<PAGE> 1
As Filed with the Securities and Exchange Commission
on January 2, 1997
Registration No. 333-13219
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 1
on FORM S-8
to
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 *
---------------
WESTINGHOUSE ELECTRIC CORPORATION
(Exact name of registrant as specified in its charter)
---------------
PENNSYLVANIA 25-0877540
(State or other jurisdiction) (I.R.S. Employer
of incorporation or organization) Identification No.)
11 Stanwix Street
Pittsburgh, Pennsylvania 15222
(Address of Registrant's principal executive offices)
Amended and Restated Infinity Boadcasting Corporation Stock Option Plan
WCK Acquisition Corp. Stock Option Plan
Infinity Boadcasting Corporation Warrant
Certificate No. 2 to Mel Karmazin
(Full title of plans)
Louis J. Briskman, Esq.
Senior Vice President and
General Counsel
Westinghouse Electric Corporation
11 Stanwix Street
Pittsburgh, Pennsylvania 15222
(412) 244-2300
(Name, address, and telephone number, including area
code, of agent for service)
--------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC PROMPTLY AFTER
FILING OF THIS POST-EFFECTIVE AMENDMENT.
* Filed as a Post-Effective Amendment on Form S-8 to such Form S-4 Registration
Statement pursuant to the procedure described herein. See "Introductory
Statement"
<PAGE> 2
INTRODUCTORY STATEMENT
Westinghouse Electric Corporation ("Westinghouse" or the "Company") hereby
amends its Registration Statement on Form S-4 (No. 333-13219) (the "Form S-4")
by filing this Post-Effective Amendment No. 1 on Form S-8 (the "Post-Effective
Amendment") relating to the sale of up to 21,510,674 shares of Common Stock, par
value $1.00 per share, of Westinghouse ("Westinghouse Common Stock") issuable
upon the exercise of stock options and warrants granted under The Amended and
Restated Infinity Broadcasting Corporation Stock Option Plan, The Acquisition
Corp. Stock Option Plan and the Infinity Broadcasting Corporation Warrant
Certificate No. 3 to Mel Karmazin (collectively, the "Plans").
On December 31, 1996, R Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Westinghouse, was merged with and into Infinity
Broadcasting Corporation, a Delaware corporation ("Infinity"). As a result of
such merger (the "Merger"), Infinity became a wholly owned subsidiary of
Westinghouse and each outstanding share (other than shares owned by Westinghouse
or Infinity or their subsidiaries) of Class A Common Stock ("Class A Common"),
par value $.002 per share, and Class B Common Stock, $.002 par value per share
("Class B Common" and together with Class A Common, "Infinity Common Stock") has
been converted into 1.71 shares of Westinghouse Common Stock. In addition, each
outstanding option and warrant issued pursuant to the Plans will no longer be
exercisable for shares of Infinity Common Stock, but instead, will constitute an
option or warrant, to acquire, on substantially the same terms and conditions as
were applicable under such option or warrant immediately prior to consummation
of the Merger that number of shares of Westinghouse Common Stock (rounded down
to the nearest whole share) equal to the product of (x) the number of shares of
Infinity Common Stock for which such option or warrant was theretofore
exercisable and (y) 1.71. The exercise price for each option or warrant shall be
equal to the exercise price per share for such option or warrant immediately
prior to the effective time of the Merger divided by 1.71.
The designation of the Post-Effective Amendment as Registration No.
333-13219 denotes that the Post-Effective Amendment relates only to the shares
of Westinghouse Common Stock issuable on the exercise of stock options or
warrants under the Plans and that this is the first Post-Effective Amendment to
the Form S-4 filed with respect to such shares.
<PAGE> 3
2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents, each as filed by Westinghouse with the Securities
and Exchange Commission (the "Commission") pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), are incorporated herein by
reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996.
(c) The Company's Current Reports on Form 8-K reporting events on
January 9, 1996, February 8, 1996, April 19, 1996, May 2, 1996, June 5,
1996, June 10, 1996, June 20, 1996, August 6, 1996, September 19, 1996,
November 4, 1996, November 13, 1996 and December 31, 1996.
(d) The Company's Current Report on Form 8-K/A dated February 6, 1996.
(e) Description of the Company's Common Stock contained in its
Registration Statement on Form 10 filed pursuant to the Exchange Act on
May 15, 1935, as amended or updated pursuant to the Exchange Act.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment to this Registration Statement which indicates
that all shares covered hereby have been sold or which deregisters all
such shares then remaining unsold shall be deemed to be incorporated in
this Registration Statement by reference and to be a part hereof from the
respective date of filing of each such document. Any statement contained
in a document incorporated or deemed to be incorporated by reference
herein 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 such statement so modified or superseded shall not be deemed, except
as
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3
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 validity of the Westinghouse Common Stock being offered hereby has
been passed upon by Louis J. Briskman, Senior Vice President and General
Counsel of Westinghouse. As of the Westinghouse Record Date (as defined in
the Form S-4), Mr. Briskman beneficially owned 240,385 shares of
Westinghouse Common Stock (including 238,490 shares issuable upon the
exercise of stock options that are exercisable within 60 days of the
Westinghouse Record Date).
Item 6. Indemnification of Directors and Officers
Section 1741 of the Business Corporation Law of the Commonwealth of
Pennsylvania (the "BCL") empowers a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or proceeding (a "Proceeding"),
whether civil, criminal, administrative or investigative, by reason of the
fact that such person is or was a representative of the corporation or is
or was serving at the request of the corporation as a representative of
another corporation or enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or her in connection with such Proceeding, if
he or she acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to the best interests of the corporation
and, with respect to any criminal proceeding, had no reasonable cause to
believe his or her conduct was unlawful. Section 1742 of the BCL empowers
a corporation to indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed
action by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that such person is or was a representative of
the corporation or is or was serving at the request of the corporation as
a representative of another corporation or enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by him or her
in connection with the defense or settlement of the action if he or
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4
she acted in good faith and in a manner he or she reasonably believed to
be in, or not opposed to, the best interests of the corporation provided
that indemnification shall not be made in respect to any claim, issue or
matter as to which such person has been adjudged to be liable to the
corporation unless there is a judicial determination that in view of all
the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for the expenses that the court deems proper.
Section 1743 of the BCL provides that to the extent a representative
of a corporation has been successful on the merits or otherwise in defense
of any Proceeding, or in defense of any claim, issue or matter herein, he
or she shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith.
Section 1745 of the BCL provides that expenses (including attorneys'
fees) incurred in defending a Proceeding may be paid by the corporation in
advance of the final disposition of such Proceeding upon receipt of an
undertaking by or on behalf of the representative to repay such amount if
it is ultimately determined that he or she is not entitled to be
indemnified by the corporation.
Section 1746 of the BCL provides that the indemnification and
advancement of expenses provided by, or granted pursuant to, the other
sections of the BCL shall not be deemed exclusive of any other rights to
which a person seeking indemnification or advancement of expenses may be
entitled under any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise. However, Section 1746 also provides that such
indemnification shall not be made in any case where the act or failure to
act giving rise to the claim for indemnification is determined by a court
to have constituted willful misconduct of recklessness.
The Company provides for indemnification of its directors and officers
pursuant to Article ELEVENTH of the Restated Articles of Incorporation of
the Company and Article XVII of the By-laws of the Company. Article
ELEVENTH of the Restated Articles and Article XVII of the By-laws provide
in effect that, with respect to Proceedings based on acts or omissions on
or after January 27, 1987, and unless prohibited by applicable law, the
Company shall indemnify directors and officers against all expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement incurred in connection with any such Proceedings (subject to
certain limitations in the case of
<PAGE> 6
5
actions by such persons against the Company). Under Article XVII, the
Company shall also advance amounts to any director or officer during the
pendency of any such Proceedings against expenses incurred, provided that,
if required by law, the Company receives an undertaking to repay such
amounts if it is ultimately determined that such person is not to be
indemnified under such Article. The indemnification provided for in such
Articles is in addition to any rights to which any director or officer may
otherwise be entitled. Article XVII of the By-laws provides that the right
of a director or officer to such indemnification and advancement of
expenses shall be a contract right and further provides procedures for the
enforcement of such right.
The Company has purchased directors' and officers' liability insurance
policies indemnifying its officers and directors and the officers and
directors of its subsidiaries against claims and liabilities (with stated
exceptions) to which they may become subject by reason of their positions
with the Company or its subsidiaries as directors and officers.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 Restated Articles of Incorporation of the Company
as amended to December 13, 1996.
4.2 By-laws of the Company, as amended to
September 25, 1996 (incorporated by reference to
Exhibit 4.2 to the Company's Registration
Statement on Form S-4 filed October 22, 1996).
4.3 Rights Agreement (incorporated by reference to
Exhibit 1 to Form 8-K filed on January 9, 1996).
4.4 Amended and Restated Infinity Broadcasting
Corporation Stock Option Plan.
4.5 The WCK Acquisition Corp. Stock Option Plan
</TABLE>
<PAGE> 7
6
<TABLE>
<S> <C>
4.6 Infinity Broadcasting Corporation Warrant Certificate
No. 3 to Mel Karmazin.
5 Opinion of Louis J. Briskman, Senior Vice President
and General Counsel, as to the legality of the
securities being registered.
23.1 Consent of Counsel -- contained in opinion filed as
Exhibit 5.
23.2 Consent of Price Waterhouse LLP.
*24 Powers of Attorney.
</TABLE>
Item 9. Undertakings
The undersigned Registrant hereby undertakes:
(a) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement 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.
(b) 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 offer thereof.
(c) 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.
(d) 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 Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Ex
--------------------
* Previously filed.
<PAGE> 8
7
change Act of 1934) that is incorporated by reference in this 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:
(e) 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 provi-
sions, 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 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Westinghouse Electric Corporation, 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 of Pittsburgh, Commonwealth of Pennsylvania, on the 2nd day of
January, 1997.
Westinghouse Electric Corporation
By: /s/ LOUIS J. BRISKMAN
-------------------------
Louis J. Briskman
Senior Vice President and
General Counsel
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8
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on
January 2, 1997 in the capacities indicated:
<TABLE>
<CAPTION>
Signature Title
<S> <C>
* Chairman and Chief Executive
------------------------- Officer (principal executive
(Michael H. Jordan) officer) and Director
* Vice Chairman and President and
------------------------- Director
(Gary M. Clark)
* Executive Vice President and
------------------------- Chief Financial Officer
(Frederic G. Reynolds) (principal financial officer)
/s/ CAROL V. SAVAGE Vice President and Chief
------------------------- Accounting Officer
(Carol V. Savage) (principal accounting officer)
*
------------------------- Director
(Frank C. Carlucci)
*
------------------------- Director
(Robert E. Cawthorn)
*
------------------------- Director
(George H. Conrades)
*
------------------------- Director
(William H. Gray III)
</TABLE>
<PAGE> 10
9
<TABLE>
<S> <C>
*
------------------------- Director
(David K. P. Li)
*
------------------------- Director
(David T. McLaughlin)
*
------------------------- Director
(Richard R. Pivirotto)
*
------------------------- Director
(Paula Stern)
*
------------------------- Director
(Robert D. Walter)
</TABLE>
*By: /s/ LOUIS J. BRISKMAN
------------------------
Louis J. Briskman
Attorney-in-Fact
<PAGE> 1
Exhibit 4.1
RESTATED ARTICLES
OF
WESTINGHOUSE ELECTRIC CORPORATION
(As amended December 13, 1996)
FIRST: The name of the corporation (hereinafter called the
"Company") is WESTINGHOUSE ELECTRIC CORPORATION.
SECOND: The location and post office address of the current registered
office of the Company in the Commonwealth of Pennsylvania is Westinghouse
Building, Gateway Center, Pittsburgh, Allegheny County, Pennsylvania 15222.
THIRD: The Company is subject to the Act of the General Assembly of
the Commonwealth of Pennsylvania, known as the "Business Corporation Law,"
approved May 5, 1933, and any act amendatory thereof, supplementary thereto or
substituted therefor, and the purposes for which the Company is organized are:
(1) To develop, build, manufacture, process and otherwise
produce, to purchase, lease, exchange and otherwise acquire, and to
hold, own, use, operate, repair, sell, lease, assign, distribute and
otherwise deal in and dispose of structures, machinery, equipment,
apparatus,
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appliances, devices, products, materials, articles, processes and
systems for any application or purpose, whether for use for industrial,
utility, transportation, broadcasting, communication, home, defense,
consumer or other purposes or applications, or combinations thereof,
whatsoever, including but not limited to the following: for the
generation, conversion, transmission, utilization, storage and control
of any form of energy whatsoever (including but not limited to
electrical, mechanical, chemical, atomic, nuclear, steam, thermal,
mineral, gas, water and solar); for the handling, conditioning,
heating, cooling, treatment, application or use of air and other gases,
liquids and solids; for aerial, nautical, terrestrial, spatial or
celestial operations, applications or navigation; for radio, television
and all other forms of transmission, reception or communication; and
for incorporation into or use in, on or about any establishment,
building or structure of any kind or nature whatsoever; and any and all
related engines, turbines, motors, parts, tools, accessories and
improvements thereof and supplies or materials pertaining or incidental
to any of the above structures, machinery, equipment, apparatus,
appliances, devices, products, materials, articles, processes and
systems, of any kind or nature whatsoever.
(2) To develop, build, manufacture, process and otherwise
produce, to purchase, lease, exchange and
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otherwise acquire, and to hold, own, use, operate, repair, sell, lease,
assign, distribute and otherwise deal in and dispose of structures,
machinery, equipment, apparatus, appliances, devices, products,
materials, articles, processes, systems, goods, wares and merchandise
of every kind, nature and description, and to engage in any industrial,
manufacturing, mining, mercantile, broadcasting, trading or other
lawful business of any kind or character whatsoever.
(3) To conduct and carry on research work in, and to engage
in any activity pertaining or incidental to, any scientific, technical
or other field or fields, and to render services of a scientific,
technical or other nature to any person, association, firm,
corporation, country, state, municipality or other governmental
division or subdivision.
(4) To purchase, lease, exchange and otherwise acquire all,
or any part of, or any interest in, the properties, assets, business
and goodwill of any one or more persons, associations, firms or
corporations; to pay for the same in cash, property or its own or
other securities; to hold, own, use, operate, reorganize and otherwise
manage such properties, assets, business and goodwill; to sell, lease,
assign, distribute, liquidate and otherwise deal in and dispose of the
whole or any part thereof; and in connection therewith, to assume or
guarantee performance of any
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liabilities, obligations or contracts of such persons, associations,
firms or corporations.
(5) To develop, apply for, register, take licenses in respect
of, purchase, lease, exchange and otherwise acquire, and to hold, own,
use, operate, sell, lease, assign, grant licenses in respect of,
manufacture under, exercise and otherwise deal in and dispose of any
and all inventions, devices, formulae, technical or business
information, including trade secrets, know-how, processes,
improvements and modifications thereof, letters patent and all rights
connected therewith or appertaining thereto, copyrights, trademarks,
trade names, trade symbols and other indications of origin and
ownership, franchises, licenses, concessions or other rights granted
by or recognized under the laws of any country, state, municipality or
other governmental division or subdivision.
(6) To purchase, exchange and otherwise acquire, and to hold,
own, sell, assign, transfer, reissue, cancel and otherwise deal in and
dispose of its own shares and securities, to such extent and in such
manner and upon such terms as it may determine; provided that the
Company shall not use its funds or property for the purchase of its
own shares when such purchase shall be prohibited by law; and provided
that shares of its capital stock which belong to the Company shall not
be voted directly or indirectly.
(7) To enter into, make, perform and carry out
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contracts and agreements of every kind and description which may be
necessary, appropriate, convenient or advisable in carrying out the
purposes of the Company, with any person, association, firm,
corporation, country, state, municipality or other governmental
division or subdivision.
(8) To carry out any of or all the foregoing purposes as
principal or agent and alone or with associates; and to execute from
time to time such general or special powers of attorney to such person
or persons as it may determine, granting to such person or persons
such powers as it may deem proper, and to revoke such powers of
attorney as and when it may desire; and to conduct its business in any
and all of its branches at one or more offices in the Commonwealth of
Pennsylvania and elsewhere.
(9) To do everything necessary, suitable, convenient or
proper for, or in connection with, or incident to, the accomplishment
of any of the purposes herein enumerated, or which shall at any time
appear conducive to or expedient for the accomplishment of any of such
purposes, not inconsistent with the laws of the Commonwealth of
Pennsylvania.
Except as otherwise expressly provided in this Article THIRD,
none of the purposes set forth above in this Article THIRD shall be in any way
limited or restricted by reference to, or inference from, any other of the
purposes therein set forth, and each of said purposes shall be regarded as a
separate and independent purpose.
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The purposes set forth above shall be construed as powers as
well as purposes; but the enumeration herein of certain powers is not intended
to be exclusive of, or a waiver of, but shall be in addition to, the powers,
rights or privileges granted or conferred by said "Business Corporation Law"
and any other laws of the Commonwealth of Pennsylvania applicable to the
Company that may now or hereafter be in force. Without limiting the generality
of the foregoing, the Company shall have and may exercise the general powers
which are now or may hereafter be enumerated in Section 302 of said "Business
Corporation Law," or any act amendatory thereof, supplemental thereto or
substituted therefor, to the same extent as if such powers were set forth in
full herein.
Except as otherwise provided by law or these Restated
Articles of Incorporation or the By-laws, the powers of the Company shall be
exercised by its Board of Directors.
Nothing herein contained shall authorize or be construed as
intended to authorize the Company to carry on any business or exercise any
powers in any commonwealth, state, territory, or country which a business
corporation organized under the laws of such commonwealth, state, territory or
country could not carry on or exercise, except to the extent permitted or
authorized by the laws of such commonwealth, state, territory or country; and
notwithstanding any provision herein, the Company shall not be deemed to have
the power to carry on or exercise within the Commonwealth of Pennsylvania any
business whatsoever
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<PAGE> 7
the carrying on or exercising of which would prevent the Company from being
classified as a business corporation under said "Business Corporation Law," or
any act amendatory thereof, supplemental thereto or substituted therefor.
FOURTH: The term of existence of Company shall be perpetual.
FIFTH: A. The total number of shares of all classes of stock
which the Company shall have authority to issue is 1,125,000,000 consisting of:
(1) 25,000,000 shares of Preferred Stock, par value $1.00 per share ("Preferred
Stock"), and (2) 1,100,000,000 shares of Common Stock, par value $1.00 per
share ("Common Stock").
B. The Board of Directors is hereby expressly authorized to
provide, out of the unissued shares of Preferred Stock, for series of Preferred
Stock. Before any share of any such series is issued, the Board shall fix, and
hereby is expressly empowered to fix, the following provisions of the shares
thereof:
(1) the terms of such series, the number of shares to
constitute such series and the stated value thereof if different from
the par value thereof;
(2) whether the shares of such series shall have voting
rights in addition to any voting rights provided by
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law and, if so, the terms of such voting rights, which may be general
or limited;
(3) the dividends, if any, payable on such series, whether
any such dividends shall be cumulative and, if so, from what dates,
the conditions and dates upon which such dividends shall be payable,
the preference or relation which such dividends shall bear to the
dividends payable on any shares of stock of any other class or any
other series of Preferred Stock;
(4) whether the shares of such series shall be subject to
redemption at the election of the Company or the holders of such
series and, if so, the times, prices and other conditions of such
redemption;
(5) the amount or amounts payable upon shares of such series
upon, and the rights of the holders of such series in the event of,
voluntary or involuntary liquidation, dissolution or winding up, or
upon any distribution of the assets of the Company;
(6) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to
and manner in which any such retirement or sinking fund shall be
applied to the purchase or redemption of the shares of such series for
retirement or other corporate purposes and the terms and provisions
relative to the operation thereof;
(7) whether the shares of such series shall be
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<PAGE> 9
convertible into, or exchangeable for, shares of stock of any other
class or any other series of Preferred Stock or any other securities
and, if so, the price or prices or the rate or rates of conversion or
exchange and the method, if any, of adjusting the same, and any other
terms and conditions of conversion or exchange;
(8) the limitations and restrictions, if any, to be effective
while any shares of such series are outstanding upon the payment of
dividends or the making of other distributions on, or upon the
purchase, redemption or other acquisition by the Company of, the
Common Stock or shares of stock of any other class or any other series
of Preferred Stock;
(9) the conditions or restrictions, if any, upon the creation
of indebtedness of the Company or upon the issue of any additional
stock, including additional shares of any other series of Preferred
Stock or of any other class of stock; and
(10) any other powers, preferences and relative,
participating, optional and other special rights, and any
qualifications, limitations and restrictions thereof.
C. 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
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all other series of Preferred Stock at any time outstanding. All shares of any
one series of Preferred Stock shall be identical in all respects with all other
shares of such series, except that shares of any one series issued at different
times may differ as to the dates from which dividends thereon shall be
cumulative.
D. Subject to the provisions of this Article FIFTH and
actions taken by the Board of Directors pursuant to this Article FIFTH:
(1) such dividends (whether in cash, stock or otherwise) as
may be determined by the Board of Directors may be declared and paid
on the Common Stock from time to time in accordance with the laws of
the Commonwealth of Pennsylvania; and the holders of the Preferred
Stock shall not be entitled to participate in any such dividends
whether payable in cash, stock or otherwise;
(2) voting power shall be exclusively vested in the Common
Stock;
(3) dividends upon shares of any class of the Company shall
be payable only out of assets legally available for the payment of
such dividends, and the rights of the holders of the Preferred Stock
of all series and of the holders of the Common Stock in respect of
dividends shall at all times be subject to the power of the Board of
Directors, which is hereby expressly vested in said Board, from time
to time to set aside such reserves and to make such other provisions,
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<PAGE> 11
if any, as said Board shall deem to be necessary or advisable for
working capital, for additions, improvements and betterments to plant
and equipment, for expansion of the Company's business (including the
acquisition of real and personal property for that purpose), for plans
for maintaining employment at the plants of the Company and also for
other plans for the benefit of employees generally, and for any other
purposes of the Company whether or not similar to those herein
mentioned;
(4) holders of Preferred Stock and holders of Common Stock
shall not have any preemptive, preferential or other right to
subscribe for or purchase or acquire any shares of any class or any
other securities of the Company, whether now or hereafter authorized,
and whether or not convertible into, or evidencing or carrying the
right to purchase, shares of any class or any other securities now or
hereafter authorized, and whether the same shall be issued for cash,
services or property, or by way of dividend or otherwise, other than
such right, if any, as the Board of Directors in its discretion from
time to time may determine. If the Board of Directors shall offer to
the holders of the Preferred Stock or the holders of the Common Stock,
or any of them, any such shares or other securities of the Company,
such offer shall not in any way constitute a waiver or release of the
right of the Board of Directors subsequently to dispose of other
portions of said shares or securities
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without so offering the same to said holders.
(5) the shares of Preferred Stock and the shares of Common
Stock may be issued for such consideration and for such corporate
purposes as the Board of Directors may from time to time determine;
(6) subject to the provisions of the By-laws of the Company
as from time to time amended, with respect to the closing of the
transfer books or the fixing of a record date for the determination of
shareholders entitled to vote, each holder of record of shares of any
class of the Company shall be entitled to one vote, on each matter
submitted to a vote at a meeting of shareholders and in respect of
which shares of such class shall be entitled to be voted, for every
share of such class standing in his name on the books of the Company;
(7) in each election of directors no shareholder shall have
any right to cumulate his votes and cast them for one candidate or
distribute them among two or more candidates.
E. 1. DESIGNATION AND AMOUNT. The shares of this series shall
be designated as "Series A Participating Preferred Stock" (the "Series A
Preferred Stock"). The par value of each share of Series A Preferred Stock
shall be $1.00. The number of shares constituting the Series A Preferred Stock
initially shall be 5,000,000; PROVIDED, HOWEVER, that, if more than a total of
5,000,000 shares of Series A Preferred Stock shall be issuable
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<PAGE> 13
upon the exercise of Rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of December 28, 1995, between the Company and First Chicago
Trust Company of New York, as Rights Agent (as such agreement may be amended
from time to time, the "Rights Agreement"), the Board of Directors of the
Company, pursuant to Section 1914(c) and/or Section 1522(b) of the Pennsylvania
Business Corporation Law of 1988, as amended (the "Pennsylvania BCL"), and in
accordance with the provisions of Article FIFTH of the Restated Articles of
Incorporation, shall adopt a resolution or resolutions increasing the previously
determined total number of shares of Series A Preferred Stock authorized to be
issued (to the extent that the Restated Articles of Incorporation then permit)
to the largest number of whole shares (rounded up to the nearest whole number)
issuable upon exercise of such Rights and directing that a statement or articles
of amendment with respect to such increase in authorized shares for the Series A
Preferred Stock be executed and filed with the Department of State of the
Commonwealth of Pennsylvania.
2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the provisions for adjustment hereinafter set
forth, the holders of outstanding shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, (i) a cash dividend in an amount per
share (rounded to the nearest cent) equal to 100 times the aggregate per share
amount of each cash dividend declared or paid
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<PAGE> 14
on the Common Stock, $1.00 par value per share, of the Company (the "Common
Stock") and any other security ranking junior to the Series A Preferred Stock,
and (ii) a preferential cash dividend (the "Preferential Dividends"), if any, in
preference to the holders of Common Stock and any other security ranking junior
to the Series A Preferred Stock, on the first day of March, June, September and
December of each year (each a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, payable in an amount (except in
the case of the first Quarterly Dividend Payment if the date of the first
issuance of Series A Preferred Stock is a date other than a Quarterly Dividend
Payment date, in which case such payment shall be a prorated amount of such
amount) equal to $1.00 per share of Series A Preferred Stock less the per share
amount of all cash dividends declared on the Series A Preferred Stock pursuant
to clause (i) of this sentence since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Preferred Stock. In addition, in the event the Company shall, at any time after
the issuance of any share or fraction of a share of Series A Preferred Stock,
pay any dividend or make any distribution on the shares of Common Stock of the
Company, whether by way of a dividend or a reclassification of stock, a
recapitalization, reorganization or partial liquidation of the Company or
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<PAGE> 15
otherwise, which is payable in cash or any debt security, debt instrument, real
or personal property or any other property (other than (x) cash dividends
subject to the immediately preceding sentence, (y) a distribution of shares of
Common Stock or other capital stock of the Company or (z) a distribution of
rights or warrants to acquire any such shares, including as such a right any
debt security convertible into or exchangeable for any such shares, at a price
less than the Fair Market Value (as hereinafter defined) of such shares on the
date of issuance of such rights or warrants), then, and in each such event, the
Company shall simultaneously pay on each then outstanding share of Series A
Preferred Stock a distribution, in like kind, of 100 times such distribution
paid on a share of Common Stock (subject to the provisions for adjustment
hereinafter set forth). The dividends and distributions on the Series A
Preferred Stock to which holders thereof are entitled pursuant to clause (i) of
the first sentence of this paragraph and pursuant to the second sentence of this
paragraph are hereinafter referred to as "Dividends" and the multiple of such
cash and non-cash dividends and distributions on the Common Stock applicable to
the determination of the Dividends, which shall be 100 initially but shall be
adjusted from time to time as hereinafter provided, is hereinafter referred to
as the "Dividend Multiple." In the event the Company shall at any time after
January 9, 1996 declare or pay any dividend or make any distribution on Common
Stock payable in shares of Common Stock, or effect a subdivision or split or a
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<PAGE> 16
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then in each
such case the Dividend Multiple thereafter applicable to the determination of
the amount of Dividends which holders of shares of Series A Preferred Stock
shall be entitled to receive shall be the Dividend Multiple applicable
immediately prior to such event multiplied by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) The Company shall declare each Dividend at the same time
it declares any cash or non-cash dividend or distribution on the Common Stock
in respect of which a Dividend is required to be paid. No cash or non-cash
dividend or distribution on the Common Stock in respect of which a Dividend is
required to be paid shall be paid or set aside for payment on the Common Stock
unless a Dividend in respect of such dividend or distribution on the Common
Stock shall be simultaneously paid, or set aside for payment, on the Series A
Preferred Stock.
(c) Preferential Dividends shall begin to accrue on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of such shares of Series A
Preferred Stock. Accrued but unpaid Preferential Dividends shall cumulate but
shall not bear interest.
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<PAGE> 17
(d) Any dividend payment made on shares of the Series A
Preferred Stock shall first be credited against the earliest accrued but unpaid
Preferential Dividend due with respect to shares of the Series A Preferred
Stock.
(e) All dividends paid with respect to shares of the Series A
Preferred Stock pursuant to this paragraph 2 shall be paid pro rata on a
share-by-share basis to the holders entitled thereto.
(f) The holders of shares of Series A Preferred Stock shall not be
entitled to receive any dividends or distributions except as provided herein.
3. VOTING RIGHTS. The holders of record of outstanding
shares of Series A Preferred Stock shall have the following voting rights:
(a) Subject to the provisions for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the holders
of the Common Stock. The number of votes which a holder of a share of
Series A Preferred Stock is entitled to cast, as the same may be
adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "Vote Multiple." In the event the Company shall at
any time after January 9, 1996 declare or pay any dividend on Common
Stock, payable in shares of Common Stock, or effect a subdivision or
split or a combination, consolidation or reverse split of the
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<PAGE> 18
outstanding shares of Common Stock into a greater or lesser number of
shares of Common Stock, then in each such case the Vote Multiple
thereafter applicable to the determination of the number of votes per
share to which holders of shares of Series A Preferred Stock shall be
entitled after such event shall be the Vote Multiple immediately prior
to such event multiplied by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in the Restated
Articles of Incorporation, in the By-laws, or as otherwise provided by
law, the holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock shall vote together as one class on all
matters submitted to a vote of shareholders of the Company.
(c) In the event that the Preferential Dividends payable to
the holders of Series A Preferred Stock are in arrears and unpaid for
the equivalent of six quarterly periods, the Board of Directors will
be increased by two directors and the holders of Series A Preferred
Stock, together with the holders of all other outstanding series of
the Preferred Stock in respect of which such a default in payment of
dividends as described hereinabove exists and is entitled to vote
thereon, voting as a single class without
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<PAGE> 19
regard to series, will be entitled to elect two directors of the
expanded Board of Directors. Such entitlement shall continue until such
time as all dividends in arrears on all of the Series A Preferred Stock
at the time outstanding have been paid or declared and set aside for
payment, whereupon such voting rights of the holders of the Series A
Preferred Stock shall cease (and, unless holders of shares of other
series of Preferred Stock shall still have the right to elect such
directors, the respective terms of the two additional directors shall
thereupon expire and the number of directors constituting the full
board be decreased by two) subject to being again revived from time to
time upon the reoccurrence of the conditions described in this
paragraph (3)(c) as giving rise thereto.
At any time when the rights of holders of Series A Preferred
Stock to elect two additional directors shall have so vested, the
Company shall, upon the written request of the holders of record of
not less than 10% of the Series A Preferred Stock then outstanding (or
10% of all of the shares of Preferred Stock having the right to vote
for such directors in case holders of shares of other series of
Preferred Stock shall also have the right to elect directors in such
circumstances), call a special meeting of holders of the Series A
Preferred Stock (and other series of Preferred Stock, if applicable)
for the election of directors. In the case of a written request, the
special meeting shall be held
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<PAGE> 20
within 60 days after the delivery of the request, upon the notice
provided by law and in the By-laws of the Company; except that the
Company shall not be required to call such a special meeting if the
request is received less than 120 days before the date fixed for the
next ensuing annual meeting of shareholders of the Company.
Whenever the number of directors of the Company shall have
been increased by two as provided in this paragraph (3)(c), the number
as so increased may thereafter be further increased or decreased in
such manner as may be permitted by the By-laws and without the vote of
the holders of Series A Preferred Stock. No such action shall impair
the right of the holders of Series A Preferred Stock to elect and to
be represented by two directors as provided in this paragraph (3)(c).
The two directors elected as provided in this paragraph
(3)(c) shall serve until the next annual meeting of shareholders of
the Company and until their respective successors shall be elected and
qualified or the earlier expiration of their terms as provided in this
paragraph (3)(c). No such director may be removed without the vote of
holders of a majority of shares of Series A Preferred Stock (or
holders of a majority of shares of Preferred Stock having the right to
vote in the election of such director in case holders of shares of
other series of Preferred Stock shall also have the right to elect
such director). If,
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<PAGE> 21
prior to the expiration of the term of any such director, a vacancy in
the office of such director shall occur, such vacancy shall, until the
expiration of such term, in each case be filled by the remaining
director elected as provided in this paragraph (3)(c) or, if none
remains in office, by vote of the holders of record of a majority of
the outstanding shares of Series A Preferred Stock (or holders of a
majority of shares of Preferred Stock who are then entitled to
participate in the election of such directors in case holders of shares
of other series of Preferred Stock shall also have the right to elect
such director).
(d) Except as otherwise required by the Articles of
Incorporation or By-laws or set forth in this paragraph 3 or in
paragraph 13 or as otherwise provided by law, holders of Series A
Preferred Stock shall have no other 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 the
taking of any corporate action.
4. CERTAIN RESTRICTIONS.
(a) Whenever Preferential Dividends or Dividends are in arrears
or the Company shall be in default of payment thereof, thereafter and until all
accrued and unpaid Preferential Dividends and Dividends, whether or not
declared, on shares of Series A Preferred Stock outstanding shall have been
paid or set irrevocably aside for payment in full, and in addition to any and
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all other rights which any holder of shares of Series A Preferred Stock may
have in such circumstances, the Company 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 Preferred
Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity as to dividends with the
Series A Preferred Stock, unless dividends are paid ratably on the
Series A Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled if the full dividends
accrued thereon were to be paid;
(iii) except as permitted by subparagraph (iv) of this paragraph
4(a), 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 Preferred
Stock, provided that the Company may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for
shares of any stock of the Company ranking junior (both as to
dividends and upon liquidation, dissolution or winding up) to the
Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
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<PAGE> 23
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock (either as to dividends
or upon liquidation, dissolution or winding up), except as permitted by
subparagraph (iii) of this paragraph 4(a) or in accordance with a
purchase offer made 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 Company shall not permit any Subsidiary (as hereinafter
defined) of the Company to purchase or otherwise acquire for consideration any
shares of stock of the Company unless the Company could, under subparagraph (a)
of this paragraph 4, purchase or otherwise acquire such shares at such time and
in such manner. A "Subsidiary" of the Company shall mean any corporation or
other entity of which securities or other ownership interests entitled to cast
at least a majority of the votes that would be entitled to be cast in an
election of the board of directors of such corporation or other entity or other
persons performing similar functions are beneficially owned, directly or
indirectly, by the Company or by any corporation or other entity that is
otherwise controlled by the Company.
(c) The Company shall not issue any shares of Series A Preferred
Stock except upon exercise of Rights issued pursuant to
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<PAGE> 24
the Rights Agreement, a copy of which is on file with the Secretary of the
Company at its principal executive office and shall be made available to
shareholders of record without charge upon written request therefor addressed to
said Secretary. Notwithstanding the foregoing sentence, nothing contained in the
provisions of this Article FIFTH (E) shall prohibit or restrict the Company from
issuing for any purpose any series of Preferred Stock with rights and privileges
similar to, different from, or greater than, those of the Series A Preferred
Stock or, subject to the limitations set forth in paragraph 13, from creating
other securities senior to, junior to or on a parity with the Series A Preferred
Stock.
5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall
be retired and cancelled promptly after the acquisition thereof. All such
shares upon their retirement and cancellation shall become authorized but
unissued shares of Preferred Stock, without designation as to series, and such
shares may be redesignated and reissued as part of any series of the Preferred
Stock.
6. LIQUIDATION, DISSOLUTION OR WINDING UP; FAIR VALUE FOR
PURPOSES OF PENNSYLVANIA ANTI-TAKEOVER STATUTE.
(a) Upon any voluntary or involuntary liquidation, dissolution
or winding up of the Company, no distribution shall be made (i) to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or
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<PAGE> 25
winding up) to the Series A Preferred Stock unless the holders of shares of
Series A Preferred Stock outstanding shall have received out of the assets of
the Company available for distribution to its shareholders after payment or
provision for payment of any securities ranking senior to the Series A Preferred
Stock, for each share of Series A Preferred Stock, subject to adjustment as
hereinafter provided, (A) $100.00 plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment or, (B) if greater than the amount specified in clause (i)(A) of
this sentence, an amount equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, as the same may be adjusted as
hereinafter provided, and (ii) to the holders of stock ranking on a parity upon
liquidation, dissolution or winding up with the Series A Preferred Stock, unless
simultaneously therewith distributions are made ratably on the Series A
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Series A Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the holders of such
parity shares are entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Series A Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Company pursuant to
clause (i)(B) of the foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount" and the multiple of the amount
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<PAGE> 26
to be distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Company applicable pursuant to said clause to
the determination of the Participating Liquidation Amount, as said multiple may
be adjusted from time to time as hereinafter provided, is hereinafter referred
to as the "Liquidation Multiple." In the event the Company shall at any time
after January 9, 1996 declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, then, in each such case, the
Liquidation Multiple thereafter applicable to the determination of the
Participating Liquidation Amount to which holders of Series A Preferred Stock
shall be entitled after such event shall be the Liquidation Multiple applicable
immediately prior to such event multiplied by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. Except as provided in this
paragraph 6(a), holders of Series A Preferred Stock shall not be entitled to any
distribution in the event of liquidation, dissolution or winding up of the
Company.
(b) For the purposes of this paragraph 6, none of the following
shall be deemed to be a voluntary or involuntary liquidation, dissolution or
winding up of the Company:
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<PAGE> 27
(i) the voluntary sale, conveyance, lease, exchange or transfer
(for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Company;
(ii) the consolidation or merger of the Company with or into
one or more other corporations or other associations;
(iii) the consolidation or merger of one or more corporations
or other associations with or into the Company;
(iv) the participation by the Company in a share exchange;
(v) the division of the Company pursuant to sections 1951
through 1957 of the Pennsylvania BCL;
(vi) the conversion of the Company pursuant to sections 1961
through 1966 of the Pennsylvania BCL;
(c) Notwithstanding anything to the contrary in this Article
FIFTH (E), in case any Controlling Person or Group (as defined from time to time
in Section 2543 of the Pennsylvania BCL) shall be required to purchase any
shares of Series A Preferred Stock pursuant to Sections 2541 through 2548 of the
Pennsylvania BCL, as in effect from time to time, the amount that is determined
to represent the "fair value" (as that term is used in such Section 2542 of the
Pennsylvania BCL) of such shares shall be an amount per share equal to the
Liquidation Multiple then in effect times the aggregate amount per share that
such Controlling Person or Group is required to pay to purchase any share of
Common Stock pursuant to such Sections 2541 through 2548
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<PAGE> 28
of the Pennsylvania BCL.
7. CERTAIN RECLASSIFICATIONS AND OTHER EVENTS.
(a) In the event that holders of shares of Common Stock of the
Company receive after January 9, 1996 in respect of their shares of Common
Stock any share of capital stock of the Company (other than any share of Common
Stock of the Company), whether by way of reclassification, recapitalization,
reorganization, dividend or other distribution or otherwise (a "Transaction"),
then, and in each such event, the dividend rights, voting rights and rights
upon the liquidation, dissolution or winding up of the Company of the shares of
Series A Preferred Stock shall be adjusted so that after such event the holders
of Series A Preferred Stock shall be entitled, in respect of each share of
Series A Preferred Stock held, in addition to such rights in respect thereof to
which such holder was entitled immediately prior to such adjustment, to (i)
such additional dividends as equal the Dividend Multiple in effect immediately
prior to such Transaction multiplied by the additional dividends which the
holder of a share of Common Stock shall be entitled to receive by virtue of the
receipt in the Transaction of such capital stock, (ii) such additional voting
rights as equal the Vote Multiple in effect immediately prior to such
Transaction multiplied by the additional voting rights to which the holder of a
share of Common Stock shall be entitled by virtue of the receipt in the
Transaction of such capital stock and (iii) such additional distributions upon
liquidation, dissolution or winding up of the
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<PAGE> 29
Company as equal the Liquidation Multiple in effect immediately prior to such
Transaction multiplied by the additional amount which the holder of a share of
Common Stock shall be entitled to receive upon liquidation, dissolution or
winding up of the Company by virtue of the receipt in the Transaction of such
capital stock, as the case may be, all as provided by the terms of such capital
stock.
(b) In the event that holders of shares of Common Stock of the
Company receive after January 9, 1996 in respect of their shares of Common
Stock any right or warrant to purchase Common Stock (including as such a right,
for all purposes of this paragraph 7(b), any security convertible into or
exchangeable for Common Stock) at a purchase price per share less than the Fair
Market Value of a share of Common Stock on the date of issuance of such right
or warrant, then and in each such event the dividend rights, voting rights and
rights upon the liquidation, dissolution or winding up of the Company of the
shares of Series A Preferred Stock shall each be adjusted so that after such
event the Dividend Multiple, the Vote Multiple and the Liquidation Multiple
shall each be the product of the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple, as the case may be, in effect immediately prior to such
event multiplied by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights
or warrants plus the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such
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<PAGE> 30
rights or warrants and the denominator of which shall be the number of shares of
Common Stock outstanding immediately before such issuance of rights or warrants
plus the number of shares of Common Stock which could be purchased, at the Fair
Market Value of the Common Stock at the time of such issuance, by the maximum
aggregate consideration payable upon exercise in full of all such rights or
warrants.
(c) In the event that holders of shares of Common Stock of the
Company receive after January 9, 1996 in respect of their shares of Common
Stock any right or warrant to purchase capital stock of the Company (other than
shares of Common Stock), including as such a right, for all purposes of this
paragraph 7(c), any security convertible into or exchangeable for capital stock
of the Company (other than Common Stock), at a purchase price per share less
than the Fair Market Value of a share of such capital stock on the date of
issuance of such right or warrant, then and in each such event the dividend
rights, voting rights and rights upon liquidation, dissolution or winding up of
the Company of the shares of Series A Preferred Stock shall each be adjusted so
that after such event each holder of a share of Series A Preferred Stock shall
be entitled, in respect of each share of Series A Preferred Stock held, in
addition to such rights in respect thereof to which such holder was entitled
immediately prior to such event, to receive (i) such additional dividends as
equal the Dividend Multiple in effect immediately prior to such event
multiplied, first, by the additional
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<PAGE> 31
dividends to which the holder of a share of Common Stock shall be entitled upon
exercise of such right or warrant by virtue of the capital stock which could be
acquired upon such exercise, and multiplied again by the Discount Fraction (as
hereinafter defined), (ii) such additional voting rights as equal the Vote
Multiple in effect immediately prior to such event multiplied, first, by the
additional voting rights to which the holder of a share of Common Stock shall be
entitled upon exercise of such right or warrant by virtue of the capital stock
which could be acquired upon such exercise, and multiplied again by the Discount
Fraction and (iii) such additional distributions upon liquidation, dissolution
or winding up of the Company as equal the Liquidation Multiple in effect
immediately prior to such event multiplied, first, by the additional amount
which the holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Company upon exercise of such
right or warrant by virtue of the capital stock which could be acquired upon
such exercise, and multiplied again by the Discount Fraction. For purposes of
this paragraph, the "Discount Fraction" shall be a fraction the numerator of
which shall be the difference between the Fair Market Value of a share of the
capital stock subject to a right or warrant distributed to holders of shares of
Common Stock of the Company as contemplated by this paragraph 7(c) immediately
after the distribution thereof and the purchase price per share for such share
of capital stock pursuant to such right or warrant and the
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denominator of which shall be the Fair Market Value of a share of such capital
stock immediately after the distribution of such right or warrant.
(d) For purposes of this Article FIFTH (E), the "Fair Market
Value" of a share of capital stock of the Company (including a share of Common
Stock) on any date shall be deemed to be the average of the daily closing price
per share thereof over the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that in
the event that such Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 30 Trading
Days after (i) the ex-dividend date for a dividend or distribution on stock
payable in shares of such stock or securities convertible into shares of such
stock, or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such stock or
division of the Company pursuant to Sections 1951 through 1957 of the
Pennsylvania BCL, then, and in each such case, the Fair Market Value shall be
appropriately adjusted by the Board of Directors of the Company to take into
account ex-dividend or post-effective date trading. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way
(in either case, as reported in the applicable transaction reporting system
with respect to securities listed or admitted to trading
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on the New York Stock Exchange), or, if the shares are not listed or admitted to
trading on the New York Stock Exchange, as reported in the applicable
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the shares are listed or admitted to
trading or, if the shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
The Nasdaq Stock Market or such other system then in use, or if on any such date
the shares are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the shares selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the shares are listed or admitted to trading is open for the
transaction of business or, if the shares are not listed or admitted to trading
on any national securities exchange, on which the New York Stock Exchange or
such other national securities exchange as may be selected by the Board of
Directors of the Company is open. If the shares are not publicly held or not so
listed or traded on any day within the period of 30 Trading Days applicable to
the determination of Fair Market Value thereof as aforesaid, "Fair Market Value"
shall mean the fair market value thereof per share as determined in good faith
by the Board of Directors of the Company. In either case referred to in the
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foregoing sentence, the determination of Fair Market Value shall be described in
a statement filed with the Secretary of the Company.
8. CONSOLIDATION, MERGER, ETC. In case the Company shall enter
into any consolidation, merger, division, share exchange, combination, sale of
all or substantially all of the Company's assets, or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each
outstanding share of Series A Preferred Stock shall at the same time be
similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and/or other property (payable in like kind), as the case may
be, for which or into which each share of Common Stock is changed or exchanged
multiplied by the highest of the Vote Multiple, the Dividend Multiple or the
Liquidation Multiple in effect immediately prior to such event; PROVIDED,
HOWEVER, no fractional share or scrip representing fractional shares of any
other stock or securities shall be issued. Instead of any fractional interest
in a share of such other stock or securities which would otherwise be
deliverable pursuant to this paragraph 8, the Company will pay to the holder
thereof an amount in cash (computed to the nearest cent) equal to the same
fraction of the Fair Market Value of a share of such other stock or security.
9. EFFECTIVE TIME OF ADJUSTMENTS.
(a) Adjustments to the Series A Preferred Stock
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required by the provisions hereof shall be effective as of the time at which the
event requiring such adjustments occurs.
(b) The Company shall give prompt written notice to each holder
of a share of outstanding Series A Preferred Stock of the effect of any
adjustment to the voting rights, dividend rights or rights upon liquidation,
dissolution or winding up of the Company of such shares required by the
provisions hereof. Notwithstanding the foregoing sentence, the failure of the
Company to give such notice shall not affect the validity of or the force or
effect of or the requirement for such adjustment.
10. NO REDEMPTION. The shares of Series A Preferred Stock shall
not be redeemable at the option of the Company or any holder thereof.
Notwithstanding the foregoing sentence of this paragraph, the Company may
acquire shares of Series A Preferred Stock in any other manner permitted by
law, the provisions hereof and the Restated Articles of Incorporation.
11. RANKING. The Series A Preferred Stock shall rank senior to
the Common Stock and, unless otherwise provided in a Statement with Respect to
Shares or an amendment to the Restated Articles of Incorporation relating to
the determination of a subsequent series of preferred stock of the Company, the
Series A Preferred Stock shall rank junior to all other series of the Company's
preferred stock, including the Series C Conversion Preferred Stock, as to the
payment of dividends and the distribution of assets on liquidation, dissolution
or winding up.
12. LIMITATIONS. Except as may otherwise be required
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by law, the shares of Series A Preferred Stock shall not have any powers,
preferences or relative, participating, optional or other special rights other
than those specifically set forth in this Article FIFTH (E) (as such may be
amended from time to time) or otherwise in the Restated Articles of
Incorporation.
13. AMENDMENT. So long as any shares of the Series A Preferred
Stock are outstanding, the Company shall not amend this Article FIFTH (E) or
the Restated Articles of Incorporation in any manner which would alter or
change the rights, preferences or limitations of the Series A Preferred Stock
so as to affect such rights, preferences or limitations in any material respect
prejudicial to the holders of the Series A Preferred Stock without, in addition
to any other vote of shareholders required by law, the affirmative vote of the
holders of two-thirds or more of the outstanding shares of Series A Preferred
Stock, voting together as a single class; PROVIDED, HOWEVER, that the creation
of another series of the Preferred Stock ranking senior to or on a parity with
the Series A Preferred Stock as to the payment of dividends or the distribution
of assets or liquidation, dissolution or winding up shall not be deemed to be
prejudicial to the holders of the Series A Preferred Stock for the purposes of
this paragraph 13.
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F. 1. DESIGNATION AND AMOUNT. The shares of this
series shall be designated as "Series C Conversion Preferred Stock" (the
"Series C Preferred Stock") consisting of 3,795,000 shares.
2. RANK. The Series C Preferred Stock shall, with respect to
dividend rights and rights upon liquidation, dissolution and winding up, rank
prior to the Common Stock, par value $1.00 per share (the "Common Stock"), and
the Series A Participating Preferred Stock, par value $1.00 per share (the
"Series A Preferred Stock"), of the Company. All equity securities of the
Company to which the Series C Preferred Stock ranks prior, whether with respect
to dividends or upon liquidation, dissolution, winding up or otherwise,
including the Common Stock and the Series A Preferred Stock, are collectively
referred to herein as the "Junior Securities;" all equity securities of the
Company with which the Series C Preferred Stock ranks on a parity are
collectively referred to herein as the "Parity Securities;" and all equity
securities of the Company (other than convertible debt securities) to which the
Series C Preferred Stock ranks junior are collectively referred to herein as
the "Senior Securities." The Series C Preferred Stock shall be subject to the
creation of Junior Securities, Parity Securities and Senior Securities, subject
to the limitations thereon provided for in paragraphs (6)(c) and (6)(d).
3. DIVIDENDS.
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(a) The holders of outstanding shares of the Series C Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available for the payment of dividends,
cumulative preferential cash dividends accruing at the per share rate of $3.25
per quarter and no more, payable in arrears on the first day of each March,
June, September and December, respectively (each such date being hereinafter
referred to as a "Dividend Payment Date"), commencing on June 1, 1994. If any
Dividend Payment Date is not a business day (as defined in paragraph
(4)(h)(i)), then the Dividend Payment Date shall be on the next succeeding day
that is a business day. Each such dividend will be payable to holders of record
as they appear on the stock books of the Company on such record dates, not less
than 10 nor more than 90 days preceding the payment dates thereof, as shall be
fixed by the Board of Directors, except that no such record date shall be
declared for the final dividend payable on June 1, 1997 and holders of shares
of Series C Preferred Stock will receive such final dividend only upon
surrender of their share certificates. Dividends on a share of Series C
Preferred Stock shall accrue (whether or not the Company has earnings, whether
or not there are funds legally available for the payment of such dividends and
whether or not such dividends are declared) on a daily basis from the previous
Dividend Payment Date, except that the first dividend shall accrue from the
date of issuance of such share of Series C Preferred Stock. Accrued and unpaid
dividends shall not bear
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interest. Dividends will cease to accrue in respect of the Series C Preferred
Stock on the Mandatory Conversion Date (as defined in paragraph (4)(a)) or on
the Settlement Date (as defined in paragraph (4)(h)(v)), in the event of their
earlier conversion pursuant to paragraph (4)(n), upon the effective date of such
conversion, and will cease to accrue on the date of their earlier redemption
pursuant to paragraph (4)(c) unless the Company shall default in delivering the
shares of Common Stock and cash, if any, payable by the Company upon such
redemption. Dividends (or cash amounts equal to accrued and unpaid dividends)
payable on the Series C Preferred Stock for any period shorter than a quarterly
dividend period shall be computed on the basis of a 360-day year of twelve
30-day months and, for purposes of calculating the accrual of dividends,
dividends will accrue to, but not including, the date fixed for payment.
(b) Unless full cumulative dividends, if any, accrued on the
Series C Preferred Stock have been or contemporaneously are declared and paid
or declared and a sum set apart sufficient for such payment through the most
recent Dividend Payment Date (or the obligations of the Company with respect to
the payment of such dividends are satisfied as contemplated by paragraphs
(4)(a), (b) or (c)), then, whether or not the Mandatory Conversion Date has
occurred, (i) no full cash dividend shall be declared by the Board of Directors
or paid or set apart for payment by the Company or other distribution declared
or made on any Parity Securities, (ii) no dividend shall be declared or paid
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or set aside for payment or other distribution declared or made upon the Common
Stock, the Series A Preferred Stock or upon any other Junior Securities (other
than a dividend or distribution paid in shares of, or warrants, rights or
options exercisable for or convertible into, Common Stock, the Series A
Preferred Stock or any other Junior Securities) and (iii) no Common Stock,
Series A Preferred Stock or any other Junior Securities shall be redeemed,
purchased or otherwise acquired for any consideration, nor shall any moneys be
paid to or made available for a sinking fund for the redemption of any shares of
any such series or class by the Company, except by conversion into or in
exchange for Junior Securities. If any dividends are not paid or set apart in
full, as aforesaid, with respect to the Series C Preferred Stock and any Parity
Securities, all dividends declared with respect to the Series C Preferred Stock
and any Parity Securities shall be declared pro rata so that the amount of
dividends declared per share on the Series C Preferred Stock and such Parity
Securities shall in all cases bear to each other the same ratio that accrued
dividends per share on the Series C Preferred Stock and such Parity Securities
bear to each other. Holders of the shares of the Series C Preferred Stock shall
not be entitled to any dividends, whether payable in cash, property or stock, in
excess of full cumulative dividends as provided in paragraph (3)(a).
(c) Subject to the foregoing provisions of this paragraph (3)
and paragraph (4)(d), the Board of Directors may declare and the Company may
pay or set apart for payment
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dividends and other distributions on any of the Junior Securities or Parity
Securities, and may redeem, purchase or otherwise retire any Junior Securities
or Parity Securities, and the holders of the shares of the Series C Preferred
Stock shall not be entitled to share therein.
(d) Any dividend payment made on shares of the Series C
Preferred Stock shall first be credited against the earliest accrued but unpaid
dividend due with respect to shares of the Series C Preferred Stock.
(e) All dividends paid with respect to shares of the Series C
Preferred Stock pursuant to this paragraph (3) shall be paid pro rata to the
holders entitled thereto.
(f) Holders of shares of the Series C Preferred Stock shall be
entitled to receive the dividends provided for in this paragraph (3) in
preference to and in priority over any dividends upon any of the Junior
Securities.
4. REDEMPTIONS OR CONVERSIONS.
(a) AUTOMATIC CONVERSION ON MANDATORY CONVERSION DATE. Unless
earlier called for redemption by the Company or converted in accordance with
the provisions hereof, on June 1, 1997 (the "Mandatory Conversion Date"), each
outstanding share of the Series C Preferred Stock shall automatically convert
into:
(i) shares of Common Stock at the Common Equivalent Rate
(determined as provided in paragraph (4)(d)) in effect on the
Mandatory Conversion Date; and
(ii) the right to receive an amount in cash equal to
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all accrued and unpaid dividends on such share of Series C Preferred
Stock to the Mandatory Conversion Date, whether or not declared, out of
funds legally available for the payment of dividends (and dividends
shall cease to accrue on such share as of the Mandatory Conversion
Date).
The Company shall at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
Common Stock and/or its Common Stock held in its treasury for the purpose of
effecting any conversion of the Series C Preferred Stock, either pursuant to
this paragraph (4)(a) ("Mandatory Conversion") or pursuant to paragraphs
(4)(b), (c) or (n) the full number of shares of Common Stock then deliverable
upon any conversion of all outstanding shares of Series C Preferred Stock.
The right to receive an amount in cash equal to all accrued and
unpaid dividends on such shares of Series C Preferred Stock (the "Accrued
Dividend Amount") will occur upon Mandatory Conversion whether or not the
Company has earnings and whether or not such dividends are declared; PROVIDED,
HOWEVER, that to the extent that funds are not legally available for the
payment of the Accrued Dividend Amount upon Mandatory Conversion, the holders
of Series C Preferred Stock shall be entitled to receive, and the Company shall
distribute to such holders, on the fifth business day next succeeding the
Mandatory Conversion Date, in lieu of payment in cash of the Accrued Dividend
Amount, a number of shares of Common Stock equal to 110% of the Accrued
Dividend
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Amount divided by the Current Market Price (as defined in paragraph (4)(d)(vii))
of the Common Stock determined as of the second Trading Date (as defined in
paragraph (4)(h)(vi)) prior to the Mandatory Conversion Date, except that (i) no
such distribution shall be made by the Company if, prior to the date on which
the Company is required to make such distribution, the Company shall have made
payment in full of the Accrued Dividend Amount in cash and (ii) if the Company
does not have a sufficient number of authorized but unissued shares of Common
Stock and shares of Common Stock held in its treasury not reserved for other
corporate purposes to make such distribution in full, the Company shall make
such distribution to the fullest extent possible, pro rata to the holders of
Series C Preferred Stock entitled thereto (as nearly as may be practicable
without creating fractional shares), and the holders of Series C Preferred Stock
shall thereafter have the right to receive, and the Company shall pay to such
holders as promptly as possible, the remainder in cash or shares of Common Stock
or a combination thereof, on the same terms set forth in this paragraph (4)(a)
for the payment in cash of amounts equal to accrued and unpaid dividends and for
the distribution of shares of Common Stock in lieu of payment of such amounts in
cash.
(b) AUTOMATIC CONVERSION UPON THE OCCURRENCE OF CERTAIN EVENTS.
Immediately prior to the effectiveness of an amendment of the articles, merger,
consolidation, share exchange, division or conversion of the Company or similar
extraordinary transaction
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that results in the conversion or exchange of Common Stock into, or the right of
the holders thereof to receive, in lieu of or in addition to their shares of
Common Stock, other securities or other property (whether of the Company or any
other entity) (any such amendment, merger, consolidation, share exchange,
division or conversion or similar extraordinary transaction being referred to
herein as a "Fundamental Transaction") each outstanding share of the Series C
Preferred Stock shall automatically convert, on the Settlement Date, as defined
in paragraph (4)(h)(v) into:
(A) shares of Common Stock at the same rate as would have been
the case if the Series C Preferred Stock had been called for
redemption on the business day immediately preceding the Mandatory
Conversion Date (with a Current Market Price determined as of the
second Trading Date prior to the Settlement Date) but in no case
greater than the Common Equivalent Rate; plus
(B) the right to receive an amount in cash equal to all accrued
and unpaid dividends on such share of the Series C Preferred Stock to
and including the Settlement Date, whether or not declared, out of
funds legally available for the payment of dividends (and dividends
shall cease to accrue on such share after the Settlement Date); plus
(C) the right to receive an amount of cash initially equal to
$34.90, declining by $0.03056 on each day following the date of
issuance of the Series C Preferred Stock (computed on the basis of a
360-day year of twelve 30-day
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months) to $0.00 on June 1, 1997, in each case determined with
reference to the Settlement Date, out of funds legally available
therefor.
At the option of the Company, it may deliver on the Settlement
Date in lieu of some or all of the cash consideration described in clauses (B)
and (C) above, pro rata to the holders of Series C Preferred Stock entitled
thereto, a number of shares of Common Stock to be determined by dividing the
amount of cash consideration that the Company has elected to pay in Common
Stock by the Current Market Price (as defined in paragraph (4)(d)(vii)) of the
Common Stock determined, in the case of a Fundamental Transaction, as of the
second Trading Date prior to the Settlement Date.
(c) OPTIONAL REDEMPTION. The Company shall have the right to
call, in whole or in part, the outstanding shares of the Series C Preferred
Stock for redemption on the business day immediately preceding the Mandatory
Conversion Date. On the redemption date, the Company shall deliver to the
holders thereof in exchange for each such share called for redemption the
greater of (i) a number of shares of Common Stock equal to the Call Price (as
defined in paragraph (4)(h)(ii)) divided by the Current Market Price of the
Common Stock determined as of the second Trading Date immediately preceding the
Notice Date (as defined in paragraph 4(h)(iv)) and (ii) 8.85 shares of Common
Stock (subject to adjustment in the same manner as the Common Equivalent Rate,
as described in paragraph 4(d)). Accrued and unpaid dividends on
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shares of Series C Preferred Stock so redeemed will be paid in cash on the date
fixed for their redemption, whether or not declared, out of funds legally
available for the payment of dividends (and dividends shall cease to accrue on
such share as of such date). If fewer than all the outstanding shares of Series
C Preferred Stock are to be called for redemption, shares to be redeemed shall
be selected by the Company from outstanding shares of Series C Preferred Stock
by lot or pro rata (as nearly as may be practicable without creating fractional
shares) or by any other method determined by the Board of Directors of the
Company in its sole discretion to be equitable.
(d) COMMON EQUIVALENT RATE ADJUSTMENTS. The Common Equivalent
Rate to be used to determine the number of shares of Common Stock to be
delivered on the conversion of the Series C Preferred Stock into shares of
Common Stock pursuant to paragraphs (4)(a) or (b) shall be initially ten shares
of Common Stock for each share of Series C Preferred Stock; PROVIDED, HOWEVER,
that such Common Equivalent Rate shall be subject to adjustment from time to
time as provided below in this paragraph (4)(d). All adjustments to the Common
Equivalent Rate shall be calculated to the nearest 1/100th of a share of Common
Stock (or, if there is not a nearest 1/100th of a share, to the next lower
1/100th of a share). No adjustment will be required unless such adjustment
would require an increase or decrease of at least one percent therein;
PROVIDED, HOWEVER, that any adjustments which, by reason of the foregoing, are
not required to be made will be
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carried forward and taken into account in any subsequent adjustment. Such rate
in effect at any time is herein called the "Common Equivalent Rate."
(i) If the Company shall:
(A) pay a dividend or make a distribution with
respect to Common Stock in shares of Common Stock,
(B) subdivide or split its outstanding shares of
Common Stock into a greater number of shares,
(C) combine its outstanding shares of Common Stock
into a smaller number of shares, or
(D) issue by reclassification of its shares of Common
Stock any shares of Common Stock of the Company other than in a
Fundamental Transaction described in paragraph (4)(b),
then, in any such event, the Common Equivalent Rate in effect immediately prior
thereto shall be adjusted so that the holder of a share of the Series C
Preferred Stock shall be entitled to receive on the conversion of such share of
the Series C Preferred Stock, the number of shares of Common Stock which such
holder would have owned or been entitled to receive after the happening of any
of the events described above had such share of the Series C Preferred Stock
been converted at the Common Equivalent Rate in effect immediately prior to such
event or any record date with respect thereto. Such adjustment shall become
effective at the opening of business on the business date next following the
record date for determination of shareholders entitled to receive
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such dividend or distribution in the case of a dividend or distribution, and
shall become effective immediately after the effective date in case of a
subdivision, split, combination or reclassification; and any shares of Common
Stock issuable in payment of a dividend shall be deemed to have been issued
immediately prior to the close of business on the record date for such dividend
for purposes of calculating the number of outstanding shares of Common Stock
under clauses (ii) and (iii) below. Such adjustments shall be made successively.
(ii) If the Company shall, after the date hereof, issue rights
or warrants to all holders of its Common Stock entitling them (for a period not
exceeding 45 days from the date of such issuance) to subscribe for or purchase
shares of Common Stock at a price per share less than the Current Market Price
of the Common Stock (determined pursuant to paragraph (4)(d)(vii)) on the
record date for the determination of shareholders entitled to receive such
rights or warrants, then in each case the Common Equivalent Rate shall be
adjusted by multiplying the Common Equivalent Rate in effect immediately prior
to the date of issuance of such rights or warrants by a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding on the date
of issuance of such rights or warrants, immediately prior to such issuance,
plus the number of additional shares of Common Stock offered for subscription
or purchase pursuant to such rights or warrants, and of which the denominator
shall be the number of shares of Common Stock outstanding on the
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date of issuance of such rights or warrants, immediately prior to such issuance,
plus the number of shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock so offered for subscription or
purchase pursuant to such rights or warrants would purchase at such Current
Market Price (determined by multiplying such total number of shares by the
exercise price of such rights or warrants and dividing the product so obtained
by such Current Market Price). Such adjustment shall become effective at the
opening of business on the business day next following the record date for the
determination of shareholders entitled to receive such rights or warrants. To
the extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Common Equivalent Rate shall be readjusted to the
Common Equivalent Rate which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made upon the basis of
delivery of only the number of shares of Common Stock actually delivered. Such
adjustments shall be made successively.
(iii) If the Company shall pay a dividend or make a distribution
to all holders of its Common Stock of evidence of its indebtedness or other
assets (including shares of capital stock of the Company (other than Common
Stock) but excluding any distributions and dividends referred to in clause (i)
above or any cash dividends), or shall issue to all holders of its Common Stock
rights or warrants to subscribe for or purchase any of its
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securities (other than those referred to in clause (ii) above), then in each
such case, the Common Equivalent Rate shall be adjusted by multiplying the
Common Equivalent Rate in effect on the record date mentioned below by a
fraction, of which the numerator shall be the Current Market Price of the Common
Stock (determined pursuant to paragraph (4)(d)(vii)) on the record date for the
determination of shareholders entitled to receive such dividend or distribution,
and of which the denominator shall be such Current Market Price per share of
Common Stock less the fair value (as determined by the Board of Directors of the
Company, whose determination shall be conclusive) as of such record date of the
portion of the assets or evidences of indebtedness so distributed, or of such
subscription rights or warrants, applicable to one share of Common Stock. Such
adjustment shall become effective on the opening of business on the business day
next following the record date for the determination of shareholders entitled to
receive such dividend or distribution.
(iv) In case the Company shall, by dividend or otherwise, at any
time distribute to all holders of its Common Stock cash (excluding (a) any cash
dividends on the Common Stock to the extent that the aggregate cash dividends
per share of Common Stock in any consecutive 12-month period do not exceed the
greater of (x) the amount per share of Common Stock of the cash dividends paid
on the Common Stock in the next preceding 12-month period, to the extent that
such dividends for the preceding 12-month period did not require an adjustment
to the Common
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Equivalent Rate pursuant to this paragraph (as adjusted to reflect subdivisions
or combinations of the Common Stock) and (y) 15 percent of the average daily
Closing Prices (as defined in paragraph (4)(h)(iii)) of the Common Stock for the
ten consecutive Trading Days immediately prior to the date of declaration of
such distribution and (b) any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary), then, in each such case, unless the Company elects to reserve such
an amount of cash for distribution to the holders of the Series C Preferred
Stock so that any such shares will receive upon conversion, in addition to the
shares of the Common Stock to which such holder is entitled, the amount of cash
(to the extent not excluded as provided above) which such holder would have
received if such holder had, immediately prior to the record date for such
distribution of cash, converted its shares of Series C Preferred Stock into
Common Stock, the Common Equivalent Rate shall be increased so that the same
shall equal the rate determined by multiplying the Common Equivalent Rate in
effect at the close of business on such record date by a fraction of which the
numerator shall be the Closing Price of the Common Stock on such record date and
the denominator shall be the Closing Price of the Common Stock less the amount
of cash so distributed (to the extent not excluded as provided above) applicable
to one share of Common Stock, such increase to become effective immediately
prior to the opening of business on the day following
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such record date; PROVIDED, HOWEVER, that in the event the portion of the cash
so distributed applicable to one share of Common Stock is equal to or greater
than the Closing Price of the Common Stock on such record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each holder of
shares of Series C Preferred Stock shall thereafter have the right to receive
upon conversion the amount of cash (to the extent not excluded as provided
above) such holder would have received had such holder converted each share of
Series C Preferred Stock on such record date. If any adjustment is required to
be made as set forth in this paragraph (4)(d)(iv) as a result of a distribution
which is a dividend described in subclause (a) of this paragraph, such
adjustment shall be based upon the amount by which such distribution exceeds the
amount of the dividend permitted to be excluded pursuant to such subclause (a)
of this paragraph. If an adjustment is required to be made pursuant to this
paragraph as a result of a distribution which is not such a dividend, such
adjustment shall be based upon the full amount of such distribution.
(v) In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Company or any subsidiary of
the Company for all or any portion of the Common Stock to the extent that the
cash and value of any other consideration included in such payment per share of
Common Stock exceeds 110% of the first reported sales price per share of Common
Stock on the Trading Day next succeeding the Expiration
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Time (as defined below), the Common Equivalent Rate shall be increased so that
the same shall equal the rate determined by multiplying the Common Equivalent
Rate in effect immediately prior to the last time tenders or exchanges may be
made pursuant to such tender or exchange offer (the "Expiration Time") by a
fraction of which the denominator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) on the Expiration Time
multiplied by the first reported sales price of the Common Stock on the Trading
Day next succeeding the Expiration Time, and the numerator shall be the sum of
(A) the fair market value (determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors) of the aggregate consideration payable to shareholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (B) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the first reported sales price of the Common Stock on the Trading Day
next succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the Expiration
Time.
(vi) Anything in this paragraph (4) notwithstanding, the Company
shall be entitled to make such upward adjustments in
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the Common Equivalent Rate, in addition to those required by this paragraph (4),
as the Company in its sole discretion may determine to be advisable, in order
that any stock dividends, subdivisions of shares, distributions of rights to
purchase stock or securities, or distributions of securities convertible into or
exchangeable for stock (or any transaction which could be treated as any of the
foregoing transactions pursuant to Section 305 of the Internal Revenue Code of
1986, as amended) hereafter made by the Company to its shareholders shall not be
taxable. If the Company determines that an adjustment to the Common Equivalent
Rate should be made, an adjustment shall be made effective as of such date as is
determined by the Board of Directors of the Company. The determination of the
Board of Directors of the Company as to whether an adjustment to the Common
Equivalent Rate should be made pursuant to the foregoing provisions of this
paragraph (4)(d)(vi), and, if so, as to what adjustment should be made and when,
shall be conclusive, final and binding on the Company and all shareholders of
the Company.
(vii) As used in this paragraph (4), the "Current Market Price"
of the Common Stock on any date shall be the average of the daily Closing
Prices (as defined in paragraph (4)(h)(iii)) for the five consecutive Trading
Dates ending on and including the date of determination of the Current Market
Price; PROVIDED, HOWEVER, that if the Closing Price for the Trading Date next
following such five-day period (the "next-day closing price") is less than 95%
of such average, then the Current Market
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Price per share of Common Stock on such date of determination shall be the
next-day Closing Price; and provided, further, that, if any event that results
in an adjustment of the Common Equivalent Rate occurs during such five-day
period or, for the purposes of calculating the Current Market Price in
connection with any redemption or conversion of Series C Preferred Stock or any
determination of an amount in cash payable in lieu of a fraction of a share of
Common Stock, if any event that results in an adjustment of the Common
Equivalent Rate occurs during the period beginning on the first day of such
five-day period and ending on the applicable redemption or conversion date, the
Current Market Price as determined pursuant to the foregoing will be
appropriately adjusted to reflect the occurrence of such event.
(viii) In any case in which paragraph (4)(d) shall require that
an adjustment as a result of any event become effective at the opening of
business on the business day next following a record date and the date fixed
for conversion or redemption pursuant to paragraphs (4)(a), (b), (c) or (n)
occurs after such record date, but before the occurrence of such event the
Company may in its sole discretion elect to defer the following until after the
occurrence of such event: (A) issuing to the holder of any converted or
redeemed shares of the Series C Preferred Stock the additional shares of Common
Stock issuable upon such conversion or redemption before giving effect to such
adjustment and (B) paying to such holder any amount in cash in
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lieu of a fractional share of Common Stock pursuant to paragraph (4)(f).
(e) NOTICE OF ADJUSTMENTS. Whenever the Common Equivalent Rate
or Optional Conversion Rate is adjusted as herein provided, the Company shall:
(i) forthwith compute the adjusted Common Equivalent Rate and
the adjusted Optional Conversion Rate (as defined in paragraph 4(n))
in accordance with this paragraph (4) and prepare a certificate signed
by the Chief Financial Officer, any Vice President, the Treasurer or
Controller of the Company setting forth the adjusted Common Equivalent
Rate, the adjusted Optional Conversion Rate, the method of calculation
thereof in reasonable detail and the facts requiring such adjustment
and upon which such adjustment is based, which certificate shall be
conclusive, final and binding evidence of the correctness of the
adjustment, and file such certificate forthwith with the transfer
agent or agents for the Series C Preferred Stock and the Common Stock;
and
(ii) mail a notice stating that the Common Equivalent Rate and
the Optional Conversion Rate have been adjusted, the facts requiring
such adjustment and the facts upon which such adjustment is based and
setting forth the adjusted Common Equivalent Rate and the adjusted
Optional Conversion Rate to the holder of record of the outstanding
shares of the Series C Preferred Stock at or prior to the time the
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Company mails an interim statement to its shareholders covering the
fiscal quarter during which the facts requiring such adjustment
occurred, but in any event within 45 days of the end of such fiscal
quarter.
(f) NO FRACTIONAL SHARES. No fractional share or scrip
representing fractional shares of Common Stock shall be issued upon the
redemption or conversion of any shares of Series C Preferred Stock. Instead of
any fractional interest in a share of Common Stock which would otherwise be
deliverable upon the redemption or conversion of a share of Series C Preferred
Stock, the Company shall pay to the holder of such share an amount in cash
(computed to the nearest cent) equal to the same fraction of the (i) Current
Market Price of the Common Stock determined as of the second Trading Date
immediately preceding the Notice Date, in the case of redemption pursuant to
paragraph 4(c), (ii) Closing Price (as defined in paragraph 4(h)(iii) of the
Common Stock determined (A) as of the fifth Trading Date immediately preceding
the Mandatory Conversion Date, in the case of a Mandatory Conversion, or (B) as
of the second Trading Date immediately preceding the date of conversion in the
case of any optional conversion pursuant to paragraph 4(n), or (iii) the
Settlement Date, in the case of a Fundamental Transaction. If more than one
share shall be surrendered for conversion at one time by the same holder, the
number of full shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series C Preferred
Stock so
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surrendered.
(g) CANCELLATION. Shares of Series C Preferred Stock that have
been issued and reacquired in any manner, including shares purchased,
exchanged, redeemed or converted, shall not be reissued as part of the Series C
Preferred Stock and shall (upon compliance with any applicable provisions of
the laws of the Commonwealth of Pennsylvania) have the status of authorized and
unissued shares of the class of Preferred Stock undesignated as to series and
may be redesignated and reissued as part of any series of the Preferred Stock.
(h) DEFINITIONS. As used in this paragraph (4):
(i) the term "business day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State
of New York or the Commonwealth of Pennsylvania are authorized or
obligated by law or executive order to close or are closed because of
a banking moratorium or otherwise;
(ii) the term "Call Price" shall mean $131.25 per share;
(iii) the term "Closing Price" on any day shall mean the closing
sale price regular way on such day or, in case no such sale takes
place on such day, the reported closing bid price regular way, in each
case on the New York Stock Exchange or, if the Common Stock is not
listed or admitted to trading on such Exchange, then on the principal
national securities exchange on which the Common Stock is listed or
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admitted to trading (which shall be the national securities exchange
on which the greatest number of shares of Common Stock has been traded
during the five consecutive Trading Dates ending on and including the
date of determination of the Current Market Price), or, if not quoted
or listed or admitted to trading on any national securities exchange
or quotation system, the closing bid price of the Common Stock on the
over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similarly generally
accepted reporting service, or if not so available as determined in
good faith by the Board of Directors, on the basis of such relevant
factors as it in good faith considers, in the reasonable judgement of
the Board of Directors, appropriate;
(iv) the term "Notice Date" with respect to any notice given by
the Company in connection with the Series C Preferred Stock shall be
the earlier of the public announcement with respect to any matter or
the commencement of the mailing of such notice to the holders of the
Series C Preferred Stock in accordance with paragraph (4)(i);
(v) the term "Settlement Date" shall mean the business day
immediately prior to the effective date of a Fundamental Transaction;
(vi) the term "Trading Date" shall mean a date on which the New
York Stock Exchange (or any successor thereto) is open for the
transaction of business.
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(i) NOTICE OF REDEMPTION OR AUTOMATIC CONVERSION. The Company
will provide notice of any redemption or automatic conversion (including any
potential conversion upon the effectiveness of a Fundamental Transaction but
excluding any conversion pursuant to paragraphs (4)(a) or (n)) of shares of
Series C Preferred Stock to holders of record of the Series C Preferred Stock
to be called or converted not less than 15 nor more than 60 days prior to the
date fixed for such redemption or conversion, as the case may be; PROVIDED,
HOWEVER, that if the timing of a Fundamental Transaction makes it impracticable
to provide at least 15 days notice, the Company shall provide such notice as
soon as is practicable. Such notice shall be provided by mailing notice of such
redemption or conversion first class postage prepaid, to each holder of record
of the Series C Preferred Stock to be redeemed or converted, at such holder's
address as it appears on the stock register of the Company; PROVIDED, HOWEVER,
that no failure to give such notice nor any defect therein shall affect the
validity of the proceeding for the redemption or conversion of any shares of
Series C Preferred Stock to be redeemed or converted, except as to the holder
to whom the Company has failed to give such notice or whose notice was
defective. Each such notice shall state, as appropriate, the following:
(i) the redemption or automatic conversion date;
(ii) that all outstanding shares of Series C Preferred Stock are
to be redeemed or converted or, in the case of a
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call for redemption pursuant to paragraph (4)(c) of fewer than all
outstanding shares of Series C Preferred Stock, the number of such
shares held by such holder to be redeemed;
(iii) in the case of a call for redemption pursuant to paragraph
(4)(c), the Call Price, the number of shares of Common Stock
deliverable upon redemption of each share of Series C Preferred Stock
to be redeemed and, if applicable, the Current Market Price used to
calculate such number of shares of Common Stock subject to any
subsequent adjustments pursuant to paragraph (4)(d);
(iv) whether the Company is delivering shares of Common Stock in
lieu of cash (in the case of a conversion pursuant to paragraphs
(4)(a) or (4)(b)), the Current Market Price to be used to calculate
the number of such shares of Common Stock and, if the Company is
delivering shares in respect of less than all the cash that would
otherwise be deliverable by the Company upon such conversion, the
portion of such cash in lieu of which Common Stock will be delivered;
(v) the place or places where certificates for such shares are
to be surrendered for redemption or conversion; and
(vi) that dividends on the shares of Series C Preferred Stock to
be redeemed or converted will cease to accrue on such redemption or
automatic conversion date or, in the case of a conversion pursuant to
paragraph (4)(b), on the related Settlement Date, unless, in the case
of a redemption
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pursuant to paragraph (4)(c), the Company shall default in delivering
the shares of Common Stock and cash, if any, payable by the Company at
the time and place specified in such notice.
(j) DEPOSIT OF SHARES AND FUNDS. The Company's obligation to
deliver shares of Common Stock and provide funds in accordance with this
paragraph (4) shall be deemed fulfilled if, on or before a redemption or
conversion date or Settlement Date, the Company shall deposit, with a bank or
trust company, or an affiliate of a bank or trust company, having an office or
agency in New York city and having a capital and surplus of at least
$50,000,000, such number of shares of Common Stock as are required to be
delivered by the Company pursuant to this paragraph (4) upon the occurrence of
the related redemption or conversion (including any payment of cash in lieu of
the issuance of fractional share amounts pursuant to paragraph (4)(f)),
together with funds (or, in the case of a conversion pursuant to paragraphs
(4)(a) or (4)(b), shares of Common Stock and/or funds) sufficient to pay all
accrued and unpaid dividends on the shares to be redeemed or converted as
required by this paragraph (4), in trust for the account of the holders of the
shares to be redeemed or converted (and so as to be and continue to be
available thereto), with irrevocable instructions and authority to such bank or
trust company that such shares and funds be delivered upon redemption or
conversion of the shares of Series C Preferred Stock so called for redemption
or converted. Any interest
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accrued on such funds shall be paid to the Company from time to time. Any shares
of Common Stock or funds so deposited and unclaimed at the end of two years from
such redemption or conversion date shall be repaid and released to the Company,
after which the holder or holders of such shares of Series C Preferred Stock so
called for redemption or converted shall look only to the Company for delivery
of such shares of Common Stock or funds.
(k) SURRENDER OF CERTIFICATES; STATUS. Each holder of shares of
Series C Preferred Stock to be redeemed or converted shall surrender the
certificates evidencing such shares (properly endorsed or assigned for
transfer, unless any notice shall state otherwise) to the Company at the place
designated in the notice of such redemption or conversion and shall thereupon
be entitled to receive certificates evidencing shares of Common Stock and to
receive any funds payable pursuant to this paragraph (4) following such
surrender and following the date of such redemption or conversion. In case
fewer than all the shares represented by any such surrendered certificate are
called for redemption, a new certificate shall be issued at the expense of the
Company representing the unredeemed shares. If such notice of redemption or
conversion shall have been given, and if on the date fixed for redemption or
conversion (or on the Mandatory Conversion Date) shares of Common Stock and
funds necessary for the redemption or conversion shall have been either set
aside by the Company separate and apart from its other funds or assets in
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trust for the account of the holders of the shares to be redeemed or converted
(and so as to be and continue to be available therefor) or deposited with a bank
or trust company or affiliate thereof as provided in paragraph (4)(j), or the
circumstances described in clause (ii) to the proviso appearing in the third
full paragraph of paragraph (4)(a) are in effect, then, notwithstanding that the
certificates evidencing any shares of Series C Preferred Stock so called for
redemption or subject to conversion shall not have been surrendered, the shares
represented thereby so called for redemption or subject to conversion shall be
deemed no longer outstanding, dividends with respect to the shares so called for
redemption or subject to conversion shall cease to accrue after the date fixed
for redemption or conversion or, in the case of a conversion pursuant to
paragraph (4)(b), on the related Settlement Date, and all rights with respect to
the shares so called for redemption or subject to conversion shall forthwith
after such date cease and terminate, except for the right of the holders to
receive the shares of Common Stock and funds, if any, payable pursuant to this
paragraph (4) without interest upon surrender of their certificates therefor.
(l) DIVIDEND PAYMENTS. Holders of shares of Series C Preferred
Stock at the close of business on a record date for any payment of declared
dividends will be entitled to receive the dividend payable on such shares of
Series C Preferred Stock on the corresponding Dividend Payment Date
notwithstanding the
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optional conversion of such shares of Series C Preferred Stock following such
record date and before such Dividend Payment Date. However, shares of Series C
Preferred Stock surrendered for optional conversion pursuant to paragraph 4(n)
after the close of business on a record date for any payment of declared
dividends and before the opening of business on the next succeeding Dividend
Payment Date must be accompanied by payment in cash of an amount equal to the
dividend attributable to the current quarterly dividend period payable on such
date. Notwithstanding the foregoing, holders of Series C Preferred Stock who
convert pursuant to paragraph 4(n) their Series C Preferred Stock at any time
after such Series C Preferred Stock have been called for redemption, will be
entitled to receive, in addition to shares of Common Stock issuable upon
conversion, cash payment of dividends accrued and unpaid to the date of such
conversion. Except as set forth in the preceding sentence, upon any optional
conversion pursuant to paragraph 4(n) of shares of Series C Preferred Stock, the
Company will make no payment of or allowance for accrued and unpaid dividends,
whether or not in arrears, on such shares of Series C Preferred Stock, or for
previously declared dividends or distributions on the shares of Common Stock
issued upon such conversion.
(m) PAYMENT OF TAXES. The Company will pay any and all
documentary, stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Common Stock on the redemption or conversion of
shares of Series C Preferred Stock
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pursuant to this paragraph (4); PROVIDED, HOWEVER, that the Company shall not be
required to pay any tax which may be payable in respect of any registration of
transfer involved in the issue or delivery of shares of Common Stock in a name
other than that of the registered holder of Series C Preferred Stock redeemed or
converted or to be redeemed or converted, and no such issue or delivery shall be
made unless and until the person requesting such issue has paid to the Company
the amount of any such tax or has established, to the satisfaction of the
Company, that such tax has been paid.
(n) CONVERSION AT THE OPTION OF THE HOLDER. After 40 days
following the latest date of original issuance of the Series C Preferred Stock,
the shares of the Series C Preferred Stock are convertible, in whole or in
part, at the option of the holders thereof, at any time before the Mandatory
Conversion Date, unless previously redeemed, into shares of Common Stock at a
rate of 8.85 shares of Common Stock for each share of Series C Preferred Stock
(the "Optional Conversion Rate"). The Optional Conversion Rate is subject to
adjustment in the same manner as the Common Equivalent Rate, as described in
paragraph (4)(d). The right to convert shares of Series C Preferred Stock
called for redemption will terminate immediately before the close of business
on the redemption date with respect to such shares.
Conversion of shares of Series C Preferred Stock at the option
of the holder may be effected by delivering certificates evidencing such shares
of Series C Preferred Stock, together with
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written notice of conversion and a proper assignment of such certificates to the
Company or in blank (and, if applicable, cash payment of an amount equal to the
dividend attributable to the current quarterly dividend period payable on such
shares), to the office of the transfer agent for Series C Preferred Stock or to
any other office or agency maintained by the Company for that purpose and
otherwise in accordance with conversion procedures established by the Company.
Each optional conversion will be deemed to have been effected immediately before
the close of business on the date on which the foregoing requirements have been
satisfied. The conversion will be at the Optional Conversion Rate in effect at
such time and on such date.
5. LIQUIDATION PREFERENCES.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, the holders of shares
of Series C Preferred Stock then outstanding shall be entitled to be paid out
of the assets of the Company available for distribution to its shareholders,
after payment or provision for payment of any Senior Securities, an amount per
share of Series C Preferred Stock in cash equal to the sum of (i) $144.40 plus
(ii) all accrued and unpaid dividends thereon to the date of liquidation,
dissolution or winding up, before any payment shall be made or any assets
distributed to the holders of any of the Junior Securities. If the assets of
the Company are not sufficient to pay in full the liquidation payments payable
to the holders of outstanding shares of the
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Series C Preferred Stock and any Parity Securities, then the holders of all such
shares shall share ratably in such distribution of assets in accordance with the
amount which would be payable on such distribution if the amounts to which the
holders of outstanding shares of Series C Preferred Stock and the holders of
outstanding shares of such Parity Securities are entitled were paid in full.
Except as provided in this paragraph (5)(a), holders of Series C Preferred Stock
shall not be entitled to any distribution in the event of liquidation,
dissolution or winding up of the affairs of the Company.
(b) For the purposes of this paragraph (5), none of the
following shall be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the Company:
(i) the voluntary sale, conveyance, lease, exchange or transfer
(for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Company;
(ii) the consolidation or merger of the Company with or into
one or more other corporations or other associations;
(iii) the consolidation or merger of one or more corporations
or other associations with or into the Company;
(iv) the participation by the Company in a share exchange;
(v) the division of the Company pursuant to 15 Pa.C.S.
Subch. 19D;
(vi) the conversion of the Company pursuant to 15
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Pa.C.S. Subch. 19E.
6. VOTING RIGHTS.
(a) The holders of record of shares of Series C Preferred Stock
shall not be entitled to any voting rights except as hereinafter provided in
this paragraph (6) or as otherwise provided by law.
(b) In the event that dividends payable to the holders of Series
C Preferred Stock are in arrears and unpaid for the equivalent of six quarterly
periods, the Board of Directors will be increased by two directors and the
holders of Series C Preferred Stock, together with the holders of all other
outstanding series of the Preferred Stock in respect of which such a default in
payment of dividends as described hereinabove exists and is entitled to vote
thereon, voting as a single class without regard to series, will be entitled to
elect two directors of the expanded Board of Directors. Such entitlement shall
continue until such time as all dividends in arrears on all of the Series C
Preferred Stock at the time outstanding have been paid or declared and set
aside for payment, whereupon such voting rights of the holders of the Series C
Preferred Stock shall cease (and the respective terms of the two additional
directors shall thereupon expire and the number of directors constituting the
full board be decreased by two) subject to being again revived from time to
time upon the reoccurrence of the conditions described in this paragraph (6)(b)
as giving rise thereto.
At any time when the rights of holders of Series C
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Preferred Stock to elect two additional directors shall have so vested,
the Company shall, upon the written request of the holders of record of
not less than 10% of the Series C Preferred Stock then outstanding (or
10% of all of the shares of Preferred Stock having the right to vote for
such directors in case holders of shares of other series of Preferred
Stock shall also have the right to elect directors in such
circumstances), call a special meeting of holders of the Series C
Preferred Stock (and other series of Preferred Stock, if applicable) for
the election of directors. In the case of a written request, the special
meeting shall be held within 60 days after the delivery of the request,
upon the notice provided by law and in the By-laws of the Company;
except that the Company shall not be required to call such a special
meeting if the request is received less than 120 days before the date
fixed for the next ensuing annual meeting of shareholders of the
Company.
Whenever the number of directors of the Company shall have been
increased by two as provided in this paragraph (6)(b), the number as so
increased may thereafter be further increased or decreased in such manner as
may be permitted by the By-laws and without the vote of the holders of Series C
Preferred Stock. No such action shall impair the right of the holders of Series
C Preferred Stock to elect and to be represented by two directors as provided
in this paragraph (6)(b).
The two directors elected as provided in this paragraph (6)(b)
shall serve until the next annual meeting of shareholders
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of the Company and until their respective successors shall be elected
and qualified or the earlier expiration of their terms as provided in
this paragraph (6)(b). No such director may be removed without the vote
of holders of a majority of the shares of Series C Preferred Stock (or
holders of a majority of shares of Preferred Stock having the right to
vote in the election of such director in case holders of shares of other
series of Preferred Stock shall also have the right to elect such
director). If, prior to the expiration of the term of any such director,
a vacancy in the office of such director shall occur, such vacancy
shall, until the expiration of such term, in each case be filled by the
remaining director elected as provided in this paragraph (6)(b) or, if
none remains in office, by vote of the holders of record of a majority
of the outstanding shares of Series C Preferred Stock (or holders of a
majority of shares of Preferred Stock who are then entitled to
participate in the election of such directors in case holders of shares
of other series of Preferred Stock shall also have the right to elect
such director).
(c) So long as any shares of the Series C Preferred Stock are
outstanding (except when notice of the redemption or conversion of all
outstanding shares of Series C Preferred Stock has been given pursuant to
paragraph (4)(i) and shares of Common Stock and any necessary funds have been
deposited in trust for such redemption or conversion pursuant to paragraph
(4)(j)), the Company shall not, without the affirmative vote of the holders of
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at least 66-2/3% of the shares of Series C Preferred Stock and any other series
of Preferred Stock entitled to vote thereon at the time outstanding, voting
together as one class without regard to series, in person or by proxy, or by
resolution adopted at an annual or special meeting called for the purpose,
amend pursuant to the provisions of 15 Pa.C.S. Subchapter 19B or in the context
of any other type of Fundamental Transaction any of the provisions of the
Company's Restated Articles of Incorporation which would either (i) authorize
any new class of Senior Securities or (ii) alter or change the rights,
preferences or limitations of the Series C Preferred Stock so as to affect such
rights, preferences or limitations in any material respect prejudicial to the
holders of the Series C Preferred Stock.
(d) So long as any shares of the Series C Preferred Stock are
outstanding (except when notice of the redemption or conversion of all
outstanding shares of Series C Preferred Stock has been given pursuant to
paragraph (4)(i) and shares of Common Stock and any necessary funds have been
deposited in trust for such redemption or conversion pursuant to paragraph
(4)(j)), the Company shall not, without the affirmative vote of the holders of
at least a majority of the shares of Series C Preferred Stock and any other
series of Preferred Stock entitled to vote thereon at the time outstanding
voting or consenting, as the case may be, voting together as one class without
regard to series, given in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting called for the purpose,
amend
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pursuant to the provisions of 15 Pa.C.S. Subchapter 19B or in the context
of any other type of Fundamental Transaction any of the provisions of the
Company's Restated Articles of Incorporation which would either (i) increase
the total number of authorized shares of Preferred Stock or (ii) authorize or
create any class of Parity Securities.
7. INCREASE IN SHARES. The number of shares of Series C
Preferred Stock may, to the extent of the Company's authorized and unissued
Preferred Stock, be increased by further resolution duly adopted by the Board
of Directors and the filing of a statement with respect to shares with the
Department of State of the Commonwealth of Pennsylvania.
8. LIMITATIONS. Except as may otherwise be required by law, the
shares of Series C Preferred Stock shall not have any powers, preferences or
relative, participating, optional or other special rights other than those
specifically set forth in this Article FIFTH (F) (as such Article FIFTH (F) may
be amended from time to time) or otherwise in the Restated Articles of
Incorporation of the Company.
SIXTH: A. A higher than majority shareholder vote for certain
Business Combinations (as defined below) shall be required as follows:
(1) In addition to any affirmative vote required by law or these
Restated Articles of Incorporation or the terms of any series of
Preferred Stock or any other securities of the
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Company and except as otherwise expressly provided in Section B. of
this Article SIXTH:
(a) any merger or consolidation of the Company or
any Subsidiary with (i) any Interested Stockholder or with (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;
(b) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of
transactions whether or not related) to an Interested
Stockholder (or an Affiliate or Associate of an Interested
Stockholder) of any assets of the Company or of a Subsidiary
having an aggregate Fair Market Value of $10,000,000 or more;
(c) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of
transactions whether or not related) to or with the Company or a
Subsidiary of any assets of an Interested Stockholder (or an
Affiliate or Associate of an Interested Stockholder) having an
aggregate Fair Market Value of $10,000,000 or more;
(d) the issuance or sale by the Company or any
Subsidiary (in one transaction or a series of transactions
whether or not related) of any securities of the Company or of
any Subsidiary to any Interested
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Stockholder or any Affiliate or Associate of any Interested
Stockholder in exchange for cash, securities or other
consideration (or a combination thereof) having an aggregate Fair
Market Value of $10,000,000 or more except an issuance of
securities upon conversion of convertible securities of the
Company or of a Subsidiary which were not acquired by such
Interested Stockholder (or such Affiliate or Associate) from the
Company or a Subsidiary;
(e) the adoption of any plan or proposal for the
liquidation or dissolution of the Company 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 Company, or
any merger or consolidation of the Company with any of its
Subsidiaries or any other transaction (whether or not with or
into or otherwise involving an Interested Stockholder) which has
the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of
equity securities or securities convertible into equity
securities of the Company or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder or any Affiliate
or Associate of any Interested Stockholder; shall require the
affirmative vote of (i) the holders of
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at least eighty percent (80%) of the combined voting power of the
then outstanding shares of capital stock of the Company entitled
to vote generally in an annual election of directors (the "Voting
Stock") and (ii) the holders of at least a majority of the
combined voting power of the then outstanding Voting Stock held
by Disinterested Stockholders, in each case voting together as a
single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a
lesser percentage may be specified, by law, by any other
provisions of these Restated Articles of Incorporation or by the
terms of any series of Preferred Stock or any other securities of
the Company;
(2) The term "Business Combination" as used in this Article SIXTH
shall mean any transaction which is referred to in any one or more of
clauses (a) through (f) of paragraph (1) of Section A. of this Article
SIXTH.
B. The provisions of Section A. of this Article SIXTH shall not
be applicable to any Business Combination, and such Business Combination shall
require only such affirmative vote (if any) as is required by law, any other
provision of these Restated Articles of Incorporation or the terms of any class
or series of capital stock of the Company entitled to a preference over the
Common Stock as to dividends or upon liquidation, or the terms of
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any other securities of the Company, if all of the conditions specified in
either of the following paragraphs (1) or (2) are met:
(1) The Business Combination shall have been approved by a
majority of the Disinterested Directors or
(2) All the following six conditions shall have been met -
(a) The transaction constituting the Business Combination
shall provide for a consideration to be received by holders of
Common Stock in exchange for their 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
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:
(i) (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 Common Stock beneficially
owned by the Interested Stockholder which were
acquired (x) within the two-year period immediately
prior to the first public announcement of the
proposed Business Combination (the "Announcement
Date") or (y) in the transaction in which it became
an Interested Stockholder,
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whichever is higher;
(ii) the Fair Market Value per share of Common
Stock on the Announcement Date or on the date on
which the Interested Stockholder became an Interested
Stockholder (the "Determination Date"), whichever is
higher; and
(iii) (if applicable) the price per share
equal to the Fair Market Value per share of Common
Stock determined pursuant to clause (ii) immediately
preceding, multiplied by the ratio of (x) the highest
per share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid in
order to acquire any shares of Common Stock
beneficially owned by the Interested Stockholder
which were acquired within the two-year period
immediately prior to the Announcement Date to (y) the
Fair Market Value per share of Common Stock on the
first day in such two-year period on which the
Interested Stockholder beneficially owned any shares
of Common Stock, whether or not such Stockholder was
an Interested Stockholder on that day.
(b) If the transaction constituting the Business
Combination shall provide for a consideration to be received by
holders of any class of outstanding Voting Stock other than
Common Stock, the aggregate amount of
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the cash and the Fair Market Value as of the date of the
consummation of the Business Combination of consideration other
than cash to be received per share by holders of shares of such
Voting Stock shall be at least equal to the highest of the
following (it being intended that the requirements of this clause
(2)(b) shall be required to be met with respect to every class of
outstanding Voting Stock other than Institutional Voting Stock,
whether or not the Interested Stockholder beneficially owns any
shares of a particular class of Voting Stock):
(i) (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 of Voting Stock
beneficially owned by the Interested Stockholder
which were acquired (x) within the two-year period
immediately prior to the Announcement Date or (y) in
the transaction in which it became an Interested
Stockholder, whichever is higher;
(ii) (if applicable) the highest preferential
amount per share to which the holders of shares of
such class of Voting Stock are entitled in the event
of any voluntary or involuntary liquidation,
dissolution or winding up
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of the Company;
(iii) the Fair Market Value per share of such
class of Voting Stock on the Announcement Date or on
the Determination Date, whichever is higher; and
(iv) (if applicable) the price per share equal to
the Fair Market Value per share of such class of
Voting Stock determined pursuant to clause (iii)
immediately preceding, multiplied by the ratio of (x)
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 of Voting Stock beneficially owned by the
Interested Stockholder which were acquired within the
two-year period immediately prior to the Announcement
Date to (y) the Fair Market Value per share of such
class of Voting Stock on the first day in such
two-year period on which the Interested Stockholder
beneficially owned any shares of such class of Voting
Stock, whether or not such Stockholder was an
Interested Stockholder on that day.
(c) The consideration to be received by holders of a
particular class of Voting Stock (including Common Stock) shall
be in cash or in the same form as was
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previously paid in order to acquire shares of such class of
Voting Stock which are beneficially owned by the Interested
Stockholder and, if the Interested Stockholder beneficially owns
shares of any class of Voting Stock which were acquired with
varying forms of consideration, the form of consideration to be
received by holders of such class of Voting Stock shall be either
cash or the form used to acquire the largest number of shares of
such class of Voting Stock beneficially owned by it. The prices
determined in accordance with clauses (a) and (b) of paragraph
(2) of this Section B. shall be subject to an appropriate
adjustment in the event of any stock dividend, stock split,
subdivision, combination of shares or similar event.
(d) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
Business Combination:
(i) except as approved by a majority of the
Disinterested Directors, there shall have been no
failure to declare and pay at the regular date
therefor any full quarterly dividends (whether or
not cumulative) on any outstanding Preferred Stock
or other capital stock entitled to a preference over
the Common Stock as to dividends or upon
liquidation;
(ii) except as approved by a majority of the
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Disinterested Directors, there shall have been (x) no
reduction in the annual amount of dividends paid on
the Common Stock (except as necessary to reflect any
subdivision of the Common Stock) and (y) no failure
to increase the annual amount of dividends as
necessary to prevent any such reduction in the event
of any reclassification (including any reverse stock
split), recapitalization, reorganization or similar
transaction which has the effect of reducing the
number of outstanding shares of the Common Stock;
(iii) 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
(iv) there shall have always been at least three
Disinterested Directors on the Board of Directors.
(e) 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 shareholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the Company, whether
in
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anticipation of or in connection with such Business
Combination or otherwise.
(f) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall be mailed to
shareholders 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).
C. For the purposes of this Article SIXTH:
(1) A "person" shall mean any individual, a
partnership, a corporation, an association, a trust or other
entity.
(2) "Interested Stockholder" at any particular time
shall mean any person (other than the Company or any Subsidiary)
who or which:
(a) is at such time the beneficial owner, directly
or indirectly, of five percent (5%) or more of the
voting power of the Voting Stock;
(b) is an Affiliate of the Company and at any
time within the two-year period immediately prior to
the date in question was the beneficial
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owner, directly or indirectly, of five percent (5%)
or more of the voting power of the Voting Stock; or
(c) is at such time 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 (as defined in C.(2)(a) and (b) above),
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.
(3) "Disinterested Stockholder" shall mean a
shareholder of the Company who is not an Interested
Stockholder or an Affiliate or an Associate of an Interested
Stockholder.
(4) A person shall be a "beneficial owner" of any
shares of Voting Stock:
(a) which such person or any of its Affiliates or
Associates beneficially owns, directly or indirectly;
(b) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether or not such
right is exercisable
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immediately) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding; or
(c) which are beneficially owned, directly or
indirectly, by any other person with which such person or any
of its Affiliates or Associates has any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting
or disposing of any shares of Voting Stock.
(5) For the purpose of determining whether a person is an
Interested Stockholder pursuant to paragraph (2) of this Section
C., the number of shares of Voting Stock deemed to be outstanding
shall include shares deemed owned by an Interested Stockholder
through application of paragraph (4) of this Section C. but shall
not include any other shares of Voting Stock which may be
issuable pursuant to any agreement, arrangement or understanding,
or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise.
(6) "Affiliate" or "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the
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Securities Exchange Act of 1934, as in effect on December 31,
1984 (the term "registrant" in such Rule 12b-2 meaning in this
case the Company).
(7) "Subsidiary" means any corporation of which a
majority of any class of equity security is owned, directly or
indirectly, by the Company; PROVIDED, HOWEVER, that for the
purposes of the definition of Interested Stockholder set forth
in paragraph (2) of this Section C. the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Company.
(8) "Disinterested Director" means any member of the
Board of Directors who is unaffiliated with, and not a
representative or nominee of, an Interested Stockholder and (a)
was a member of the Board prior to the time that the Interested
Stockholder became an Interested Stockholder, or (b) recommended
to succeed a Disinterested Director by a majority of the
Disinterested Directors then on the Board.
(9) "Fair Market Value" means: (a) in the case of
stock, the highest closing sale price during the 30-day period
immediately preceding the date in question of a share of such
stock on the Composite Tape for New York Stock Exchange Listed
Stocks, or, if such stock is not quoted on the Composite Tape,
on the New York Stock
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<PAGE> 87
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 bid quotation with respect to a share of such stock
during the 30-day period preceding the date in question on the
National Association of Securities Dealers, Inc. Automated
Quotation System or any other 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 (b) in the case of
property other than cash or stock, the fair market value of such
property on the date in question as determined by a majority of
the Disinterested Directors in good faith.
(10) In the event of any Business Combination in
which the Company survives, the phrase "consideration other than
cash to be received" as used in paragraph (2) of Section B. of
this Article SIXTH shall include the shares of Common Stock and
the shares of any other class of outstanding Voting Stock
retained by the holders of such shares.
(11) The term "class" of Voting Stock shall be
deemed to refer to a series of Voting Stock where more than one
series of Voting Stock is outstanding within a
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class of Voting Stock.
(12) "Institutional Voting Stock" shall mean any
class of Voting Stock which was issued to and continues to be
held solely by one or more insurance companies, pension funds,
commercial banks, savings banks or similar financial
institutions or institutional investors.
D. A majority of the Disinterested Directors of the Company
shall have the power and duty to determine for the purposes of this Article
SIXTH, on the basis of information known to them after reasonable inquiry, (1)
whether a person is an Interested Stockholder, (2) the number of shares of
Voting Stock beneficially owned by any person, (3) whether a person is an
Affiliate or Associate of another, (4) whether the requirements of Section B.
of this Article SIXTH have been met with respect to any Business Combination,
(5) whether a class of Voting Stock is Institutional Voting Stock and (6)
whether the assets which are subject to any Business Combination have, or the
consideration to be received for the issuance or transfer of securities by this
Company or any subsidiary in any Business Combination has, an aggregate Fair
Market Value of $10,000,000 or more. Any such determination made in good faith
shall be binding and conclusive on all parties.
E. Nothing contained in this Article SIXTH shall be
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construed to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
F. In addition to any requirements of law and any other
provisions of these Restated Articles of Incorporation or the terms of any
class or series of capital stock of the Company entitled to a preference over
the Common Stock as to dividends or upon liquidation, or the terms of any other
securities of the Company (and notwithstanding the fact that a lesser
percentage may be specified by law, these Restated Articles of Incorporation or
any such terms), the affirmative vote of
(1) the holders of eighty percent (80%) or more of the combined
voting power of the Voting Stock, voting together as a single class,
and
(2) a majority of the combined voting power of the Voting Stock
held by the Disinterested Stockholders, voting together as a single
class, shall be required to amend, alter or repeal, or adopt any
provision inconsistent with, this Article SIXTH.
SEVENTH: A. Except as otherwise fixed by or pursuant to the terms of
any class or series of capital stock of the Company entitled to a preference
over the Common Stock as to dividends or upon liquidation, the number,
qualification, terms of office, manner of election, time and place of meeting,
compensation, powers and duties of the directors shall be fixed from time to
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time by or pursuant to the By-laws.
B. If the By-laws so provide, the members of the Board (other
than those who may be elected by the holders of any class or series of capital
stock having a preference over the Common Stock as to dividends or upon
liquidation pursuant to the terms of these Restated Articles of Incorporation
or of such class or series of stock) shall be classified, with respect to the
time for which they severally hold office, into three classes, as nearly equal
in number as possible, having such terms and being elected in such manner as
shall be specified in the By-laws.
EIGHTH: In furtherance and not in limitation of the powers
conferred upon it by law, the Board of Directors is expressly authorized to:
(1) adopt any By-laws a majority of the entire Board of
Directors may deem necessary or desirable for the efficient conduct of
the affairs of the Company, including, but not limited to, provisions
governing the conduct of, and the matters which may properly be
brought before, meetings of the shareholders and provisions specifying
the manner and extent to which prior notice shall be given of the
submission of proposals to be considered at any such meeting or of
nominations for the election of directors to be held at any such
meeting; and
(2) repeal, alter or amend the By-laws by the vote of a
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majority of the entire Board of Directors.
NINTH: In addition to any requirements of law and any other
provisions of these Restated Articles of Incorporation or the terms of any
series of Preferred Stock or any other securities of the Company (and
notwithstanding the fact that a lesser percentage may be specified by law,
these Restated Articles of Incorporation or any such terms), the affirmative
vote of the holders of eighty percent (80%) or more of the combined voting
power of the then outstanding shares of capital stock of the Company entitled
to vote generally in an annual election (the "Voting Stock"), voting together
as a single class, shall be required to:
(1) remove a director without cause (For purposes of this
Article (NINTH) "cause" shall mean the willful and continuous failure
of a director to substantially perform such director's duties to the
Company, other than any such failure resulting from incapacity due to
physical or mental illness, or the willful engaging by a director in
gross misconduct materially and demonstrably injurious to the
Company);
(2) adopt, amend, alter or repeal any provision of the By-laws,
except that By-law XVI may be amended or altered by a majority vote of
the Voting Stock if the majority of the entire Board of Directors has
first recommended the amendment or alteration for approval by the
shareholders;
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(3) amend, alter or repeal or adopt any provision inconsistent
with, Articles SEVENTH or EIGHTH or this Article NINTH; and
(4) amend, alter or repeal or adopt any provisions inconsistent
with any provision, other than Articles SIXTH, SEVENTH or EIGHTH or
this Article NINTH, contained in these Restated Articles of
Incorporation, unless otherwise first recommended and approved by a
majority of the entire Board of Directors or, if there is an
Interested Stockholder (as defined in Article SIXTH), by a majority of
the Disinterested Directors (as defined in Article SIXTH), in which
cases a majority vote of the Voting Stock is required to amend, alter
or repeal such other provisions of these Restated Articles of
Incorporation.
TENTH: To the fullest extent that the law of the Commonwealth of
Pennsylvania, as it exists on January 27, 1987, or as it may thereafter be
amended, permits the elimination of the liability of directors, no director of
the corporation shall be liable for monetary damages for any action taken, or
any failure to take any action. This Article TENTH shall not apply to any
breach of performance of duty or any failure of performance of duty by any
director occurring prior to January 27, 1987. No amendment to or repeal of this
Article TENTH shall apply to or have any effect on the liability or alleged
liability of any director of the Company for or with respect to any act or
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failure to act on the part of such director occurring prior to such amendment
or repeal.
ELEVENTH: The Company may, to the fullest extent permitted by
applicable law as then in effect, indemnify any person who is or was a
director, officer, employee or agent of the Company or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise (including,
without limitation, any employee benefit plan) and may take such steps as may
be deemed appropriate by the Company, including purchasing and maintaining
insurance, entering in to contracts (including, without limitation, contracts
of indemnification between the Company and its directors and officers),
creating a trust fund, granting security interests or using other means
(including, without limitation, a letter of credit) to insure the payment of
such amount as may be necessary to effect such indemnification. This Article
shall apply to any action taken, or any failure to take any action, on or after
January 27, 1987.
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Exhibit 4.4
This document constitutes part of a
prospectus covering securities that
have been registered under the
securities Act of 1933.
INFINITY BROADCASTING CORPORATION
STOCK OPTION PLAN
(formerly the Infinity Broadcasting Corporation
Key Employee Stock Option Plan)
-----------------------------------------------
1. PURPOSE.
This plan, which was formerly known as the Infinity Broadcasting
Corporation Key Employee Stock Option Plan and shall be known as the Infinity
Broadcasting Corporation Stock Option Plan (the "Plan"), is intended to promote
the interests of Infinity Broadcasting Corporation (the "Company") and its
shareholders by encouraging long-term growth of the Company's earnings by
offering to those key employees and non-employee directors of the Company and
its subsidiaries who have been or will be largely responsible for such growth
the opportunity to acquire equity interests or increase their equity interests
in the Company, thereby aligning their interests more closely with the interests
of stockholders, and by encouraging key employees and non-employee directors to
remain in the service of the Company and its subsidiaries and providing a basis
for attracting able employees and non-employee directors in the future.
2. SHARES SUBJECT TO THE PLAN.
(a) SHARES. Subject to adjustment as provided in Section 9, the aggregate
number of shares of the Class A Common Stock of the Company ("Class A Shares")
to be delivered upon exercise of all options granted under the Plan shall be
1,776,233, and the aggregate number of shares of the Class B Common Stock of the
Company ("Class B Shares" and together with Class A Shares, "Shares") to be
delivered upon exercise of all options granted under the Plan shall be 125,000.
Such Shares may be authorized but unissued Shares or treasury Shares. In the
event the number of Shares to be delivered upon the exercise in full of any
option granted under the Plan is reduced for any reason whatsoever, or in the
event any option granted under the Plan can no longer under any circumstances be
exercised, the number of Shares
<PAGE> 2
no longer subject to such option shall thereupon be released from such option
and shall thereafter be available to be re-optioned under the Plan. All Shares
issued pursuant to the exercise of options granted under the Plan shall be
fully paid and non-assessable.
(b) RIGHT OF FIRST REFUSAL. All Shares issued pursuant to the exercise of
options granted under the Plan shall be subject to a right of first refusal by
the Company at a value determined in good faith by the Board of Directors of the
Company (the "Board") in its sole discretion, which value shall in no case be
less than the par value of such Shares, unless at such time the Company shall be
subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance therewith files reports
and other information with the Securities and Exchange Commission. A holder of
Shares who receives a bona fide offer shall, within 30 days thereof, notify the
Company of such offer and the proposed date of sale. The Company shall exercise
its right of first refusal by (i) notifying the holder of such Shares, within 30
days of its receipt of such notice, of its intention to purchase all, but not
less than all, of the Shares subject to the bona fide offer and (ii) tendering
full payment for such Shares. Once the Company has tendered payment with respect
to any such Shares, the Optionee's sole right with respect to such Shares shall
be the right to the payment so tendered. The Board's determination of the amount
to be paid to the Optionee shall be binding.
(c) RIGHT TO REPURCHASE SHARES. All Shares issued pursuant to this Plan
shall be subject to the right of the Company to repurchase such Shares at a
value determined in good faith by the Board in its sole discretion, upon the
termination of employment (including the termination of all service as a
director of the Company, its parents and subsidiaries, in the case of an
Optionee who is a director of any such entity but is not an employee of any such
entity) of the Optionee with respect to whom such Shares were issued unless, at
the time of such termination of employment, the Company shall be subject to the
informational requirements of the Act, and in accordance therewith files reports
and other information with the Securities and Exchange Commission. The Company
shall exercise such right by (i) notifying the optionee within thirty days of
the date of his termination of its intention to repurchase all, but not less
than all, of its Shares issued to such Optionee pursuant to the Plan and (ii)
tendering full payment for the
2
<PAGE> 3
Shares. Once the Company has tendered payment with respect to any such Shares,
an Optionee's sole right with respect to such Shares shall be the right to the
payment so tendered. The Board's determination of the amount to be paid to the
Optionee shall be binding. The Company is not, however, obligated to purchase
any Shares under the Plan.
3. EFFECTIVE DATE, AMENDMENTS.
(a) The Plan was adopted on October 27, 1988 and became effective
("Effective Date") on October 27, 1988, upon approval by the holders of a
majority of all the outstanding Shares of voting stock on the Company entitled
to vote thereon.
(b) AMENDMENT DATE. The Plan was amended on September 10, 1990, effective
as of the same date (the "Amendment Date"), upon approval of the holders of a
majority of all of the outstanding Shares of voting stock of the Company
entitled to vote thereon. The Plan was amended and restated effective February
4, 1992, upon the approval of the holders of a majority of all outstanding
shares of voting stock of the Company entitled to vote thereon, and was further
amended effective as of August 18, 1992, upon the approval of the Company's
stockholders in accordance with Rule 16b-3 under the Exchange Act.
(c) The Plan was amended, restated and renamed, effective as of July 26,
1993, the date on which the Company's stockholders approved the amendments to
Sections 1, 5 and 7 reflected herein in accordance with Rule 16b-3 under the
Exchange Act, except that the amendments reflected herein to Section 4 of the
Plan became effective as of February 4, 1992.
(d) The Plan was further amended, effective as of August 16, 1993, to
reflect the Company's three-for-two stock split in the form of a 50% stock
dividend.
4. ADMINISTRATION.
(a) THE ADMINISTRATOR. The term "Administrator" as used herein shall mean a
committee appointed by the Board and consisting of two or more members of the
Board, each of whom is a "disinterested person" within the meaning of Rule 16b-3
under the Exchange Act.
3
<PAGE> 4
(b) AUTHORITY. Subject to the provisions of the Plan, the Administrator
shall interpret the Plan and the options granted under the plan, shall make all
other determinations necessary or advisable for the administration of the Plan
and shall correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any option, in the manner and to the extent the
Administrator deems desirable to carry the Plan or option into effect. The
Administrator may, with the consent of the person or persons entitled to
exercise any outstanding option, amend such option consistent with the
provisions of the Plan. In granting options pursuant to Section 5 hereof to
persons other than the Chief Executive Officer of the Company (the "CEO"), the
Administrator may consider recommendations by the CEO in addition to the other
factors set forth in Section 5.
(c) PROCEDURE. All determinations of the Administrator shall be made by not
less than a majority of its members at a meeting at which a quorum is present. A
majority of the entire Administrator shall constitute a quorum for the
transaction of business. Any action required or permitted to be taken at a
meeting of the Administrator may be taken without a meeting, if a unanimous
written consent which sets forth the action is signed by each member of the
Administrator and filed with the minutes of proceedings of the Administrator. No
member of the Administrator shall be liable, in the absence of bad faith, for
any act or omission with respect to his services. Without limiting the
generality of the foregoing, no member of the Administrator shall be liable for
any action or determination made in good faith with respect to the Plan or to
any option granted thereunder.
5. GRANTING OF OPTIONS.
(a) ELIGIBILITY, GRANT OF OPTIONS AND SELECTION OF OPTIONEES. The
Administrator shall have authority within ten years of the Effective Date of the
Plan, to grant to such key employees (including officers and directors who are
employees) and non-employee directors of the Company and its present and future
subsidiaries as may be selected by it ("Optionees"), options to purchase Shares.
The Administrator shall have the further authority within ten years after the
Amendment Date to grant to Optionees options to purchase Shares. All options
granted hereunder shall be granted on the terms and conditions hereinafter set
forth. In selecting Optionees, and in determining the number of Shares to be
covered by each option, the Administrator may
4
<PAGE> 5
consider the office or position held by the Optionee, the Optionee's degree of
responsibility for and contributions to the growth and success of the Company,
the Optionee's potential or any other performance factors which it may consider
relevant. Appropriate officers of the Company are hereby authorized to execute
and deliver option agreements in the name of the Company, in the form and as
directed from time to time by the Administrator.
(b) TIME OF GRANTING OPTION. Noting contained in the Plan or any
resolutions adopted or to be adopted by the Board or the stockholders of the
Company shall constitute the granting of any option hereunder. Options shall be
granted only by action of or pursuant to the authority of the Administrator;
provided, however, that no participant shall have any rights with respect to
such grant unless and until he or she shall have executed and delivered an
option agreement in form and substance satisfactory to the Administrator.
6. OPTION PRICE.
MINIMUM OPTION PRICE. The option price per share of the Common Stock
underlying each option shall be fixed by the Administrator.
7. TERMS AND CONDITIONS OF OPTIONS.
Options granted under the Plan shall be in such form as the Administrator
may from time to time approve, subject to the following terms and conditions,
and may contain such additional terms and conditions (which terms and conditions
need not be the same in each case), including restrictions against competition
be the Optionee, not inconsistent with the Plan, as the Administrator shall deem
desirable:
(a) OPTION PERIOD AND CONDITIONS AND LIMITATIONS ON EXERCISE. The options
shall be exercised in full or in installments at such time or times as the
Administrator, in its sole discretion, may determine. The right to purchase
shall be cumulative so that if the full number of the Shares purchasable in any
period shall not be purchased, the balance may be purchased at any time from
time to time thereafter prior to the expiration of the option term as
established by the Administrator. No stock option shall be exercisable with
respect to any of the Shares subject to the option later than ten years from the
date of grant. The
5
<PAGE> 6
date on which an option ultimately becomes unexercisable is hereinafter
referred to as the Option Expiration Date. To the extent not prohibited by
other provisions of the Plan, each option shall be exercisable at such time or
times and subject to such conditions as are set forth in the option.
(b) TERMINATION OF EMPLOYMENT, DISABILITY AND DEATH. For purposes of the
Plan and each option granted under the Plan, an Optionee's employment shall be
deemed to have terminated at the close of business on the day preceding the
first date on which he is no longer for any reason whatsoever employed by the
Company or any parent or subsidiary of the Company (or, in the case of a
non-employee director, at the close of business on the day preceding the first
date on which he no longer serves as a director of the Company or of any of its
parents or subsidiaries). Unless otherwise provided in an applicable option
agreement, if an Optionee's employment is terminated for any reason whatsoever
the right to exercise said option shall terminate:
(1) At the expiration of thirty days after the Optionee's employment
is terminated;
(2) At the expiration of three months after the Optionee ceases to
receive wages through the Company's or a subsidiary's payroll because of
disability, within the meaning of Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended (the "Code"). The determination of the
Administrator on any question involving disability shall be conclusive and
binding; or
(3) At the expiration of three months after the Optionee's death if
the Optionee's employment is terminated by reason of death or if the
Optionee had a right to exercise an option on the date of death pursuant to
Section 7(b)(1) or (2); and prior to such date such option may be exercised
by the estate or by the person or persons who acquire the right to exercise
such option by bequest or inheritance with respect to any or all of the
Shares remaining subject to such option at the time of the Optionee's
death.
An option exercised after cessation of employment by an Optionee for any
reason may, subject to adjustment as provided in Section 9, be exercised only
with respect to the number of Shares which the Optionee could have acquired by
an exercise of the option immediately prior to the cessation of such employment.
In no event may an option be exercised
6
<PAGE> 7
after its Option Expiration Date. The Administrator may adopt, amend or rescind
from time to time such provisions as it deems appropriate with respect to the
effect of leaves of absence approved by any duly authorized officer of the
Company or any subsidiary with respect to any Optionee.
(c) OPTIONS NOT TRANSFERABLE. An option shall not be transferable otherwise
than by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended (or the rules
thereunder), and during the lifetime of the Optionee shall be exercisable only
by the Optionee. Any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of, or to subject to execution, attachment or similar process,
any option other then as permitted in the preceding sentence, shall give no
right to the purported transferee.
(d) LEGAL LIMITATIONS. Notwithstanding any provision of the Plan or the
terms of any option issued pursuant to the Plan, the Company shall not be
required to issue any Shares hereunder if such issuance would, in the judgment
of the Administrator, constitute a violation of any state or federal law, or of
the rules or regulations of any governmental regulatory body, or any securities
exchange.
8. EXERCISE AND PAYMENT.
(a) EXERCISE. In order to exercise an option under the Plan, the person or
persons entitled to exercise it shall deliver to the Company written notice of
the number of full Shares with respect to which such option is to be exercised
accompanied by payment in full for the Shares being purchased plus, in the case
of a nonqualified option, any required withholding tax. No fractional Shares
will be issued. The payment of the option exercise price shall be in cash.
The withholding tax shall be paid in cash or through a payroll deduction no
later than the next payroll cycle.
(b) AWARD OF CASH OR SHARES IN LIEU OF EXERCISE. An Option Agreement may
provide that, in lieu of accepting payment of the option price and delivering
any or all Shares as to which an option has been exercised, the Administrator,
in its sole discretion, may elect to pay the holder of such option an amount in
cash or Shares, or a combination of cash and Shares, equal to the amount by
which the fair market
7
<PAGE> 8
value on the date of exercise of the Shares as to which such option has been
exercised exceeds the purchase price that would otherwise be payable by the
holder of such option to acquire such Shares.
(c) RIGHTS AS A STOCKHOLDER. The person or persons entitled to exercise, or
who have exercised, an option shall not be entitled to any rights as a
stockholder of the Company with respect to any Shares subject to the option
until such person or persons shall have become the holder of record of such
Shares.
9. ADJUSTMENT OF SHARES.
(a) In the event that any time after the Effective Date of the Plan the
outstanding Shares are changed into or exchanged for a different number or kind
of Shares of the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split, stock dividend
or combination of Shares, the Administrator shall make an appropriate and
equitable adjustment in the number and kind of Shares subject to outstanding
options, or portions thereof then unexercised, and the number of Shares subject
to the Plan, to the end that after such event the Shares subject to the Plan and
the Optionee's right to a proportionate interest in the Company shall be
maintained as before the occurrence of such event. Such adjustment in an
outstanding option shall be made without change in the total price applicable to
the option or the unexercised portion of the option (except for any change in
the total price resulting from rounding-off Share quantities or prices) and with
any necessary corresponding adjustment in option price per Share. Any such
adjustment made by the Administrator shall be final and binding upon all
Optionees, the Company and all other interested persons. Any adjustment of an
incentive stock option under this paragraph shall be made in such manner so as
not to constitute a "modification" within the meaning of Section 424(h)(3) of
the Code. The Administrator, in its sole discretion, may at any time make or
provide for such adjustments to the Plan or any option granted thereunder as it
shall deem appropriate to prevent the reduction or enlargement or rights,
including adjustments in the event of changes in the outstanding Class A Common
Stock or Class B Common Stock by reason of mergers, consolidations, combinations
or exchanges of shares, separations, reorganizations, liquidations and the like
in which the Company is not the sole surviving successor to the assets or
business of the Company immediately prior thereto.
8
<PAGE> 9
In the event of any offer to holders of Class A Common Stock or Class B Common
Stock generally relating to the acquisition of their shares, the Administrator
may make such adjustments as it deems equitable in respect of outstanding
options. Any such determination of the Administrator pursuant to this Section
shall be conclusive.
(b) In the event of a merger or consolidation of the Company or the
acquisition of all or substantially all of the outstanding common stock of the
Company resulting in the exchange or payment of other consideration for Shares,
each option authorized or awarded under this Plan shall be deemed to represent
the right to receive, upon fulfillment of the terms and conditions of this Plan
and an applicable award agreement, the consideration the holder or recipient of
such option would have received had the option been an outstanding Share
immediately prior to the consummation of such transaction.
10. LIMITATIONS.
(a) AUTHORITY LIMITED TO ADMINISTRATOR. No person shall at any time have
any right to receive an option hereunder and no person shall have authority to
enter into an agreement for the granting of an option or to make any
representation or warranty with respect thereto, except as granted by the
Administrator, as provided in the Plan. Optionees shall have no right in respect
to their options except as set forth in the Plan.
(b) NO RIGHT TO EMPLOYMENT. Neither the action of the Company in
establishing the Plan, nor the action taken by it or by the Administrator under
the Plan, nor any provision of the Plan, shall be construed as giving to any
person the right to be retained in the employ of the Company or any subsidiary
or as giving to any person the right to be retained as a director of the Company
or any subsidiary. No provision of the Plan will supersede any terms of any
employment agreements that an Optionee may have with the Company.
11. AMENDMENTS AND TERMINATION.
The Board may terminate, alter, suspend, modify or amend the Plan in such
respects as it shall deem advisable. Except as otherwise provided in Section 9,
no action of the Board may, without the approval of security holders in the
manner required by subsection (b) of Rule 16b-3, (i) increase
9
<PAGE> 10
materially the aggregate number of Shares as to which options may be granted or
which may be issued under the Plan, (ii) reduce the minimum option price, (iii)
extend the period within which options may be exercised, (iv) extend the period
during which options may be granted, (v) increase materially the benefits
accruing to participants under the Plan, or (vi) modify materially the
requirements as to eligibility for participation in the Plan. No termination,
alteration, suspension, modification or amendment of the Plan may, without the
consent of the Optionee to whom any option shall theretofore have been granted,
adversely affect the rights of such Optionee under any such option then
outstanding.
12. USE OF CERTAIN TERMS.
The terms "parent" and "subsidiary" shall have the meanings ascribed to
them in Section 424 of the Code and unless the context otherwise requires, the
other terms used in the Plan which correspond to like terms defined in Sections
421 through 424, inclusive, of the Code and regulations and revenue rulings
applicable thereto, shall have the meanings attributed to them therein.
10
<PAGE> 11
AMENDMENTS TO THE
INFINITY BROADCASTING CORPORATION
STOCK OPTION PLAN
---------------------------------
The Plan is amended in the manner set forth below:
i. Section 2(a) of the Plan is amended to reflect the Company's
three-for-two stock split in the form of a stock dividend, effective May 19,
1995, so that the first sentence thereof reads in its entirety as follows:
"Subject to adjustment as provided in Section 9, the aggregate number of
shares of the Class A Common Stock of the Company ("Class A Shares") to be
delivered upon exercise of all options granted under the Plan shall be
6,996,525 and the aggregate number of shares of the Class B Common Stock of
the Company ("Class B Shares" and together with Class A Shares, "Shares")
to be delivered upon exercise of all options granted under the Plan shall
be 1,181,250."
Section 2(a) is further amended to delete the last sentence thereof.
ii. Section 7(c) of the Plan is deleted in its entirety and a new Section
7(c) is added in lieu thereof, to read as follows:
"(c) NONTRANSFERABILITY OF AWARDS. An option shall not be transferable
otherwise than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended
(or the rules thereunder), or to a Permitted Transferee; provided that no
otherwise permitted transfer shall be effective unless the deceased
Optionee's beneficiary or the representative of his estate or the Permitted
Transferee acknowledges and agrees in writing, in a form reasonably
acceptable to the Company, to be bound by the provisions of the Plan and
the Option Agreement covering such Options as if such beneficiary or estate
were the Optionee. All rights with respect to Options granted to an
Optionee under the Plan
<PAGE> 12
shall be exercisable during his lifetime by such optionee (or, if
applicable, a Permitted Transferee). Following an Optionee's death, all
rights with respect to Options that were exercisable at the time of such
Optionee's death and have not terminated shall be exercised by his
designated beneficiary or estate (or, if applicable, a Permitted
Transferee). As used in this Section 7(c), a Permitted Transferee shall be
a member of the Optionee's family or a trust or similar vehicle for the
benefit of such family members to whom or to which the Administrator shall
permit (on such terms and conditions as it shall establish) an Option to be
transferred."
iii. This Amendment made by paragraph 1 hereof shall be effective as of May
19, 1995, and the amendment made by paragraph 2 hereby shall be effective as of
June 15, 1995.
IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this Amendment as of June 15, 1995.
INFINITY BROADCASTING CORPORATION
By: /s/ FARID SULEMAN
----------------------------
Name: Farid Suleman
Title: VP of Finance
<PAGE> 13
AMENDMENT TO THE
INFINITY BROADCASTING CORPORATION
STOCK OPTION PLAN
---------------------------------
The Infinity Broadcasting Corporation Stock Option Plan (the "Plan"), as
amended and restated as of August 16, 1993, and amended as of November 19, 1993,
is further amended as follows, effective as of the date on which the following
amendment to Section 2 of the Plan, and the material terms of the following
amendment to Section 5 of the Plan, are approved by the Company's stockholders
in accordance with the requirements of rule 16b-3 under the Securities Exchange
Act of 1934, as amended, and Section 162(m) of the Internal Revenue Code of
1986, as amended, respectively:
1. Subsection 2(a) of the Plan ("Shares") is amended so that the first
clause of the first sentence thereof reads as follows:
"Subject to adjustment as provided in Section 9 and to the last sentence of
this Subsection,";
and is further amended by adding a new final sentence thereto, reading
as follows:
"Subject to adjustment as provided in Section 9, the aggregate number of
Class A shares set forth in the first sentence of this subsection is hereby
increased by 2,000,000, and the aggregate number of Class B Shares set
forth in such sentence is hereby increased by 600,000."
<PAGE> 14
2. Section 3 of the Plan ("Effective Date; Amendments") is awarded to read
in its entirety as follows:
"The Plan was adopted in October 27, 1988 and became effective on that date
upon approval by the holders of a majority of all outstanding Shares of
voting stock of the Company entitled to vote thereon. The Plan was
thereafter amended effective as of September 10, 1990, February 4, 1992,
August 18, 1992, July 26, 1993, August 15, 1993 and November 19, 1993. The
Plan is hereby amended, effective as of [June 13, 1994]."
3. Section 4 of the Plan ("Administration") is amended, for purposes of
clarity, so that the final sentence of subsection "(c)" thereof reads as
follows:
"Without limiting the generality of the foregoing or the scope of any
applicable provision of the Company's Charter or By-Laws of any
indemnification agreement, no member of the Administrator shall be liable
for any action or determination made in good faith with respect to the Plan
or any option granted thereunder"
4. Section 5 of the Plan ("Granting of Options") is amended to read in its
entirety as follows:
"(a) ELIGIBILITY, GRANT OF OPTIONS AND SELECTION OF OPTIONEES. The
Administrator shall have authority, within ten years after September 10,
1990, to grant to such key employees (including officers and directors who
are employees) and non-employee directors of the Company and its present
and future subsidiaries as may be selected by it ("Optionees"), options to
purchase Shares. All options granted hereunder shall be granted on the
terms and conditions hereinafter set forth. In selecting Optionees, and in
determining the number of Shares to be covered by each option, the
Administrator may consider the office or position held by the Optionee, the
Optionee's degree of responsibility for and contributions to the growth and
success of the Company, the Optionee's potential or any other performance
factors which it may consider relevant. Appropriate officers of the Company
are hereby authorized to execute and
2
<PAGE> 15
deliver option agreements in the name of the Company, in the form and as
directed from time to time by the Administrator.
"(b) ANNUAL MAXIMUM NUMBER OF SHARES SUBJECT TO AWARD. The following
provisions shall apply to option awards made in fiscal years of the Company
beginning on or after January 1, 1994 (each, a "Plan Year"). In the first
Plan Year in which an award is made to an Optionee, the Administrator may
grant such Optionee Options for the purchase of up to 200,000 Shares. The
maximum number of Shares as to which Options may be awarded to such
Optionee in each succeeding Plan Year shall be (x) 200,000 plus (y) the
excess, if any, of (1) the maximum award that could have been made to such
Optionee in the most recent Plan Year in which such Optionee received an
award hereunder over (2) the total number of Shares as to which options
were awarded to such Optionee in such most recent Plan Year (including
awards, if any, made under subsection 5(c)) (such excess being referred to
as the "Additional Amount"). In no event shall any Optionee's Additional
Amount exceed 300,000 Shares for any Plan Year.
"(c) CERTAIN AWARDS. The Administrator shall have the authority, prior to
the beginning of each Plan Year (or at such later time as may be permitted
under Section 162(m)), to establish in writing an EBITDA target (the
"EBITDA Target") for such Plan Year and to make an award of options for the
purchase of up to 112,500 Shares to any Eligible optionee upon the
Company's attainment of such EBITDA Target (or the attainment of a
prorated portion of such target, as determined by the Administrator in the
case of an award in respect of a period shorter than a Plan Year). the
maximum number of Shares as to which options may be awarded pursuant to
this subsection 5(c) shall be prorated in the event of an award in respect
of a period shorter than a Plan Year. The per Share exercise price of any
option awarded pursuant to this subsection 5(c) shall be 85% of the Fair
Market Value of a Share as of the last day of the period for which the
award is made. Any option granted pursuant to this Section 5(c) shall be
immediately exercisable and shall expire
3
<PAGE> 16
ten years after the date of grant. For the purposes of the Plan: the term
"EBITDA" means earnings of the Company and its consolidated subsidiaries
before interest, taxes, depreciation and amortization, as reported in the
Company's report on Form 10-K for the Plan Year or, if for a portion of a
Plan Year, as approved by the Board based on the Company's books and
records; the term "Eligible Optionee" means the Company's Chief Executive
Officer and any other senior executive officer of the Company designated as
an Eligible Optionee by the Board prior to the commencement of the
applicable Plan Year (or, if later, prior to the commencement of such
individual's service as a senior executive officer or such other time as
may be specified under Section 162(m) of the Code (as defined below)); and
the term "Fair Market Value" means, with respect to any Share, the closing
price of a Class A Share (as reported on the NASDAQ National Market System)
on the date as of which the determination is made, in the event no price is
so reported, the fair market value of a Class A Share on such date, as
determined in good faith by the Administrator.
"(d) TIME OF GRANTING OPTION. Nothing contained in the Plan or any
resolutions adopted or to be adopted by the Board or the stockholders of
the Company shall constitute the granting of any option hereunder. Options
shall be granted only by action of or pursuant to the authority of the
Administrator; provided, however, that no participant shall have any rights
with respect to such grant unless and until he or she shall have executed
and delivered an option agreement in form and substance satisfactory to the
Administrator."
5. Subsection 10(b) of the Plan ("No Right to Employment") is amended by
the addition of the following clause as the end of the final sentence thereof:
"; provided that awards made pursuant to subsection 5(c) hereof shall be
deemed for purposes of an applicable employment agreement to have been made
pursuant thereto to the extent such agreement provides for such awards."
4
<PAGE> 17
6. The Plan is amended, for purposes of clarity, by the addition of a new
section 13 thereto, reading in its entirety as follows:
"13. GOVERNING LAW.
The Plan shall be governed by and construed and enforced in accordance with
the laws of the State of New York, without regard to principles of
conflicts of law,"
IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this amendment instrument as of the 30th day of March, 1994.
INFINITY BROADCASTING CORPORATION
By /s/ FARID SULEMAN
---------------------------------
Title: Vice President-Finance and
Chief Financial Officer
5
<PAGE> 18
AMENDMENT TO THE
INFINITY BROADCASTING CORPORATION
STOCK OPTION PLAN
---------------------------------
The Infinity Broadcasting Corporation Stock option Plan (the "Plan"), as
amended and restated as of August 16, 1993, is hereby further amended as follows
to reflect the Company's three-for-two stock split in the form of a stock
dividend, effective as of November 19, 1993:
Section 2(a) of the Plan ("Shares") is amended so that the first sentence
thereof reads in its entirety as follows:
"Subject to adjustment as provided in Section 9, the aggregate number of
shares of the Class A Common Stock of the Company ("Class A Shares") to be
delivered upon exercise of all options granted under the Plan shall be
2,664,350 and the aggregate number of shares of the Class B Common Stock of
the Company ("Class B Shares" and, together with Class A Shares, "Shares")
to be delivered upon exercise of all options granted under the Plan shall
be 187,500."
IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this amendment instrument as of the 19th day of November, 1993.
INFINITY BROADCASTING CORPORATION
By /s/ FARID SULEMAN
--------------------------------
Title: VP of Finance/CFO
<PAGE> 1
Exhibit 4.5
WCK ACQUISITION CORP.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of June 27, 1988, between WCK
Acquisition Corp., a Delaware corporation (the "Corporation"), and Mel Karmazin
(the "Employee").
The Board of Directors of the Corporation (the "Board") has granted to
the Employee, effective immediately, an option to purchase an aggregate of
475,770 shares of the Corporation's Class B Common Stock, par value $0.01 per
share (the "Class B Shares").
Pursuant to the Agreement and Plan of Merger, dated as of June 22,
1988 (the "Merger Agreement"), between the Corporation and Infinity
Broadcasting Corporation, a Delaware corporation ("Infinity" or the "Surviving
Corporation"), the Corporation will merge with and into Infinity (the
"Merger"), and Infinity will assume all of the outstanding obligations of the
Corporation, including the Corporation's obligations hereunder.
To evidence the stock option so granted, and to set forth its terms and
conditions, the Corporation and the Employee hereby agree as follows:
1. CONFORMATION OF GRANT SUBJECT TO PLAN: OPTION PRICE. The Corporation
hereby evidences and confirms its grants to the Employee, on the effective date
set forth above, of an option (the "Option") to purchase 475,770 Class B Shares
at an option price of $0.10 per share.
2. TERM FOR EXERCISE. The Option shall become available for exercise
beginning on the earlier of:
(a) 180 days after the effective time of the Merger;
(b) the date of the Employee's death;
(c) the date of the Employee's disability (as defined below);
(d) the business day before the effective date of any registration
statement of the Surviving Corporation covering any of the Surviving
Corporation's Class A Common Stock; or
<PAGE> 2
(e) the business day before the effective time, closing or termination
date of any merger or other business combination, tender offer, sale of all
or substantially all of the assets of liquidation (or other similar
transaction) involving the Surviving Company or its Class A Common Stock or
Class B Common Stock, other than the Merger,
subject to the provisions hereof, and provided that for purposes of paragraphs
(a), (d) and (e) of this Section 2, the Employee shall not have ceased to be
employed by the Corporation. The Option shall expire ten years from the date
hereof, and the Class B Shares available under the Option may be purchased at
any time and from time to time in one or more installments.
3. WHO MAY EXERCISE. During the lifetime of the Employee, the Option may be
exercised only by him. If the Employee shall die during his employment by the
Corporation or by a corporation that is a parent or subsidiary of the
Corporation, or by a successor by merger to the Corporation or a parent or
subsidiary of the Corporation, or at such other time as the Employee, if living,
could have exercised his Option, and prior to the expiration date specified in
Section 2 hereof, the Option may be exercised to the extent of the number of
Class B Shares available for exercise by the Employee on the date of his death,
by the Employee's estate, personal representative or beneficiary who acquired
the Option by will or by the laws of descent and distribution, at any time prior
to the earlier of (a) the first anniversary of the Employee's death or (b) the
expiration date specified in Section 2 hereof. On the earlier of such dates, the
Option shall terminate.
4. EXERCISE AFTER TERMINATION OF EMPLOYMENT. If the Employee shall cease
other than by reason of death, to be employed by the Corporation or by a
corporation that is a parent or a subsidiary of the Corporation, or by a
successor by merger to the Corporation or a parent or subsidiary of the
Corporation, the Option shall terminate on the earlier of the expiration date
specified in Section 2 hereof or the date which is three months (or, if the
Employee shall cease to be so employed by reason of disability (as defined in
Section 105(d)(4) of the Internal Revenue Code of 1986, as amended) one year)
after the day his employment ended. In the event of such termination of
employment, the Options may be exercised to the extent of the number of Class B
Shares with respect
2
<PAGE> 3
to which the Employee could have exercised it on the day his employment ends.
5. RESTRICTIONS ON EXERCISE. The option may be exercised with respect to
full Class B Shares. No fractional shares of stock shall be issued. the Option
may not be exercised in whole or in part, and no certificates representing Class
B Shares subject to the Option shall be delivered:
(a) if any requisite approval or consent of any governmental authority
of any kind having jurisdiction over the exercise of options shall not have
been secured;
(b) unless all applicable federal, state and local tax withholding
requirements are satisfied.
The Corporation may (but need not) require as a condition to the exercise of
the Option in whole or in part at any time that the Employee (or any person
exercising the Option after his death in accordance with the provisions of
Section 3 hereof) represent to the Corporation or its successor by merger in
writing that he is purchasing the Class B Shares to be acquired upon such
exercise for his own account for investment only and not with a view to
distribution or with any present intention of reselling any thereof.
6. MANNER OF EXERCISE. To the extent the Option shall have become and
remains exercisable as provided in this Agreement, and subject to such
administrative regulations as the Board may adopt, the Option may be exercised
from time to time in whole or in part, by notice to the Secretary of the
Corporation in writing, specifying the number of Class B Shares with respect to
which the Option is being exercised and accompanied by full payment of the
option price for such Class B Shares in (a) cash or cash equivalents, (b) shares
of stock of the Corporation or of any parent or subsidiary of the Corporation,
or of any successor by merger to the Corporation or any parent or subsidiary of
the Corporation, or stock of more than one of such companies, represented by
certificates duly endorsed to the Corporation or its nominees or its successor
by merger, having a market value equal to the option price, or (c) any
combination of the foregoing, provided that the Employee may not pay all or part
of the option price in shares of stock without the approval of the Board. The
Board shall, in its good faith judgment, make all determinations of market
3
<PAGE> 4
value of consideration in connection with Section 6 of this Agreement. In the
event that the Option shall be exercised by a person other than the Employee in
accordance with the provisions of Section 3 hereof, such person shall furnish
to the Corporation evidence satisfactory to it of his right to exercise the
Option. The Corporation may require the Employee or other person exercising the
Option to furnish or execute such documents as the corporation shall deem
necessary to evidence such exercise, to determine whether registration is then
required under the Securities Act of 1933, as amended (the "Securities Act"),
or to comply with or satisfy the requirements of the Securities Act or any
other law.
7. NON-ASSIGNABILITY. The Option is not assignable or transferable except
by will or by the laws of descent and distribution to the extent contemplated by
Section 3 hereof. At the request of the Employee, Class B Shares purchased on
exercise of the Option will be issued in or transferred into the name of the
Employee and another person with the right to survivorship.
8. RIGHTS AS STOCKHOLDERS. The Employee shall have no rights as a
stockholder with respect to any Class B Shares covered by the Option until the
issuance of a certificate to him for such Class B Shares. No adjustment shall be
made for dividends or other rights for which the record date is prior to the
issuance of such certificate or certificates.
9. DISPOSITION OF SHARES. If the Employee disposes of any shares received
upon exercise of the Option, whether by sale, exchange, gift, or otherwise
within two years from the date the Option was granted, or within one year from
the date the Class B Shares were transferred to him, the Employee shall notify
the Secretary of the Corporation of the number of such Class B Shares, the date
they were disposed of, the manner of disposition and the amount, if any,
realized upon such disposition.
10. CAPITAL AND OTHER ADJUSTMENTS. In the event of a stock dividend, stock
split or share combination of the common stock, or any recapitalization or other
transaction of the Corporation: (a) the number of the Class B Shares covered by
the Option shall be proportionally adjusted so that the holder of the Option
shall receive upon exercise of the Option, the number of Class B Shares which
such holder would have owned or been entitled to receive after the happening of
such event had
4
<PAGE> 5
the Option been exercised pursuant to this Agreement immediately prior to the
happening of such event and (b) the purchase price per Class B Share covered by
the Option shall be correspondingly and proportionally adjusted. To the extent
deemed equitable and appropriate by the board, in its sole discretion, subject
to any required action by the stockholders of the Corporation, in the event of
any merger, consolidation, reorganization, liquidation or dissolution, the
Option shall pertain to the securities and other property, if any, which a
holder of the number of Class B Shares covered by the Option would have been
entitled to receive in connection with such event. In the event that the
Warrants (the "Warrants") issued as contemplated by Schedule III to the
Commitment Letter, dated June 8, 1988, as amended, from Shearson Lehman Hutton
Holdings Inc. shall cover less than 25% of the aggregate amount of the Class B
Shares and the shares of Class A Common Stock of the Company (collectively, the
"Shares"), the number of Class B Shares covered by the Option and this
Agreement shall be adjusted downward so that the Class B Shares received by the
Employee in the Merger, plus the number of Shares covered by this Option (as so
adjusted), shall equal 15% of the Shares then outstanding, assuming exercise of
the Warrants, and assuming that any other options or other similar rights in
respect of the Shares are not exercised.
11. NOTICE. Notice to the Secretary of the Corporation shall be deemed
given in writing and mailed to the Secretary of the Corporation by first-class
mail at the then principal office of the Corporation.
12. INTERPRETATION OF AGREEMENT; GOVERNING LAW. The option is not intended
to be an incentive stock option within the meaning of Section 422A of the Code.
This Agreement shall be construed and enforced in accordance with, and governed
by, the laws of the State of New York.
5
<PAGE> 6
IN WITNESS WHEREOF, the Corporation and the Employee have duly executed
this Agreement.
WCK ACQUISITION CORP.
By: /s/ MICHAEL WIENER
--------------------------
Name: Michael Wiener
Title: Chairman of the Board
and Secretary
Attest:
/s/ MEL KARMAZIN
--------------------------
Mel Karmazin
/s/ FARID SULEMAN
- -----------------------
Name: Farid Suleman
Title: Vice President-
Finance
6
<PAGE> 7
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of August 2, 1988, between WCK Acquisition
Corp., a Delaware corporation (the "Corporation"), and Mel Karmazin (the
"Employee").
WHEREAS, the Corporation and the Employee entered into a Stock Option
Agreement, dated as of June 27, 1988 (the "Stock Option Agreement"), pursuant to
which the Corporation granted to the Employee an option (the "Option") to
purchase an aggregate of 475,770 shares of the Corporation's Class B Common
Stock, par value $0.01 per share (the "Class B Shares"); and
WHEREAS, the Corporation and the Employee desire to amend the Stock Option
Agreement to reduce the number of Class B shares subject to the Option;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. AMENDMENTS. The Corporation and the Employee agree to amend the Stock
Option Agreement by deleting the number "475,770" from the fourth line of
Section 1 of the Stock Option Agreement and substituting therefor the number
"415,229".
2. EFFECTIVENESS; RATIFICATION. The provisions of this Agreement shall
become effective as of the date hereof and shall be binding upon and inure to
the benefit of the parties to this Agreement. Except as amended hereby, the
Stock Option Agreement shall remain in full force and effect.
3. APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of New York.
4. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
<PAGE> 8
IN WITNESS WHEREOF, the Corporation and the Employee have duly executed
this Agreement.
WCK ACQUISITION CORP.
By /s/ MICHAEL A. WIENER
-------------------------
Name: Michael A. Wiener
Title: Secretary
/s/ MEL KARMAZIN
-------------------------
Mel Karmazin
Attest:
/s/ Farid Suleman
- --------------------------------
Name: Farid Suleman
Title: Vice President
2
<PAGE> 9
AMENDMENT NO. 1
TO
STOCK OPTION AGREEMENT
AMENDMENT NO. 1 to Stock Option Agreement, dated as of October 14, 1988,
between Infinity Broadcasting Corporation, a Delaware corporation (the
"Corporation," as the successor to WCK Acquisition Corp.), and Mel Karmazin (the
"Employee").
The Board of Directors of the Corporation (the "Board") has determined to
increase the number of shares of the Corporation's Class B Common Stock, par
value $.01 per share (the "Class B Shares"), covered by the option (the
"Option") that was granted to the Employee pursuant to the Stock Option
Agreement, dated as of June 27, 1988 (the "Option Agreement"). With this
Amendment No. 1, the Board intends to increase the number of Class B Shares
covered by the option so that upon exercise of the option the Employee would own
approximately ___ of the outstanding shares of the Corporation's common stock,
on a fully diluted basis. This percentage of ownership of the common stock of
the Corporation by the Employee assumes (a) exercise of (i) options held by
other employees of the Corporation, (ii) warrants held by Shearson Lehman Hutton
Inc., and (iii) warrants issued in connection with the Corporation's 14.25%
Senior Subordinated Discount Indentures Due August 1, 1999 for an aggregate
number of the Corporation's shares of common stock equal to 22% of the
Corporation's common stock, on a fully diluted basis and (b) completion of the
purchase by the Corporation from Messrs. Wiener and Carres of a total of 183,472
Class B Shares. In accordance with the terms of a Stock Subscription Agreement,
dated as of June 27, 1988, amended and restated as of August 1, 1988.
To evidence this change in the Option, the Corporation and the Employee
hereby agree that the option Agreement shall be amended as follows:
Section 1. Section 1 of the Option Agreement shall be expanded and restated
to read as follows, in its entirety:
1. CONFIRMATION OF GRANT: OPTION PRICING. The Corporation hereby
evidences and confirm its grant to the Employee, on the effective date set
forth
<PAGE> 10
above, of an option (the "Option") to purchase 542,135 Class B Shares at an
option price of $0.10 per share.
Section 2. Except as modified, amended, or supplemented hereby, and except
as modified, amended or supplemented hereby, the Option Agreement shall
remain unchanged on in full force and effect.
Section 3. This Amendment No. 1 shall be construed and enforced in
accordance with, and governed by, the Laws of the State of New York.
IN WITNESS WHEREOF, the Corporation and the Employee have duly executed
this Amendment No. 1.
INFINITY BROADCASTING CORPORATION
By /s/ MICHAEL A. WIENER
-------------------------
Michael A. Wiener
Co-Chairman of the Board
and Secretary
/s/ MEL KARMAZIN
-------------------------
Mel Karmazin
President and Chief
Executive Officer
Attest:
/s/ FARID SULEMAN
- --------------------------------
Farid Suleman
Vice President-Finance and
Chief Financial Officer
<PAGE> 1
Exhibit 4.6
INFINITY BROADCASTING CORPORATION (THE "COMPANY") IS A CORPORATION
ORGANIZED UNDER THE LAWS OF THE STATE OF DELAWARE AND THE WARRANTS REPRESENTED
BY THIS CERTIFICATE AND THE STOCK ISSUED UPON EXERCISE HEREOF MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF OR ENCUMBERED WITHOUT COMPLIANCE WITH THE PROVISIONS OF,
AND IS OTHERWISE RESTRICTED BY THE PROVISIONS OF, THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION AND THAT CERTAIN AMENDED AND RESTATED STOCKHOLDERS'
AGREEMENT AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY, DATED AS OF
SEPTEMBER 10, 1990. A COPY OF SUCH STOCKHOLDERS' AGREEMENT IS ON FILE AND
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF THE COMPANY.
EXERCISABLE AT ANY TIME SUBJECT TO THE PROVISIONS HEREOF
NO. 3 INFINITY BROADCASTING CORPORATION WARRANT CERTIFICATE
Warrant Certificate for 62,500 Warrants
to Purchase 62,500 shares of Class A
Common Stock of
Infinity Broadcasting Corporation
(the "Company")
This Warrant Certificate certifies that, for value received, Mel Karmazin
(the "Holder"), is the owner of warrants, which entitle the Holder to purchase
at any time from and after the date hereof and without expiration up to an
aggregate of 62,500 shares of the Company's Class A Common Stock, par value
$.002 per share (the "Class A Common Stock") at the purchase price stated in
Section 2.3 hereof (the "Exercise Price"). The number of shares purchasable upon
exercise of the Warrants and the Exercise Price shall be subject to adjustment
from time to time as herein provided. In this Warrant Certificate, the
securities issuable upon exercise of the Warrants are referred to as the
"Warrant Shares".
The Warrants are subject to the following terms, conditions and provisions:
<PAGE> 2
SECTION 1. Registration; Transferability; Exchange of Warrant Certificate.
1.1 Registration. The Company shall number and register the Warrants in a
register (the "Warrant Register") maintained at the office of the Company (the
"Office"). The Company shall be entitled to treat the Holder of the Warrants as
the owner in fact thereof for all purposes and shall not be bound to recognize
any equitable or other claim to or interest in such Warrants on the part of any
other person. If at any time there are more than 50 holders of warrants issued
pursuant to (i) the Stock Purchase Agreement, dated as of August 3, 1990, among
the Company, certain selling stockholders and certain purchasers (the "Stock
Purchase Agreement"), and (ii) the Securities Purchase Agreement, dated as of
September 30, 1991, among the Company and certain purchasers (the "Securities
Purchase Agreement"), the Company shall appoint a warrant agent to maintain, in
New York City, New York, the Warrant Register (including the recordation of
transfers and exercises of Warrants). Such a warrant agent shall be a bank or
trust company in good standing, incorporated under the laws of the United States
of America or any State thereof or the District of Columbia and having at the
time of its appointment as warrant agent a combined capital and surplus of at
least $10,000,000. Upon such appointment, the warrant agent and the Company may
enter into a warrant agency agreement upon customary terms; provided that,
other than with respect to the identity of the entity maintaining the Warrant
Register (including the recordation of transfers and exercises of Warrants),
such warrant agency agreement shall in no way amend or modify or conflict with
the provisions of this Warrant Certificate.
1.2 Transfer. Subject to compliance with the restrictions on transfer set
forth in this Warrant Certificate, the Warrants shall be transferable only on
the Warrant Register upon delivery thereof by the Holder or by his duly
authorized attorney or representative or accompanied by proper evidence of
succession, assignment or authority to transfer. In all cases of transfer by an
attorney, the original power of attorney, duly approved, or a copy thereof, duly
certified shall be deposited and shall remain with the Company. In case of
transfer by executors, administrators, guardians or other legal representatives,
duly authenticated evidence of their authority shall be produced, and may be
required to be deposited and
2
<PAGE> 3
to remain with the Company in its discretion. No transfer of the Warrants or
any interest therein other than in compliance with this Section 1.2 shall be
made or recorded in the Warrant Register, and any such purported transfer shall
be void and of no effect.
SECTION 2. Terms of Warrant. Exercise of Warrants.
2.1 Term of Warrant. Subject to the terms of this Warrant Certificate, the
Holder shall have the right, which may be exercised at any time from the date
hereof, without expiration, to purchase from the Company and to cause the
Company to issue and sell to the Holder of the Warrants up to an aggregate of
62,500 fully paid and nonassessable Warrant Shares or such other number of
Warrant Shares which the Holder may at the time be entitled to purchase in
accordance with this Warrant Certificate.
2.2 Exercise of Warrants. Subject to the terms of this Warrant
Certificate, the Warrants evidenced by this Warrant Certificate may be exercised
in whole or in part, upon surrender to the Company, at its Office, of this
Warrant Certificate, with a Purchase Form substantially in the form attached
hereto duly completed and signed, and upon payment to the Company of the
Exercise Price. Payment of the aggregate Exercise Price shall be in cash or by
check payable to the order of the Company.
Upon the surrender of this Warrant Certificate, with the Purchase Form duly
executed, and payment of the
3
<PAGE> 4
Exercise Price as aforesaid, the Company shall issue and deliver to or upon the
Written order of the Holder and in such name or names as the Holder may
designate a certificate or certificates for such number of Warrant Shares so
purchased. Such certificate or certificates shall be dated and deemed to have
been issued as of the date of the surrender of this Warrant Certificate and
payment of the Exercise Price, as aforesaid. The right of purchase represented
by this Warrant Certificate shall be exercisable, at the election of the
Holder, in full at any time or in part from time to time. In the event the
Holder shall exercise fewer than all the Warrants evidenced hereby, a new
Warrant Certificate shall be issued evidencing the remaining unexercised
Warrants.
4
<PAGE> 5
2.3 Exercise Price. The price per share at which each Warrant Shares shall
be purchased upon exercise of each Warrant shall be $0.002, subject to
adjustment pursuant to Section 6. The aggregate Exercise Price for all Warrant
Shares subject to this Warrant Certificate shall be rounded to the next higher
$0.01.
2.4 Restriction on Exercise. (a) Notwithstanding anything contained herein
to the contrary, the Warrants may not be exercised in full or in part as long as
the Company directly or indirectly holds any right, title or interest in any FCC
License, provided, however, that this Warrant may be exercised in full or in
part when the Company is holding a FCC License if such exercise either (i)
complies with the Communications Act of 1934, as amended, including, without
limitation, the alien ownership and control provisions contained therein and the
rules, regulations and policies of the Federal Communications Commission (the
"Communications Act and Rules") or (ii) is exercised in connection with a sale
to a person or entity or persons or entities whose ownership of Warrant Shares
would not violate the Communications Act and Rules. For purposes of this Warrant
Certificate, the term "FCC License" shall mean any license, permit or other
authorization issued by the FCC to the Company or any of its subsidiaries
necessary to conduct its business or operations. If requested by the Company,
the Holder will consider in good faith exercising the Warrants if such exercise
would facilitate a transaction contemplated by the Company and would comply with
this Section 2.4; provided that for so long as the Purchasers (as defined in the
Stock Purchase Agreement) continue to hold warrants issued pursuant to the Stock
Purchase Agreement or the Securities Purchase Agreement, the Purchasers shall
only be required to consider in good faith exercising such warrants if all (but
not less than all) of the Purchasers are permitted to exercise their warrants
issued pursuant to the Stock Purchase Agreement or the Securities Purchase
Agreement in compliance with Section 2.4.
(b) Notwithstanding anything contained herein to the contrary, the
Warrants may not be exercised in full or in part unless the Holder has made any
and all filings which are required in connection with such exercise under
5
<PAGE> 6
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder, and all applicable waiting periods under such
Act with respect to such filing shall have expired or been terminated.
SECTION 3. Payment of Taxes. The Company covenants and agrees that it will
pay when due and payable all documentary, stamp and other similar taxes, if any,
which may be payable in respect of the issuance or delivery of the Warrants or
of the Warrant Shares purchasable and issuable upon the exercise of the
Warrants.
SECTION 4. Mutilated or Missing Warrants. In the event this Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company shall
issue and deliver in exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of and in substitution for the Warrant
Certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor
and representing an equivalent right or interest, but only upon, in the event of
a lost, stolen or destroyed certificate, receipt of evidence satisfactory to the
company of such loss, theft or destruction. In making application for such a
substitute Warrant Certificate, the Holder shall also comply with such other
reasonable regulations and pay such other reasonable charges as the Company may
prescribe.
SECTION 5. Reservation and availability of Warrant Shares; Purchase and
Cancellation of Warrants.
5.1 Reservation of Warrant Shares. (a) The Company shall at all times
reserve and keep available free from preemptive rights (other than pursuant to
the Stockholders' Agreement), out of the aggregate of its authorized but
unissued shares of Common Stock, for the purpose of enabling it to satisfy any
obligations to issue the Warrant Shares upon exercise of the Warrants, the full
number of Warrant Shares deliverable upon the exercise of all the Warrants
evidenced by this Warrant Certificate. The Company or, if appointed, the
transfer agent for the Common Stock and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid (each, a "Transfer Agent") will be irrevocably
authorized and directed at all times to reserve such number of authorized shares
of Class A Common Stock, as shall be required for such purpose. The Company will
keep a copy of this Warrant
6
<PAGE> 7
Certificate on file with each Transfer Agent. The Company will furnish such
Transfer Agent a copy of all notices of adjustments and certificates related
thereto which are transmitted to the Holder pursuant to Section 6 hereof.
(b) The Company covenants that all Warrant Shares issuable upon exercise of
the Warrants will, upon issuance, be fully paid, nonassessable and free from
preemptive rights (other than pursuant to the Stockholders' Agreement) and free
from all taxes, liens, charges and security interests with respect to the
issuance thereof (other than any liens, charges and security interests to
which the Warrants are themselves subject).
(c) Before taking any action which would cause an adjustment pursuant to
Section 6 reducing the Exercise Price, the Company will take any and all
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares at the Exercise Price as so adjusted.
5.2 Warrant Shares Record Date. Each person in whose name any stock
certificate for Warrant Shares is issued shall for all purposes be deemed to
have become the holder of record of the Warrant Shares represented thereby on,
and such stock certificate shall be dated the date upon which this Warrant
Certificate was duly surrendered and payment of the Exercise Price (and any
applicable transfer taxes) was made.
5.3 Cancellation of Warrant. Upon surrender of the Warrant Certificate for
exchange, Substitution, transfer or exercise, it shall be cancelled by the
Company and retired.
SECTION 6. Adjustment of Number or Warrant Shares and Exercise Price. The
number of securities purchasable upon the exercise of the Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events as hereinafter described.
6.1 Mandatory Adjustment. The number of securities purchasable upon the
exercise of the Warrant and the Exercise Price shall be subject to adjustment as
follows:
7
<PAGE> 8
(a) in case the Company shall (i) declare or pay a dividend on any
class of its outstanding common stock in shares of common stock or make a
distribution to holders of its outstanding common stock in shares of common
stock, (ii) subdivide any class of its outstanding common stock into a
greater number of shares of common stock, (iii) combine any class of its
outstanding common stock into a smaller number of shares of common stock or
(iv) issue by reclassification of any class of its shares of common stock
other securities of the Company (including any such reclassification in
connection with a consolidation, merger or other business combination in
which the Company is the surviving corporation), the number and kind of
Warrant Shares purchasable and issuable upon exercise of the Warrants shall
be adjusted so that the Holder, upon exercise thereof, shall be entitled to
receive the number and kind of Warrant Shares and other securities of the
Company that the Holder would have owned or have been entitled to receive
after the happening of any of the events described above had the Warrants
been exercised and the relevant Warrant Shares issued in the name of the
Holder immediately prior to the happening of such event or, if applicable,
any record date with respect thereto. An adjustment made pursuant to
this paragraph (a) shall became effective on the date of the dividend
payment, subdivision, combination or issuance retroactive to the record
date with respect thereto, if any, for such event. Such adjustment shall
be made successively whenever such an issuance is made.
(b) In case the Company shall distribute to all holders of its
outstanding common stock evidences of indebtedness of the Company, cash
(including cash dividends payable out of consolidated earnings or earned
surplus) or assets or securities other than its common stock (including
stock of a subsidiary or securities convertible into or exercisable for
such stock but excluding dividends or distributions referred to in Sections
6.1(a) above or Section 6.1(c) below) (any such evidences of indebtedness,
assets or securities, the "assets or securities"), then, in each case, the
Exercise Price shall be adjusted by subtracting from the Exercise Price
then in effect the value (as determined in accordance with Section 6.2(b))
of the assets or securities that the
8
<PAGE> 9
Holder would have been entitled to receive as a result of such distribution
had the Warrant been exercised and the relevant Warrant Shares issued in
the name of the Holder immediately prior to the record date for such
distribution; provided that if, after giving effect to such adjustment, the
Exercise Price would be less than the then par value of the Common Stock,
the Company shall distribute such assets or securities to the Holder as if
the Holder had exercised the Warrants and the Warrant Shares had been
issued in the name of the Holder immediately prior to the record date for
such distribution. Any adjustment required by this Section 6.1(b) shall be
made whenever any such distribution is made, and shall become effective on
the date of distribution retroactive to the record date for the
determination of stockholders entitled to receive such distribution.
(c) No adjustment in the number of Warrant Shares purchasable
hereunder shall be required unless such adjustment would require an
increase or decrease of at least one tenth of one percent (.10%) in the
number of Warrant Shares purchasable upon the exercise of each Warrant;
PROVIDED, HOWEVER, that any adjustments which by reason of this Section
6.1(c) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations shall be made to the
nearest one-thousandth of a share. No adjustment need be made for a
change in the par value of the Warrant Shares.
(d) Whenever the number of Warrant Shares is adjusted, as herein
provided, the Exercise Price payable upon exercise of each Warrant shall be
adjusted by multiplying such Exercise Price immediately prior to such
adjustment by a fraction of which the numerator shall be the number of
Warrant Shares purchasable upon the exercise of each Warrant immediately
prior to such adjustment and of which the denominator shall be the number
of Warrant Shares purchasable immediately thereafter.
6.2 Notice at Adjustment. (a) No action which results in any adjustment of
the number of Warrant Shares purchasable upon the exercise of the Warrants or
the Exercise Price of such Warrants, as herein provided, shall
9
<PAGE> 10
be undertaken by the Company unless the Company shall give to the Holder
the greater of 10 business days notice and the number of days notice
required to be given to stockholders with respect to such action or such
adjustment prior to effecting such action and a certificate of the Chief
Financial Officer of the Company, setting forth in reasonable detail (i)
the number of Warrant Shares pur- chasable upon the exercise of the
Warrants and the Exercise Price of the Warrants after such adjustment, (ii)
a brief statement of the facts requiring such adjustment and (iii) the
computation by which such adjustment was made.
(b) If any adjustment is required to be made pursuant to Section
6.1(b) (unless the proviso to the first sentence of that Section is
applicable to the action), the Company and the Holder shall negotiate in
good faith toward agreeing upon the necessary adjustment. If no agreement
can be reached within 14 days from the date of receipt by the Holder of
such notice, the Company and the holders of a majority of the warrants
issued pursuant to the Stock Purchase Agreement and the Securities Purchase
Agreement shall appoint within 21 days from the date of such receipt a
mutually acceptable independent investment banking firm to determine the
necessary adjustment. Such firm shall make the necessary determination
which shall be binding absent actual fraud or manifest error. One-half of
the fees of such firm for making such determination and any related
reimbursable expenses shall he paid by each of such holders and the
Company.
6.3 Preservation of Purchase Rights Upon Merger, Consolidation, etc. (a) In
the event of any merger, consolidation or other acquisition or business
combination in which the Company is not the surviving corporation or in which
all of the outstanding common stock of the Company is converted into, acquired
or exchanged for securities, cash or property or in the event of the sale or
other disposition of all or substantially all the assets of the Company, the
successor, parent or purchasing person, as the case may be, shall deliver to the
Holder an undertaking that the Holder shall have the right thereafter upon
payment of the Exercise Price in effect immediately prior to such action to
purchase upon exercise of each Warrant the kind and amount of securities, cash
and property which the Holder would have owned or have been entitled to receive
upon the happening of such merger, consolidation, acquisition, business
combination or sale had each Warrant been exercised and the relevent Warrant
10
<PAGE> 11
Shares issued in the name of the Holder immediately prior to the relevant record
date, if any, or the occurrence of such merger, consolidation, acquisition,
business combination or sale. Such undertaking shall provide for adjustments,
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 6. The Company will not effect any transaction of
the type referred to in this Section 6.4 unless the successor or purchasing
person delivers such undertaking. The provisions of this Section 6.4 shall
similarly apply to successive mergers, consolidations, business combinations and
sales or transfers.
(b) Upon any liquidation, dissolution or winding up of the Company, the
Holder shall receive such cash or property (less the Exercise Price) which the
Holder would have been entitled to receive upon the happening of such
liquidation, dissolution or winding up had the Warrants been exercised and the
Warrant Shares issued immediately prior to the occurrence of such liquidation,
dissolution or winding up.
6.4 Statement on the Warrant. Irrespective of any adjustments in the number
or kind of securities purchasable upon the exercise of the Warrant or the
Exercise Price, any Warrant Certificate theretofore or thereafter issued may
continue to express the same price and number and any kind of shares as are
stated in this Warrant Certificate.
SECTION 7. Fractional Interests. The Company shall not be required to
issue fractional securities on the exercise of Warrants. If any fraction of a
security would be issuable on the exercise of Warrants, the Company shall pay to
the Holder of such Warrants an amount in cash equal to the fair market value of
such fraction.
SECTION 8. Registration. The Holder shall, from time to time, have the
rights, if any, with respect to registration of Warrant Shares as are set forth
in the Stockholders' Agreement.
SECTION 9. No Rights as a Stockholder; Notices to Holder. Nothing
contained in this Warrant Certificate shall be construed as conferring upon the
Holder the right to vote or to consent or to receive notice as a stockholder in
respect of any meeting of stockholders of the Company for the election of the
directors of the Company
11
<PAGE> 12
or any other matter, or any rights whatsoever as a stockholder of the Company.
If, however, at any time prior to the expiration of the Warrant and prior to its
exercise, any of the following events shall occur:
(a) the Company shall declare any dividend payable in cash or in any
securities upon its shares of common stock or make any distribution to the
holders of its shares of common stock:
(b) the Company shall offer to all holders of its shares of common
stock any additional shares of common stock or securities convertible into
or exchangeable for shares of common stock or any right to subscribe for or
purchase any thereof;
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger, sale, transfer or lease of
all or substantially all of its property, assets and business as an
entirety) shall be proposed; or
(a) any consolidation or merger to which the Company is a party and
for which approval of the holders of common stock is required, or of the
conveyance or transfer of all or substantially all assets of the Company
as, or substantially as, an entirety, or of any reclassification or change
of outstanding shares of Common Stock issuable upon exercise of the Warrant
(other than a change in par value to no par value, or from no par value to
par value) or as a result of a subdivision or combination,
then in any one or more of said events, the Company shall give to the Holder the
qreater of 10 business days' written notice and the number of days written
notice required to be given to stockholders with respect to such action prior to
the applicable record date hereinafter specified, stating (i) the date as of
which the holders of record of shares of common stock to be entitled to receive
any such dividends, rights or warrants are to be determined or (ii) the date on
which any such dissolution, liquidation, winding up, consolidation, merger
conveyance or transfer is expected to become effective and the date as of which
it is expected that holders of record of shares of common stock shall be
entitled to exchange their shares of common stock for securities or other
property, if any, deliverable
12
<PAGE> 13
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation, or winding up. Failure to mail or receive such notice
or any defect therein or in the mailinq thereof shall not affect the validity of
any action taken in connection with such dividend, distribution or subscription
rights, or such proposed dissolution, liquidation, winding up, consolidation,
merger, conveyance, transfer or reclassification.
SECTION 10. Identity of Transfer Agent. Forthwith upon the appointment
of any Transfer Agent for the common stock, or any other shares of the Company's
capital stock issuable upon the exercise of the Warrant, the Company shall
promptly notify the Holder of the name and address of such Transfer Agent.
SECTION 11. Notices. Any notice, except as provided in Section 9 of this
Warrant Certificate, or demand authorized by this Warrant Certificate to be
qiven by the Holder to the Company, shall be in writing and shall be delivered
in person or by facsimile transmission, or mailed by overnight courier, or
otherwise delivered, to the Company, at 600 Madison Avenue, New York, New York
10022, attention of Chief Executive Officer, with a copy to Richard D. Bohm,
Esq., Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022. The
Company may change the address to which notices to it are to be delivered or
mailed hereunder by notice to the Holder.
Any notice pursuant to this Warrant Certificate by the Company to the
Holder shall be in writing and shall be mailed by overnight courier or
otherwise delivered, to the Holder at Infinity Broadcasting Corporation,
600 Madison Avenue, New York, New York 10022.
Notices delivered personally shall be effective at the time delivered by
hand. notices sent by mail shall be effective when received, notices sent by
facsimile transmission shall be effective when confirmed and notices sent by
courier guaranteeing next day delivery shall be effective on the next business
day after timely delivery to the courier.
SECTION 12. Supplements and Amendments. The Warrant Certificate may not be
supplemented, amended or otherwise modified without the prior written consent of
the Holder.
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<PAGE> 14
SECTION 13. Successors. All the covenants and provisions of this Warrant
Certificate by or for the bene- fit of the Company shall bind and inure to the
benefit of its respective successors and assigns hereunder.
SECTION 14. Applicable Law. This Warrant Certificate and the Warrants
evidenced hereby shall be governed by and construed in accordance with the laws
of the State of New York, without giving effect to principles of conflict of
laws. The Company and the Holder agree to submit to the non-exclusive
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Warrant Certificate and the Warrants
evidenced hereby.
SECTION 15. Benefits of this Warrant Certificate. Nothing in this
Warrant Certificate shall be construed to give to any person or entity other
than the Company and the Holder any legal or equitable right,
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<PAGE> 15
remedy or claim under this Warrant Certificate; and this Warrant Certificate
shall be for the sole and exclusive benefit of this Company and the Holder.
SECTION 16. Captions. The captions of the Sections and paragraphs of this
Warrant Certificate have been inserted for convenience only and shall have no
substantive effect.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed this 30th day of September, 1991.
INFINITY BROADCASTING CORPORATION
By: MEL KARMAZIN
-----------------------------
Name: Mel Karmazin
Title: Chief Executive Officer
Attest:
By: MICHAEL A. WIENER
-----------------------------
Name: Michael A. Wiener
Title: Secretary
15
<PAGE> 16
PURCHASE FORM
(To be executed upon exercise of Warrants)
The undersigned hereby irrevocably elects to exercise the right,
represented by the attached Warrant Certificate (the "Certificate"), to purchase
__________ shares of Class A Common Stock as provided for in the Certificate and
herewith tenders in payment for such shares of Class A Common Stock payment of
the purchase price in full in the form of cash or a check payable to the order
of Infinity Broadcasting Corporation in the amounts of $______, all in
accordance with the terms of the Certificate. The undersigned requests that a
certif- icate for such shares of Common Stock be registered in the name of
_____________ whose address is __________________ and that such certificate
shall be delivered to _______________ at the following address: ________________
If said number of shares of Class A Common Stock is less than all of the shares
of Class A Common Stock purchasable under the Certificate, the undersigned
requests that a new Warrant Certificate representing the right to purchase the
remaining balance of the shares of Class A Common Stock be registered in the
name of _______________ whose address is ____________________ and that such
certificate shall be delivered to _________________ whose address is
_________________________.
Dated: _______________________
[HOLDER]
By: _____________________________
Name:
Title:
<PAGE> 17
ASSIGNMENT
(To be executed only upon assignment
of the Warrant Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________ (Name and Address of Assignee Must Be Printed or
Typewritten) the within Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
________________, Attorney, to transfer said Warrant Certificate on the books of
the within-named Company, with full power of substitution in the premises.
Dated:
________________________________
Signature of Registered Holder
<PAGE> 1
Exhibit 5
January 2, 1997
Westinghouse Electric Corporation
11 Stanwix Street
Pittsburgh, PA 15222
Ladies and Gentlemen:
This opinion is being submitted in connection with the filing with the
Securities and Exchange Commission, under the Securities Act of 1933, a amended,
of the Post-Effective Amendment No. 1 to Registration Statement on Form S-8 to
Westinghouse Electric Corporation's (the "Company") Registration Statement on
Form S-4, Registration No. 333-13219. The Post-Effective Amendment No. 1 relates
to 21,510,674 shares of the Common Stock, par value $1.00 per share (the "Common
Stock") of Westinghouse Electric Corporation (the "Company") issuable upon the
exercise of stock options and warrants granted under The Amended and Restated
Infinity Broadcasting Corporation Stock Option Plan, The WCK Acquisition Corp.
Stock Option Plan and the Infinity Broadcasting Corporation Warrant Certificate
No. 3 to Mel Karmazin (collectively, the "Plans") which have been assumed by the
Company in connection with the merger involving the Company and Infinity
Broadcasting Corporation ("Infinity"), pursuant to the terms of an Agreement and
Plan of Merger, dated as of June 20, 1996 (as amended, the "Merger Agreement").
I have reviewed the Restated Articles and the By-laws, both as amended, of
the Company, a Pennsylvania corporation and such other documents as I have
deemed necessary as a basis for the options hereinafter expressed. I am of the
opinion that the Company is a duly organized and validly existing corporation
under the laws of the Commonwealth of Pennsylvania.
Based on the foregoing and having regard for such legal considerations as I
deem relevant, I am of the opinion that the shares of Common Stock, when issued
and delivered in accordance with the terms of the options and warrants issued
under the Plans, as assumed by the Company pursuant to the Merger Agreement,
will be duly authorized, validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Post-Effective Amendment.
Very truly yours,
/s/ LOUIS J. BRISKMAN
Louis J. Briskman
Senior Vice President
and General Counsel
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 (No. 333-13219) of Westinghouse Electric Corporation of
our report dated February 12, 1996 except for the restatement discussed in Note
23, for which the date is March 31, 1996, which is included in its Form 8-K
dated September 19, 1996.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
600 Grant Street
Pittsburgh, Pennsylvania 15219-9954
December 27, 1996
