock for each share of this
Series, subject to adjustment as provided in this Section 3 (such
rate, as so adjusted from time to time, is herein called the
"Conversion Rate") plus (ii) a number of shares of Common Stock equal
to
(A) (1) the Accrued Dividend Amount minus (2) the
Common Dividend Excess, if applicable, or plus (3) the Common
Dividend Deficiency, if applicable (the "Net Dividend Amount"),
divided by
(B) the Closing Price of the Common Stock on the
last Trading Day prior to the Conversion Date;
provided, however, that in the event that the Net Dividend Amount is a
negative number, the number of shares deliverable upon conversion of
a share of Series I Stock shall be equal to
(I) the number of shares determined pursuant to
clause (i) minus
(II) a number of shares equal to (x) the absolute
value of the Net Dividend Amount divided by (y) the Closing Price
of the Common Stock on the last Trading Day prior to the
Conversion Date;
and provided further that, in the event that the Net Dividend Amount
is a positive number, the Corporation shall have the right to deliver
cash equal to the Net Dividend
<PAGE>
Amount or any portion thereof, in which case its obligation to deliver
shares of Common Stock pursuant to clause (ii) shall be reduced by a
number of shares equal to (x) the aggregate amount of cash so
delivered divided by (y) the Closing Price of the Common Stock on the
last Trading Day prior to the Conversion Date, unless the Corporation
shall deliver cash equal to the entire Net Dividend Amount, in which
case its entire obligation under clause (ii) shall be discharged. The
obligations of the Corporation to issue the Common Stock or make the
cash payments provided by this Section 3.1 shall be absolute whether
or not any accrued dividend by which such issuance or payment is
measured has been declared by the Board of Directors and whether or
not the Corporation would have adequate surplus or net profits to pay
such dividend if declared or is otherwise restricted from making such
dividend.
3.2 Except as provided in this Section 3, no
adjustments in respect of payments of dividends on shares surrendered
for conversion or any dividend on the Common Stock issued upon
conversion shall be made upon the conversion of any shares of this
Series (it being understood that if the Conversion Date for shares of
Series I Stock occurs after a Record Date and on or prior to a
Dividend Payment Date, the holder of record on such Record Date shall
be entitled to receive the dividend payable with respect to such
shares on the related Dividend Payment Date pursuant to Section 2.1
hereof).
3.3 The Corporation may, but shall not be required to,
in connection with any conversion of shares of this Series, issue a
fraction of a share of Common Stock, and if the Corporation shall
determine not to issue any such fraction, the Corporation shall,
subject to Section 3.6(c), make a cash payment (rounded to the nearest
cent) equal to such fraction multiplied by the Closing Price of the
Common Stock on the last Trading Day prior to the Conversion Date.
3.4 Any holder of shares of this Series electing to
convert such shares into Common Stock shall surrender the certificate
or certificates for such shares at the office of the transfer agent or
agents therefor (or at such other place as the Corporation may
designate by notice to the holders of shares of this Series) during
regular business hours, duly endorsed to the Corporation or in blank,
or accompanied by instruments of transfer to the Corporation or in
blank, or in form satisfactory to the Corporation, and shall give
written notice to the
<PAGE>
Corporation at such office that such holder elects to convert such
shares of this Series. The Corporation shall, as soon as practicable
(subject to Section 3.6(d)) after such deposit of certificates for
shares of this Series, accompanied by the written notice above
prescribed, issue and deliver at such office to the holder for whose
account such shares were surrendered, or to his nominee, certificates
representing the number of shares of Common Stock and the cash, if
any, to which such holder is entitled upon such conversion.
3.5 Conversion shall be deemed to have been made as of
the date (the "Conversion Date") that certificates for the shares of
this Series to be converted, and the written notice prescribed in
Section 3.4 are received by the transfer agent or agents for this
Series; and the Person entitled to receive the Common Stock issuable
upon such conversion shall be treated for all purposes as the record
holder of such Common Stock on such date. Notwithstanding anything to
the contrary contained herein, in the event the Corporation shall have
rescinded a redemption of shares of this Series pursuant to Section
4.5, any holder of shares of this Series that shall have surrendered
shares of this Series for conversion following the day on which notice
of the subsequently rescinded redemption shall have been given but
prior to the close of business on the later of (a) the Trading Day
next succeeding the date on which public announcement of the
rescission of such redemption shall have been made and (b) the Trading
Day on which the notice of rescission required by Section 4.5 is
deemed given pursuant to Section 8.2 (a "Converting Holder"), may
rescind the conversion of such shares surrendered for conversion by
(i) properly completing a form prescribed by the Corporation and
mailed to holders of shares of this Series (including Converting
Holders) with the Corporation's notice of rescission, which form shall
provide for the certification by any Converting Holder rescinding a
conversion on behalf of any beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) of shares of this Series that the
beneficial ownership (within the meaning of such Rule) of such shares
shall not have changed from the date on which such shares were
surrendered for conversion to the date of such certification and (ii)
delivering such form to the Corporation no later than the close of
business on that date which is ten (10) Trading Days following the
date on which the Corporation's notice of rescission is deemed given
pursuant to Section 8.2. The delivery of such form by a Converting
Holder shall be
<PAGE>
accompanied by (x) any certificates representing shares of Common
Stock issued to such Converting Holder upon a conversion of shares of
this Series that shall be rescinded by the proper delivery of such
form (the "Surrendered Shares"), (y) any securities, evidences of
indebtedness or assets (other than cash) distributed by the
Corporation to such Converting Holder by reason of such Converting
Holder's being a record holder of Surrendered Shares and (z) payment
in New York Clearing House funds or other funds acceptable to the
Corporation of an amount equal to the sum of (I) any cash such
Converting Holder may have received in lieu of the issuance of
fractional shares upon conversion and (II) any cash paid or payable by
the Corporation to such Converting Holder by reason of such Converting
Holder being a record holder of Surrendered Shares. Upon receipt by
the Corporation of any such form properly completed by a Converting
Holder and any certificates, securities, evidences of indebtedness,
assets or cash payments required to be returned or made by such
Converting Holder to the Corporation as set forth above, the
Corporation shall instruct the transfer agent or agents for shares of
Common Stock and shares of this Series to cancel any certificates
representing Surrendered Shares (which Surrendered Shares shall be
deposited in the treasury of the Corporation) and reissue certificates
representing shares of this Series to such Converting Holder (which
shares of this Series shall be deemed to have been outstanding at all
times during the period following their surrender for conversion). The
Corporation shall, as promptly as practicable, and in no event more
than five (5) Trading Days, following the receipt of any such properly
completed form and any such certificates, securities, evidences of
indebtedness, assets or cash payments required to be so returned or
made, pay to the Converting Holder or as otherwise directed by such
Converting Holder any dividend or other payment made on such shares
during the period from the time such shares shall have been
surrendered for conversion to the rescission of such conversion. All
questions as to the validity, form, eligibility (including time or
receipt) and acceptance of any form submitted to the Corporation to
rescind the conversion of shares of this Series, including questions
as to the proper completion or execution of any such form or any
certification contained therein, shall be resolved by the Corporation,
whose determination shall be final and binding. The Corporation shall
not be required to deliver certificates for shares of Common Stock
while the stock transfer books for such stock or for this Series are
duly closed for any purpose or during any period commencing at a
<PAGE>
Redemption Rescission Event and ending at either (i) the time and date
at which the Corporation's right of rescission shall expire pursuant
to Section 4.5 if the Corporation shall not have exercised such right
or (ii) the close of business on that day which is ten (10) Trading
Days following the date on which notice of rescission pursuant to
Section 4.4 is deemed given pursuant to Section 8.2 if the Corporation
shall have exercised such right of rescission, but certificates for
shares of Common Stock shall be delivered as soon as practicable after
the opening of such books or the expiration of such period.
3.6 The Conversion Rate shall be adjusted from time to
time as follows for events occurring after the date of the
Certificate:
(a) In case the Corporation shall, at any time or
from time to time while any of the Series I Stock is outstanding,
(i) pay a dividend in shares of its Common Stock, (ii) combine
its outstanding shares of Common Stock into a smaller number of
shares, (iii) subdivide its outstanding shares of Common Stock or
(iv) reclassify (other than by way of a merger that is subject to
Section 3.7) its shares of Common Stock, then the Conversion Rate
in effect immediately before such action shall be adjusted so
that immediately following such event the holders of the Series I
Stock shall be entitled to receive upon conversion or exchange
thereof the kind and amount of shares of Capital Stock of the
Corporation that they would have owned or been entitled to
receive upon or by reason of such event if such shares of Series
I Stock had been converted or exchanged immediately before the
record date (or, if no record date, the effective date) for such
event (it being understood that any distribution of cash or of
Capital Stock (other than Common Stock), including any
distribution of Capital Stock (other than Common Stock) that
shall accompany a reclassification of the Common Stock, shall be
subject to Section 2.3 rather than this Section 3.6(a)). An
adjustment made pursuant to this Section 3.6(a) shall become
effective retroactively immediately after the record date in the
case of a dividend or distribution and shall become effective
retroactively immediately after the effective date in the case of
a subdivision, combination or reclassification. For the purposes
of this Section 3.6(a), in the event that the holders of Common
Stock are entitled to make any election with respect to
<PAGE>
the kind or amount of securities receivable by them in any
transaction that is subject to this Section 3.6(a) (including any
election that would result in all or a portion of the transaction
becoming subject to Section 2.3), the kind and amount of
securities that shall be distributable to the holders of the
Series I Stock shall be based on (i) the election, if any, made
by the record holder (as of the date used for determining the
holders of Common Stock entitled to make such election) of the
largest number of shares of Series I Stock in writing to the
Corporation on or prior to the last date on which a holder of
Common Stock may make such an election or (ii) if no such
election is timely made, an assumption that such holder failed to
exercise any such rights (provided that if the kind or amount of
securities is not the same for each nonelecting holder, then the
kind and amount of securities receivable shall be based on the
kind or amount of securities receivable by a plurality of
nonelecting holders of Common Stock). Concurrently with the
mailing to holders of Common Stock of any document pursuant to
which such holders may make an election of the type referred to
in this Section, the Corporation shall mail a copy thereof to the
record holders of the Series I Stock as of the date used for
determining the holders of record of Common Stock entitled to
such mailing.
(b) In case a Change of Control shall occur, the
Conversion Rate in effect immediately prior to the Change of
Control Date shall be increased (but not decreased) by
multiplying such rate by a fraction as follows: (i) in the case
of a Change of Control specified in Section 1.5(a), a fraction in
which the numerator is the Conversion Price prior to adjustment
pursuant hereto and the denominator is the Current Market Price
of the Common Stock at the Change of Control Date, (ii) in the
case of a Change of Control specified in Section 1.5(b), the
greater of the following fractions: (x) a fraction the numerator
of which is the highest price per share of Common Stock paid by
the Acquiring Person in connection with the transaction giving
rise to the Change of Control or in any transaction within six
months prior to or after the Change of Control Date (the "Highest
Price"), and the denominator of which is the Current Market Price
of the Common Stock as of the date (but not earlier than six
months prior to the Change of Control Date) on which the first
public announcement is made by the
<PAGE>
Acquiring Person that it intends to acquire or that it has
acquired 40% or more of the outstanding shares of Common Stock
(the "Announcement Date") or (y) a fraction the numerator of
which is the Conversion Price prior to adjustment pursuant hereto
and the denominator of which is the Current Market Price of the
Common Stock on the Announcement Date and (iii) in the case where
there co-exists a Change of Control specified in both Section
1.5(a) and Section 1.5(b), the greatest of the fractions
determined pursuant to clauses (i) and (ii). Such adjustment
shall become effective immediately after the Change of Control
Date and shall be made, in the case of clauses (ii) and (iii)
above, successively for six months thereafter in the event and at
the time of any increase in the Highest Price after the Change of
Control Date; provided, however, that no such successive
adjustment shall be made with respect to the Conversion Rate of
the shares of this Series in respect of any event occurring after
the Conversion Date.
(c) The Corporation shall be entitled to make such
additional adjustments in the Conversion Rate, in addition to
those required by subsections 3.6(a) and 3.6(b), as shall be
necessary in order that any dividend or distribution in Common
Stock or any subdivision, reclassification or combination of
shares of Common Stock referred to above, shall not be taxable to
the holders of Common Stock for United States Federal income tax
purposes so long as such additional adjustments pursuant to this
Section 3.6(c) do not decrease the Conversion Rate.
(d) In any case in which this Section 3.6 shall
require that any adjustment be made effective as of or
retroactively immediately following a record date, the
Corporation may elect to defer (but only for five (5) Trading
Days following the occurrence of the event that necessitates the
filing of the statement referred to in Section 3.6(f)) issuing to
the holder of any shares of this Series converted after such
record date (i) the shares of Common Stock and other Capital
Stock of the Corporation issuable upon such conversion over and
above (ii) the shares of Common Stock and other Capital Stock of
the Corporation issuable upon such conversion on the basis of the
Conversion Rate prior to adjustment; provided, however, that the
Corporation shall deliver to such holder a due
<PAGE>
bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of
the event requiring such adjustment.
(e) All calculations under this Section 3 shall be
made to the nearest cent, one-hundredth of a share or, in the
case of the Conversion Rate, one hundred-thousandth.
Notwithstanding any other provision of this Section 3, the
Corporation shall not be required to make any adjustment of the
Conversion Rate unless such adjustment would require an increase
or decrease of at least 1.00000% of such Conversion Rate. Any
lesser adjustment shall be carried forward and shall be made at
the time of and together with the next subsequent adjustment
that, together with any adjustment or adjustments so carried
forward, shall amount to an increase or decrease of at least
1.00000% in such rate. Any adjustments under this Section 3 shall
be made successively whenever an event requiring such an
adjustment occurs.
(f) Whenever an adjustment in the Conversion Rate
is required, the Corporation shall forthwith place on file with
its transfer agent or agents for this Series a statement signed
by a duly authorized officer of the Corporation, stating the
adjusted Conversion Rate determined as provided herein. Such
statements shall set forth in reasonable detail such facts as
shall be necessary to show the reason for and the manner of
computing such adjustment. Promptly after the adjustment of the
Conversion Rate, the Corporation shall mail a notice thereof to
each holder of shares of this Series.
(g) In the event that at any time as a result of
an adjustment made pursuant to this Section 3, the holder of any
share of this Series thereafter surrendered for conversion shall
become entitled to receive any shares of Capital Stock of the
Corporation other than shares of Common Stock, the conversion
rate of such other shares so receivable upon conversion of any
such share of this Series shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock
contained in subparagraphs (a) through (f) and (h) of this
Section 3.6, and the provisions of Section 3.1 through 3.5 and
3.7 through 3.10 shall apply on like or similar
<PAGE>
terms to any such other shares and the determination of the Board
of Directors as to any such adjustment shall be conclusive.
(h) No adjustment shall be made pursuant to this
Section 3.6 (i) if the effect thereof would be to reduce the
Conversion Price below the par value of the Common Stock or (ii)
subject to Section 3.6(c) hereof, with respect to any share of
Series I Stock that is converted, prior to the time such
adjustment otherwise would be made.
3.7 In case after the date of the Certificate (a) any
consolidation or merger to which the Corporation is a party, other
than a merger or consolidation in which the Corporation is the
surviving or continuing corporation and that does not result in any
reclassification of, or change (other than a change in par value or
from par value to no par value or from no par value to par value, or
as a result of a subdivision or combination) in, outstanding shares of
Common Stock or (b) any sale or conveyance of all or substantially all
of the property and assets of the Corporation, then lawful provision
shall be made as part of the terms of such transaction whereby the
holder of each share of Series I Stock shall have the right
thereafter, during the period such share shall be convertible or
exchangeable, to convert such share into or have such share exchanged
for the kind and amount of shares of stock or other securities and
property receivable upon such consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock into
which such shares of this Series could have been converted or
exchanged immediately prior to such consolidation, merger, sale or
conveyance, subject to adjustment that shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section
3 (based on (i) the election, if any, made in writing to the
Corporation by the record holder (as of the date used for determining
holders of Common Stock entitled to make such election) of the largest
number of shares of Series I Stock on or prior to the last date on
which a holder of Common Stock may make an election regarding the kind
or amount of securities or other property receivable by such holder in
such transaction or (ii) if no such election is timely made, an
assumption that such holder failed to exercise any such rights
(provided that if the kind or amount of securities or other property
is not the same for each nonelecting holder, then the kind and amount
of securities or other property receivable shall be based
<PAGE>
upon the kind and amount of securities or other property receivable by
a plurality of the nonelecting holders of Common Stock)). In the event
that any of the transactions referred to in clauses (a) or (b)
involves the distribution of cash (or property other than equity
securities) to a holder of Common Stock, lawful provision shall be
made as part of the terms of the transaction whereby the holder of
each share of Series I Stock on the record date fixed for determining
holders of Common Stock entitled to receive such cash or property (or
if no such record date is established, the effective date of such
transaction) shall be entitled to receive the amount of cash or
property that such holder would have been entitled to receive had such
holder converted his shares of Series I Stock into Common Stock
immediately prior to such record date (or effective date) (based on
the election or nonelection made by the record holder of the largest
number of shares of Series I Stock, as provided above). Concurrently
with the mailing to holders of Common Stock of any document pursuant
to which such holders may make an election regarding the kind or
amount of securities or other property that will be receivable by such
holder in any transaction described in clause (a) or (b) of the first
sentence of this Section 3.7, the Corporation shall mail a copy
thereof to the holders of the Series I Stock as of the date used for
determining the holders of record of Common Stock entitled to such
mailing. The Corporation shall not enter into any of the transactions
referred to in clauses (a) or (b) of the preceding sentence unless
effective provision shall be made in the certificate or articles of
incorporation or other constituent documents of the Corporation or the
entity surviving the consolidation or merger, if other than the
Corporation, or the entity acquiring the Corporation's assets, as the
case may be, so as to give effect to the provisions set forth in this
Section 3.7. The provisions of this Section 3.7 shall apply similarly
to successive consolidations, mergers, sales or conveyances. For
purposes of this Section 3.7 the term "Corporation" shall refer to the
Corporation (as defined in Section 1.14) as constituted immediately
prior to the merger, consolidation or other transaction referred to in
this Section.
3.8 The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but
unissued stock, for the purpose of effecting the conversion of the
shares of this Series, such number of its duly authorized shares of
Common Stock (or, if applicable, any other shares of Capital Stock of
the
<PAGE>
Corporation) as shall from time to time be sufficient to effect the
conversion of all outstanding shares of this Series into such Common
Stock (or such other shares of Capital Stock) at any time (assuming
that, at the time of the computation of such number of shares, all
such Common Stock (or such other shares of Capital Stock) would be
held by a single holder); provided, however, that nothing contained
herein shall preclude the Corporation from satisfying its obligations
in respect of the conversion of the shares by delivery of purchased
shares of Common Stock (or such other shares of Capital Stock) that
are held in the treasury of the Corporation. All shares of Common
Stock (or such other shares of Capital Stock of the Corporation) that
shall be deliverable upon conversion of the shares of this Series
shall be duly and validly issued, fully paid and nonassessable. For
purposes of this Section 3, any shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Corporation.
3.9 If any shares of Common Stock or other shares of
Capital Stock of the Corporation that would be issuable upon
conversion of shares of this Series hereunder require registration
with or approval of any governmental authority before such shares may
be issued upon conversion, the Corporation will in good faith and as
expeditiously as possible cause such shares to be duly registered or
approved, as the case may be. The Corporation will use commercially
reasonable efforts to list the shares of (or depositary shares
representing fractional interests in) Common Stock or other shares of
Capital Stock of the Corporation required to be delivered upon
conversion of shares of this Series prior to such delivery upon the
principal national securities exchange upon which the outstanding
Common Stock or such other shares of Capital Stock is listed at the
time of such delivery.
3.10 The Corporation shall pay any and all issue or
other taxes that may be payable in respect of any issue or delivery of
shares of Common Stock or other shares of Capital Stock of the
Corporation on conversion of shares of this Series pursuant hereto.
The Corporation shall not, however, be required to pay any tax that is
payable in respect of any transfer involved in the issue or delivery
of Common Stock or such other shares of Capital Stock in a name other
than that in which the shares of this Series so converted were
registered, and no such issue or delivery shall be made unless and
until the Person requesting such issue has paid to the Corporation the
amount of such tax, or
<PAGE>
has established, to the satisfaction of the Corporation, that such tax
has been paid.
3.11 In case of (i) the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, (ii) any
Pro Rata Repurchase or (iii) any action triggering an adjustment to
the Conversion Rate pursuant to this Section 3, then, in each case,
the Corporation shall cause to be filed with the transfer agent or
agents for the Series I Stock, and shall cause to be mailed,
first-class postage prepaid, to the holders of record of the
outstanding shares of Series I Stock, at least fifteen (15) days prior
to the applicable record date for any such transaction (or if no
record date will be established, the effective date thereof), a notice
stating (x) the date, if any, on which a record is to be taken for the
purpose of any such transaction (or if no record date will be
established, the date as of which holders of record of Common Stock
entitled to participate in such transaction are determined), and (y)
the expected effective date thereof. Failure to give such notice or
any defect therein shall not affect the legality or validity of the
proceedings described in this Section 3.11.
4. Redemption or Exchange.
4.1 (a) The Corporation may, at its sole option,
subject to Section 2.2 hereof, from time to time on and after October
2, 1999, redeem, out of funds legally available therefor, or, as
provided below, exchange shares of Common Stock for, all or (in the
case of Section 4.1(b)(i), any part) of the outstanding shares of this
Series. The redemption price for each share of this Series called for
redemption pursuant to clause (i) of Section 4.1(b) shall be the
Liquidation Value together with an amount equal to the accrued and
unpaid dividends to the date fixed for redemption (hereinafter
collectively referred to as the "Redemption Price"). The exchange
price for each share of this Series called for exchange pursuant to
clause (ii) of Section 4.1(b) shall be a number of shares of Common
Stock equal to the Conversion Rate, together with, at the option of
the Corporation, either (x) cash or (y) a number of shares of Common
Stock, valued at the Closing Price on the Trading Day immediately
preceding the date fixed for exchange, equal, in either case, to the
aggregate amount of accrued and unpaid dividends on the Series I Stock
to the date fixed for exchange (provided that any dividends
<PAGE>
that are in arrears must be paid in cash) (hereinafter collectively
referred to as the "Exchange Price").
(b) On the date fixed for redemption or exchange
the Corporation shall, at its option, effect either
(i) a redemption of the shares of this Series
to be redeemed by way of payment, out of funds legally available
therefor, of cash equal to the aggregate Redemption Price for the
shares of this Series then being redeemed;
(ii) an exchange of the shares of this Series
for the Exchange Price in shares of Common Stock (provided that
the Corporation (A) shall be entitled to deliver cash (1) in lieu
of any fractional share of Common Stock (determined in a manner
consistent with Section 3.3) and (2) equal to accrued and unpaid
dividends to the date fixed for exchange in lieu of shares of
Common Stock and (B) shall be required to deliver cash in respect
of any dividends that are in arrears); or
(iii) any combination thereof with respect to
each share of this Series called for redemption or exchange.
(c) Notwithstanding clauses (ii) and (iii) of
Section 4.1(b), the Corporation shall be entitled to effect an
exchange of shares of Series I Stock for Common Stock or other shares
of Capital Stock of the Corporation only to the extent that duly and
validly issued, fully paid and nonassessable shares of Common Stock
(or such other shares of Capital Stock) shall be available for
issuance (including delivery of previously issued shares of Common
Stock held in the Corporation's treasury on the date fixed for
exchange). The Corporation shall comply with Sections 3.9 and 3.10
with respect to shares of Common Stock or other shares of Capital
Stock of the Corporation that would be issuable upon exchange of
shares of this Series. Certificates for shares of Common Stock issued
in exchange for surrendered shares of this Series pursuant to this
Section 4.1 shall be made available by the Corporation not later than
the fifth Trading Day following the date for exchange.
4.2 In the event that fewer than all the outstanding
shares of this Series are to be redeemed
<PAGE>
pursuant to Section 4.1(b)(i), the number of shares to be redeemed
from each holder of shares of this Series shall be determined by the
Corporation by lot or pro rata or by any other method as may be
determined by the Board of Directors in its sole discretion to be
equitable, and the certificate of the Corporation's Secretary or an
Assistant Secretary filed with the transfer agent or transfer agents
for this Series in respect of such determination by the Board of
Directors shall be conclusive.
4.3 In the event the Corporation shall redeem or
exchange shares of this Series pursuant to Section 4.1, notice of such
redemption or exchange shall be given by first class mail, postage
prepaid, mailed not less than fifteen (15) nor more than sixty (60)
days prior to the date fixed for redemption or exchange, as the case
may be, to each record holder of the shares to be redeemed or
exchanged, at such holder's address as the same appears on the books
of the Corporation. Each such notice shall state: (i) whether the
shares of this Series are to be redeemed or exchanged; (ii) the time
and date as of which the redemption or exchange shall occur; (iii) the
total number of shares of this Series to be redeemed or exchanged and,
if fewer than all the shares held by such holder are to be redeemed,
the number of such shares to be redeemed from such holder; (iv) the
Redemption Price or the Exchange Price, as the case may be; (v) that
shares of this Series called for redemption or exchange may be
converted at any time prior to the time and date fixed for redemption
or exchange (unless the Corporation shall, in the case of a
redemption, default in payment of the Redemption Price or, in the case
of an exchange, fail to exchange the shares of this Series for the
applicable number of shares of Common Stock and any cash portion of
the Exchange Price or shall exercise its right to rescind such
redemption pursuant to Section 4.5, in which case such right of
conversion shall not terminate at such time and date); (vi) the
applicable Conversion Price and Conversion Rate; (vii) the place or
places where certificates for such shares are to be surrendered for
payment of the Redemption Price, in the case of redemption, or for
delivery of certificates representing the shares of Common Stock and
the payment of any cash portion of the Exchange Price, in the case of
exchange; and (viii) that dividends on the shares of this Series to be
redeemed or exchanged will cease to accrue on such redemption or
exchange date.
<PAGE>
4.4 If notice of redemption or exchange shall have been
given by the Corporation as provided in Section 4.3, dividends on the
shares of this Series so called for redemption or exchange shall cease
to accrue, such shares shall no longer be deemed to be outstanding,
and all rights of the holders thereof as stockholders with respect to
shares so called for redemption or exchange (except (i) in the case of
redemption, the right to receive from the Corporation the Redemption
Price without interest and in the case of exchange, the right to
receive from the Corporation the Exchange Price without interest and
(ii) the right to convert such shares in accordance with Section 3)
shall cease (including any right to receive dividends otherwise
payable on any Dividend Payment Date that would have occurred after
the time and date of redemption or exchange) either (i) in the case of
a redemption or exchange pursuant to Section 4.1, from and after the
time and date fixed in the notice of redemption or exchange as the
time and date of redemption or exchange (unless the Corporation shall
(x) in the case of a redemption, default in the payment of the
Redemption Price, (y) in the case of an exchange, fail to exchange the
applicable number of shares of Common Stock and any cash portion of
the Exchange Price or (z) exercise its right to rescind such
redemption pursuant to Section 4.5, in which case such rights shall
not terminate at such time and date) or (ii) if the Corporation shall
so elect and state in the notice of redemption or exchange, from and
after the time and date (which date shall be the date fixed for
redemption or exchange or an earlier date not less than fifteen (15)
days after the date of mailing of the redemption or exchange notice)
on which the Corporation shall irrevocably deposit with a designated
bank or trust company doing business in the Borough of Manhattan, City
and State of New York, as paying agent, money sufficient to pay at the
office of such paying agent, on the redemption date, the Redemption
Price, in the case of redemption, or certificates representing the
shares of Common Stock to be so exchanged and any cash portion of the
Exchange Price, in the case of an exchange. Any money or certificates
so deposited with any such paying agent that shall not be required for
such redemption or exchange because of the exercise of any right of
conversion or otherwise shall be returned to the Corporation
forthwith. Upon surrender (in accordance with the notice of redemption
or exchange) of the certificate or certificates for any shares of this
Series to be so redeemed or exchanged (properly endorsed or assigned
for transfer, if the Corporation shall so require and the notice of
redemption or
<PAGE>
exchange shall so state), such shares shall be redeemed or exchanged
by the Corporation at the Redemption Price or the Exchange Price, as
applicable, as set forth in Section 4.1 (unless the Corporation shall
have exercised its right to rescind such redemption pursuant to
Section 4.5). In case fewer than all the shares represented by any
such certificate are to be redeemed, a new certificate shall be issued
representing the unredeemed shares (or fractions thereof as provided
in Section 8.4), without cost to the holder thereof, together with the
amount of cash, if any, in lieu of fractional shares other than those
issuable in accordance with Section 8.4. Subject to applicable escheat
laws, any moneys so set aside by the Corporation in the case of
redemption and unclaimed at the end of one year from the redemption
date shall revert to the general funds of the Corporation, after which
reversion the holders of such shares so called for redemption or
exchange shall look only to the general funds of the Corporation for
the payment of the Redemption Price or the Exchange Price, as
applicable, without interest. Any interest accrued on funds so
deposited shall be paid to the Corporation from time to time.
4.5 In the event that a Redemption Rescission Event
shall occur following any day on which a notice of redemption shall
have been given pursuant to Section 4.3 but at or prior to the earlier
of (a) the time and date fixed for redemption as set forth in such
notice of redemption and (b) the time and date at which the
Corporation shall have irrevocably deposited funds or certificates
with a designated bank or trust company pursuant to Section 4.4, the
Corporation may, at its sole option, at any time prior to the earliest
of (i) the close of business on that day which is two (2) Trading Days
following such Redemption Rescission Event, (ii) the time and date
fixed for redemption as set forth in such notice and (iii) the time
and date on which the Corporation shall have irrevocably deposited
such funds with a designated bank or trust company, rescind the
redemption to which such notice of redemption shall have related by
making a public announcement of such rescission (the date on which
such public announcement shall have been made being hereinafter
referred to as the "Rescission Date"). The Corporation shall be deemed
to have made such announcement if it shall issue a release to the Dow
Jones News Service, Reuters Information Services or any successor news
wire service. From and after the making of such announcement, the
Corporation shall have no obligation to redeem shares of
<PAGE>
this Series called for redemption pursuant to such notice of
redemption or to pay the redemption price therefor and all rights of
holders of shares of this Series shall be restored as if such notice
of redemption had not been given. The Corporation shall give notice of
any such rescission by one of the means specified in Section 8.2 as
promptly as practicable, but in no event later than the close of
business on that date which is five (5) Trading Days following the
Rescission Date to each record holder of shares of this Series at the
close of business on the Rescission Date and to any other Person or
entity that was a record holder of shares of this Series and that
shall have surrendered shares of this Series for conversion following
the giving of notice of the subsequently rescinded redemption. Each
notice of rescission shall (w) state that the redemption described in
the notice of redemption has been rescinded, (x) state that any
Converting Holder shall be entitled to rescind the conversion of
shares of this Series surrendered for conversion following the day on
which notice of redemption was given but prior to the close of
business on the later of (1) the Trading Day next succeeding the date
on which public announcement of the rescission of such redemption
shall have been made and (2) the Trading Day on which the
Corporation's notice of rescission is deemed given pursuant to Section
8.2, (y) be accompanied by a form prescribed by the Corporation to be
used by any Converting Holder rescinding the conversion of shares so
surrendered for conversion (and instructions for the completion and
delivery of such form, including instructions with respect to payments
that may be required to accompany such delivery shall be in accordance
with Section 3.5) and (z) state that such form must be properly
completed and received by the Corporation no later than the close of
business on a date that shall be ten (10) Trading Days following the
date of the mailing of such notice of rescission is deemed given
pursuant to Section 8.2.
4.6 The shares of this Series shall not be subject to
the provisions of Section 5 of Article IV of the Certificate of
Incorporation.
5. Pro Rata Repurchase.
5.1 Upon a Pro Rata Repurchase, each holder of shares
of this Series shall have the right to require that the Corporation
repurchase, out of funds legally available therefor, a Pro Rata
Portion (as defined below) of the shares of such holder, or any lesser
number requested by
<PAGE>
the holder, at a price per share equal to the highest price per share
of Common Stock paid in the Pro Rata Repurchase multiplied by the
Conversion Rate then in effect plus an amount equal to the accrued but
unpaid dividends on such shares to the date of repurchase.
5.2 At any time prior to or within thirty (30) days
following any Pro Rata Repurchase, the Corporation shall mail a notice
to each holder of shares of this Series stating:
(a) that a Pro Rata Repurchase will occur or has
occurred and that such holder will have (upon such Pro Rata
Repurchase) or has the right to require the Corporation to
repurchase such holder's shares in an amount not in excess of the
Pro Rata Portion at a repurchase price in cash determined as set
forth above plus an amount equal to accrued and unpaid dividends,
if any, to the date of repurchase;
(b) the repurchase date for the Series I Stock
(which shall be no earlier than fifteen (15) days nor later than
sixty (60) days from the date such notice is mailed); and
(c) the instructions determined by the
Corporation, consistent with this Section, that a holder must
follow in order to have its shares repurchased.
5.3 Holders electing to have any shares repurchased
will be required to surrender such shares, with an appropriate form
duly completed, to the Corporation at the address specified in the
notice at least five (5) days prior to the repurchase date. Holders
will be entitled to withdraw their election if the Corporation
receives, not later than three (3) days prior to the repurchase date,
a telegram, telex, facsimile transmission or letter setting forth the
name of the holder, the certificate numbers of the shares delivered
for purchase by the holder and a statement that such holder is
withdrawing his election to have such shares repurchased. Holders will
have such additional withdrawal and other rights as may be required
pursuant to applicable law.
5.4 On the repurchase date, the Corporation shall (i)
pay the repurchase price plus an amount equal to accrued and unpaid
dividends as provided in Section 5.1, if
<PAGE>
any, to the holders entitled thereto and (ii) issue to such holders
any equity securities of the Corporation (other than Common Stock)
that would at the time be issuable upon conversion of the shares of
Series I Stock that are then being repurchased pursuant hereto.
5.5 The Board of Directors will not approve any tender
or exchange offer by the Corporation or a third party for shares of
Common Stock or recommend that the holders of Common Stock accept any
offer or tender their shares into any offer unless a Pro Rata Portion
of the shares of this Series of all holders are entitled to be
tendered into such offer at a price not less than the price per share
for shares of Common Stock pursuant to such offer multiplied by the
Conversion Rate then in effect plus an amount equal to accrued but
unpaid dividends on such shares to the date of payment for such shares
in such tender or exchange offer.
5.6 For purposes hereof, "Pro Rata Portion" with
respect to the shares of this Series held by any holder shall mean all
the shares of this Series then owned by such holder times a fraction,
the numerator of which is the number of outstanding shares of Common
Stock (a) purchased in the applicable Pro Rata Repurchase or (b) for
which a tender or exchange offer referred to in Section 5.5 is made,
as the case may be, and the denominator of which is the number of
outstanding shares of Common Stock immediately prior to such Pro Rata
Repurchase or the commencement of such tender or exchange offer, as
the case may be.
6. Voting. The shares of this Series shall have no voting
rights except as required by law or as set forth below.
6.1 Each share of this Series shall be entitled to vote
together with holders of the shares of Common Stock (and any other
class or series that may similarly be entitled to vote with the shares
of Common Stock) as a single class upon all matters upon which holders
of Common Stock are entitled to vote. In any such vote, the holders of
this Series shall be entitled to two (2) votes per $100 of Liquidation
Value of Series I Stock, subject to adjustment at the same time and in
the same manner as each adjustment of the Conversion Rate pursuant to
Section 3, so that the holders of this Series shall be entitled
following such adjustment to the number of votes equal to the number
of votes such holders were entitled to under this
<PAGE>
Section 6.1 immediately prior to such adjustment multiplied by a
fraction (x) the numerator of which is the Conversion Rate as adjusted
pursuant to Section 3 and (y) the denominator of which is the
Conversion Rate immediately prior to such adjustment.
6.2 (a) So long as any shares of this Series remain
outstanding, unless a greater percentage shall then be required by
law, the Corporation shall not, without the affirmative vote at a
meeting or the written consent with or without a meeting of the
holders of shares of this Series representing at least 66-2/3% of the
aggregate voting power of shares of this Series then outstanding (i)
authorize any Senior Stock or reclassify (by merger, consolidation or
otherwise) any Junior Stock or Parity Stock as Senior Stock, (ii)
merge into or consolidate with any Person where the surviving or
continuing corporation will have any authorized Senior Stock other
than capital stock corresponding to shares of Senior Stock existing
immediately before such merger or consolidation) or (iii) amend, alter
or repeal (by operation of law or otherwise) any of the provisions of
the Certificate or the Certificate of Incorporation, so as in any such
case to adversely affect the voting powers, designations, preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions of the shares of this
Series.
(b) No consent of holders of shares of this Series
shall be required for (i) the creation of any indebtedness of any kind
of the Corporation, (ii) the authorization or issuance of any class of
Junior Stock or Parity Stock, (iii) the authorization, designation or
issuance of additional shares of Series I Stock or (iv) subject to
Section 6.2(a), the authorization or issuance of any other shares of
Preferred Stock.
6.3 (a) If and whenever at any time or times dividends
payable on shares of this Series shall have been in arrears and unpaid
in an aggregate amount equal to or exceeding the amount of dividends
payable thereon for six quarterly dividend periods, then the number of
directors constituting the Board of Directors shall be increased by
two and the holders of shares of this Series, together with the
holders of any shares of any Parity Stock as to which in each case
dividends are in arrears and unpaid in an aggregate amount equal to or
exceeding the amount of dividends payable thereon for six quarterly
dividend
<PAGE>
periods, shall have the exclusive right, voting separately as a class
with such other series, to elect two directors of the Corporation.
(b) Such voting right may be exercised initially
either by written consent or at a special meeting of the holders of
the Preferred Stock having such voting right, called as hereinafter
provided, or at any annual meeting of stockholders held for the
purpose of electing directors, and thereafter at each such annual
meeting until such time as all dividends in arrears on the shares of
this Series shall have been paid in full and all dividends payable on
the shares of this Series on four subsequent consecutive Dividend
Payment Dates shall have been paid in full on such dates or funds
shall have been set aside for the payment thereof, at which time such
voting right and the term of the directors elected pursuant to Section
6.3(a) shall terminate.
(c) At any time when such voting right shall have
vested in holders of shares of such series of Preferred Stock
described in Section 6.3(a), and if such right shall not already have
been exercised by written consent, a proper officer of the Corporation
may call, and, upon the written request, addressed to the Secretary of
the Corporation, of the record holders of shares representing ten
percent (10%) of the voting power of the shares then outstanding of
such Preferred Stock having such voting right, shall call, a special
meeting of the holders of such Preferred Stock having such voting
right. Such meeting shall be held at the earliest practicable date
upon the notice required for annual meetings of stockholders at the
place for holding annual meetings of stockholders, or, if none, at a
place designated by the Board of Directors. Notwithstanding the
provisions of this Section 6.3(c), no such special meeting shall be
called during a period within 60 days immediately preceding the date
fixed for the next annual meeting of stockholders.
(d) At any meeting held for the purpose of
electing directors at which the holders of such Preferred Stock shall
have the right to elect directors as provided herein, the presence in
Person or by proxy of the holders of shares representing more than
fifty percent (50%) in voting power of the then outstanding shares of
such Preferred Stock having such right shall be required and shall be
sufficient to constitute a quorum of such class for the election of
directors by such class.
<PAGE>
(e) Any director elected by holders of Preferred
Stock pursuant to the voting right created under this Section 6.3
shall hold office until the next annual meeting of stockholders
(unless such term has previously terminated pursuant to Section
6.3(b)) and any vacancy in respect of any such director shall be
filled only by vote of the remaining director, by the holders of such
Preferred Stock, entitled to elect such director or directors by
written consent or at a special meeting called in accordance with the
procedures set forth in Section 6.3(c), or, if no special meeting is
called or written consent executed, at the next annual meeting of
stockholders. Upon any termination of such voting right, subject to
applicable law, the term of office of all directors elected by holders
of such Preferred Stock voting separately as a class pursuant to this
Section 6.3 shall terminate.
(f) In exercising the voting rights set forth in
this Section 6.3, each share of this Series shall have a number of
votes equal to its Liquidation Value.
7. Liquidation Rights.
7.1 Upon the dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, the holders of the
shares of this Series shall be entitled to receive out of the assets
of the Corporation available for distribution to stockholders, in
preference to the holders of, and before any payment or distribution
shall be made on, Junior Stock, the amount of $100 per share (the
"Liquidation Value"), plus an amount equal to all accrued and unpaid
dividends to the date of final distribution.
7.2 Neither the sale, exchange or other conveyance (for
cash, shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation nor the
merger or consolidation of the Corporation into or with any other
corporation into or with the Corporation, shall be deemed to be a
dissolution, liquidation or winding up, voluntary or involuntary, for
the purposes of this Section 7.
7.3 After the payment to the holders of the shares of
this Series of full preferential amounts provided for in this Section
7, the holders of this Series as such shall have no right or claim to
any of the remaining assets of the Corporation.
<PAGE>
7.4 In the event the assets of the Corporation
available for distribution to the holders of shares of this Series
upon any dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, shall be insufficient to pay in full
all amounts to which such holders are entitled pursuant to Section
7.1, no such distribution shall be made on account of any shares of
any Parity Stock upon such dissolution, liquidation or winding up
unless proportionate distributive amounts shall be paid on account of
the shares of this Series, ratably, in proportion to the full
distributable amounts for which holders of all Parity Stock are
entitled upon such dissolution, liquidation or winding up.
8. Other Provisions.
8.1 All notices from the Corporation to the holders
shall be given by one of the methods specified in Section 8.2. With
respect to any notice to a holder of shares of this Series required to
be provided hereunder, neither failure to give such notice, nor any
defect therein or in the transmission thereof, to any particular
holder shall affect the sufficiency of the notice or the validity of
the proceedings referred to in such notice with respect to the other
holders or affect the legality or validity of any distribution, right,
warrant, reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any
such action. Any notice that was mailed in the manner herein provided
shall be conclusively presumed to have been duly given whether or not
the holder receives the notice.
8.2 All notices and other communications hereunder
shall be deemed given (i) on the first Trading Day following the date
received, if delivered personally, (ii) on the Trading Day following
timely deposit with an overnight courier service, if sent by overnight
courier specifying next day delivery and (iii) on the first Trading
Day that is at least five days following deposit in the mails, if sent
by first class mail to (x) a holder at its last address as it appears
on the transfer records or registry for the Series I Stock and (y) the
Corporation at the following address (or at such other address as the
Corporation shall specify in a notice pursuant to this Section): TW
Inc., 75 Rockefeller Plaza, New York, New York 10019, Attention:
General Counsel.
<PAGE>
8.3 Any shares of this Series that have been converted,
redeemed, exchanged or otherwise acquired by the Corporation shall,
after such conversion, redemption, exchange or acquisition, as the
case may be, be retired and promptly cancelled and the Corporation
shall take all appropriate action to cause such shares to obtain the
status of authorized but unissued shares of Preferred Stock, without
designation as to series, until such shares are once more designated
as part of a particular series by the Board of Directors. The
Corporation may cause a certificate setting forth a resolution adopted
by the Board of Directors that none of the authorized shares of this
Series are outstanding to be filed with the Secretary of State of the
State of Delaware. When such certificate becomes effective, all
matters set forth in the Certificate with respect to the Series I
Stock shall be eliminated from the Certificate of Incorporation and
the shares of Preferred Stock designated hereby as Series I Stock
shall have the status of authorized and unissued shares of Preferred
Stock and may be reissued as part of any new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors.
8.4 The shares of this Series shall be issuable in
whole shares or, if authorized by the Board of Directors, in any
fraction of a whole share so authorized or any integral multiple of
such fraction.
8.5 The Corporation shall be entitled to recognize the
exclusive right of a Person registered on its records as the holder of
shares of this Series, and such record holder shall be deemed the
holder of such shares for all purposes.
8.6 All notice periods referred to in the Certificate
shall commence on the date of the mailing of the applicable notice.
<PAGE>
8.7 Certificates for shares of this Series shall bear
such legends as the Corporation shall from time to time deem
appropriate.
IN WITNESS WHEREOF, TW INC. has caused this certificate to
be signed this 10th day of October, 1996.
TW INC.,
by /s/ Thomas W. McEnerney
--------------------------
Name: Thomas W. McEnerney
Title: Vice President
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF SERIES J CONVERTIBLE
PREFERRED STOCK
OF
TW INC.
--------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
--------------------
TW INC., hereafter to be renamed "Time Warner Inc." (the
"Corporation"), a corporation organized and existing by virtue of
the General Corporation Law of the State of Delaware (the "DGCL"),
does hereby certify that the following resolution was duly adopted
by action of the Board of Directors of the Corporation (the "Board
of Directors") at a meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly granted
to and vested in the Board of Directors by the provisions of
Section 2 of Article IV of the Restated Certificate of
Incorporation of the Corporation, as amended from time to time (the
"Certificate of Incorporation"), and Section 151(g) of the DGCL,
the Board of Directors hereby creates, from the authorized shares
of Preferred Stock, par value $.10 per share ("Preferred Stock"),
of the Corporation authorized to be issued pursuant to the
Certificate of Incorporation, a series of Preferred Stock, and
hereby fixes the voting powers, designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, of the shares
of such series as follows:
The series of Preferred Stock hereby established shall
consist of 3,350,000 shares designated as Series J
<PAGE>
Convertible Preferred Stock. The rights, preferences and
limitations of such series shall be as follows:
1. Definitions. As used herein, the following terms shall
have the indicated meanings:
1.1 "Board of Directors" shall mean the Board of
Directors of the Corporation or, with respect to any action to be
taken by the Board of Directors, any committee of the Board of
Directors duly authorized to take such action.
1.2 "Certificate" shall mean the certificate of the
voting powers, designations, preferences and relative,
participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, of Series J
Convertible Preferred Stock filed with respect to this resolution
with the Secretary of State of the State of Delaware pursuant to
Section 151 of the DGCL.
1.3 "Closing Price" of the Common Stock shall mean
the last reported sale price of the Common Stock (regular way) as
shown on the Composite Tape of the NYSE, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices on the NYSE, or, if the Common Stock is not listed or
admitted to trading on the NYSE, on the principal national
securities exchange on which such stock is listed or admitted to
trading, or, if it is not listed or admitted to trading on any
national securities exchange, the last reported sale price of the
Common Stock, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, in either case as
reported by NASDAQ.
1.4 "Common Stock" shall mean the class of Common
Stock, par value $.01 per share, of the Corporation authorized at
the date of the Certificate, or any other class of stock resulting
from (x) successive changes or reclassifications of such Common
Stock consisting solely of changes in par value, or from par value
to no par value or (y) a subdivision or combination, and in any
such case including any shares thereof authorized after the date of
the Certificate.
1.5 "Conversion Price" shall have the meaning set
forth in Section 3.1.
<PAGE>
1.6 "Conversion Rate" shall have the meaning set
forth in Section 3.1.
1.7 "Converting Holder" shall have the meaning set
forth in Section 3.5.
1.8 "Current Market Price" of the Common Stock on
any date shall mean the average of the daily Closing Prices per
share of the Common Stock for the five (5) consecutive Trading Days
ending on the Trading Day immediately preceding the applicable
conversion, redemption or exchange date referred to in Section 3 or
Section 4.
1.9 "Dividend Payment Date" shall have the meaning
set forth in Section 2.1.
1.10 "DGCL" shall mean the General Corporation Law
of the State of Delaware.
1.11 "Effective Time" shall mean May 2, 1995.
1.12 "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
1.13 "Junior Stock" shall mean the Common Stock, the
Series A Stock, the Series LMC Stock, the Series LMCN-V Stock and
the shares of any other class or series of stock of the Corporation
that, by the terms of the Certificate of Incorporation or of the
instrument by which the Board of Directors, acting pursuant to
authority granted in the Certificate of Incorporation, shall fix
the relative rights, preferences and limitations thereof, shall be
junior to the Series J Stock in respect of the right to receive
dividends or to participate in any distribution of assets other
than by way of dividends.
1.14 "Liquidation Value" shall have the meaning set
forth in Section 6.1.
1.15 "NASDAQ" shall mean the Nasdaq Stock Market.
1.16 "NYSE" shall mean the New York Stock Exchange,
Inc.
1.17 "Parity Stock" shall mean the Series D Stock,
the Series E Stock, the Series F Stock, the Series G
<PAGE>
Stock, the Series H Stock, the Series I Stock, the Series L Stock,
the Series M Stock and the shares of any other class or series of
stock of the Corporation that, by the terms of the Certificate of
Incorporation or of the instrument by which the Board of Directors,
acting pursuant to authority granted in the Certificate of
Incorporation, shall fix the relative rights, preferences and
limitations thereof, shall, in the event that the stated dividends
thereon are not paid in full, be entitled to share ratably with the
Series J Stock in the payment of dividends, including
accumulations, if any, in accordance with the sums that would be
payable on such shares if all dividends were declared and paid in
full, or shall, in the event that the amounts payable thereon on
liquidation are not paid in full, be entitled to share ratably with
the Series J Stock in any distribution of assets other than by way
of dividends in accordance with the sums that would be payable in
such distribution if all sums payable were discharged in full;
provided, however, that the term "Parity Stock" shall be deemed to
refer (i) in Section 2.2, to any stock that is Parity Stock in
respect of dividend rights; (ii) in Section 6, to any stock that is
Parity Stock in respect of the distribution of assets; and (iii) in
Sections 5.2 and 5.3, to any stock that is Parity Stock in respect
of either dividend rights or the distribution of assets and that,
pursuant to the Certificate of Incorporation or any instrument in
which the Board of Directors, acting pursuant to authority granted
in the Certificate of Incorporation, shall so designate, is
entitled to vote with the holders of Series J Stock.
1.18 "Preferred Stock" shall mean the class of
Preferred Stock, par value $.10 per share, of the Corporation
authorized at the date of the Certificate, including any shares
thereof authorized after the date of the Certificate.
1.19 "Pro Rata Repurchase" shall mean the purchase
of shares of Common Stock by the Corporation or by any of its
subsidiaries, which purchase is subject to Section 13(e) of the
Exchange Act or is made pursuant to an offer made available to all
holders of Common Stock, but excluding any purchase made in open
market transactions that satisfies the conditions of clause (b) of
Rule 10b-18 under the Exchange Act or has been designed (as
reasonably determined by the Board of Directors) to prevent such
purchase from having a material effect on the trading
market of the Common Stock. The "Effective Date" of a Pro
Rata
<PAGE>
Repurchase shall mean the applicable expiration date (including all
extensions thereof) of any tender or exchange offer that is a Pro
Rata Repurchase or the date of purchase with respect to any Pro
Rata Repurchase that is not a tender or exchange offer.
1.20 "Record Date" shall have the meaning set forth
in Section 2.1.
1.21 "Redemption Price" shall have the meaning set
forth in Section 4.1.
1.22 "Redemption Rescission Event" shall mean the
occurrence of (a) any general suspension of trading in, or
limitation on prices for, securities on the principal national
securities exchange on which shares of Common Stock are registered
and listed for trading (or, if shares of Common Stock are not
registered and listed for trading on any such exchange, in the
over-the-counter market) for more than six-and-one-half (6-1/2)
consecutive trading hours, (b) any decline in either the Dow Jones
Industrial Average or the Standard & Poor's Index of 400 Industrial
Companies (or any successor index published by Dow Jones & Company,
Inc. or Standard & Poor's Corporation) by either (i) an amount in
excess of 10%, measured from the close of business on any Trading
Day to the close of business on the next succeeding Trading Day
during the period commencing on the Trading Day preceding the day
notice of any redemption or exchange of shares of this Series is
given (or, if such notice is given after the close of business on a
Trading Day, commencing on such Trading Day) and ending at the
earlier of (x) the time and date fixed for redemption or exchange
in such notice and (y) the time and date at which the Corporation
shall have irrevocably deposited funds with a designated bank or
trust company pursuant to Section 3.5 or (ii) an amount in excess
of 15% (or, if the time and date fixed for redemption or exchange
is more than 15 days following the date on which notice of
redemption or exchange is given, 20%), measured from the close of
business on the Trading Day preceding the day notice of such
redemption or exchange is given (or, if such notice is given after
the close of business on a Trading Day, from such Trading Day) to
the close of business on any Trading Day on or prior to the earlier
of the dates specified in clauses (x) and (y) above, (c) a
declaration of a banking moratorium or any suspension of payments
in respect of banks by Federal or state authorities in the United
States or (d) the commencement of a war or armed hostilities or
other national
<PAGE>
or international calamity directly or indirectly involving the
United States that in the reasonable judgment of the Corporation
could have a material adverse effect on the market for the Common
Stock.
1.23 "Rescission Date" shall have the meaning set
forth in Section 4.5.
1.24 "Senior Stock" shall mean the shares of any
class or series of stock of the Corporation that, by the terms of
the Certificate of Incorporation or of the instrument by which the
Board of Directors, acting pursuant to authority granted in the
Certificate of Incorporation, shall fix the relative rights,
preferences and limitations thereof, shall be senior to the Series
J Stock in respect of the right to receive dividends or to
participate in any distribution of assets other than by way of
dividends.
1.25 "Series A Stock" shall mean the series of
Preferred Stock authorized and designated as Series A Participating
Preferred Stock at the date of the Certificate, including any
shares thereof authorized and designated after the date of the
Certificate.
1.26 "Series D Stock" shall mean the series of
Preferred Stock authorized and designated as the Series D
Convertible Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after the
date of the Certificate.
1.27 "Series E Stock" shall mean the series of
Preferred Stock authorized and designated as the Series E
Convertible Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after the
date of the Certificate.
1.28 "Series F Stock" shall mean the series of
Preferred Stock authorized and designated as the Series F
Convertible Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after the
date of the Certificate.
1.29 "Series G Stock" shall mean the series of
Preferred Stock authorized and designated as the Series G
Convertible Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after the
date of the Certificate.
<PAGE>
1.30 "Series H Stock" shall mean the series of
Preferred Stock authorized and designated as the Series H
Convertible Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after the
date of the Certificate.
1.31 "Series I Stock" shall mean the series of
Preferred Stock authorized and designated as the Series I
Convertible Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after the
date of the Certificate.
1.32 "Series J Stock" and "this Series" shall mean
the series of Preferred Stock authorized and designated as the
Series J Convertible Preferred Stock, including any shares thereof
authorized and designated after the date of the Certificate.
1.33 "Series L Stock" shall mean the series of
Preferred Stock authorized and designated as the 10-1/4% Series L
Exchangeable Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after the
date of the Certificate.
1.34 "Series LMC Stock" shall mean the series of
Series Common Stock authorized and designated as Series LMC Common
Stock at the date of the Certificate, including any shares thereof
authorized and designated after the date of the Certificate.
1.35 "Series LMCN-V Stock" shall mean the series of
Series Common Stock authorized and designated as Series LMCN-V
Common Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the
Certificate.
1.36 "Series M Stock" shall mean the series of
Preferred Stock authorized and designated as the 10-1/4% Series M
Exchangeable Preferred Stock at the date of the Certificate,
including any shares thereof authorized and designated after the
date of the Certificate.
1.37 "Surrendered Shares" shall have the meaning set
forth in Section 3.5.
1.38 "Trading Day" shall mean, so long as
the Common Stock is listed or admitted to trading on the
NYSE, a day on which the NYSE is open for the transaction of
<PAGE>
business, or, if the Common Stock is not listed or admitted to
trading on the NYSE, a day on which the principal national
securities exchange on which the Common Stock is listed is open for
the transaction of business, or, if the Common Stock is not so
listed or admitted for trading on any national securities exchange,
a day on which NASDAQ is open for the transaction of business.
2. Cash Dividends.
2.1 The holders of the outstanding Series J Stock
shall be entitled to receive quarter-annual dividends, as and when
declared by the Board of Directors out of funds legally available
therefor. Each quarter-annual dividend shall be an amount per share
equal to (i) in the case of each Dividend Payment Date (as defined
below) occurring on or prior to May 2, 2000, the greater of (A)
$.9375 per $100 in Liquidation Value of Series J Stock (which is
equivalent to $3.75 per annum) and (B) an amount per $100 in
Liquidation Value of Series J Stock equal to the product of (1) the
Conversion Rate and (2) the aggregate per share amount of regularly
scheduled dividends paid in cash on the Common Stock during the
period from but excluding the immediately preceding Dividend
Payment Date to and including such Dividend Payment Date (the
greater amount being termed the "Preferred Dividend Amount"), and
(ii) in the case of each Dividend Payment Date occurring
thereafter, an amount per $100 in Liquidation Value of Series J
Stock equal to the product of (1) the Conversion Rate and (2) the
aggregate per share amount of regularly scheduled dividends paid in
cash on the Common Stock during the period from but excluding the
immediately preceding Dividend Payment Date to and including such
Dividend Payment Date. All dividends shall be payable in cash on or
about the first day of February, May, August and November in each
year, as fixed by the Board of Directors, or such other dates as
are fixed by the Board of Directors (provided that May 2, 2000,
shall be a Dividend Payment Date) (each, a "Dividend Payment
Date"), to the holders of record of Series J Stock at the close of
business on or about the 15th day of the month next preceding such
first day of February, May, August and November (or May 2, 2000),
as the case may be, as fixed by the Board of Directors, or such
other dates as are fixed by the Board of Directors (each, a "Record
Date"). Subject to the next sentence, in the case of dividends
payable in respect of periods prior to May 2, 2000, (i) such
dividends shall accrue on each share on a day-to-day basis, whether
or not earned or declared, and (ii) any such dividends that become
<PAGE>
payable for any partial dividend period shall be computed on the
basis of the actual days elapsed in such period. Notwithstanding
the preceding sentence, the amount accruing and payable in respect
of the first dividend on the Series J Stock payable after the date
of the Certificate shall equal the Preferred Dividend Amount. From
and after May 2, 2000, dividends on the Series J Stock (determined
as to amount as provided herein) shall accrue to the extent, but
only to the extent, that regularly scheduled cash dividends are
declared by the Board of Directors on the Common Stock with a
payment date after May 2, 2000 (or, in the case of Series J Stock
originally issued after May 2, 2000, after the Dividend Payment
Date next preceding such date of original issuance). All dividends
that accrue in accordance with the foregoing provisions shall be
cumulative from and after the day immediately succeeding the date
of issuance of the relevant shares of Series J Stock. The amount
payable to each holder of record on any Dividend Payment Date shall
be rounded to the nearest cent.
2.2 Except as hereinafter provided in this Section
2.2, unless all dividends on the outstanding shares of Series J
Stock and any Parity Stock that shall have accrued and become
payable as of any date shall have been paid, or declared and funds
set apart for payment thereof, no dividend or other distribution
(payable other than in shares of Junior Stock) shall be paid to the
holders of Junior Stock or Parity Stock, and no shares of Series J
Stock, Parity Stock or Junior Stock shall be purchased or redeemed
by the Corporation or any of its subsidiaries (except by conversion
into or exchange for, or out of the net cash proceeds from the
concurrent sale of, Junior Stock), nor shall any monies be paid or
made available for a sinking fund for the purchase or redemption of
any Series J Stock, Junior Stock or Parity Stock; provided,
however, that nothing herein shall prevent the Corporation from
completing the purchase of Series J Stock, Parity Stock or Junior
Stock for which a purchase contract was entered into, or the notice
of redemption of which was originally published, prior to the date
on which any such dividends were first required to be paid. When
dividends are not paid in full upon the shares of this Series and
any Parity Stock, all dividends declared upon shares of this Series
and all Parity Stock shall be declared pro rata so that the amount
of dividends declared per share on this Series and all such Parity
Stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the shares of this Series and all
such Parity Stock bear to each other.
<PAGE>
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of
the full amount of dividends that become payable pursuant to the
terms of this Section 2. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or
payments on this Series that may be in arrears.
3. Conversion Rights.
3.1 Each holder of a share of this Series shall have
the right at any time or, as to any share of this Series called for
redemption or exchange, at any time prior to the close of business
on the date fixed for redemption or exchange (unless the
Corporation defaults in the payment of the Redemption Price, fails
to exchange the shares of this Series for the applicable number of
shares of Common Stock and any applicable cash amount, or exercises
its right to rescind such redemption or exchange pursuant to
Section 4.5, in which case such right shall not terminate at the
close of business on such date), to convert such share into fully
paid and nonassessable shares of Common Stock at a rate of 2.08264
shares of Common Stock for each share of this Series, subject to
adjustment as provided in this Section 3 (such rate, as so adjusted
from time to time, is herein called the "Conversion Rate"). The
"Conversion Price" at any time shall equal $100 divided by the
Conversion Rate in effect at such time (rounded to the nearest one
hundredth of a cent).
3.2 If any shares of this Series are surrendered for
conversion subsequent to the Record Date preceding a Dividend
Payment Date but on or prior to such Dividend Payment Date (except
shares called for redemption or exchange on a redemption date or
exchange date between such Record Date and Dividend Payment Date
and with respect to which such redemption or exchange has not been
rescinded), the registered holder of such shares at the close of
business on such Record Date shall be entitled to receive the
dividend, if any, payable on such shares on such Dividend Payment
Date notwithstanding the conversion thereof. Shares of this Series
surrendered for conversion during the period from the close of
business on any Record Date next preceding any Dividend Payment
Date to the opening of business on such Dividend Payment Date shall
(except in the case of shares that have been called for redemption
or exchange on a redemption date or exchange date within such
period and with respect to which such redemption or exchange
<PAGE>
has not been rescinded) be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Corporation
of an amount equal to the dividend payable on such Dividend Payment
Date on the shares being surrendered for conversion. Except as
provided in this Section 3.2, no adjustments in respect of payments
of dividends on shares surrendered for conversion or any dividend
on the Common Stock issued upon conversion shall be made upon the
conversion of any shares of this Series.
3.3 The Corporation may, but shall not be required
to, in connection with any conversion of shares of this Series,
issue a fraction of a share of Common Stock, and if the Corporation
shall determine not to issue any such fraction, the Corporation
shall, subject to Section 3.6(f), make a cash payment (rounded to
the nearest cent) equal to such fraction multiplied by the Closing
Price of the Common Stock on the last Trading Day prior to the date
of conversion.
3.4 Any holder of shares of this Series electing to
convert such shares into Common Stock shall surrender the
certificate or certificates for such shares at the office of the
transfer agent or agents therefor (or at such other place as the
Corporation may designate by notice to the holders of shares of
this Series) during regular business hours, duly endorsed to the
Corporation or in blank, or accompanied by instruments of transfer
to the Corporation or in blank, or in form satisfactory to the
Corporation, and shall give written notice to the Corporation at
such office that such holder elects to convert such shares of this
Series. The Corporation shall, as soon as practicable (subject to
Section 3.6(f)) after such deposit of certificates for shares of
this Series, accompanied by the written notice above prescribed and
the payment of cash in the amount required by Section 3.2, if any,
issue and deliver at such office to the holder for whose account
such shares were surrendered, or to his nominee, certificates
representing the number of shares of Common Stock and the cash, if
any, to which such holder is entitled upon such conversion.
3.5 Conversion shall be deemed to have been made as
of the date that certificates for the shares of this Series to be
converted, and the written notice and payment prescribed in
Sections 3.2 and 3.4 are received by the transfer agent or agents
for this Series; and the person entitled to receive the Common
Stock issuable upon such
<PAGE>
conversion shall be treated for all purposes as the record holder
of such Common Stock on such date. Notwithstanding anything to the
contrary contained herein, in the event the Corporation shall have
rescinded a redemption or exchange of shares of this Series
pursuant to Section 4.5, any holder of shares of this Series that
shall have surrendered shares of this Series for conversion
following the day on which notice of the subsequently rescinded
redemption or exchange shall have been given but prior to the close
of business on the later of (a) the Trading Day next succeeding the
date on which public announcement of the rescission of such
redemption or exchange shall have been made and (b) the date of the
mailing of the notice of rescission required by Section 4.5 (a
"Converting Holder") may rescind the conversion of such shares
surrendered for conversion by (i) properly completing a form
prescribed by the Corporation and mailed to holders of shares of
this Series (including Converting Holders) with the Corporation's
notice of rescission, which form shall provide for the
certification by any Converting Holder rescinding a conversion on
behalf of any beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of shares of this Series that the
beneficial ownership (within the meaning of such Rule) of such
shares shall not have changed from the date on which such shares
were surrendered for conversion to the date of such certification
and (ii) delivering such form to the Corporation no later than the
close of business on that date which is fifteen (15) Trading Days
following the date of the mailing of the Corporation's notice of
rescission. The delivery of such form by a Converting Holder shall
be accompanied by (x) any certificates representing shares of
Common Stock issued to such Converting Holder upon a conversion of
shares of this Series that shall be rescinded by the proper
delivery of such form (the "Surrendered Shares"), (y) any
securities, evidences of indebtedness or assets (other than cash)
distributed by the Corporation to such Converting Holder by reason
of such Converting Holder's being a record holder of Surrendered
Shares and (z) payment in New York Clearing House funds or other
funds acceptable to the Corporation of an amount equal to the sum
of (I) any cash such Converting Holder may have received in lieu of
the issuance of fractional shares upon conversion and (II) any cash
paid or payable by the Corporation to such Converting Holder by
reason of such Converting Holder being a record holder of
Surrendered Shares. Upon receipt by the Corporation of any such
form properly completed by a Converting Holder and any
certificates, securities, evidences of indebtedness, assets or cash
payments required
<PAGE>
to be returned or made by such Converting Holder to the Corporation
as set forth above, the Corporation shall instruct the transfer
agent or agents for shares of Common Stock and shares of this
Series to cancel any certificates representing Surrendered Shares
(which Surrendered Shares shall be deposited in the treasury of the
Corporation) and reissue certificates representing shares of this
Series to such Converting Holder (which shares of this Series shall
be deemed to have been outstanding at all times during the period
following their surrender for conversion). The Corporation shall,
as promptly as practicable, and in no event more than five (5)
Trading Days, following the receipt of any such properly completed
form and any such certificates, securities, evidences of
indebtedness, assets or cash payments required to be so returned or
made, pay to the Converting Holder or as otherwise directed by such
Converting Holder any dividend or other payment made on such shares
during the period from the time such shares shall have been
surrendered for conversion to the rescission of such conversion.
All questions as to the validity, form, eligibility (including time
or receipt) and acceptance of any form submitted to the Corporation
to rescind the conversion of shares of this Series, including
questions as to the proper completion or execution of any such form
or any certification contained therein, shall be resolved by the
Corporation, whose determination shall be final and binding. The
Corporation shall not be required to deliver certificates for
shares of Common Stock while the stock transfer books for such
stock or for this Series are duly closed for any purpose or during
any period commencing at a Redemption Rescission Event and ending
at either (A) the time and date at which the Corporation's right of
rescission shall expire pursuant to Section 4.5 if the Corporation
shall not have exercised such right or (B) the close of business on
that day which is fifteen (15) Trading Days following the date of
the mailing of a notice of rescission pursuant to Section 4.4 if
the Corporation shall have exercised such right of rescission, but
certificates for shares of Common Stock shall be issued and
delivered as soon as practicable after the opening of such books or
the expiration of such period.
3.6 The Conversion Rate shall be adjusted from time
to time as follows for events occurring after the date of the
Certificate:
(a) In case the Corporation shall, at any time or
from time to time while any of the Series J
<PAGE>
Stock is outstanding, (i) pay a dividend in shares of its
Common Stock, (ii) combine its outstanding shares of Common
Stock into a smaller number of shares, (iii) subdivide its
outstanding shares of Common Stock or (iv) issue by
reclassification of its shares of Common Stock any shares of
stock of the Corporation, then the Conversion Rate in effect
immediately before such action shall be adjusted so that the
holders of the Series J Stock, upon conversion of all shares
thereof immediately following such event, shall be entitled to
receive the kind and amount of shares of capital stock of the
Corporation that they would have owned or been entitled to
receive upon or by reason of such event if such shares of
Series J Stock had been converted immediately before the
record date (or, if no record date, the effective date) for
such event. An adjustment made pursuant to this Section 3.6(a)
shall become effective retroactively immediately after the
record date in the case of a dividend or distribution and
shall become effective retroactively immediately after the
effective date in the case of a subdivision, combination or
reclassification. For the purposes of this Section 3.6(a),
each holder of Series J Stock shall be deemed to have failed
to exercise any right to elect the kind or amount of
securities receivable upon the payment of any such dividend,
subdivision, combination or reclassification (provided that if
the kind or amount of securities receivable upon such
dividend, subdivision, combination or reclassification is not
the same for each nonelecting share, then the kind and amount
of securities receivable upon such dividend, subdivision,
combination or reclassification for each nonelecting share
shall be deemed to be the kind and amount so receivable per
share by a plurality of the nonelecting shares).
(b) In case the Corporation shall, at any time or
from time to time while any of the Series J Stock is
outstanding, issue rights or warrants to all holders of shares
of its Common Stock entitling them (for a period expiring
within 45 days after the record date for such issuance) to
subscribe for or purchase shares of Common Stock (or
securities convertible into shares of Common Stock) at a price
per share less than the Current Market Price of the Common
Stock at such record date (treating the price per share of the
securities convertible into Common Stock as equal to (x) the
sum of (i) the price for a unit of the security
<PAGE>
convertible into Common Stock plus (ii) any additional
consideration initially payable upon the conversion of such
security into Common Stock divided by (y) the number of shares
of Common Stock initially underlying such convertible
security), the Conversion Rate shall be adjusted so that it
shall equal the rate determined by multiplying the Conversion
Rate in effect immediately prior to the date of issuance of
such rights or warrants by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants plus the
number of additional shares of Common Stock offered for
subscription or purchase (or into which the convertible
securities so offered are initially convertible), and the
denominator of which shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights or
warrants plus the number of shares that the aggregate offering
price of the total number of shares so offered for
subscription or purchase (or the aggregate purchase price of
the convertible securities so offered plus the aggregate
amount of any additional consideration initially payable upon
conversion into Common Stock) would purchase at such Current
Market Price of the Common Stock. Such adjustment shall become
effective retroactively immediately after the record date for
the determination of stockholders entitled to receive such
rights or warrants.
(c) In case the Corporation shall, at any time or
from time to time while any of the Series J Stock is
outstanding, distribute to all holders of shares of its Common
Stock (including any such distribution made in connection with
a consolidation or merger in which the Corporation is the
continuing corporation and the Common Stock is not changed or
exchanged, but excluding any transaction for which an
adjustment is made under Section 3.7) cash, evidences of its
indebtedness, securities or assets (excluding (i) regularly
scheduled cash dividends in amounts, if any, determined from
time to time by the Board of Directors or (ii) dividends
payable in shares of Common Stock for which adjustment is made
under Section 3.6(a)) or rights or warrants to subscribe for
or purchase securities of the Corporation (excluding those
referred to in Section 3.6(b)), then in each such case the
Conversion Rate shall be adjusted so that it shall equal the
rate determined by multiplying the
<PAGE>
Conversion Rate in effect immediately prior to the date of
such distribution by a fraction, the numerator of which shall
be the Current Market Price of the Common Stock on the record
date referred to below, and the denominator of which shall be
such Current Market Price of the Common Stock less the then
fair market value (as determined by the Board of Directors,
whose determination shall be conclusive) of the portion of the
cash or assets or evidences of indebtedness or securities so
distributed or of such subscription rights or warrants
applicable to one share of Common Stock (provided that such
denominator shall never be less than 1.0); provided, however,
that no adjustment shall be made with respect to any
distribution of rights to purchase securities of the
Corporation if the holder of shares of this Series would
otherwise be entitled to receive such rights upon conversion
at any time of shares of this Series into Common Stock unless
such rights are subsequently redeemed by the Corporation, in
which case such redemption shall be treated for purposes of
this Section as a dividend on the Common Stock. Such
adjustment shall be made whenever any such distribution is
made and shall become effective retroactively immediately
after the record date for the determination of stockholders
entitled to receive such distribution.
(d) In case the Corporation or any subsidiary
thereof shall, at any time and from time to time while any of
the Series J Stock is outstanding, make a Pro Rata Repurchase,
the Conversion Rate in effect immediately prior to such action
shall be adjusted by multiplying such Conversion Rate by a
fraction, the numerator of which shall be the product of (i)
the number of shares of Common Stock outstanding immediately
before such Pro Rata Repurchase minus the number of shares of
Common Stock repurchased in such Pro Rata Repurchase and (ii)
the Current Market Price of the Common Stock as of the day
immediately preceding the first public announcement by the
Corporation of the intent to effect such Pro Rata Repurchase,
and the denominator of which shall be (A) the product of (x)
the number of shares of Common Stock outstanding immediately
before such Pro Rata Repurchase and (y) the Current Market
Price of the Common Stock as of the day immediately preceding
the first public announcement by the Corporation of the intent
to effect such Pro Rata Repurchase minus (B) the aggregate
purchase price of
<PAGE>
the Pro Rata Repurchase (provided that such denominator shall
never be less than 1.0). Such adjustment shall become
effective immediately after the Effective Date of such Pro
Rata Repurchase.
(e) The Corporation shall be entitled to make such
additional adjustments in the Conversion Rate, in addition to
those required by subsections 3.6(a), 3.6(b), 3.6(c) and
3.6(d), as shall be necessary in order that any dividend or
distribution in Common Stock, any subdivision,
reclassification or combination of shares of Common Stock or
any issuance of rights or warrants referred to above, shall
not be taxable to the holders of Common Stock for United
States Federal income tax purposes.
(f) In any case in which this Section 3.6 shall
require that any adjustment be made effective as of or
retroactively immediately following a record date, the
Corporation may elect to defer (but only for five (5) Trading
Days following the filing of the statement referred to in
Section 3.6(h)) issuing to the holder of any shares of this
Series converted after such record date (i) the shares of
Common Stock and other capital stock of the Corporation
issuable upon such conversion over and above (ii) the shares
of Common Stock and other capital stock of the Corporation
issuable upon such conversion on the basis of the Conversion
Rate prior to adjustment; provided, however, that the
Corporation shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the
event requiring such adjustment.
(g) All calculations under this Section 3.6 shall be
made to the nearest cent, one-hundredth of a share or, in the
case of the Conversion Rate, one ten-thousandth.
Notwithstanding any other provision of this Section 3.6, the
Corporation shall not be required to make any adjustment of
the Conversion Rate unless such adjustment would require an
increase or decrease of at least 1.0000% of such rate. Any
lesser adjustment shall be carried forward and shall be made
at the time of and together with the next subsequent
adjustment that, together with any adjustment or adjustments
so carried forward, shall amount to an increase or decrease of
at least 1.0000% in such rate. Any adjustments under this
Section 3.6 shall be made
<PAGE>
successively whenever an event requiring such an adjustment
occurs.
(h) Whenever an adjustment in the Conversion Rate is
required, the Corporation shall forthwith place on file with
its transfer agent or agents for this Series a statement
signed by a duly authorized officer of the Corporation,
stating the adjusted Conversion Rate determined as provided
herein. Such statements shall set forth in reasonable detail
such facts as shall be necessary to show the reason for and
the manner of computing such adjustment. Promptly after the
adjustment of the Conversion Rate, the Corporation shall mail
a notice thereof to each holder of shares of this Series.
(i) In the event that at any time as a result of an
adjustment made pursuant to this Section 3.6, the holder of
any share of this Series thereafter surrendered for conversion
shall become entitled to receive any shares of stock of the
Corporation other than shares of Common Stock, the conversion
rate of such other shares so receivable upon conversion of any
such share of this Series shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock
contained in subparagraphs (a) through (h) and (j) of this
Section 3.6, and the provisions of Section 3.1 through 3.5 and
3.7 through 3.10 shall apply on like or similar terms to any
such other shares and the determination of the Board of
Directors as to any such adjustment shall be conclusive.
(j) No adjustment shall be made pursuant to this
Section 3.6 (i) if the effect thereof would be to reduce the
Conversion Price below the par value of the Common Stock or
(ii) subject to Section 3.6(f), with respect to any share of
Series J Stock that is converted, prior to the time such
adjustment otherwise would be made.
3.7 In case after the date of the Certificate of (a)
any consolidation or merger to which the Corporation is a party,
other than a merger or consolidation in which the Corporation is
the surviving or continuing corporation and that does not result in
any reclassification of, or change (other than a change in par
value or from par
<PAGE>
value to no par value or from no par value to par value, or as a
result of a subdivision or combination) in, outstanding shares of
Common Stock or (b) in a transaction where the Common Stock will
cease to be registered under the Securities Exchange Act of 1934,
any sale or conveyance of all or substantially all of the property
and assets of the Corporation, then each share of this Series
remaining outstanding after such consolidation, merger, sale or
conveyance shall be convertible from and after the date of such
consolidation, merger, sale or conveyance, as the case may be, into
the kind and amount of shares of stock or other securities and
property receivable upon such consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock into
which such shares of this Series could have been converted
immediately prior to such consolidation, merger, sale or
conveyance, subject to adjustment that shall be as nearly
equivalent as may be practicable to the adjustments provided for in
this Section 3 (and assuming such holder of Common Stock failed to
exercise his rights of election, if any, as to the kind or amount
of securities, cash or other property receivable upon such
consolidation, merger, sale or conveyance (provided that if the
kind or amount of securities, cash or other property receivable
upon such consolidation, merger, sale or conveyance is not the same
for each nonelecting share, then the kind and amount of securities,
cash or other property receivable upon such consolidation, merger,
sale or conveyance for each nonelecting share shall be deemed to be
the kind and amount so receivable per share by a plurality of the
nonelecting shares)). The Corporation shall not enter into any of
the transactions referred to in clause (a) or (b) of the preceding
sentence unless effective provision shall be made so as to give
effect to the provisions set forth in this Section 3.7. The
provisions of this Section 3.7 shall apply similarly to successive
consolidations, mergers, sales or conveyances.
3.8 The Corporation shall at all times reserve and
keep available, free from preemptive rights, out of its authorized
but unissued stock, for the purpose of effecting the conversion of
the shares of this Series, such number of its duly authorized
shares of Common Stock (or, if applicable, any other shares of
capital stock of the Corporation) as shall from time to time be
sufficient to effect the conversion of all outstanding shares of
this Series into such Common Stock (or such other shares of capital
stock) at any time (assuming that, at the time of the computation
of such number of shares, all such Common
<PAGE>
Stock (or such other shares of capital stock) would be held by a
single holder); provided, however, that nothing contained herein
shall preclude the Corporation from satisfying its obligations in
respect of the conversion of the shares by delivery of purchased
shares of Common Stock (or such other shares of capital stock) that
are held in the treasury of the Corporation. The Corporation shall
from time to time, in accordance with the laws of the State of
Delaware, use its best efforts to cause the authorized amount of
Common Stock (or such other shares of capital stock) to be
increased if the aggregate of the authorized amount of the Common
Stock (or such other shares of capital stock) remaining unissued
and the issued shares of such Common Stock (or such other shares of
capital stock) in its treasury (other than any shares of such
Common Stock (or such other shares capital stock) reserved for
issuance in any other connection) shall not be sufficient to permit
the conversion of the shares of this Series into the Common Stock
(or such other shares of capital stock).
3.9 If any shares of Common Stock that would be
issuable upon conversion of shares of this Series hereunder require
registration with or approval of any governmental authority before
such shares may be issued upon conversion, the Corporation will in
good faith and as expeditiously as possible cause such shares to be
duly registered or approved, as the case may be. The Corporation
will endeavor to list the shares of (or depositary shares
representing fractional interests in) Common Stock required to be
delivered upon conversion of shares of this Series prior to such
delivery upon the principal national securities exchange upon which
the outstanding Common Stock is listed at the time of such
delivery.
3.10 The Corporation shall pay any and all issue or
other taxes that may be payable in respect of any issue or delivery
of shares of Common Stock on conversion of shares of this Series
pursuant hereto. The Corporation shall not, however, be required to
pay any tax that is payable in respect of any transfer involved in
the issue or delivery of Common Stock in a name other than that in
which the shares of this Series so converted were registered, and
no such issue or delivery shall be made unless and until the person
requesting such issue has paid to the Corporation the amount of
such tax, or has established, to the satisfaction of the
Corporation, that such tax has been paid.
<PAGE>
3.11 In case (i) of a consolidation or merger to
which the Corporation is a party and in which the Common Stock is
to be exchanged for securities or other property or of the sale or
conveyance to another person or entity or group of persons or
entities acting in concert as a partnership, limited partnership,
syndicate or other group (within the meaning of Rule 13d-3 under
the Exchange Act) of all or substantially all of the property and
assets of the Corporation, (ii) of the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation or (iii)
of any Pro Rata Repurchase or other action triggering an adjustment
to the Conversion Rate pursuant to this Section 3; then, in each
case, the Corporation shall cause to be filed with the transfer
agent or agents for the Series J Stock, and shall cause to be
mailed, first-class postage prepaid, to the holders of record of
the outstanding shares of Series J Stock, at least fifteen (15)
days prior to the applicable record date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for
the purpose of any distribution or grant of rights or warrants
triggering an adjustment to the Common Stock Conversion Rate
pursuant to this Section 3, or, if a record is not to be taken, the
date as of which the holders of record of Common Stock entitled to
such distribution, rights or warrants are to be determined, or (y)
the date on which any reclassification, consolidation, merger,
sale, conveyance, dissolution, liquidation, winding up or Pro Rata
Repurchase triggering an adjustment to the Conversion Rate pursuant
to this Section 3 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 Common Stock for securities or
other property deliverable upon such reclassification,
consolidation, merger, sale, conveyance, dissolution, liquidation,
winding up or Pro Rata Repurchase. Failure to give such notice or
any defect therein shall not affect the legality or validity of the
proceedings described in clause (i), (ii) or (iii) of this Section
3.11.
4. Redemption or Exchange.
4.1 Redemption or Exchange at the Option of the
Corporation. (a) The Corporation may, at its sole option, subject
to Section 2.2, from time to time on and after May 2, 2000, redeem,
out of funds legally available therefor, or, as provided below,
exchange shares of Common Stock for, all or any part of the
outstanding shares of this
<PAGE>
Series. The redemption or exchange price for each share of this
Series called for redemption or exchange pursuant to clause (i) of
the next sentence of this Section 4.1(a) shall be the Liquidation
Value together in each case with an amount equal to the accrued and
unpaid dividends to the date fixed for redemption or exchange
(hereinafter collectively referred to as the "Redemption Price").
On the date fixed for redemption or exchange, the Corporation
shall, at its option, effect either
(i)(A) a redemption of the shares of this Series to
be redeemed by way of payment, out of funds legally available
therefor, of cash equal to the aggregate Redemption Price for
the shares of this Series then being redeemed, (B) an exchange
of the shares of this Series being exchanged for shares of
Common Stock the aggregate Current Market Price of which shall
be equal to the aggregate Redemption Price of the shares of
this Series then being exchanged (provided that the
Corporation shall be entitled to deliver cash in lieu of any
fractional share of Common Stock (determined in a manner
consistent with Section 3.3)) or (C) any combination thereof
with respect to each share of this Series called for
redemption or exchange; provided, however, that the
Corporation may not redeem or exchange any shares of this
Series pursuant to this clause (i) unless the Closing Price of
the Common Stock shall have equalled or exceeded 125% of the
applicable Conversion Price (as determined in accordance with
Section 3) for at least twenty (20) Trading Days within thirty
(30) consecutive Trading Days ending within fifteen (15)
Trading Days prior to the date notice of redemption is given;
or
(ii) an exchange of the shares of this Series being
exchanged for shares of Common Stock at a rate of exchange per
$100 in Liquidation Value of Series J Stock equal to the
Conversion Rate (provided that the Corporation shall be
entitled to deliver cash in lieu of any fractional share of
Common Stock (determined in a manner consistent with Section
3.3)); provided, however, that the Corporation may not
exchange any shares of this Series pursuant to this clause
(ii) unless all dividends with respect to such shares accrued
through the Dividend Payment Date immediately prior to the
date fixed for such exchange shall have been declared and paid
in accordance with Section 2. Except as provided in the
proviso in the previous
<PAGE>
sentence, upon receipt of shares of Common Stock in exchange
for shares of this Series being exchanged pursuant to this
clause (ii), the holders of such shares of this Series shall
not be entitled to any accrued and unpaid dividends to the
date fixed for exchange.
(b) Notwithstanding clauses (i)(B), (i)(C) and (ii)
of Section 4.1(a), the Corporation shall be entitled to effect an
exchange of shares of Series J Stock for Common Stock only to the
extent Common Stock shall be available for issuance (including
delivery of previously issued shares of Common Stock held in the
Corporation's treasury) on the date for exchange and only to the
extent shares of Common Stock are issued and exchanged for shares
of this Series on a timely basis in accordance with the terms of
this Section 4. Certificates for shares of Common Stock issued in
exchange for surrendered shares pursuant to this Section 4.1 shall
be made available by the Corporation not later than the fifth
Trading Day following the date for exchange; subject, however, to
Section 4.2.
4.2 In the event that fewer than all the outstanding
shares of this Series are to be redeemed or exchanged pursuant to
Section 4.1(a), the number of shares to be redeemed or exchanged
from each holder of shares of this Series shall be determined by
the Corporation by lot or pro rata or by any other method as may be
determined by the Board of Directors in its sole discretion to be
equitable, and the certificate of the Corporation's Secretary or an
Assistant Secretary filed with the transfer agent or transfer
agents for this Series in respect of such determination by the
Board of Directors shall be conclusive.
4.3 In the event the Corporation shall redeem or
exchange shares of this Series pursuant to Section 4.1(a), notice
of such redemption or exchange shall be given by first class mail,
postage prepaid, mailed not less than fifteen (15) nor more than
sixty (60) days prior to the date fixed for redemption or exchange,
as applicable, to each record holder of the shares to be redeemed
or exchanged, at such holder's address as the same appears on the
books of the Corporation. Each such notice shall state: (i) whether
the shares of this Series are to be redeemed or exchanged and, if
exchanged, whether such shares are to be exchanged at the
Redemption Price or the Conversion Rate; (ii) the time and date as
of which the redemption or exchange shall occur; (iii) the total
number
<PAGE>
of shares of this Series to be redeemed or exchanged and, if fewer
than all the shares held by such holder are to be redeemed or
exchanged, the number of such shares to be redeemed or exchanged
from such holder; (iv) the Redemption Price, if applicable; (v)
that shares of this Series called for redemption or exchange may be
converted at any time prior to the time and date fixed for
redemption or exchange (unless the Corporation shall, in the case
of a redemption, default in payment of the Redemption Price or, in
the case of an exchange, fail to exchange the shares of this Series
for the applicable number of shares of Common Stock and amount of
cash, or shall exercise its right to rescind such redemption or
exchange pursuant to Section 4.5, in which case such right of
conversion shall not terminate at such time and date); (vi) the
applicable Conversion Price or Conversion Rate; (vii) the place or
places where certificates for such shares are to be surrendered (A)
for payment of the Redemption Price, in the case of redemption, or
(B) for delivery of certificates representing the shares of Common
Stock and for payment of any applicable cash amount, in the case of
exchange; and (viii) that, in the case of any redemption or
exchange pursuant to Section 4.1(a)(i), dividends on the shares to
be redeemed or exchanged will cease to accrue on such date fixed
for redemption or exchange.
4.4 If notice of redemption or exchange shall have
been given by the Corporation as provided in Section 4.3, dividends
on the shares of this Series so called for redemption or exchange
shall cease to accrue, such shares shall no longer be deemed to be
outstanding, and all rights of the holders thereof as stockholders
with respect to shares so called for redemption or exchange (except
(i) in the case of redemption, the right to receive from the
Corporation the Redemption Price without interest and, in the case
of exchange, the right to receive from the Corporation the shares
of Common Stock and cash amount, if any, exchanged therefor and
(ii) the right to convert such shares in accordance with Section 3)
shall cease (including any right to receive dividends otherwise
payable on any Dividend Payment Date that would have occurred after
the time and date of redemption or exchange) either (A) in the case
of a redemption or exchange pursuant to Section 4.1(a), from and
after the time and date fixed in the notice of redemption or
exchange as the time and date of redemption or exchange (unless the
Corporation shall (x) in the case of a redemption, default in the
payment of the Redemption Price, (y) in the case of an exchange,
fail to exchange the shares
<PAGE>
of this Series for the applicable number of shares of Common Stock
and any applicable cash amount pursuant to Section 4.1, or (z)
exercise its right to rescind such redemption pursuant to Section
4.5, in which case such rights shall not terminate at such time and
date) or (B) if the Corporation shall so elect and state in the
notice of redemption or exchange, from and after the time and date
(which date shall be the date of redemption or exchange or an
earlier date not less than fifteen (15) days after the date of
mailing of the redemption or exchange notice) on which the
Corporation shall irrevocably deposit with a designated bank or
trust company doing business in the Borough of Manhattan, City and
State of New York, as paying agent, money sufficient to pay at the
office of such paying agent, on the redemption date, the Redemption
Price, in the case of redemption, or certificates representing the
shares of Common Stock to be so exchanged and any applicable cash
amount, in the case of an exchange. Any money or certificates so
deposited with any such paying agent that shall not be required for
such redemption or exchange because of the exercise of any right of
conversion or otherwise shall be returned to the Corporation
forthwith. Upon surrender (in accordance with the notice of
redemption or exchange) of the certificate or certificates for any
shares of this Series to be so redeemed or exchanged (properly
endorsed or assigned for transfer, if the Corporation shall so
require and the notice of redemption or exchange shall so state),
such shares shall be redeemed or exchanged by the Corporation at
the Redemption Price or the Conversion Rate, as applicable, as set
forth in Section 4.1 (unless the Corporation shall have exercised
its right to rescind such redemption or exchange pursuant to
Section 4.5). In case fewer than all the shares represented by any
such certificate are to be redeemed or exchanged, a new certificate
shall be issued representing the unredeemed shares (or fractions
thereof as provided in Section 7.3), without cost to the holder
thereof, together with the amount of cash, if any, in lieu of
fractional shares other than those issuable in accordance with
Section 7.3. Subject to applicable escheat laws, any moneys so set
aside by the Corporation in the case of redemption and unclaimed at
the end of one year from the redemption date shall revert to the
general funds of the Corporation, after which reversion the holders
of such shares so called for redemption shall look only to the
general funds of the Corporation for the payment of the Redemption
Price without interest. Any interest accrued on funds so deposited
shall be paid to the Corporation from time to time.
<PAGE>
4.5 In the event that a Redemption Rescission Event
shall occur following any day on which a notice of redemption or
exchange shall have been given pursuant to Section 4.3 but at or
prior to the earlier of (a) the time and date fixed for redemption
or exchange as set forth in such notice of redemption or exchange
and (b) the time and date at which the Corporation shall have
irrevocably deposited funds or certificates with a designated bank
or trust company pursuant to Section 4.4, the Corporation may, at
its sole option, at any time prior to the earliest of (i) the close
of business on that day which is two (2) Trading Days following
such Redemption Rescission Event, (ii) the time and date fixed for
redemption or exchange as set forth in such notice and (iii) the
time and date on which the Corporation shall have irrevocably
deposited such funds with a designated bank or trust company,
rescind the redemption or exchange to which such notice of
redemption or exchange shall have related by making a public
announcement of such rescission (the date on which such public
announcement shall have been made being hereinafter referred to as
the "Rescission Date"). The Corporation shall be deemed to have
made such announcement if it shall issue a release to the Dow Jones
News Service, Reuters Information Services or any successor news
wire service. From and after the making of such announcement, the
Corporation shall have no obligation to redeem or exchange shares
of this Series called for redemption or exchange pursuant to such
notice of redemption or exchange or to pay the redemption or
exchange price therefor and all rights of holders of shares of this
Series shall be restored as if such notice of redemption or
exchange had not been given. The Corporation shall give notice of
any such rescission by first-class mail, postage prepaid, mailed as
promptly as practicable, but in no event later than the close of
business on that date which is five (5) Trading Days following the
Rescission Date to each record holder of shares of this Series at
the close of business on the Rescission Date and to any other
person or entity that was a record holder of shares of this Series
and that shall have surrendered shares of this Series for
conversion following the giving of notice of the subsequently
rescinded redemption or exchange. Each notice of rescission shall
(w) state that the redemption or exchange described in the notice
of redemption or exchange has been rescinded, (x) state that any
Converting Holder shall be entitled to rescind the conversion of
shares of this Series surrendered for conversion following the day
on which notice of redemption or exchange was given but on or prior
to the date
<PAGE>
of the mailing of the Corporation's notice of rescission, (y) be
accompanied by a form prescribed by the Corporation to be used by
any Converting Holder rescinding the conversion of shares so
surrendered for conversion (and instructions for the completion and
delivery of such form, including instructions with respect to
payments that may be required to accompany such delivery shall be
in accordance with Section 3.5) and (z) state that such form must
be properly completed and received by the Corporation no later than
the close of business on a date that shall be fifteen (15) Trading
Days following the date of the mailing of such notice of
rescission.
5. Voting. The shares of this Series shall have no voting
rights except as required by law or as set forth below.
5.1 Each share of this Series shall be entitled to
vote together with holders of the shares of Common Stock (and any
other class or series that may similarly be entitled to vote with
the shares of Common Stock) as a single class upon all matters upon
which holders of Common Stock are entitled to vote. In any such
vote, the holders of this Series shall be entitled to two (2) votes
per $100 in Liquidation Value of Series J Stock, subject to
adjustment at the same time and in the same manner as each
adjustment of the Conversion Rate pursuant to Section 3.6, so that
the holders of this Series shall be entitled following such
adjustment to the number of votes equal to the number of votes such
holders were entitled to under this Section 5.1 immediately prior
to such adjustment multiplied by a fraction (x) the numerator of
which is the Conversion Rate as adjusted pursuant to Section 3.6
and (y) the denominator of which is the Conversion Rate immediately
prior to such adjustment.
5.2 (a) So long as any shares of this Series remain
outstanding, unless a greater percentage shall then be required by
law, the Corporation shall not, without the affirmative vote at a
meeting or the written consent with or without a meeting of the
holders of shares of this Series representing at least 66-2/3% of
the aggregate voting power of shares of this Series then
outstanding (i) authorize any Senior Stock or reclassify any Junior
Stock or Parity Stock as Senior Stock or (ii) amend, alter or
repeal any of the provisions of the Certificate or the Certificate
of Incorporation, so as in any such case to materially and
adversely affect the preferences, special
<PAGE>
rights, powers or privileges of the shares of this Series;
provided, however, that no amendment that effects a split of this
Series or that effects a combination of the shares of this Series
into a fewer number of Shares shall be deemed to have any such
material adverse effect.
(b) No consent of holders of shares of this Series
shall be required for (i) the creation of any indebtedness of any
kind of the Corporation, (ii) the authorization or issuance of any
class of Junior Stock or Parity Stock, (iii) the authorization,
designation or issuance of additional shares of Series J Stock or
(iv) subject to Section 5.2(a), the authorization or issuance of
any other shares of Preferred Stock.
5.3 (a) If and whenever at any time or times
dividends payable on shares of this Series shall have been in
arrears and unpaid in an aggregate amount equal to or exceeding the
amount of dividends payable thereon for six quarterly dividend
periods, then the number of directors constituting the Board of
Directors shall be increased by two and the holders of shares of
this Series, together with the holders of any shares of any Parity
Stock as to which in each case dividends are in arrears and unpaid
in an aggregate amount equal to or exceeding the amount of
dividends payable thereon for six quarterly dividend periods, shall
have the exclusive right, voting separately as a class with such
other series, to elect two directors of the Corporation.
(b) Such voting right may be exercised initially
either by written consent or at a special meeting of the holders of
the Preferred Stock having such voting right, called as hereinafter
provided, or at any annual meeting of stockholders held for the
purpose of electing directors, and thereafter at each such annual
meeting until such time as all dividends accumulated on the shares
of this Series shall have been paid in full and all dividends
payable on the shares of this Series on four subsequent consecutive
Dividend Payment Dates shall have been paid in full on such dates
or funds shall have been set aside for the payment thereof, at
which time such voting right and the term of the directors elected
pursuant to Section 5.3(a) shall terminate.
(c) At any time when such voting right shall have
vested in holders of shares of such series of Preferred Stock
described in Section 5.3(a), and if such right shall
<PAGE>
not already have been exercised by written consent, a proper
officer of the Corporation may call, and, upon the written request,
addressed to the Secretary of the Corporation, of the record
holders of shares representing twenty-five percent (25%) of the
voting power of the shares then outstanding of such Preferred Stock
having such voting right, shall call, a special meeting of the
holders of such Preferred Stock having such voting right. Such
meeting shall be held at the earliest practicable date upon the
notice required for annual meetings of stockholders at the place
for holding annual meetings of stockholders, or, if none, at a
place designated by the Board of Directors. Notwithstanding the
provisions of this Section 5.3(c), no such special meeting shall be
called during a period within 60 days immediately preceding the
date fixed for the next annual meeting of stockholders.
(d) At any meeting held for the purpose of electing
directors at which the holders of such Preferred Stock shall have
the right to elect directors as provided herein, the presence in
person or by proxy of the holders of shares representing more than
fifty percent (50%) in voting power of the then outstanding shares
of such Preferred Stock having such right shall be required and
shall be sufficient to constitute a quorum of such class for the
election of directors by such class.
(e) Any director elected by holders of Preferred
Stock pursuant to the voting right created under this Section 5.3
shall hold office until the next annual meeting of stockholders
(unless such term has previously terminated pursuant to Section
5.3(b)) and any vacancy in respect of any such director shall be
filled only by vote of the remaining director so elected, or if
there be no such remaining director, by the holders of such
Preferred Stock entitled to elect such director or directors by
written consent or at a special meeting called in accordance with
the procedures set forth in Section 5.3(c), or, if no special
meeting is called or written consent executed, at the next annual
meeting of stockholders. Upon any termination of such voting right,
subject to applicable law, the term of office of all directors
elected by holders of such Preferred Stock voting separately as a
class pursuant to this Section 5.3 shall terminate.
(f) In exercising the voting rights set forth in
this Section 5.3, each share of this Series shall have a number of
votes equal to its Liquidation Value.
<PAGE>
6. Liquidation Rights.
6.1 Upon the dissolution, liquidation or winding up
of the Corporation, whether voluntary or involuntary, the holders
of the shares of this Series shall be entitled to receive out of
the assets of the Corporation available for distribution to
stockholders, in preference to the holders of, and before any
payment or distribution shall be made on, Junior Stock, the amount
of $100 per share (which amount shall be appropriately adjusted
from time to time to reflect any split or combination of the shares
of this Series) (the "Liquidation Value"), plus an amount equal to
all accrued and unpaid dividends to the date of final distribution.
6.2 Neither the sale, exchange or other conveyance
(for cash, shares of stock, securities or other consideration) of
all or substantially all the property and assets of the Corporation
nor the merger or consolidation of the Corporation into or with any
other corporation, or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to be a
dissolution, liquidation or winding up, voluntary or involuntary,
for the purposes of this Section 6.
6.3 After the payment to the holders of the shares
of this Series of full preferential amounts provided for in this
Section 6, the holders of this Series as such shall have no right
or claim to any of the remaining assets of the Corporation.
6.4 In the event the assets of the Corporation
available for distribution to the holders of shares of this Series
upon any dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, shall be insufficient to pay in
full all amounts to which such holders are entitled pursuant to
Section 6.1, no such distribution shall be made on account of any
shares of any Parity Stock upon such dissolution, liquidation or
winding up unless proportionate distributive amounts shall be paid
on account of the shares of this Series, ratably, in proportion to
the full distributable amounts for which holders of all Parity
Stock are entitled upon such dissolution, liquidation or winding
up.
<PAGE>
7. Other Provisions.
7.1 All notices from the Corporation to the holders
shall be given by first class mail. With respect to any notice to a
holder of shares of this Series required to be provided hereunder,
neither failure to mail such notice, nor any defect therein or in
the mailing thereof, to any particular holder shall affect the
sufficiency of the notice or the validity of the proceedings
referred to in such notice with respect to the other holders or
affect the legality or validity of any distribution, right,
warrant, reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon
any such action. Any notice that was mailed in the manner herein
provided shall be conclusively presumed to have been duly given
whether or not the holder receives the notice.
7.2 Any shares of this Series that have been
converted, redeemed, exchanged or otherwise acquired by the
Corporation shall, after such conversion, redemption, exchange or
acquisition, as the case may be, be retired and the Corporation
shall take all appropriate action to cause such shares to obtain
the status of authorized but unissued shares of Preferred Stock,
without designation as to series, until such shares are once more
designated as part of a particular series by the Board of
Directors. The Corporation may cause a certificate setting forth a
resolution adopted by the Board of Directors that none of the
authorized shares of this Series are outstanding to be filed with
the Secretary of State of the State of Delaware. When such
certificate becomes effective, all matters set forth in the
Certificate with respect to the Series J Stock shall be eliminated
from the Certificate of Incorporation and the shares of Preferred
Stock designated hereby as Series J Stock shall have the status of
authorized and unissued shares of Preferred Stock and may be
reissued as part of any new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors.
7.3 The shares of this Series shall be issuable in
whole shares or, if authorized by the Board of Directors of the
Corporation, in any fraction of a whole share so authorized or any
integral multiple of such fraction.
<PAGE>
7.4 Subject to Section 7.6, the Corporation shall be
entitled to recognize the exclusive right of a person registered on
its records as the holder of shares of this Series, and such record
holder shall be deemed the holder of such shares for all purposes.
7.5 All notice periods referred to in the
Certificate shall commence on the date of the mailing of the
applicable notice.
7.6 Certificates for shares of this Series shall
bear such legends as the Corporation shall from time to time deem
appropriate.
IN WITNESS WHEREOF, TW INC. has caused this
certificate to be signed this 10th day of October, 1996.
TW INC.,
by /s/ Thomas W. McEnerney
--------------------------
Name: Thomas W. McEnerney
Title: Vice President
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF
10-1/4% SERIES M EXCHANGEABLE
PREFERRED STOCK
OF
TW INC.
----------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
----------------------
TW INC., hereafter to be renamed "Time Warner Inc." (the
"Corporation"), a corporation organized and existing by virtue of
the General Corporation Law of the State of Delaware (the "DGCL"),
does hereby certify that the following resolution was duly adopted
by action of the Board of Directors of the Corporation (the "Board
of Directors") at a meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly granted
to and vested in the Board of Directors by the provisions of
Section 2 of Article IV of the Restated Certificate of
Incorporation of the Corporation, as amended from time to time (the
"Certificate of Incorporation"), and Section 151(g) of the DGCL,
the Board of Directors hereby creates, from the authorized shares
of Preferred Stock, par value $.10 per share (the "Preferred
Stock"), of the Corporation authorized to be issued pursuant to the
Certificate of Incorporation, a series of Preferred Stock, and
hereby fixes the voting powers, designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, of the shares
of such series as follows:
The series of Preferred Stock hereby established shall
consist of 15,200,000 shares designated as 10-1/4% Series M
Exchangeable Preferred Stock (such series being hereinafter
referred to as "Series M Stock" or "this
<PAGE>
Series"). The rights, preferences and limitations of the
Series M Stock shall be as follows:
1. Definitions. As used herein, the following terms shall
have the following meanings:
1.1. "Accrued Dividends" shall mean, with respect to any
share of this Series, as of any specified date, the accrued and
unpaid dividends on such share.
1.2. "Applicable Series B Redemption Date" shall mean,
with respect to any Mandatory Redemption Date, the Series B
Redemption Date occurring one year and one day prior to such
Mandatory Redemption Date.
1.3. "Board of Directors" shall mean the Board of
Directors of the Corporation or, with respect to any action to be
taken by the Board of Directors, any committee of the Board of
Directors duly authorized to take such action.
1.4. "Board of Representatives of TWE" shall mean the
Board of Representatives of TWE (as defined in the TWE Partnership
Agreement).
1.5. "Business Day" shall mean any day other than a
Saturday, Sunday or other day on which commercial banks in the City
of New York are authorized or required by law or executive order to
close.
1.6. "Certificate" shall mean the certificate of the
voting powers, designations, preferences and relative,
participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, of 10- 1/4%
Series M Exchangeable Preferred Stock filed with respect to this
resolution with the Secretary of State of the State of Delaware
pursuant to Section 151 of the DGCL.
1.7. "Change of Control" shall mean:
(i) whenever, in any three-year period, a majority
of the members of the Board of Directors elected during such
three-year period shall have been so elected against the
recommendation of the management of the Corporation or the
Board of Directors in office immediately prior to such
election; it being understood that for purposes of this clause
(i) a member of such Board of Directors shall be deemed to
have been elected against the recommendation of such Board of
Directors
<PAGE>
if his or her initial election occurs as a result of either an
actual or threatened election contest (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than
such Board of Directors; or
(ii) whenever any Person shall acquire (whether by
merger, consolidation, sale, assignment, lease, transfer or
otherwise, in one transaction or any related series of
transactions) or otherwise beneficially own voting securities
of the Corporation that represent in excess of 50% of the
voting power of all outstanding voting securities of the
Corporation generally entitled to vote for the election of
directors, if such Person had acquired or publicly announced
its intention to initially acquire ten percent or more of such
voting securities in a transaction that had not, within 30
days after the date of such acquisition or public
announcement, been approved by the management of the
Corporation.
1.8. "Common Stock" shall mean the class of Common Stock,
par value $.01 per share, of the Corporation or any other class of
stock resulting from successive changes or reclassifications of
such Common Stock consisting solely of changes in par value, or
from par value to no par value, or as a result of a subdivision or
combination.
1.9. "Cumulative Priority Capital of the TWE Series B
Interests" shall mean, as of any date, the excess of (a) the sum of
(i) the aggregate B Contributions (as defined in the TWE
Partnership Agreement) of the Corporation (and its subsidiaries)
and (ii) the aggregate cumulative B Returns (as defined in the TWE
Partnership Agreement) of the Corporation (and its subsidiaries) as
of such date, over (b) the sum of all distributions theretofore
made to the Corporation (and its subsidiaries) with respect to the
TWE Series B Interests pursuant to the TWE Partnership Agreement.
1.10. "DGCL" shall mean the General Corporation Law of
the State of Delaware.
1.11. "Dividend Payment Date" shall mean March 30, June
30, September 30 and December 30 of each
<PAGE>
year, commencing on the first such date to occur following the
Issue Date (the "First Dividend Payment Date").
1.12. "Dividend Record Date" shall mean, with respect to
each Dividend Payment Date, the twentieth day immediately preceding
such Dividend Payment Date.
1.13. "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
1.14. "Excluded Tax Distributions" shall mean, with
respect to any period, all Tax Distributions made by TWE during
such period other than Included Tax Distributions.
1.15. "Final Redemption Date" shall mean July 1, 2016.
1.16. "Included Tax Distributions" shall mean, with
respect to any period, Tax Distributions made by TWE during such
period with respect to the TWE Series B Interests, but only if the
total distributions made by TWE during such period with respect to
the TWE Series B Interests exceed such Tax Distributions.
1.17. "Insolvency Distribution Date", shall mean the date
of the completion of the liquidation, winding up or dissolution of
TWE upon the Insolvency of TWE, including the distribution of all
of the cash and non-cash assets to the partners of TWE.
1.18. "Insolvency of TWE" shall mean:
(i) the entry by a court having jurisdiction in the
premises of (a) a decree or order for relief in respect of TWE
in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or
other similar law or (b) a decree or order adjudging TWE a
bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of TWE under any applicable
federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar
official of TWE or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or
<PAGE>
any such other decree or order under either clause (a) or (b)
above unstayed and in effect for a period of 60 consecutive
days; or
(ii) the commencement by TWE of a voluntary case or
proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or
order for relief in respect of TWE in an involuntary case or
proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any
applicable federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of TWE or of
any substantial part of its property, or the making by it of a
general assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts
generally as they become due, or the adoption of a resolution
by the Board of Representatives of TWE to take any of the
foregoing actions.
1.19. "Insolvency Redemption Amount" shall mean an amount
equal to the lesser of (i) the sum of (a) the Pro Rata Percentage
as of the Insolvency Distribution Date, multiplied by the sum of
cash distributions and non-cash distributions (the value of which
shall be determined pursuant to a TWE Insolvency Valuation)
received by the Corporation (and its subsidiaries) with respect to
its TWE Series B Interests and its TWE Junior Interests in
connection with such liquidation, winding up or dissolution in
accordance with the TWE Partnership Agreement, and (b) an amount
equal to the aggregate dividends payable during the period from the
Insolvency Distribution Date to the Insolvency Redemption Date on
the shares of Series M Stock outstanding from time to time during
such period and (ii) the aggregate Liquidation Preference of the
outstanding shares of Series M Stock plus Accrued Dividends
thereon.
1.20. "Insolvency Redemption Amount Per Share" shall mean
an amount equal to (i) the Insolvency Redemption
<PAGE>
Amount divided by (ii) the number of shares of Series M Stock
outstanding on the Insolvency Redemption Date.
1.21. "Insolvency Redemption Date", shall mean the day
that is one year and one day following the Insolvency Distribution
Date.
1.22. "Issue Date" shall mean, with respect to each share
of Series M Stock, the date upon which such share is first issued.
1.23. "Junior Stock" shall mean the Common Stock, the
Series A Participating Cumulative Preferred Stock, the Series LMC
Common Stock, the Series LMCN-V Common Stock and the shares of any
other class or series of stock of the Corporation created after the
Initial Issue Date that, by the terms of the Certificate of
Incorporation or of the instrument by which the Board of Directors,
acting pursuant to authority granted in the Certificate of
Incorporation, shall fix the relative rights, preferences and
limitations thereof, shall be junior to the Series M Stock in
respect of the right to receive dividends or to participate in any
other distribution of assets.
1.24. "Liquidation Preference" shall mean, with respect
to each share of Series M Stock, $1,000.
1.25. "Mandatory Redemption Amount" shall mean an amount
equal to (i) the Pro Rata Percentage (determined as of June 30,
2015, without giving effect to the Series B Redemption occurring on
such date) multiplied by the amount (as determined by a TWE
Valuation) that the Corporation (and its subsidiaries) would have
received in accordance with the TWE Partnership Agreement with
respect to its TWE Series B Interests and its TWE Junior Interests,
had TWE sold all of its assets and liquidated on June 30, 2015,
plus (ii) the aggregate dividends payable from July 1, 2015 to July
1, 2016 on the shares of Series M Stock from time to time
outstanding during such period.
1.26. "Mandatory Redemption Amount Per Share" shall mean
an amount equal to (i) the Mandatory Redemption Amount divided by
(ii) the number of shares of Series M Stock outstanding on the
Final Redemption Date.
1.27. "Mandatory Redemption Date" shall mean July 1 of
each of 2012, 2013, 2014 and 2015.
<PAGE>
1.28. "Mandatory Redemption Price Per Share" shall mean
an amount equal to the Liquidation Preference of each share of
Series M Stock to be redeemed, plus Accrued Dividends thereon.
1.29. "Material Contribution of Assets" shall mean a
contribution to TWE in a single transaction or a series of related
transactions of Relevant Assets, the fair market value of which
(net of associated debt) is in excess of $1,000,000,000 (as
determined by the Board of Directors in good faith).
1.30. "Nationally Recognized Investment Banking Firm"
shall mean an investment banking firm having a national reputation
in the United States that shall have experience in valuation or
securities rating matters, as the case may be, and that shall be
approved by a majority of the members of the Board of Directors who
are not officers or employees of the Corporation or its
subsidiaries, including TWE.
1.31. "Optional Redemption Price Per Share" shall mean,
as of any date, the price at which the Corporation may, at its
option, redeem one share of the Series M Stock pursuant to Section
3.1.
1.32. "Parity Stock" shall mean the shares of the
Corporation's Series D Convertible Preferred Stock, Series E
Convertible Preferred Stock, Series F Convertible Preferred Stock,
Series G Convertible Preferred Stock, Series H Convertible
Preferred Stock, Series I Convertible Preferred Stock, Series J
Convertible Preferred Stock, 10-1/4% Series L Exchangeable
Preferred Stock and any other class or series of stock of the
Corporation created after the Initial Issue Date that, by the terms
of the Certificate of Incorporation or of the instrument by which
the Board of Directors, acting pursuant to authority granted in the
Certificate of Incorporation, shall fix the relative rights,
preferences and limitations thereof, shall, in the event that the
stated dividends thereon are not paid in full, be entitled to share
ratably with the Series M Stock in the payment of dividends,
including accumulations, if any, in accordance with the sums which
would be payable on such shares if all dividends were declared and
paid in full, or shall, in the event that the amounts payable
thereon in liquidation are not paid in full, be entitled to share
ratably with the Series M Stock in any other distribution of assets
in accordance with the sums that would be payable in such
distribution if all sums
<PAGE>
payable were discharged in full; provided, however, that the term
"Parity Stock" shall be deemed to refer (i) in Section 2.3 hereof,
to any stock that is Parity Stock in respect of dividend rights;
(ii) in Section 10 hereof, to any stock that is Parity Stock in
respect of the distribution of assets; and (iii) in Section 9.1
hereof, to any stock that is Parity Stock in respect of either
dividend rights or the distribution of assets and that, pursuant to
the Certificate of Incorporation or any instrument in which the
Board of Directors, acting pursuant to authority granted in the
Certificate of Incorporation, shall so designate, is entitled to
vote as part of the Voting Rights Class.
1.33. "Person" shall mean any individual, corporation,
general partnership, limited partnership, limited liability
partnership, joint venture, association, joint-stock company,
trust, limited liability company, unincorporated organization or
government or any agency or political subdivision thereof.
1.34. "Pro Rata Percentage" shall mean, as of any date, a
fraction, the numerator of which shall be the aggregate Liquidation
Preference of the outstanding shares of Series M Stock as of such
date, plus Accrued Dividends thereon, and the denominator of which
shall be the Cumulative Priority Capital of the TWE Series B
Interests as of such date. In calculating the Pro Rata Percentage
in connection with the mandatory redemption on the Final Redemption
Date or upon an Insolvency of TWE, the Cumulative Priority Capital
of the TWE Series B Interests shall be increased by the sum of all
Tax Distributions (other than Included Tax Distributions) made by
TWE to the Corporation (and its subsidiaries) following April 11,
1996, with respect to the TWE Series B Interests.
1.35. "Rating Confirmation" shall mean either (i) a
confirmation from each of Moody's Investors Service, Inc. or any
successor to its rating agency business ("Moody's") and Standard
and Poor's Corporation or any successor to its rating agency
business ("S&P") that any contemplated redemption or exchange by
the Corporation would not result in a downgrade of its rating of
the Corporation's senior unsecured long-term debt, or (ii) a good
faith determination by the Board of Directors or any committee
thereof (after consultation with a Nationally Recognized Investment
Banking Firm) that any contemplated redemption or exchange by the
Corporation should not result in a downgrade in the rating
<PAGE>
of the Corporation's senior unsecured long-term debt by either
Moody's or S&P.
1.36. "Redeemable Number" shall mean, with respect to any
Mandatory Redemption Date, a number (rounded down to the nearest
whole number) of shares of Series M Stock equal to (i) the Pro Rata
Percentage (as of the Applicable Series B Redemption Date without
giving effect to the Series B Redemption occurring on such date) of
the amount of (a) cash distributions received by the Corporation
(and its subsidiaries) in respect of the Series B Redemption
occurring on the Applicable Series B Redemption Date, plus (b) cash
distributions received by the Corporation in respect of its TWE
Junior Interests from the Applicable Series B Redemption Date to
such Mandatory Redemption Date, divided by (ii) the Liquidation
Preference per share of Series M Stock plus Accrued Dividends
thereon; provided, however, that in no event shall the Redeemable
Number exceed 20%, 25%, 33 1/3% and 50% of the number of shares of
Series M Stock outstanding on the Mandatory Redemption Dates
occurring on July 1 of 2012, 2013, 2014 and 2015, respectively.
1.37. "Relevant Assets" shall mean filmed entertainment
or programming assets currently owned by the Corporation or any of
its subsidiaries (other than TWE) or that the Corporation or any of
its subsidiaries (other than TWE) currently has an agreement to
acquire.
1.38. "Reorganization of TWE" shall mean (i) any merger
or consolidation of TWE or any sale of all or substantially all of
the assets of TWE, (ii) the liquidation, winding up or dissolution
of TWE other than as a result of the Insolvency of TWE, (iii) the
making of any distributions, in cash or other property (other than
cash distributions in accordance with the TWE Partnership
Agreement), on the partnership interests in TWE from and after
April 11, 1996, having an aggregate fair market value (together
with any such prior distributions) in excess of $500,000,000 as
determined by the Board of Directors in good faith, (iv) any
transaction or series of related transactions that results in a
sale or transfer of 10% or more of the total assets of TWE
(excluding asset swaps and contributions to subsidiaries or joint
ventures, other than joint ventures with any partner of TWE as of
the Initial Issue Date that is not a subsidiary of the Company)
unless such sale or transfer is made at fair market value, the
proceeds of such sale or transfer are substantially in cash
<PAGE>
and such cash is used to repay debt or is reinvested in the
business of TWE, (v) any transfer in the beneficial ownership of a
class of partnership interests in TWE that would result in the
Corporation (directly or indirectly) owning (after giving effect to
any reductions permitted by clauses (a) or (b) of this clause (v))
less than 90% or more than 110% of its percentage ownership
interest in such class of partnership interests in TWE as of April
11, 1996, other than any change resulting from (a) cash
distributions in accordance with the TWE Partnership Agreement or
(b) the issuance of partnership interests in TWE upon exercise of
the U S WEST Option, (vi) any material reduction in voting or
management rights of the Corporation (and its subsidiaries) in TWE,
(vii) any issuance of additional partnership interests in TWE that
rank senior to the TWE Series B Interests (other than (a) the TWE
Contingent Interests, (b) partnership interests in TWE issued upon
exercise of the U S WEST Option or (c) partnership interests in TWE
having a fair market value (together with any such prior issuances)
no greater than $500,000,000, as determined by the Board of
Directors in good faith, issued in connection with any contribution
of assets to TWE), it being understood that allocations of income
or accretion with respect to the capital accounts associated with
the outstanding partnership interests in TWE shall not be
considered issuances of additional partnership interests in TWE,
(viii) any amendment to the TWE Partnership Agreement (other than
an amendment to effectuate an issuance of partnership interests in
TWE permitted by clause (vii)(c) above) that adversely affects the
allocation of income or payment of distributions to, or priority
capital rate of return or priority of, the TWE Series B Interests
or (ix) the date that is six months following the occurrence of a
Material Contribution of Assets that does not otherwise result in
the occurrence of an event specified in clauses (i) through (viii)
above.
1.39. "Reorganization Redemption/Exchange Date" means,
with respect to any Reorganization of TWE, the first Dividend
Payment Date following the 90th day after such Reorganization of
TWE; provided, however, that if such first Dividend Payment Date
occurs on or prior to the 30th day following such 90th day, then
the Reorganization Redemption/Exchange Date means the second
Dividend Payment Date following the 90th day after such
Reorganization of TWE.
<PAGE>
1.40. "Reorganization Redemption Price Per Share" shall
mean, with respect to each share of Series M Stock, (i) (a) 110% of
the Liquidation Preference thereof, plus (b) Accrued Dividends
thereon, or (ii) if the Series M Stock may be redeemed at the
option of the Corporation at such time, the Optional Redemption
Price Per Share then in effect.
1.41. "Senior Stock" shall mean the shares of any class
or series of stock of the Corporation created after the Initial
Issue Date that, by the terms of the Certificate of Incorporation
or of the instrument by which the Board of Directors, acting
pursuant to authority granted in the Certificate of Incorporation,
shall fix the relative rights, preferences and limitations thereof,
shall be senior to the Series M Stock in respect of the right to
receive dividends or to participate in any other distribution of
assets.
1.42. "Series B Redemption" shall mean each distribution
with respect to the TWE Series B Interests in accordance with
Section 8.4(c)(ii) of the TWE Partnership Agreement.
1.43. "Series B Redemption Date" shall mean June 30 of
each of 2011, 2012, 2013, 2014 and 2015.
1.44. "Series L Stock" shall mean the Corporation's
10-1/4% Series L Exchangeable Preferred Stock that may be issued
after the Initial Issue Date upon a Reorganization of TWE pursuant
to Section 6.1(i), and that shall have the voting powers,
designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or
restrictions as are set forth in a certificate of designations
substantially in the form attached hereto as Exhibit A.
1.45. "Tax Distributions" shall mean cash distributions
made to the Corporation (and its subsidiaries) pursuant to Section
8.5 of the TWE Partnership Agreement.
1.46. "TWE" shall mean Time Warner Entertainment Company,
L.P., a Delaware limited partnership.
1.47. "TWE Contingent Interests" shall mean the
partnership interests in TWE associated with the C Sub-Accounts
and the D Sub-Accounts (each as defined in the TWE Partnership
Agreement) of the Corporation (and its subsidiaries).
<PAGE>
1.48. "TWE Insolvency Valuation" shall mean the average
of the determinations of two Nationally Recognized Investment
Banking Firms with respect to the fair market value, as of the
Insolvency Distribution Date, of each non- cash distribution from
TWE received by the Corporation (and its subsidiaries) upon a
liquidation, winding up or dissolution of TWE upon the Insolvency
of TWE. The Nationally Recognized Investment Banking Firms shall be
selected by the Corporation within 30 days following the Insolvency
Distribution Date and shall render their opinions within 90 days
following the Insolvency Distribution Date. For purposes of the
foregoing, (i) the fair market value of such non-cash distributions
shall be based on the price at which such property would be sold in
an arm's-length transaction between a willing buyer and a willing
seller, and to the extent such property comprises an operating
business, it shall be valued on a going concern basis; and (ii)
such value shall be increased by the sum of all Tax Distributions
(other than Included Tax Distributions) made by TWE to the
Corporation (and its subsidiaries) following April 11, 1996, with
respect to the TWE Series B Interests.
1.49. "TWE Junior Interests" shall mean the TWE Residual
Interests together with the TWE Contingent Interests.
1.50. "TWE Partnership Agreement" shall mean that certain
Agreement of Limited Partnership, dated as of October 29, 1991, as
the same may be amended from time to time.
1.51. "TWE Residual Interests" shall mean the partnership
interests in TWE associated with the Common Sub-Accounts (as
defined in the TWE Partnership Agreement) of the Corporation (and
its subsidiaries).
1.52. "TWE Series A Interests" shall mean the partnership
interests in TWE associated with the A Sub-Accounts (as defined in
the TWE Partnership Agreement) of the Corporation (and its
subsidiaries).
1.53. "TWE Series B Interests" shall mean the partnership
interests in TWE associated with the B Sub-Accounts (as defined in
the TWE Partnership Agreement) of the Corporation (and its
subsidiaries).
1.54. "TWE Valuation" shall mean the average of the
determinations of two Nationally Recognized Investment
<PAGE>
Banking Firms with respect to the fair market value of the assets
of TWE as of June 30, 2015 (without giving effect to the Series B
Redemption or any distribution in respect of the TWE Junior
Interests occurring on such date). The Nationally Recognized
Investment Banking Firms shall be selected by the Corporation by
September 28, 2015 and shall render their opinions by November 27,
2015. For purposes of the foregoing, (i) the fair market value of
the assets of TWE shall be determined on a going concern basis,
assuming that each division of TWE is sold in a separate
arm's-length transaction between a willing buyer and a willing
seller; and (ii) such value shall be increased by the sum of all
Tax Distributions (other than Included Tax Distributions) made by
TWE to the Corporation (and its subsidiaries) following April 11,
1996, with respect to the TWE Series B Interests.
1.55. "U S WEST Option" shall mean the option granted to
U S WEST, Inc., a Delaware corporation, to increase its share of
the partnership interests in TWE pursuant to the Option Agreement,
dated as of September 15, 1992, between TWE and U S WEST, Inc.
1.56. "Voting Rights Triggering Event" shall mean the
failure of the Corporation to (i) pay dividends on the Series M
Stock in cash, or to the extent permitted by its terms, by the
issuance of additional shares of Series M Stock, for more than six
consecutive quarterly dividend periods or (ii) discharge any
redemption or exchange obligation with respect to the Series M
Stock.
2. Dividends.
2.1. The holders of shares of the outstanding Series M
Stock shall be entitled, when, as and if declared by the Board of
Directors out of funds legally available therefor, to receive
dividends on each outstanding share of Series M Stock. Except as
otherwise provided in this Section 2.1, each quarter-annual
dividend shall be an amount per share (rounded to the nearest $.01)
equal to $25.625 per $1,000 Liquidation Preference of Series M
Stock (the "Preferred Dividend Amount") and shall be payable on
each Dividend Payment Date, to the holders of record of Series M
Stock at the close of business on the Dividend Record Date
applicable to such Dividend Payment Date, commencing on the First
Dividend Payment Date. Such dividends shall be cumulative and shall
accrue on a day-to-day basis, whether or not earned or declared,
from and after the Issue Date applicable to each share of this
Series. Dividends on the
<PAGE>
Series M Stock that are not declared and paid when due will
compound quarterly on each Dividend Payment Date at the dividend
rate. Dividends payable for any partial dividend period shall be
computed on the basis of actual days elapsed over a 365- (or 366-)
day year. Notwithstanding the foregoing, the amount accruing and
payable in respect of the first dividend on the Series M Stock
payable after the date of the Certificate shall equal the Preferred
Dividend Amount.
2.2. Dividends may, at the option of the Corporation, be
paid on any Dividend Payment Date either in cash or by issuing
fully paid and nonassessable shares of Series M Stock with an
aggregate Liquidation Preference equal to the amount of such
dividends; provided, however, that dividends payable on any
Dividend Payment Date shall be paid (i) in cash, to the extent of
an amount equal to the Pro Rata Percentage as of the Preceding
Dividend Record Date multiplied by the amount of cash
distributions, other than Excluded Tax Distributions, if any,
received by the Corporation (and its subsidiaries) with respect to
its TWE Series B Interests and TWE Junior Interests on or after the
Preceding Dividend Record Date to but not including, the current
Dividend Record Date, and (ii) in Series M Stock or cash, at the
Corporation's option, to the extent of any balance.
2.3. Except as hereinafter provided in this Section 2.3,
no full dividends or other distributions may be declared or paid or
set apart for payment on Series M Stock or any other Parity Stock,
and no Parity Stock, including the Series M Stock, may be
repurchased, exchanged, redeemed or otherwise acquired by the
Corporation, nor may funds be set apart for payment with respect
thereto, unless full cumulative dividends shall have been paid or
set apart for such payment on, and all applicable redemption,
exchange and repurchase obligations shall have been satisfied with
respect to, all outstanding shares of Series M Stock and such other
Parity Stock; provided, however, that dividends or distributions
may be made on Parity Stock if they are payable in Junior Stock,
and Parity Stock may be converted into or exchanged for Parity
Stock (having no greater preference upon liquidation) or Junior
Stock; and provided further that if the Company shall have
satisfied all applicable redemption, exchange and repurchase
obligations with respect to all outstanding shares of Series M
Stock and other Parity Stock, but if full dividends are not so
paid, the Series M Stock shall share dividends with all other
<PAGE>
Parity Stock, so that the amount of dividends declared per share on
Series M Stock and all such other Parity Stock shall in all cases
bear to each other the same ratio that full cumulative dividends
per share on the shares of Series M Stock and all such other Parity
Stock bear to each other. No dividends or other distributions may
be paid or set apart for such payment on Junior Stock, and no
Junior Stock may be repurchased, exchanged, redeemed or otherwise
acquired nor may funds be set apart for payment with respect
thereto, if full cumulative dividends have not been paid on, or any
applicable redemption, exchange or repurchase obligations shall not
have been satisfied with respect to, the Series M Stock and all
other Parity Stock; provided, however, that dividends or
distributions may be made on Junior Stock if they are
payable-in-kind in additional shares of, or warrants, rights, calls
or options exercisable for or convertible into additional shares
of, Junior Stock; and provided further that Junior Stock may be
converted into or exchanged for Junior Stock.
2.4. Holders of shares of Series M Stock shall not be
entitled to any dividends, whether payable in cash, property or
stock, in excess of full cumulative dividends, as herein provided,
on the Series M 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 M Stock that may be in arrears (it being
understood that the compounding of unpaid dividends shall not
constitute money in lieu of interest).
2.5. To the extent that the amount of any quarter-annual
dividend payable to a holder of Series M Stock (in respect of all
shares held by such holder) that is payable in additional shares of
Series M Stock, valued at the Liquidation Preference thereof, does
not equal a whole number of shares of Series M Stock, such
fractional amount shall be paid in cash to such holder of Series M
Stock.
3. Optional Redemption.
3.1. At any time on or after July 1, 2006, the
Corporation may, at its sole option, subject to the provisions of
Sections 2.3 and 3.2, redeem, out of funds legally available
therefor, all or any part of the outstanding shares of Series M
Stock. The redemption prices for each share of Series M Stock
called for redemption during the 12-month periods commencing on
July 1 of the years set forth below shall be the amount (expressed
as a
<PAGE>
percentage of the Liquidation Preference thereof) set forth
opposite such years, plus Accrued Dividends thereon to the
redemption date.
Period Percentage of Liquidation Preference
------ ------------------------------------
2006 105.125%
2007 103.844%
2008 102.563%
2009 101.281%
2010 and thereafter 100.000%
3.2. No optional redemption shall be effected unless the
Corporation shall have obtained a Rating Confirmation with respect
to such redemption.
4. Mandatory Redemption.
4.1. On each Mandatory Redemption Date, the Corporation
shall redeem, out of funds legally available therefor, the
Redeemable Number of shares of Series M Stock with respect to such
Mandatory Redemption Date at the Mandatory Redemption Price Per
Share.
4.2. On the Final Redemption Date, the Corporation shall
redeem, out of funds legally available therefor, each of the then
outstanding shares of Series M Stock at the lesser of the Mandatory
Redemption Amount Per Share and the Mandatory Redemption Price Per
Share; provided, however, that if the Corporation does not obtain a
TWE Valuation within 120 days following the final Series B
Redemption Date, the Corporation shall redeem, out of funds legally
available therefor, such shares at the Mandatory Redemption Price
Per Share; and provided further that, if the TWE Series B Interests
have been fully redeemed in accordance with the TWE Partnership
Agreement, the Corporation shall redeem, out of funds legally
available therefor, such shares at the Mandatory Redemption Price
Per Share.
4.3. Upon the redemption of all of the outstanding shares
of Series M Stock on the Final Redemption Date pursuant to Section
4.2, the Corporation's obligations with respect thereto will be
discharged.
<PAGE>
5. Redemption upon Insolvency of TWE.
5.1. In the event of a liquidation, winding up or
dissolution of TWE upon the Insolvency of TWE, the Corporation
shall redeem, out of funds legally available therefor, each of the
outstanding shares of Series M Stock on the Insolvency Redemption
Date at the Insolvency Redemption Amount Per Share.
5.2. Upon such redemption, the Corporation's obligation
with respect to the Series M Stock will be discharged.
6. Reorganization of TWE.
6.1. In the event of a Reorganization of TWE, on the
Reorganization Redemption/Exchange Date, the Corporation shall
either (at its election) (i) exchange each outstanding share of
Series M Stock for shares of Series L Stock having an aggregate
liquidation preference of $1,000 plus the Accrued Dividends on such
share of Series M Stock so exchanged (the "Reorganization
Exchange") or (ii) redeem, out of funds legally available therefor,
each outstanding share of Series M Stock at the Reorganization
Redemption Price Per Share (the "Reorganization Redemption");
provided, however, that the Corporation may not effect a
Reorganization Redemption prior to July 1, 2011 unless the
Corporation shall have obtained a Rating Confirmation with respect
to such Reorganization Redemption; and provided, further, that the
Corporation may not effect a Reorganization Exchange on or after
July 1, 2011. Within 90 days after a Reorganization of TWE, the
Corporation shall make a public announcement that a Reorganization
of TWE has occurred and as to whether it will effect a
Reorganization Exchange or Reorganization Redemption.
6.2. The Corporation shall be entitled to effect a
Reorganization Exchange only to the extent that upon issuance of
shares of Series L Stock such shares shall be duly authorized and
validly issued, fully paid and nonassessable shares of Series L
Stock. Certificates for shares of Series L Stock issued in exchange
for surrendered shares of this Series pursuant to a Reorganization
Exchange shall be made available by the Corporation not later than
the fifth Business Day following the Reorganization
Redemption/Exchange Date.
<PAGE>
6.3. Prior to giving notice of its intention to effect a
Reorganization Exchange, the Corporation shall execute and file
with the Secretary of State of the State of Delaware a certificate
of designations substantially in the form of Exhibit A hereto
relating to the Series L Stock, with such changes as may be
required by law or that would not adversely affect the interests of
the holders of the Series L Stock.
6.4. To the extent that in connection with a
Reorganization Exchange any holder of Series M Stock shall be
entitled to receive, in respect of all of its shares of Series M
Stock, a number of shares of Series L Stock that does not equal a
whole number of shares, then such holder shall receive cash in lieu
of such fractional amount.
7. Procedure for Redemption or Exchange.
7.1. In the event the Corporation shall elect or be
required to redeem or exchange shares of Series M Stock pursuant to
Sections 3, 4, 5 or 6 hereof, notice of such redemption or exchange
shall be given by first-class mail, not less than 30 nor more than
60 days prior to the redemption or exchange date, to each record
holder of the shares to be redeemed or exchanged, at such holder's
address as the same appears on the books of the Corporation. Each
such notice shall state: (i) whether the redemption or exchange is
pursuant to Section 3, 4, 5 or 6 hereof; (ii) the time and date as
of which the redemption or exchange shall occur; (iii) the total
number of shares of Series M Stock to be redeemed or exchanged and,
if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such
holder; (iv) in the case of a redemption, the redemption price; (v)
the place or places where certificates for such shares are to be
surrendered for payment of the redemption price in the case of a
redemption, or for delivery of certificates representing shares of
Series L Stock in the case of an exchange; (vi) that dividends on
the shares to be redeemed will cease to accrue on such redemption
or exchange date unless the Corporation defaults in the payment of
the redemption price or fails to satisfy its exchange obligation;
and (vii) in the case of redemption, the name of any bank or trust
company, if any, performing the duties referred to in Section 7.3.
7.2. On or before any redemption or exchange date, each
holder of shares of Series M Stock to be redeemed
<PAGE>
or exchanged shall surrender the certificate or certificates
representing such shares of Series M Stock to the Corporation, in
the manner and at the place designated in the notice of redemption
or exchange, and on the redemption or exchange date, the full
redemption price or shares of Series L Stock, as the case may be,
for such shares of Series M Stock shall be paid or delivered to the
Person whose name appears on such certificate or certificates as
the owner thereof, and each surrendered certificate shall be
returned to authorized but unissued shares. Upon surrender (in
accordance with the notice of redemption or exchange) of the
certificate or certificates representing any shares to be so
redeemed or exchanged (properly endorsed or assigned for transfer,
if the Corporation shall so require and the notice of redemption or
exchange shall so state), such shares shall be redeemed by the
Corporation at the redemption price or exchanged by the Corporation
for shares of Series L Stock. If fewer than all the shares
represented by any such certificate are to be redeemed, a new
certificate shall be issued representing the unredeemed shares,
without cost to the holder thereof, together with the amount of
cash, if any, in lieu of fractional shares.
7.3. If a notice of redemption or exchange shall have
been given as provided in Section 7.1, dividends on the shares of
Series M Stock so called for redemption shall cease to accrue, such
shares shall no longer be deemed to be outstanding, and all rights
of the holders thereof as stockholders of the Corporation with
respect to shares so called for redemption or exchange (except the
right to receive from the Corporation the redemption price or the
Series L Stock without interest) shall cease (including any right
to receive dividends otherwise payable on any Dividend Payment Date
that would have occurred after the time and date of redemption or
exchange) either (i) from and after the time and date fixed in the
notice of redemption or exchange as the time and date of redemption
or exchange (unless the Corporation shall default in the payment of
the redemption price or shall fail to satisfy its exchange
obligation, in which case such rights shall not terminate at such
time and date) or (ii) if the Corporation shall so elect and state
in the notice of redemption, from and after the time and date
(which date shall be the date fixed for redemption or an earlier
date not less than 30 days after the date of mailing of the
redemption notice) on which the Corporation shall irrevocably
deposit in trust for the holders of the shares to be redeemed with
a designated bank or trust company doing business in the Borough of
Manhattan,
<PAGE>
City and State of New York, as paying agent, money sufficient to
pay at the office of such paying agent, on the redemption date, the
redemption price. Any money so deposited with any such paying agent
that shall not be required for such redemption shall be returned to
the Corporation forthwith. Subject to applicable escheat laws, any
moneys so set aside by the Corporation and unclaimed at the end of
one year from the redemption date shall revert to the general funds
of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general
funds of the Corporation for the payment of the redemption price
without interest. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
7.4. In the event that fewer than all the outstanding
shares of Series M Stock are to be redeemed, the shares to be
redeemed shall be determined pro rata or by lot, as determined by
the Corporation, except that the Corporation may redeem such shares
held by any holder of fewer than 100 shares (or shares held by
holders who would hold fewer than 100 shares as a result of such
redemption), as may be determined by the Corporation.
8. Change of Control.
8.1. Upon the occurrence of a Change of Control of the
Corporation, the Corporation shall make an offer (the "Change of
Control Offer") to each holder of Series M Stock to repurchase, out
of funds legally available therefor, all or any part of such
holder's Series M Stock at a purchase price per share in cash equal
to 101% of the Liquidation Preference thereof, plus an amount equal
to all Accrued Dividends thereon to the date of purchase. The
Change of Control Offer must be made within 30 days following a
Change of Control, shall remain open for at least 30 and not more
than 40 days and shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other applicable securities laws and
regulations.
8.2. In the event the Corporation shall be required to
make a Change of Control Offer pursuant to Section 8.1 hereof,
notice of such Change of Control Offer shall be given by
first-class mail, to each record holder of shares of Series M
Stock, at such holder's address as the same appears on the books of
the Corporation. Each such notice shall state: (i) that a Change of
Control has occurred; (ii) the last day on which the Change of
Control
<PAGE>
Offer may be accepted (the "Expiration Date"); (iii) the
repurchase price; (iv) the name and address of the paying agent;
and (v) the procedures that holders must follow to accept the
Change of Control Offer.
8.3. On or before the Expiration Date, each holder of
shares of Series M Stock wishing to accept the Change of Control
Offer shall surrender the certificate or certificates representing
such shares of Series M Stock that such holder wishes to have
repurchased to the Corporation, in the manner and at the place
designated in the notice described in Section 8.2, and on the
repurchase date, the full repurchase price for such shares of
Series M Stock shall be payable to the Person whose name appears on
such certificate or certificates as the owner thereof, and each
surrendered certificate shall be returned to authorized but
unissued shares. Upon surrender (in accordance with the notice
described in Section 8.2) of the certificate or certificates
representing any shares to be so repurchased (properly endorsed or
assigned for transfer, if the Corporation shall so require and the
notice of a Change of Control Offer shall so state), such shares
shall be repurchased by the Corporation at the repurchase price. In
case fewer than all the shares represented by any such certificate
are to be repurchased, a new certificate shall be issued
representing the non-repurchased shares, without cost to the holder
thereof, together with the amount of cash, if any, in lieu of
fractional shares.
9. Voting.
9.1. The shares of Series M Stock shall have no voting
rights except as required by law or as set forth below:
(a) If and whenever at any time or times, a
Voting Rights Triggering Event occurs, then the number of directors
constituting the Board of Directors shall be increased by two
(without duplication of any such increase in directorships required
under the terms of any other Parity Stock) and the holders of
shares of Series M Stock, voting or consenting, as the case may be,
together as a class with the holders of any shares of Parity Stock
entitled to vote thereon and as to which (i) dividends are in
arrears or unpaid in an aggregate amount equal to or exceeding the
amount of dividends payable thereon for six quarterly dividend
periods or (ii) redemption or exchange obligations have not been
satisfied (together with the
<PAGE>
Series M Stock, the "Voting Rights Class"), will be entitled to
elect two directors of the Corporation to fill the newly created
directorships.
(b) Such voting rights may be exercised
initially either by written consent or at a special meeting of the
holders of the shares of the Voting Rights Class, called as
hereinafter provided, or at any annual meeting of stockholders held
for the purpose of electing directors, and thereafter at each such
annual meeting until such time as all dividends in arrears on the
shares of this Series shall have been paid in full and/or all
redemption or exchange obligations have been satisfied, as
applicable, at which time or times such voting rights and the term
of the directors elected pursuant to Section 9.1(a) shall
terminate.
(c) At any time when such voting rights shall
have vested in holders of shares of the Voting Rights Class
described in Section 9.1(a), and if such rights shall not already
have been exercised by written consent, a proper officer of the
Corporation may call, and, upon the written request of the record
holders of shares representing twenty-five percent (25%) of the
voting power of the shares then outstanding of the Voting Rights
Class, addressed to the Secretary of the Corporation, shall call a
special meeting of the holders of shares of Voting Rights Class.
Such meeting shall be held at the earliest practicable date upon
the notice required for annual meetings of stockholders at the
place for holding annual meetings of stockholders of the
Corporation, or, if none, at a place designated by the Board of
Directors. Notwithstanding the provisions of this Section 9.1(c),
no such special meeting shall be called during a period within the
60 days immediately preceding the date fixed for the next annual
meeting of stockholders.
(d) At any meeting held for the purpose of
electing directors at which the holders of the Voting Rights Class
shall have the right to elect directors as provided herein, the
presence in person or by proxy of the holders of shares
representing more than fifty percent (50%) in voting power of the
then outstanding shares of the Voting Rights Class shall be
required and shall be sufficient to constitute a quorum of such
class for the election of directors by such class.
(e) Any director elected pursuant to
the voting rights created under this Section 9.1 shall hold
<PAGE>
office until the next annual meeting of stockholders (unless such
term has previously terminated pursuant to Section 9.1(b)) and any
vacancy in respect of any such director shall be filled only by
vote of the remaining director so elected by holders of the Voting
Rights Class, or if there be no such remaining director, by the
holders of shares of the Voting Rights Class by written consent or
at a special meeting called in accordance with the procedures set
forth in this Section 9, or, if no such special meeting is called
or written consent executed, at the next annual meeting of
stockholders. Upon any termination of such voting rights, the term
of office of all directors elected pursuant to this Section 9 shall
terminate.
(f) So long as any shares of Series M Stock
remain outstanding, unless a greater percentage shall then be
required by law, the Corporation shall not, without the affirmative
vote at a meeting or the written consent with or without a meeting
of the holders of shares of Series M Stock representing at least a
majority of the outstanding shares of Series M Stock voting or
consenting, as the case may be, separately as one class, (i)
create, authorize or issue any Senior Stock or (ii) amend the
Certificate or the Certificate of Incorporation so as to affect
adversely the specified rights, preferences, privileges or voting
rights of holders of shares of Series M Stock. The holders of at
least a majority of the outstanding shares of Series M Stock,
voting or consenting, as the case may be, separately as one class,
may waive compliance with any provision of the Certificate.
(g) In exercising the voting rights set forth
in this Section 9.1, each share of Series M Stock shall have a
number of votes equal to its Liquidation Preference.
9.2. Except as set forth in Section 9.1, the Corporation
may (a) create, authorize or issue any shares of Junior Stock or
Parity Stock or (b) increase or decrease the amount of authorized
capital stock of any class, including any preferred stock, without
the consent of the holders of Series M Stock, voting or consenting
separately as a class, and in taking the actions specified in (a)
and (b) the Corporation shall not be deemed to have affected
adversely the rights, preferences, privileges or voting rights of
holders of shares of Series M Stock.
<PAGE>
10. Liquidation Rights.
10.1. In the event of any liquidation, dissolution or
winding-up of the Corporation, whether voluntary or involuntary,
the holders of the shares of Series M Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to stockholders up to their Liquidation Preference of
$1,000 per share plus Accrued Dividends thereon in preference to
the holders of, and before any distribution is made on, any Junior
Stock, including, without limitation on any Common Stock.
10.2. Neither the sale, conveyance, exchange or transfer
(for cash, shares of stock, securities or other consideration) of
all or substantially all the property and assets of the Corporation
nor the merger or consolidation of the Corporation into or with any
other corporation, or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary,
for the purposes of this Section 10.
10.3. After the payment to the holders of the shares of
Series M Stock of full preferential amounts provided for in this
Section 10, the holders of Series M Stock as such shall have no
right or claim to any of the remaining assets of the Corporation.
10.4. In the event the assets of the Corporation
available for distribution to the holders of shares of Series M
Stock upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders are
entitled pursuant to Section 10.1, no such distribution shall be
made on account of any shares of any Parity Stock upon such
liquidation, dissolution or winding up unless proportionate
distributable amounts shall be paid on account of the shares of
Series M Stock, ratably, in proportion to the full distributable
amounts for which holders of all Parity Stock are entitled upon
such liquidation, dissolution or winding up.
11. Merger, Consolidation and Sale of Assets. Subject to
the next sentence, without the affirmative vote or consent of the
holders of at least a majority of the outstanding shares of Series
M Stock, voting or consenting, as the case may be, separately as
one class, the Corporation
<PAGE>
may not consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, any Person unless: (a) the
Person formed by such consolidation or merger (if other than the
Corporation) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made shall be a
corporation organized or existing under the laws of the United
States or any State thereof or the District of Columbia; (b) each
share of Series M Stock shall be converted into or exchanged for
and shall become a share of such successor, transferee or resulting
corporation or a parent corporation of such corporation, having in
respect of such successor, transferee or resulting corporation or
parent corporation substantially the same powers, preferences and
relative participating, optional or other special rights, and the
qualifications, limitations or restrictions thereon, that the
Series M Stock had immediately prior to such transaction; and (c)
immediately after giving effect to such transaction, no Voting
Rights Triggering Event shall have occurred or be continuing.
12. Transfer Agent and Registrar. The transfer agent and
registrar (the "Transfer Agent") for the Series M Stock shall be
ChaseMellon Shareholder Services L.L.C. The Corporation may, in its
sole discretion, remove the Transfer Agent with 10 days' prior
written notice to the Transfer Agent and appoint a successor
Transfer Agent prior to such removal.
13. Covenant to Report. Notwithstanding that the
Corporation may not be subject to the reporting requirements of
Section 13 or Section 15(d) of the Exchange Act, the Corporation
will provide the Transfer Agent and the holders of Series M Stock
with all information, documents and reports specified in Section 13
and Section 15(d) of the Exchange Act.
14. Other Provisions.
14.1. With respect to any notice to a holder of shares of
Series M Stock required to be provided hereunder, neither failure
to mail such notice, nor any defect therein or in the mailing
thereof, to any particular holder shall affect the sufficiency of
the notice or the validity of the proceedings referred to in such
notice with respect to the other holders or affect the legality or
validity of any distribution, right, warrant, reclassification,
consolidation, merger, conveyance, transfer, dissolution,
<PAGE>
liquidation or winding up, or the vote upon any such action. Any
notice that was mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the
holder receives the notice.
14.2. Shares of Series M Stock issued and reacquired
will, upon compliance with the applicable requirements of the DGCL,
have the status of authorized but unissued shares of Preferred
Stock of the Corporation undesignated as to series and may with any
and all other authorized but unissued shares of Preferred Stock of
the Corporation be designated or redesignated and issued or
reissued, as the case may be, as part of any series of Preferred
Stock of the Corporation, except that any issuance or reissuance of
shares of Series M Stock must be in compliance with the
Certificate.
14.3. The shares of Series M Stock shall be issuable in
whole shares.
14.4. The Corporation shall be entitled to recognize the
exclusive right of a person registered on its records as the holder
of shares of Series M Stock for all purposes.
14.5. All notice periods referred to herein shall
commence on the date of the mailing of the applicable notice.
IN WITNESS WHEREOF, TW Inc. has caused this certificate
to be signed this 10th day of October, 1996.
TW INC.,
by /s/ Thomas W. McEnerney
---------------------------
Name: Thomas W. McEnerney
Title: Vice President
<PAGE>
EXHIBIT A
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF
10-1/4% SERIES L EXCHANGEABLE
PREFERRED STOCK
OF
TW INC.
--------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
--------------------
TW INC., hereafter to be renamed "Time Warner Inc." (the
"Corporation"), a corporation organized and existing by virtue of
the General Corporation Law of the State of Delaware (the "DGCL"),
does hereby certify that the following resolution was duly adopted
by action of the Board of Directors of the Corporation (the "Board
of Directors") at a meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly granted
to and vested in the Board of Directors by the provisions of
Section 2 of Article IV of the Restated Certificate of
Incorporation of the Corporation, as amended from time to time (the
"Certificate of Incorporation"), and Section 151(g) of the DGCL,
the Board of Directors hereby creates, from the authorized shares
of Preferred Stock, par value $.10 per share (the "Preferred
Stock"), of the Corporation authorized to be issued pursuant to the
Certificate of Incorporation, a series of Preferred Stock, and
hereby fixes the voting powers, designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, of the shares
of such series as follows:
The series of Preferred Stock hereby established shall
consist of 9,000,000 shares designated as 10-1/4% Series L
Exchangeable Preferred Stock (such series being hereinafter
referred to as "Series L Stock" or "this
<PAGE>
Series"). The rights, preferences and limitations of the Series L
Stock shall be as follows:
1. Definitions. As used herein, the following terms shall
have the following meanings:
1.1 "Accrued Dividends" shall mean, with respect to
any share of this Series, as of any specified date, the accrued and
unpaid dividends on such share.
1.2 "Board of Directors" shall mean the Board of
Directors of the Corporation or, with respect to any action to be
taken by the Board of Directors, any committee of the Board of
Directors duly authorized to take such action.
1.3 "Business Day" shall mean any day other than a
Saturday, Sunday or other day on which commercial banks in the City
of New York are authorized or required by law or executive order to
close.
1.4 "Certificate" shall mean the certificate of the
voting powers, designations, preferences and relative,
participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, of 10-1/4%
Series L Exchangeable Preferred Stock filed with respect to this
resolution with the Secretary of State of the State of Delaware
pursuant to Section 151 of the DGCL.
1.5 "Change of Control" shall mean:
(i) whenever, in any three-year period, a
majority of the members of the Board of Directors elected during
such three-year period shall have been so elected against the
recommendation of the management of the Corporation or the Board of
Directors in office immediately prior to such election; it being
understood that for purposes of this clause (i) a member of such
Board of Directors shall be deemed to have been elected against the
recommendation of such Board of Directors if his or her initial
election occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents by or on behalf
of a Person other than such Board of Directors; or
<PAGE>
(ii) whenever any Person shall acquire (whether
by merger, consolidation, sale, assignment, lease, transfer or
otherwise, in one transaction or any related series of
transactions) or otherwise beneficially own voting securities of
the Corporation that represent in excess of 50% of the voting power
of all outstanding voting securities of the Corporation generally
entitled to vote for the election of directors, if such Person had
acquired or publicly announced its intention to initially acquire
ten percent or more of such voting securities in a transaction that
had not, within 30 days after the date of such acquisition or
public announcement, been approved by the management of the
Corporation.
1.6 "Common Stock" shall mean the class of Common
Stock, par value $.01 per share, of the Corporation or any other
class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes
in par value, or from par value to no par value, or as a result of
a subdivision or combination.
1.7 "Debt Exchange" shall mean the exchange of
Series L Stock for Senior Subordinated Debentures pursuant to
Section 5.
1.8 "DGCL" shall mean the General Corporation Law of
the State of Delaware.
1.9 "Dividend Payment Date" shall mean March 30,
June 30, September 30 and December 30 of each year, commencing on
the first such date to occur after the Issue Date.
1.10 "Dividend Record Date" shall mean, with respect
to each Dividend Payment Date, the fifteenth day immediately
preceding such Dividend Payment Date.
1.11 "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
1.12 "Exchange Date" shall mean the date upon which
the Debt Exchange occurs.
1.13 "Initial Issue Date" shall mean the first date
on which shares of Series L Stock are issued in exchange for shares
of Series M Preferred Stock.
<PAGE>
1.14 "Issue Date" shall mean, with respect to each
share of Series L Stock, the date upon which such share is first
issued.
1.15 "Junior Stock" shall mean the Common Stock, the
Series A Participating Cumulative Preferred Stock, the Series LMC
Common Stock, the Series LMCN-V Common Stock and the shares of any
other class or series of stock of the Corporation that, by the
terms of the Certificate of Incorporation or of the instrument by
which the Board of Directors, acting pursuant to authority granted
in the Certificate of Incorporation, shall fix the relative rights,
preferences and limitations thereof, shall be junior to the Series
L Stock in respect of the right to receive dividends or to
participate in any other distribution of assets.
1.16 "Liquidation Preference" shall mean, with
respect to each share of Series L Stock, $1,000.
1.17 "Mandatory Redemption Date" shall mean July 1,
2011.
1.18 "Mandatory Redemption Price Per Share" shall
mean, with respect to each share of Series L Stock to be redeemed,
an amount equal to the Liquidation Preference thereof, plus Accrued
Dividends thereon.
1.19 "Nationally Recognized Investment Banking Firm"
shall mean an investment banking firm having a national reputation
in the United States that shall have experience in securities
rating matters and that shall be approved by a majority of the
members of the Board of Directors who are not officers or employees
of the Corporation or its subsidiaries, including TWE.
1.20 "Optional Redemption Price Per Share" shall
mean, as of any date, the price at which the Corporation may, at
its option, redeem one share of Series L Stock pursuant to Section
3.1.
1.21 "Parity Stock" shall mean the shares of the
Corporation's Series D Convertible Preferred Stock, Series E
Convertible Preferred Stock, Series F Convertible Preferred Stock,
Series G Convertible Preferred Stock, Series H Convertible
Preferred Stock, Series I Convertible Preferred Stock, Series J
Convertible Preferred Stock, 10-1/4% Series M Exchangeable
Preferred Stock and any other class or series of stock of the
Corporation that, by the
<PAGE>
terms of the Certificate of Incorporation or of the instrument by
which the Board of Directors, acting pursuant to authority granted in
the Certificate of Incorporation, shall fix the relative rights,
preferences and limitations thereof, shall, in the event that the
stated dividends thereon are not paid in full, be entitled to share
ratably with the Series L Stock in the payment of dividends, including
accumulations, if any, in accordance with the sums that would be
payable on such shares if all dividends were declared and paid in
full, or shall, in the event that the amounts payable thereon in
liquidation are not paid in full, be entitled to share ratably with
the Series L Stock in any other distribution of assets in accordance
with the sums that would be payable in such distribution if all sums
payable were discharged in full; provided, however, that the term
"Parity Stock" shall be deemed to refer (i) in Section 2.3 hereof, to
any stock that is Parity Stock in respect of dividend rights; (ii) in
Section 9 hereof, to any stock that is Parity Stock in respect of the
distribution of assets; and (iii) in Section 8.1 hereof, to any stock
that is Parity Stock in respect of either dividend rights or the
distribution of assets and that, pursuant to the Certificate of
Incorporation or any instrument in which the Board of Directors,
acting pursuant to authority granted in the Certificate of
Incorporation, shall so designate, is entitled to vote as part of the
Voting Rights Class.
1.22 "Person" shall mean any individual,
corporation, general partnership, limited partnership, limited
liability partnership, joint venture, association, joint-stock
company, trust, limited liability company, unincorporated
organization or government or any agency or political subdivision
thereof.
1.23 "Rating Confirmation" shall mean either (i) a
confirmation from each of Moody's Investors Service, Inc. or any
successor to its rating agency business ("Moody's") and Standard
and Poor's Corporation or any successor to its rating agency
business ("S&P") that any contemplated redemption or exchange by
the Corporation would not result in a downgrade of its rating of
the Corporation's senior unsecured long-term debt, or (ii) a good
faith determination by the Board of Directors or any committee
thereof (after consultation with a Nationally Recognized Investment
Banking Firm) that any contemplated redemption or exchange by the
Corporation should not result in a downgrade in the rating of the
Corporation's senior unsecured long-term debt by either Moody's or
S&P.
<PAGE>
1.24 "Senior Stock" shall mean the shares of any
class or series of stock of the Corporation that, by the terms of
the Certificate of Incorporation or of the instrument by which the
Board of Directors, acting pursuant to authority granted in the
Certificate of Incorporation, shall fix the relative rights,
preferences and limitations thereof, shall be senior to the Series
L Stock in respect of the right to receive dividends or to
participate in any other distribution of assets.
1.25 "Senior Subordinated Debentures" shall mean the
10-1/4% Senior Subordinated Debentures 2011 issued by the
Corporation, as the case may be, pursuant to the Senior
Subordinated Indenture.
1.26 "Senior Subordinated Indenture", shall mean an
indenture substantially in the form filed as an exhibit to the
Current Report on Form 8-K dated April 11, 1996, of the corporation
named "Time Warner Inc." on such date.
1.27 "Series M Preferred Stock" shall mean the
Corporation's 10-1/4% Series M Exchangeable Preferred Stock in
exchange for which shares of this Series were first issued.
1.28 "TWE" shall mean Time Warner Entertainment
Company, L.P., a Delaware limited partnership.
1.29 "Voting Rights Triggering Event" shall mean the
failure of the Corporation to (i) pay dividends on the Series L
Stock in cash, or to the extent permitted by its terms, by the
issuance of additional shares of Series L Stock, for more than six
consecutive quarterly dividend periods or (ii) discharge any
redemption or exchange obligation with respect to the Series L
Stock.
2. Dividends.
2.1 The holders of outstanding shares of Series L
Stock shall be entitled, when, as and if declared by the Board of
Directors out of funds legally available therefor, to receive
dividends on each outstanding share of Series L Stock. Each
quarter-annual dividend shall be an amount per share (rounded to
the nearest $.01) equal to $25.625 per $1,000 Liquidation
Preference of Series L Stock and shall be payable on each Dividend
Payment Date, to the holders of record of Series L Stock at the
close of business
<PAGE>
on the Dividend Record Date applicable to such Dividend Payment
Date, commencing on the first Dividend Payment Date following the
Initial Issue Date. Such dividends shall be cumulative and shall
accrue on a day-to-day basis, whether or not earned or declared,
from and after the Issue Date applicable to each share of this
Series. Dividends on the Series L Stock that are not declared and
paid when due will compound quarterly on each Dividend Payment Date
at the dividend rate. Dividends payable for any partial dividend
period shall be computed on the basis of actual days elapsed over a
365- (or 366-) day year.
2.2 With respect to any periods ending on or prior
to June 30, 2006, dividends may, at the option of the Corporation,
be paid on any Dividend Payment Date either in cash or by issuing
fully paid and nonassessable shares of Series L Stock with an
aggregate Liquidation Preference equal to the amount of such
dividends (or, in connection with a Debt Exchange, by issuing
Senior Subordinated Debentures with an aggregate principal amount
equal to the amount of such dividends as provided in Section 5.1).
Thereafter, dividends payable on any Dividend Payment Date shall be
paid only in cash.
2.3 Except as hereinafter provided in this Section
2.3, no full dividends or other distributions may be declared or
paid or set apart for payment on Series L Stock or any other Parity
Stock, and no Parity Stock, including the Series L Stock, may be
repurchased, exchanged, redeemed or otherwise acquired by the
Corporation, nor may funds be set apart for payment with respect
thereto, unless full cumulative dividends shall have been paid or
set apart for such payment on, and all applicable redemption,
exchange and repurchase obligations shall have been satisfied with
respect to, all outstanding shares of Series L Stock and such other
Parity Stock; provided, however, that dividends or distributions
may be made on Parity Stock if they are payable in Junior Stock,
and Parity Stock may be converted into or exchanged for Parity
Stock (having no greater preference upon liquidation) or Junior
Stock; and provided further that if the Company shall have
satisfied all applicable redemption, exchange and repurchase
obligations with respect to all outstanding shares of Series M
Preferred Stock and other Parity Stock, but if full dividends are
not so paid, the Series L Stock shall share dividends with all
other Parity Stock, so that the amount of dividends declared per
share on Series L Stock and all such other Parity Stock shall in
all cases bear to each other the same ratio that
<PAGE>
full cumulative dividends per share on the shares of Series L Stock
and all such other Parity Stock bear to each other. No dividends or
other distributions may be paid or set apart for such payment on
Junior Stock, and no Junior Stock may be repurchased, redeemed,
exchanged or otherwise acquired nor may funds be set apart for
payment with respect thereto, if full cumulative dividends have not
been paid on, or any applicable redemption, exchange or repurchase
obligations shall not have been satisfied with respect to, the
Series L Stock and all other Parity Stock; provided, however, that
dividends or distributions may be made on Junior Stock if they are
payable-in-kind in additional shares of, or warrants, rights, calls
or options exercisable for or convertible into additional shares of
Junior Stock; and provided further that Junior Stock may be
converted into or exchanged for Junior Stock.
2.4 Holders of shares of Series L Stock shall not be
entitled to any dividends, whether payable in cash, property or
stock, in excess of full cumulative dividends, as herein provided,
on the Series L 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 L Stock that may be in arrears (it being
understood that compounding of unpaid dividends shall not
constitute money in lieu of interest).
2.5 To the extent that the amount of any
quarter-annual dividend payable to a holder of Series L Stock (in
respect of all shares held by such holder) that is payable in
additional shares of Series L Stock, valued at the Liquidation
Preference thereof, does not equal a whole number of shares of
Series L Stock, such fractional amount shall be paid in cash to
such holder of Series L Stock.
3. Optional Redemption.
3.1 At any time on or after July 1, 2006, the
Corporation may, at its sole option, subject to the provisions of
Sections 2.3 and 3.2, redeem, out of funds legally available
therefor, all or any part of the outstanding shares of Series L
Stock. The redemption prices for each share of Series L Stock
called for redemption during the 12-month periods commencing on
July 1 of the years set forth below shall be the amount (expressed
as a percentage of the Liquidation Preference thereof) set forth
opposite such years, plus Accrued Dividends thereon to the
redemption date.
<PAGE>
Period Percentage of Liquidation Preference
------ ------------------------------------
2006 105.125%
2007 103.844%
2008 102.563%
2009 101.281%
2010 and thereafter 100.000%
3.2 No optional redemption shall be effected unless
the Corporation shall have obtained a Rating Confirmation with
respect to such redemption.
4. Mandatory Redemption.
4.1 On the Mandatory Redemption Date, the
Corporation shall redeem, out of funds legally available therefor,
each of the then outstanding shares of Series L Stock as of the
Mandatory Redemption Date at the Mandatory Redemption Price Per
Share.
4.2 Upon the redemption of all of the outstanding
shares of Series L Stock on the Mandatory Redemption Date pursuant
to Section 4.1, the Corporation's obligations with respect thereto
will be discharged.
5. Debt Exchange.
5.1 On any Dividend Payment Date, subject to the
provisions of Sections 2.3 and 5.2, the Corporation may, at its
sole option, exchange, out of funds legally available therefor,
each of the shares of Series L Stock, in whole but not in part, for
Senior Subordinated Debentures having an aggregate principal amount
equal to the Liquidation Preference on the Series L Stock plus
Accrued Dividends thereon. Notwithstanding the foregoing, the
Corporation may not exercise such exchange option unless all
Accrued Dividends in respect of shares of Series L Stock
surrendered to the Corporation upon exchange shall have been paid
either in cash or, in respect of Accrued Dividends relating to any
Dividend Payment Date prior to July 1, 2006, at the option of the
Corporation, in cash, additional shares of Series L Stock or Senior
Subordinated Debentures having a principal amount equal to such
amount.
5.2 No Debt Exchange shall be effected unless the
Corporation shall have obtained a Rating Confirmation with respect
to the Debt Exchange.
<PAGE>
5.3 Upon the Debt Exchange, the Corporation shall
issue Senior Subordinated Debentures only in denominations of
$1,000 and integral multiples thereof and shall pay cash in lieu of
issuing Senior Subordinated Debentures in principal amounts of less
than $1,000.
5.4 Prior to giving notice of its intention to
effect the Debt Exchange, the Corporation shall execute and deliver
with a bank or trust company selected by the Corporation, the
Senior Subordinated Indenture.
6. Procedure for Redemption or Exchange.
6.1 In the event the Corporation shall elect or be
required to redeem or exchange shares of Series L Stock pursuant to
Sections 3, 4 or 5 hereof, notice of such redemption or exchange
shall be given by first-class mail, not less than 30 nor more than
60 days prior to the redemption or exchange date, to each record
holder of the shares to be redeemed or exchanged, at such holder's
address as the same appears on the books of the Corporation. Each
such notice shall state: (i) whether the redemption or exchange is
pursuant to Section 3, 4 or 5 hereof; (ii) the time and date as of
which the redemption or exchange shall occur; (iii) the total
number of shares of Series L Stock to be redeemed or exchanged and,
if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such
holder; (iv) in the case of a redemption, the redemption price; (v)
the place or places where certificates for such shares are to be
surrendered for payment of the redemption price in the case of a
redemption, or for delivery of Senior Subordinated Debentures in
the case of the Debt Exchange; (vi) that dividends on the shares to
be redeemed will cease to accrue on such redemption or exchange
date unless the Corporation defaults in the payment of the
redemption price or fails to satisfy its exchange obligation; and
(vii) in the case of redemption, the name of any bank or trust
company, if any, performing the duties referred to in Section 6.3.
6.2 On or before any redemption or exchange date,
each holder of shares of Series L Stock to be redeemed or exchanged
shall surrender the certificate or certificates representing such
shares of Series L Stock to the Corporation, in the manner and at
the place designated in the notice of redemption or exchange, and
on the redemption or exchange date, the full redemption price or
Senior Subordinated Debentures in the principal amount specified in
<PAGE>
Section 5.1, as the case may be, for such shares of Series L Stock
shall be paid or delivered to the Person whose name appears on such
certificate or certificates as the owner thereof, and each
surrendered certificate shall be returned to authorized but
unissued shares. Upon surrender (in accordance with the notice of
redemption or exchange) of the certificate or certificates
representing any shares to be so redeemed or exchanged (properly
endorsed or assigned for transfer, if the Corporation shall so
require and the notice of redemption or exchange shall so state),
such shares shall be redeemed by the Corporation at the redemption
price or exchanged by the Corporation for Senior Subordinated
Debentures in the principal amount specified in Section 5.1. If
fewer than all the shares represented by any such certificate are
to be redeemed, a new certificate shall be issued representing the
unredeemed shares, without cost to the holder thereof, together
with the amount of cash, if any, in lieu of fractional shares.
6.3 If a notice of redemption or exchange shall have
been given as provided in Section 6.1, dividends on the shares of
Series L Stock so called for redemption or exchange shall cease to
accrue, such shares shall no longer be deemed to be outstanding,
and all rights of the holders thereof as stockholders of the
Corporation with respect to shares so called for redemption or
exchange (except the right to receive from the Corporation the
redemption price or the Senior Subordinated Debentures without
interest) shall cease (including any right to receive dividends
otherwise payable on any Dividend Payment Date that would have
occurred after the time and date of redemption or exchange) either
(i) from and after the time and date fixed in the notice of
redemption or exchange as the time and date of redemption or
exchange (unless the Corporation shall default in the payment of
the redemption price or shall fail to satisfy its exchange
obligation, in which case such rights shall not terminate at such
time and date) or (ii) if the Corporation shall so elect and state
in the notice of redemption, from and after the time and date
(which date shall be the date fixed for redemption or an earlier
date not less than 30 days after the date of mailing of the
redemption notice) on which the Corporation shall irrevocably
deposit in trust for the holders of the shares to be redeemed with
a designated bank or trust company doing business in the Borough of
Manhattan, City and State of New York, as paying agent, money
sufficient to pay at the office of such paying agent, on the
redemption date, the redemption price. Any money so deposited with
any such paying agent
<PAGE>
that shall not be required for such redemption shall be returned to
the Corporation forthwith. Subject to applicable escheat laws, any
moneys so set aside by the Corporation and unclaimed at the end of
one year from the redemption date shall revert to the general funds
of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general
funds of the Corporation for the payment of the redemption price
without interest. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
6.4 In the event that fewer than all the outstanding
shares of Series L Stock are to be redeemed, the shares to be
redeemed shall be determined pro rata or by lot, as determined by
the Corporation, except that the Corporation may redeem such shares
held by any holder of fewer than 100 shares (or shares held by
holders who would hold fewer than 100 shares as a result of such
redemption), as may be determined by the Corporation.
7. Change of Control.
7.1 Upon the occurrence of a Change of Control of
the Corporation, the Corporation shall make an offer (the "Change
of Control Offer") to each holder of Series L Stock to repurchase,
out of funds legally available therefor, all or any part of such
holder's Series L Stock at a purchase price per share in cash equal
to 101% of the Liquidation Preference thereof, plus an amount equal
to all Accrued Dividends thereon to the date of purchase. The
Change of Control Offer must be made within 30 days following a
Change of Control, shall remain open for at least 30 and not more
than 40 days and shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other applicable securities laws and
regulations.
7.2 In the event the Corporation shall be required
to make a Change of Control Offer pursuant to Section 7.1 hereof,
notice of such Change of Control Offer shall be given by
first-class mail, to each record holder of shares of Series L
Stock, at such holder's address as the same appears on the books of
the Corporation. Each such notice shall state: (i) that a Change of
Control has occurred; (ii) the last day on which the Change of
Control Offer may be accepted (the "Expiration Date"); (iii) the
repurchase price; (iv) the name and address of the paying
<PAGE>
agent; and (v) the procedures that holders must follow to accept
the Change of Control Offer.
7.3 On or before the Expiration Date, each holder of
shares of Series L Stock wishing to accept the Change of Control
Offer shall surrender the certificate or certificates representing
such shares of Series L Stock that such holder wishes to have
repurchased to the Corporation, in the manner and at the place
designated in the notice described in Section 7.2, and on the
repurchase date, the full repurchase price for such shares of
Series L Stock shall be payable to the Person whose name appears on
such certificate or certificates as the owner thereof, and each
surrendered certificate shall be returned to authorized but
unissued shares. Upon surrender (in accordance with the notice
described in Section 7.2) of the certificate or certificates
representing any shares to be so repurchased (properly endorsed or
assigned for transfer, if the Corporation shall so require and the
notice of a Change of Control Offer shall so state), such shares
shall be repurchased by the Corporation at the repurchase price. In
case fewer than all the shares represented by any such certificate
are to be repurchased, a new certificate shall be issued
representing the non-repurchased shares, without cost to the holder
thereof, together with the amount of cash, if any, in lieu of
fractional shares.
8. Voting.
8.1 The shares of Series L Stock shall have no
voting rights except as required by law or as set forth below:
(a) If and whenever at any time or times, a
Voting Rights Triggering Event occurs, then the number of directors
constituting the Board of Directors shall be increased by two
(without duplication of any such increase in directorships required
under the terms of any other Parity Stock) and the holders of
shares of Series L Stock, voting or consenting, as the case may be,
together as a class with the holders of any shares of Parity Stock
entitled to vote thereon and as to which (i) dividends are in
arrears or unpaid in an aggregate amount equal to or exceeding the
amount of dividends payable thereon for six quarterly dividend
periods or (ii) redemption or exchange obligations have not been
satisfied (together with the Series L Stock, the "Voting Rights
Class"), will be entitled
<PAGE>
to elect two directors of the Corporation to fill the newly created
directorships.
(b) Such voting rights may be exercised
initially either by written consent or at a special meeting of the
holders of the shares of the Voting Rights Class, called as
hereinafter provided, or at any annual meeting of stockholders held
for the purpose of electing directors, and thereafter at each such
annual meeting until such time as all dividends in arrears on the
shares of this Series shall have been paid in full and/or all
redemption or exchange obligations have been satisfied, as
applicable, at which time or times such voting rights and the term
of the directors elected pursuant to Section 8.1(a) shall
terminate.
(c) At any time when such voting rights shall
have vested in holders of shares of the Voting Rights Class
described in Section 8.1(a), and if such rights shall not already
have been exercised by written consent, a proper officer of the
Corporation may call, and, upon the written request of the record
holders of shares representing twenty-five percent (25%) of the
voting power of the shares then outstanding of the Voting Rights
Class, addressed to the Secretary of the Corporation, shall call a
special meeting of the holders of shares of Voting Rights Class.
Such meeting shall be held at the earliest practicable date upon
the notice required for annual meetings of stockholders at the
place for holding annual meetings of stockholders of the
Corporation, or, if none, at a place designated by the Board of
Directors. Notwithstanding the provisions of this Section 8.1(c),
no such special meeting shall be called during a period within the
60 days immediately preceding the date fixed for the next annual
meeting of stockholders.
(d) At any meeting held for the purpose of
electing directors at which the holders of the Voting Rights Class
shall have the right to elect directors as provided herein, the
presence in person or by proxy of the holders of shares
representing more than fifty percent (50%) in voting power of the
then outstanding shares of the Voting Rights Class shall be
required and shall be sufficient to constitute a quorum of such
class for the election of directors by such class.
(e) Any director elected pursuant to the voting
rights created under this Section 8.1 shall hold office until the
next annual meeting of stockholders (unless
<PAGE>
such term has previously terminated pursuant to Section 8.1(b)) and
any vacancy in respect of any such director shall be filled only by
vote of the remaining director so elected by holders of the Voting
Rights Class, or if there be no such remaining director, by the
holders of shares of the Voting Rights Class by written consent or
at a special meeting called in accordance with the procedures set
forth in this Section 8, or, if no such special meeting is called
or written consent executed, at the next annual meeting of
stockholders. Upon any termination of such voting rights, the term
of office of all directors elected pursuant to this Section 8 shall
terminate.
(f) So long as any shares of Series L Stock
remain outstanding, unless a greater percentage shall then be
required by law, the Corporation shall not, without the affirmative
vote at a meeting or the written consent with or without a meeting
of the holders of shares of Series L Stock representing at least a
majority of the outstanding shares of Series L Stock voting or
consenting, as the case may be, separately as one class, (i)
create, authorize or issue any Senior Stock or (ii) amend the
Certificate or the Certificate of Incorporation so as to affect
adversely the specified rights, preferences, privileges or voting
rights of holders of shares of Series L Stock. The holders of at
least a majority of the outstanding shares of Series L Stock,
voting or consenting, as the case may be, separately as one class,
may waive compliance with any provision of the Certificate.
(g) In exercising the voting rights set forth
in this Section 8.1, each share of Series L Stock shall have a
number of votes equal to its Liquidation Preference.
8.2 Except as set forth in Section 8.1, the
Corporation may (a) create, authorize or issue any shares of Junior
Stock or Parity Stock or (b) increase or decrease the amount of
authorized capital stock of any class, including any preferred
stock, without the consent of the holders of Series L Stock, voting
or consenting separately as a class, and in taking the actions
specified in (a) and (b) the Corporation shall not be deemed to
have affected adversely the rights, preferences, privileges or
voting rights of holders of shares of Series L Stock.
<PAGE>
9. Liquidation Rights.
9.1 In the event of any liquidation, dissolution or
winding-up of the Corporation, whether voluntary or involuntary,
the holders of the shares of Series L Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to stockholders up to their Liquidation Preference of
$1,000 per share plus Accrued Dividends thereon in preference to
the holders of, and before any distribution is made on, any Junior
Stock, including, without limitation on any Common Stock.
9.2 Neither the sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all the property and assets
of the Corporation nor the merger or consolidation of the
Corporation into or with any other corporation, or the merger or
consolidation of any other corporation into or with the
Corporation, shall be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, for the purposes of this
Section 9.
9.3 After the payment to the holders of the shares
of Series L Stock of full preferential amounts provided for in this
Section 9, the holders of Series L Stock as such shall have no
right or claim to any of the remaining assets of the Corporation.
9.4 In the event the assets of the Corporation
available for distribution to the holders of shares of Series L
Stock upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders are
entitled pursuant to Section 9.1, no such distribution shall be
made on account of any shares of any Parity Stock upon such
liquidation, dissolution or winding up unless proportionate
distributable amounts shall be paid on account of the shares of
Series L Stock, ratably, in proportion to the full distributable
amounts for which holders of all Parity Stock are entitled upon
such liquidation, dissolution or winding up.
10. Merger, Consolidation and Sale of Assets. Subject to
the next sentence, without the affirmative vote or consent of the
holders of at least a majority of the outstanding shares of Series
L Stock, voting or consenting, as the case may be, separately as
one class, the Corporation
<PAGE>
may not consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, any Person unless: (a) the
Person formed by such consolidation or merger (if other than the
Corporation) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made shall be a
corporation organized or existing under the laws of the United
States or any State thereof or the District of Columbia; (b) each
share of Series L Stock shall be converted into or exchanged for
and shall become a share of such successor, transferee or resulting
corporation or a parent corporation of such corporation, having in
respect of such successor, transferee or resulting corporation or
parent corporation substantially the same powers, preferences and
relative participating, optional or other special rights, and the
qualifications, limitations or restrictions thereon, that the
Series L Stock had immediately prior to such transaction; and (c)
immediately after giving effect to such transaction, no Voting
Rights Triggering Event shall have occurred or be continuing.
11. Transfer Agent and Registrar. The transfer agent and
registrar (the "Transfer Agent") for Series L Stock shall be
ChaseMellon Shareholder Services L.L.C. The Corporation may, in its
sole discretion, remove the Transfer Agent with 10 days' prior
written notice to the Transfer Agent and appoint a successor
Transfer Agent prior to such removal.
12. Covenant to Report. Notwithstanding that the
Corporation may not be subject to the reporting requirements of
Section 13 or Section 15(d) of the Exchange Act, the Corporation
will provide the Transfer Agent and the holders of Series L Stock
with all information, documents and reports specified in Section 13
and Section 15(d) of the Exchange Act.
13. Other Provisions.
13.1 With respect to any notice to a holder of
shares of Series L Stock required to be provided hereunder, neither
failure to mail such notice, nor any defect therein or in the
mailing thereof, to any particular holder shall affect the
sufficiency of the notice or the validity of the proceedings
referred to in such notice with respect to the other holders or
affect the legality or validity of any distribution, right,
warrant, reclassification, consolidation, merger, conveyance,
<PAGE>
transfer, dissolution, liquidation or winding up, or the
vote upon any such action. Any notice that was mailed in
the manner herein provided shall be conclusively presumed
to have been duly given whether or not the holder receives
the notice.
13.2 Shares of Series L Stock issued and reacquired
will, upon compliance with the applicable requirements of the DGCL,
have the status of authorized but unissued shares of Preferred
Stock of the Corporation undesignated as to series and may with any
and all other authorized but unissued shares of Preferred Stock of
the Corporation be designated or redesignated and issued or
reissued, as the case may be, as part of any series of Preferred
Stock of the Corporation, except that any issuance or reissuance of
shares of Series L Stock must be in compliance with the
Certificate.
13.3 The shares of Series L Stock shall be issuable
in whole shares.
13.4 The Corporation shall be entitled to recognize
the exclusive right of a person registered on its records as the
holder of shares of Series L Stock for all purposes.
13.5 All notice periods referred to herein shall
commence on the date of the mailing of the applicable notice.
IN WITNESS WHEREOF, TW Inc. has caused this
certificate to be signed this day of , .
TW INC.,
by
--------------------------
Name:
Title:
BY-LAWS
OF
TW INC.
Incorporated under the Laws of the State of Delaware
<PAGE>
ARTICLE I
Offices
SECTION 1. Registered Office. The registered office of TW
Inc. (hereinafter called the Corporation) in the State of Delaware
shall be at 32 Loockerman Square, Suite L-100, Dover, Delaware 19901
and the registered agent shall be The Prentice-Hall Corporation
System, Inc., or such other office or agent as the Board of Directors
of the Corporation (the "Board") shall from time to time select.
SECTION 2. Other Offices. The Corporation may also have an
office or offices, and keep the books and records of the Corporation,
except as may otherwise be required by law, at such other place or
places, either within or without the State of Delaware, as the Board
may from time to time determine or the business of the Corporation may
require.
ARTICLE II
Meetings of Stockholders
SECTION 1. Place of Meeting. All meetings of the
stockholders of the Corporation (the "stockholders") shall be held at
the office of the Corporation or at such other places, within or
without the State of Delaware, as may from time to time be fixed by
the Board.
SECTION 2. Annual Meetings. The annual meeting of the
stockholders for the election of directors and for the transaction of
such other business as may properly come before the meeting
<PAGE>
shall be held on such date and at such hour as shall from time to time
be fixed by the Board. Any previously scheduled annual meeting of the
stockholders may be postponed by action of the Board taken prior to
the time previously scheduled for such annual meeting of stockholders.
SECTION 3. Special Meetings. Except as otherwise required by
law or the Restated Certificate of Incorporation of the Corporation
(the "Certificate") and subject to the rights of the holders of any
series of Preferred Stock or Series Common Stock or any class or
series of stock having a preference over the Common Stock as to
dividends or upon liquidation, special meetings of the stockholders
for any purpose or purposes may be called by the Chairman, either
Co-Chief Executive Officer, or the President or a majority of the
entire Board. Only such business as is specified in the notice of any
special meeting of the stockholders shall come before such meeting.
SECTION 4. Notice of Meetings. Except as otherwise provided
by law, written notice of each meeting of the stockholders, whether
annual or special, shall be given, either by personal delivery or by
mail, not less than 10 nor more than 60 days before the date of the
meeting to each stockholder of record entitled to notice of the
meeting. If mailed, such notice shall be deemed given when deposited
in the United States mail, postage prepaid, directed to the
stockholder at such stockholder's address as it appears on the records
of the Corporation. Each such notice shall state the place, date and
hour of the meeting, and, in the case of a special meeting, the
purpose or purposes for which the
<PAGE>
meeting is called. Notice of any meeting of stockholders shall not be
required to be given to any stockholder who shall attend such meeting
in person or by proxy without protesting, prior to or at the
commencement of the meeting, the lack of proper notice to such
stockholder, or who shall waive notice thereof as provided in Article
X of these By-laws. Notice of adjournment of a meeting of stockholders
need not be given if the time and place to which it is adjourned are
announced at such meeting, unless the adjournment is for more than 30
days or, after adjournment, a new record date is fixed for the
adjourned meeting.
SECTION 5. Quorum. Except as otherwise provided by law or by
the Certificate, the holders of a majority of the votes entitled to be
cast by the stockholders entitled to vote generally, present in person
or by proxy, shall constitute a quorum at any meeting of the
stockholders; provided, however, that in the case of any vote to be
taken by classes, the holders of a majority of the votes entitled to
be cast by the stockholders of a particular class, present in person
or by proxy, shall constitute a quorum of such class.
SECTION 6. Adjournments. The chairman of the meeting or the
holders of a majority of the votes entitled to be cast by the
stockholders who are present in person or by proxy may adjourn the
meeting from time to time whether or not a quorum is present. In the
event that a quorum does not exist with respect to any vote to be
taken by a particular class, the chairman of the meeting or the
holders of a majority of the votes entitled to be cast by the
stockholders of such class who are present in person or by proxy
<PAGE>
may adjourn the meeting with respect to the vote(s) to be taken by
such class. At any such adjourned meeting at which a quorum may be
present, any business may be transacted which might have been
transacted at the meeting as originally called.
SECTION 7. Order of Business. At each meeting of the
stockholders, the Chairman or, in the absence of the Chairman, the
President, or in the absence of both the Chairman and the President,
such person as shall be selected by the Board shall act as chairman of
the meeting. The order of business at each such meeting shall be as
determined by the chairman of the meeting. The chairman of the meeting
shall have the right and authority to prescribe such rules,
regulations and procedures and to do all such acts and things as are
necessary or desirable for the proper conduct of the meeting,
including, without limitation, the establishment of procedures for the
maintenance of order and safety, limitations on the time allotted to
questions or comments on the affairs of the Corporation, restrictions
on entry to such meeting after the time prescribed for the
commencement thereof, and the opening and closing of the voting polls.
At any annual meeting of stockholders, only such business
shall be conducted as shall have been brought before the annual
meeting (i) by or at the direction of the chairman of the meeting or
(ii) by any stockholder who is a holder of record at the time of the
giving of the notice provided for in this Section 7, who is entitled
to vote at the meeting and who complies with the procedures set forth
in this Section 7.
<PAGE>
For business properly to be brought before an annual meeting
by a stockholder, the stockholder must have given timely notice
thereof in proper written form to the Secretary of the Corporation
(the "Secretary"). To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices
of the Corporation not less than 70 days nor more than 90 days prior
to the anniversary date of the immediately preceding annual meeting;
provided, however, that in the event that the date of the annual
meeting is more than 30 days earlier or more than 60 days later than
such anniversary date, notice by the stockholder to be timely must be
so delivered or received not earlier than the 90th day prior to such
annual meeting and not later than the close of business on the later
of the 70th day prior to such annual meeting or the 10th day following
the day on which public announcement of the date of such meeting is
first made. To be in proper written form, a stockholder's notice to
the Secretary shall set forth in writing as to each matter the
stockholder proposes to bring before the annual meeting: (i) a brief
description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual
meeting; (ii) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business; (iii)
the class and number of shares of the Corporation which are
beneficially owned by the stockholder; and (iv) any material interest
of the stockholder in such business. The foregoing notice requirements
shall be deemed satisfied by a stockholder if the stockholder has
notified the Corporation of his or her intention to
<PAGE>
present a proposal at an annual meeting and such stockholder's
proposal has been included in a proxy statement that has been prepared
by management of the Corporation to solicit proxies for such annual
meeting; provided, however, that if such stockholder does not appear
or send a qualified representative to present such proposal at such
annual meeting, the Corporation need not present such proposal for a
vote at such meeting, notwithstanding that proxies in respect of such
vote may have been received by the Corporation. Notwithstanding
anything in the By-laws to the contrary, no business shall be
conducted at any annual meeting except in accordance with the
procedures set forth in this Section 7. The chairman of an annual
meeting shall, if the facts warrant, determine that business was not
properly brought before the annual meeting in accordance with the
provisions of this Section 7 and, if he should so determine, he shall
so declare to the annual meeting and any such business not properly
brought before the annual meeting shall not be transacted.
SECTION 8. List of Stockholders. It shall be the duty of the
Secretary or other officer who has charge of the stock ledger to
prepare and make, at least 10 days before each meeting of the
stockholders, a complete list of the stockholders entitled to vote
thereat, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in such
stockholder's name. Such list shall be produced and kept available at
the times and places required by law.
SECTION 9. Voting. Except as otherwise provided by law or by
the Certificate, each stockholder of record of any series of
<PAGE>
Preferred Stock or Series Common Stock shall be entitled at each
meeting of stockholders to such number of votes, if any, for each
share of such stock as may be fixed in the Certificate or in the
resolution or resolutions adopted by the Board providing for the
issuance of such stock, and each stockholder of record of Common Stock
shall be entitled at each meeting of stockholders to one vote for each
share of such stock, in each case, registered in such stockholder's
name on the books of the Corporation:
(1) on the date fixed pursuant to Section 6 of Article VII
of these By-laws as the record date for the determination of
stockholders entitled to notice of and to vote at such meeting;
or
(2) if no such record date shall have been so fixed, then at
the close of business on the day next preceding the day on which
notice of such meeting is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the
meeting is held.
Each stockholder entitled to vote at any meeting of
stockholders may authorize not in excess of three persons to act for
such stockholder by proxy. Any such proxy shall be delivered to the
secretary of such meeting at or prior to the time designated for
holding such meeting, but in any event not later than the time
designated in the order of business for so delivering such proxies. No
such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.
At each meeting of the stockholders, all corporate actions
to be taken by vote of the stockholders (except as
<PAGE>
otherwise required by law and except as otherwise provided in the
Certificate or these By-laws) shall be authorized by a majority of the
votes cast by the stockholders entitled to vote thereon who are
present in person or represented by proxy, and where a separate vote
by class is required, a majority of the votes cast by the stockholders
of such class who are present in person or represented by proxy shall
be the act of such class.
Unless required by law or determined by the chairman of the
meeting to be advisable, the vote on any matter, including the
election of directors, need not be by written ballot. In the case of a
vote by written ballot, each ballot shall be signed by the stockholder
voting, or by such stockholder's proxy, and shall state the number of
shares voted.
SECTION 10. Inspectors. The chairman of the meeting shall
appoint two or more inspectors to act at any meeting of stockholders.
Such inspectors shall perform such duties as shall be required by law
or specified by the chairman of the meeting. Inspectors need not be
stockholders. No director or nominee for the office of director shall
be appointed such inspector.
SECTION 11. Public Announcements. For purpose of Section 7
of this Article II and Section 3 of Article III, "public announcement"
shall mean disclosure (i) in a press release reported by the Dow Jones
News Service, Reuters Information Service or any similar or successor
news wire service or (ii) in a writing distributed generally to
stockholders and in a document publicly filed by the Corporation with
the Securities and Exchange Commission pursuant to Sections 13, 14 or
15(d) of the Securities
<PAGE>
Exchange Act of 1934 or any successor provisions thereto.
ARTICLE III
Board of Directors
SECTION 1. General Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board,
which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by law or by the Certificate
directed or required to be exercised or done by the stockholders.
SECTION 2. Number, Qualification and Election. Except as
otherwise fixed by or pursuant to the provisions of Article IV of the
Certificate relating to the rights of the holders of any series of
Preferred Stock or Series Common Stock or any class or series of stock
having preference over the Common Stock as to dividends or upon
liquidation, the number of directors of the Corporation shall be
determined from time to time by the Board by the affirmative vote of
directors constituting at least a majority of the entire Board;
provided that the number thereof may not be less than three.
The directors, other than those who may be elected by the
holders of shares of any series of Preferred Stock or Series Common
Stock or any class or series of stock having a preference over the
Common Stock of the Corporation as to dividends or upon liquidation
pursuant to the terms of Article IV of the Certificate or any
resolution or resolutions providing for the issuance of such stock
adopted by the Board, shall be classified, with respect to the time
<PAGE>
for which they severally hold office, into three classes as nearly
equal in number as possible, with each class to hold office until its
successors are elected and qualified. If the number of directors is
changed by the Board, any newly created directorships or any decrease
in directorships shall be so apportioned among the classes as to make
all classes as nearly equal as possible; provided, however, that no
decrease in the number of directors shall shorten the term of any
incumbent director. Subject to the rights of the holders of any series
of Preferred Stock or Series Common Stock or any class or series of
stock having a preference over the Common Stock of the Corporation as
to dividends or upon liquidation, at each such annual meeting of the
stockholders, the successors of the class of directors whose term
expires at that meeting shall be elected to hold office for a term
expiring at the annual meeting of stockholders held in the third year
following the year of their election.
Each director shall be at least 21 years of age. Directors
need not be stockholders of the Corporation.
In any election of directors, the persons receiving a
plurality of the votes cast, up to the number of directors to be
elected in such election, shall be deemed elected.
SECTION 3. Notification of Nominations. Subject to the
rights of the holders of any series of Preferred Stock or Series
Common Stock or any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation, nominations for
the election of directors may be made by the Board or by any
stockholder who is a stockholder of record at the time of
<PAGE>
giving of the notice of nomination provided for in this Section 3 and
who is entitled to vote for the election of directors. Any stockholder
of record entitled to vote for the election of directors at a meeting
may nominate persons for election as directors only if timely written
notice of such stockholder's intent to make such nomination is given,
either by personal delivery or by United States mail, postage prepaid,
to the Secretary. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices
of the Corporation (i) with respect to an election to be held at an
annual meeting of stockholders, not less than 70 nor more than 90 days
prior to the anniversary date of the immediately preceding annual
meeting; provided, however, that in the event that the date of the
annual meeting is more than 30 days earlier or more than 60 days later
than such anniversary date, notice by the stockholder to be timely
must be so delivered or received not earlier than the 90th day prior
to such annual meeting and not later than the close of business on the
later of the 70th day prior to such annual meeting or the 10th day
following the day on which public announcement of the date of such
meeting is first made and (ii) with respect to an election to be held
at a special meeting of stockholders for the election of directors,
not earlier than the 90th day prior to such special meeting and not
later than the close of business on the later of the 60th day prior to
such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of
the nominees to be elected at such meeting. Each such notice shall set
forth: (a) the name and
<PAGE>
address of the stockholder who intends to make the nomination and of
the person or persons to be nominated; (b) a representation that the
stockholder is a holder of record of stock of the Corporation entitled
to vote at such meeting and intends to appear in person or by proxy at
the meeting to nominate the person or persons specified in the notice;
(c) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder as
would have been required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission
had each nominee been nominated, or intended to be nominated, by the
Board; and (e) the consent of each nominee to serve as a director of
the Corporation if so elected. The chairman of the meeting may refuse
to acknowledge the nomination of any person not made in compliance
with the foregoing procedure. Only such persons who are nominated in
accordance with the procedures set forth in this Section 3 shall be
eligible to serve as directors of the Corporation.
Notwithstanding anything in the immediately preceding
paragraph of this Section 3 to the contrary, in the event that the
number of directors to be elected to the Board of Directors of the
Corporation at an annual meeting of stockholders is increased and
there is no public announcement naming all of the nominees for
directors or specifying the size of the increased Board of Directors
made by the Corporation at least 70 days prior to the
<PAGE>
first anniversary of the preceding year's annual meeting, a
shareholder's notice required by this Section 3 shall also be
considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to or
mailed to and received by the secretary at the principal executive
offices of the Corporation not later than the close of business on the
10th day following the day on which such public announcement is first
made by the Corporation.
SECTION 4. Quorum and Manner of Acting. Except as otherwise
provided by law, the Certificate or these By-laws, a majority of the
entire Board shall constitute a quorum for the transaction of business
at any meeting of the Board, and, except as so provided, the vote of a
majority of the directors present at any meeting at which a quorum is
present shall be the act of the Board. The chairman of the meeting or
a majority of the directors present may adjourn the meeting to another
time and place whether or not a quorum is present. At any adjourned
meeting at which a quorum is present, any business may be transacted
which might have been transacted at the meeting as originally called.
SECTION 5. Place of Meeting. The Board may hold its meetings
at such place or places within or without the State of Delaware as the
Board may from time to time determine or as shall be specified or
fixed in the respective notices or waivers of notice thereof.
SECTION 6. Regular Meetings. Regular meetings of the Board
shall be held at such times and places as the Board shall from time to
time by resolution determine. If any day fixed for a
<PAGE>
regular meeting shall be a legal holiday under the laws of the place
where the meeting is to be held, the meeting which would otherwise be
held on that day shall be held at the same hour on the next succeeding
business day.
SECTION 7. Special Meetings. Special meetings of the Board
shall be held whenever called by the Chairman, either Co-Chief
Executive Officer, or the President or by a majority of the directors.
SECTION 8. Notice of Meetings. Notice of regular meetings of
the Board or of any adjourned meeting thereof need not be given.
Notice of each special meeting of the Board shall be given by
overnight delivery service or mailed to each director, in either case
addressed to such director at such director's residence or usual place
of business, at least two days before the day on which the meeting is
to be held or shall be sent to such director at such place by
telegraph or telecopy or be given personally or by telephone, not
later than the day before the meeting is to be held, but notice need
not be given to any director who shall, either before or after the
meeting, submit a signed waiver of such notice or who shall attend
such meeting without protesting, prior to or at its commencement, the
lack of notice to such director. Every such notice shall state the
time and place but need not state the purpose of the meeting.
SECTION 9. Rules and Regulations. The Board may adopt such
rules and regulations not inconsistent with the provisions of law, the
Certificate or these By-laws for the conduct of its meetings and
management of the affairs of the Corporation as the
<PAGE>
Board may deem proper.
SECTION 10. Participation in Meeting by Means of
Communications Equipment. Any one or more members of the Board or any
committee thereof may participate in any meeting of the Board or of
any such committee by means of conference telephone or similar
communications equipment by means of which all persons participating
in the meeting can hear each other, and such participation in a
meeting shall constitute presence in person at such meeting.
SECTION 11. Action without Meeting. Any action required or
permitted to be taken at any meeting of the Board or any committee
thereof may be taken without a meeting if all of the members of the
Board or of any such committee consent thereto in writing and the
writing or writings are filed with the minutes or proceedings of the
Board or of such committee.
SECTION 12. Resignations. Any director of the Corporation
may at any time resign by giving written notice to the Board, the
Chairman, the President or the Secretary. Such resignation shall take
effect at the time specified therein or, if the time be not specified
therein, upon receipt thereof; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 13. Removal of Directors. Directors may be removed
only as provided in Section 4 of Article VI of the Certificate.
SECTION 14. Vacancies. Subject to the rights of the holders
of any series of Preferred Stock or Series Common Stock or
<PAGE>
any class or series of stock having a preference over the Common Stock
of the Corporation as to dividends or upon liquidation, any vacancies
on the Board resulting from death, resignation, removal or other cause
shall only be filled by the Board by the affirmative vote of a
majority of the remaining directors then in office, even though less
than a quorum of the Board, or by a sole remaining director, and newly
created directorships resulting from any increase in the number of
directors shall be filled by the Board, or if not so filled, by the
stockholders at the next annual meeting thereof or at a special
meeting called for that purpose in accordance with Section 3 of
Article II of these By-laws. Any director elected in accordance with
the preceding sentence of this Section 14 shall hold office for the
remainder of the full term of the class of directors in which the new
directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified.
SECTION 15. Compensation. Each director, in consideration of
such person serving as a director, shall be entitled to receive from
the Corporation such amount per annum and such fees (payable in cash
or stock) for attendance at meetings of the Board or of committees of
the Board, or both, as the Board shall from time to time determine. In
addition, each director shall be entitled to receive from the
Corporation reimbursement for the reasonable expenses incurred by such
person in connection with the performance of such person's duties as a
director. Nothing contained in this Section shall preclude any
director from serving the Corporation or any of its subsidiaries in
any other capacity
<PAGE>
and receiving proper compensation therefor.
SECTION 16. Independent Directors.
(a) Independence of Members of Board of Directors at Time of
Nomination. At the time that the Board determines the slate of
directors for election at an Annual Meeting of Stockholders, a
majority of the members of the Board, assuming the election of the
nominated slate and taking into account resignations effective on or
prior to such Annual Meeting, shall be determined by the Board to be
eligible to be classified as independent directors.
(b) Directors Elected to Fill Vacancies on the Board or
Newly Created Directorships. If the Board elects directors between
Annual Meetings of Stockholders to fill vacancies or newly created
directorships, the majority of all directors holding office
immediately after such elections shall be determined by the Board to
be eligible to be classified as independent directors.
(c) Determination of Independence of Directors. In its
determination of a director's eligibility to be classified as an
independent director pursuant to this Section 16, the Board shall
consider, among such other factors as it may in any case deem
relevant, that the director: (i) has not been employed by the
Corporation as an executive officer within the past three years; (ii)
is not a paid adviser or consultant to the Corporation and derives no
financial benefit from any entity as a result of advice or consultancy
provided to the Corporation by such entity; (iii) is not an executive
officer, director or significant stockholder of
<PAGE>
a significant customer or supplier of the Corporation; (iv) has no
personal services contract with the Corporation; (v) is not an
executive officer or director of a tax-exempt entity receiving a
significant part of its annual contributions from the Corporation;
(vi) is not a member of the immediate family of any director who is
not considered an independent director; and (vii) is free of any other
relationship that would interfere with the exercise of independent
judgment by such director.
ARTICLE IV
Committees of the Board of Directors
SECTION 1. Establishment of Committees of the Board of
Directors; Election of Members of Committees of the Board of
Directors; Functions of Committees of the Board of Directors. The
Board may, in accordance with and subject to the General Corporation
Law of the State of Delaware, from time to time establish committees
of the Board to exercise such powers and authorities of the Board, and
to perform such other functions, as the Board may from time to time
determine.
SECTION 2. Procedure; Meetings; Quorum. Regular meetings of
committees of the Board, of which no notice shall be necessary, may be
held at such times and places as shall be fixed by resolution adopted
by a majority of the members thereof. Special meetings of any
committee of the Board shall be called at the request of any member
thereof. Notice of each special meeting of any committee of the Board
shall be sent by overnight delivery service, or mailed to each member
thereof, in either case addressed
<PAGE>
to such member at such member's residence or usual place of business,
at least two days before the day on which the meeting is to be held or
shall be sent to such member at such place by telegraph or telecopy or
be given personally or by telephone, not later than the day before the
meeting is to be held, but notice need not be given to any member who
shall, either before or after the meeting, submit a signed waiver of
such notice or who shall attend such meeting without protesting, prior
to or at its commencement, the lack of such notice to such member. Any
special meeting of any committee of the Board shall be a legal meeting
without any notice thereof having been given, if all the members
thereof shall be present thereat and no member shall protest the lack
of notice to such member. Notice of any adjourned meeting of any
committee of the Board need not be given. Any committee of the Board
may adopt such rules and regulations not inconsistent with the
provisions of law, the Certificate or these By-laws for the conduct of
its meetings as such committee of the Board may deem proper. A
majority of the members of any committee of the Board shall constitute
a quorum for the transaction of business at any meeting, and the vote
of a majority of the members thereof present at any meeting at which a
quorum is present shall be the act of such committee. Each committee
of the Board shall keep written minutes of its proceedings and shall
report on such proceedings to the Board.
<PAGE>
ARTICLE V
Officers
SECTION 1. Number; Term of Office. The officers of the
Corporation shall be such officers, which may include a Chairman of
the Board, Chief Executive Officer or Co-Chief Executive Officers,
President, Chief Operating Officer, Chairman of the Executive
Committee and one or more Vice Chairmen and Vice Presidents
(including, without limitation, Assistant, Executive, Senior and Group
Vice Presidents) and a Treasurer, Secretary and Controller and such
other officers or agents with such titles and such duties as the Board
may from time to time determine, each to have such authority,
functions or duties as in these By-laws provided or as the Board may
from time to time determine, and each to hold office for such term as
may be prescribed by the Board and until such person's successor shall
have been chosen and shall qualify, or until such person's death or
resignation, or until such person's removal in the manner hereinafter
provided. The Chairman, the Chief Executive Officers, the
Vice-Chairmen, the Chairman of the Executive Committee, and the
President, if any, shall be elected from among the directors. One
person may hold the offices and perform the duties of any two or more
of said officers; provided, however, that no officer shall execute,
acknowledge or verify any instrument in more than one capacity if such
instrument is required by law, the Certificate or these By-laws to be
executed, acknowledged or verified by two or more officers. The Board
may from time to time authorize any officer to appoint and remove any
such other officers and agents and to prescribe their powers and
<PAGE>
duties. The Board may require any officer or agent to give security for the
faithful performance of such person's duties.
Except as otherwise provided by these By-laws, any reference
to the Chairman or Chief Executive Officer in these By-laws shall be
deemed to mean, if there are Co-Chairmen or Co-Chief Executive
Officers, either Co-Chairmen or either Co-Chief Executive Officer,
each of whom may severally exercise the full powers and authorities of
the office of Chairman or Chief Executive Officer, as the case may be.
SECTION 2. Removal. Any officer may be removed, either with
or without cause, by the Board at any meeting thereof called for the
purpose or, except in the case of any officer elected by the Board, by
any superior officer upon whom such power may be conferred by the
Board.
SECTION 3. Resignation. Any officer may resign at any time
by giving notice to the Board, the Chairman or the Secretary. Any such
resignation shall take effect at the date of receipt of such notice or
at any later date specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 4. Vacancies. A vacancy in any office because of
death, resignation, removal or any other cause may be filled for the
unexpired portion of the term in the manner prescribed in these
By-laws for election to such office.
SECTION 5. Chairman of the Board. The Chairman shall, if
present, preside at meetings of the Board and, if present, preside at
meetings of the stockholders, and, if present and in the
<PAGE>
absence of the Chairman of the Executive Committee, preside at
meetings of the Executive Committee. The Chairman may sign and execute
in the name of the Corporation deeds, mortgages, bonds, contracts or
other instruments. The Chairman shall, when requested, counsel with
and advise the other officers of the Corporation and shall perform
such other duties as he may agree with the Chief Executive Officer or
as the Board may from time to time determine.
SECTION 6. Chief Executive Officer. The Chief Executive
Officer shall have general supervision and direction of the business
and affairs of the Corporation, subject to the control of the Board.
The Chief Executive Officer may sign and execute in the name of the
Corporation deeds, mortgages, bonds, contracts or other instruments.
The Chief Executive Officer shall, when requested, counsel with and
advise the other officers of the Corporation and shall perform such
other duties as the Board may from time to time determine.
SECTION 7. The President. The President shall perform such
senior executive duties as the Board shall from time to time
determine. The President shall, if present and in the absence of the
Chairman, preside at meetings of the stockholders and, if present and
in the absence of the Chairman, preside at meetings of the Board and,
if present and in the absence of the Chairman of the Executive
Committee and the Chairman of the Board, preside at meetings of the
Executive Committee. The President may sign and execute in the name of
the Corporation deeds, mortgages, bonds, contracts or other
instruments. The President shall, when
<PAGE>
requested, counsel with and advise the other officers of the
Corporation and shall perform such other duties as he may agree with
the Chief Executive Officer or as the Board may from time to time
determine.
SECTION 8. Chief Operating Officer. The Chief Operating
Officer shall perform such senior duties in connection with the
operations of the Corporation as the Board or the Chief Executive
Officer shall from time to time determine. The Chief Operating Officer
may sign and execute in the name of the Corporation deeds, mortgages,
bonds, contracts and other instruments. The Chief Operating Officer,
shall, when requested, counsel with and advise the other officers of
the Corporation and shall perform such other duties as he may agree
with the Chief Executive Officer or as the Board may from time to time
determine.
SECTION 9. Vice-Chairman of the Board. In the absence of the
Chairman of the Board and the President, the Vice-Chairman of the
Board (the "Vice Chairman") if one shall have been elected, or if
there shall be more than one, a Vice-Chairman as designated by the
Chairman or the President, or, in the absence of such designation, as
designated by the Board, shall, if present, preside at meetings of the
Board. The Vice Chairman may sign and execute in the name of the
Corporation deeds, mortgages, bonds, contracts or other instruments.
The Vice Chairman shall, when requested, counsel with and advise the
other officers of the Corporation and shall perform such other duties
as he may agree with the Chief Executive Officer or as the Board may
from time to time determine.
<PAGE>
SECTION 10. Chairman of the Executive Committee. The
Chairman of the Executive Committee shall, if present, preside at
meetings of the Executive Committee. The Chairman of the Executive
Committee shall perform such other duties as the Board or the
Executive Committee may from time to time determine. The Chairman of
the Executive Committee shall, when requested, counsel with and advise
the other officers of the Corporation and shall perform such other
duties as he may agree with the Chief Executive Officer or as the
Board may from time to time determine.
SECTION 11. Chief Financial Officer. The Chief Financial
Officer of the Corporation, if one shall have been elected, shall
perform all the powers and duties of the office of the chief financial
officer and in general have overall supervision of the financial
operations of the Corporation. The Chief Financial Officer may sign
and execute in the name of the Corporation deeds, mortgages, bonds,
contracts or other instruments. The Chief Financial Officer shall,
when requested, counsel with and advise the other officers of the
Corporation and shall perform such other duties as he may agree with
the Chief Executive Officer or as the Board may from time to time
determine.
SECTION 12. Vice-Presidents. Any Vice-President shall have
such powers and duties as shall be prescribed by his superior officer
or the Board. Any Vice-President may sign and execute in the name of
the Corporation deeds, mortgages, bonds, contracts or other
instruments. The Vice President shall, when requested, counsel with
and advise the other officers of the Corporation and shall perform
such other duties as he may agree with the Chief
<PAGE>
Executive Officer or as the Board may from time to time determine.
SECTION 13. Treasurer. The Treasurer, if one shall have been
elected, shall supervise and be responsible for all the funds and
securities of the Corporation; the deposit of all moneys and other
valuables to the credit of the Corporation in depositories of the
Corporation; borrowings and compliance with the provisions of all
indentures, agreements and instruments governing such borrowings to
which the Corporation is a party; the disbursement of funds of the
Corporation and the investment of its funds; and in general shall
perform all of the duties incident to the office of the Treasurer. The
Treasurer may sign and execute in the name of the Corporation deeds,
mortgages, bonds, contracts or other instruments. The Treasurer shall,
when requested, counsel with and advise the other officers of the
Corporation and shall perform such other duties as he may agree with
the Chief Executive Officer or as the Board may from time to time
determine.
SECTION 14. Controller. The Controller shall be the chief
accounting officer of the Corporation. The Controller may sign and
execute in the name of the Corporation deeds, mortgages, bonds,
contracts or other instruments. The Controller shall, when requested,
counsel with and advise the other officers of the Corporation and
shall perform such other duties as he may agree with the Chief
Executive Officer or the Chief Financial Officer or as the Board may
from time to time determine.
SECTION 15. Secretary. It shall be the duty of the Secretary to
act as secretary at all meetings of the Board, of the committees of the
Board and of the stockholders and to record the
<PAGE>
proceedings of such meetings in a book or books to be kept for that
purpose; the Secretary shall see that all notices required to be given
by the Corporation are duly given and served; the Secretary shall be
custodian of the seal of the Corporation and shall affix the seal or
cause it to be affixed to all certificates of stock of the Corporation
(unless the seal of the Corporation on such certificates shall be a
facsimile, as hereinafter provided) and to all documents, the
execution of which on behalf of the Corporation under its seal is duly
authorized in accordance with the provisions of these By-laws; the
Secretary shall have charge of the books, records and papers of the
Corporation and shall see that the reports, statements and other
documents required by law to be kept and filed are properly kept and
filed; and in general shall perform all of the duties incident to the
office of Secretary. The Secretary shall, when requested, counsel with
and advise the other officers of the Corporation and shall perform
such other duties as he may agree with the Chief Executive Officer or
as the Board may from time to time determine.
SECTION 16. Assistant Treasurers and Assistant Secretaries.
Any Assistant Treasurers and Assistant Secretaries shall perform such
duties as shall be assigned to them by the Board. Any Assistant
Treasurer or Assistant Secretary shall perform such duties as shall be
assigned to them by the Treasurer or Secretary, respectively, or by
the Chairman of the Board or by the Chief Executive Officer.
<PAGE>
ARTICLE VI
Indemnification
SECTION 1. Right to Indemnification. The Corporation, to the
fullest extent permitted by applicable law as then in effect, shall
indemnify any person who is or was a director or officer of the
Corporation and who is or was involved in any manner (including,
without limitation, as a party or a witness) or is threatened to be
made so involved in any threatened, pending or completed
investigation, claim, action, suit or proceeding, whether civil,
criminal, administrative or investigative (including, without
limitation, any action, suit or proceedings by or in the right of the
Corporation to procure a judgment in its favor) (a "Proceeding") by
reason of the fact that such person is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise (including, without limitation, any employee benefit plan)
(a "Covered Entity") against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such Proceeding;
provided, however, that the foregoing shall not apply to a director or
officer of the Corporation with respect to a Proceeding that was
commenced by such director or officer unless the proceeding was
commenced after a Change in Control (as hereinafter defined in Section
4(e) of this Article). Any director or officer of the Corporation
entitled to indemnification as provided in this Section 1 is
hereinafter called
<PAGE>
an "Indemnitee". Any right of an Indemnitee to indemnification shall
be a contract right and shall include the right to receive, prior to
the conclusion of any Proceeding, payment of any expenses incurred by
the Indemnitee in connection with such proceeding, consistent with the
provisions of applicable law as then in effect and the other
provisions of this Article.
SECTION 2. Insurance, Contracts and Funding. The Corporation
may purchase and maintain insurance to protect itself and any
director, officer, employee or agent of the Corporation or of any
Covered Entity against any expenses, judgments, fines and amounts paid
in settlement as specified in Section 1 of this Article or incurred by
any such director, officer, employee or agent in connection with any
Proceeding referred to in Section 1 of this Article, to the fullest
extent permitted by applicable law as then in effect. The Corporation
may enter into contracts with any director, officer, employee or agent
of the Corporation or of any Covered Entity in furtherance of the
provisions of this Article and may create a trust fund, grant a
security interest or use other means (including, without limitation, a
letter of credit) to ensure the payment of such amounts as may be
necessary to effect indemnification as provided or authorized in this
Article.
SECTION 3. Indemnification Not Exclusive Right. The right of
indemnification provided in this Article shall not be exclusive of any
other rights to which an Indemnitee may otherwise be entitled, and the
provisions of this Article shall inure to the benefit of the heirs and
legal representatives of any Indemnitee under this Article and shall
be applicable to Proceedings commenced
<PAGE>
or continuing after the adoption of this Article, whether arising from
acts or omissions occurring before or after such adoption.
SECTION 4. Advancement of Expenses; Procedures; Presumptions
and Effect of Certain Proceedings; Remedies. In furtherance, but not
in limitation of the foregoing provisions, the following procedures,
presumptions and remedies shall apply with respect to advancement of
expenses and the right to indemnification under this Article:
(a) Advancement of Expenses. All reasonable expenses
(including attorney's fees) incurred by or on behalf of the Indemnitee
in connection with any Proceeding shall be advanced to the Indemnitee
by the Corporation within 20 days after the receipt by the Corporation
of a statement or statements from the Indemnitee requesting such
advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall
reasonably evidence the expenses incurred by the Indemnitee and, if
required by law at the time of such advance, shall include or be
accompanied by an undertaking by or on behalf of the Indemnitee to
repay the amounts advanced if ultimately it should be determined that
the Indemnitee is not entitled to be indemnified against such expenses
pursuant to this Article.
(b) Procedure for Determination of Entitlement to
Indemnification. (i) To obtain indemnification under this Article, an
Indemnitee shall submit to the Secretary a written request, including
such documentation and information as is reasonably available to the
Indemnitee and reasonably necessary to
<PAGE>
determine whether and to what extent the Indemnitee is entitled to
indemnification (the "Supporting Documentation"). The determination of
the Indemnitee's entitlement to indemnification shall be made not
later than 60 days after receipt by the Corporation of the written
request for indemnification together with the Supporting
Documentation. The Secretary shall, promptly upon receipt of such a
request for indemnification, advise the Board in writing that the
Indemnitee has requested indemnification.
(ii) The Indemnitee's entitlement to indemnification
under this Article shall be determined in one of the following ways:
(A) by a majority vote of the Disinterested Directors (as hereinafter
defined in Section 4(e) of this Article), whether or not they
constitute a quorum of the Board; (B) by a written opinion of
Independent Counsel (as hereinafter defined in Section 4(e) of this
Article) if (x) a Change in Control (as hereinafter defined in Section
4(e) of this Article) shall have occurred and the Indemnitee so
requests or (y) there are no Disinterested Directors or a majority of
such Disinterested Directors so directs; (C) by the stockholders of
the Corporation; or (D) as provided in Section 4(c) of this Article.
(iii) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 4(b) (ii) of this Article, a majority of the Disinterested
Directors shall select the Independent Counsel, but only an
Independent Counsel to which the Indemnitee does not reasonably
object; provided, however, that if a Change in Control shall have
occurred, the Indemnitee shall select such Independent Counsel, but
<PAGE>
only an Independent Counsel to which a majority of the Disinterested
Directors does not reasonably object.
(c) Presumptions and Effect of Certain Proceedings.
Except as otherwise expressly provided in this Article, if a Change in
Control shall have occurred, the Indemnitee shall be presumed to be
entitled to indemnification under this Article (with respect to
actions or omissions occurring prior to such Change in Control) upon
submission of a request for indemnification together with the
Supporting Documentation in accordance with Section 4(b)(i) of this
Article, and thereafter the Corporation shall have the burden of proof
to overcome that presumption in reaching a contrary determination. In
any event, if the person or persons empowered under Section 4(b) of
this Article to determine entitlement to indemnification shall not
have been appointed or shall not have made a determination within 60
days after receipt by the Corporation of the request therefor,
together with the Supporting Documentation, the Indemnitee shall be
deemed to be, and shall be, entitled to indemnification unless (A) the
Indemnitee misrepresented or failed to disclose a material fact in
making the request for indemnification or in the Supporting
Documentation or (B) such indemnification is prohibited by law. The
termination of any Proceeding described in Section 1 of this Article,
or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, adversely affect the right of the
Indemnitee to indemnification or create a presumption that the
Indemnitee did not act in good faith and in a manner which the
Indemnitee
<PAGE>
reasonably believed to be in or not opposed to the best interests of
the Corporation or, with respect to any criminal proceeding, that the
Indemnitee had reasonable cause to believe that such conduct was
unlawful.
(d) Remedies of Indemnitee. (i) In the event that a
determination is made pursuant to Section 4(b) of this Article that
the Indemnitee is not entitled to indemnification under this Article,
(A) the Indemnitee shall be entitled to seek an adjudication of
entitlement to such indemnification either, at the Indemnitee's sole
option, in (x) an appropriate court of the State of Delaware or any
other court of competent jurisdiction or (y) an arbitration to be
conducted by a single arbitrator pursuant to the rules of the American
Arbitration Association; (B) any such judicial proceeding or
arbitration shall be de novo and the Indemnitee shall not be
prejudiced by reason of such adverse determination; and (C) if a
Change in Control shall have occurred, in any such judicial proceeding
or arbitration, the Corporation shall have the burden of proving that
the Indemnitee is not entitled to indemnification under this Article
(with respect to actions or omissions occurring prior to such Change
in Control).
(ii) If a determination shall have been made or deemed
to have been made, pursuant to Section 4(b) or (c) of this Article,
that the Indemnitee is entitled to indemnification, the Corporation
shall be obligated to pay the amounts constituting such
indemnification within five days after such determination has been
made or deemed to have been made and shall be conclusively bound by
such determination unless (A) the Indemnitee misrepresented or
<PAGE>
failed to disclose a material fact in making the request for
indemnification or in the Supporting Documentation or (B) such
indemnification is prohibited by law. In the event that (X)
advancement of expenses is not timely made pursuant to Section 4(a) of
this Article or (Y) payment of indemnification is not made within five
days after a determination of entitlement to indemnification has been
made or deemed to have been made pursuant to Section 4(b) or (c) of
this Article, the Indemnitee shall be entitled to seek judicial
enforcement of the Corporation's obligation to pay to the Indemnitee
such advancement of expenses or indemnification. Notwithstanding the
foregoing, the Corporation may bring an action, in an appropriate
court in the State of Delaware or any other court of competent
jurisdiction, contesting the right of the Indemnitee to receive
indemnification hereunder, due to the occurrence of an event described
in sub-clause (A) or (B) of this clause (ii) (a "Disqualifying
Event"); provided, however, that in any such action the Corporation
shall have the burden of proving the occurrence of such Disqualifying
Event.
(iii) The Corporation shall be precluded from asserting
in any judicial proceeding or arbitration commenced pursuant to this
Section 4(d) that the procedures and presumptions of this Article are
not valid, binding and enforceable and shall stipulate in any such
court or before any such arbitrator that the Corporation is bound by
all the provisions of this Article.
(iv) In the event that the Indemnitee, pursuant to this
Section 4(d), seeks a judicial adjudication of or an award in
arbitration to enforce rights under, or to recover damages for
<PAGE>
breach of, this Article, the Indemnitee shall be entitled to recover
from the Corporation, and shall be indemnified by the Corporation
against, any expenses actually and reasonably incurred by the
Indemnitee if the Indemnitee prevails in such judicial adjudication or
arbitration. If it shall be determined in such judicial adjudication
or arbitration that the Indemnitee is entitled to receive part but not
all of the indemnification or advancement of expenses sought, the
expenses incurred by the Indemnitee in connection with such judicial
adjudication or arbitration shall be prorated accordingly.
(e) Definitions. For purposes of this Section 4:
(i) "Authorized Officer" means any one of the Chairman,
the President, a Vice Chairman, the Chief Financial Officer, any Vice
President or the Secretary of the Corporation.
(ii) "Change in Control" means the occurrence of any of
the following (w) any merger or consolidation of the Corporation in
which the Corporation is not the continuing or surviving corporation
or pursuant to which shares of the Corporation's Common Stock would be
converted into cash, securities or other property, other than a merger
of the Corporation in which the holders of the Corporation's Common
Stock immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation immediately
after the merger, (x) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or
substantially all, the assets of the Corporation, or the liquidation
or dissolution of the Corporation, (y) any person (as such term is
defined in Section
<PAGE>
4(c) of Article V of the Certificate of Incorporation) shall become an
Interested Stockholder (as defined therein) without the prior consent
of the Board, or (z) during any period of two consecutive years,
individuals who at the beginning of such period who shall have
constituted the entire Board shall have ceased for any reason to
constitute a majority thereof unless the election, or the nomination
for election by the Corporation's stockholders, of each new director
shall have been approved by a vote of at least two- thirds of the
directors then still in office who were directors at the beginning of
the period.
(iii) "Disinterested Director" means a director of the
Corporation who is not or was not a party to the Proceeding in respect
of which indemnification is sought by the Indemnitee.
(iv) "Independent Counsel" means a law firm or a member
of a law firm that neither presently is, nor in the past five years
has been, retained to represent: (x) the Corporation or the Indemnitee
in any matter material to either such party or (y) any other party to
the Proceeding giving rise to a claim for indemnification under this
Article. Notwithstanding the foregoing, the term "Independent Counsel"
shall not include any person who, under the applicable standards of
professional conduct then prevailing under the law of the State of
Delaware, would have a conflict of interest in representing either the
Corporation or the Indemnitee in an action to determine the
Indemnitee's rights under this Article.
SECTION 5. Severability. If any provision or provisions of
this Article shall be held to be invalid, illegal or
<PAGE>
unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Article
(including, without limitation, all portions of any paragraph of this
Article containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby;
and (b) to the fullest extent possible, the provisions of this Article
(including, without limitation, all portions of any paragraph of this
Article containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or
enforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
SECTION 6. Indemnification of Employees Serving as
Directors. The Corporation, to the fullest extent permitted by
applicable law as then in effect, shall indemnify any person who is or
was an employee of the Corporation and who is or was involved in any
manner (including, without limitation, as a party or a witness) or is
threatened to be made so involved in any threatened, pending or
completed Proceeding by reason of the fact that such employee is or
was serving (a) as a director of a corporation in which the
Corporation had at the time of such service, directly or indirectly, a
50 percent or greater equity interest (a "Subsidiary Director") and
(b) at the written request of an Authorized Officer, as a director of
another corporation in which the Corporation had at the time of such
service, directly or indirectly, a less than 50 percent equity
interest (or no equity interest at all) or in a
<PAGE>
capacity equivalent to that of a director for any partnership, joint
venture, trust or other enterprise (including, without limitation, any
employee benefit plan) in which the Corporation has an interest (a
"Requested Employee"), against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such Subsidiary Director or Requested Employee
in connection with such Proceeding. The Corporation may also advance
expenses incurred by any such Subsidiary Director or Requested
Employee in connection with any such Proceeding, consistent with the
provisions of applicable law as then in effect.
SECTION 7. Indemnification of Employees and Agents.
Notwithstanding any other provision or provisions of this Article, the
Corporation, to the fullest extent permitted by applicable law as then
in effect, may indemnify any person other than a director or officer
of the Corporation, a Subsidiary Director or a Requested Employee, who
is or was an employee or agent of the Corporation and who is or was
involved in any manner (including, without limitation, as a party or a
witness) or is threatened to be made so involved in any threatened,
pending or completed Proceeding by reason of the fact that such person
is or was a director, officer, employee or agent of a Covered Entity
against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such
person in connection with such Proceeding. The Corporation may also
advance expenses incurred by such employee or agent in connection with
any such Proceeding, consistent with the provisions of applicable law
<PAGE>
as then in effect.
ARTICLE VII
Capital Stock
SECTION 1. Certificates for Shares. Certificates
representing shares of stock of each class of the Corporation,
whenever authorized by the Board, shall be in such form as shall be
approved by the Board. The certificates representing shares of stock
of each class shall be signed by, or in the name of, the Corporation
by the Chairman or the President, a Vice Chairman or any
Vice-President and by the Secretary or any Assistant Secretary or the
Treasurer or any Assistant Treasurer of the Corporation, and sealed
with the seal of the Corporation, which may be a facsimile thereof.
Any or all such signatures may be facsimiles if countersigned by a
transfer agent or registrar. Although any officer, transfer agent or
registrar whose manual or facsimile signature is affixed to such a
certificate ceases to be such officer, transfer agent or registrar
before such certificate has been issued, it may nevertheless be issued
by the Corporation with the same effect as if such officer, transfer
agent or registrar were still such at the date of its issue.
The stock ledger and blank share certificates shall be kept
by the Secretary or by a transfer agent or by a registrar or by any
other officer or agent designated by the Board.
SECTION 2. Transfer of Shares. Transfers of shares of stock
of each class of the Corporation shall be made only on the books of
the Corporation by the holder thereof, or by such holder's
<PAGE>
attorney thereunto authorized by a power of attorney duly executed and
filed with the Secretary or a transfer agent for such stock, if any,
and on surrender of the certificate or certificates for such shares
properly endorsed or accompanied by a duly executed stock transfer
power (or by proper evidence of succession, assignment or authority to
transfer) and the payment of any taxes thereon; provided, however,
that the Corporation shall be entitled to recognize and enforce any
lawful restriction on transfer. The person in whose name shares are
registered on the books of the Corporation shall be deemed the owner
thereof for all purposes as regards the Corporation; provided,
however, that whenever any transfer of shares shall be made for
collateral security and not absolutely, and written notice thereof
shall be given to the Secretary or to such transfer agent, such fact
shall be stated in the entry of the transfer. No transfer of shares
shall be valid as against the Corporation, its stockholders and
creditors for any purpose, except to render the transferee liable for
the debts of the Corporation to the extent provided by law, until it
shall have been entered in the stock records of the Corporation by an
entry showing from and to whom transferred.
SECTION 3. Registered Stockholders and Addresses of
Stockholders. The Corporation shall be entitled to recognize the
exclusive right of a person registered on its records as the owner of
shares of stock to receive dividends and to vote as such owner, shall
be entitled to hold liable for calls and assessments a person
registered on its records as the owner of shares of stock, and shall
not be bound to recognize any equitable or other claim to or
<PAGE>
interest in such share or shares of stock on the part of any other
person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of Delaware.
Each stockholder shall designate to the Secretary or
transfer agent of the Corporation an address at which notices of
meetings and all other corporate notices may be served or mailed to
such person, and, if any stockholder shall fail to designate such
address, corporate notices may be served upon such person by mail
directed to such person at such person's post office address, if any,
as the same appears on the stock record books of the Corporation or at
such person's last known post office address.
SECTION 4. Lost, Destroyed and Mutilated Certificates. The
holder of any share of stock of the Corporation shall immediately
notify the Corporation of any loss, theft, destruction or mutilation
of the certificate therefor; the Corporation may issue to such holder
a new certificate or certificates for shares, upon the surrender of
the mutilated certificate or, in the case of loss, theft or
destruction of the certificate, upon satisfactory proof of such loss,
theft or destruction; the Board, or a committee designated thereby, or
the transfer agents and registrars for the stock, may, in their
discretion, require the owner of the lost, stolen or destroyed
certificate, or such person's legal representative, to give the
Corporation a bond in such sum and with such surety or sureties as
they may direct to indemnify the Corporation and said transfer agents
and registrars against any claim that may be made on account of the
alleged loss, theft or destruction of any such certificate or the
issuance of such new
<PAGE>
certificate.
SECTION 5. Regulations. The Board may make such additional
rules and regulations as it may deem expedient concerning the issue
and transfer of certificates representing shares of stock of each
class of the Corporation and may make such rules and take such action
as it may deem expedient concerning the issue of certificates in lieu
of certificates claimed to have been lost, destroyed, stolen or
mutilated.
SECTION 6. Fixing Date for Determination of Stockholders of
Record. In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or entitled to receive payment of any dividend or
other distribution or allotment or any rights, or entitled to exercise
any rights in respect of any change, conversion or exchange of stock
or for the purpose of any other lawful action, the Board may fix, in
advance, a record date, which shall not be more than 60 nor less than
10 days before the date of such meeting, nor more than 60 days prior
to any other action. A determination of stockholders entitled to
notice of or to vote at a meeting of the stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board may
fix a new record date for the adjourned meeting.
SECTION 7. Transfer Agents and Registrars. The Board may
appoint, or authorize any officer or officers to appoint, one or more
transfer agents and one or more registrars.
<PAGE>
ARTICLE VIII
Seal
The Board shall provide a corporate seal, which shall be in
the form of a circle and shall bear the full name of the Corporation
and the words and figures of "Corporate Seal Delaware 1983", or such
other words or figures as the Board may approve and adopt. The seal
may be used by causing it or a facsimile thereof to be impressed or
affixed or in any other manner reproduced.
ARTICLE IX
Fiscal Year
The fiscal year of the Corporation shall end on the 31st day
of December in each year.
ARTICLE X
Waiver of Notice
Whenever any notice whatsoever is required to be given by
these By-laws, by the Certificate or by law, the person entitled
thereto may, either before or after the meeting or other matter in
respect of which such notice is to be given, waive such notice in
writing, which writing shall be filed with or entered upon the records
of the meeting or the records kept with respect to such other matter,
as the case may be, and in such event such notice need not be given to
such person and such waiver shall be deemed equivalent to such notice.
<PAGE>
ARTICLE XI
Amendments
Any By-law (other than this Article XI) may be adopted,
repealed, altered or amended by a majority of the entire Board at any
meeting thereof, provided that such proposed action in respect thereof
shall be stated in the notice of such Meeting. The stockholders of the
Corporation shall have the power to amend, alter or repeal any
provision of these By-laws only to the extent and in the manner
provided in the Certificate.
ARTICLE XII
Miscellaneous
SECTION 1. Execution of Documents. The Board or any
committee thereof shall designate the officers, employees and agents
of the Corporation who shall have power to execute and deliver deeds,
contracts, mortgages, bonds, debentures, notes, checks, drafts and
other orders for the payment of money and other documents for and in
the name of the Corporation and may authorize (including authority to
redelegate) by written instrument to other officers, employees or
agents of the Corporation. Such delegation may be by resolution or
otherwise and the authority granted shall be general or confined to
specific matters, all as the Board or any such committee may
determine. In the absence of such designation referred to in the first
sentence of this Section, the officers of the Corporation shall have
such power so referred to, to the extent incident to the normal
performance of their duties.
<PAGE>
SECTION 2. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the credit
of the Corporation or otherwise as the Board or any committee thereof
or any officer of the Corporation to whom power in respect of
financial operations shall have been delegated by the Board or any
such committee or in these By-laws shall select.
SECTION 3. Checks. All checks, drafts and other orders for
the payment of money out of the funds of the Corporation, and all
notes or other evidences of indebtedness of the Corporation, shall be
signed on behalf of the Corporation in such manner as shall from time
to time be determined by resolution of the Board or of any committee
thereof or by any officer of the Corporation to whom power in respect
of financial operations shall have been delegated by the Board or any
such committee thereof or as set forth in these By-laws.
SECTION 4. Proxies in Respect of Stock or Other Securities
of Other Corporations. The Board or any committee thereof shall
designate the officers of the Corporation who shall have authority
from time to time to appoint an agent or agents of the Corporation to
exercise in the name and on behalf of the Corporation the powers and
rights which the Corporation may have as the holder of stock or other
securities in any other corporation or other entity, and to vote or
consent in respect of such stock or securities; such designated
officers may instruct the person or persons so appointed as to the
manner of exercising such powers and rights; and such designated
officers may execute or cause to be executed in the name and on behalf
of the Corporation and under its
<PAGE>
corporate seal, or otherwise, such written proxies, powers of attorney
or other instruments as they may deem necessary or proper in order
that the Corporation may exercise its said powers and rights.
SECTION 5. Subject to Law and Certificate of Incorporation.
All powers, duties and responsibilities provided for in these By-laws,
whether or not explicitly so qualified, are qualified by the
provisions of the Certificate and applicable laws.
RIGHTS AGREEMENT dated as of
October 10, 1996, between TW INC., a
Delaware corporation, which will be
renamed "Time Warner Inc." (the
"Company"), and CHASEMELLON SHAREHOLDER
SERVICES L.L.C., as Rights Agent (the
"Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one Right (as hereinafter defined) for each
share of Common Stock, par value $.01 per share, of the Company (the
"Common Stock") outstanding at the Close of Business (as hereinafter
defined) on the date hereof (the "Record Date"), and has authorized
the issuance of one Right (as such number may hereafter be adjusted
pursuant to the provisions of this Rights Agreement) with respect to
each share of Common Stock that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption
Date or the Expiration Date (as such terms are hereinafter defined);
provided, however, that Rights may be issued with respect to shares of
Common Stock that shall become outstanding after the Distribution Date
and prior to the earlier of the Redemption Date or the Expiration Date
in accordance with the provisions of Section 23. Each Right shall
initially represent the right to purchase one one-thousandths
(1/1,000ths) of a share of Series A Participating Cumulative Preferred
Stock, par value $.10 per share, of the Company (the "Preferred
Shares"), having the powers, rights and preferences set forth in the
Certificate of Designation attached as Exhibit A.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Rights
Agreement, the following terms have the meanings indicated:
"Acquiring Person" shall after the date hereof mean, as of
any time, any Person who or which, alone or together with all
Affiliates and Associates of such Person, shall be the Beneficial
Owner of more than 15% of the Common Shares outstanding as of such
time, other than (a) the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any of its Subsidiaries, or
any Person holding Common Shares for or pursuant to the terms of
<PAGE>
any such employee benefit plan, or (b) any Person who or which, alone
or together with one or more of its Affiliates or Associates, becomes
or became the Beneficial Owner of more than 15% of the Common Shares
outstanding as of such time pursuant to a Qualifying Offer.
Notwithstanding the foregoing, the term "Acquiring Person" shall not
include any Person who or which as of any time becomes the Beneficial
Owner of more than 15% of the Common Shares outstanding as of such
time (i) solely as the result of a change in the number of Common
Shares outstanding since the most recent preceding date on which such
Person acquired Beneficial Ownership of any Common Shares or (ii)
solely as the result of the acquisition by such Person or one or more
of its Affiliates or Associates of Beneficial Ownership of additional
Common Shares if such acquisition was made in the good faith belief
that such acquisition would not cause either the number of Common
Shares beneficially owned by such Person, together with its Affiliates
and Associates, to exceed 15% of the Common Shares outstanding at the
time of such acquisition or otherwise cause a Distribution Date or the
adjustment provided in Section 11(a) to occur and such good faith
belief was based on the good faith reliance on information contained
in publicly filed reports or documents of the Company which were
inaccurate or out-of-date or (iii) solely as the result of the
acquisition of beneficial ownership of any Common Shares by any of
such Person's Affiliates or Associates who or which are not Controlled
Related Parties of such Person or (iv) solely as the result of any
transaction or event pursuant to which any Person who or which
beneficially owns any Common Shares and was not previously an
Affiliate or Associate of such Person becomes an Affiliate or
Associate of such Person or (v) solely as the result of the
acquisition by such Person or one or more of its Affiliates or
Associates of Beneficial Ownership of additional Common Shares if such
acquisition was made in the good faith belief that such acquisition
would not cause the number of Common Shares beneficially owned by such
Person, together with its Affiliates and Associates, to exceed 15% of
the Common Shares outstanding at the time of such acquisition or
otherwise cause a Distribution Date or the adjustment provided in
Section 11(a) to occur and such good faith belief was based on the
good faith reliance on inaccurate or out-of-date information
concerning the number of Common Shares beneficially owned by any
Affiliates or Associates of such Person who or which are not
Controlled Related Parties of such Person; provided, however, that in
the case of any of clauses (i) through (v), the percentage of the
Common Shares outstanding represented by the number
<PAGE>
of Common Shares beneficially owned by such Person is reduced to 15%
or less within the applicable cure period. For purposes of the
immediately preceding sentence, the "applicable cure period" shall be
the period commencing on (and including) the date that such Person
becomes aware that the number of Common Shares beneficially owned by
such Person exceeds 15% of the Common Shares outstanding (except that
if such Person has separately agreed in writing with the Company to
notify the Company once such Person becomes aware of such fact, the
cure period shall commence on (and include) the date of receipt by
such Person of written notice from the Company that the number of
Common Shares beneficially owned by such Person exceeds, as of the
date such notice is given, 15% of the Common Shares outstanding as of
such date) and ending upon the Close of Business on (i) the fifth
Business Day after such date in the case of any Person described in
clause (i) or (ii) of the immediately preceding sentence or (ii) the
tenth Business Day after such date in the case of any Person described
in clause (iii), (iv) or (v) of the immediately preceding sentence;
provided, however, that if such reduction would require the
disposition by such Person or any of its Affiliates or Associates of
any Common Shares and such Person notifies the Company in writing
that, in such Person's good faith belief, such disposition within such
period could not reasonably be accomplished without violation of
applicable law or could reasonably be accomplished only for
consideration or on terms materially disadvantageous as compared to
the consideration or terms on which such disposition could be
accomplished during some longer period of time, then such period shall
be extended for such time as the directors of the Company whose
approval would be required to redeem the Rights under Section 24 shall
reasonably deem to be required in order to prevent such violation of
applicable law or shall reasonably deem to be sufficient to minimize
such disadvantageous effect (as the case may be), subject to the
condition that such Person shall during the cure period, as extended
(or until such earlier time at which such Person, together with its
Affiliates and Associates, otherwise ceases to beneficially own more
than 15% of the outstanding Common Shares), diligently and in good
faith proceed to effect the required disposition as expeditiously as
reasonably practicable and comply with any arrangements regarding the
voting of a number of Common Shares beneficially owned by such Person,
together with its Affiliates and Associates, equal to the number so
required to be disposed of pending completion of such disposition as
such directors of the Company shall
<PAGE>
request (including arrangements not to vote such number of Common
Shares or only to vote such number of Common Shares in a manner
approved by such directors of the Company). For purposes of this
definition, the determination of whether any Person (other than a
director of the Company, in his or her capacity as a director of the
Company) acted in "good faith" shall be conclusively determined in
good faith by those directors of the Company whose approval would be
required to redeem the Rights under Section 24.
"Affiliate" and "Associate", when used with reference to any
Person, shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Exchange
Act, as in effect on the date of this Rights Agreement.
A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", and shall be deemed to have
"Beneficial Ownership" of, any securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of
Rule 13d-3 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Rights Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates has: (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (written
or oral), or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed
under this clause (A) to be the Beneficial Owner of, or to
beneficially own, or to have Beneficial Ownership of, any
securities tendered pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for
purchase or exchange thereunder; or (B) the right to vote
pursuant to any agreement, arrangement or understanding (written
or oral); provided, however, that a Person shall not be deemed
under this clause (B) to be the Beneficial Owner of, or to
beneficially own, any security if (1) the agreement, arrangement
or understanding (written or oral) to vote such security arises
solely from a revocable proxy or consent given
<PAGE>
to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act and (2)
the beneficial ownership of such security is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement
or understanding (written or oral) for the purpose of acquiring,
holding, voting or disposing of any Common Shares, any other
securities of the Company generally entitled to vote together
with the Common Shares or any rights, warrants, options or other
securities exercisable or exchangeable for, or convertible into,
Common Shares or other securities of the Company generally
entitled to vote together with the Common Shares.
A Person shall also be deemed to be the "Beneficial Owner"
of, and to "beneficially own", and to have "Beneficial Ownership" of,
Common Shares of the Company if such Person is the Beneficial Owner
of, or beneficially owns, or has Beneficial Ownership of (as the case
may be), any other securities of the Company (whether or not
convertible into or exchangeable for Common Shares) generally entitled
to vote together with the Common Shares. If the preceding sentence is
applicable in any case, such Person shall be deemed by virtue of
Beneficial Ownership of such other securities to be the "Beneficial
Owner" of, and to "beneficially own", and to have "Beneficial
Ownership" of, that number of Common Shares of the Company equal to
the greater of (x) the number of votes entitled to be cast in respect
of such other securities upon any matter being voted upon by the
holders of Common Shares and the holders of such other securities,
voting together as a single class, and (y) if applicable, the number
of Common Shares of the Company issuable upon conversion in full into,
or exchange in full for, Common Shares of the Company of such other
securities.
In the event any Common Shares are subject to a voting trust
approved by the directors of the Company whose approval would be
required to redeem the Rights under Section 24, then (x) the trustee
or trustees under such voting trust shall be deemed not to be the
"Beneficial
<PAGE>
Owner" of any such Common Shares and (y) each beneficiary of such
voting trust shall be deemed to be the "Beneficial Owner" of all such
Common Shares.
Notwithstanding the foregoing, (a) no Person ordinarily engaged in
business as an underwriter of securities shall be deemed to be the
"Beneficial Owner" of, to "beneficially own", or to have any
"Beneficial Ownership" of, any securities acquired in a bona fide firm
commitment underwriting pursuant to an underwriting agreement with the
Company; and (b) no Person shall be deemed to be the "Beneficial
Owner" of, to "beneficially own", or to have any "Beneficial
Ownership" of, any securities by reason of such Person or any of such
Person's Affiliates or Associates having the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) such securities pursuant to a right of first refusal, right of
first offer or similar agreement, arrangement or understanding
(written or oral) granted by another Person (the "subject Person") (I)
that does not provide any direct or indirect limitations or
restrictions on the ability of the subject Person to exercise (or
refrain from exercising) any voting rights associated with such
securities or contain any other agreement, arrangement or
understanding with respect to such voting rights, (II) that does not
contain any incentive for the subject Person to support or oppose any
particular Business Combination or otherwise to exercise (or refrain
from exercising) any voting rights associated with such securities in
a manner advantageous to such Person or any of such Person's
Affiliates or Associates and (III) prior written notice of which shall
have been given to the Company.
"Book Value", when used with reference to Common Shares
issued by any Person, shall mean the amount of equity of such Person
applicable to each Common Share, determined (i) in accordance with
generally accepted accounting principles in effect on the date as of
which such Book Value is to be determined, (ii) using all the
consolidated assets and all the consolidated liabilities of such
Person on the date as of which such Book Value is to be determined,
except that no value shall be included in such assets for goodwill
arising from consummation of a business combination, and (iii) after
giving effect to (A) the exercise of all rights, options and warrants
to purchase such Common Shares (other than the Rights), and the
conversion of all securities convertible into such Common Shares, at
an exercise or conversion price, per Common Share, which is less than
such
<PAGE>
Book Value before giving effect to such exercise or conversion
(whether or not exercisability or convertibility is conditioned upon
occurrence of a future event), (B) all dividends and other
distributions on the capital stock of such Person declared prior to
the date as of which such Book Value is to be determined and to be
paid or made after such date, and (C) any other agreement, arrangement
or understanding (written or oral), or transaction or other action
prior to the date as of which such Book Value is to be determined
which would have the effect of thereafter reducing such Book Value.
"Business Combination" shall have the meaning set forth in
Section 11(c)(I).
"Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions
in the Borough of Manhattan, The City of New York, are authorized or
obligated by law or executive order to close.
"Certificate of Designation" shall mean the Certificate of
Designation of Series A Participating Cumulative Preferred Stock
setting forth the powers, preferences, rights, qualifications,
limitations and restrictions of such series of Preferred Stock of the
Company, a copy of which is attached as Exhibit A.
"Close of Business" on any given date shall mean 5:00 p.m.,
New York City time, on such date; provided, however, that, if such
date is not a Business Day, "Close of Business" shall mean 5:00 p.m.,
New York City time, on the next succeeding Business Day.
"Common Shares", when used with reference to the Company
prior to a Business Combination, shall mean the shares of Common Stock
of the Company or any other shares of capital stock of the Company
into which the Common Stock shall be reclassified or changed. "Common
Shares", when used with reference to any Person (other than the
Company prior to a Business Combination), shall mean shares of capital
stock of such Person (if such Person is a corporation) of any class or
series, or units of equity interests in such Person (if such Person is
not a corporation) of any class or series, the terms of which do not
limit (as a maximum amount and not merely in proportional terms) the
amount of dividends or income payable or distributable on such class
or series or the
<PAGE>
amount of assets distributable on such class or series upon any
voluntary or involuntary liquidation, dissolution or winding up of
such Person and do not provide that such class or series is subject to
redemption at the option of such Person, or any shares of capital
stock or units of equity interests into which the foregoing shall be
reclassified or changed; provided, however, that, if at any time there
shall be more than one such class or series of capital stock or equity
interests of such Person, "Common Shares" of such Person shall include
all such classes and series substantially in the proportion of the
total number of shares or other units of each such class or series
outstanding at such time.
"Common Shares outstanding" or "outstanding Common Shares"
when used in this Section 1 in the definition of "Acquiring Person"
and when used in Section 3(b), with respect to any Person who is, as
of any time, the Beneficial Owner of, beneficially owns, or has
Beneficial Ownership of, any specified percentage of "Common Shares
outstanding" or "outstanding Common Shares", shall mean the sum of (i)
all Common Shares and any other securities generally entitled to vote
together with the Common Shares (in the case of such other securities,
counted as a number of Common Shares equal to the greater of (x) the
number of votes entitled to be cast in respect of such other
securities upon any matter being voted upon by the holders of Common
Shares and the holders of such other voting securities, voting
together as a single class and (y) if applicable, the number of Common
Shares issuable upon conversion in full into, or exchangeable in full
for, Common Shares of such other securities) actually issued as of
such time, except Common Shares or such other securities, if any, then
owned by the Company or any Subsidiary of the Company which, under the
laws of the jurisdiction of incorporation of the Company, could not
then be voted at a meeting of the holders of Common Shares called for
the purpose of electing directors of the Company plus (ii) the maximum
aggregate number of Common Shares and such other securities which
would be issued upon the exercise in full of all then outstanding
options, warrants and rights, however denominated (but in each case
only if issued by the Company or any of its Subsidiaries, and
excluding the Rights and excluding any securities included in clause
(i) of this calculation), to subscribe for, purchase or otherwise
acquire any Common Shares or such other securities, and the conversion
into, or exchange for, Common Shares or such other securities in full
of all then outstanding securities of the Company or any of
<PAGE>
its Subsidiaries that are convertible into or exchangeable for Common
Shares or such other securities (excluding any securities included in
clause (i) of this calculation), in each case with or without payment
of additional consideration in cash or property, whether or not such
options, warrants, rights or securities are then exercisable,
convertible or exchangeable, as the case may be, regardless of whether
or not any of such Common Shares or such other securities would be
deemed to be outstanding under generally accepted accounting
principles for purposes of determining book value or net income per
share and regardless of whether or not any of such Common Shares or
such other securities would be deemed to be outstanding under
paragraph (d)(1)(i) of Rule 13d-3 of the General Rules and Regulations
under the Exchange Act (either as in effect on the date of this Rights
Agreement or as subsequently amended) or under any other rule,
regulation or statute for the purpose of computing the percentage of
Common Shares outstanding owned by any particular Person as of any
time or for any other purpose.
"Common Stock" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
"Company" shall have the meaning set forth in the heading of
this Rights Agreement; provided, however, that if there is a Business
Combination, "Company" shall have the meaning set forth in Section
11(c)(III).
The term "control" with respect to any Person shall mean the
power to direct the management and policies of such Person, directly
or indirectly, by or through stock ownership, agency or otherwise, or
pursuant to or in connection with an agreement, arrangement or
understanding (written or oral) with one or more other Persons by or
through stock ownership, agency or otherwise; and the terms
"controlling" and "controlled" shall have meanings correlative to the
foregoing.
"Controlled Related Party" means, when used with respect to
any specified Person, each Affiliate or Associate of such Person if
such Person possesses, directly or indirectly, by or through stock
ownership, agency or otherwise, or pursuant to or in connection with
an agreement, arrangement or understanding (written or oral) with one
or more other persons, the power to direct decisions regarding the
acquisition, disposition or voting
<PAGE>
by such Affiliate or Associate of Common Shares or rights to acquire
or vote Common Shares.
"Distribution Date" shall have the meaning set forth in
Section 3(b).
"Exchange Act" shall mean the Securities Exchange Act of
1934, as in effect on the date in question, unless otherwise
specifically provided.
"Exchange Consideration" shall have the meaning set forth in
Section 11(b)(I).
"Expiration Date" shall have the meaning set forth in
Section 7(a).
"Major Part", when used with reference to the assets of the
Company and its Subsidiaries as of any date, shall mean assets (i)
having a fair market value aggregating 50% or more of the total fair
market value of all the assets of the Company and its Subsidiaries
(taken as a whole) as of the date in question, (ii) accounting for 50%
or more of the total value (net of depreciation and amortization) of
all the assets of the Company and its Subsidiaries (taken as a whole)
as would be shown on a consolidated or combined balance sheet of the
Company and its Subsidiaries as of the date in question, prepared in
accordance with generally accepted accounting principles then in
effect, or (iii) accounting for 50% or more of the total amount of
earnings before interest, taxes, depreciation and amortization or
revenues of the Company and its Subsidiaries (taken as a whole) as
would be shown on, or derived from, a consolidated or combined
statement of income of the Company and its Subsidiaries for the period
of 12 months ending on the last day of the Company's monthly
accounting period next preceding the date in question, prepared in
accordance with generally accepted accounting principles then in
effect.
"Market Value", when used with reference to Common Shares on
any date, shall be deemed to be the average of the daily closing
prices, per share, of such Common Shares for the period which is the
shorter of (1) 30 consecutive Trading Days immediately prior to the
date in question or (2) the number of consecutive Trading Days
beginning on the Trading Day immediately after the date of the first
public announcement of the event requiring a determination of the
Market Value and ending on the Trading Day immediately prior to the
record date of such event; provided, however, that,
<PAGE>
in the event that the Market Value of such Common Shares is to be
determined in whole or in part during a period following the
announcement by the issuer of such Common Shares of any action of the
type described in Section 12(a) that would require an adjustment
thereunder, then, and in each such case, the Market Value of such
Common Shares shall be appropriately adjusted to reflect the effect of
such action on the market price of such Common Shares. The closing
price for each Trading Day shall be the closing price quoted on the
composite tape for securities listed on the New York Stock Exchange,
or, if such securities are not quoted on such composite tape or if
such securities are not listed on such exchange, on the principal
United States securities exchange registered under the Exchange Act
(or any recognized foreign stock exchange) on which such securities
are listed, or, if such securities are not listed on any such
exchange, the average of the closing bid and asked quotations with
respect to a share of such securities on the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or
such other system then in use, or if no such quotations are available,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such securities selected
by the Board of Directors of the Company. If on any such Trading Day
no market maker is making a market in such securities, the closing
price of such securities on such Trading Day shall be deemed to be the
fair value of such securities as determined in good faith by the Board
of Directors of the Company (whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the
Rights Agent, the holders of Rights and all other Persons); provided,
however, that for the purpose of determining the closing price of the
Preferred Shares for any Trading Day on which there is no such market
maker for the Preferred Shares the closing price on such Trading Day
shall be deemed to be the Formula Number (as defined in the
Certificate of Designation) times the closing price of the Common
Shares of the Company on such Trading Day.
"Person" shall mean an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or
other entity.
"Preferred Shares" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this
Rights Agreement to Preferred Shares shall be deemed to include any
authorized
<PAGE>
fraction of a Preferred Share, unless the context otherwise requires.
"Principal Party" shall mean the Surviving Person in a
Business Combination; provided, however, that, if such Surviving
Person is a direct or indirect Subsidiary of any other Person,
"Principal Party" shall mean the Person which is the ultimate parent
of such Surviving Person and which is not itself a Subsidiary of
another Person. In the event ultimate control of such Surviving Person
is shared by two or more Persons, "Principal Party" shall mean that
Person that is immediately controlled by such two or more Persons.
"Purchase Price" with respect to each Right shall mean $150,
as such amount may from time to time be adjusted as provided herein,
and shall be payable in lawful money of the United States of America.
All references herein to the Purchase Price shall mean the Purchase
Price as in effect at the time in question.
"Qualifying Offer" shall mean an all-cash tender offer for
all outstanding Common Shares which meets all of the following
requirements:
(1) on or prior to the date such offer is commenced within
the meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act, such Person has, and has provided to the
Company, firm written commitments from responsible financial
institutions, which have been accepted by such Person (or one of
its Affiliates), to provide, subject only to customary terms and
conditions, funds for such offer which, when added to the amount
of cash and cash equivalents which such Person then has available
and has irrevocably committed in writing to the Company to
utilize for purposes of such offer, will be sufficient to pay for
all Common Shares outstanding on a fully diluted basis pursuant
to the offer and the second-step transaction required by clause
(v) below and all related expenses, together with copies of all
written materials prepared by such Person for such financial
institutions in connection with obtaining such financing
commitments;
(2) after the consummation of such offer, such Person, alone
or together with any of its Affiliates and Associates, owns
Common Shares representing a majority of the then outstanding
Common Shares;
<PAGE>
(3) such offer remains open for at least 45 Business Days;
provided, however, that (x) if there is any increase in the price
of such offer, such offer must remain open for at least an
additional 20 Business Days after the last such increase, (y)
such offer must remain open for at least 20 Business Days after
the date that any bona fide alternative offer is made which, in
the opinion of one or more investment banking firms designated by
the Company, provides for consideration per share in excess of
that provided for in such offer, and (z) such offer must remain
open for at least 20 Business Days after the date on which such
Person reduces the per share price offered in accordance with
clause (5)(y) below; provided further, however, that such offer
need not remain open, as a result of this clause (3), beyond (i)
the time which any other offer satisfying the criteria for a
Qualifying Offer is then required to be kept open under this
clause (3), or (ii) the scheduled expiration date, as such date
may be extended by public announcement on or prior to the then
scheduled expiration date, of any other tender or exchange offer
for Common Shares with respect to which the Board of Directors
has agreed to redeem the Rights immediately prior to acceptance
for payment of Common Shares thereunder (unless such other offer
is terminated prior to its expiration without any Common Shares
having been purchased thereunder);
(4) such offer is accompanied by a written opinion, in
customary form, of a nationally recognized investment banking
firm which is addressed to the holders of Common Shares other
than such Person and states that the price to be paid to holders
pursuant to the offer is fair from a financial point of view to
such holders and includes any written presentation of such firm
showing the analysis and range of values underlying such
conclusions; and
(5) prior to or on the date that such offer is commenced
within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, such Person makes an
irrevocable written commitment to the Company (x) to consummate a
transaction or transactions promptly upon the completion of such
offer, whereby all Common Shares not purchased in such offer will
be acquired at the same price per share paid in such offer,
subject only to the condition that the Board of Directors shall
have granted any approvals
<PAGE>
required to enable such Person to consummate such transaction or
transactions following consummation of such offer without
obtaining the vote of any other stockholder, (y) that such Person
will not make any amendment to the original offer which reduces
the per share price offered (other than a reduction to reflect
any dividend declared by the Company after the commencement of
such offer or any material change in the capital structure of the
Company initiated by the Company after the commencement of such
offer, whether by way of recapitalization, reorganization,
repurchase or otherwise), changes the form of consideration
offered, or reduces the number of shares being sought or which is
in any other respect materially adverse to the Company's
stockholders, and (z) that neither such Person nor of any its
Affiliates or Associates will make any offer for any equity
securities of the Company for a period of six months after the
commencement of the original offer if such original offer does
not result in the tender of the number of Common Shares required
to be purchased pursuant to clause (2) above, unless another
tender offer by another party for all outstanding Common Shares
is commenced that (a) constitutes a Qualifying Offer or (b) is
approved by the Board of Directors of the Company (in which
event, any new offer by such Person or of any of its Affiliates
or Associates must be at a price no less than that provided for
in such approved offer).
"Record Date" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
"Redemption Date" shall have the meaning set forth in
Section 24(a).
"Redemption Price" with respect to each Right shall mean
$.01, as such amount may from time to time be adjusted in accordance
with Section 12. All references herein to the Redemption Price shall
mean the Redemption Price as in effect at the time in question.
"Registered Common Shares" shall mean Common Shares which
are, as of the date of consummation of a Business Combination, and
have continuously been for the 12 months immediately preceding such
date, registered under Section 12 of the Exchange Act.
<PAGE>
"Right Certificate" shall mean a certificate evidencing a
Right in substantially the form attached as Exhibit B.
"Rights" shall mean the rights to purchase Preferred Shares
(or other securities) as provided in this Rights Agreement.
"Securities Act" shall mean the Securities Act of 1933, as
in effect on the date in question, unless otherwise specifically
provided.
"Subsidiary" shall mean a Person, at least a majority of the
total outstanding voting power (being the power under ordinary
circumstances (and not merely upon the happening of a contingency) to
vote in the election of directors of such Person (if such Person is a
corporation) or to participate in the management and control of such
Person (if such Person is not a corporation)) of which is owned,
directly or indirectly, by another Person or by one or more other
Subsidiaries of such other Person or by such other Person and one or
more other Subsidiaries of such other Person.
"Surviving Person" shall mean (1) the Person which is the
continuing or surviving Person in a consolidation or merger specified
in Section 11(c)(I)(i) or 11(c)(I)(ii) or (2) the Person to which the
Major Part of the assets of the Company and its Subsidiaries is sold,
leased, exchanged or otherwise transferred or disposed of in a
transaction specified in Section 11(c)(I)(iii); provided, however,
that, if the Major Part of the assets of the Company and its
Subsidiaries is sold, leased, exchanged or otherwise transferred or
disposed of in one or more related transactions specified in Section
11(c)(I)(iii) to more than one Person, the "Surviving Person" in such
case shall mean the Person that acquired assets of the Company and/or
its Subsidiaries with the greatest fair market value in such
transaction or transactions.
"Trading Day" shall mean a day on which the principal
national securities exchange (or principal recognized foreign stock
exchange, as the case may be) on which any securities or Rights, as
the case may be, are listed or admitted to trading is open for the
transaction of business or, if the securities or Rights in question
are not listed or admitted to trading on any national securities
<PAGE>
exchange (or recognized foreign stock exchange, as the case may be), a
Business Day.
SECTION 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time
appoint one or more co-Rights Agents as it may deem necessary or
desirable (the term "Rights Agent" being used herein to refer,
collectively, to the Rights Agent together with any such co-Rights
Agents). In the event the Company appoints one or more co-Rights
Agents, the respective duties of the Rights Agent and any co-Rights
Agents shall be as the Company shall determine.
SECTION 3. Issue of Rights and Right Certificates. (a) One
Right shall be associated with each Common Share outstanding on the
Record Date, each additional Common Share that shall become
outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Expiration Date and each
additional Common Share with which Rights are issued after the
Distribution Date but prior to the earlier of the Redemption Date or
the Expiration Date as provided in Section 23; provided, however,
that, if the number of outstanding Rights are combined into a smaller
number of outstanding Rights pursuant to Section 12(a), the
appropriate fractional Right determined pursuant to such Section shall
thereafter be associated with each such Common Share.
(b) Until the earlier of (i) such time as the Company learns
that a Person has become an Acquiring Person or (ii) the Close of
Business on such date, if any, as may be designated by the Board of
Directors of the Company following the commencement of, or first
public disclosure of an intent to commence, a tender or exchange offer
by any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any of its
Subsidiaries, or any Person holding Common Shares for or pursuant to
the terms of any such employee benefit plan and other than a
Qualifying Offer) for outstanding Common Shares, if upon consummation
of such tender or exchange offer such Person could be the Beneficial
Owner of more than 15% of the outstanding Common Shares (the Close of
Business on the earlier of such dates being the "Distribution Date"),
(x) the Rights will be evidenced by the certificates for Common Shares
registered in the names of the holders thereof
<PAGE>
and not by separate Right Certificates and (y) the Rights, including
the right to receive Right Certificates, will be transferable only in
connection with the transfer of Common Shares. As soon as practicable
after the Distribution Date, the Rights Agent will send, by
first-class, postage-prepaid mail, to each record holder of Common
Shares as of the Distribution Date, at the address of such holder
shown on the records of the Company, a Right Certificate evidencing
one whole Right for each Common Share (or for the number of Common
Shares with which one whole Right is then associated if the number of
Rights per Common Share held by such record holder has been adjusted
in accordance with the proviso in Section 3(a)). If the number of
Rights associated with each Common Share has been adjusted in
accordance with the proviso in Section 3(a), at the time of
distribution of the Right Certificates the Company may make any
necessary and appropriate rounding adjustments so that Right
Certificates representing only whole numbers of Rights are distributed
and cash is paid in lieu of any fractional Right in accordance with
Section 15(a). As of and after the Distribution Date, the Rights will
be evidenced solely by such Right Certificates.
(c) With respect to any certificate for Common Shares, until
the earliest of the Distribution Date, the Redemption Date or the
Expiration Date, the Rights associated with the Common Shares
represented by any such certificate shall be evidenced by such
certificate alone, the registered holders of the Common Shares shall
also be the registered holders of the associated Rights and the
surrender for transfer of any such certificate shall also constitute
the transfer of the Rights associated with the Common Shares
represented thereby.
(d) Certificates issued for Common Shares after the Record
Date (including, without limitation, upon transfer or exchange of
outstanding Common Shares), but prior to the earliest of the
Distribution Date, the Redemption Date or the Expiration Date, may
have printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement dated
as of October 10, 1996, as it may be amended from time to time
(the "Rights Agreement"), between Time Warner Inc. (the
"Company") and ChaseMellon Shareholder Services L.L.C., as Rights
<PAGE>
Agent (the "Rights Agent"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Rights Agent will mail to the
holder of this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. Rights
beneficially owned by Acquiring Persons or their Affiliates or
Associates (as such terms are defined in the Rights Agreement)
and by any subsequent holder of such Rights are null and void and
nontransferable.
Notwithstanding this paragraph (d), the omission of a legend shall not
affect the enforceability of any part of this Rights Agreement or the
rights of any holder of Rights.
SECTION 4. Form of Right Certificates. The Right
Certificates (and the form of election to purchase and form of
assignment to be printed on the reverse side thereof) shall be in
substantially the form set forth as Exhibit B and may have such marks
of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and
as are not inconsistent with the provisions of this Rights Agreement,
or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of
Sections 7, 11 and 23, the Right Certificates, whenever issued, shall
be dated as of the Distribution Date, and on their face shall entitle
the holders thereof to purchase such number of Preferred Shares as
shall be set forth therein for the Purchase Price set forth therein,
subject to adjustment from time to time as herein provided.
SECTION 5. Execution, Countersignature and Registration. (a)
The Right Certificates shall be executed on behalf of the Company by
the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Operating Officer, the Treasurer or a Vice President
(whether preceded by any additional title) of the Company, either
manually or by facsimile signature, and have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the
Secretary, an Assistant Secretary or a Vice
<PAGE>
President (whether preceded by any additional title, provided that
such Vice President shall not have also executed the Right
Certificates) of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid or obligatory for any purpose
unless so countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such an
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates may
nevertheless be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the
person who signed such Right Certificates had not ceased to be such an
officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any person who, at the actual date of
execution of such Right Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although at the date of
execution of this Rights Agreement any such person was not such an
officer of the Company.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office in New York, New
York, books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights
evidenced by each of the Right Certificates, the certificate number of
each of the Right Certificates and the date of each of the Right
Certificates.
SECTION 6. Transfer, Split-Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates; Uncertificated Rights. (a) Subject to the provisions of
Sections 7(e) and 15, at any time after the Distribution Date, and at
or prior to the Close of Business on the earlier of the Redemption
Date or the Expiration Date, any Right Certificate or Right
Certificates may be transferred, split-up, combined or exchanged for
another Right Certificate or Right Certificates representing, in the
aggregate, the same number of Rights as the Right Certificate or Right
Certificates surrendered then represented. Any registered holder
desiring to transfer, split-up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights
Agent and shall surrender the Right Certificate or Right Certificates
to be transferred, split-
<PAGE>
up, combined or exchanged at the principal office of the Rights Agent;
provided, however, that neither the Rights Agent nor the Company shall
be obligated to take any action whatsoever with respect to the
transfer of any Right Certificate surrendered for transfer until the
registered holder shall have completed and signed the certification
contained in the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall, subject to Sections 7(e)
and 15, countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection
with any transfer, split-up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a valid Right Certificate, and, in case
of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request, reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancelation of the
Right Certificate if mutilated, the Company will make a new Right
Certificate of like tenor and deliver such new Right Certificate to
the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the Company
and the Rights Agent may amend this Rights Agreement to provide for
uncertificated Rights in addition to or in place of Rights evidenced
by Right Certificates.
SECTION 7. Exercise of Rights; Expiration Date of Rights.
(a) Subject to Section 7(e) and except as otherwise provided herein
(including Section 11), each Right shall entitle the registered holder
thereof, upon exercise thereof as provided herein, to purchase for the
Purchase Price, at any time after the Distribution Date and at or
prior to the earlier of (i) the Close of Business on January 20, 2004
(the Close of Business on such date being the "Expiration Date"), or
(ii) the Redemption Date, one one-thousandths (1/1,000ths) of a
Preferred Share, subject
<PAGE>
to adjustment from time to time as provided in Sections 11 and 12.
(b) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date,
upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights
Agent at the principal office of the Rights Agent in New York, New
York, together with payment of the Purchase Price for each one
one-thousandths (1/1,000ths) of a Preferred Share as to which the
Rights are exercised, at or prior to the earlier of (i) the Expiration
Date or (ii) the Redemption Date.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the
Preferred Shares to be purchased together with an amount equal to any
applicable transfer tax, in lawful money of the United States of
America, in cash or by certified check or money order payable to the
order of the Company, the Rights Agent shall thereupon (i) either (A)
promptly requisition from any transfer agent of the Preferred Shares
(or make available, if the Rights Agent is the transfer agent)
certificates for the number of Preferred Shares to be purchased and
the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests or (B) if the Company shall have elected to
deposit the Preferred Shares with a depositary agent under a
depositary arrangement, promptly requisition from the depositary agent
depositary receipts representing the number of one one-thousandths
(1/1,000ths) of a Preferred Share to be purchased (in which case
certificates for the Preferred Shares to be represented by such
receipts shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to comply with
all such requests, (ii) when appropriate, promptly requisition from
the Company the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 15, (iii) promptly after
receipt of such certificates or depositary receipts, cause the same to
be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt
promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.
<PAGE>
(d) In case the registered holder of any Right Certificate
shall exercise fewer than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 15.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, any Rights that are at any time beneficially owned by an
Acquiring Person or any Affiliate or Associate of an Acquiring Person
shall be null and void and nontransferable, and any holder of any such
Right (including any purported transferee or subsequent holder) shall
not have any right to exercise or transfer any such Right.
(f) Notwithstanding anything in this Rights Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder of any
Right Certificates upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
(g) The Company may temporarily suspend, for a period of
time not to exceed 90 calendar days after the Distribution Date, the
exercisability of the Rights in order to prepare and file a
registration statement under the Securities Act, on appropriate form,
with respect to the Preferred Shares purchasable upon exercise of the
Rights and permit such registration statement to become effective;
provided, however, that no such suspension shall remain effective
after, and the Rights shall without any further action by the Company
or any other Person become exercisable immediately upon, the
effectiveness of such registration statement. Upon any such
suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended and
shall issue a further public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision
herein to the contrary, the Rights shall not be exercisable
<PAGE>
in any jurisdiction if the requisite qualification under the blue sky
or securities laws of such jurisdiction shall not have been obtained
or the exercise of the Rights shall not be permitted under applicable
law.
SECTION 8. Cancelation and Destruction of Right
Certificates. All Right Certificates surrendered or presented for the
purpose of exercise, transfer, split-up, combination or exchange
shall, and any Right Certificate representing Rights that have become
null and void and nontransferable pursuant to Section 7(e) surrendered
or presented for any purpose shall, if surrendered or presented to the
Company or to any of its agents, be delivered to the Rights Agent for
cancelation or in canceled form, or, if surrendered or presented to
the Rights Agent, shall be canceled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly permitted by this
Rights Agreement. The Company shall deliver to the Rights Agent for
cancelation and retirement, and the Rights Agent shall so cancel and
retire, any Right Certificate purchased or acquired by the Company.
The Rights Agent shall deliver all canceled Right Certificates to the
Company, or shall, at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 9. Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares
or any authorized and issued Preferred Shares held in its treasury,
free from preemptive rights or any right of first refusal, a number of
Preferred Shares sufficient to permit the exercise in full of all
outstanding Rights.
(b) In the event that there shall not be sufficient
Preferred Shares issued but not outstanding or authorized but unissued
to permit the exercise or exchange of Rights in accordance with
Section 11, the Company covenants and agrees that it will take all
such action as may be necessary to authorize additional Preferred
Shares for issuance upon the exercise or exchange of Rights pursuant
to Section 11; provided, however, that if the Company is unable to
cause the authorization of additional Preferred Shares, then the
Company shall, or in lieu of seeking any such authorization, the
Company may, to the extent necessary and permitted by applicable law
and any agreements or instruments in effect prior to the
<PAGE>
Distribution Date to which it is a party, (A) upon surrender of a
Right, pay cash equal to the Purchase Price in lieu of issuing
Preferred Shares and requiring payment therefor, (B) upon due exercise
of a Right and payment of the Purchase Price for each Preferred Share
as to which such Right is exercised, issue equity securities having a
value equal to the value of the Preferred Shares which otherwise would
have been issuable pursuant to Section 11, which value shall be
determined by a nationally recognized investment banking firm selected
by the Board or (C) upon due exercise of a Right and payment of the
Purchase Price for each Preferred Share as to which such Right is
exercised, distribute a combination of Preferred Shares, cash and/or
other equity and/or debt securities having an aggregate value equal to
the value of the Preferred Shares which otherwise would have been
issuable pursuant to Section 11, which value shall be determined by a
nationally recognized investment banking firm selected by the Board.
To the extent that any legal or contractual restrictions (pursuant to
agreements or instruments in effect prior to the Distribution Date to
which it is party) prevent the Company from paying the full amount
payable in accordance with the foregoing sentence, the Company shall
pay to holders of the Rights as to which such payments are being made
all amounts which are not then restricted on a pro rata basis as such
payments become permissible under such legal or contractual
restrictions until such payments have been paid in full.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares
delivered upon exercise or exchange of Rights shall, at the time of
delivery of the certificates for such Preferred Shares (subject to
payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
(d) So long as the Preferred Shares issuable upon the
exercise or exchange of Rights are to be listed on any national
securities exchange, the Company covenants and agrees to use its best
efforts to cause, from and after such time as the Rights become
exercisable or exchangeable, all Preferred Shares reserved for such
issuance to be listed on such securities exchange upon official notice
of issuance upon such exercise or exchange.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all Federal and state transfer taxes
and charges which may be payable in
<PAGE>
respect of the issuance or delivery of Right Certificates or of any
Preferred Shares or Common Shares or other securities upon the
exercise or exchange of the Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than,
or in respect of the issuance or delivery of certificates for the
Preferred Shares or Common Shares or other securities, as the case may
be, in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or exchange or
to issue or deliver any certificates for Preferred Shares or Common
Shares or other securities, as the case may be, upon the exercise or
exchange of any Rights until any such tax shall have been paid (any
such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
SECTION 10. Preferred Shares Record Date. Each Person in
whose name any certificate for Preferred Shares or Common Shares or
other securities is issued upon the exercise or exchange of Rights
shall for all purposes be deemed to have become the holder of record
of the Preferred Shares or Common Shares or other securities, as the
case may be, represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of any Purchase Price (and any
applicable transfer taxes) was made; provided, however, that, if the
date of such surrender and payment is a date upon which the transfer
books of the Company for the Preferred Shares or Common Shares or
other securities, as the case may be, are closed, such Person shall be
deemed to have become the record holder of such Preferred Shares or
Common Shares or other securities, as the case may be, on, and such
certificate shall be dated, the next succeeding Business Day on which
the transfer books of the Company for the Preferred Shares or Common
Shares or other securities, as the case may be, are open.
SECTION 11. Adjustments in Rights After There Is an
Acquiring Person; Exchange of Rights for Shares; Business
Combinations. (a) Upon a Person becoming an Acquiring Person, proper
provision shall be made so that each holder of a Right, except as
provided in Section 7(e), shall thereafter have a right to receive,
upon exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, such number of one one-thousandths
<PAGE>
(1/1,000ths) of a Preferred Share as shall equal the result obtained
by multiplying the Purchase Price by a fraction, the numerator of
which is the number of one one-thousandths (1/1,000ths) of a Preferred
Share for which a Right is then exercisable and the denominator of
which is 50% of the Market Value of the Common Shares on the date on
which a Person becomes an Acquiring Person. As soon as practicable
after a Person becomes an Acquiring Person (provided the Company shall
not have elected to make the exchange permitted by Section 11(b)(I)
for all outstanding Rights), the Company covenants and agrees to use
its best efforts to:
(I) prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the
Preferred Shares purchasable upon exercise of the Rights;
(II) cause such registration statement to become effective
as soon as practicable after such filing;
(III) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date; and
(IV) qualify or register the Preferred Shares purchasable
upon exercise of the Rights under the blue sky or securities laws
of such jurisdictions as may be necessary or appropriate.
(b)(I) The Board of Directors of the Company may, at its
option, at any time after a Person becomes an Acquiring Person,
mandatorily exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that shall have
become null and void and nontransferable pursuant to the provisions of
Section 7(e)) for consideration per Right consisting of one-half of
the securities that would be issuable at such time upon the exercise
of one Right in accordance with Section 11(a) or, if applicable,
Section 9(b) (the consideration issuable per Right pursuant to this
Section 11(b)(I) being the "Exchange Consideration"). The Board of
Directors of the Company may, at its option, issue, in substitution
for Preferred Shares, Common Shares in an amount per Preferred Share
equal to the Formula Number (as defined in the Certificate of
Designation) if there are sufficient Common Shares issued but not
outstanding or authorized but unissued. If the Board of Directors of
the Company elects to exchange all the
<PAGE>
Rights for Exchange Consideration pursuant to this Section 11(b)(I)
prior to the physical distribution of the Rights Certificates, the
Corporation may distribute the Exchange Consideration in lieu of
distributing Right Certificates, in which case for purposes of this
Rights Agreement holders of Rights shall be deemed to have
simultaneously received and surrendered for exchange Right
Certificates on the date of such distribution.
(II) Any action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 11(b)(I) shall
be irrevocable and, immediately upon the taking of such action and
without any further action and without any notice, the right to
exercise any such Right pursuant to Section 11(a) shall terminate and
the only right thereafter of a holder of such Right shall be to
receive the Exchange Consideration in exchange for each such Right
held by such holder or, if the Exchange Consideration shall not have
been paid or issued, to exercise any such Right pursuant to Section
11(c)(I). The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all
holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state
the method by which the exchange of the Rights for the Exchange
Consideration will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights
(other than Rights which shall have become null and void and
nontransferable pursuant to the provisions of Section 7(e)) held by
each holder of Rights.
(c)(I) In the event that, following a Distribution Date,
directly or indirectly, any transactions specified in the following
clause (i), (ii) or (iii) of this Section 11(c) (each such transaction
being a "Business Combination") shall be consummated:
(i) the Company shall consolidate with, or merge with and
into, any Acquiring Person or any Affiliate or Associate of an
Acquiring Person;
<PAGE>
(ii) any Acquiring Person or any Affiliate or Associate of
an Acquiring Person shall merge with and into the Company and, in
connection with such merger, all or part of the Common Shares
shall be changed into or exchanged for capital stock or other
securities of the Company or of any Acquiring Person or Affiliate
or Associate of an Acquiring Person or cash or any other
property; or
(iii) the Company shall sell, lease, exchange or otherwise
transfer or dispose of (or one or more of its Subsidiaries shall
sell, lease, exchange or otherwise transfer or dispose of), in
one or more transactions, the Major Part of the assets of the
Company and its Subsidiaries (taken as a whole) to any Acquiring
Person or any Affiliate or Associate of an Acquiring Person,
then, in each such case, proper provision shall be made so that each
holder of a Right, except as provided in Section 7(e), shall
thereafter have the right to receive, upon the exercise thereof for
the Purchase Price in accordance with the terms of this Rights
Agreement, the securities specified below (or, at such holder's
option, the securities specified in Section 11(a)):
(A) If the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the
Purchase Price in accordance with the terms of this Rights
Agreement, such number of Registered Common Shares of such
Principal Party, free and clear of all liens, encumbrances or
other adverse claims, as shall have an aggregate Market Value
equal to the result obtained by multiplying the Purchase Price by
two;
(B) If the Principal Party involved in such Business
Combination does not have Registered Common Shares outstanding,
each Right shall thereafter represent the right to receive, upon
the exercise thereof for the Purchase Price in accordance with
the terms of this Rights Agreement, at the election of the holder
of such Right at the time of the exercise thereof, any of:
(1) such number of Common Shares of the Surviving
Person in such Business Combination as shall have an
aggregate Book Value immediately
<PAGE>
after giving effect to such Business Combination equal to
the result obtained by multiplying the Purchase Price by
two;
(2) such number of Common Shares of the Principal Party
in such Business Combination (if the Principal Party is not
also the Surviving Person in such Business Combination) as
shall have an aggregate Book Value immediately after giving
effect to such Business Combination equal to the result
obtained by multiplying the Purchase Price by two; or
(3) if the Principal Party in such Business Combination
is an Affiliate of one or more Persons which has Registered
Common Shares outstanding, such number of Registered Common
Shares of whichever of such Affiliates of the Principal
Party has Registered Common Shares with the greatest
aggregate Market Value on the date of consummation of such
Business Combination as shall have an aggregate Market Value
on the date of such Business Combination equal to the result
obtained by multiplying the Purchase Price by two.
(II) The Company shall not consummate any Business
Combination unless each issuer of Common Shares for which Rights may
be exercised, as set forth in this Section 11(c), shall have
sufficient authorized Common Shares that have not been issued or
reserved for issuance (and which shall, when issued upon exercise
thereof in accordance with this Rights Agreement, be validly issued,
fully paid and nonassessable and free of preemptive rights, rights of
first refusal or any other restrictions or limitations on the transfer
or ownership thereof) to permit the exercise in full of the Rights in
accordance with this Section 11(c) and unless prior thereto:
(i) a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Common
Shares of such issuer purchasable upon exercise of the Rights,
shall be effective under the Securities Act; and
(ii) the Company and each such issuer shall have:
(A) executed and delivered to the Rights Agent a
supplemental agreement providing for the
<PAGE>
assumption by such issuer of the obligations set forth in
this Section 11(c) (including the obligation of such issuer
to issue Common Shares upon the exercise of Rights in
accordance with the terms set forth in Sections 11(c)(I) and
11(c)(III)) and further providing that such issuer, at its
own expense, will use its best efforts to:
(1) cause a registration statement under the
Securities Act on an appropriate form, with respect to
the Rights and the Common Shares of such issuer
purchasable upon exercise of the Rights, to remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the
Expiration Date;
(2) qualify or register the Rights and the Common
Shares of such issuer purchasable upon exercise of the
Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate; and
(3) list the Rights and the Common Shares of such
issuer purchasable upon exercise of the Rights on each
national securities exchange on which the Common Shares
were listed prior to the consummation of the Business
Combination or, if the Common Shares were not listed on
a national securities exchange prior to the
consummation of the Business Combination, on a national
securities exchange;
(B) furnished to the Rights Agent a written opinion of
independent counsel stating that such supplemental agreement
is a valid, binding and enforceable agreement of such
issuer; and
(C) filed with the Rights Agent a certificate of a
nationally recognized firm of independent accountants
setting forth the number of Common Shares of such issuer
which may be purchased upon the exercise of each Right after
the consummation of such Business Combination.
<PAGE>
(III) After consummation of any Business Combination and
subject to the provisions of Section 11(c)(II), (i) each issuer of
Common Shares for which Rights may be exercised as set forth in this
Section 11(c) shall be liable for, and shall assume, by virtue of such
Business Combination, all the obligations and duties of the Company
pursuant to this Rights Agreement, (ii) the term "Company" shall
thereafter be deemed to refer to such issuer, (iii) each such issuer
shall take such steps in connection with such consummation as may be
necessary to assure that the provisions hereof (including the
provisions of Sections 11(a) and 11(c)) shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common
Shares thereafter deliverable upon the exercise of the Rights, and
(iv) the number of Common Shares of each such issuer thereafter
receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions of Sections 11 and 12 and the provisions
of Sections 7, 9 and 10 with respect to the Preferred Shares shall
apply, as nearly as reasonably may be, on like terms to any such
Common Shares.
SECTION 12. Certain Adjustments. (a) To preserve the actual
or potential economic value of the Rights, if at any time after the
date of this Rights Agreement there shall be any change in the Common
Shares or the Preferred Shares, whether by reason of stock dividends,
stock splits, recapitalizations, mergers, consolidations, combinations
or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any
distribution or issuance of cash, assets, evidences of indebtedness or
subscription rights, options or warrants to holders of Common Shares
or Preferred Shares, as the case may be (other than distribution of
the Rights or regular quarterly cash dividends) or otherwise, then, in
each such event the Board of Directors of the Company shall make such
appropriate adjustments in the number of Preferred Shares (or the
number and kind of other securities) issuable upon exercise of each
Right, the Purchase Price and Redemption Price in effect at such time
and the number of Rights outstanding at such time (including the
number of Rights or fractional Rights associated with each Common
Share) such that following such adjustment such event shall not have
had the effect of reducing or limiting the benefits the holders of the
Rights would have had absent such event.
<PAGE>
(b) If, as a result of an adjustment made pursuant to
Section 12(a), the holder of any Right thereafter exercised shall
become entitled to receive any securities other than Preferred Shares,
thereafter the number of such securities so receivable upon exercise
of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions of Sections 11 and 12 and the provisions of Sections 7, 9
and 10 with respect to the Preferred Shares shall apply, as nearly as
reasonably may be, on like terms to any such other securities.
(c) All Rights originally issued by the Company subsequent
to any adjustment made to the amount of Preferred Shares or other
securities relating to a Right shall evidence the right to purchase,
for the Purchase Price, the adjusted number and kind of securities
purchasable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(d) Irrespective of any adjustment or change in the Purchase
Price or the number of Preferred Shares or number or kind of other
securities issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express
the terms which were expressed in the initial Right Certificates
issued hereunder.
(e) In any case in which action taken pursuant to Section
12(a) requires that an adjustment be made effective as of a record
date for a specified event, the Company may elect to defer until the
occurrence of such event the issuing to the holder of any Right
exercised after such record date the Preferred Shares and/or other
securities, if any, issuable upon such exercise over and above the
Preferred Shares and/or other securities, if any, issuable before
giving effect to such adjustment; provided, however, that the Company
shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional
securities upon the occurrence of the event requiring such adjustment.
SECTION 13. Certificate of Adjustment. Whenever an
adjustment is made as provided in Section 11 or 12, the Company shall
(a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment (b)
promptly file with the Rights Agent and with each transfer agent for
the Preferred
<PAGE>
Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate (or, prior to the Distribution
Date, of the Common Shares) in accordance with Section 25. The Rights
Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained.
SECTION 14. Additional Covenants. (a) Notwithstanding any
other provision of this Rights Agreement, no adjustment to the number
of Preferred Shares (or fractions of a share) or other securities for
which a Right is exercisable or the number of Rights outstanding or
associated with each Common Share or any similar or other adjustment
shall be made or be effective if such adjustment would have the effect
of reducing or limiting the benefits the holders of the Rights would
have had absent such adjustment, including, without limitation, the
benefits under Sections 11 and 12, unless the terms of this Rights
Agreement are amended so as to preserve such benefits.
(b) The Company covenants and agrees that, after the
Distribution Date, except as permitted by Section 26, it will not take
(or permit any Subsidiary of the Company to take) any action if at the
time such action is taken it is intended or reasonably foreseeable
that such action will reduce or otherwise limit the benefits the
holders of the Rights would have had absent such action, including,
without limitation, the benefits under Sections 11 and 12. Any action
taken by the Company during any period after any Person becomes an
Acquiring Person but prior to the Distribution Date shall be null and
void unless such action could be taken under this Section 14(b) from
and after the Distribution Date. The Company shall not consummate any
Business Combination if any issuer of Common Shares for which Rights
may be exercised after such Business Combination in accordance with
Section 11(c) shall have taken any action that reduces or otherwise
limits the benefits the holders of the Rights would have had absent
such action, including, without limitation, the benefits under
Sections 11 and 12.
SECTION 15. Fractional Rights and Fractional Shares. (a) The
Company may, but shall not be required to, issue fractions of Rights
or distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, the Company may pay to the registered
holders of the Right Certificates with regard to which such fractional
Rights would otherwise be issuable an amount in
<PAGE>
cash equal to the same fraction of the current market value of a whole
Right. For purposes of this Section 15(a), the current market value of
a whole Right shall be the closing price of the Rights (as determined
pursuant to the second and third sentences of the definition of Market
Value contained in Section 1) for the Trading Day immediately prior to
the date on which such fractional Rights would have been otherwise
issuable.
(b) The Company may, but shall not be required to, issue
fractions of Preferred Shares upon exercise of the Rights or
distribute certificates which evidence fractional Preferred Shares. In
lieu of fractional Preferred Shares, the Company may elect to (i)
utilize a depository arrangement as provided by the terms of the
Preferred Shares or (ii) in the case of a fraction of a Preferred
Share (other than one one-thousandths (1/1,000ths) of a Preferred
Share or any integral multiple thereof), pay to the registered holders
of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current
market value of one Preferred Share, if any are outstanding and
publicly traded (or the Formula Number times the current market value
of one Common Share if the Preferred Shares are not outstanding and
publicly traded). For purposes of this Section 15(b), the current
market value of a Preferred Share (or Common Share) shall be the
closing price of a Preferred Share (or Common Share) (as determined
pursuant to the second and third sentences of the definition of Market
Value contained in Section 1) for the Trading Day immediately prior to
the date of such exercise. If, as a result of an adjustment made
pursuant to Section 12(a), the holder of any Right thereafter
exercised shall become entitled to receive any securities other than
Preferred Shares, the provisions of this Section 15(b) shall apply, as
nearly as reasonably may be, on like terms to such other securities.
(c) The Company may, but shall not be required to, issue
fractions of Common Shares upon exchange of Rights pursuant to Section
11(b), or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company may pay
to the registered holders of the Right Certificates with regard to
which such fractional Common Shares would otherwise be issuable an
amount in cash equal to the same fraction of the current Market Value
of one Common Share as of the date on which a Person became an
Acquiring Person.
<PAGE>
(d) The holder of Rights by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right except as provided in this
Section 15.
SECTION 16. Rights of Action. (a) All rights of action in
respect of this Rights Agreement are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and
any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the Common Shares) may, in his own
behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the
Rights evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Rights Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Rights Agreement and
shall be entitled to specific performance of the obligations of any
Person under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Rights
Agreement.
(b) Any holder of Rights who prevails in an action to
enforce the provisions of this Rights Agreement shall be entitled to
recover the reasonable costs and expenses, including attorneys' fees,
incurred in such action.
SECTION 17. Transfer and Ownership of Rights and Right
Certificates. (a) Prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares.
(b) After the Distribution Date, the Right Certificates will
be transferable, subject to Section 7(e), only on the registry books
of the Rights Agent if surrendered at the principal office of the
Rights Agent, duly endorsed or accompanied by a proper instrument of
transfer.
(c) The Company and the Rights Agent may deem and treat the
Person in whose name a Right Certificate (or,
<PAGE>
prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificates or the associated certificate for
Common Shares made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.
SECTION 18. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall be
entitled to vote or receive dividends or be deemed, for any purpose,
the holder of the Preferred Shares or of any other securities of the
Company which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or in
any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a stockholder of the
Company, including, without limitation, any right to vote for the
election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
stockholders, or to receive dividends or other distributions or
subscription rights, or otherwise, until the Right or Rights evidenced
by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
SECTION 19. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this
Rights Agreement and the exercise and performance of its duties
hereunder.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted
by it in connection with its administration of this Rights Agreement
in reliance upon any Right Certificate or certificate for the Common
Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the
proper Person or Persons.
<PAGE>
SECTION 20. Merger or Consolidation or Change of Rights
Agent. (a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the stock transfer
or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Rights Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided that
such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22. In case, at the time
such successor Rights Agent shall succeed to the agency created by
this Rights Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and, in case at that time
any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the name of
the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates
so countersigned; and, in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have
the full force provided in the Right Certificates and in this Rights
Agreement.
SECTION 21. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Rights Agreement
upon the following terms and conditions, by all of which the Company
and the holders of Right Certificates (or, prior to the Distribution
Date, of the Common Shares), by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the
<PAGE>
opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken, suffered or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the identity
of any Acquiring Person) be proved or established by the Company prior
to taking, refraining from taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, the
Chief Operating Officer, the Chief Financial Officer, a Vice President
(whether preceded by any additional title), the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of
this Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or wilful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Rights
Agreement or in the Right Certificates (except as to its
countersignature thereof) or be required to verify the same, but all
such statements and recitals are and shall be deemed to have been made
by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Rights Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Rights Agreement or in any Right Certificate; nor
shall it be responsible for any adjustment required under the
provisions of Section 11 or 12 or responsible for the manner, method
or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect
<PAGE>
to the exercise of Rights evidenced by Right Certificates after actual
notice of any such adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization
or reservation of any Preferred Shares or Common Shares to be issued
pursuant to this Rights Agreement or any Right Certificate or as to
whether any Preferred Shares or Common Shares will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, a Vice
President (whether preceded by any additional title), the Secretary or
the Treasurer of the Company, in connection with its duties and it
shall not be liable for any action taken or suffered to be taken by it
in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not the Rights Agent under this
Rights Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct
<PAGE>
provided reasonable care was exercised in the selection and continued
employment thereof.
(j) The Company agrees to indemnify and to hold the Rights
Agent harmless against any loss, liability, damage or expense
(including reasonable fees and expenses of legal counsel) which the
Rights Agent may incur resulting from its actions as Rights Agent
pursuant to this Rights Agreement; provided, however, that the Rights
Agent shall not be indemnified or held harmless with respect to any
such loss, liability, damage or expense incurred by the Rights Agent
as a result of, or arising out of, its own negligence, bad faith or
wilful misconduct. In no case shall the Company be liable with respect
to any action, proceeding, suit or claim against the Rights Agent
unless the Rights Agent shall have notified the Company, by letter or
by facsimile confirmed by letter, of the assertion of any action,
proceeding, suit or claim against the Rights Agent, promptly after the
Rights Agent shall have notice of any such assertion of an action,
proceeding, suit or claim or have been served with the summons or
other first legal process giving information as to the nature and
basis of the action, proceeding, suit or claim. The Company shall be
entitled to participate at its own expense in the defense of any such
action, proceeding, suit or claim, and, if the Company so elects, the
Company shall assume the defense of any such action, proceeding, suit
or claim. In the event that the Company assumes such defense, the
Company shall not thereafter be liable for the fees and expenses of
any additional counsel retained by the Rights Agent, so long as the
Company shall retain counsel satisfactory to the Rights Agent, in the
exercise of its reasonable judgment, to defend such action,
proceeding, suit or claim. The Rights Agent agrees not to settle any
litigation in connection with any action, proceeding, suit or claim
with respect to which it may seek indemnification from the Company
without the prior written consent of the Company.
SECTION 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Rights Agreement upon 30 days' notice in writing mailed to
the Company and to each transfer agent of the Common Shares and the
Preferred Shares by registered or certified mail, and to the holders
of the Right Certificates (or, prior to the Distribution Date, of the
Common Shares) by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or
<PAGE>
successor Rights Agent, as the case may be, and to each transfer agent
of the Common Shares and the Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates (or,
prior to the Distribution Date, of the Common Shares) by first-class
mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (or, prior to the Distribution Date,
of the Common Shares) (who shall, with such notice, submit his Right
Certificate or, prior to the Distribution Date, the certificate
representing his Common Shares, for inspection by the Company), then
the registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares) may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing business under the
laws of the United States or of the State of New York (or of any other
state of the United States so long as such corporation is authorized
to conduct a stock transfer or corporate trust business in the State
of New York), in good standing, having a principal office in the State
of New York, which is authorized under such laws to exercise stock
transfer or corporate trust powers and is subject to supervision or
examination by Federal or state authority and which has at the time of
its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000; provided that the principal transfer agent for the
Common Shares shall in any event be qualified to be the Rights Agent.
After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Shares and the Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Right Certificates (or, prior
to the Distribution Date, of the Common Shares). Failure to
<PAGE>
give any notice provided for in this Section 22, however, or any
defect therein shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
SECTION 23. Issuance of Additional Rights and Right
Certificates. Notwithstanding any of the provisions of this Rights
Agreement or of the Rights to the contrary, the Company may, at its
option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or
change made in accordance with the provisions of this Rights
Agreement. In addition, in connection with the issuance or sale of
Common Shares following the Distribution Date and prior to the earlier
of the Redemption Date and the Expiration Date, the Company (a) shall,
with respect to Common Shares so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement,
or upon the exercise, conversion or exchange of securities, notes or
debentures issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right Certificate shall be issued if, and to
the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Right
Certificate would be issued, and (ii) no such Right Certificate
shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
SECTION 24. Redemption and Termination. (a) The Board of
Directors of the Company may, at its option, at any time prior to the
earlier of (i) such time as a Person becomes an Acquiring Person and
(ii) the Expiration Date, order the redemption of all, but not fewer
than all, the then outstanding Rights at the Redemption Price (the
date of such redemption being the "Redemption Date"), and the Company,
at its option, may pay the Redemption Price either in cash or Common
Shares or other securities of the Company deemed by the Board of
Directors of the Company, in the exercise of its sole discretion, to
be at least equivalent in value to the Redemption Price; provided,
however, that, in addition to any other limitations contained herein
on the right to redeem outstanding Rights (including the occurrence
<PAGE>
of any event or the expiration of any period after which the Rights
may no longer be redeemed), for the 120-day period after any date of a
change (resulting from a proxy or consent solicitation) in a majority
of the Board of Directors of the Company in office at the commencement
of such solicitation, the Rights may only be redeemed if (A) there are
directors then in office who were in office at the commencement of
such solicitation and (B) the Board of Directors of the Company, with
the concurrence of a majority of such directors then in office,
determines that such redemption is, in their judgment, in the best
interests of the Company and its stockholders.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. Within 10 Business
Days after the action of the Board of Directors of the Company
ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the transfer agent
for the Common Shares. Each such notice of redemption will state the
method by which payment of the Redemption Price will be made. The
notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder of Rights
receives such notice. In any case, failure to give such notice by
mail, or any defect in the notice, to any particular holder of Rights
shall not affect the sufficiency of the notice to other holders of
Rights.
SECTION 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of
a Right Certificate (or, prior to the Distribution Date, of the Common
Shares) to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
<PAGE>
Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
Attention: General Counsel
Subject to the provisions of Section 22, any notice or demand
authorized by this Rights Agreement to be given or made by the Company
or by the holder of a Right Certificate (or, prior to the Distribution
Date, of the Common Shares) to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Company) as follows:
ChaseMellon Shareholder Services L.L.C.
85 Challenger Road, 4th Floor
Ridgefield Park, New Jersey 07660
Attention: Patricia Hoffmann
Notices or demands authorized by this Rights Agreement to be given or
made by the Company or the Rights Agent to any holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares)
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the transfer agent
for the Common Shares.
SECTION 26. Supplements and Amendments. At any time prior to
the Distribution Date and subject to the last sentence of this Section
26, the Company may, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of this Rights Agreement
(including, without limitation, the date on which the Distribution
Date shall occur, the time during which the Rights may be redeemed
pursuant to Section 24 or any provision of the Certificate of
Designation) without the approval of any holder of the Rights. From
and after the Distribution Date and subject to applicable law, the
Company may, and the Rights Agent shall if the Company so directs,
amend this Rights Agreement without the approval of any holders of
Right Certificates (i) to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provision of this Rights Agreement or
(ii) to make any other provisions in regard to matters or questions
arising hereunder which the Company may deem
<PAGE>
necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person).
Any supplement or amendment adopted during any period after any Person
has become an Acquiring Person but prior to the Distribution Date
shall be null and void unless such supplement or amendment could have
been adopted under the prior sentence from and after the Distribution
Date. Any supplement or amendment to this Rights Agreement duly
approved by the Company that does not amend Sections 19, 20, 21 or 22
in a manner adverse to the Rights Agent shall become effective
immediately upon execution by the Company, whether or not also
executed by the Rights Agent. Notwithstanding anything contained in
this Rights Agreement to the contrary, during the 120-day period after
any date of a change (resulting from a proxy or consent solicitation)
in a majority of the Board of Directors of the Company in office at
the commencement of such solicitation, this Rights Agreement may be
supplemented or amended only if (A) there are directors then in office
who were in office at the commencement of such solicitation and (B)
the Board of Directors of the Company, with the concurrence of a
majority of such directors then in office, determines that such
supplement or amendment is, in their judgment, in the best interests
of the Company and its stockholders and, after the Distribution Date,
the holders of the Right Certificates. In addition, notwithstanding
anything to the contrary contained in this Rights Agreement, no
supplement or amendment to this Rights Agreement shall be made which
(a) reduces the Redemption Price (except as required by Section 12(a))
or (b) provides for an earlier Expiration Date.
SECTION 27. Successors. All the covenants and provisions of
this Rights Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
SECTION 28. Benefits of Rights Agreement; Determinations and
Actions by the Board of Directors, etc. (a) Nothing in this Rights
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, of the Common
Shares) any legal or equitable right, remedy or claim under this
Rights Agreement; but this Rights Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and
<PAGE>
the registered holders of the Right Certificates (and, prior to the
Distribution Date, of the Common Shares).
(b) Except as explicitly otherwise provided in this Rights
Agreement, the Board of Directors of the Company shall have the
exclusive power and authority to administer this Rights Agreement and
to exercise all rights and powers specifically granted to the Board of
Directors of the Company or to the Company, or as may be necessary or
advisable in the administration of this Rights Agreement, including,
without limitation, the right and power to (i) interpret the
provisions of this Rights Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Rights
Agreement (including, without limitation, a determination to redeem or
not redeem the Rights or to amend this Rights Agreement and a determi-
nation of whether an offer constitutes a Qualifying Offer and whether
there is an Acquiring Person).
(c) Nothing contained in this Rights Agreement shall be
deemed to be in derogation of the obligation of the Board of Directors
of the Company to exercise its fiduciary duty. Without limiting the
foregoing, nothing contained herein shall be construed to suggest or
imply that the Board of Directors shall not be entitled to reject any
Qualifying Offer or any other tender offer, or to recommend that
holders of Common Shares reject any Qualifying Offer or any other
tender offer, or to take any other action (including, without
limitation, the commencement, prosecution, defense or settlement of
any litigation and the submission of additional or alternative offers
or other proposals) with respect to any Qualifying Offer or any other
tender offer that the Board of Directors believes is necessary or
appropriate in the exercise of such fiduciary duty.
SECTION 29. Severability. If any term, provision, covenant
or restriction of this Rights Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Rights Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
SECTION 30. Governing Law. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract
made under the law of the State of Delaware and for all purposes shall
be governed by and construed in
<PAGE>
accordance with the law of such State applicable to contracts to be
made and performed entirely within such State.
SECTION 31. Counterparts; Effectiveness. This Rights
Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the
same instrument. This Rights Agreement shall be effective as of the
Close of Business on the date hereof.
SECTION 32. Descriptive Headings. Descriptive headings of
the several Sections of this Rights Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Rights Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Rights Agreement to be duly executed as of the day and year first
above written.
TW INC.,
by /s/ Thomas W. McEnerney
--------------------------
Name: Thomas W. McEnerney
Title: Vice President
CHASEMELLON SHAREHOLDER
SERVICES L.L.C., as Rights
Agent,
by
--------------------------
Name:
Title:
<PAGE>
EXHIBIT A
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS, AND QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS THEREOF, OF SERIES A
PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
TW INC.
--------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
--------------------
TW INC., hereafter to be renamed "Time Warner Inc." (the
"Corporation"), a corporation organized and existing by virtue of the
General Corporation Law of the State of Delaware (the "DGCL"), does hereby
certify that the following resolution was duly adopted by action of the
Board of Directors of the Corporation (the "Board of Directors") at a
meeting duly held on October 9, 1996.
RESOLVED that pursuant to the authority expressly granted to and
vested in the Board of Directors by the provisions of Section 2 of Article
IV of the Restated Certificate of Incorporation of the Corporation, as
amended from time to time (the "Certificate of Incorporation"), and Section
151(g) of the DGCL, the Board of Directors hereby creates, from the
authorized shares of Preferred Stock, par value $.10 per share ("Preferred
Stock"), of the Corporation authorized to be issued pursuant to the
Certificate of Incorporation, a series of Preferred Stock, and hereby fixes
the voting powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of the shares of such series as follows:
SECTION 1. Designation and Number of Shares. The shares of
such series shall be designated as "Series A Participating Cumulative
Preferred Stock" ("Series A Stock"). The number of shares initially
constituting the Series A Stock shall be 8,000,000; provided, however,
that, if more than a total of 8,000,000 shares of Series A Stock shall
be issuable upon the exercise of Rights (the "Rights") issued pursuant
to the Rights Agreement dated as of
<PAGE>
October 10, 1996, between the Corporation and ChaseMellon Shareholder
Services L.L.C., as Rights Agent (the "Rights Agreement"), the Board
of Directors, pursuant to Section 151(g) of the DGCL, shall direct by
resolution or resolutions that a certificate be properly executed,
acknowledged, filed and recorded, in accordance with the provisions of
Section 103 thereof, providing for the total number of shares of
Series A Stock authorized to be issued to be increased (to the extent
that the Certificate of Incorporation then permits) to the largest
number of whole shares (rounded up to the nearest whole number)
issuable upon exercise of such Rights.
SECTION 2. Dividends or Distributions. (a) Subject to the
prior and superior rights of the holders of shares of any other series
of Preferred Stock or other class of capital stock of the Corporation
ranking prior and superior to the shares of Series A Stock with
respect to dividends, the holders of shares of the Series A Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of the assets of the Corporation legally available
therefor, (1) quarterly dividends payable in cash on the last day of
each fiscal quarter in each year, or such other dates as the Board of
Directors shall approve (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 a
fraction of a share of Series A Stock, in the amount of $.01 per whole
share (rounded to the nearest cent) less the amount of all cash
dividends declared on the Series A Stock pursuant to the following
clause (2) 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 Stock (the total of which shall not, in any event, be less than
zero) and (2) dividends payable in cash on the payment date for each
cash dividend declared on the common stock, par value $.01 per share
("Common Stock"), of the Corporation in an amount per whole share
(rounded to the nearest cent) equal to the Formula Number (as
hereinafter defined) then in effect times the cash dividends then to
be paid on each share of Common Stock. In addition, if the Corporation
shall pay any dividend or make any distribution on the Common Stock
payable in assets, securities or other forms of noncash consideration
(other than dividends or distributions solely in shares of Common
Stock), then, in each such case, the Corporation shall simultaneously
pay or make on each outstanding whole share of Series A Stock a
<PAGE>
dividend or distribution in like kind equal to the Formula Number then
in effect times such dividend or distribution on each share of the
Common Stock. As used herein, the "Formula Number" shall be 1,000;
provided, however, that, if at any time after the date of this
Certificate, the Corporation shall (i) declare or pay any dividend on
the Common Stock payable in shares of Common Stock or make any
distribution on the Common Stock in shares of Common Stock, (ii)
subdivide (by a stock split or otherwise) the outstanding shares of
Common Stock into a larger number of shares of Common Stock or (iii)
combine (by a reverse stock split or otherwise) the outstanding shares
of Common Stock into a smaller number of shares of Common Stock, then
in each such event the Formula Number shall be adjusted to a number
determined by multiplying the Formula Number in effect immediately
prior to such event by a fraction, the numerator of which is the
number of shares of Common Stock that are outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that are outstanding immediately prior to such event
(and rounding the result to the nearest whole number); and provided
further, that, if at any time after the date of this Certificate, the
Corporation shall issue any shares of its capital stock in a merger,
reclassification, or change of the outstanding shares of Common Stock,
then in each such event the Formula Number shall be appropriately
adjusted to reflect such merger, reclassification or change so that
each share of Series A Stock continues to be the economic equivalent
of a Formula Number of shares of Common Stock prior to such merger,
reclassification or change.
(b) The Corporation shall declare a dividend or distribution
on the Series A Stock as provided in Section 2(a) immediately prior to
or at the same time it declares a dividend or distribution on the
Common Stock (other than a dividend or distribution solely in shares
of Common Stock); provided, however, that, in the event no dividend or
distribution (other than a dividend or distribution in shares of
Common Stock) 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 $.01 per
share on the Series A Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date. The Board of Directors may
fix a record date for the determination of holders of shares of Series
A Stock entitled to receive a dividend or distribution declared
thereon, which record date
<PAGE>
shall be the same as the record date for any corresponding dividend or
distribution on the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Stock from and after the Quarterly Dividend
Payment Date next preceding the date of original issue of such shares of
Series A Stock; provided, however, that dividends on such shares that are
originally issued after the record date for the determination of holders of
shares of Series A Stock entitled to receive a quarterly dividend and on or
prior to the next succeeding Quarterly Dividend Payment Date shall begin to
accrue and be cumulative from and after such Quarterly Dividend Payment
Date. Notwithstanding the foregoing, dividends on shares of Series A Stock
that are originally issued prior to the record date for the determination
of holders of shares of Series A Stock entitled to receive a quarterly
dividend on the first Quarterly Dividend Payment Date shall be calculated
as if cumulative from and after the last day of the fiscal quarter next
preceding the date of original issuance of such shares. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
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.
(d) So long as any shares of the Series A Stock are outstanding,
no dividends or other distributions shall be declared, paid or distributed,
or set aside for payment or distribution, on the Common Stock unless, in
each case, the dividend required by this Section 2 to be declared on the
Series A Stock shall have been declared.
(e) The holders of the shares of Series A Stock shall not be
entitled to receive any dividends or other distributions except as provided
herein.
SECTION 3. Voting Rights. The holders of shares of Series A Stock
shall have the following voting rights:
(a) Each holder of Series A Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each
share of Series A Stock held of record on each matter on which holders
of the Common Stock or stockholders generally are entitled to vote,
multiplied by the maximum number of votes per share that any holder of
<PAGE>
the Common Stock then has with respect to such matter (assuming any
holding period or other requirement to vote a greater number of shares
is satisfied).
(b) Except as otherwise provided herein or by applicable
law, the holders of shares of Series A Stock and the holders of shares
of Common Stock shall vote together as one class for the election of
directors and on all other matters submitted to a vote of
stockholders.
(c) If, at the time of any annual meeting of stockholders
for the election of directors, the equivalent of six quarterly
dividends (whether or not consecutive) payable on any share or shares
of Series A Stock are in default, the number of directors constituting
the Board of Directors shall be increased by two. In addition to
voting together with the holders of Common Stock for the election of
other directors, the holders of record of the Series A Stock, voting
separately as a class to the exclusion of the holders of Common Stock,
shall be entitled at said meeting of stockholders (and at each
subsequent annual meeting of stockholders), unless all dividends in
arrears have been paid or declared and set apart for payment prior
thereto, to vote for the election of two directors, the holders of any
Series A Stock being entitled to cast a number of votes per share of
Series A Stock equal to the Formula Number. Until the default in
payments of all dividends that permitted the election of said
directors shall cease to exist, any director who shall have been so
elected pursuant to the next preceding sentence may be removed at any
time, either with or without cause, only by the affirmative vote of
the holders of the shares of Series A Stock at the time entitled to
cast a majority of the votes entitled to be cast for the election of
any such director at a special meeting of such holders called for that
purpose, and any vacancy thereby created may be filled by the vote of
such holders. If and when such default shall cease to exist, the
holders of the Series A Stock shall be divested of the foregoing
special voting rights, subject to revesting in the event of each and
every subsequent like default in payments of dividends. Upon the
termination of the foregoing special voting rights, the terms of
office of all persons who may have been elected directors pursuant to
said special voting rights shall forthwith terminate, and the number
of directors constituting the Board of Directors shall be reduced by
two. The voting rights granted by this Section 3(c) shall be in
addition to any other voting rights granted to the holders of the
Series A Stock in this Section 3.
<PAGE>
(d) Except as provided herein, in Section 11 or by
applicable law, holders of Series A 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 authorizing or taking any corporate action.
SECTION 4. Certain Restrictions. (a) Whenever quarterly
dividends or other dividends or distributions payable on the Series A
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 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 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 Stock,
except dividends paid ratably on the Series A 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 Stock;
provided, however, 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 Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Stock, or any shares of stock ranking on a parity with the
Series A 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
<PAGE>
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.
SECTION 5. Liquidation Rights. Upon the liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, no distribution shall be made (1) to the holders of
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Stock unless,
prior thereto, the holders of shares of Series A Stock shall have
received an amount equal to the accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment, plus an amount equal to the greater of (x) $.01 per whole
share or (y) an aggregate amount per share equal to the Formula Number
then in effect times the aggregate amount to be distributed per share
to holders of Common Stock or (2) to the holders of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Stock, except distributions made ratably
on the Series A Stock and all other such parity stock in proportion to
the total amounts to which the holders of all such shares are entitled
upon such liquidation, dissolution or winding up.
SECTION 6. 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 or any other
property, then in any such case the then outstanding shares of Series
A Stock shall at the same time be similarly exchanged or changed into
an amount per share equal to the Formula Number then in effect times
the aggregate amount of stock, securities, cash or any other property
(payable in kind), as the case may be, into which or for which each
share of Common Stock is exchanged or changed. In the event both this
Section 6 and Section 2 appear to apply to a transaction, this Section
6 will control.
<PAGE>
SECTION 7. No Redemption; No Sinking Fund. (a) The shares of
Series A Stock shall not be subject to redemption by the Corporation
or at the option of any holder of Series A Stock except as set forth
in Section 5 of Article IV of the Certificate of Incorporation;
provided, however, that the Corporation may purchase or otherwise
acquire outstanding shares of Series A Stock in the open market or by
offer to any holder or holders of shares of Series A Stock.
(b) The shares of Series A Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.
SECTION 8. Ranking. The Series A Stock shall rank junior to
all other series of Preferred Stock, unless the Board of Directors
shall specifically determine otherwise in fixing the powers,
preferences and relative, participating, optional or other special
rights, and qualifications, limitations and restrictions thereof.
SECTION 9. Fractional Shares. The Series A Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights
Agreement in whole shares or in any fraction of a share that is one
one-thousandths (1/1,000ths) of a share or any integral multiple of
such fraction that shall entitle the holder, in proportion to such
holder's fractional shares, to receive dividends, exercise voting
rights, participate in distributions and to have the benefit of all
other rights of holders of Series A Stock. In lieu of fractional
shares, the Corporation, prior to the first issuance of a share or a
fraction of a share of Series A Stock, may elect (1) to make a cash
payment as provided in the Rights Agreement for fractions of a share
other than one one-thousandths (1/1,000ths) of a share or any integral
multiple thereof or (2) to issue depository receipts evidencing such
authorized fraction of a share of Series A Stock pursuant to an
appropriate agreement between the Corporation and a depository
selected by the Corporation; provided, however, that such agreement
shall provide that the holders of such depository receipts shall have
all the rights, privileges and preferences to which they are entitled
as holders of the Series A Stock.
SECTION 10. Reacquired Shares. Any shares of Series A Stock
purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such
<PAGE>
shares shall upon their retirement become authorized but unissued
shares of Preferred Stock, without designation as to series until such
shares are once more designated as part of a particular series by the
Board of Directors pursuant to the provisions of Section 2 of Article
IV of the Certificate of Incorporation.
SECTION 11. Amendment. None of the powers, preferences and
relative, participating, optional or other special rights of the
Series A Stock as provided herein or in the Certificate of
Incorporation shall be amended in any manner that would alter or
change the powers, preferences, rights or privileges of the holders of
Series A Stock so as to affect them adversely without the affirmative
vote of the holders of at least 66-2/3% of the outstanding shares of
Series A Stock, voting as a separate class; provided, however, that no
such amendment approved by the holders of at least 66-2/3% of the
outstanding shares of Series A Stock shall be deemed to apply to the
powers, preferences, rights or privileges of any holder of shares of
Series A Stock originally issued upon exercise of the Rights after the
time of such approval without the approval of such holder.
IN WITNESS WHEREOF, TW INC. has caused this Certificate to
be duly executed in its corporate name on this 10th day of October,
1996.
TW INC.,
by /s/ Thomas W. McEnerney
--------------------------
Name: Thomas W. McEnerney
Title: Vice President
<PAGE>
EXHIBIT B
[Form of Right Certificate]
Certificate No. [R]-
___________ Rights
NOT EXERCISABLE AFTER JANUARY 20, 2004, OR EARLIER IF
REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT,
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.
Right Certificate
TIME WARNER INC.
This certifies that , or registered
assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement dated as of October
10, 1996 (the "Rights Agreement"), between Time Warner Inc., a
Delaware corporation formerly known as "TW Inc." (the "Company"), and
ChaseMellon Shareholder Services L.L.C., as Rights Agent (the "Rights
Agent"), unless the Rights evidenced hereby shall have been previously
redeemed by the Company, to purchase from the Company at any time
after the Distribution Date (as defined in the Rights Agreement) and
prior to 5:00 p.m., New York City time, on January 20, 2004 (the
"Expiration Date"), at the principal office of the Rights Agent, or
its successors as Rights Agent, in the City of New York, one
one-thousandths (1/1,000ths) of a fully paid, nonassessable share of
Series A Participating Cumulative Preferred Stock, par value $.10 per
share, of the Company (the "Preferred Shares"), at a purchase price
per one one-thousandths (1/1,000ths) of a share equal to $150 (the
"Purchase Price") payable in cash, upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly
executed.
<PAGE>
The Purchase Price and the number and kind of shares which
may be purchased upon exercise of each Right evidenced by this Right
Certificate, as set forth above, are the Purchase Price and the number
and kind of shares which may be so purchased as of [ ]. As
provided in the Rights Agreement, the Purchase Price and the number
and kind of shares which may be purchased upon the exercise of each
Right evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.
If the Rights evidenced by this Right Certificate are at any
time beneficially owned by an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement), such Rights shall be null and void and
nontransferable and the holder of any such Right (including any
purported transferee or subsequent holder) shall not have any right to
exercise or transfer any such Right.
This Right Certificate is subject to all the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which reference to the Rights
Agreement is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certifi-
cates. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available from
the Company upon written request.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal stock transfer or
corporate trust office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like
aggregate number and kind of shares as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for
the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Right Certificate may be redeemed by the
Company at its option at a redemption price
<PAGE>
(in cash or shares of Common Stock or other securities of the Company
deemed by the Board of Directors to be at least equivalent in value)
of $.01 per Right (which amount shall be subject to adjustment as
provided in the Rights Agreement) at any time prior to the earlier
of (i) such time as a Person becomes an Acquiring Person and (ii) the
Expiration Date; provided, however, that, for the 120-day period after
any date of a change (resulting from a proxy or consent solicitation)
in a majority of the Board of Directors of the Company in office at
the commencement of such solicitation, the Rights may only be redeemed
if (A) there are directors then in office who were in office at the
commencement of such solicitation and (B) the Board of Directors of
the Company, with the concurrence of a majority of such directors then
in office, determines that such redemption is, in their judgment, in
the best interests of the Company and its stockholders.
The Company may, but shall not be required to, issue
fractions of Preferred Shares or distribute certificates which
evidence fractions of Preferred Shares upon the exercise of any Right
or Rights evidenced hereby. In lieu of issuing fractional shares, the
Company may elect to make a cash payment as provided in the Rights
Agreement for fractions of a share other than one one-thousandths
(1/1,000ths) of a share or any integral multiple thereof or to issue
certificates or utilize a depository arrangement as provided in the
terms of the Rights Agreement and the Preferred Shares.
No holder of this Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
the Preferred Shares or of any other securities of the Company which
may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of
the Company, including, without limitation, any right to vote for the
election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or other distributions or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in accordance with
the provisions of the Rights Agreement.
<PAGE>
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of:
TIME WARNER INC.,
by
---------------------------
Name:
Title:
Attest:
- --------------------
Name:
Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES L.L.C.,
as Rights Agent,
by
--------------------------
Authorized Officer
<PAGE>
[On Reverse Side of Right Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Right Certificate to purchase
the Preferred Shares (or other shares) issuable upon the exercise of
such Rights and requests that certificates for such shares be issued
in the name of:
Please insert social security
or other identifying number
- ---------------------------------------------------------------------
(Please print name and address)
- ---------------------------------------------------------------------
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right
<PAGE>
Certificate for the balance remaining of such Rights shall be
registered in the name of and delivered to:
Please insert social security
or other identifying number
- ---------------------------------------------------------------------
(Please print name and address)
- ---------------------------------------------------------------------
Dated: , 19
----------------------------
Signature
Signature Guaranteed:
NOTICE
The signature on the foregoing Form of Election to Purchase
must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the caption
"Interests of Named Experts and Counsel" in Post Effective Amendment
No. 1 to Form S-4 (Registration Statement No. 333-11471) filed on Form
S-8 of Time Warner Inc. (formerly named TW Inc.) ("Time Warner") and
to the incorporation by reference therein of (i) our reports dated
February 6, 1996, with respect to the consolidated financial
statements and schedules of Time Warner (referred to therein as "Old
Time Warner") and Time Warner Entertainment Company, L.P., and our
report dated March 3, 1995 with respect to the combined financial
statements of the Time Warner Service Partnerships, incorporated by
reference from Time Warner's Annual Report on Form 10-K for the year
ended December 31, 1995, as amended by Time Warner's Form 10-KA, dated
June 27, 1996, and (ii) our report dated March 8, 1996, with respect
to the consolidated financial statements and schedule of Cablevision
Industries Corporation and Subsidiaries, and our reports dated July
28, 1995, with respect to the financial statements of Newhouse
Broadcasting Cable Division of Newhouse Broadcasting Corporation and
Subsidiaries and Vision Cable Division of Vision Cable Communications,
Inc. and Subsidiaries, from Time Warner's Current Report on Form 8-K
dated August 14, 1996, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
New York, New York
October 10, 1996
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Post-Effective Amendment No. 1 on Form S-8 to Registration Statement
No. 333-11471 on Form S-4 of Time Warner Inc. (formerly named TW Inc.)
of our report on the Paragon Communications financial statements and
schedule dated January 19, 1995, except as to Note 6, which is as of
January 27, 1995, which appears on page F-82 of the Annual Report on
Form 10-K of Time Warner Entertainment Company, L.P. for the year
ended December 31, 1994, which is incorporated by reference in the
Time Warner Inc. Annual Report on Form 10-K for the year ended
December 31, 1994. We also consent to the reference to us under the
heading "Interests of Named Experts and Counsel" in such Registration
Statement.
PRICE WATERHOUSE LLP
Denver, Colorado
October 10, 1996
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Post-Effective Amendment No. 1 to Form S-4 (No. 333-11471) on Form S-8
of Time Warner Inc. (formerly named TW Inc.) of our report dated
February 5, 1996, which appears on page 53 of Turner Broadcasting
System, Inc.'s 1995 Annual Report to Shareholders, which is
incorporated by reference in Turner Broadcasting System, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1995, which is
incorporated by reference in the Joint Proxy Statement/Prospectus of
Time Warner Inc. and Turner Broadcasting System, Inc. that is made a
part of the Registration Statement on Form S-4 (No. 333-11471) of Time
Warner Inc. (formerly named TW Inc.). We also consent to the
incorporation by reference of our report on the Financial Statement
Schedule, which appears on page 43 of such Annual Report on Form 10-K.
We also consent to the reference to us under the heading Interests of
Named Experts and Counsel in such Post-Effective Amendment No. 1 to
Form S-4 on Form S-8.
Price Waterhouse LLP
Atlanta, Georgia
October 10, 1996
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports and to all references to our Firm included in or made a part
of this Post Effective Amendment No. 1 to the Registration Statement
on Form S-4 (Registration Statement File No. 333-11471) for Time Warner
Inc. (formerly known as TW Inc.).
ARTHUR ANDERSEN LLP
Stamford, Connecticut
October 10, 1996
EXHIBIT 23.5
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective
Amendment No. 1 on Form S-8 to Registration Statement No. 333-11471 on
Form S-4 of Time Warner Inc. (formerly named TW Inc.) of our report
dated April 20, 1995, with respect to the consolidated financial
statements of KBLCOM Incorporated appearing in the Form 8-K of Time
Warner Inc. dated August 14, 1996 and to the reference to us under the
heading "Interests of Named Experts and Counsel" in the Post-Effective
Amendment No. 1 on Form S-8 to Registration Statement No. 333-11471 on
Form S-4.
DELOITTE & TOUCHE LLP
Houston, Texas
October 10, 1996
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
officers and directors of Time Warner Inc. (formerly named TW Inc.), a
Delaware corporation (the "Corporation"), hereby constitutes and
appoints RICHARD J. BRESSLER, PETER R. HAJE, GERALD M. LEVIN, JOHN A.
LABARCA, PHILIP R. LOCHNER, JR., THOMAS W. MCENERNEY, AND RICHARD D.
PARSONS and each of them, his true and lawful attorneys-in-fact and
agents, with full power to act without the others, for him and in his
name, place and stead, in any and all capacities, to sign one or more
Registration Statements on Form S-3, Form S-4 or Form S-8 or any other
appropriate form and any and all amendments to any such Registration
Statement (including post-effective amendments), to be filed with the
Securities and Exchange Commission for the registration under the
provisions of the Securities Act of 1933, as amended, of the shares of
common stock, par value $0.01 per share, of the Corporation (including
any associated preferred stock purchase rights), the shares of
preferred stock par value $.10 per share, of the Corporation, and
interests in certain employee benefit plans of the Corporation and its
subsidiaries to be issued in connection with (a) transactions
contemplated by the Amended and Restated Agreement and Plan of Merger
dated as of September 22, 1995, among the Corporation, Time Warner
Inc., Time Warner Acquisition Corp., TW Acquisition Corp. and Turner
Broadcasting System, Inc., as amended by Amendment No. 1 thereto dated
as of August 8, 1996 (the "Merger Agreement"), (b) the Time Warner
Dividend Reinvestment and Stock Purchase Plan, and (c) certain
employee benefit plans of the Corporation including (1) the Time
Warner Savings Plan, (2) the Cable Employees Savings Plan, (3) the
Time Warner Thrift Plan, (4) the Time Warner 1989 Stock Incentive
Plan, (5) the Time Warner 1989 Lorimar Non-Employee Replacement Stock
Option Plan, (6) the Time Warner 1989 WCI Replacement Stock Option
Plan, (7) the 1988 Restricted Stock Plan for Non-Employee Directors of
Time Warner Inc., (8) the Time Warner Inc. 1988 Stock Incentive Plan,
(9) the Time Warner 1986 Stock Option Plan, (10) the Time Warner 1981
Stock Option Plan, (11) the Time Warner Publishing Group Stock
Incentive Plan, (12) the Time Warner Filmed Entertainment Group Stock
Incentive Plan, (13) the Time Warner Music Group Stock Incentive Plan,
(14) the Time Warner Programming Group Stock Incentive Plan, (15) the
Time Warner Cable Television Group Stock Incentive Plan, (16) the Time
Warner Corporate Group Stock Incentive Plan, (17) the Time Warner Inc.
1993 Stock Option Plan, (18) the Time Warner Inc. 1994 Stock Option
Plan, (19) the Time Warner 1996 Stock Option Plan for Non-Employee
Directors, (20) the Turner Broadcasting System, Inc. 1988 Stock Option
Plan, (21) the Turner Broadcasting System, Inc. 1993 Stock Option and
Equity-Based Award Plan, (22) the New Line Cinema Corporation 1986
Stock Option Plan, (23) the New Line Cinema Corporation 1990 Stock
Option Plan, (24) the New Line Cinema Corporation 1991 Stock Option
Plan, (25) the New Line Cinema Corporation Nonqualified Stock Option
Agreements, and (26) other employee stock incentive, stock option and
benefit plans or successor plans maintained for the benefit of
employees of the Corporation or any of its subsidiaries and Turner
Broadcasting System, Inc. or any of its subsidiaries, including New
Line Cinema Corporation, in accordance with the terms of the Merger
Agreement, with power where appropriate to affix thereto the corporate
seal of the Corporation and to attest
<PAGE>
said seal, and to file any such Registration Statement, including a
form of prospectus, and any and all amendments and post-effective
amendments to any such Registration Statement, with all exhibits
thereto, and any and all documents in connection therewith, with the
Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and
necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents,
or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has hereunto set
his name as of the 10th day of October, 1996.
(i) Principal Executive Officer:
/s/ Gerald M. Levin
- --------------------------------
Gerald M. Levin
Director, Chairman of the Board
and Chief Executive Officer
(ii) Principal Financial Officer:
/s/ Richard J. Bressler
- --------------------------------
Richard J. Bressler
Senior Vice President and
Chief Financial Officer
(iii) Principal Accounting Officer:
/s/ John A. LaBarca
- --------------------------------
John A. LaBarca
Vice President and
Controller
<PAGE>
(iv) Directors:
/s/ Merv Adelson
- --------------------------------
(Merv Adelson)
/s/ Lawrence B. Buttenwieser
- --------------------------------
(Lawrence B. Buttenwieser)
/s/ Beverly Sills Greenough
- --------------------------------
(Beverly Sills Greenough)
/s/ Carla Hills
- --------------------------------
(Carla Hills)
/s/ David T. Kearns
- --------------------------------
(David T. Kearns)
/s/ Reuben Mark
- --------------------------------
(Reuben Mark)
/s/ Michael A. Miles
- --------------------------------
(Michael A. Miles)
/s/ J. Richard Munro
- --------------------------------
(J. Richard Munro)
/s/ Richard D. Parsons
- --------------------------------
(Richard D. Parsons)
/s/ Donald S. Perkins
- --------------------------------
(Donald S. Perkins)
<PAGE>
(iv) Directors (Cont.):
/s/ R. E. Turner
- --------------------------------
(R. E. Turner)
/s/ Raymond S. Troubh
- --------------------------------
(Raymond S. Troubh)
/s/ Francis T. Vincent
- --------------------------------
(Francis T. Vincent)
