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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 10, 1995
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CNA FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 1-5823 36-6169860
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
CNA Plaza, Chicago, Illinois 60685
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (312) 822-5000
(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets
On May 10, 1995, CNA Financial Corporation ("CNA") consummated the
merger (the "Merger") of its wholly owned subsidiary, Chicago Acquisition
Corp. ("Merger Sub"), with and into The Continental Corporation
("Continental"), pursuant to the Merger Agreement dated as of December 6,
1994, by and among CNA, Continental and Merger Sub, for aggregate
consideration of $1,125 million (based on a conversion price of $20.00 per
share of Continental's common stock, par value $1.00 per share). CNA is
funding the cash purchase price with proceeds from a five-year revolving
credit facility from a syndicate of banks led by the First National Bank of
Chicago, as administrative agent, and The Chase Manhattan Bank, N.A., as
syndication agent. As a result and upon the consummation of the Merger,
Continental became a wholly owned subsidiary of CNA. Continental is an
insurance holding company principally engaged in the business of owning a
group of property and casualty insurance companies, which business CNA
currently intends to continue.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
The financial statements of Continental required to be filed
herewith are incorporated by reference. See exhibits 99.01
and 99.02 below.
(b) Pro Forma Financial Information.
The required pro forma financial information is included
below as exhibit 99.03.
(c) Exhibits.
Exhibit No. Description
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2.01 Securities Purchase Agreement, dated as of
December 6, 1994, by and between CNA
Financial Corporation and The Continental
Corporation (with exhibits thereto) (Exhibit 1
to Form 8-K dated December 9, 1994
incorporated herein by reference.)
2.02 Merger Agreement, dated as of December 6,
1994, by and among CNA Financial Corporation,
Chicago Acquisition Corp. and The Continental
Corporation (Exhibit 2 to Form 8-K dated
December 9, 1994 incorporated herein by
reference.)
4.01* Certificate of Merger of Chicago Acquisition
Corporation with and into The Continental
Corporation as filed with the Secretary of State
of the State of New York on May 10, 1995.
23.01* Consent of KPMG Peat Marwick LLP
(2)<PAGE>
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Item 7. Financial Statements and Exhibits (continued)
99.01 Consolidated Balance Sheets of Continental and
Subsidiaries as of December 31, 1994 and 1993,
and the related Consolidated Statements of
Income, Shareholders' Equity and Cash Flows
for each of the three years in the period
ended December 31, 1994, together with the
notes thereto and the related report of
Independent Accountants (incorporated herein
by reference to Schedule 14A (pages F17 to F51)
to The Continental Corporation's Proxy
Statement (Commission File Number 1-5686)
dated March 29, 1995).
99.02 Consolidated Balance Sheets of Continental and
Subsidiaries as of March 31, 1995 (unaudited)
and December 31, 1994, and the related
Consolidated Statements of Income and Cash
Flows for the Three Months Ended March 31,
1995 and 1994 (unaudited), and Notes to
Financial Statements (incorporated herein by
reference to pages 3 through 17 of The
Continental Corporation's Form 10-Q
(Commission File Number 1-5686) dated May
15, 1995).
99.03* Unaudited Pro Forma Condensed Consolidated
Balance Sheet as of March 31, 1995 and Unaudited
Pro Forma Condensed Statement of Consolidated
Operations for the three months ended March 31,
1995 and for the year ended December 31, 1994.
99.04 Press Release issued by CNA Financial
Corporation dated May 9, 1995. (Exhibit 99.01
to Form 8-K dated May 10, 1995 incorporated
herein by reference.)
*Filed herewith
(3)<PAGE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CNA FINANCIAL CORPORATION
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Date: July 24, 1995 By: Peter E. Jokiel
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Peter E. Jokiel
Senior Vice President and
Chief Financial Officer
(4)
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EXHIBIT 4.01
STATE OF NEW YORK } SS:
DEPARTMENT OF STATE }
I hereby certify that I have compared the annexed copy with the original
documents filed by the Department of State and that the same is a correct
transcript of said original.
With my hand and seal of the Department of State on
May 16, 1995
ALEXANDER F. TREADWELL
Secretary of State
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CERTIFICATE OF MERGER
OF
CHICAGO ACQUISITION CORP.
with and into
THE CONTINENTAL CORPORATION
Under Section 904 of the
Business Corporation Law
The Continental Corporation, a New York corporation, and
Chicago Acquisition Corp., a New York corporation, hereby certify that:
1. The names of constituent business corporations
participating in the merger herein certified are:
a. Chicago Acquisition Corp., a corporation organized under
the laws of the State of New York, the Certificate of incorporation of
which was filed by the Department of State of the State of New York on
December 1, 1994; and
b. The Continental Corporation, a corporation organized
under the laws of the State of New York, the Certificate of Incorporation
of which was filed by the Department of State of the State of New York on
May 15, 1968.
C. The name of the surviving corporation (the "Surviving
Corporation") following the merger shall be The Continental Corporation.
2. a. The outstanding capital stock of Chicago Acquisition
Corp. consists of 1000 shares of Common Stock, par value $0.01 per share,
each share entitled to one vote.
b. The outstanding capital stock of The Continental
Corporation consists of (i) 55,498,057 shares of Common Stock, par value
$1.00, per share, each share entitled to-one vote and voting as class, (ii)
828,100 shares of Series T Preferred Stock, par value $4.00 per share, each
share entitled to one vote and voting as a class, (iii) 171,900 shares of
Series F Preferred Stock, par value $4.00 per share, each share entitled to
one vote and voting as a class and (iv) 375,000 shares of series H
Preferred Stock, par value $4.00 per share, each share entitled to one vote
and voting as a class.
3. An Agreement and Plan of Merger, dated as of December 6,
1994, by and among CNA Financial Corporation, Chicago Acquisition Corp. and
The Continental Corporation, providing for the merger of Chicago
Acquisition Corp. with and into The Continental Corporation (the "Merger"),
was approved
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and adopted (i) with respect to Chicago Acquisition Corp., by resolutions
duly adopted by unanimous written consent of the Board of Directors thereof
on December 6, 1994, and by written consent of the sole shareholder thereof
dated December 6, 1994 and (ii) with respect to The Continental
Corporation, by resolutions duly adopted by the Board of Directors thereof
on December 6, 1994, and by the affirmative vote of at least two-thirds of
the issued and outstanding shares of each class of stock entitled to vote
thereon at a special meeting of shareholders held on May 9, 1995.
4. The Certificate of Incorporation of the Surviving Corporation
shall be amended to be in its entirety identical to the Certificate of
Incorporation of Chicago Acquisition Corp. immediately prior to the
Merger, save that the name of the Surviving Corporation' shall be The
Continental Corporation, and the Certificate of incorporation of the
Surviving Corporation shall be as follows:
FIRST: The name of the corporation (the
"Corporation") is THE CONTINENTAL CORPORATION.
SECOND: The purposes for which the Corporation is
formed are to engage in any lawful act or activity for which
corporations may be organized under the New York Business
Corporation Law, but the Corporation is not formed to engage in
any act or activity requiring the consent or approval of any
state official, department, board, agency or other body without
such consent or approval first being obtained.
THIRD: The office of the Corporation is to be
located in the County of New York, State of New York.
FOURTH: The aggregate number of shares which the
Corporation shall have the authority to issue shall be two million
and eight hundred and fifty-four thousand and one hundred
(2,854,100) of which two million and eight hundred and fifty three
thousand and one hundred (2,853,100) shall be shares of
Preferred Stock of the par value of $0.01 each, and one thousand
(1,000) shall be shares of Common Stock of the par value of $0.01
each. The relative rights, preferences and limitations of the
shares of each class are as follows:
(a) The holders of shares of Common Stock shall
be entitled to one vote per share on all matters upon which
shareholders are entitled to vote and shall not be entitled to any
preference in the distribution of dividends or assets.
(b) Two million and eight hundred and fifty-three
thousand and one hundred (2,853,100) of the shares
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of Preferred Stock may be issued from time to time in series. Each
share of a series shall be equal to every other share of the same
series. The Board of Directors shall have authority to establish and
designate series and to fix the number of shares and the relative
rights, preferences and limitations as between series, subject to
such limitations as may be prescribed by law. In particular, the
Board of Directors may establish, designate and fix the following
with respect to each series of Preferred Stock:
(i) The distinctive serial designation of the series which shall
distinguish those shares from the shares of all other series;
(ii) The number of shares included in the series, which may be
increased or decreased from time to time unless otherwise provided by
the Board of Directors in creating the series;
(iii) The annual dividend rate for the shares of the series and
the date or dates upon which such dividends shall be payable;
(iv) Whether dividends on the shares of the series shall be
cumulative and, on the shares of any series having cumulative
dividend rights, the date or dates or method of determining the date
or dates from which dividends on the shares of the series shall be
cumulative;
(v) The amount or amounts which shall be paid out of the
assets of the Corporation to the holders of the shares of the series
upon the involuntary liquidation, dissolution or winding up of the
Corporation and upon the voluntary liquidation, dissolution or
winding up of the Corporation;
(vi) The price or prices at which, the period or periods
within which and the terms and conditions upon which the shares of
the series may be redeemed in whole or in part, at the option of the
Corporation;
(vii) The obligation, it any, of the Corporation to purchase or
redeem shares of the series pursuant to a sinking fund And the price
or prices at which, the period or periods within which and the terms
and conditions upon which the shares of the series shall be redeemed,
in whole or in part, pursuant to such sinking fund;
(viii) The period or periods within which and the terms
and conditions, if any, including the price or prices or the rate or
rate of conversion and the terms and
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conditions of any adjustments thereof, upon which the shares of the
series shall be convertible at the option of the holder into shares
of any class or stock or into shares of any other series of Preferred
Stock, except into a class of shares having rights or preferences as
to dividends or distribution or assets upon liquidation which are
prior or superior in rank to those of the shares being converted;
(ix) The voting rights, if any, of the shares of the series In
addition to those required by law, including the number of votes per
share and the transaction of any business or of any specified item of
business in connection with which the shares of the series shall
vote as a class; and
(x) Any other relative rights, preferences or limitations of
the shares of the series not inconsistent herewith or with applicable
law.
The Corporation may make pro rata distributions of the
authorized but unissued shares of any series of the Preferred Stock
to holders of another class or series of its outstanding shares.
FIFTH: The Secretary of State of the State of New York is
designated as agent of the Corporation upon whom process against the
Corporation may be served. The post office address to which the
Secretary of State shall mail a copy of any process against the
Corporation served upon him is: c/o C T Corporation System, 1633
Broadway, New York, New York 10019.
SIXTH: The name and address of the registered agent which is to
be the agent of the corporation upon whom process against it may be
served, are C T Corporation System., 1633 Broadway, New York, New
York 10019.
SEVENTH: The holders of equity shares and the holders of
voting shares (as each term is defined in Section 622 of the New
York Business Corporation Law) of the Corporation shall not have any
preemptive rights.
EIGHTH: The business and affairs of the Corporation shall be
managed under the direction of the Board of Directors. The exact
number of directors shall be fixed from time to time by the Board of
Directors pursuant to a resolution adopted by a majority of the
entire Board of Directors.
NINTH: (a) Each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit
or proceedings or appeal thereof, whether civil, criminal,
administrative or
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investigative (hereinafter a "proceeding"), by reason of the fact
that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the Corporation or
is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while
serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest
extent authorized by the New York Business Corporation Law, as the
same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law
permitted the Corporation to provide prior to such amendment),
against all expense, liability and loss (including, but not limited
to all attorneys, fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit
of his or her heirs, executors and administrators; provided, however,
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that, except as provided in paragraph (b) of this Article NINTH, the
Corporation shall indemnify any such person seeking indemnification
in connection with a proceeding (or part thereof) initiated by such
person only if such proceeding (or part thereof) was authorized by
the Board of Directors of the Corporation. The right to
indemnification conferred in this paragraph (a) shall be a contract
right and shall include the right to be paid by the Corporation the
expenses (including, without limitation, attorneys' fees) incurred in
defending any such proceeding in advance of its final disposition;
provided, however, that, if the New York Business Corporation Law
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requires, the payment of such expenses incurred by a director or
officer in his or her capacity as a director or officer (and not in
any other capacity in which service was or is rendered by such person
while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a
proceeding shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay
all amounts so advanced if it shall ultimately be determined that
such director or officer is not entitled to be indemnified under this
Article NINTH or otherwise. The Corporation may, by action of its
Board of Directors, provide indemnification to employees and agents
of the Corporation with the same scope and effect as the foregoing
5<PAGE>
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indemnification of directors and officers, or on such other terms and
conditions as the Board of Directors may deem necessary or desirable.
(b) If a claim under paragraph (a) of this Article NINTH is
not paid in full by the Corporation within thirty days after a
written claim has been received by the Corporation, the claimant may
at any time thereafter bring suit against the Corporation to recover
the unpaid amount of the claim and, if successful in whole or in
part, the claimant shall be entitled to be paid also the expense
(including, without limitation, attorneys' fees) of prosecuting such
claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending
any proceeding in ,advance of its final disposition where the
required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct
which make it permissible under the New York Business Corporation,
Law for the Corporation to indemnify, the claimant for the amount
claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its
Board of Directors, or any part thereof, independent legal counsel,
or its shareholders) to have made a determination prior to the
commencement or such action that indemnification of the claimant is
proper in the circumstances because he or she has met the applicable
standard of conduct set forth in the New York Business Corporation
Law, nor an actual determination by the Corporation (including its
Board of Directors, or any part thereof, independent legal counsel,
or its shareholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard
of conduct.
(c) The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final
disposition conferred in this Article NINTH shall not be exclusive
of any other right which any person may have or hereafter acquire
under any statute, provision of the Certificate of Corporation,
by-law, agreement, vote of shareholders or disinterested directors or
otherwise.
(d) The Corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust
or other enterprise against any expense, liability or loss, to the
fullest extent allowed by law, whether or not the Corporation would
have the power to indemnify such person against much expense,
liability or loss under the New York Business Corporation Law.
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TENTH: A director of the Corporation shall not be personally
liable to the corporation or its shareholders for damages for any
breach of duty in such capacity except that the liability of a
director shall not be limited if (1) a judgment or other final
adjudication adverse to him establishes that his acts or omissions
were in bad faith or involved intentional misconduct or a knowing
violation of law or that he personally gained in fact a financial
profit or other advantage to which he was not legally entitled or that
his acts violated Section 719 of the New York Business Corporation
Law, or (2) his acts or omissions occurred prior to the adoption of
this provision.
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Article I. Series E Preferred Stock.
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Section I. Designation and Number.
----------------------
(a) The shares of such series shall be designated as
"Cumulative Convertible Preferred Stock, Series E" (the "Series E
Preferred Stock"). The number of shares initially constituting the Series
E Preferred Stock shall be 828,100, which number may be decreased (but not
increased) by the Board of Directors without a vote of stockholders;
provided, however, that such number may not be decreased below the sum of
- -------- -------
(x) the number of then outstanding shares of Series E Preferred Stock and
(y) the number of shares of Series E Preferred Stock into which the
outstanding shares of Series T Preferred Stock are exchangeable.
(b) The Series E Preferred Stock shall, with respect to
dividend rights and rights on liquidation, dissolution or winding up, rank
pari passu with the Corporation's $2.50 Cumulative Convertible Preferred
- ---- -----
Stock, Series A (the "Series A Preferred Stock"), $2.50 Cumulative
Preferred Stock, Series B (the "Series 13 Preferred Stock"), Cumulative
Preferred Stock, Series F (the "Series F Preferred Stock"), Cumulative
Preferred Stock, Series G (the "Series G Preferred Stock"), Cumulative
Preferred Stock, Series H (the "Series H Preferred Stock"), Cumulative
Preferred Stock, Series T (the "Series T Preferred Stock" and together
with the Series E Preferred Stock, Series F Preferred Stock, Series G
Preferred Stock and Series H Preferred Stock, the "Chicago Preferred
Stock") and the New Preferred Stock (if any) (the Series A Preferred
Stock, Series B Preferred Stock, Chicago Preferred Stock (other
than the Series E Preferred Stock) and New Preferred Stock (if any) are
collectively defined for the purposes of this Article 1 as the "Other
Preferred Stock") and prior to all other classes and series of capital
stock of the Corporation now or hereafter authorized including, without
limitation, the Common Stock, par value $1.00 per share, of the Corporation
(the "Common Stock").
(c) Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Article 6 below.
Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series E Preferred Stock, in
preference to the holders of shares of Common Stock and of any shares of
other capital stock of the Corporation other than the Other Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of the assets of the Corporation at the time legally
available therefor, cumulative cash dividends at an annual rate on the
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Liquidation Preference thereof equal to 9.75% (subject to increase
pursuant to Section 2(b)), calculated on the basis of a 360-day year
consisting of twelve 30-day months, accruing and payable in equal quarterly
payments, in immediately available funds, on the Business Day immediately
preceding the last day of March, June, September and December in each year
(each such date being referred to herein as a "Quarterly Dividend Payment
Date") commencing on the Business Day immediately preceding December 31,
1994, provided, however, that with respect to such first Quarterly
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Dividend Payment Date, the holders of shares of Series E Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of the assets of the Corporation at the time legally available
therefor, a cumulative cash dividend in respect of each share of Series E
Preferred Stock in the amount of (i) 9.75% (or the then effective annual
rate) of the Liquidation Preference multiplied by (ii) a fraction equal to
(A) the number of days from (and including) the Issue Date to (but excluding)
such Quarterly Dividend Payment Date divided by (B) 360. No interest shall
be payable in respect of any dividend payment on the Series Preferred Stock
that may be in arrears.
(b) If (i) a private placement or public offering of the New
Preferred Stock or the New Senior Notes, pursuant to which the Corporation
shall receive at least $100,000,000 in gross proceeds is not consummated
within 360 days after the termination of the Merger Agreement or (ii) the
annual dividend rate on the New Preferred Stock or the annual interest rate
on the New Senior Notes, as applicable, exceeds 13%, then the annual rate
of the cumulative cash dividends shall be increased to a rate of 10.750%,
effective (x) in the case of clause (i), the date that is 360 days after
the termination of the Merger Agreement, and (y) in the case of clause
(ii), the date of the issuance of the New Preferred Stock or the New Senior
Notes, as applicable. If on any date (A) all of the Purchaser Designees
shall not have been elected to the Corporation's Board of Directors or any
such Purchaser Designees shall not have been appointed to the committees of
the Corporation's Board of Directors in accordance with the provisions of
Section 6.17 of the Securities Purchase Agreement, (E) the Corporation
shall have failed to declare, or shall have failed to pay, the full amount
of dividends payable on the Series E Preferred Stock for six quarterly
dividend periods, (C) the Corporation shall have failed to satisfy its
obligation to convert shares of Series E Preferred Stock pursuant to
Section 10 or (D) a breach of any of the Material Provisions of the
Securities Purchase Agreement or any of the Corporation's material
obligations under the Registration Rights Agreement shall have occurred
then, effective as of the date of such failure or breach, the annual rate
of the cumulative cash dividends shall be increased to a
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rate of 11.75% and shall remain at such rate until such time as (1) the
Purchaser Designees shall have been elected to the Corporation's Board of
Directors and appointed to the committees of the Corporation's Board of
Directors in accordance with the provisions of Section 6.17 of the
Securities Purchase Agreement, (2) all dividends accrued to date on the
Series E Preferred Stock shall have been declared and paid in full, (3) any
conversion obligations in respect of the Chicago Preferred Stock that have
become due shall have been fully satisfied and (4) there shall exist no
breach of any of the Material Provisions of the Securities Purchase
Agreement or any of the Corporation's material obligations under the
Registration Rights Agreement, as the case may be, at which time the annual
rate of the cumulative cash dividends shall be reduced to a rate of 9.75%,
subject to being increased to a rate of 11.75% in the event of each and
every subsequent event of the character indicated above.
(c) Dividends payable pursuant to Section 2(a) shall begin to
accrue and be cumulative from the Issue Date, and shall accrue on a daily
basis, in each case whether or not declared. Dividends paid on the shares
of Series E Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares of Series E
Preferred Stock at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series E
Preferred Stock entitled to receive payment of a dividend declared thereon,
which record date shall be not more than 60 days, nor less than 10 days,
prior to the date fixed for the payment thereof. Accumulated but unpaid
dividends for any past quarterly dividend periods may be declared and paid
at any time, without reference to any regular Quarterly Dividend Payment
Date, to holders of record on such date, not more than 60 nor less than
10 days preceding the payment date thereof, as may be fixed by the Board of
Directors.
(d) The holders of shares of Series E Preferred Stock shall
not be entitled to receive any dividends or other distributions except as
provided herein.
Section 3. Voting Rights.
-------------
In addition to any voting rights provided by law, the holders
of shares of Series E Preferred Stock shall have the following voting
rights:
(a) Except as otherwise required by applicable law so long as
the Series E Preferred Stock is outstanding, each
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share of Series E Preferred Stock shall entitle the holder thereof to vote,
in person or by proxy, at a special or annual meeting of stockholders, on
all matters voted on by holders of Common Stock voting together as a single
class with other shares entitled to vote thereon. With respect to any such
vote, each share of Series E Preferred Stock shall entitle the holder
thereof to cast that number of votes per share as is equal to the number of
votes that such holder would be entitled to cast had such holder converted
his shares of Series E Preferred Stock into Common Stock on the record date
for determining the stockholders of the Corporation eligible to vote on any
such matters.
(b) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders
of at least 66-2/3% of the outstanding shares of Series E Preferred Stock,
voting separately as a single class, in person or by proxy, at a special or
annual meeting of stockholders called for the purpose, shall be necessary
to (i) authorize, adopt or approve an amendment to the Certificate of
Incorporation that would increase or decrease the par value of the shares
of Series E Preferred Stock, or alter or change the powers, preferences or
special rights of the shares of Series E Preferred Stock, (ii) amend, alter
or repeal the Certificate of Incorporation so as to affect the shares of
Series E Preferred Stock adversely or (iii) effect the voluntary
liquidation, dissolution, winding up, recapitalization or reorganization of
the Corporation, or the consolidation or merger of the Corporation with or
into any other Person, or the sale or other distribution to another Person
of all or substantially all of the assets of the Corporation;
provided, however, that no separate vote of the holders of Series E Preferred
- -------- -------
Stock shall be required to effect any of the transactions described in clause
(iii) above unless such transaction would either require a class vote
pursuant to clause (i) or (ii) above or would require a vote by any
shareholders of the Corporation (other than pursuant to this sentence);
provided further, that no separate vote of the holders of the Series E
- -------- -------
Preferred Stock as a class shall be required in the case of a
recapitalization, reorganization, consolidation or merger of, or sale by,
the Corporation if (A)(a) such recapitalization, reorganization,
consolidation, merger or sale constitutes a Specified Corporate Action, (b)
the Corporation has sufficient funds legally available to it (after giving
effect to such transaction) to redeem, at the then applicable price
hereunder and pursuant to the terms hereof, all the outstanding shares of
Series E Preferred Stock, (c) such redemption shall not be prohibited by
any agreement to which the Corporation or any of its Subsidiaries is a
party, by applicable law or otherwise, (d) the Board of Directors of the
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Corporation, including a majority of the directors who are not officers or
employees of the Corporation, shall have adopted a resolution confirming
that such funds are available and that the holders of Series E Preferred
Stock have the right to require such redemption and (e) the Corporation
shall have set aside sufficient funds to redeem through the Mandatory
Redemption Date the shares of Series E Preferred Stock held by such holders
(except that no funds need be set aside with respect to such shares held by
any such holder who has theretofore notified the Corporation (whether
pursuant to Section 6(c) or otherwise) that it will not require redemption
of such shares) or (B) (1) the Corporation shall be the resulting or
surviving corporation, (2) the resulting or surviving corporation will have
after such recapitalization, reorganization, consolidation or merger no
Senior Stock or Parity Stock either authorized or outstanding (except such
Parity Stock of the Corporation as may have been authorized or outstanding
immediately preceding such consolidation or merger) or such stock of the
resulting or surviving corporation (having the same powers, preferences
and special rights of any such Parity Stock) as may be issued in exchange
therefor), (3) each holder of shares of Series E Preferred Stock immediately
preceding such recapitalization, reorganization, consolidation or merger
will receive in exchange therefor the same number of shares of stock, with
the same preferences, rights and powers, of the resulting or surviving
corporation, (4) after such recapitalization, reorganization, consolidation
or merger the resulting or surviving corporation shall not be in breach
of any of the terms hereof, any of the Material Provisions of the Securities
Purchase Agreement or any of its material obligations under the Registration
Rights Agreement and (5) all or substantially all the holders of the
outstanding shares of capital stock of the Corporation immediately prior
to such consolidation or merger are entitled to receive shares representing
50% or more of the then outstanding shares of capital stock of the resulting
or surviving corporation entitled to vote generally in the election of
directors.
(c) If on any date (i) the Corporation shall have failed to
declare, or shall have failed to pay, the full amount of dividends payable
on any series of Chicago Preferred Stock, for six quarterly dividend
periods or (ii) a breach of any of the Material Provisions of the
Securities Purchase Agreement or any of the Corporation's material
obligations under the Registration Rights Agreement shall have occurred,
then the number of directors constituting the Board of Directors shall,
without further action, be increased by two and the holders of shares
of Series E Preferred Stock shall have, in addition to the other voting
rights set forth herein with respect to the Series E Preferred Stock, the
exclusive right, together with the
12<PAGE>
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holders of all other series of Chicago Preferred Stock, voting separately
as a single class together with the holders of such other series of Chicago
Preferred Stock, to elect two directors of the Corporation to fill such
newly created directorship, by written consent as provided herein, or at a
special meeting of such holders called as provided herein. Any such
additional directors shall continue as directors (subject to reelection or
removal as provided in Section 3(d)(ii)) and the holders of Series E
Preferred Stock shall have such additional voting rights until such time as
(A) dividends then payable on all series of Chicago Preferred Stock shall
have been declared and paid in full and (B) there shall exist no breach of
any of the Material Provisions of the Securities Purchase Agreement or any
of the Corporation's material obligations under the Registration Rights
Agreement, as the case may be, at which time such additional directors
shall cease to be directors, the number of directors constituting the Board
of Directors shall be reduced by two and such additional voting rights of
the holders of all series of Chicago Preferred Stock shall terminate,
subject to revesting in the event of each and every subsequent event of the
character indicated above.
(d) (i) The foregoing right of holders of shares of Series E
Preferred Stock to take any action as provided in Section 3(c) may be
exercised at any annual meeting of stockholders or at a special meeting of
holders of shares of Chicago Preferred Stock held for such purpose as
hereinafter provided or at any adjournment thereof, or by the written
consent, delivered to the Secretary of the Corporation, of the holders of
the minimum number of shares required to take such action.
So long as such right to vote continues (and unless such right
has been exercised by written consent of the minimum number of shares
required to take such action), the President of the Corporation may call,
and upon the written request of holders of record of at least 5% of the
aggregate outstanding shares of Chicago Preferred Stock addressed to the
Secretary of the Corporation at the principal office of the Corporation,
shall call, a special meeting of the holders of shares entitled to vote as
provided herein. Such meeting shall be held within 30 days after delivery
of such request to the Secretary, at the place and upon the notice provided
by law and in the by-laws of the Corporation for the holding of meetings of
stockholders.
(ii) At each meeting of stockholders at which the holders of
shares of Series E Preferred Stock shall have the right, voting separately
as a single class together with the holders of all other series of Chicago
Preferred Stock, to elect two directors of the Corporation as provided in
Section 3(c) or to take any action, the presence in person or by proxy
13<PAGE>
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of the holders of record of one-third of the total aggregate number of
shares of Chicago Preferred Stock then outstanding and entitled to vote on
the matter shall be necessary and sufficient to constitute a quorum. At
any such meeting or at any adjournment thereof:
(A) the absence of a quorum of the holders of
shares of Chicago Preferred Stock shall not prevent the
election of directors other than those to be elected by the
holders of shares of Chicago Preferred Stock, and the absence
of a quorum of the holders of shares of any other class or
series of capital stock shall not prevent the election of
directors to be elected by the holders of shares of Chicago
Preferred Stock or the taking of any action as provided in
Section 3(c); and
(B) in the absence of a quorum of the holders of
shares of Chicago Preferred Stock, a majority of the holders of
such shares present in person or by proxy shall have the power to
adjourn the meeting as to the actions to be taken by the holders
of shares of Chicago Preferred Stock from time to time and place
to place without notice other than announcement at the meeting
until a quorum shall be present.
For taking of any action as provided in Section 3(b) or Section
3(c) by the holders of shares of Series E Preferred Stock, each such holder
shall have one vote for each share of such stock standing in his name on
the transfer books of the Corporation as of any record date fixed for such
purpose or, if no such date be fixed, at the close of business on the
Business Day next preceding the day on which notice is given, or if notice
is waived, at the close of business on the Business Day next preceding the
day on which the meeting is held; provided, however, that shares of Chicago
-------- -------
Preferred Stock held by the Corporation or any Subsidiary of the
Corporation shall not be deemed to be outstanding for purposes of taking
any action as provided in this Section 3.
Each director elected by the holders of shares of Chicago
Preferred Stock as provided in Section 3(c) shall, unless his term shall
expire earlier in accordance with the provisions thereof, hold office until
the annual meeting of stockholders next succeeding his election or until
his successor, if any, is elected and qualified.
If any director so elected by the holders of Chicago Preferred
Stock shall cease to serve as a director before his term shall expire
(except by reason of the termination of the voting rights accorded to the
holders of Chicago Preferred
14<PAGE>
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Stock in accordance with Section 3(c)), the holders of the Chicago
Preferred Stock then outstanding and entitled to vote for such director
may, by written consent as provided herein, or at a special meeting of such
holders called as provided herein, elect a successor to hold office for the
unexpired term of the director whose place shall be vacant.
Any director elected by the holders of shares of Chicago
Preferred Stock, voting together as a separate class, may be removed from
office with or without cause only by the vote or written consent of the
holders of at least a majority of the aggregate outstanding shares of
Chicago Preferred Stock at the time of removal. A special meeting of the
holders of shares of Chicago Preferred Stock may be called in accordance
with the procedures set forth in Section 3(d)(i).
Section 4. Certain Restrictions.
--------------------
(a) So long as any shares of Series E Preferred Stock remain
outstanding, the Corporation shall not declare or make any Restricted
Payment.
(b) Whenever quarterly dividends payable on shares of Series
E Preferred Stock as provided in Section 2(a) are not paid in full, at such
time and thereafter until all unpaid dividends payable, whether or not
declared, on the outstanding shares of Series E Preferred Stock shall have
been paid in full or declared and set apart for payment, or whenever the
Corporation shall not have converted shares of Series E Preferred Stock at
a time required by Section 10, at such time and thereafter until all
conversion obligations provided in Section 10 that have come due shall have
been satisfied or all necessary funds have been set apart for payment, or
whenever the Corporation shall not have paid the Optional Redemption Price,
the Mandatory Redemption Price, Special Redemption Price or the Maturity
Redemption Price when due, at such time and thereafter until all such
amounts have been paid in full or set apart for payment, the Corporation
shall not: (A) declare or pay dividends, or make any other distributions,
on any shares of Junior Stock, or (B) declare or pay dividends, or make any
other distributions, on any shares of Parity Stock, except dividends or
distributions paid ratably on the Series E Preferred Stock and all Parity
Stock on which dividends are payable and in arrears, in proportion to the
total amounts to which the holders of all shares of the Series E Preferred
Stock and Parity Stock are then entitled.
(c) Whenever dividends payable on shares of Series E
Preferred Stock as provided in Section 2 are not paid in full, at such time
and thereafter until all unpaid dividends payable,
15<PAGE>
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whether or not declared, on the outstanding shares of Series E Preferred
Stock shall have been paid in full or declared and set apart for payment,
or whenever the Corporation shall not have converted shares of Series E
Preferred Stock at a time required by Section 10, at such time and
thereafter until all conversion obligations provided in Section 10 that
have come due shall have been satisfied or all necessary funds have been
set apart for payment, or whenever the Corporation shall not have paid the
optional Redemption Price, the Mandatory Redemption Price, Special
Redemption Price or the Maturity Redemption Price when due, at such time
and thereafter until all such amounts have been paid in full or set apart
for payment, the Corporation shall not redeem, purchase or otherwise
acquire for consideration any shares of Junior Stock or Parity Stock;
provided, however, that (A) the Corporation may accept shares of Parity
- -------- -------
Stock or Junior Stock for conversion into Junior Stock and (E) the
Corporation may at any time redeem, purchase or otherwise acquire shares of
Parity Stock pursuant to any mandatory redemption, put, sinking fund or
other similar obligation contained in such Parity Stock, pro rata with the
Series E Preferred Stock in proportion to the total amount then required to
be applied by the Corporation to redeem, repurchase, or otherwise acquire
shares of Series E Preferred Stock and shares of such Parity Stock.
(d) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to purchase or otherwise acquire
for consideration any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(c), purchase such shares at such
time and in such manner.
Section 5. Optional Redemption.
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(a) (i) The Corporation shall not have any right to redeem
any shares of Series E Preferred Stock prior to December 30, 2001.
Thereafter (A) at any time after December 31, 2001 or (B) at any time, so
long as shares of Common Stock shall have traded on the New York Stock
Exchange (or another national securities exchange or on Nasdaq) on each
trading day during a 30-consecutive trading day period (each of which
trading days shall be after December 30, 2001 and no more than 5 Business
Days prior to the date notice is given of an Optional Redemption (as
defined below)) and had a Closing Price on at least 20 of such trading days
in excess of 150% of the Conversion Price in effect on such trading day,
subject to the restrictions contained in Section 4, the Corporation shall
have the right, at its sole option and election, to redeem (the "Optional
Redemption") all or a portion of the shares of Series E Preferred Stock, on
not more than 45 nor less than 30 days notice of the
16<PAGE>
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date of redemption (any such date an "Optional Redemption Date") at a
price per share (the "Optional Redemption Price") equal to (A) the
following prices per share (stated as a percentage of the Liquidation
Preference of such share) plus (E) an amount per share equal to all accrued
and unpaid dividends thereon, whether or not declared or payable, to the
applicable Optional Redemption Date, in immediately available funds:
Optional Redemption Price
If Redeemed as a Percentage of
During the Period Liquidation Preference
----------------- -------------------------
December 30, 2001 to 102.775%
December 29, 2002
December 30, 2002 to 101.850%
December 29, 2003
December 30, 2003 to 100.925%
December 29, 2004
December 30, 2004 and 100%
thereafter
(ii) If the Corporation shall determine to redeem less than
all the shares of Series E Preferred Stock then outstanding pursuant to
paragraph (i), the shares to be redeemed shall be selected pro rata (as
nearly as may be) so that the number of shares redeemed from each holder
shall be the same proportion of all the shares to be redeemed that the total
number of shares of Series E Preferred Stock then held by such holder bears
to the total number of shares of Series E Preferred Stock then outstanding.
(iii) Notwithstanding the foregoing, any shares of Series E
Preferred Stock redeemed pursuant to this Section 5(a) at any time when
holders of shares of Series E Preferred Stock have the right to require the
Corporation to redeem the shares of Series E Preferred Stock pursuant to
Section 6 or an event giving rise to such a right has occurred shall be
redeemed at a price equal to higher of the price to be paid pursuant to
Section 5(a) and the price to be paid pursuant to Section 6.
(b) Notice of any Optional Redemption shall specify the
Optional Redemption Date, the Optional Redemption Price, the place or
places of payment, that payment will,be made upon presentation and surrender
of the shares of Series E Preferred Stock, that on and after the date of such
Optional Redemption
17<PAGE>
<PAGE>
dividends will cease to accrue on such shares, the then effective
Conversion Price and that the right of holders to convert shares of Series
E Preferred Stock shall terminate at the close of business on the Business
Day immediately preceding the Optional Redemption Date (unless the
Corporation defaults in the payment of the Optional Redemption Price) and
be given by publication in a newspaper of general circulation in the
Borough of Manhattan, The City of New York (if such publication shall be
required by applicable law, rule, regulation or securities exchange
requirement), not less than 30, nor more than 45, days prior to the Optional
Redemption Date; and, in any case, a similar notice shall be mailed at least
30, but not more than 45 days prior to the Optional Redemption Date to each
holder of shares of Series E Preferred Stock, at such holder's address as it
appears on the transfer books of the Corporation. In order to facilitate
the redemption of shares of Series E Preferred Stock, the Board of
Directors may fix a record date for the determination of shares of Series E
Preferred Stock to be redeemed, or may cause the transfer books of the
Corporation for the Series E Preferred Stock to be closed, not more than
60 days or less than 45 days prior to the Optional Redemption Date.
(c) on the date of any Optional Redemption that is specified
in a notice given pursuant to Section 5(b), the Corporation shall, and at
any time after such notice shall have been mailed and before the Optional
Redemption Date the Corporation may, deposit for the benefit of the holders
of shares of Series E Preferred Stock the funds necessary for such
redemption with a bank or trust company in the Borough of Manhattan, The
City of New York, that is "well capitalized" within the meaning of the
applicable bank regulations and having a capital and surplus of at least
$500,000,000. Any moneys so deposited by the Corporation and unclaimed at
the end of two years from the Optional Redemption Date shall revert to the
general funds of the Corporation. After such reversion, any such bank or
trust company shall, upon demand, pay over to the Corporation such
unclaimed amounts and thereupon such bank or trust company shall be
relieved of all responsibility in respect thereof and any holder of shares
of Series E Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Optional Redemption Price. In the event
that moneys are deposited pursuant to this Section 5(c) in respect of
shares of Series E Preferred Stock that are converted in accordance with
the provisions of Section 10, such moneys shall, upon such conversion,
revert to the general funds of the Corporation and, upon demand, such bank
or trust company shall pay over to the Corporation such moneys and shall be
relieved of all responsibilities to the holders of such converted shares
in respect thereof. Any interest accrued on funds deposited
18<PAGE>
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pursuant to this Section 5(c) shall be paid from time to time to the
Corporation for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 5(c) in respect of shares of
Series E Preferred Stock to be redeemed pursuant to Section 5(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the optional Redemption Date
(i) the shares represented thereby shall no longer be deemed outstanding,
(ii) the rights to receive dividends thereon shall cease to accrue, and
(iii) all rights of the holders of shares of Series E Preferred Stock to
be redeemed shall cease and terminate, excepting only the right to receive
the Optional Redemption Price therefor and the right to convert such shares
into shares of Common Stock until the close of business on the Business Day
immediately preceding the Optional Redemption Date (and to receive accrued
and unpaid dividends thereon), in accordance with Section 10;
provided, however, that if the Corporation shall default in the payment of
- -------- -------
the Optional Redemption Price the shares of Series E Preferred Stock shall
thereafter be deemed to be outstanding and the holders thereof shall have
all of the rights of a holder of Series E Preferred Stock until such time
as such default shall no longer be continuing or shall have been waived by
holders of at least 66-2/3% of the then outstanding shares of Series E
Preferred Stock.
(e) Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of
shares of Series E Preferred Stock receives such notice, and failure to
give such notice by mail, or any defect in such notice, to the holders of
any shares designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Series E Preferred
Stock. On or after the Optional Redemption Date, each holder of the shares
called for redemption, subject to their right to convert shares of Series E
Preferred Stock as provided in section 10, shall surrender the certificate
evidencing such shares to the Corporation at the place designated in such
notice and shall thereupon be entitled to receive payment of the Optional
Redemption Price. If less than all the shares evidenced by any such
surrendered certificate are redeemed, a new certificate shall be issued
evidencing the unredeemed shares.
Section 6. Mandatory Redemption at the Option of the Holder.
------------------------------------------------
(a) If one or more events constituting a Specified
Corporate Action shall occur, each holder of shares of the
19<PAGE>
<PAGE>
Series E Preferred Stock shall have the right, on the date or dates
specified in Section 6(b) (the "Mandatory Redemption Date"), to require the
Corporation to redeem (a "Mandatory Redemption") all or any part of the
shares of Series E Preferred Stock then held by such holder as such holder
may elect at a price per share (the "Mandatory Redemption Price") equal to
(A) the following prices per share (stated as a percentage of the
Liquidation Preference of such share) plus (B) an amount per share equal to
all accrued and unpaid dividends thereon, whether or not declared or payable,
to the applicable Mandatory Redemption Date, in immediately available funds:
If the Mandatory
Redemption Date Mandatory Redemption Price
Occurs During the as a Percentage of
Period Liquidation Preference
----------------- --------------------------
December 30, 1994 to 110.4%
June 29, 1995
June 30, 1995 to 116.8%
December 29,1995
December 30, 1995 to 126.7%
June 29, 1996
June 30, 1996 and 138.0%
thereafter
(b) The date fixed for each Mandatory Redemption shall be
fixed by the Corporation and shall be not less than 60 days nor more than
90 days following the occurrence of any Specified Corporate Action giving
rise thereto (or, in the case of a Specified Corporate Action described in
clause (iii) of the definition of "Specified Corporate Action," not less
than 60 days nor more than 90 days following the date on which the
Corporation obtains actual knowledge of such Specified Corporate Action);
provided, however, that in the event of a Specified Corporate Action that
- -------- -------
constitutes a Control Transaction, in addition to the dates fixed for a
Specified Corporate Action Redemption as specified above, an additional
Specified Corporate Action Redemption Date shall be set for the date and
time immediately preceding the consummation of any such Control
Transaction; provided, further, that, upon the request of a holder, the
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Board of Directors shall agree to extend the date of redemption in respect
of any such Specified Corporate Action (without changing the
consideration that is otherwise payable
20<PAGE>
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in respect of such redemption other than with respect to adjustments to the
amount of accrued and unpaid dividends included in such redemption price)
to the extent necessary for any holder of shares of Series E Preferred
Stock to avoid liability under Section 16(b) of the Exchange Act, provided,
that no such redemption extension shall be for a period greater than six
months. The Corporation shall, within 5 days of the occurrence of a
Specified Corporate Action (or, in the case of a Specified Corporate Action
described in clause (iii) of the definition of "Specified Corporate
Action," within 5 days of the date on which the Corporation obtains actual
knowledge of such Specified Corporate Action), give notice thereof by
publication in a newspaper of general circulation in the Borough of
Manhattan, The City of New York (if such publication shall be required by
applicable law, rule, regulation or securities exchange requirement), and,
in any case, a similar notice shall be mailed to each holder of shares of
the Series E Preferred Stock, at such holder's address as it appears on the
transfer books of the Corporation. Each such notice shall specify the
Specified Corporate Action that has occurred and the date of such
occurrence, the place or places of payment, the then effective Mandatory
Redemption Price and Conversion Price and the date the right of such holder
to require a Mandatory Redemption shall terminate.
(c) If the notice sent by the Corporation pursuant to Section
6(b) shall contain (i) a form inquiring as to whether a holder of shares of
Series E Preferred Stock intends to surrender the certificates)
representing such shares for redemption pursuant to this Section 6 and (ii)
a stamped self-addressed envelope for return of such form to the
Corporation or its designee, within ten Business Days of such notice, each
holder shall return such inquiry form to the Corporation and shall indicate
in such form the proportion of such holder's shares of Series E Preferred
Stock that will be surrendered for redemption pursuant to this Section 6.
If such notice shall indicate that if a holder does not respond prior to
ten Business Days after the date of such notice that such holder will be
deemed to have notified the Corporation that it will not require the
redemption of the shares of Series E Preferred Stock held by such holder
for purposes of Section 3(b) and such holder does not respond to the
Corporation's inquiry prior to ten Business Days after the date of such
notice, such holder will be deemed to have notified the Corporation that
it will not require the redemption of the shares of Series E Preferred Stock
held by such holder for purposes of Section 3(b). Nothing contained in
this Section 6(c) shall affect the right of a holder of Series E Preferred
Stock to require the Corporation to redeem such shares pursuant to
Section 6(a).
21<PAGE>
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(d) Each holder of shares of the Series E Preferred Stock
shall have the right, at such holder's option exercisable at any time on 30
days' notice to the Corporation on or after December 30, 2009 (the date of
any such exercise, the "Special Redemption Date"), to require the
Corporation to redeem (a "Special Redemption") all or any part of the
shares of Series E Preferred Stock then held by such holder as such holder
may elect by written notice delivered at least 30 days prior to the Special
Redemption Date at a price per share equal to the sum of (A) 100% of the
Liquidation Preference of such share and (B) an amount per share equal to
all accrued and unpaid dividends thereon whether or not declared or payable
to the Special Redemption Date (the "Special Redemption Price") in
immediately available funds.
(e) on the date fixed for any Mandatory Redemption or on any
Special Redemption Date, each holder of shares of Series E Preferred Stock
who elects to have shares of Series E Preferred Stock held by it redeemed
shall surrender the certificate representing such shares to the Corporation
at the place designated in such notice together with an election to have
such redemption made and shall thereupon be entitled to receive payment
therefor provided in this Section 6. If less than all the shares represented
by any such surrendered certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares. From and after the date of such
redemption (i) the rights to receive dividends thereon shall cease to
accrue and (ii) all rights of the holders of shares of Series E Preferred
Stock so redeemed shall cease and terminate, excepting only the right to
receive the Mandatory Redemption Price or Special Redemption Price
therefor; provided, however, that if the Corporation shall default in the
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payment of the Mandatory Redemption Price the shares of Series E Preferred
Stock that were to be redeemed shall thereafter be deemed to be outstanding
and the holders thereof shall have all of the rights of a holder of Series
E Preferred Stock until such time as such default shall no longer be
continuing or shall have been waived by holders of at least 66-2/3% of the
then outstanding shares of Series E Preferred Stock.
Section 7. Redemption Upon Maturity.
------------------------
(a) On December 30, 2034 (the "Maturity Date"), the
Corporation shall redeem (the "Maturity Redemption") the remaining
outstanding shares of the Series E Preferred Stock at a price per share
(the "Maturity Redemption Price") equal to (A) 100% of the Liquidation
Preference per share plus (B) an amount equal to accrued and unpaid
dividends thereon, whether or not declared or payable, to the Maturity
Date, in immediately available funds.
22<PAGE>
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(b) Notice of the Maturity Redemption shall be given by
publication in a newspaper of general circulation in the Borough of
Manhattan, The City of New York (if such publication shall be required by
applicable law, rule, regulation or securities exchange requirement), not
less than 30, nor more than 60, days prior to the Maturity Date and, in any
case, a similar notice shall be mailed at least 30, but not more than 60,
days prior to the Maturity Date to each holder of shares of Series E
Preferred Stock, at such holder's address as it appears on the transfer
books of the Corporation.
(c) On the Maturity Date, the Corporation shall, and at any
time after such notice shall have been mailed and before the Maturity Date
the Corporation may, deposit for the benefit of the holders of shares of
Series E Preferred Stock the funds necessary for such redemption with a
bank or trust company in the Borough of Manhattan, The City of New York,
that is "well capitalized" within the meaning of the applicable banking
regulations and having a capital and surplus of at least $500,000,000. Any
moneys so deposited by the Corporation and unclaimed at the end of two years
from the date designated for such redemption shall revert to the general funds
of the Corporation. After such reversion, any such bank or trust company
shall, upon demand, pay over to the Corporation such unclaimed amounts and
thereupon such bank or trust company shall be relieved of all
responsibility in respect thereof and any holder of shares of Series E
Preferred Stock to be redeemed shall look only to the Corporation for the
payment of the Maturity Redemption Price. In the event that moneys are
deposited pursuant to this Section 7(c) in respect of shares of Series E
Preferred Stock that are converted in accordance with the provisions of
Section 10, such moneys shall, upon such conversion, revert to the general
funds of the Corporation and, upon demand, such bank or trust company shall
pay over to the Corporation such moneys and shall be relieved of all
responsibilities to the holders of such converted shares in respect thereof.
Any interest accrued and unpaid on funds deposited pursuant to this Section
5(c) shall be paid from time to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 7(c) in respect of shares of
Series E Preferred Stock to be redeemed pursuant to Section 7(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Maturity Date, (i) the
rights to receive dividends thereon shall cease to accrue and (ii) all
rights of the holders of shares of Series E Preferred Stock shall cease and
terminate, excepting only the right to receive the Maturity Redemption
Price therefor; provided, however, that
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23<PAGE>
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if the Corporation shall default in the payment of the Maturity Redemption
Price, the shares of Series E Preferred Stock that were to be redeemed
shall thereafter be deemed to be outstanding and the holders thereof shall
have all of the rights of a holder of Series E Preferred Stock until such
time as such default shall no longer be continuing.
Section 8. Acquired Shares.
---------------
Any shares of Series E Preferred Stock converted, exchanged,
redeemed, purchased or otherwise acquired by the Corporation or any of its
Subsidiaries in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares of Series E
Preferred Stock shall upon their cancellation become authorized but
unissued shares of preferred stock, par value $4.00 per share, of the
Corporation and, upon the filing of an appropriate certificate with the
Department of State of the State of New York, may be reissued as part of
another series of preferred stock, par value $4.00 per share, of the
Corporation subject to the conditions or restrictions on issuance set forth
herein, but in any event may not be reissued as shares of Series E Preferred
Stock or Parity Stock unless all of the shares of Series E Preferred Stock
issued on the Issue Date shall have already been redeemed, converted or
exchanged.
Section 9. Liquidation, Dissolution or Winding Up.
---------------------------------------
(a) If the Corporation shall commence a voluntary case under
the United States bankruptcy laws or any applicable bankruptcy, insolvency
or similar law of any other country, or consent to the entry of an order
for relief in an involuntary case under any such law or to the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
other similar official) of the Corporation or of any substantial part of
its property, or make an assignment for the benefit of its creditors, or admit
in writing its inability to pay its debts generally as they become due (any
such event, a "Voluntary Liquidation Event"), or if a decree or order for
relief in respect of the Corporation shall be entered by a court having
jurisdiction in the premises in an involuntary case under the United States
bankruptcy laws or any applicable bankruptcy, insolvency or similar law of
any other country, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the
Corporation or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and on account of any such event
the Corporation shall liquidate, dissolve or wind up, or if the Corporation
shall otherwise liquidate, dissolve or wind up, no distribution shall be
made
24<PAGE>
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(i) to the holders of shares of Junior Stock unless, prior thereto, the
holders of shares of Series E Preferred Stock, subject to Section 10, shall
have received (A) if a Voluntary Liquidation Event shall have occurred, the
Optional Redemption Price with respect to each share and (B) if a Voluntary
Liquidation Event shall not have occurred, the Liquidation Preference, plus
all accrued and unpaid dividends, whether or not declared or currently
payable, to the date of distribution, with respect to each share, or (ii)
to the holders of shares of Parity Stock, except distributions made ratably
on the Series E Preferred Stock and all Parity Stock in proportion to the
total amounts to which the holders of all shares of the Series E Preferred
Stock (which amounts are set forth in clauses (A) and (B) above) and Parity
Stock are entitled upon.such liquidation, dissolution or winding up.
(b) Neither the consolidation or merger of the Corporation
with or into any other Person nor the sale or transfer of all or any part
of the Corporation's assets for cash, securities or other property shall be
deemed to be a liquidation, dissolution or winding up of the Corporation
for purposes of this Section 9.
Section 10. Conversion.
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(a) Any holder of Series E Preferred Stock shall have the
right, at its option, at any time and from time to time prior to the
Maturity Date (but subject to the provisions of Section 10(b)) to convert,
subject to the terms and provisions of this Section 10, each share of
Series E Preferred Stock into such number of fully paid and nonassessable
shares of Common Stock (calculated as to each conversion to the nearest
1/l00th of a share of Common Stock) for each full share of Series E
Preferred Stock as is equal, subject to Section 10(g), to the quotient of
(i) the Liquidation Preference divided by (ii) the Conversion Price (as
defined below) then in effect, except that with respect to any share that
shall be called for redemption, such right shall terminate at the close of
business on the date of redemption for such share, unless in any such case
the Corporation shall default in performance or payment due upon redemption
thereof. The Conversion Price initially shall be $15.75, and thereafter
shall be subject to adjustment as set forth in Section 10(d). Such
conversion right shall be exercised by the surrender of the shares of
Series E Preferred Stock to be converted to the Corporation at any time
during usual business hours at its principal place of business to be
maintained by it, accompanied by written notice that the holder elects to
convert such shares and specifying the name or names (with addresses) in
which a certificate or certificates for shares of Common Stock are to be
issued and
25<PAGE>
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(if so required by the Corporation) by a written instrument or instruments
of transfer in form reasonably satisfactory to the Corporation duly
executed by the holder or its duly authorized legal representative and
transfer tax stamps or funds therefor, if required pursuant to Section
10(k). All shares of Series E Preferred Stock surrendered for conversion
shall be delivered to the Corporation for cancellation and cancelled by it
and no shares shall be issued in lieu thereof.
(b) As promptly as practicable after the surrender, as
herein provided, of any shares of Series E Preferred Stock for conversion
pursuant to Section 10(a), the Corporation shall deliver to or upon the
written order of the holder of the shares so surrendered a certificate or
certificates representing the number of fully paid and nonassessable shares
of Common Stock into which such shares may be or have been converted in
accordance with the provisions of this Section 10. Subject to the following
provisions of this paragraph and of Section 10(d), such conversion shall be
deemed to have been made immediately prior to the close of business on the
date that such shares shall have been surrendered in satisfactory form for
conversion, and the Person or Persons entitled to receive the Common Stock
deliverable upon conversion of such shares shall be treated for all
purposes as having become the record holder or holders of such Common Stock
at such appropriate time, and such conversion shall be at the Conversion
Price in effect at such time; provided, however, that no surrender shall be
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effective to constitute the Person or Persons entitled to receive the
Common Stock deliverable upon such conversion as the record holder or
holders of such Common Stock while the share transfer books of the
Corporation shall be closed (but not for any period in excess of five
days), but such surrender shall be effective to constitute the Person or
Persons entitled to receive such Common Stock as the record holder or
holders thereof for all purposes immediately prior to the close of business
on the next succeeding day on which such share transfer books are open, and
such conversion shall be deemed to have been made at, and shall be made at
the Conversion Price in effect at, such time on such next succeeding day.
In case of any Optional Redemption, Special Redemption or Maturity
Redemption of any shares of Series E Preferred Stock, the right of
conversion shall cease and terminate, as to the shares to be redeemed, at
the close of business on (A) the Business Day immediately preceding the
Optional Redemption Date, in the case of an Optional Redemption, (B) the
Business Day immediately preceding the Special Redemption Date, in the case
of the Special Redemption, and (C) the Business Day immediately preceding
the Maturity Date, in the case of a Maturity Redemption, unless the
Corporation shall default in the
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payment of the applicable redemption price for the shares to be redeemed.
If the last day for the exercise of the conversion right shall
not be a Business Day, then such conversion right may be exercised on the
next preceding Business Day.
(c) To the extent permitted by law, when shares of Series E
Preferred Stock are converted, all dividends accrued and unpaid (whether or
not declared or currently payable) on the Series E Preferred Stock so
converted to the date of conversion shall be immediately due and payable
and must accompany the shares of Common Stock issued upon such conversion;
provided, however, that if shares being converted are held by a Person
- -------- -------
other than the original holder or any of its Affiliates and such shares are
not "restricted securities" (as defined in Rule 144 under the Securities
Act of 1933, as amended), then no such accrued and unpaid dividends shall
be payable when such shares are converted.
(d) The Conversion Price shall be subject to adjustment as
follows:
(i) In case the Corporation shall at any time or from
time to time (A) pay a dividend or make a distribution on the outstanding
shares of Common Stock in Common Stock (other than pursuant to a dividend
reinvestment plan approved by the Corporation's Board of Directors), (B)
subdivide the outstanding shares of Common Stock into a larger number of
shares, (C) combine the outstanding shares of Common Stock into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the Common Stock, then, and in each such case, the
Conversion Price in effect immediately prior to such event shall be
adjusted (and any other appropriate actions shall be taken by the
Corporation) so that the holder of any share of Series E Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock or other securities of the Corporation
that such holder would have owned or would have been entitled to receive
upon or by reason of any of the events described above, had such share of
Series E Preferred Stock been converted immediately prior to the occurrence
of such event. An adjustment made pursuant to this Section 10(d)(i) shall
become effective retroactively (A) in the case of any such dividend or
distribution, to the opening of business on the day immediately following
the close of business on the record date for the determination of holders
of Common Stock entitled to receive such dividend or distribution or (B) in
the case of any such subdivision, combination or reclassification,
27<PAGE>
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to the close of business on the day upon which such corporate action
becomes effective.
(ii) In case the Corporation shall at any time or from
time to time issue or sell shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock, or any
options, warrants or other rights to acquire shares of Common Stock (other
than (x) options granted to any employee or director of the Corporation
pursuant to a stock option plan approved by the shareholders of the
Corporation or (y) rights issued pursuant to a shareholder rights plan,
"Poison pill" or similar arrangement that complies with Section 10(k))) for
a consideration per share less than the Conversion Price then in effect at
the record date or issuance date, as the case may be (the "Date") referred
to in the following sentence (treating the price per share of any security
convertible or exchangeable or exercisable into Common Stock as equal to
(A) the sum of the price for such security convertible, exchangeable or
exercisable into Common Stock plus any additional consideration payable
(without regard to any antidilution adjustments) upon the conversion,
exchange or exercise of such security into Common Stock divided by (B) the
number of shares of Common Stock initially underlying such convertible,
exchangeable or exercisable security), other than issuances or sales for
which an adjustment is made pursuant to another paragraph of this Section
10(d), then, and in each such case, the Conversion Price then in effect
shall be adjusted by dividing the Conversion Price in effect on the day
immediately prior to the Date by a fraction (x) the numerator of which
shall be the sum of the number of shares of Common Stock out.standing
immediately prior to the Date plus the number of additional shares of
Common Stock issued or to be issued (or the maximum number into which such
convertible or exchangeable securities initially may convert or exchange or
for which such options, warrants or other rights initially may be exercised)
and (y) the denominator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to the Date plus the number
of shares of Common Stock that the aggregate consideration (if any of such
aggregate consideration is other than cash, as valued by the Board of
Directors including a majority of the Directors who are not officers or
employees of the Corporation or any of its Subsidiaries, which determination
shall be conclusive and described in a resolution of the Board of Directors)
for the total number of such additional shares of Common Stock so issued
(or into which such convertible or exchangeable securities may convert or
exchange or for which such options, warrants or other rights may be exercised
plus the aggregate amount of any additional consideration initially payable
upon conversion, exchange or exercise of such security) would purchase at
the Conversion Price. Such
28<PAGE>
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adjustment shall be made whenever such shares, securities, options,
warrants or other rights are issued, and shall become effective
retroactively to a date immediately following the close of business (i) in
the case of issuance to stockholders of the Corporation, as such, on the
record date for the determination of stockholders entitled to receive such
shares, securities, options, warrants or other rights and (ii) in all other
cases, on the date ("issuance date") of such issuance; provided, however,
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that the determination as to whether an adjustment is required to be made
pursuant to this Section 10(d)(ii) shall only be made upon the issuance of
such shares or such convertible or exchangeable securities, options, warrants
or other rights, and not upon the issuance of the security into which such
convertible or exchangeable security converts or exchanges, or the security
underlying such option, warrants or other right; provided, further, that if
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any convertible or exchangeable securities, options, warrants or other rights
(or any portions thereof) that shall have given rise to an adjustment
pursuant to this Section 10(d)(ii) shall have expired or terminated without
the exercise thereof and/or if by reason of the terms of such convertible
or exchangeable securities, options, warrants or other rights there shall
have been an increase or increases, with the passage of time or otherwise,
in the price payable upon the exercise or conversion thereof, then the
Conversion Price hereunder shall be readjusted (but to no greater extent
than originally adjusted) on the basis of (x) eliminating from the
computation any additional shares of Common Stock corresponding to such
convertible or exchangeable securities, options, warrants or other rights
as shall have expired or terminated, (y) treating the additional shares of
Common Stock, if any, actually issued or issuable pursuant to the previous
exercise of such convertible or exchangeable securities, options, warrants
or other rights as having been issued for the consideration actually
received and receivable therefor and (z) treating any of such convertible
or exchangeable securities, options, warrants or other rights that remain
outstanding as being subject to exercise or conversion on the basis of such
exercise or conversion price as shall be in effect at the time.
(iii) In case the Corporation shall at any time or from
time to time distribute to all holders of shares of its Common Stock
(including any such distribution made in connection with a consolidation or
merger in which the Corporation is the resulting or surviving corporation
and the Common Stock is not changed or exchanged or a redemption of any
rights or other securities issued pursuant to a shareholder rights plan,
"poison pill" or similar arrangement) cash, evidences of indebtedness of
the Corporation or another issuer, securities of the Corporation or
another issuer or other assets (excluding
29<PAGE>
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(A) Permitted Dividends described in clause (B) of the definition thereof
and (E) securities for which adjustment is made under section 10(d)(i) or
Section 10(d)(ii)), then, and in each such case, the Conversion Price then
in effect shall be adjusted by dividing the Conversion Price in effect
immediately prior to the date of such distribution by a fraction (x) the
numerator of which shall be the Current Market Price of the Common Stock on
the record date referred to below and (y) the denominator of which shall be
such Current Market Price of the Common Stock less the then Fair Market
Value (as determined by the Board of Directors of the Corporation, which
determination shall be conclusive) of the portion of the cash, evidences of
indebtedness, securities or other assets so distributed or of such
subscription rights or warrants applicable to one share of Common Stock
(but such denominator not to be less than one); provided, however, that no
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adjustment shall be made with respect to any distribution of rights to
purchase securities of the Corporation if the holder of shares of Series E
Preferred Stock would otherwise be entitled to receive such rights upon
conversion at any time of shares of Series E Preferred Stock into Common
Stock unless such rights are subsequently redeemed by the Corporation, in
which case such redemption shall be treated for purposes of this Section
10(d)(iii) as a dividend on the Common Stock. Such adjustment shall be
made whenever any such distribution is made and shall become effective
retroactively to a date immediately following the close of business on the
record date for the determination of stockholders entitled to receive
such distribution.
(iv) In the case the Corporation at any time or from
time to time shall take any action affecting its Common Stock, other than
an action described in any of Section 10(d)(i) through Section 10(d)(iii),
inclusive, or Section 10(h), then, the Conversion Price shall be adjusted
in such manner and at such time as the Board of Directors of the
Corporation (other than Purchaser Designees or directors elected pursuant
to Section 3(c)) in good faith determines to be equitable in the
circumstances (such determination to be evidenced in a resolution, a
certified copy of which shall be mailed to the holders of the Series E
Preferred Stock).
(v) The Corporation may make such reductions in the
Conversion Price, in addition to those required by subparagraphs (i), (ii),
(iii) and (iv) of this Section 10(d), as the Board of Directors considers
to be advisable in order to avoid or to diminish any income tax to holders
of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
30<PAGE>
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(vi) Notwithstanding anything herein to the contrary, no
adjustment under this Section 10(d) need be made to the Conversion Price
unless such adjustment would require an increase or decrease of at least
1% of the Conversion Price then in effect. Any lesser adjustment shall
be carried forward and shall be made at the time of and together with the
next subsequent adjustment, which, together with any adjustment or
adjustments so carried forward, shall amount to an increase or decrease of
at least 1% of such Conversion Price. Any adjustment to the Conversion
Price carried forward and not theretofore made shall be made immediately
prior to the conversion of any shares of Series E Preferred Stock pursuant
hereto; provided, however, that any such adjustment shall in any event be
-------- -------
made no later than three years after the occurrence of the event giving
rise to such adjustment.
(e) If the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such
dividend or distribution, then thereafter no adjustment in the Conversion
Price then in effect shall be required by reason of the taking of such
record.
(f) Upon any increase or decrease in the Conversion Price,
then, and in each such case, the Corporation promptly shall deliver to each
registered holder of Series E Preferred Stock at least 10 Business Days
prior to effecting any of the foregoing transactions a certificate, signed
by the President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the Corporation,
setting forth in reasonable detail the event requiring the adjustment and
the method by which such adjustment was calculated and specifying the
increased or decreased Conversion Price then in effect following such
adjustment.
(g) No fractional shares or scrip representing fractional
shares shall be issued upon the conversion of any shares of Series E
Preferred Stock. If more than one share of Series E Preferred Stock 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 Liquidation Preference of the shares
of Series E Preferred Stock so surrendered. If the conversion of any share
or shares of Series E Preferred Stock results in a fraction, an amount
equal to such fraction multiplied by the Current Market Price of the Common
Stock on the Business Day preceding the day of conversion shall be paid to
such holder in cash by the Corporation on the date of issuance
31<PAGE>
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of the certificates representing the shares issued by the Corporation upon
such conversion.
(h) in case of any capital reorganization or reclassification
or other change of outstanding shares of Common Stock (other than a change
in par value, or from par value to no par value, or from no par value to
par value), or in case of any consolidation or merger of the Corporation
with or into another Person (other than a consolidation or merger in which
the Corporation is the resulting or surviving Person and which does not
result in any reclassification or change of outstanding Common Stock), or
in case of any sale or other disposition to another Person of all or
substantially all of the assets of the Corporation (any of the foregoing,
a "Transaction"), the Corporation, or such successor or purchasing Person,
as the case may be, shall execute and deliver to each holder of Series E
Preferred Stock at least 10 Business Days prior to effecting any of the
foregoing Transactions a certificate that the holder of each share of
Series E Preferred Stock then outstanding shall have the right thereafter
to convert such share of Series E Preferred Stock into the kind and amount
of shares of stock or other securities (of the Corporation or another issuer)
or property or cash receivable upon such Transaction by a holder of the
number of shares of Common Stock into which such share of Series E Preferred
Stock could have been converted immediately prior to such Transaction.
Such certificate shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Section 10. If, in the case of any such Transaction, the stock, other
securities, cash or property receivable thereupon by a holder of Common
Stock includes shares of stock or other securities of a Person other than
the successor or purchasing Person and other than the Corporation, which
controls or is controlled by the successor or purchasing Person or which,
in connection with such Transaction, issues stock, securities, other
property or cash to holders of Common Stock, then such certificate also
shall be executed by such Person, and such Person shall, in such certificate,
specifically acknowledge the obligations of such successor or purchasing
Person and acknowledge its obligations to issue such stock, securities,
other property or cash to the holders of Series E Preferred Stock upon
conversion of the shares of Series E Preferred Stock as provided above.
The provisions of this Section 10(h) and any equivalent thereof in any such
certificate similarly shall apply to successive Transactions. The provisions
of this Section 10(h) and any equivalent thereof in any such certificate
are and shall be in addition to, and not in lieu of, the requirements
with respect to a Mandatory Redemption.
32<PAGE>
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(i) In case at any time or from time to time:
(A) the Corporation shall declare a dividend (or any
other distribution) on its Common Stock (other than a Permitted Dividend);
(B) the Corporation shall authorize the granting to
the holders of its Common Stock of rights or warrants to subscribe for or
purchase any shares of stock of any class or of any other rights or
warrants;
(C) there shall be any reclassification of the Common
Stock (other than a subdivision or combination of the outstanding Common
Stock, or a change in par value, or from par value to no par value, or from
no par value to par value), or any consolidation or merger to which the
Corporation is a party and for which approval of any shareholders of the
Corporation is required, or any sale or other disposition of all or
substantially all of the assets of the Corporation; or
(D) the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation; then the Corporation shall
mail to each holder of shares of Series E Preferred Stock at such holder's
address as it appears on the transfer books of the Corporation, as promptly
as possible but in any event at least ten days prior to the applicable date
hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution or rights or
warrants or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding up is expected to become effective; provided that in
the case of any event to which Section 10(h) applies, the Corporation shall
give at least 10 days' prior written notice as aforesaid. Such notice also
shall specify the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their Common Stock for shares
of stock or other securities or property or cash deliverable upon such
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding up.
(j) The Corporation shall at all times reserve and keep
available for issuance upon the conversion of the Series E Preferred Stock,
such number of its authorized but unissued shares of Common Stock as will
from time to time be sufficient to permit the conversion of all outstanding
shares of Series E Preferred Stock, and shall take all action required to
increase
33<PAGE>
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the authorized number of shares of Common Stock if at any time there shall be
insufficient authorized but unissued shares of Common Stock to permit such
reservation or to permit the conversion of all outstanding shares of Series E
Preferred Stock.
(k) The Corporation shall not adopt a shareholders right plan,
"poison pill" or similar arrangement unless such plan or arrangement shall
provide that (i) each holder of a share of Series E Preferred Stock shall be
entitled to receive thereunder, upon conversion of a share of Series E
Preferred Stock (in accordance with the terms hereof) prior to the earlier to
occur of either the date of redemption of the rights issued under such plan or
the date of expiration of the rights issued under such plan, rights for each
share of Common Stock issued upon conversion of such share of Series E
Preferred Stock in an amount equal to the amount of rights issued with respect
to each outstanding share of Common Stock pursuant to such plan and (ii) if
such rights are redeemed prior to the conversion of any share of Series E
Preferred Stock into Common Stock, then upon conversion of such share of
Series E Preferred Stock the holder thereof shall receive an amount in cash
equal to the amount in cash that such holder would have received had he
converted such share of Series E Preferred Stock prior to such redemption
(unless prior to such conversion the Conversion Price applicable to such share
of Series E Preferred Stock shall have been adjusted pursuant to Section
10(d)(iii) as a result of such redemption).
(1) The issuance or delivery of certificates for Common Stock
upon the conversion of shares of Series E Preferred Stock shall be made
without charge to the converting holder of shares of Series E Preferred Stock
for such certificates or for any tax in respect of the issuance or delivery of
such certificates or the securities represented thereby, and such certificates
shall be issued or delivered in the respective names of, or in such names as
may be directed by, the holders of the shares of Series E Preferred Stock
converted; provided, however, that the Corporation shall not be required to
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pay any tax that may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate in a name other than that of the
holder of the shares of Series E Preferred Stock converted, and the
Corporation shall not be required to issue or deliver such certificate unless
or until the Person or Persons requesting the issuance or delivery thereof
shall have paid to the Corporation the amount of such tax or shall have
established to the reasonable satisfaction of the Corporation that such tax
has been paid.
34<PAGE>
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Section 11. Exchange.
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(a) Subject to the provisions of this Section 11, the
Corporation shall have the right, with the consent of the holders of all of
the outstanding shares of Series E Preferred Stock (which consent may be
withheld for any reason whatsoever), at any time but on only one occasion,
to exchange all (but not less than all) of the shares of Series E Preferred
Stock for Convertible Subordinated Notes of the Corporation ("Convertible
Notes"), at a price per share equal to the Liquidation Preference per
share, with the Convertible Notes valued for such purpose at their face
value. Simultaneously with such exchange the Corporation shall pay to each
holder of Series E Preferred Stock an amount per share in cash equal to all
accrued and unpaid dividends thereon, whether or not declared or currently
payable, to the date fixed for exchange thereof. The Convertible Notes
shall have an annual interest rate equal to the annual dividend rate on
Series E Preferred Stock and shall contain other terms substantially
similar to the Series E Preferred Stock, including the date of maturity
thereof and the right to convert such notes into shares of Common Stock.
(b) Notice of an exchange of shares of Series E Preferred
Stock pursuant to Section 11(a) shall be given by publication in a
newspaper of general circulation in the Borough of Manhattan, The City of
New York (if such publication shall be required by applicable law, rule,
regulation or securities exchange requirement), not less than 30, nor more
than 60 days prior to the date fixed for exchange; and, in any case, a
similar notice shall be mailed at least 30, but not more than 60 days prior
to the date fixed for exchange to each holder at such holder's address as
it appears on the transfer books of the Corporation. In order to facilitate
the exchange of shares of Series E Preferred Stock hereunder the Board of
Directors may fix a record date for the determination of shares of Series E
Preferred Stock to be exchanged, or may cause the transfer books of the
Corporation for the Series E Preferred Stock to be closed, not more than
60 days or less than 30 days prior to the date fixed for exchange.
(c) On the date of any exchange being made pursuant to
Section 11(a) that is specified in a notice given pursuant to Section
11(b), the Corporation shall, and at any time after the date that is 10
days prior to the date of exchange the Corporation may, deposit for the
benefit of the holders of shares of Series E Preferred Stock to be
exchanged (i) the Convertible Notes necessary for such exchange and (ii) an
amount in cash equal to all dividends payable with respect thereto upon
such exchange with a bank or trust company in the
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Borough of Manhattan, The city of New York, that is "well capitalized"
within the meaning of the applicable banking regulations and having a
capital and surplus of at least $500,000,000. Any Convertible Notes so
deposited by the Corporation and unclaimed at the end of two years from the
date designated for such exchange shall revert to the Corporation. After
such reversion, any such bank or trust company shall, upon demand, return
to the Corporation such unclaimed Convertible Notes and thereupon such bank
or trust company shall be relieved of all responsibility in respect thereof
and any holder of shares of Series E Preferred Stock to be exchanged shall
look only to the Corporation for the delivery of the Convertible Notes. In
the event that Convertible Notes and moneys are deposited pursuant to this
Section 11(c) in respect of shares of Series E Preferred Stock that are
converted in accordance with the provisions of Section 10, such Convertible
Notes and moneys shall, upon such conversion, revert to the Corporation
and, upon demand, such bank or trust company shall return to the
Corporation such Convertible Notes and moneys and shall be relieved of all
responsibilities to the holders of such converted shares in respect
thereof. Any interest accrued on Convertible Notes deposited pursuant to
this Section 11(c) shall accrue for the accounts of, and be payable to,
the holders of shares of Series E Preferred Stock to be exchanged therefor.
(d) Notice of exchange having been given as aforesaid and
not having been deemed terminated as aforesaid, upon the deposit of
Convertible Notes pursuant to clause (i) of Section 11(c) and the deposit
of the cash referred to in clause (ii) of Section 11(c) in respect of
shares of Series E Preferred Stock to be exchanged pursuant to Section
11(a), notwithstanding that any certificates for such shares shall not have
been surrendered for cancellation, from and after the date of exchange
designated in the notice of exchange (i) the shares represented thereby
shall no longer be deemed outstanding, (ii) the rights to receive dividends
thereon (except as provided in paragraph (b) above) shall cease to accrue,
and (iii) all rights of the holders of shares of Series E Preferred Stock
to be exchanged shall cease and terminate, excepting only the right to
receive the Convertible Notes therefor, the right to receive the dividends
described in paragraph (b) above and the right to convert such shares into
shares of Common Stock until the close of business on the Business Day
preceding the date of exchange, in accordance with Section 10;
provided, however, that if the Corporation shall default in the execution
- -------- -------
and delivery of the Convertible Notes, the shares of Series E Preferred
Stock that were to be exchanged shall thereafter be deemed to be outstanding
and the holders thereof shall have all of the rights of a holder of Series
E Preferred Stock until
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such time as such default shall no longer be continuing or shall have been
waived by holders of at least 66-2/3% of the then outstanding shares of
Series E Preferred Stock.
Section 12. Sinking Fund.
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(a) So long as any shares of Series E Preferred Stock shall
be outstanding, the Corporation shall, on the final business day (any such
date, the "Sinking Fund Date") of each calendar year after 2003, (i) set
aside a sum of money equal to 3-1/3% of the aggregate liquidation
preference of the shares o@ Series E Preferred Stock then outstanding, and
(ii) apply such money to redeem such number of shares of Series E Preferred
Stock at the Sinking Fund Redemption Price (the Corporation's obligations
described in this paragraph in respect of any Sinking Fund Date being
hereinafter referred to as the "Sinking Fund Obligation" for such date)
at a price per share (the "Sinking Fund Redemption Price") equal to the sum
of (A) the Liquidation Preference of such share and (B) an amount per share
equal to all accrued and unpaid dividends thereon, whether or not declared or
payable, to the applicable Sinking Fund Date, in immediately available funds;
provided, however, that if the Corporation for any reason fails to discharge
- -------- -------
its Sinking Fund Obligation on any Sinking Fund Date, such Sinking Fund
Obligation, to the extent not discharged, shall become an additional
Sinking Fund Obligation for each succeeding Sinking Fund Date until fully
discharged; provided, further, that no shares of Series E Preferred Stock
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purchased or acquired by the Corporation otherwise than through redemption
pursuant to this paragraph or pursuant to an Optional Redemption may be
credited against the Sinking Fund Obligation in respect of any Sinking Fund
Date.
(b) The shares to be redeemed pursuant to paragraph (a)
shall be selected pro rata (as nearly as may be) so that the number of shares
redeemed from each holder shall be the same proportion of all the shares
to be redeemed that the total number of shares of Series E Preferred Stock
then held by such holder bears to the total number of shares of Series E
Preferred Stock then outstanding.
(c) Notice of the Sinking Fund Redemption shall be given by
publication in a newspaper of general circulation in the Borough of
Manhattan, The City of New York (if such publication shall be required by
applicable law, rule, regulation or securities exchange requirement), not
less than 30, nor more than 60 days prior to the Sinking Fund Date and, in
any case, a similar notice shall be mailed at least 30, but not more than
60 days prior to the Sinking Fund Date to each holder of
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shares of Series E Preferred Stock, at such holder's address as it appears
on the transfer books of the Corporation.
(d) On the Sinking Fund Date, the Corporation shall, and at
any time after such notice shall have been mailed and before the Sinking
Fund Date the Corporation may, deposit for the benefit of the holders of
shares of Series E Preferred Stock the funds necessary for such redemption
with a bank or trust company in the Borough of Manhattan, The City of New
York, that is "well capitalized" within the meaning of the applicable
banking regulations and having a capital and surplus of at least
$500,000,000. Any moneys so deposited by the Corporation and unclaimed at
the end of two years from the date designated for such redemption shall
revert to the general funds of the Corporation. After such reversion, any
such bank or trust company shall, upon demand, pay over to the Corporation
such unclaimed amounts and thereupon such bank or trust company shall be
relieved of all responsibility in respect thereof and any holder of shares
of Series E Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Sinking Fund Redemption Price.
Any interest accrued and unpaid on funds deposited pursuant to this
Section 12(c) shall be paid from time to time to the Corporation for its
own account.
(e) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 12(c) in respect of shares of
Series E Preferred Stock to be redeemed pursuant to Section 12(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Sinking Fund Date, (i) the
rights to receive dividends thereon shall cease to accrue and (ii) all
rights of the holders of shares of Series E Preferred Stock shall cease and
terminate, excepting only the right to receive the Sinking Fund Redemption
Price therefor; provided, however, that if the Corporation shall default in
-------- -------
the payment of the Sinking Fund Redemption Price, the shares of Series E
Preferred Stock that were to be redeemed shall thereafter be deemed to be
outstanding and the holders thereof shall have all of the rights of a
holder of Series E Preferred Stock until such time as such default shall no
longer be continuing.
Article 2. Series F Preferred Stock.
------------------------
Section 1. Designation and Number.
----------------------
(a) The shares of such series shall be designated as
"Cumulative Preferred Stock, Series F" (the "Series F Preferred Stock").
The number of shares initially constituting the Series F Preferred Stock
shall be 171,900 which number may be
38<PAGE>
<PAGE>
decreased (but not increased) by the Board of Directors without a vote of
stockholders; provided, however, that such number may not be decreased
below the number of then outstanding shares of Series F Preferred Stock.
(b) The Series F Preferred Stock shall, with respect to
dividend rights and rights on liquidation, dissolution or winding up, rank
pari passu with the Corporation's $2.50 Cumulative Convertible Preferred
- ---- -----
Stock, Series A (the "Series A Preferred Stock"), $2.50 Cumulative
Preferred Stock, Series B (the "Series B Preferred Stock"), Cumulative
Convertible Preferred Stock, Series E (the "Series E Preferred Stock"),
Cumulative Preferred Stock, Series G (the "Series G Preferred Stock"),
Cumulative Preferred Stock, Series H (the "Series H Preferred Stock"),
Cumulative Preferred Stock, Series T (the "Series T Preferred Stock" and
together with the Series E Preferred Stock, Series F Preferred Stock Series
G Preferred Stock and Series,H Preferred Stock, the Chicago Preferred
Stock") and the New Preferred Stock (if any) (the Series A Preferred Stock,
Series P Preferred Stock, Chicago Preferred Stock (other than the Series F
Preferred Stock) and New Preferred Stock (if any) are collectively defined
for the purposes of this Article 3 as the "Other Preferred Stock") and
prior to all other classes and series of capital stock of the Corporation
now or hereafter authorized including, without limitation, the Common Stock,
par value $1.00 per share, of the Corporation (the "Common Stock").
(c) Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Article 6 below.
Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series F Preferred Stock, in
preference to the holders of shares of Common Stock and of any shares of
other capital stock of the corporation other than the Other Preferred
Stock shall be entitled to receive, when, as and if declared by the Board
of Directors out of the assets of the Corporation at the time legally
available therefor, cumulative cash dividends at an annual rate on the
Liquidation Preference thereof equal to 9.75% (subject to increase pursuant
to Section 2(b)), calculated on the basis of a 360-day year consisting of
twelve 30-day months, accruing and payable in equal quarterly payments,
in immediately available funds, on the Business Day immediately preceding
the last day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date")
commencing on the Business Day immediately preceding December 31, 1994;
provided, however, that with respect to such first Quarterly Dividend Payment
- -------- -------
Date, the holders of shares of
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Series F Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of the assets of the Corporation at
the time legally available therefor, a cumulative cash dividend in respect
of each share of Series F Preferred Stock in the amount of (i) 9.75% (or
the then effective annual rate) of the Liquidation Preference multiplied by
(ii) a fraction equal to (A) the number of days from (and including) the
Issue Date to (but excluding) such Quarterly Dividend Payment Date divided
by (B) 360. No interest shall be payable in respect of any dividend
payment on the Series F Preferred Stock that may be in arrears.
(b) If (i) a private placement or public offering of the New
Preferred Stock or the New Senior Notes pursuant to which the Corporation
shall receive at least $100,000,000 in gross proceeds is not consummated
within 360 days after the termination of the Merger Agreement or (ii) the
annual dividend rate on the New Preferred Stock or the annual interest rate
on the New Senior Notes, as applicable, exceeds 13%, then the annual
rate of the cumulative cash dividends shall be increased to a rate of
10.75%, effective (x) in the case of clause (i), the date that is 360 days
after the termination of the Merger Agreement and (y) in the case of clause
(ii), the date of the issuance of the New Preferred Stock or the New Senior
Notes, as applicable. If on any date (A) all of the Purchaser Designees
shall not have been elected to the Corporation's Board of Directors or any
such Purchaser Designees shall not have been appointed to the committees of
the Corporation's Board of Directors, in accordance with the provisions of
Section 6.17 of the Securities Purchase Agreement, (B) the Corporation
shall have failed to declare, or shall have failed to pay, the full amount
of dividends payable on the Series F Preferred Stock for six quarterly
dividend periods, (C) the Corporation shall have failed to satisfy its
obligation to convert shares of Series E Preferred Stock pursuant to
Article 1, Section 10 or (D) a breach of any of the Material Provisions of
the Securities Purchase Agreement or any of the Corporation's material
obligations under the Registration Rights Agreement shall have occurred
then, effective as of the date of such failure or breach, the annual rate
of the cumulative cash dividends shall be increased to a rate of 11.75% and
shall remain at such rate until such time as (1) the Purchaser Designees
shall have been elected to the Corporation's Board of Directors and
appointed to the committees of the Corporation's Board of Directors in
accordance with the provisions of Section 6.17 of the Securities Purchase
Agreement, (2) all dividends accrued to date on the Series F Preferred
Stock shall have been declared and paid in full, (3) any conversion
obligations in respect of the Chicago Preferred Stock that have become due
shall have been fully satisfied and (4) there shall exist no breach of any
of
40<PAGE>
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the Material Provisions of the Securities Purchase Agreement or any of the
Corporation's material obligations under the Registration Rights Agreement,
as the case may be, at which time the annual rate of the cumulative cash
dividends shall be reduced to a rate of 9.75%, subject to being increased
to a rate of 11.75% in the event of each and every subsequent event of
the character indicated above.
(c) Dividends payable pursuant to Section 2(a) shall begin to
accrue and be cumulative from the Issue Date, and shall accrue on a daily
basis, in each case whether or not declared. Dividends paid on the shares
of Series F Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares of Series F
Preferred Stock at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of shares of Series F
Preferred Stock entitled to receive payment of a dividend declared thereon,
which record date shall be not more than 60 days nor less than 10 days
prior to the date fixed for the payment thereof. Accumulated but unpaid
dividends for any past quarterly dividend periods may be declared and paid
at any time, without reference to any regular Quarterly Dividend Payment
Date, to holders of record on such date, not more than 60 nor less than 10
days preceding the payment date thereof, as may be fixed by the Board of
Directors.
(d) The holders of shares of Series F Preferred Stock shall
not be entitled to receive any dividends or other distributions except as
provided herein.
Section 3. Voting Rights.
-------------
In addition to any voting rights provided by law, the holders
of shares of Series F Preferred Stock shall have the following voting
rights:
(a) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders
of at least 66-2/3% of the outstanding shares of Series F Preferred Stock,
voting separately as a single class, in person or by proxy, at a special or
annual meeting of stockholders called for the purpose, shall be necessary
to (i) authorize, adopt or approve an amendment to the Certificate of
Incorporation that would increase or decrease the par value of the shares
of Series F Preferred Stock, or alter or change the powers, preferences or
special rights of the shares of Series F Preferred Stock, (ii) amend, alter
or repeal the Certificate of Incorporation so as to affect the
41<PAGE>
<PAGE>
shares of Series F Preferred Stock adversely or (iii) effect the voluntary
liquidation, dissolution, winding up, recapitalization or reorganization of
the Corporation, or the consolidation or merger of the Corporation with or
into any other Person, or the sale or other distribution to another Person
of all or substantially all of the assets of the Corporation;
provided, however, that no separate vote of the holders of Series F Preferred
- -------- -------
Stock shall be required to effect any of the transactions described in clause
(iii) above unless such transaction would either require a class vote
pursuant to clause (i) or (ii) above or would require a vote by any
shareholders of the Corporation (other than pursuant to this sentence);
provided further, that no separate vote of the holders of the Series F
- -------- -------
Preferred Stock as a class shall be required in the case of a
recapitalization, reorganization, consolidation or merger of, or sale by,
the Corporation if (A) (a) such recapitalization, reorganization,
consolidation, merger or sale constitutes a Specified Corporate Action,
(b) the Corporation has sufficient funds legally available to it (after
giving effect to such transaction) to redeem, at the then applicable price
hereunder and pursuant to the terms hereof, all the outstanding shares of
Series F Preferred Stock, (c) such redemption shall not be prohibited by
any agreement to which the Corporation or any of its Subsidiaries is a
party, by applicable law or otherwise, (d) the Board of Directors of the
Corporation, including a majority of the directors who are not officers or
employees of the Corporation, shall have adopted a resolution confirming
that such funds are available and that the holders of Series F Preferred
Stock have the right to require such redemption and (e) the Corporation
shall have set aside sufficient funds through the Specified Corporation
Action Redemption Date to redeem the shares of Series F Preferred Stock
held by such holders (except that no funds need be set aside with respect
to such shares held by any such holder who has theretofore notified the
Corporation (whether pursuant to Section 6(a)(iii) or otherwise) that it
will not require redemption of such shares) or (B) (1) the Corporation
shall be the resulting or surviving corporation, (2) the resulting or
surviving corporation will have after such recapitalization, reorganization,
consolidation or merger no Senior Stock or Parity Stock either authorized
or outstanding (except such Parity Stock of the Corporation as may have
been authorized or outstanding immediately preceding such consolidation or
merger) or such stock of the resulting or surviving corporation (having the
same powers, preferences and special rights of any such Parity Stock) as
may be issued in exchange therefor), (3) each holder of shares of Series F
Preferred Stock immediately preceding such recapitalization, reorganization,
consolidation or merger will receive in exchange therefor the same number
of shares of stock, with the same preferences, rights and powers,
42<PAGE>
<PAGE>
of the resulting or surviving corporation, (4) after such recapitalization,
reorganization, consolidation or merger the resulting or surviving
corporation shall not be in breach of any of the terms hereof, any of the
Material Provisions of the Securities Purchase Agreement or any of its
material obligations under the Registration Rights Agreement and (5) all or
substantially all the holders of the outstanding shares of capital stock of
the Corporation immediately prior to such consolidation or merger are
entitled to receive shares representing 50% or more of the then outstanding
shares of capital stock of the resulting or surviving corporation entitled
to vote generally in the election of directors.
(b) If on any date (i) the Corporation shall have failed to
declare, or shall have failed to pay, the full amount of dividends payable
on any series of Chicago Preferred Stock for six quarterly dividend periods
or (ii) a breach of any of the Material Provisions of the Securities
Purchase Agreement or any of the Corporation's material obligations under
the Registration Rights Agreement shall have occurred, then the number of
directors constituting the Board of Directors shall, without further
action, be increased by two and the holders of shares of Series F Preferred
Stock shall have, in addition to the other voting rights set forth herein
with respect to the Series F Preferred Stock, the exclusive right, together
with the holders of all other series of Chicago Preferred Stock, voting
separately as a single class together with the holders of such other series
of Chicago Preferred Stock, to elect two directors of the Corporation to
fill such newly created directorship, by written consent as provided
herein, or at a special meeting of such holders called as provided herein.
Any such additional directors shall continue as directors (subject to
reelection or removal as provided in Section 3(c)(ii)) and the holders of
Series F Preferred Stock shall have such additional voting rights until
such time as (A) dividends then payable on all series of Chicago Preferred
Stock shall have been declared and paid in full and (B) there shall exist
no breach of any of the Material Provisions of the Securities Purchase
Agreement or any of the Corporation's material obligations under the
Registration Rights Agreement, as the case may be, at which time such
additional directors shall cease to be directors, the number of directors
constituting the Board of Directors shall be reduced by two and such
additional voting rights of the holders of all series of Chicago Preferred
Stock shall terminate, subject to revesting in the event of each and every
subsequent event of the character indicated above.
(c) (i) The foregoing right of holders of shares of Series F
Preferred Stock to take any action as provided in
43<PAGE>
<PAGE>
Section 3(b) may be exercised at any annual meeting of stockholders or at a
special meeting of holders of shares of Chicago Preferred Stock, held for
such purpose as hereinafter provided or at any adjournment thereof, or by
the written consent, delivered to the Secretary of the Corporation, of the
holders of the minimum number of shares required to take such action.
So long as such right to vote continues (and unless such right
has been exercised by written consent of the minimum number of shares
required to take such action), the President of the Corporation may call,
and upon the written request of holders of record of at least 5% of the
aggregate outstanding shares of Chicago Preferred Stock, addressed to the
Secretary of the Corporation at the principal office of the Corporation,
shall call, a special meeting of the holders of shares entitled to vote
as provided herein. Such meeting shall be held within 30 days after
delivery of such request to the Secretary, at the place and upon the notice
provided by law and in the by-laws of the Corporation for the holding of
meetings of stockholders.
(ii) At each meeting of stockholders at which the holders of
shares of Series F Preferred Stock shall have the right, voting separately
as a single class together with the holders of all other series of Chicago
Preferred Stock, to elect two directors of the Corporation as provided in
Section 3(b) or to take any action, the presence in person or by proxy of
the holders of record of one-third of the total aggregate number of shares
of Chicago Preferred Stock then outstanding and entitled to vote on the
matter shall be necessary and sufficient to constitute a quorum. At any
such meeting or at any adjournment thereof:
(A) the absence of a quorum of the holders of shares of
Chicago Preferred Stock shall not prevent the election of
directors other than those to be elected by the holders of
shares of Chicago Preferred Stock, and the absence of a quorum
of the holders of shares of any other class or series of
capital stock shall not prevent the election of directors to be
elected by the holders of shares of Chicago Preferred Stock, or
the taking of any action as provided in Section 3(b); and
(B) in the absence of a quorum of the holders of
shares of Chicago Preferred Stock, a majority of the holders of
such shares present in person or by proxy shall have the power
to adjourn the meeting as to the actions to be taken by the
holders of shares of Chicago Preferred Stock, from time to time
and place to place without notice other than announcement at
the meeting until a quorum shall be present.
44<PAGE>
<PAGE>
For taking of any action as provided in Section 3(a) or Section
3(b) by the holders of shares of Series F Preferred Stock, each such holder
shall have one vote for each share of such stock standing in his name on
the transfer books of the Corporation as of any record date fixed for such
purpose or, if no such date be fixed, at the close of business on the
Business Day next preceding the day on which notice is given,, or if notice
is waived, at the close of business on the Business Day next preceding the
day on which the meeting is held; provided, however, that shares of Chicago
-------- -------
Preferred Stock held by the Corporation or any Subsidiary of the
Corporation shall not be deemed to be outstanding for purposes of taking
any action as provided in this Section 3.
Each director elected by the holders of shares of Chicago
Preferred Stock, as provided in Section 3(b) shall, unless his term shall
expire earlier in accordance with the provisions thereof, hold office until
the annual meeting of stockholders next succeeding his election or until
his successor, if any, is elected and qualified.
If any director so elected by the holders of Chicago Preferred
Stock shall cease to serve as a director before his term shall expire
(except by reason of the termination of the voting rights accorded to the
holders of Chicago Preferred Stock, in accordance with Section 3(b)), the
holders of the Chicago Preferred Stock then outstanding and entitled to
vote for such director may, by written consent as provided herein, or at
a special meeting of such holders called as provided herein, elect a
successor to hold office for the unexpired term of the director whose place
shall be vacant.
Any director elected by the holders of shares of Chicago
Preferred Stock, voting together as a separate class, may be removed from
office with or without cause only by the vote or written consent of the
holders of at least a majority of the aggregate outstanding shares of
Chicago Preferred Stock at the time of removal. A special meeting of the
holders of shares of Chicago Preferred Stock, may be called in accordance
with the procedures set forth in Section 3(c)(i).
Section 4. Certain Restrictions.
--------------------
(a) So long as any shares of Series F Preferred Stock remain
outstanding, the Corporation shall not declare or make any Restricted
Payment.
(b) Whenever quarterly dividends payable on shares of Series
F Preferred Stock as provided in Section 2(a) are not paid in full, at such
time and thereafter until all unpaid
45<PAGE>
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dividends payable, whether or not declared, on the outstanding shares of
Series F Preferred Stock shall have been paid in full or declared and set
apart for payment at such time and thereafter until all necessary funds
have been set apart for payment, or whenever the Corporation shall not have
paid the optional Redemption Price, the Specified Corporate Action
Redemption Price, the Conversion Redemption Price, the Special Redemption
Price or the Maturity Redemption Price when due, at such time and
thereafter until all such amounts have been paid in full or set apart for
payment, the Corporation shall not: (A) declare or pay dividends, or make
any other distributions, on any shares of Junior Stock, or (B) declare or
pay dividends, or make any other distributions, on any shares of Parity
Stock, except dividends or distributions paid ratably on the Series F
Preferred Stock and all Parity Stock on which dividends are payable and
in arrears, in proportion to the total amounts to which the holders of all
shares of the Series F Preferred Stock and Parity Stock are then entitled.
(c) Whenever dividends payable on shares of Series F
Preferred Stock as provided in Section 2 are not paid in full, at such time
and thereafter until all unpaid dividends payable, whether or not declared,
on the outstanding shares of Series F Preferred Stock shall have been paid
in full or declared and set apart for payment, at such time and thereafter
until all necessary funds have been set apart for payment, or whenever the
Corporation shall not have paid the Optional Redemption Price, the
Specified Corporate Action Redemption Price, the Conversion Redemption
Price, the Special Redemption Price or the Maturity Redemption Price when
due, at such time and thereafter until all such amounts have been paid in
full or set apart for payment, the Corporation shall not redeem, purchase or
otherwise acquire for consideration any shares of Junior Stock or Parity
Stock; provided, however, that (A) the Corporation may accept shares of any
-------- -------
Parity Stock or Junior Stock for conversion into Junior Stock and (B) the
Corporation may at any time redeem, purchase or otherwise acquire shares of
any Parity Stock pursuant to any mandatory redemption, put, sinking fund or
other similar obligation contained in such Parity Stock, pro rata with the
Series F Preferred Stock in proportion to the total amount then required to
be applied by the Corporation to redeem, repurchase, or otherwise acquire
shares of Series F Preferred Stock and shares of such Parity Stock.
(d) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to purchase or otherwise acquire
for consideration any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(c), purchase such shares at such
time and in such manner.
46<PAGE>
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Section 5. Optional Redemption.
(a) (i) The Corporation shall not have any right to redeem
any shares of Series F Preferred Stock prior to December 30, 2001.
Thereafter, (A) at any time so long as shares of Common Stock shall have
traded on the New York Stock Exchange (or another national securities
exchange or on Nasdaq) on each trading day during a 30-consecutive trading
day period (each of which trading days shall be after December 30, 2001 and
no more than 5 Business Days prior to the date notice is given of an
Optional Redemption (as defined below)) and had a Closing Price on at least
20 of such trading days in excess of 150% of the Conversion Amount in
effect on such trading day as determined pursuant to Section 11, subject to
the restrictions contained in Section 4 or (B) at any time after December
30, 2009, the Corporation shall have the right, at its sole option and
election, to redeem (the "Optional Redemption") all or a portion of the
shares of Series F Preferred Stock, on not more than 45 nor less than 30
days' notice of the date of redemption (any such date, an "Optional
Redemption Date") at a price per share (the "Optional Redemption Price")
equal to the sum of (A) the following prices per share (stated as a
percentage of the Liquidation Preference of such share), (B) an amount per
share equal to all accrued and unpaid dividends thereon, whether or not
declared or payable, to the applicable Optional Redemption Date and (C) the
Additional Amount (as defined in Section 11), in immediately available
funds:
Optional Redemption Price
If Redeemed as a Percentage of
During the Period Liquidation Preference
----------------- -------------------------
December 30, 2001 to 102.775%
December 29, 2002
December 30, 2002 to 101.850%
December 29, 2003
December 30, 2003 to 100.925%
December 29, 2004
December 30, 2004 and 100%
thereafter
(ii) If the Corporation shall have the right to, or shall
determine to, redeem less than all the shares of Series F Preferred Stock
then outstanding pursuant to paragraph (i), the shares to be redeemed shall
be selected pro rata (as nearly as may be) so that the number of shares
redeemed from each holder
47<PAGE>
<PAGE>
shall be the same proportion of all the shares to be redeemed that the
total number of shares of Series F Preferred Stock then held by such holder
bears to the total number of shares of Series F Preferred Stock then
outstanding.
(iii) Notwithstanding the foregoing, any shares of Series F
Preferred Stock redeemed pursuant to this Section 5(a) at any time when the
holders of shares of Series F Preferred Stock have the right to require the
Corporation to redeem the shares of Series F Preferred Stock pursuant to
Section 6 or an event giving rise to such a right has occurred shall be
redeemed at a price equal to higher of the price to be paid pursuant to
Section 5(a) and the price to be paid pursuant to Section 6.
(b) Notice of any Optional Redemption shall specify the
Optional Redemption Date fixed for redemption, the Optional Redemption
Price, the place or places of payment, that payment will be made upon
presentation and surrender of the shares of Series F Preferred Stock and
that on and after the date of such Optional Redemption dividends will cease
to accrue on such shares and be given by publication in a newspaper of general
circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or
securities exchange requirement), not less than 30, nor more than 45, days
prior to the Optional Redemption Date; and, in any case, a similar notice
shall be mailed at least 30, but not more than 45, days prior to the Optional
Redemption Date to each holder of shares of Series F Preferred Stock, at
such holder's address as it appears on the transfer books of the
Corporation. In order to facilitate the redemption of shares of Series F
Preferred Stock, the Board of Directors may fix a record date for the
determination of shares of Series F Preferred Stock to be redeemed, or may
cause the transfer books of the Corporation for the Series F Preferred
Stock to be closed, not more than 60 days or less than 45 days prior to the
Optional Redemption Date.
(c) On the date of any Optional Redemption that is specified
in a notice given pursuant to Section 5(b), the Corporation shall, and at
any time after such notice shall have been mailed and before the Optional
Redemption Date the Corporation may, deposit for the benefit of the holders
of shares of Series F Preferred Stock the funds necessary for such
redemption with a bank or trust company in the Borough of Manhattan, The
City of New York, that is "well capitalized" within the meaning of the
applicable bank regulations and having a capital and surplus of at least
$500,000,000. Any moneys so deposited by the Corporation and unclaimed at
the end of two years from the Optional Redemption Date shall revert to the
48<PAGE>
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general funds of the Corporation. After such reversion, any such bank or
trust company shall, upon demand, pay over to the Corporation such
unclaimed amounts and thereupon such bank or trust company shall be
relieved of all responsibility in respect thereof and any holder of shares
of Series F Preferred Stock to be redeemed shall look only to the Corporation
for the payment of the Optional Redemption Price. Any interest accrued on
funds deposited pursuant to this Section 5(c) shall be paid from time to time
to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 5(c) in respect of shares of
Series F Preferred Stock to be redeemed pursuant to Section 5(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Optional Redemption Date
(i) the shares represented thereby shall no longer be deemed outstanding,
(ii) the rights to receive dividends thereon shall cease to accrue, and
(iii) all rights of the holders of shares of Series F Preferred Stock to be
redeemed shall cease and terminate, excepting only the right to receive the
Optional Redemption Price therefor; provided, however, that if the Corporation
-------- -------
shall default in the payment of the Optional Redemption Price, the shares of
Series F Preferred Stock shall thereafter be deemed to be outstanding and
the holders thereof shall have all of the rights of a holder of Series F
Preferred Stock until such time as such default or failure shall no longer
be continuing or shall have been waived by holders of at least 66-2/3% of
the then outstanding shares of Series F Preferred Stock.
(e) Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of
shares of Series F Preferred Stock receives such notice, and failure to
give such notice by mail, or any defect in such notice, to the holders of
any shares designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Series F Preferred
Stock. On or after the Optional Redemption Date fixed for redemption as
stated in such notice, each holder of the shares called for redemption
shall surrender the certificate evidencing such shares to the Corporation
at the place designated in such notice and shall thereupon be entitled to
receive payment of the Optional Redemption Price. If less than all the
shares evidenced by any such surrendered certificate are redeemed, a new
certificate shall be issued evidencing the unredeemed shares.
Section 6. Mandatory Redemption at the Option
49<PAGE>
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of the Holder.
----------------------------------
(a) (i) If one or more events constituting a Specified
Corporate Action shall occur, each holder of shares of the Series F
Preferred Stock shall have the right, at such holder's option on the date
or dates specified in Section 6(a)(ii) (the "Specified Corporate Action
Redemption Date"), to require the Corporation to redeem (a "Specified
Corporate Action Redemption") all or any part of the shares of Series F
Preferred Stock then held by such holder as such holder may elect at a
price per share equal to the greater of (I) the sum of (A) the following
prices per share (stated as a percentage of the Liquidation Preference of
such share) and (B) an amount per share equal to all accrued and unpaid
dividends thereon, whether or not declared or payable, to the applicable
Specified Corporate Action Redemption Date
If the Specified Corporate Specified Corporate Action
Action Redemption Date Redemption as a Percentage of
Occurs During the Period Liquidation Preference
-------------------------- -----------------------------
December 30,1994 to 110.4%
June 29, 1995
June 30, 1995 to 116.8%
December 29, 1995
December 30, 1995 to 126.7%
June 29, 1996
June 30, 1996 and 138.0%
thereafter
and (II) the sum of (x) 100% of the Liquidation Preference of such share,
(y) an amount per share equal to all accrued and unpaid dividends thereon
whether or not declared or payable to the Specified Corporate Action
Redemption Date and (z) the Additional Amount measured as of the date of
any such redemption, in either case in immediately available funds (the
"Specified Corporate Action Redemption Price").
(ii) The date fixed for each Specified Corporate Action
Redemption shall be fixed by the Corporation and shall be not less than 60
days nor more than 90 days following the occurrence of any Specified
Corporate Action giving rise thereto (or, in the case of a Specified
Corporate Action as described in clause (iii) of the definition of
"Specified Corporate Action," not less than 60 days nor more than 90 days
following the date on which the Corporation obtains actual
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knowledge of such Specified Corporate Action); provided, however, that in
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the event of a Specified Corporate Action that constitutes a Control
Transaction, in addition to the dates fixed for a Specified Corporate
Action Redemption as specified above, an additional Specified Corporate
Action Redemption Date shall be set for the date and time immediately
preceding the consummation of any such Control Transaction (and the Market
Price utilized in determining the Additional Amount for the purposes of
such Specified Corporate Action Redemption shall be the highest price per
share of Common Stock paid by any acquiror in such Control Transaction);
provided, further, that, upon the request of a holder, the Board of Directors
- -------- -------
shall agree to extend the date of redemption in respect of any such Specified
Corporate Action (without changing the consideration that is otherwise
payable in respect of such redemption other than with respect to adjustments
to the amount of accrued and unpaid dividends included in such redemption
price) to the extent necessary for any holder of shares of Series F Preferred
Stock to avoid liability under Section 16(b) of the Exchange Act, provided
--------
that no such redemption extension shall be for a period greater than six
months. The Corporation shall, within 5 days of the occurrence of a
Specified Corporate Action (or, in the case of a Specified Corporate Action
described in clause (iii) of the definition of "Specified Corporate Action,"
within 5 days of the date on which the Corporation obtains actual knowledge
of such Specified Corporate Action), give notice thereof by publication in a
newspaper of general circulation in the Borough of Manhattan, The City of
New York (if such publication shall be required by applicable law, rule,
regulation or securities exchange requirement), and, in any case, a similar
notice shall be mailed to each holder of shares of the Series F Preferred
Stock, at such holder's address as it appears on the transfer books of the
Corporation. Each such notice shall specify the Specified Corporate Action
that has occurred and the date of such occurrence, the place or places of
payment, the then effective Specified Corporate Action Redemption Price and
the date the right of such holder to require a Specified Corporate Action
Redemption shall terminate.
(iii) If the notice sent by the Corporation pursuant to
Section 6(a)(ii) shall contain (i) a form inquiring as to whether a holder
of shares of Series F Preferred Stock intends to surrender the
certificates) representing such shares for redemption pursuant to this
Section 6(a) and (ii) a stamped self-addressed envelope for return of such
form to the Corporation or its designee, within ten Business Days of such
notice, each holder shall return such inquiry form to the Corporation and
shall indicate in such form the proportion of such holder's shares of
Series F Preferred Stock that will be surrendered for redemption pursuant
to this Section 6(a). If
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such notice shall indicate that if a holder does not respond prior to ten
Business Days after the date of such notice that such holder will be deemed
to have notified the Corporation that it will not require the redemption of
the shares of Series F Preferred Stock held by such holder for purposes of
Section 3(b) and such holder does not respond to the Corporation's inquiry
prior to ten Business Days after the date of such notice, such holder will
be deemed to have notified the Corporation that it will not require the
redemption of the shares of Series F Preferred Stock held by such holder
for purposes of Section 3(b). Nothing contained in this Section 6(a)(iii)
shall affect the right of a holder of Series F Preferred Stock to require
the Corporation to redeem such shares pursuant to Section 6(a)(i).
(b) (i) If at any time the Additional Amount is greater than
0, then each holder of shares of the Series F Preferred Stock shall have
the right, at such holder's option exercisable at any time (such time, the
"Conversion Date") on 30 days' notice to the Corporation, to require the
Corporation to redeem (a "Conversion Redemption") all or any part of the
shares of Series F Preferred Stock then held by such holder at a price per
share (the "Conversion Redemption Price") equal to the sum of (A) 100% of
the Liquidation Preference of such shares, (B) an amount per share equal to
all accrued and unpaid dividends thereon, whether or not declared or
payable, to the applicable Conversion Redemption Date and (C) the
Additional Amount, in immediately available funds. Notwithstanding the
foregoing, if the redemption of any portion of such shares occurs during
the first two years following the Issue Date or would in the judgment of
the Board of Directors of the Corporation have a material adverse effect
on the Corporation, then the Corporation may elect to deliver with respect
to such shares, in lieu of cash, notes, including subordinated notes, of
the Corporation ("Notes") (x) having a final maturity date no later than
ten years from the date of issuance, and (y) having such other terms and
conditions as shall result in a determination that such Notes have a fair
market value as of the date of their proposed issuance at least equal to
the sum of (1) the Conversion Redemption Price with respect to such shares
and (2) customary underwriting discounts and commissions payable with
respect to the sale of securities of a type comparable to the Notes, or
shares of nonconvertible preferred stock ("Redemption Preferred Stock")
having the terms and conditions described in clauses (x) and (y) in lieu
of Notes. The Corporation shall use its best efforts to cause the Notes
or the Redemption Preferred Stock to be registered for immediate resale
pursuant to an effective registration statement under the Securities Act
prior to the issuance thereof. If such registration statement is not
effective within 120 days of
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the date of such issuance then the annual interest rate of the Notes or the
annual dividend rate of the Redemption Preferred Stock, as applicable,
shall be increased by O.5% per annum until such securities are sold
pursuant to an effective registration statement under the Securities Act.
For purposes of this Section 6(b), "fair market value" shall mean the fair
market value of the Notes or Redemption Preferred Stock, as the case may
be, as determined by an investment banking firm of national standing
selected by the Corporation and reasonably acceptable to the holders of a
majority of the shares of Series F Preferred Stock electing to effect such
Conversion Redemption. In the case that the Corporation shall be entitled
to deliver either Notes or Redemption Preferred Stock, it shall be the
election of the Corporation whether to deliver such Notes or Redemption
Preferred Stock, except that, if, the sale of the security to be delivered
by the Corporation to effect a Conversion Redemption would give rise to an
additional liability on the part of such holder upon the sale thereof and
it shall so notify the Corporation in writing, the Corporation shall
deliver to such holder the other type of security specified in such notice.
(c) Each holder of shares of the Series F Preferred Stock
shall have the right, at such holder's option exercisable at any time on 30
days' notice to the Corporation on or after December 30, 2009 (the date of
any such exercise, the "Special Redemption Date"), to require the
Corporation to redeem (a "Special Redemption") all or any part of the
shares of Series F Preferred Stock then held by such holder as such holder
may elect by written notice delivered at least 30 days prior to the Special
Redemption Date at a price per share equal to the sum of (A) 100% of the
Liquidation Preference of such share, (B) an amount per share equal to all
accrued and unpaid dividends thereon whether or not declared or payable to
the Special Redemption Date and (C) the Additional Amount, determined as of
the date immediately prior to the Special Redemption Date (the "Special
Redemption Price") in immediately available funds.
(d) On the date fixed for any Specified Corporate Action
Redemption or on any Conversion Redemption Date or Special Redemption Date,
each holder of shares of Series F Preferred Stock who elects to have shares
of Series F Preferred Stock held by it redeemed shall surrender the
certificate representing such shares to the Corporation (i) at the place
designated in such notice in the case of a Specified Corporate Action
Redemption or (ii) at the Corporation's principal place of business to be
maintained by it, in the case of a Conversion Redemption or Special
Redemption, together with an election to have such redemption made and
shall thereupon be entitled to receive payment therefor provided in this
Section 6. If less
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than all the shares represented by any such surrendered certificate are
redeemed, a new certificate shall be issued representing the unredeemed
shares. From and after the date of such redemption (i) the rights to
receive dividends thereon shall cease to accrue and (ii) all rights of the
holders of shares of Series F Preferred Stock so redeemed shall cease and
terminate, excepting only the right to receive the Specified Corporate
Action Redemption Price or Conversion Redemption Price or Special
Redemption Price therefor, as applicable; provided, however, that if the
-------- -------
Corporation shall default in the payment of the applicable redemption price
the shares of Series F Preferred Stock that were to be redeemed shall
thereafter be deemed to be outstanding and the holders thereof shall have
all of the rights of a holder of Series F Preferred Stock until such time
as such default shall no longer be continuing or shall have been waived by
holders of at least 66-2/3% of the then outstanding shares of Series F
Preferred Stock.
Section 7. Redemption Upon Maturity.
------------------------
(a) On December 30, 2034 (the "Maturity Date"), the
Corporation shall redeem (the "Maturity Redemption") the remaining
outstanding shares of the Series F Preferred Stock at a price per share
(the "Maturity Redemption Price") equal to the sum of (A) 100% of the
Liquidation Preference per share, (B) an amount equal to accrued and unpaid
dividends thereon, whether or not declared or payable, to the Maturity Date
and (C) the Additional Amount, determined as of the date immediately prior
to the Maturity Date, in immediately available funds.
(b) Notice of the Maturity Redemption shall be given by
publication in a newspaper of general circulation in the Borough of
Manhattan, The City of New York (if such publication shall be required by
applicable law, rule, regulation or securities exchange requirement), not
less than 30, nor more than 60, days prior to the Maturity Date and, in any
case, a similar notice shall be mailed at least 30, but not more than 60,
days prior to the Maturity Date to each holder of shares of Series F
Preferred Stock, at such holder's address as it appears on the transfer
books of the Corporation.
(c) On the Maturity Date, the Corporation shall, and at any
time after such notice shall have been mailed and before the Maturity Date
the Corporation may, deposit for the benefit of the holders of shares of
Series F Preferred Stock the funds necessary for such redemption with a
bank or trust company in the Borough of Manhattan, The City of New York,
that is "well capitalized" within the meaning of the applicable banking
regulations and having a capital and surplus of at least $500,000,000.
Any moneys so deposited by the Corporation and
54<PAGE>
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unclaimed at the end of two years from the date designated for such
redemption shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over
to the Corporation such unclaimed amounts and thereupon such bank or trust
company shall be relieved of all responsibility in respect thereof and any
holder of shares of Series F Preferred Stock to be redeemed shall look only
to the Corporation for the payment of the Maturity Redemption Price. Any
interest accrued and unpaid on funds deposited pursuant to this Section 5
(c) shall be paid from time to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 7(c) in respect of shares of
Series F Preferred Stock to be redeemed pursuant to Section 7(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Maturity Date, (i) the
rights to receive dividends thereon shall cease to accrue and (ii) all
rights of the holders of shares of Series F Preferred Stock shall cease
and terminate, excepting only the right to receive the Maturity Redemption
Price therefor; provided, however, that if the Corporation shall default
-------- -------
in the payment of the Maturity Redemption Price, the shares of Series F
Preferred Stock that were to be redeemed shall thereafter be deemed to be
outstanding and the holders thereof shall have all of the rights of a
holder of Series F Preferred Stock until such time as such default shall
no longer be continuing.
Section 8. Acquired Shares.
---------------
Any shares of Series F Preferred Stock exchanged, redeemed,
purchased or otherwise acquired by the Corporation or any of its
Subsidiaries in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares of Series F
Preferred Stock shall upon their cancellation become authorized but
unissued shares of preferred stock, par value $4.00 per share, of the
Corporation and, upon the filing of an appropriate certificate with the
Department of State of the State of New York, may be reissued as part of
another series of preferred stock, par value $4.00 per share, of the
Corporation subject to the conditions or restrictions on issuance set forth
herein, but in any event may not be reissued as shares of Series F
Preferred Stock or Parity Stock unless all of the shares of Series F
Preferred Stock issued on the Issue Date shall have already been redeemed
or exchanged.
55<PAGE>
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Section 9. Liquidation, Dissolution or Winding Up.
--------------------------------------
(a) if the Corporation shall commence a voluntary case under
the United States bankruptcy laws or any applicable bankruptcy, insolvency
or similar law of any other country, or consent to the entry of an order
for relief in an involuntary case under any such law or to the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
other similar official) of the Corporation or of any substantial part of
its property, or make an assignment for the benefit of its creditors, or
admit in writing its inability to pay its debts generally as they become
due (any such event, a "Voluntary Liquidation Event"), or if a decree or
order for relief in respect of the Corporation shall be entered by a court
having jurisdiction in the premises in an involuntary case under the United
States bankruptcy laws or any applicable bankruptcy, insolvency or similar
law of any other country, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the
Corporation or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and on account of any such event
the Corporation shall liquidate, dissolve or wind up, or if the Corporation
shall otherwise liquidate, dissolve or wind up, no distribution shall be
made (i) to the holders of shares of Junior Stock unless, prior thereto,
the holders of shares of Series F Preferred Stock shall have received (A)
if a Voluntary Liquidation Event shall have occurred, the Optional
Redemption Price with respect to each share and (B) if a Voluntary
Liquidation Event shall not have occurred, the Liquidation Preference and
all accrued and unpaid dividends, whether or not declared or currently
payable, to the date of distribution, with respect to each share, or (ii)
to the holders of shares of Parity Stock, except distributions made ratably
on the Series F Preferred Stock and all Parity Stock in proportion to the
total amounts to which the holders of all shares of the Series F Preferred
Stock (which amounts are set forth in clauses (A) and (B) above) and Parity
Stock are entitled upon such liquidation, dissolution or winding up.
(b) Neither the consolidation or merger of the Corporation
with or into any other Person nor the sale or transfer of all or any part
of the Corporation's assets for cash, securities or other property shall be
deemed to be a liquidation, dissolution or winding up of the Corporation
for purposes of this Section 9.
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Section 10. Exchange.
--------
(a) Subject to the provisions of this Section 10, the
Corporation shall have the right, with the consent of the holders of all of
the outstanding shares of Series F Preferred Stock (which consent may be
withheld for any reason whatsoever), at any time but on only one occasion,
to exchange all (but not less than all) of the shares of Series F Preferred
Stock for Subordinated Notes of the Corporation ("Subordinated Notes"), at
a price per share equal to the Liquidation Preference per share, with the
Subordinated Notes valued for such purpose at their face value.
Simultaneously with such exchange the Corporation shall pay to each holder
of Series F Preferred Stock an amount per share in cash equal to all
accrued and unpaid dividends thereon, whether or not declared or currently
payable, to the date fixed for exchange thereof. The Subordinated Notes
shall have an annual interest rate equal to the annual dividend rate on
Series F Preferred Stock and shall contain other terms substantially
similar to the Series F Preferred Stock, including the date of maturity
thereof.
(b) Notice of an exchange of shares of Series F Preferred
Stock pursuant to Section 10 (a) shall be given by publication in a
newspaper of general circulation in the Borough of Manhattan, The City of
New York (if such publication shall be required by applicable law, rule,
regulation or securities exchange requirement), not less than 30, nor more
than 60, days prior to the date fixed for exchange; and, in any case, a
similar notice shall be mailed at least 30, but not more than 60, days
prior to the date fixed for exchange to each holder at such holder's address
as it appears on the transfer books of the Corporation. In order to
facilitate the exchange of shares of Series F Preferred Stock hereunder the
Board of Directors may fix a record date for the determination of shares of
Series F Preferred Stock to be exchanged, or may cause the transfer books
of the Corporation for the Series F Preferred Stock to be closed, not more
than 60 days or less than 30 days prior to the date fixed for exchange.
(c) On the date of any exchange being made pursuant to
Section 10(a) that is specified in a notice given pursuant to Section
10(b), the Corporation shall, and at any time after the date that is 10
days prior to the date of exchange the Corporation may, deposit for the
benefit of the holders of shares of Series F Preferred Stock to be
exchanged (i) the Subordinated Notes necessary for such exchange and (ii)
an amount in cash equal to all dividends payable with respect thereto upon
such exchange with a bank or trust company in the Borough of Manhattan, The
City of New York, that is "well capitalized" within the meaning of the
applicable banking
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regulations and having a capital and surplus of at least $500,000,000. Any
Subordinated Notes so deposited by the Corporation and unclaimed at the end
of two years from the date designated for such exchange shall revert to the
Corporation. After such reversion, any such bank or trust company shall,
upon demand, return to the Corporation such unclaimed Subordinated Notes
and thereupon such bank or trust company shall be relieved of all
responsibility in respect thereof and any holder of shares of Series F
Preferred Stock to be exchanged shall look only to the Corporation for the
delivery of the Subordinated Notes. Any interest accrued on Subordinated
Notes deposited pursuant to this Section 10(c) shall accrue for the accounts
of, and be payable to, the holders of shares of Series F Preferred Stock to
be exchanged therefor.
(d) Notice of exchange having been given as aforesaid and not
having been deemed terminated as aforesaid, upon the deposit of
Subordinated Notes pursuant to clause (i) of Section 10(c) and the deposit
of the cash referred to in clause (ii) of Section 10(c) in respect of
shares of Series F Preferred Stock to be exchanged pursuant to Section
10(a), notwithstanding that any certificates for such shares shall not have
been surrendered for cancellation, from and after the date of exchange
designated in the notice of exchange (i) the shares represented thereby
shall no longer be deemed outstanding, (ii) the rights to receive dividends
thereon (except as provided in paragraph (b) above) shall cease to accrue,
and (iii) all rights of the holders of shares of Series F Preferred Stock
to be exchanged shall cease and terminate, excepting only the right to
receive the Subordinated Notes therefor and the right to receive the
dividends described in paragraph (b) above; provided, however, that if the
-------- -------
Corporation shall default in the execution and delivery of the Convertible
Notes, the shares of Series F Preferred Stock that were to be exchanged
shall thereafter be deemed to be outstanding and the holders thereof shall
have all of the rights of a holder of Series F Preferred Stock until such
time as such default shall no longer be continuing or shall have been
waived by holders of at least 66-2/3% of the then outstanding shares of
Series F Preferred Stock.
Section 11. Additional Amount.
-----------------
(a) For the purposes of this Article 2, "Additional Amount"
shall mean an amount per share equal to the product of (i) the excess of
the sum of (1) the Market Price of a share of Common Stock and (2) if the
Corporation shall have issued a right or rights with respect to its
outstanding shares of Common Stock pursuant to a shareholder rights plan,
"poison pill" or similar arrangement, during the period commencing on
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the "distribution date,, of such right or rights (i.e., the date on which
such right or rights commence to trade separately from the Common Stock)
and ending on the "triggering date" of such right or rights (i.e., the date
on which such right or rights commence to be exercisable), the Market Price
of such right or rights over the Conversion Amount, in effect as
hereinafter determined and (ii) (x) the Liquidation Preference divided by
(y) such Conversion Amount, in all cases calculated as of the applicable
determination date. The Additional Amount shall in no event be less than
zero. The Conversion Amount initially shall be $15.75, and shall
thereafter be subject to adjustment as set forth in Section 11(b). For the
purpose of calculating the Additional Amount in connection with an Optional
Redemption, Specified Corporate Action Redemption, Special Redemption or
Conversion Redemption, except as otherwise set forth in Section 6(a)(ii),
the Market Price of the Common Stock and, if applicable, rights shall be
the average of the Market Price of such securities on the five trading days
immediately preceding and the five trading days immediately following the
date of notice of such redemption.
(b) The Conversion Amount shall be subject to adjustment as
follows:
(i) In case the Corporation shall at any time or from
time to time (A) pay a dividend or make a distribution on the outstanding
shares of Common Stock in Common Stock (other than pursuant to a dividend
reinvestment plan approved by the Corporation's Board of Directors), (B)
subdivide the outstanding shares of Common Stock into a larger number of
shares, (C) combine the outstanding shares of Common Stock into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the Common Stock, then, and in each such case, the
Conversion Amount in effect immediately prior to such event shall be
adjusted so that if the holder of any share of Series F Preferred Stock
were entitled to convert such share into such number of shares of Common
Stock as equals the Liquidation Preference divided by the Conversion Amount
and such holder thereafter surrendered such share for conversion, such
holder would be entitled to receive the number of shares of Common Stock
or other securities of the Corporation that such holder would have owned
or would have been entitled to receive upon or by reason of any of the events
described above had such share of Series F Preferred Stock been converted
immediately prior to the occurrence of such event. An adjustment made
pursuant to this Section 11(b)(i) shall become effective retroactively (A)
in the case of any such dividend or distribution, to the opening of business
on the day immediately following the close of business on the record date
for the determination of holders of Common Stock entitled to
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receive such dividend or distribution or (B) in the case of any such
subdivision, combination or reclassification, to the close of business on
the day upon which such corporate action becomes effective.
(ii) In case the Corporation shall at any time or from
time to time issue or sell shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock, or any
options, warrants or other rights to acquire shares of Common Stock (other
than options granted to any employee or director of the Corporation
pursuant to a stock option plan approved by the shareholders of the
Corporation)) for a consideration per share less than the Conversion Amount
then in effect at the record date or issuance date, as the case may be (the
"Date") referred to in the following sentence, including, without
limitation, upon exercise of rights issued pursuant to a shareholder rights
plan,"poison pill" or similar arrangement (treating the price per share of
any security convertible or exchangeable or exercisable into Common Stock
as equal to (A) the sum of the price for such security convertible,
exchangeable or exercisable into Common Stock plus any additional
consideration payable (without regard to any antidilution
adjustments) upon the conversion, exchange or exercise of such security
into Common Stock divided by (B) the number of shares of Common Stock
initially underlying such convertible, exchangeable or exercisable
security), other than issuances or sales for which an adjustment is made
pursuant to another paragraph of this Section 11 (b) , then, and in each
such case, the Conversion Amount then in effect shall be adjusted by
dividing the Conversion Amount in effect on the day immediately prior to
the Date by a fraction (x) the numerator of which shall be the sum of the
number of shares of Common Stock outstanding immediately prior to the Date
plus the number of additional shares of Common Stock issued or to be issued
(or the maximum number into which such convertible or exchangeable securities
initially may convert or exchange or for which such options, warrants or
other rights initially may be exercised) and (y) the denominator of which
shall be the sum of the number of shares of Common Stock outstanding
immediately prior to the Date plus the number of shares of Common Stock
that the aggregate consideration (if any of such aggregate consideration is
other than cash, as valued by the Board of Directors including a majority
of the Directors who are not officers or employees of the Corporation or
any of its Subsidiaries, which determination shall be conclusive and
described in a resolution of the Board of Directors) for the total number
of such additional shares of Common Stock so issued (or into which such
convertible or exchangeable securities may convert or exchange or for
which such options, warrants or other rights may be
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exercised plus the aggregate amount of any additional consideration
initially payable upon conversion, exchange or exercise of such security)
would purchase at the Conversion Amount. Such adjustment shall be made
whenever such shares, securities, options, warrants or other rights are
issued, and shall become effective retroactively to a date immediately
following the close of business (i) in the case of issuance to stockholders
of the Corporation, as such, on the record date for the determination of
stockholders entitled to receive such shares, securities, options, warrants
or other rights and (ii) in all other cases, on the date ("issuance date")
of such issuance; provided, however, that the determination as to whether
-------- -------
an adjustment is required to be made pursuant to this Section 11(b)(ii)
shall only be made upon the issuance of such shares or such convertible or
exchangeable securities, options, warrants or other rights, and not upon
the issuance of the security into which such convertible or exchangeable
security converts or exchanges, or the security underlying such option,
warrants or other right; provided, further, that if any convertible or
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exchangeable securities, options, warrants or other rights (or any portions
thereof) that shall have given rise to an adjustment pursuant to this
Section 11(b)(ii) shall have expired or terminated without the
exercise thereof and/or if by reason of the terms of such convertible or
exchangeable securities, options, warrants or other rights there shall have
been an increase or increases, with the passage of time or otherwise, in
the price payable upon the exercise or conversion thereof, then the
Conversion Amount hereunder shall be readjusted (but to no greater extent
than originally adjusted) on the basis of (x) eliminating from the
computation any additional shares of Common Stock corresponding to such
convertible or exchangeable securities, options, warrants or other rights
as shall have expired or terminated, (y) treating the additional shares of
Common Stock, if any, actually issued or issuable pursuant to the previous
exercise of such convertible or exchangeable securities, options, warrants
or other rights as having been issued for the consideration actually
received and receivable therefor and (z) treating any of such convertible
or exchangeable securities, options, warrants or other rights that remain
outstanding as being subject to exercise or conversion on the basis of such
exercise or conversion price as shall be in effect at the time.
(iii) In case the Corporation shall at any time or from
time to time distribute to all holders of shares of its Common Stock
(including any such distribution made in connection with a consolidation or
merger in which the Corporation is the resulting or surviving corporation
and the Common Stock is not changed or exchanged or a redemption of any
rights or other securities issued pursuant to a shareholder rights plan,
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"poison pill" or similar arrangement) cash, evidences of indebtedness of
the Corporation or another issuer, securities of the Corporation or another
issuer or other assets (excluding (A) Permitted Dividends described in
clause (B) of the definition thereof and (B) securities for which
adjustment is made under Section 11(b)(i) or Section 11(b)(ii)), then, and
in each such case, the Conversion Amount then in effect shall be adjusted
by dividing the Conversion Amount in effect immediately prior to the date
of such distribution by a fraction (x) the numerator of which shall be the
Current Market Price of the Common Stock on the record date referred to
below and (y) the denominator of which shall be such Current Market Price
of the Common Stock less the then Fair Market Value (as determined by the
Board of Directors of the Corporation, which determination shall be
conclusive) of the portion of the cash, evidences of indebtedness,
securities or other assets so distributed or of such subscription rights
or warrants applicable to one share of Common Stock (but such denominator
not to be less than one). Such adjustment shall be made whenever any such
distribution is made and shall become effective retroactively to a date
immediately following the close of business on the record date for the
determination of stockholders entitled to receive such distribution.
(iv) In the case the Corporation at any time or from
time to time shall take any action affecting its Common Stock, other than
an action described in any of Section 11(b)(i) through Section 11(b)(iii),
inclusive, then, the Conversion Amount shall be adjusted in such manner and
at such time as the Board of Directors of the Corporation (other than
Purchaser Designees or directors elected pursuant to Section 3(b)) in good
faith determines to be equitable in the circumstances (such determination
to be evidenced in a resolution, a certified copy of which shall be mailed
to the holders of the Series F Preferred Stock).
(v) The Corporation may make such reductions in the
Conversion Amount, in addition to those required by subparagraphs (i),
(ii), (iii) or (iv) of this Section 11(b), as the Board of Directors
considers to be advisable in order to avoid or to diminish any income tax
to holders of Common Stock or rights to purchase Common Stock resulting
from any dividend or distribution of stock (or rights to acquire stock) or
from any event treated as such for income tax purposes.
(vi) Notwithstanding anything contained in this Section
11(b), no adjustment to the Conversion Amount shall be made with respect to
any rights issued pursuant to a shareholder rights plan, "poison pill" or
similar arrangement unless the "triggering date," (i.e., the date on which
----
such rights
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commence to be exercisable) shall have occurred or such rights shall have
been redeemed, in which event adjustments under clause (ii) and clause
(iii), respectively, shall be made.
(c) If the corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such
dividend or distribution, then thereafter no adjustment in the Conversion
Amount then in effect shall be required by reason of the taking of such
record.
(d) Upon any increase or decrease in the Conversion Amount,
then, and in each such case, the Corporation promptly shall deliver to each
registered holder of Series F Preferred Stock at least 10 Business Days
prior to effecting any of the foregoing transactions a certificate, signed
by the President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the Corporation,
setting forth in reasonable detail the event requiring the adjustment and
the method by which such adjustment was calculated and specifying the
increased or decreased Conversion Amount then in effect following such
adjustment.
Section 12. Sinking Fund.
------------
(a) So long as any shares of Series F Preferred Stock shall
be outstanding, the Corporation shall, on the final business day (any such
date, the "Sinking Fund Date") of each calendar year after 2003, (i) set
aside a sum of money equal to 3-1/3% of the aggregate liquidation
preference of the shares of Series F Preferred Stock then outstanding, and
(ii) apply such money to redeem such number of shares of Series F Preferred
Stock at the Sinking Fund Redemption Price (the Corporation's obligations
described in this paragraph in respect of any Sinking Fund Date being
hereinafter referred to as the "Sinking Fund Obligation" for such date) at
a price per share (the "Sinking Fund Redemption Price") equal to the sum of
(A) the Liquidation Preference of such share, (B) an amount per share equal
to all accrued and unpaid dividends thereon, whether or not declared or
payable, to the applicable Sinking Fund Date and (C) the Additional Amount
(as defined in Section 11), determined as of the date immediately prior to
the Sinking Fund Date, in immediately available funds; provided, however,
-------- -------
that if the Corporation for any reason fails to discharge its Sinking Fund
Obligation on any Sinking Fund Date, such Sinking Fund Obligation, to the
extent not discharged, shall become an additional Sinking Fund Obligation
for each succeeding Sinking Fund Date until fully discharged;
provided, further, that no
- -----------------
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shares of Series F Preferred Stock purchased or acquired by the Corporation
otherwise than through redemption Pursuant to this paragraph or pursuant to
an Optional Redemption may be credited against the Sinking Fund obligation
in respect of any Sinking Fund Date.
(b) Notice of the Sinking Fund Redemption shall be given by
publication in a newspaper of general circulation in the Borough of
Manhattan, The City of New York (if such publication shall be required by
applicable law, rule, regulation or securities exchange requirement), not
less than 30, nor more than 60, days prior to the Sinking Fund Date and, in
any case, a similar notice shall be mailed at least 30, but not more than
60, days prior to the Sinking Fund Date to each holder of shares of Series
F Preferred Stock, at such holder's address as it appears on the transfer
books of the Corporation.
(c) The shares to be redeemed pursuant to
paragraph (a) shall be selected pro rata (as nearly as may be) so that
the number of shares redeemed from each holder shall be the same proportion
of all the shares to be redeemed that the total number of shares of Series
F Preferred Stock then held by such holder bears to the total number of
shares of Series F Preferred Stock then outstanding.
(d) on the Sinking Fund Date, the Corporation shall, and at
any time after such notice shall have been mailed and before the Sinking
Fund Date the Corporation may, deposit for the benefit of the holders of
shares of Series F Preferred Stock the funds necessary for such redemption
with a bank or trust company in the Borough of Manhattan, The City of New
York, that is "well capitalized" within the meaning of the applicable
banking regulations and having a capital and surplus of at least
$500,000,000. Any moneys so deposited by the Corporation and unclaimed at
the end of two years from the date designated for such redemption shall
revert to the general funds of the Corporation. After such reversion, any
such bank or trust company shall, upon demand, pay over to the Corporation
such unclaimed amounts and thereupon such bank or trust company shall be
relieved of all responsibility in respect thereof and any holder of shares
of Series F Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Sinking Fund Redemption Price. Any
interest accrued and unpaid on funds deposited pursuant to this Section
12(c) shall be paid from time to time to the Corporation for its own account.
(e) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 12(c) in respect of shares of
Series F Preferred Stock to be redeemed
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pursuant to Section 12(a), notwithstanding that any certificates for such
shares shall not have been surrendered for cancellation, from and after the
Sinking Fund Date, (i) the rights to receive dividends thereon shall cease
to accrue and (ii) all rights of the holders of shares of Series F
Preferred Stock shall cease and terminate, excepting only the right to
receive the Sinking Fund Redemption Price therefor; provided, however, that
-------- -------
if the Corporation shall default in the payment of the Sinking Fund
Redemption Price, the shares of Series F Preferred Stock that were to be
redeemed shall thereafter be deemed to be outstanding and the holders
thereof shall have all of the rights of a holder of Series F Preferred Stock
until such time as such default shall no longer be continuing.
Article 3. Series G Preferred Stock.
------------------------
Section 1. Designation and Number.
----------------------
(a) The shares of such series shall be designated as
"Cumulative Preferred Stock, Series G" (the "Series G Preferred Stock").
The number of shares initially constituting the Series G Preferred Stock
shall be 625,000, which number may be decreased (but not increased) by the
Board of Directors without a vote of stockholders; provided, however, that
-------- -------
such number may not be decreased below the number of then outstanding shares
of Series G Preferred Stock or the number of shares of Series G Preferred
Stock issuable upon exercise of the option (as defined in the Securities
Purchase Agreement).
(b) The Series G Preferred Stock shall, with respect to
dividend rights and rights on liquidation, dissolution or winding up, rank
pari passu with the Corporation's $2.50 Cumulative Convertible Preferred
- ---- -----
Stock, Series A (the "Series A Preferred Stock"), $2.50 Cumulative
Preferred Stock, Series B (the "Series B Preferred Stock"), Cumulative
Convertible Preferred Stock, Series E (the "Series E Preferred Stock"),
Cumulative Preferred Stock, Series F (the "Series F Preferred Stock"),
Cumulative Preferred Stock, Series H (the "Series H Preferred Stock"),
Cumulative Preferred Stock, Series T (the "Series T Preferred Stock" and
together with the Series E Preferred Stock, Series G Preferred Stock, the
Series G Preferred Stock and the Series H Preferred Stock, the "Chicago
Preferred Stock") and the New Preferred Stock (if any) (the Series A
Preferred Stock, Series 3 Preferred Stock, Chicago Preferred Stock (other
than the Series G Preferred Stock) and New Preferred Stock (if any) are
collectively defined for the purposes of this Article 2 as the "Other
Preferred Stock") and prior to all other classes and series of capital
stock of the Corporation now or hereafter authorized including, without
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limitation, the Common Stock, par value $1.00 per share, of the Corporation
(the "Common Stock").
(c) Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Article 6 below.
Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series G Preferred Stock, in
preference to the holders of shares of Common Stock and of any shares of
other capital stock of the Corporation other than the Other Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of the assets of the Corporation at the time legally
available therefor, cumulative cash dividends at an annual rate on the
Liquidation Preference thereof equal to 9.75% (subject to increase pursuant
to Section 2(b)), calculated on the basis of a 360-day year consisting of
twelve 30-day months, accruing and payable in equal quarterly payments, in
immediately available funds, on the Business Day immediately preceding the
last day of March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date") commencing
on the Business Day immediately preceding the date of the issuance of such
shares of Series G Preferred Stock; provided, however, that with respect
-------- -------
to such first Quarterly Dividend Payment Date with respect to any shares of
Series G Preferred Stock, the holders of shares of Series G Preferred
Stock shall be entitled to receive, when, as and if declared by the Board
of Directors, out of the assets of the Corporation at the time legally
available therefor, a cumulative cash dividend in respect of each share of
Series G Preferred Stock in the amount of (i) 9.75% (or the then effective
annual rate) of the Liquidation Preference multiplied by (ii) a fraction
equal to (A) the number of days from (and including) the date of the issuance
of such shares of Series G Preferred Stock to (but excluding) such Quarterly
Dividend Payment Date divided by (B) 360. No interest shall be payable in
respect of any dividend payment on the Series G Preferred Stock that may be
in arrears.
(b) If (i) a private placement or public offering of the New
Preferred Stock or the New Senior Notes, pursuant to which the Corporation
shall receive at least $100,000,000 in gross proceeds is not consummated
within 360 days after the termination of the Merger Agreement or (ii) the
annual dividend rate on the New Preferred Stock or the annual interest rate
on the New Senior Notes, as applicable, exceeds 13%, then the annual rate
of the cumulative cash dividends shall be increased to a rate of 10.75%,
effective (x) in the case of clause (i), the date that is 360 days after
the termination of the Merger
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Agreement, and (y) in the case of clause (ii) the date of the issuance of
the New Preferred Stock or the New Senior Notes, as applicable. If on any
date (A) all of the Purchaser Designees shall not have been elected to the
Corporation's Board of Directors or any such Purchaser Designees shall not
have been appointed to the committees of the Corporation's Board of
Directors, in accordance with the provisions of Section 6.17 of the
Securities Purchase Agreement, (B) the Corporation shall have failed to
declare, or shall have failed to pay, the full amount of dividends payable
on the Series G Preferred Stock for six quarterly dividend periods, (C) the
Corporation shall have failed to satisfy its obligation to convert shares
of Series E Preferred Stock pursuant to Article 1, Section 10 or (D) a
breach of any of the Material Provisions of the Securities Purchase
Agreement or any of the Corporation's material obligations under the
Registration Rights Agreement shall have occurred then, effective as.of the
date of such failure or breach, the annual rate of the cumulative cash
dividends shall be increased to a rate of 11.75% and shall remain at such
rate until such time as (1) the Purchaser Designees shall have been elected
to the Corporation's Board of Directors and appointed to the committees of
the Corporation's Board of Directors in accordance with the provisions of
Section 6.17 of the Securities Purchase Agreement, (2) all dividends
accrued to date on the Series G Preferred Stock shall have been declared
and paid in full, (3) any conversion obligations in respect of the Chicago
Preferred Stock that have become due shall have been fully satisfied and
(4) there shall exist no breach of any of the Material Provisions of the
Securities Purchase Agreement or any of the Corporation's material
obligations under the Registration Rights Agreement, as the case may be, at
which time the annual rate of the cumulative cash dividends shall be
reduced to a rate of 9.75%, subject to being increased to a rate of 11.75%
in the event of each and every subsequent event of the character indicated
above.
(c) Dividends payable on a share of Series G Preferred Stock
pursuant to Section 2(a) shall begin to accrue and be cumulative from the
date of issuance of such share of Series G Preferred Stock, and shall
accrue on a daily basis, in each case whether or not declared. Dividends
paid on the shares of Series G Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares of Series G Preferred Stock at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares
of Series G Preferred Stock entitled to receive payment of a dividend
declared thereon, which record date shall be not more than 60 days nor less
than 10 days prior to the date fixed for the payment
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thereof. Accumulated but unpaid dividends for any past quarterly dividend
periods may be declared and paid at any time, without reference to any
regular Quarterly Dividend Payment Date, to holders of record on such date,
not more than 60 nor less than 10 days preceding the payment date thereof,
as may be fixed by the Board of Directors.
(d) The holders of shares of Series G Preferred Stock shall
not be entitled to receive any dividends or other distributions except as
provided herein.
Section 3. Voting Rights.
-------------
In addition to any voting rights provided by law, the holders
of shares of Series G Preferred Stock shall have the following voting
rights:
(a) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders
of at least 66-2/3% of the outstanding shares of Series G Preferred Stock,
voting separately as a single class, in person or by proxy, at a special or
annual meeting of stockholders called for the purpose, shall be necessary
to (i) authorize, adopt or approve an amendment to the Certificate of
Incorporation that would increase or decrease the par value of the shares
of Series G Preferred Stock, or alter or change the powers, preferences or
special rights of the shares of Series G Preferred Stock, (ii) amend, alter
or repeal the Certificate of Incorporation so as to affect the shares of
Series G Preferred Stock adversely or (iii) effect the voluntary
liquidation, dissolution, winding up, recapitalization or reorganization of
the Corporation, or the consolidation or merger of the Corporation with or
into any other Person, or the sale or other distribution to another Person
of all or substantially all of the assets of the Corporation;
provided, however, that no separate vote of the holders of Series G
- -------- -------
Preferred Stock shall be required to effect any of the transactions described
in clause (iii) above unless such transaction would either require a class
vote pursuant to clause (i) or (ii) above or would require a vote by
any shareholders of the Corporation (other than pursuant to this sentence);
provided further, that no separate vote of the holders of the Series G
- -------- -------
Preferred Stock as a class shall be required in the case of a
recapitalization, reorganization, consolidation or merger of, or sale by,
the Corporation if (A) (a) such recapitalization, reorganization,
consolidation, merger or sale constitutes a Specified Corporate Action, (b)
the Corporation has sufficient funds legally available to it (after giving
effect to such transaction) to redeem, at the then applicable price
hereunder and pursuant to the terms
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hereof, all the outstanding shares of Series G Preferred Stock, (c) such
redemption shall not be prohibited by any agreement to which the
Corporation or any of its Subsidiaries is a party, by applicable law or
otherwise, (d) the Board of Directors of the Corporation, including a
majority of the directors who are not officers or employees of the
Corporation, shall have adopted a resolution confirming that such funds are
available and that the holders of Series G Preferred Stock have the right
to require such redemption and (e) the Corporation shall have set aside
sufficient funds through the Specified Corporation Action Redemption Date
to redeem the shares of Series G Preferred Stock held by such holders
(except that no funds need be set aside with respect to such shares held by
any such holder who has theretofore notified the Corporation (whether
pursuant to Section 6(a)(iii) or otherwise) that it will not require
redemption of such shares) or (B) (1) the Corporation shall be the
resulting or surviving corporation, (2) the resulting or surviving
corporation will have after such recapitalization, reorganization,
consolidation or merger no Senior Stock or Parity Stock either authorized
or outstanding (except such Parity Stock of the Corporation as may have
been authorized or outstanding immediately preceding such consolidation or
merger) or such stock of the resulting or surviving corporation (having the
same powers, preferences and special rights of any such Parity Stock) as
may be issued in exchange therefor), (3) each holder of shares of Series G
Preferred Stock immediately preceding such recapitalization,
reorganization, consolidation or merger will receive in exchange therefor
the same number of shares of stock, with the same preferences, rights and
powers, of the resulting or surviving corporation, (4) after such
recapitalization, reorganization, consolidation or merger the resulting
or surviving corporation shall not be in breach of any of the terms hereof,
any of the Material Provisions of the Securities Purchase Agreement or any
of its material obligations under the Registration Rights Agreement and (5)
all or substantially all the holders of the outstanding shares of capital
stock of the Corporation immediately prior to such consolidation or merger
are entitled to receive shares representing 50% or more of the then
outstanding shares of capital stock of the resulting or surviving corporation
entitled to vote generally in the election of directors.
(b) If on any date (i) the Corporation shall have failed to
declare, or shall have failed to pay, the full amount of dividends payable
on any series of Chicago Preferred Stock for six quarterly dividend periods
or (ii) a breach of any of the Material Provisions of the Securities
Purchase Agreement or any of the Corporation's material obligations under
the Registration Rights Agreement shall have occurred, then the number of
directors constituting the Board of Directors shall, without
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further action, be increased by two and the holders of shares of Series G
Preferred Stock shall have, in addition to the other voting rights set
forth herein with respect to the Series G Preferred Stock, the exclusive
right, together with the holders of all other series of Chicago Preferred
Stock voting separately as a single class together with the holders of such
other series of Chicago Preferred Stock, to elect two directors of the
Corporation to fill such newly created directorship, by written consent as
provided herein, or at a special meeting of such holders called as provided
herein. Any such additional directors shall continue as directors (subject
to reelection or removal as provided in Section 3(c)(ii)) and the holders
of Series G Preferred Stock shall have such additional voting rights until
such time as (A) dividends then payable on all series of Chicago Preferred
Stock shall have been declared and paid in full and (B) there shall exist
no breach of any of the Material Provisions of the Securities Purchase
Agreement or any of the Corporation's material obligations under the
Registration Rights Agreement, as the case may be, at which time such
additional directors shall cease to be directors, the number of directors
constituting the Board of Directors shall be reduced by two and such
additional voting rights of the holders of all series of Chicago Preferred
Stock shall terminate, subject to revesting in the event of each and every
subsequent event of the character indicated above.
(c) (i) The foregoing right of holders of shares of Series G
Preferred Stock to take any action as provided in Section 3(b) may be
exercised at any annual meeting of stockholders or at a special meeting of
holders of shares of Chicago Preferred Stock, held for such purpose as
hereinafter provided or at any adjournment thereof, or by the written
consent, delivered to the Secretary of the Corporation, of the holders of
the minimum number of shares required to take such action.
So long as such right to vote continues (and unless such right
has been exercised by written consent of the minimum number of shares
required to take such action), the President of the Corporation may call,
and upon the written request of holders of record of at least 5% of the
aggregate outstanding shares of Chicago Preferred Stock, addressed to the
Secretary of the Corporation at the principal office of the Corporation,
shall call, a special meeting of the holders of shares entitled to vote as
provided herein. Such meeting shall be held within 30 days after delivery
of such request to the Secretary, at the place and upon the notice provided
by law and in the by-laws of the Corporation for the holding of meetings of
stockholders.
(ii) At each meeting of stockholders at which the holders of
shares of Series G Preferred Stock shall have
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the right, voting separately as a single class together with the holders of
all other series of Chicago Preferred Stock, to elect two directors of the
Corporation as provided in Section 3(b) or to take any action, the presence
in person or by proxy of the holders of record of one-third of the total
aggregate number of shares of Chicago Preferred Stock then outstanding and
entitled to vote on the matter shall be necessary and sufficient to
constitute a quorum. At any such meeting or at any adjournment thereof:
(A) the absence of a quorum of the holders of
shares of Chicago Preferred Stock, shall not prevent the election
of directors other than those to be elected by the holders of
shares of Chicago Preferred Stock, and the absence of a quorum of
the holders of shares of any other class or series of capital
stock shall not prevent the election of directors to be elected by
the holders of shares of Chicago Preferred Stock, or the taking of
any action as provided in Section 3(b); and
(B) in the absence of a quorum of the holders of
shares of Chicago Preferred Stock, a majority of the holders of
such shares present in person or by proxy shall have the power to
adjourn the meeting as to the actions to be taken by the holders
of shares of Chicago Preferred Stock, from time to time and
place to place without notice other than announcement at the
meeting until a quorum shall be present.
For taking of any action as provided in Section 3(a) or Section
3(b) by the holders of shares of Series G Preferred Stock, each such holder
shall have one vote for each share of such stock standing in his name on
the transfer books of the Corporation as of any record date fixed for such
purpose or, if no such date be fixed, at the close of business on the
Business Day next preceding the day on which notice is given, or if notice
is waived, at the close of business on the Business Day next preceding the
day on which the meeting is held; provided, however, that shares of Chicago
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Preferred Stock held by the Corporation or any Subsidiary of the
Corporation shall not be deemed to be outstanding for purposes of taking
any action as provided in this Section 3.
Each director elected by the holders of shares of Chicago
Preferred Stock, as provided in Section 3(b) shall, unless his term shall
expire earlier in accordance with the provisions thereof, hold office until
the annual meeting of stockholders next succeeding his election or until
his successor, if any, is elected and qualified.
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If any director so elected by the holders of Chicago Preferred
Stock shall cease to serve as a director before his term shall expire (except
by reason of the termination of the voting rights accorded to the holders of
Chicago Preferred Stock, in accordance with Section 3(b)), the holders of the
Chicago Preferred Stock then outstanding and entitled to vote for such
director may, by written consent as provided herein, or at a special meeting
of such holders called as provided herein, elect a successor to hold office
for the unexpired term of the director whose place shall be vacant.
Any director elected by the holders of shares of Chicago Preferred
Stock, voting together as a separate class, may be removed from office with or
without cause only by the vote or written consent of the holders of at least a
majority of the aggregate outstanding shares of Chicago Preferred Stock at the
time of removal. A special meeting of the holders of shares of Chicago
Preferred Stock may be called in accordance with the procedures set forth in
Section 3(c)(i).
Section 4. Certain Restrictions.
--------------------
(a) So long as any shares of Series G Preferred Stock remain
outstanding, the Corporation shall not declare or make any Restricted Payment.
(b) Whenever quarterly dividends payable on shares of Series G
Preferred Stock as provided in Section 2(a) are not paid in full, at such time
and thereafter until all unpaid dividends payable, whether or not declared, on
the outstanding shares of Series G Preferred Stock shall have been paid in
full or declared and set apart for payment at such time and thereafter until
all necessary funds have been set apart for payment, or whenever the
Corporation shall not have paid the Optional Redemption Price, the Specified
Corporate Action Redemption Price, the Conversion Redemption Price, the
Holder's Election Redemption Price, the Special Redemption Price or the
Maturity Redemption Price when due, at such time and thereafter from and until
all such amounts have been paid in full or set apart for payment, the
Corporation shall not: (A) declare or pay dividends, or make any other
distributions, on any shares of Junior Stock, or (B) declare or pay dividends,
or make any other distributions, on any shares of Parity Stock, except
dividends or distributions paid ratably on the Series G Preferred Stock and
all Parity Stock on which dividends are payable and in arrears, in proportion
to the total amounts to which the holders of all shares of the Series G
Preferred Stock and Parity Stock are then entitled.
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(c) Whenever dividends payable on shares of Series G Preferred
Stock as provided in Section 2 are not paid in full, at such time and
thereafter until all unpaid dividends payable, whether or not declared, on the
outstanding shares of Series G Preferred Stock shall have been paid in full or
declared and set apart for payment, at such time and thereafter until all
necessary funds have been set apart for payment, or whenever the Corporation
shall not have paid the optional Redemption Price, the Specified Corporate
Action Redemption Price, the Conversion Redemption Price, the Holder's
Election Redemption Price, the Special Redemption Price or the Maturity
Redemption Price when due, at such time and thereafter until all such amounts
have been paid in full or set apart for payment, the Corporation shall not
redeem, purchase or otherwise acquire for consideration any shares of Junior
Stock or Parity Stock; provided, however, that (A) the Corporation may accept
-------- -------
shares of any Parity Stock or Junior Stock for conversion into Junior Stock
and (B) the Corporation may at any time redeem, purchase or otherwise acquire
shares of any Parity Stock pursuant to any mandatory redemption, put, sinking
fund or other similar obligation contained in such Parity Stock, pro rata with
the Series G Preferred Stock in proportion to the total amount then required
to be applied by the Corporation to redeem, repurchase, or otherwise acquire
shares of Series G Preferred Stock and shares of such Parity Stock.
(d) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to purchase or otherwise acquire for
consideration any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(c), purchase such shares at such time
and in such manner.
Section 5. Optional Redemption.
-------------------
(a) (i) The Corporation shall not have any right to redeem any
shares of Series G Preferred Stock prior to December 30, 2001. Thereafter,
(A) at any time, if no shares of the Series E Preferred Stock remain
outstanding, so long as shares of Common Stock shall have traded on the New
York Stock Exchange (or another national securities exchange or on Nasdaq) on
each trading day during a 30-consecutive trading day period (each of which
trading days shall be after December 30, 2001 and no more than 5 Business Days
prior to the date notice is given of an Optional Redemption (as defined
below)) and had a Closing Price on at least 20 of such trading days in excess
of 150% of the Conversion Amount in effect on such trading day as determined
pursuant to Section 11, subject to the restrictions contained in Section 4 or
(B) at any time after December 30, 2009, the Corporation shall have the right,
at its sole option
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and election, to redeem (the "Optional Redemption") all or a portion of the
shares of Series G Preferred Stock, on not more than 45 nor less than 30 days'
notice of the date of redemption (any such date an "Optional Redemption Date")
at a price per share (the "Optional Redemption Price") equal to the sum of (A)
the following prices per share (stated as a percentage of the Liquidation
Preference of such share), (B) an amount per share equal to all accrued and
unpaid dividends thereon, whether or not declared or payable, to the
applicable Optional Redemption Date and (C) the Additional Amount (as defined
in Section 11), in immediately available funds:
Optional Redemption Price
If Redeemed as a Percentage of
During the Period Liquidation Preference
----------------- ---------------------------
December 30, 2001 to 102.775%
December 29, 2002
December 30, 2002 to 101.850%
December 29, 2003
December 30, 2003 to 100.925%
December 29, 2004
December 30, 2004 and 100%
thereafter
(ii) If the Corporation shall have the right to, or shall
determine to, redeem less than all the shares of Series G Preferred Stock then
outstanding pursuant to paragraph (i), the shares to be redeemed shall be
selected pro rata (as nearly as may be) so that the number of shares redeemed
from each holder shall be the same proportion of all the shares to be redeemed
that the total number of shares of Series G Preferred Stock then held by such
holder bears to the total number of shares of Series G Preferred Stock then
outstanding.
(iii) Notwithstanding the foregoing, any shares of Series G
Preferred Stock redeemed pursuant to this Section 5(a) at any time when
holders of shares of Series G Preferred Stock have the right to require the
Corporation to redeem the shares of Series G Preferred Stock pursuant to
Section 6 or an event giving rise to such a right has occurred shall be
redeemed at a price equal to the higher of the price to be paid pursuant to
Section 5(a) and the price to be paid pursuant to Section 6.
(b) Notice of any Optional Redemption shall specify the
Optional Redemption Date fixed for redemption, the Optional
74 <PAGE>
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Redemption Price, the place or places of payment, that payment will be made
upon presentation and surrender of the shares of Series G Preferred Stock and
that on and after the date of such Optional Redemption dividends will cease to
accrue on such shares and be given by publication in a newspaper of general
circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or
securities exchange requirement), not less than 30, nor more than 45, days
prior to the Optional Redemption Date; and, in any case, a similar notice
shall be mailed at least 30, but not more than 45, days prior to the Optional
Redemption Date to each holder of shares of Series G Preferred Stock, at such
holder's address as it appears on the transfer books of the Corporation. In
order to facilitate the redemption of shares of Series G Preferred Stock, the
Board of Directors may fix a record date for the determination of shares of
Series G Preferred Stock to be redeemed, or may cause the transfer books of
the Corporation for the Series G Preferred Stock to be closed, not more than
60 days or less than 45 days prior to the Optional Redemption Date.
(c) On the date of any Optional Redemption that is specified in
a notice given pursuant to Section 5(b), the Corporation shall, and at any
time after such notice shall have been mailed and before the Optional
Redemption Date the Corporation may, deposit for the benefit of the holders of
shares of Series G Preferred Stock the funds necessary for such redemption
with a bank or trust company in the Borough of Manhattan, The City of New
York, that is "well capitalized" within the meaning of the applicable bank
regulations and having a capital and surplus of at least $500,000,000. Any
moneys so deposited by the Corporation and unclaimed at the end of two years
from the Optional Redemption Date shall revert to the general funds of the
Corporation. After such reversion, any such bank or trust company shall, upon
demand, pay over to the Corporation such unclaimed amounts and thereupon such
bank or trust company shall be relieved of all responsibility in respect
thereof and any holder of shares of Series G Preferred Stock to be redeemed
shall look only to the Corporation for the payment of the Optional Redemption
Price. Any interest accrued on funds deposited pursuant to this Section 5(c)
shall be paid from time to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid, upon
the deposit of funds pursuant to Section 5(c) in respect of shares of Series G
Preferred Stock to be redeemed pursuant to Section 5(a), notwithstanding that
any certificates for such shares shall not have been surrendered for
cancellation, from and after the Optional Redemption Date (i) the
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shares represented thereby shall no longer be deemed outstanding, (ii) the
rights to receive dividends thereon shall cease to accrue, and (iii) all
rights of the holders of shares of Series G Preferred Stock to be redeemed
shall cease and terminate, excepting only the right to receive the Optional
Redemption Price therefor; provided, however, that if the Corporation shall
-------- -------
default in the payment of the Optional Redemption Price, the shares of Series
G Preferred Stock shall thereafter be deemed to be outstanding and the holders
thereof shall have all of the rights of a holder of Series G Preferred Stock
until such time as such default or failure shall no longer be continuing or
shall have been waived by holders of at least 66-2/3% of the then outstanding
shares of Series G Preferred Stock.
(e) Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of
shares of Series G Preferred Stock receives such notice, and failure to give
such notice by mail, or any defect in such notice, to the holders of any
shares designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Series G Preferred
Stock. On or after the Optional Redemption Date fixed for redemption as
stated in such notice, each holder of the shares called for redemption shall
surrender the certificate evidencing such shares to the Corporation at the
place designated in such notice and shall thereupon be entitled to receive
payment of the Optional Redemption Price. If less than all the shares
evidenced by any such surrendered certificate are redeemed, a new certificate
shall be issued evidencing the unredeemed shares.
Section 6. Mandatory Redemption at the
Option of the Holder.
---------------------------
(a) (i) If one or more events constituting a Specified
Corporate Action shall occur, each holder of shares of the Series G Preferred
Stock shall have the right, at such holder's option on the date or dates
specified in Section 6(a)(ii) (the "Specified Corporate Action Redemption
Date"), to require the Corporation to redeem (a "Specified Corporate Action
Redemption") all or any part of the shares of Series G Preferred Stock then
held by such holder as such holder may elect at a price per share equal to the
greater of (I) the sum of (A) the following prices per share (stated as a
percentage of the Liquidation Preference of such share) and (B) an amount per
share equal to all accrued and unpaid dividends thereon, whether or not
declared or payable, to the applicable Specified Corporate Action Redemption
Date
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If the Specified Corporate Specified Corporate Action
Action Redemption Date Redemption as a Percentage of
Occurs During the Period Liquidation Preference
------------------------ -----------------------------
December 30, 1994 to 110.4%
June 29, 1995
June 30, 1995 to 116.8%
December 29,1995
December 30, 1995 to 126.7%
June 29, 1996
June 30, 1996 and 138.0%
thereafter
and (II) the sum of (x) 100% of the Liquidation Preference of such share, (y)
an amount per share equal to all accrued and unpaid dividends thereon, whether
or not declared or payable, to the Specified Corporate Action Redemption Date
and (z) the Additional Amount measured as of the date of any such redemption,
in either case in immediately available funds (the "Specified Corporate Action
Redemption Price"); provided, however, that the holder of any share of Series
-------- -------
G Preferred Stock that was not outstanding for at least ten Business Days
prior to the date of the notice of the Specified Corporate Action shall only
be entitled to receive upon such Specified Corporate Action Redemption the
amount specified in clause (II) above.
(ii) The date fixed for each Specified Corporate Action
Redemption shall be fixed by the Corporation and shall be not less than 60
days nor more than 90 days following the occurrence of any Specified Corporate
Action giving rise thereto (or, in the case of a Specified Corporate Action as
described in clause (iii) of the definition of "Specified Corporate Action,"
not less than 60 days nor more than 90 days following the date on which the
Corporation obtains actual knowledge of such Specified Corporate Action);
provided, however, that in the event of a Specified Corporate Action that
- -------- -------
constitutes a Control Transaction, in addition to the dates fixed for a
Specified Corporate Action Redemption as specified above, an additional
Specified Corporate Action Redemption Date shall be set for the date and time
immediately preceding the consummation of any such Control Transaction (and
the Market Price utilized in determining the Additional Amount for the
purposes of such Specified Corporate Action Redemption shall be the highest
price per share of Common Stock paid by any acquiror in such Control
Transaction); provided, further, that,
-------- -------
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upon the request of a holder, the Board of Directors shall agree to extend the
date of redemption in respect of any such Specified Corporate Action (without
changing the consideration that is otherwise payable in respect of such
redemption other than with respect to adjustments to the amount of accrued and
unpaid dividends included in such redemption price) to the extent necessary
for any holder of shares of Series G Preferred Stock to avoid liability under
Section 16(b) of the Exchange Act, provided that no such redemption extension
--------
shall be for a period greater than six months. The Corporation shall, within
5 days of the occurrence of a Specified Corporate Action (or, in the case of a
Specified Corporate Action described in clause (iii) of the definition of
"Specified Corporate Action," within 5 days of the date on which the Corp .
oration obtains actual knowledge of such Specified-Corporate Action), give
notice thereof by publication in a newspaper of general circulation in the
Borough of Manhattan, The City of New York (if such publication shall be
required by applicable law, rule, regulation or securities exchange
requirement), and, in any case, a similar notice shall be mailed to each
holder of shares of the Series G Preferred Stock, at such holder's address as
it appears on the transfer books of the Corporation. Each such notice shall
specify the Specified Corporate Action that has occurred and the date of such
occurrence, the place or places of payment, the then effective Specified
Corporate Action Redemption Price and the date the right of such holder to
require a Specified Corporate Action Redemption shall terminate.
(iii) If the notice sent by the Corporation pursuant to Section
6(a)(ii) shall contain (i) a form inquiring as to whether a holder of shares
of Series G Preferred Stock intends to surrender the certificate(s)
representing such shares for redemption pursuant to this Section 6(a) and (ii)
a stamped self-addressed envelope for return of such form to the Corporation
or its designee, within ten Business Days of such notice, each holder shall
return such inquiry form to the Corporation and shall indicate in such form
the proportion of such holder's shares of Series G Preferred Stock that will
be surrendered for redemption pursuant to this Section 6. If such notice shall
indicate that if a holder does not respond prior to ten Business Days after
the date of such notice that such holder will be deemed to have notified the
Corporation that it will not require the redemption of the shares of Series G
Preferred Stock held by such holder for purposes of Section 3(b) and such
holder does not respond to the Corporation's inquiry prior to ten Business
Days after the date of such notice, such holder will be deemed to have
notified the Corporation that it will not require the redemption of the shares
of Series G Preferred Stock held by such holder for purposes of Section 3(b).
Nothing contained in this Section 6(a)(iii)
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shall affect the right of a holder of Series G Preferred Stock to require the
Corporation to redeem such shares pursuant to Section 6(a)(i).
(b) At any time after December 30, 1995, the holder of any
shares of Series G Preferred Stock shall have the right, at such holder's
option exercisable at any time upon 30 days' notice to the Corporation, to
require the Corporation to redeem (a "Holder's Election Redemption") all or
any part of the shares of Series G Preferred Stock then held by such holder at
a price per share (the "Holder's Election Redemption Price") equal to the sum
of (A) 100% of the Liquidation Preference of such share, (B) an amount per
share equal to all accrued and unpaid dividends thereon, whether or not
declared or payable, to the date specified for such Holder's Election
Redemption and (C) the Additional Amount measured as of the date of any such
redemption, in immediately available funds. Notwithstanding the foregoing, if
the redemption of any portion of such shares would in the judgment of the
Board of Directors of the Corporation have a material adverse effect on the
Corporation, then the Corporation may elect to deliver with respect to such
shares, in lieu of cash, notes, including subordinated notes, of the
Corporation ("Notes") (x) having a final maturity date no later than ten years
from the date of issuance, and (y) having such other terms and conditions as
shall result in a determination that such Notes have a fair market value as of
the date of their proposed issuance at least equal to the sum of (1) the
Holder's Election Redemption Price with respect to such shares and (2)
customary underwriting discounts and commissions payable with respect to the
sale of securities of a type comparable to the Notes or shares of
nonconvertible preferred stock ("Redemption Preferred Stock") having the terms
and conditions described in clauses (x) and (y) in lieu of Notes. The
Corporation shall use its best efforts to cause the Notes or the Redemption
Preferred Stock to be registered for immediate resale pursuant to an effective
registration statement under the Securities Act prior to the issuance thereof.
If such registration statement is not effective within 120 days of the date of
such issuance then the annual interest rate of the Notes or the annual
dividend rate of the Redemption Preferred Stock, as applicable, shall be
increased by 0.5% per annum until such securities are sold pursuant to an
effective registration statement under the Securities Act. For purposes of
this Section 6(b), "fair market value" shall mean the fair market value of
the Notes or Redemption Preferred Stock, as the case may be, as determined by
an investment banking firm of national standing selected by the Corporation
and reasonably acceptable to the holders of a majority of the shares of Series
G Preferred Stock electing to effect such Holder's Election Redemption. In
the case that the Corporation shall be entitled
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to deliver either Notes or Redemption Preferred Stock, it shall be the
election of the Corporation whether to deliver such Notes or Redemption
Preferred Stock, except that, if, the sale of the security to be delivered by
the Corporation to effect a Holder's Election Redemption would give rise to an
additional liability on the part of such holder upon the sale thereof and it
shall so notify the Corporation in writing, the Corporation shall deliver to
such holder the other type of security specified in such notice.
(c) Each holder of shares of the Series G Preferred Stock shall
have the right, at such holder's option exercisable at any time on 30 days'
notice to the Corporation on or after December 30, 2009 (the date of any such
exercise, the "Special Redemption Date"), to require the Corporation to redeem
(a "Special Redemption") all or any part of the shares of Series G Preferred
Stock then held by such holder as such holder may elect by written notice
delivered at least 30 days prior to the Special Redemption Date at a price per
share equal to the sum of (A) 100% of the Liquidation Preference of such
share, (B) an amount per share equal to all accrued and unpaid dividends
thereon whether or not declared or payable to the Special Redemption Date and
(C) the Additional Amount, determined as of the date immediately prior to the
Special Redemption Date (the "Special Redemption Price") in immediately
available funds.
(d) On the date fixed for any Specified Corporate Action
Redemption, Holder's Election Redemption or Special Redemption, each holder of
shares of Series G Preferred Stock who elects to have shares of Series G
Preferred Stock held by it redeemed shall surrender the certificate
representing such shares to the Corporation (i) at the place designated in
such notice in the case of a Specified Corporate Action Redemption or (ii) at
the Corporation's principal place of business to be maintained by it, in the
case of a Holder's Election Redemption or Special Redemption, together with an
election to have such redemption made and shall thereupon be entitled to
receive payment therefor provided in this Section 6. If less than all the
shares represented by any such surrendered certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares. From and
after the date of such redemption (i) the rights to receive dividends thereon
shall cease to accrue and (ii) all rights of the holders of shares of Series G
Preferred Stock so redeemed shall cease and terminate, excepting only the
right to receive the Specified Corporate Action Redemption Price or Holder's
Election Redemption Price or Special Redemption Price therefor, as applicable;
provided, however, that if the Corporation shall default in the payment of the
- -------- -------
applicable redemption price or, in the case of a Holder's Election Redemption,
elect to postpone payment thereof
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in accordance with Section 6(b), the shares of Series G Preferred Stock
that were to be redeemed shall thereafter be deemed to be outstanding and
the holders thereof shall have all of the rights of a holder of Series G
Preferred Stock until such time as such default shall no longer be continuing
or shall have been waived by holders of at least 66-2/3% of the then
outstanding shares of Series G Preferred Stock or, in the case of a Holder's
Election Redemption, so postponed, the date on which the Holder's Election
Redemption Price is paid.
Section 7. Redemption Upon Maturity.
-------------------------
(a) On December 30, 2034 (the "Maturity Date"), the Corporation
shall redeem (the "Maturity Redemption") the remaining outstanding shares of
the Series G Preferred Stock at a price per share (the "Maturity Redemption
Price") equal to the sum of (A) 100% of the Liquidation Preference per share,
(B) an amount equal to accrued and unpaid dividends thereon, whether or not
declared or payable, to the Maturity Date and (C) the Additional Amount,
determined as of the date immediately prior to the Maturity Date, in
immediately available funds.
(b) Notice of the Maturity Redemption shall be given by publication
in a newspaper of general circulation in the Borough of Manhattan, The City of
New York (if such publication shall be required by applicable law, rule,
regulation or securities exchange requirement), not less than 30, nor more than
60, days prior to the Maturity Date and, in any case, a similar notice shall be
mailed at least 30, but not more than 60, days prior to the Maturity Date to
each holder of shares of Series G Preferred Stock, at such holder's address as
it appears on the transfer books of the Corporation.
(c) On the Maturity Date, the Corporation shall, and at any time
after such notice shall have been mailed and before the Maturity Date the
Corporation may, deposit for the benefit of the holders of shares of Series G
Preferred Stock the funds necessary for such redemption with a bank or trust
company in the Borough of Manhattan, The City of New York, that is "well
capitalized" within the meaning of the applicable banking regulations and
having a capital and surplus of at least $500,000,000. Any moneys so deposited
by the Corporation and unclaimed at the end of two years from the date
designated for such redemption shall revert to the general funds of the Cor-
poration. After such reversion, any such bank or trust company shall, upon
demand, pay over to the Corporation such unclaimed amounts and thereupon such
bank or trust company shall be relieved of all responsibility in respect
thereof and any holder of shares of Series G Preferred Stock to be redeemed
shall look
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only to the Corporation for the payment of the Maturity Redemption Price. Any
interest accrued and unpaid on funds deposited pursuant to this Section 5(c)
shall be paid from time to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid, upon
the deposit of funds pursuant to Section 7(c) in respect of shares of Series G
Preferred Stock to be redeemed pursuant to Section 7(a), notwithstanding that
any certificates for such shares shall not have been surrendered for
cancellation, from and after the Maturity Date, (i) the rights to receive
dividends thereon shall cease to accrue and (ii) all rights of the holders of
shares of Series- G Preferred Stock shall cease and terminate, excepting only
the right to receive the Maturity Redemption Price therefor; provided,
--------
however, that if the Corporation shall default in the payment of the Maturity
- -------
Redemption Price, the shares of Series G Preferred Stock that were to be
redeemed shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series G Preferred Stock until
such time as such default shall no longer be continuing.
Section 8. Acquired Shares.
---------------
Any shares of Series G Preferred Stock exchanged, redeemed,
purchased or otherwise acquired by the Corporation or any of its Subsidiaries
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares of Series G Preferred Stock shall upon
their cancellation become authorized but unissued shares of preferred stock,
par value $4.00 per share, of the Corporation and, upon the filing of an
appropriate certificate with the Department of State of the State of New York,
may be reissued as part of another series of preferred stock, par value $4.00
per share, of the Corporation subject to the conditions or restrictions on
issuance set forth herein, but in any event may not be reissued as shares of
Series G Preferred Stock or Parity Stock unless all of the issued and
outstanding shares of Series G Preferred Stock shall have already been
redeemed or exchanged.
Section 9. Liquidation, Dissolution or Winding Up.
--------------------------------------
(a) If the Corporation shall commence a voluntary case under
the United States bankruptcy laws or any applicable bankruptcy, insolvency or
similar law of any other country, or consent to the entry of an order for
relief in an involuntary case under any such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
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other similar official) of the Corporation or of any substantial part of its
property, or make an assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due (any such
event, a "Voluntary Liquidation Event"), or if a decree or order for relief in
respect of the Corporation shall be entered by a court having jurisdiction in
the premises in an involuntary case under the United States bankruptcy laws or
any applicable bankruptcy, insolvency or similar law of any other country, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Corporation or of any substantial part of
its property, or ordering the winding up or liquidation of its affairs, and on
account of any such event the Corporation shall liquidate, dissolve or wind
up, or if the Corporation shall otherwise liquidate, dissolve or wind up, no
distribution shall be made (i) to the holders of shares of Junior Stock
unless, prior thereto, the holders of shares of Series G Preferred Stock shall
have received (A) if a Voluntary Liquidation Event shall have occurred, the
Optional Redemption Price with respect to each share and (B) if a Voluntary
Liquidation Event shall not have occurred, the Liquidation Preference and all
accrued and unpaid dividends, whether or not declared or currently payable, to
the date of distribution, with respect to each share, or (ii) to the holders
of shares of Parity Stock, except distributions made ratably on the Series G
Preferred Stock and all Parity Stock in proportion to the total amounts to
which the holders of all shares of the Series G Preferred Stock (which amounts
are set forth in clauses (A) and (B) above) and Parity Stock are entitled upon
such liquidation, dissolution or winding up.
(b) Neither the consolidation or merger of the Corporation with
or into any other Person nor the sale or transfer of all or any part of the
Corporation's assets for cash, securities or other property shall be deemed to
be a liquidation, dissolution or winding up of the Corporation for purposes of
this Section 9.
Section 10. Exchange.
--------
(a) Subject to the provisions of this Section 10, the
Corporation shall have the right, with the consent of the holders of all of
the outstanding shares of Series G Preferred Stock (which consent may be
withheld for any reason whatsoever), at any time but on only one occasion, to
exchange all (but not less than all) of the shares of Series G Preferred Stock
for Subordinated Notes of the Corporation ("Subordinated Notes"), at a price
per share equal to the Liquidation Preference per share, with the Subordinated
Notes valued for such
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purpose at their face value. Simultaneously with such exchange the
Corporation shall pay to each holder of Series G Preferred Stock an amount per
share in cash equal to all accrued and unpaid dividends thereon, whether or
not declared or currently payable, to the date fixed for exchange thereof.
The Subordinated Notes shall have an annual interest rate equal to the annual
dividend rate on Series G Preferred Stock and shall contain other terms
substantially similar to the Series G Preferred Stock, including the date of
maturity thereof.
(b) Notice of an exchange of shares of Series G Preferred Stock
pursuant to Section 10(a) shall be given by publication in a newspaper of
general circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or
securities exchange requirement), not less than 30, nor more than 60, days
prior to the date fixed for exchange; and, in any case, a similar notice shall
be mailed at least 30, but not more than 60, days prior to the date fixed for
exchange to each holder at such holder's address as it appears on the transfer
books of the Corporation. In order to facilitate the exchange of shares of
Series G Preferred Stock hereunder the Board of Directors may fix a record
date for the determination of shares of Series G Preferred Stock to be
exchanged, or may cause the transfer books of the Corporation for the Series G
Preferred Stock to be closed, not more than 60 days or less than 30 days prior
to the date fixed for exchange.
(c) on the date of any exchange being made pursuant to Section
10(a) that is specified in a notice given pursuant to Section 10(b), the
Corporation shall, and at any time after the date that is 10 days prior to the
date of exchange the Corporation may, deposit for the benefit of the holders
of shares of Series G Preferred Stock to be exchanged (i) the Subordinated
Notes necessary for such exchange and (ii) an amount in cash equal to all
dividends payable with respect thereto upon such exchange with a bank or trust
company in the Borough of Manhattan, The City of New York, that is "well
capitalized" within the meaning of the applicable banking regulations and
having a capital and surplus of at least $500,000,000. Any Subordinated Notes
so deposited by the Corporation and unclaimed at the end of two years from the
date designated for such exchange shall revert to the Corporation. After such
reversion, any such bank or trust company shall, upon demand, return to the
Corporation such unclaimed Subordinated Notes and thereupon such bank or trust
company shall be relieved of all responsibility in respect thereof and any
holder of shares of Series G Preferred Stock to be exchanged shall look only
to the Corporation for the delivery of the Subordinated Notes. Any interest
accrued on Subordinated Notes
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deposited pursuant to this Section 10(c) shall accrue for the accounts of,
and be payable to, the holders of shares of Series G Preferred Stock to be
exchanged therefor.
(d) Notice of exchange having been given as aforesaid and not
having been deemed terminated as aforesaid, upon the deposit of Subordinated
Notes pursuant to clause (i) of Section 10(c) and the deposit of the cash
referred to in clause (ii) of Section 10(c) in respect of shares of Series G
Preferred Stock to be exchanged pursuant to Section 10(a), notwithstanding
that any certificates for such shares shall not have been surrendered for
cancellation, from and after the date of exchange designated in the notice of
exchange (i) the shares represented thereby shall no longer be deemed
outstanding, (ii) the rights to receive dividends thereon (except as provided
in paragraph (b) above) shall cease to accrue, and (iii) all rights of the
holders of shares of Series G Preferred Stock to be exchanged shall cease and
terminate, excepting only the right to receive the Subordinated Notes therefor
and the right to receive the dividends described in paragraph (b) above;
provided, however, that if the Corporation shall default in the execution and
- -------- -------
delivery of the Convertible Notes, the shares of Series G Preferred Stock that
were to be exchanged shall thereafter be deemed to be outstanding and the
holders thereof shall have all of the rights of a holder of Series G Preferred
Stock until such time as such default shall no longer be continuing or shall
have been waived by holders of at least 66-2/3% of the then outstanding
shares of Series G Preferred Stock.
Section 11. Additional Amount.
-----------------
(a) For the purposes of this Article 3, "Additional Amount"
shall mean an amount per share equal to the product of (i) the excess of the
sum of (1) the Market Price of a share of Common Stock and (2) if the
Corporation shall have issued a right or rights with respect to its
outstanding shares of Common Stock pursuant to a shareholder rights plan,
"poison pill" or similar arrangement, during the period commencing on the
"distribution date" of such right or rights (i.e., the date on which such
----
right or rights commence to trade separately from the Common Stock) and ending
on the "triggering date" of such right or rights (i.e., the date on which
----
such right or rights commence to be exercisable), the Market Price of such
right or rights over the Conversion Amount, in effect as hereinafter
determined and (ii) (x) the Liquidation Preference divided by (y) such
Conversion Amount, in all cases calculated as of the applicable determination
date. The Additional Amount shall in no event be less than zero. The
Conversion Amount initially shall be $17.75, and shall thereafter be subject
to adjustment as set forth in Section 11(b). For the purpose of calculating
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the Additional Amount in connection with an optional Redemption, Specified
Corporate Action Redemption, Special Redemption or Holder's Election
Redemption, except as otherwise set forth in Section 6(a)(ii), the Market
Price of the Common Stock and, if applicable, rights shall be the average of
the Market Price of such securities on the five trading days immediately
preceding and the five trading days immediately following the date of notice
of such redemption.
(b) The Conversion Amount shall be subject to adjustment as
follows:
(i) In case the Corporation shall at any time or from time
to time (A) pay a dividend or make a distribution on the outstanding shares of
Common Stock in Common Stock (other than pursuant to a dividend reinvestment
plan approved by the Corporation's Board of Directors), (B) subdivide the
outstanding shares of Common Stock into a larger number of shares, (C) combine
the outstanding shares of Common Stock into a smaller number of shares or (D)
issue any shares of its capital stock in a reclassification of the Common
Stock, then, and in each such case, the Conversion Amount in effect
immediately prior to such event shall be adjusted so that if the holder of any
share of Series G Preferred Stock were entitled to convert such share into
such number of shares of Common Stock as equals the Liquidation Preference
divided by the Conversion Amount and such holder thereafter surrendered such
share for conversion, such holder would be entitled to receive the number of
shares of Common Stock or other securities of the Corporation that such holder
would have owned or would have been entitled to receive upon or by reason of
any of the events described above had such share of Series G Preferred Stock
been converted immediately prior to the occurrence of such event. An
adjustment made pursuant to this Section 11(b)(i) shall become effective
retroactively (A) in the case of any such dividend or distribution, to the
opening of business on the day immediately following the close of business on
the record date for the determination of holders of Common Stock entitled to
receive such dividend or distribution or (B) in the case of any such
subdivision, combination or reclassification, to the close of business on the
day upon which such corporate action becomes effective.
(ii) In case the Corporation shall at any time or from time
to time issue or sell shares of Common Stock (or securities convertible into
or exchangeable for shares of Common Stock, or any options, warrants or other
rights to acquire shares of Common Stock (other than options granted to any
employee or director of the Corporation pursuant to a stock option plan
approved by the shareholders of the Corporation))
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for a consideration per share less than the Conversion Amount then in effect
at the record date or issuance date, as the case may be (the "Date") referred
to in the following sentence, including, without limitation, upon exercise of
rights issued pursuant to a shareholder rights plan, "poison pill" or similar
arrangement (treating the price per share of any security convertible or
exchangeable or exercisable into Common Stock as equal to (A) the sum of the
price for such security convertible, exchangeable or exercisable into Common
Stock plus any additional consideration payable (without regard to any
antidilution adjustments) upon the conversion, exchange or exercise of such
security into Common Stock divided by (B) the number of shares of Common Stock
initially underlying such convertible, exchangeable or exercisable security),
other than issuances or sales for which an adjustment is made pursuant to
another paragraph of this Section ii(b), then, and in each such case, the
Conversion Amount then in effect shall be adjusted by dividing the Conversion
Amount in effect on the day immediately prior to the Date by a fraction (x)
the numerator of which shall be the sum of the number of shares of Common
Stock outstanding immediately prior to the Date plus the number of additional
shares of Common Stock issued or to be issued (or the maximum number into
which such convertible or exchangeable securities initially may convert
or exchange or for which such options, warrants or other rights initially may
be exercised) and (y) the denominator of which shall be the sum of the number
of shares of Common Stock outstanding immediately prior to the Date plus the
number of shares of Common Stock that the aggregate consideration (if any of
such aggregate consideration is other than cash, as valued by the Board of
Directors including a majority of the Directors who are not officers or
employees of the Corporation or any of its Subsidiaries, which determination
shall be conclusive and described in a resolution of the Board of Directors)
for the total number of such additional shares of Common Stock so issued (or
into which such convertible or exchangeable securities may convert or exchange
or for which such options, warrants or other rights may be exercised plus the
aggregate amount of any additional consideration initially payable upon
conversion, exchange or exercise of such security) would purchase at the
Conversion Amount. Such adjustment shall be made whenever such shares,
securities, options, warrants or other rights are issued, and shall become
effective retroactively to a date immediately following the close of business
(i) in the case of issuance to stockholders of the Corporation, as such, on
the record date for the determination of stockholders entitled to receive such
shares, securities, options, warrants or other rights and (ii) in all other
cases, on the date ("issuance date") of such issuance; provided, however,
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that the determination as to whether an adjustment is required to be made
pursuant to this Section
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11(b)(ii) shall only be made upon the issuance of such shares or such
convertible or exchangeable securities, options, warrants or other rights,
and not upon the issuance of the security into which such convertible or
exchangeable security converts or exchanges, or the security underlying such
option, warrants or other right; provided, further, that if any convertible or
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exchangeable securities, options, warrants or other rights (or any portions
thereof) that shall have given rise to an adjustment pursuant to this Section
11(b)(ii) shall have expired or terminated without the exercise thereof and/or
if by reason of the terms of such convertible or exchangeable securities,
options, warrants or other rights there shall have been an increase or
increases, with the passage of time or otherwise, in the price payable upon
the exercise or conversion thereof, then the Conversion Amount hereunder shall
be readjusted (but to no greater extent than originally adjusted) on the basis
of (x) eliminating from the computation any additional shares of Common Stock
corresponding to such convertible or exchangeable securities, options,
warrants or other rights as shall have expired or terminated, (y) treating the
additional shares of Common Stock, if any, actually issued or issuable
pursuant to the previous exercise of such convertible or exchangeable
securities, options, warrants or other rights as having been issued for the
consideration actually received and receivable therefor and (z) treating any
of such convertible or exchangeable securities, options, warrants or other
rights that remain outstanding as being subject to exercise or conversion on
the basis of such exercise or conversion price as shall be in effect at the
time.
(iii) In case the Corporation shall at any time or from time
to time distribute to all holders of shares of its Common Stock (including any
such distribution made in connection with a consolidation or merger in which
the Corporation is the resulting or surviving corporation and the Common Stock
is not changed or exchanged or a redemption of any rights or other securities
issued pursuant to a shareholder rights plan, "poison pill" or similar
arrangement) cash, evidences of indebtedness of the Corporation or another
issuer, securities of the Corporation or another issuer or other assets
(excluding (A) Permitted Dividends described in clause (B) of the definition
thereof and (B) securities for which adjustment is made under Section 11(b)(i)
or Section 11(b)(ii)), then, and in each such case, the Conversion Amount then
in effect shall be adjusted by dividing the Conversion Amount in effect
immediately prior to the date of such distribution by a fraction (x) the
numerator of which shall be the Current Market Price of the Common Stock on
the record date referred to below and (y) the denominator of which shall be
such Current Market Price of the Common Stock less the then Fair Market Value
(as determined by
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the Board of Directors of the Corporation, which determination shall be
conclusive) of the portion of the cash, evidences of indebtedness, securities
or other assets so distributed or of such subscription rights or warrants
applicable to one share of Common Stock (but such denominator not to be less
than one). Such adjustment shall be made whenever any such distribution is
made and shall become effective retroactively to a date immediately following
the close of business on the record date for the determination of stockholders
entitled to receive such distribution.
(iv) In the case the Corporation at any time or from time
to time shall take any action affecting its Common Stock, other than an action
described in any of Section 11(b)(i) through Section 11(b)(iii), inclusive,
then, the Conversion Amount shall be adjusted in such manner and at such time
as the Board of Directors of the Corporation (other than Purchaser Designees
or directors elected pursuant to Section 3(b)) in good faith determines to be
equitable in the circumstances (such determination to be evidenced in a
resolution, a certified copy of which shall be mailed to the holders of the
Series G Preferred Stock).
(v) The Corporation may make such reductions in the
Conversion Amount, in addition to those required by subparagraphs (i), (ii),
(iii) or (iv) of this Section 11(b), as the Board of Directors considers to be
advisable in order to avoid or to diminish any income tax to holders of Common
Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes.
(vi) Notwithstanding anything contained in this Section
11(b), no adjustment to the Conversion Amount shall be made with respect to
any rights issued pursuant to a shareholder rights plan, "poison pill" or
similar arrangement unless the "triggering date" (i.e. the date on which such
----
rights commence to be exercisable) shall have occurred or such rights shall
have been redeemed, in which event adjustments under clause (ii) and clause
(iii), respectively, shall be made.
(c) If the Corporation shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or other
distribution, and shall thereafter and before the distribution to stockholders
thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the Conversion Amount then in
effect shall be required by reason of the taking of such record.
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(d) Upon any increase or decrease in the Conversion Amount,
then, and in each such case, the Corporation promptly shall deliver to each
registered holder of series G Preferred Stock at least 10 Business Days prior
to effecting any of the foregoing transactions a certificate, signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary of the Corporation, setting forth
in reasonable detail the event requiring the adjustment and the method by
which such adjustment was calculated and specifying the increased or decreased
Conversion Amount then in effect following such adjustment.
Section 12. Sinking Fund.
------------
(a) So long as any shares of Series G Preferred Stock shall be
outstanding, the Corporation shall, on the final business day (any such date,
the "Sinking Fund Date") of each calendar year after 2003, (i) set aside a sum
of money equal to 3-1/3% of the aggregate liquidation preference of the
sh@res of Series G Preferred Stock then outstanding, and (ii) apply such money
to redeem such number of shares of Series G Preferred Stock at the Sinking
Fund Redemption Price (the Corporation's obligations described in this
paragraph in respect of any Sinking Fund Date being hereinafter referred to as
the "Sinking Fund Obligation" for such date) at a price per share (the
"Sinking Fund Redemption Price") equal to the sum of (A) the Liquidation
Preference of such share, (B) an amount per share equal to all accrued and
unpaid dividends thereon, whether or not declared or payable, to the
applicable Sinking Fund Date and (C) the Additional Amount (as defined in
Section 11), determined as of the date immediately prior to the Sinking Fund
Date, in immediately available funds; provided, however, that if the
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Corporation for any reason fails to discharge its Sinking Fund-obligation on
any Sinking Fund Date, such Sinking Fund Obligation, to the extent not
discharged, shall become an additional Sinking Fund Obligation for each
succeeding Sinking Fund Date until fully discharged; provided, further, that
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no shares of Series G Preferred Stock purchased or acquired by the Corporation
otherwise than through redemption pursuant to this paragraph or pursuant to an
Optional Redemption may be credited against the Sinking Fund Obligation in
respect of any Sinking Fund Date.
(b) The shares to be redeemed pursuant to paragraph
(a) shall be selected pro rata (as nearly as may be) so that the number of
shares redeemed from each holder shall be the same proportion of all the
shares to be redeemed that the total number of shares of Series G Preferred
Stock then held by such holder bears to the total number of shares of Series G
Preferred Stock then outstanding.
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(c) Notice of the Sinking Fund Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication shall be required by applicable law,
rule, regulation or securities exchange requirement), not less than 30, nor
more than 60, days prior to the Sinking Fund Date and, in any case, a similar
notice shall be mailed at least 30, but not more than 60, days prior to the
Sinking Fund Date to each holder of shares of Series G Preferred Stock, at
such holder's address as it appears on the transfer books of the Corporation.
(d) The shares to be redeemed pursuant to paragraph (a) shall
be selected pro rata (as nearly as may be) so that the number of shares
redeemed from each holder shall be the same proportion of all the shares to be
redeemed that the total number of shares of Series G Preferred Stock then held
by such holder bears to the total number of shares of Series G Preferred Stock
then outstanding.
(e) On the Sinking Fund Date, the Corporation shall, and at any
time after such notice shall have been mailed and before the Sinking Fund Date
the Corporation may, deposit for the benefit of the holders of shares of
Series G Preferred Stock the funds necessary for such redemption with a bank
or trust company in the Borough of Manhattan, The City of New York, that is
"well capitalized" within the meaning of the applicable banking regulations
and having a capital and surplus of at least $500,000,000. Any moneys so
deposited by the Corporation and unclaimed at the end of two years from the
date designated for such redemption shall revert to the general funds of the
Corporation. After such reversion, any such bank or trust company shall, upon
demand, pay over to the Corporation such unclaimed amounts and thereupon such
bank or trust company shall be relieved of all responsibility in respect
thereof and any holder of shares of Series G Preferred Stock to be redeemed
shall look only to the Corporation for the payment of the Sinking Fund
Redemption Price. Any interest accrued and unpaid on funds deposited pursuant
to this Section 5(c) shall be paid from time to time to the Corporation for
its own account.
(f) Notice of redemption having been given as aforesaid, upon
the deposit of funds pursuant to Section 12(c) in respect of shares of Series
G Preferred Stock to be redeemed pursuant to Section 12(a), notwithstanding
that any certificates for such shares shall not have been surrendered for
cancellation, from and after the Sinking Fund Date, (i) the rights to receive
dividends thereon shall cease to accrue and (ii) all rights of the holders of
shares of Series G Preferred Stock shall cease and terminate, excepting only
the right to
91<PAGE>
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receive the Sinking Fund Redemption Price therefor; provided, however, that if
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the Corporation shall default in the payment of the Sinking Fund Redemption
Price, the shares of Series G Preferred Stock that were to be redeemed shall
thereafter be deemed to be outstanding and the holders thereof shall have all
of the rights of a holder of Series G Preferred Stock until such time as such
default shall no longer be continuing.
Article 4. Series H Preferred Stock.
------------------------
Section 1. Designation and Number.
----------------------
(a) The shares of such series shall be designated as "Cumulative
Preferred Stock, Series H" (the "Series H Preferred Stock"). The number of
shares initially constituting the Series H Preferred Stock shall be 400,000
which number may be decreased (but not increased) by the Board of Directors
without a vote of stockholders; provided, however, that such number may not be
decreased below the sum of (x) the number of then outstanding shares of Series
H Preferred Stock and (y) such number of shares as may be necessary to satisfy
the dividend payments referenced in Section 2 hereof.
(b) The Series H Preferred Stock shall, with respect to dividend
rights and rights on liquidation, dissolution or winding up, rank pari passu
---- -----
with the Corporation's $2.50 Cumulative Convertible Preferred Stock, Series A
(the "Series A Preferred Stock"), $2.50 Cumulative Preferred Stock, Series B
(the "Series B Preferred-Stock"), Cumulative Convertible Preferred Stock,
Series E (the "Series E Preferred Stock"), Cumulative Preferred Stock, Series
F (the "Series F Preferred Stock"), Cumulative Preferred Stock, Series G (the
"Series G Preferred Stock"), Cumulative Preferred Stock, Series T (the "Series
T Preferred Stock" and together with the Series E Preferred Stock, Series F
Preferred Stock, Series G Preferred Stock and Series H Preferred Stock, the
"Chicago Preferred Stock") and the New Preferred Stock (if any) (the Series A
Preferred Stock, Series B Preferred Stock, Chicago Preferred Stock (other than
the Series H Preferred Stock) and New Preferred Stock (if any) are
collectively defined for the purposes of this Article 4 as the "Other
Preferred Stock") and prior to all other classes and series of capital stock
of the Corporation now or hereafter authorized including, without limitation,
the Common Stock, par value $1.00 per share, of the Corporation (the "Common
Stock").
(c) Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Article 6 below.
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Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series H Preferred Stock, in
preference to the holders of shares of Common Stock and of any shares of other
capital stock of the Corporation other than the Other Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors,
out of the assets of the Corporation at the time legally available therefor,
cumulative cash dividends at an annual rate on the Liquidation Preference
thereof equal to 12%, calculated on the basis of a 360-day year consisting of
twelve 30-day months, accruing and payable in equal quarterly payments, in
immediately available funds or, with respect to any dividends declared before
the third anniversary of the Issue Date, in additional shares of Series H
Preferred Stock having an aggregate Liquidation Preference equal to the
aggregate amount of such dividends (provided, however, that to the extent the
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amount of any such dividend payable to any holder, valued at the Liquidation
Preference thereof, does not equal an integral multiple of one one-twentieth
(1/20th) of a share of Series H Preferred Stock, such fractional amount shall
be paid in cash to such holder), on the Business Day immediately preceding the
last day of March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date") commencing on
the Business Day immediately preceding December 31, 1994; provided, however,
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that with respect to such first Quarterly Dividend Payment Date, the holders
of shares of Series H Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of the assets of the
Corporation at the time legally available therefor, a cumulative dividend in
respect of each share of Series H Preferred Stock in the amount of (i) 12% of
the Liquidation Preference multiplied by (ii) a fraction equal to (A) the
number of days from (and including) the Issue Date to (but excluding) such
Quarterly Dividend Payment Date divided by (B) 360. No interest shall be
payable in respect of any dividend payment on the Series H Preferred Stock
that may be in arrears.
(b) Dividends payable pursuant to Section 2(a) shall begin to
accrue and be cumulative from the Issue Date, and shall accrue on a daily
basis, in each case whether or not declared. Dividends paid on the shares of
Series H Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares of Series H Preferred
Stock at the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series H Preferred Stock
entitled to receive payment of a dividend declared thereon, which record date
shall be not more than 60 days nor less than 10
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days prior to the date fixed for the payment thereof. Accumulated but unpaid
dividends for any past quarterly dividend periods may be declared and paid at
any time, without reference to any regular Quarterly Dividend Payment Date,
to holders of record on such date, not more than 60 nor less than 10 days
preceding the payment date thereof, as may be fixed by the Board of Directors.
(c) The holders of shares of Series H Preferred Stock shall not be
entitled to receive any dividends or other distributions except as provided
herein.
Section 3. Voting Rights.
-------------
In addition to any voting rights provided by law, the holders of
shares of Series H Preferred Stock shall have the following voting rights:
(a) Unless the consent or approval of a greater number of shares
shall then be required by law, the affirmative vote of the holders of at least
66-2/3% of the outstanding shares of Series H Preferred Stock, voting
separately as a single class, in person or by proxy, at a special or annual
meeting of stockholders called for the purpose, shall be necessary to (i)
authorize, adopt or approve an amendment to the Certificate of Incorporation
that would increase or decrease the par value of the shares of Series H
Preferred Stock, or alter or change the powers, preferences or special rights
of the shares of Series H Preferred Stock, (ii) amend, alter or repeal the
Certificate of Incorporation so as to affect the shares of Series H Preferred
Stock adversely or (iii) effect the voluntary liquidation, dissolution, winding
up, recapitalization or reorganization of the Corporation, or the consolidation
or merger of the Corporation with or into any other Person, or the sale or
other distribution to another Person of all or substantially all of the assets
of the Corporation; provided, however, that no separate vote of the holders of
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Series H Preferred Stock shall be required to effect any of the transactions
described in clause (iii) above unless such transaction would either require
a class vote pursuant to clause (i) or (ii) above or would require a vote by
any shareholders of the Corporation (other than pursuant to this sentence);
provided further, that no separate vote of the holders of the Series H
- -------- -------
Preferred Stock as a class shall be required in the case of a recapitalization,
reorganization, consolidation or merger of, or sale by, the Corporation if
(A) (a) such recapitalization, reorganization, consolidation, merger or sale
constitutes a Specified Corporate Action, (b) the Corporation has sufficient
funds legally available to it (after giving effect to such transaction) to
redeem, at the then applicable
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price hereunder and pursuant to the terms hereof, all the outstanding shares
of Series H Preferred Stock, (c) such redemption shall not be prohibited by
any agreement to which the Corporation or any of its Subsidiaries is a party,
by applicable law or otherwise, (d) the Board of Directors of the Corporation,
including a majority of the directors who are not officers or employees of the
Corporation, shall have adopted a resolution confirming that such funds are
available and that the holders of Series H Preferred Stock have the right to
require such redemption and (e) the Corporation shall have set aside sufficient
funds through the Specified Corporation Action Redemption Date-to redeem the
shares of Series H Preferred Stock held by such holders (except that no funds
need be set aside with respect to such shares held by any such holder who has
theretofore notified the Corporation (whether pursuant to Section 6(a)(iii) or
otherwise) that it will not require redemption of such shares) or (B) (1) the
Corporation shall be the resulting or surviving corporation, (2) the resulting
or surviving corporation will have after such recapitalization, reorganization,
consolidation or merger no Senior Stock or Parity Stock either authorized or
outstanding (except such Parity Stock of the Corporation as may have been
authorized or outstanding immediately preceding such consolidation or merger)
or such stock of the resulting or surviving corporation (having the same
powers, preferences and special rights of any such Parity Stock) as may be
issued in exchange therefor), (3) each holder of shares of Series H Preferred
Stock immediately preceding such recapitalization, reorganization,
consolidation or merger will receive in exchange therefor the same number of
shares of stock, with the same preferences, rights and powers, of the resulting
or surviving corporation, (4) after such recapitalization, reorganization,
consolidation or merger the resulting or surviving corporation shall not be in
breach of any of the terms hereof, any of the Material Provisions of the
Securities Purchase Agreement or any of its material obligations under the
Registration Rights Agreement and (5) all or substantially all the holders of
the outstanding shares of capital stock of the Corporation immediately prior to
such consolidation or merger are entitled to receive shares representing 50% or
more of the then outstanding shares of capital stock of the resulting or
surviving corporation entitled to vote generally in the election of directors.
(b) If on any date (i) the Corporation shall have failed to
declare, or shall have failed to pay, the full amount of dividends payable on
any series of Chicago Preferred Stock for six quarterly dividend periods or
(ii) a breach of any of the Material Provisions of the Securities Purchase
Agreement or any of the Corporation's material obligations under the
Registration Rights Agreement shall have occurred, then the number
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of directors constituting the Board of Directors shall, without further
action, be increased by two and the holders of shares of Series H Preferred
Stock shall have, in addition to the other voting rights set forth herein with
respect to the Series H Preferred Stock, the exclusive right, together with
the holders of all other series of Chicago Preferred Stock, voting separately
as a single class together with the holders of such other series of Chicago
Preferred Stock, to elect, two directors of the Corporation to fill such
newly created directorship, by written consent as provided herein, or at a
special meeting of such holders called as provided herein. Any such
additional directors shall continue as directors (subject to reelection or
removal as provided in Section 3(c)(ii)) and the holders of Series H Preferred
Stock shall have such additional voting rights until such time as (A)
dividends then payable on all series of Chicago Preferred Stock shall have
been declared and paid in full and (B) there shall exist no breach of any of
the Material Provisions of the Securities Purchase Agreement or any of the
Corporation's material obligations under the Registration Rights Agreement, as
the case may be, at which time such additional directors shall cease to be
directors, the number of directors constituting the Board of Directors shall
be reduced by two and such additional voting rights of the holders of all
series of Chicago Preferred Stock shall terminate, subject to revesting in the
event of each and every subsequent event of the character indicated above.
(c) (i) The foregoing right of holders of shares of Series H
Preferred Stock to take any action as provided in Section 3(b) may be
exercised at any annual meeting of stockholders or at a special meeting of
holders of shares of Chicago Preferred Stock, held for such purpose as
hereinafter provided or at any adjournment thereof, or by the written consent,
delivered to the Secretary of the Corporation, of the holders of the minimum
number of shares required to take such action.
So long as such right to vote continues (and unless such right has
been exercised by written consent of the minimum number of shares required to
take such action), the President of the Corporation may call, and upon the
written request of holders of record of at least 5% of the aggregate
outstanding shares of Chicago Preferred Stock, addressed to the Secretary of
the Corporation at the principal office of the Corporation, shall call, a
special meeting of the holders of shares entitled to vote as provided herein.
Such meeting shall be held within 30 days after delivery of such request to
the Secretary, at the place and upon the notice provided by law and in the by-
laws of the Corporation for the holding of meetings of stockholders.
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(ii) At each meeting of stockholders at which the holders
of shares of Series H Preferred Stock shall have the right, voting separately
as a single class together with the holders of all other series of Chicago
Preferred Stock, to elect two directors of the Corporation as provided in
Section 3(b) or to take any action, the presence in person or by proxy of the
holders of record of one-third of the total aggregate number of shares of
Chicago Preferred Stock then outstanding and entitled to vote on the matter
shall be necessary and sufficient to constitute a quorum. At any such meeting
or at any adjournment thereof:
(A) the absence of a quorum of the holders of shares of
Chicago Preferred Stock, shall not prevent the election of
directors other than those to be elected by the holders of shares
of Chicago Preferred Stock, and the absence of a quorum of the
holders of shares of any other class or series of capital stock
shall not prevent the election of directors to be elected by the
holders of shares of Chicago Preferred Stock, or the taking of any
action as provided in Section 3(b); and
(B) in the absence of a quorum of the holders of shares
of Chicago Preferred Stock, a majority of the holders of such
shares present in person or by proxy shall have the power to
adjourn the meeting as to the actions to be taken by the holders
of shares of Chicago Preferred Stock, from time to time and place
to place without notice other than announcement at the meeting
until a quorum shall be present.
For taking of any action as provided in Section 3(a) or Section
3(b) by the holders of shares of Series H Preferred Stock, each such holder
shall have one vote . for each share of such stock standing in his name on the
transfer books of the Corporation as of any record date fixed for such purpose
or, if no such date be fixed, at the close of business on the Business Day
next preceding the day on which notice is given, or if notice is waived, at
the close of business on the Business Day next preceding the day on which the
meeting is held; provided, however, that shares of Chicago Preferred Stock
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held by the Corporation or any Subsidiary of the Corporation shall not be
deemed to be outstanding for purposes of taking any action as provided in this
Section 3.
Each director elected by the holders of shares of Chicago
Preferred Stock, as provided in Section 3(b) shall, unless his term shall
expire earlier in accordance with the provisions thereof, hold office until
the annual meeting of
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stockholders next succeeding his election or until his successor, if any, is
elected and qualified.
If any director so elected by the holders of Chicago Preferred
Stock shall cease to serve as a director before his term shall expire (except
by reason of the termination of the voting rights accorded to the holders of
Chicago Preferred Stock, in accordance with Section 3(b)), the holders of the
Chicago Preferred Stock then outstanding and entitled to vote for such
director may, by written consent as provided herein, or at a special meeting
of such holders called as provided herein, elect a successor to hold office
for the unexpired term of the director whose place shall be vacant.
Any director elected by the holders of shares of Chicago Pre@erred
Stock, voting together as a separate class, may be removed from office with or
without cause only by the vote or written consent of the holders of at least a
majority of the aggregate outstanding shares of Chicago Preferred Stock at the
time of removal. A special meeting of the holders of shares of Chicago
Preferred Stock, may be called in accordance with the procedures set forth in
Section 3(c)(i).
Section 4. Certain Restrictions.
--------------------
(a) So long as any shares of Series H Preferred Stock remain
outstanding, the Corporation shall not declare or make any Restricted Payment.
(b) Whenever quarterly dividends payable on shares of Series H
Preferred Stock as provided in Section 2(a) are not paid in full, at such time
and thereafter until all unpaid dividends payable, whether or not declared, on
the outstanding shares of Series H Preferred Stock shall have been paid in
full or declared and set apart for payment at such time and thereafter until
all necessary funds have been set apart for payment, or whenever the
Corporation shall not have paid the optional Redemption Price, the Specified
Corporate Action Redemption Price or the Maturity Redemption Price when due,
at such time and thereafter until all such amounts have been paid in full or
set apart for payment, the Corporation shall not: (A) declare or pay
dividends, or make any other distributions, on any shares of Junior Stock, or
(B) declare or pay dividends, or make any other distributions, on any shares
of Parity Stock, except dividends or distributions paid ratably on the Series
H Preferred Stock and all Parity Stock on which dividends are payable and in
arrears, in proportion to the total amounts to which the holders of all shares
of the Series H Preferred Stock and Parity Stock are then entitled.
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(c) Whenever dividends payable on shares of Series H Preferred
Stock as provided in Section 2 are not paid in full, at such time and
thereafter until all unpaid dividends payable, whether or not declared, on the
outstanding shares of Series H Preferred Stock shall have been paid in full or
declared and set apart for payment, at such time and thereafter until all
necessary funds have been set apart for payment, or whenever the Corporation
shall not have paid the Optional Redemption Price, the Specified Corporate
Action Redemption Price or the Maturity Redemption Price when due, at such
time and thereafter until all such amounts have been paid in full or set apart
for payment, the Corporation shall not redeem, purchase or otherwise acquire
for consideration any shares of Junior Stock or Parity Stock; provided,
--------
however, that (A) the Corporation may accept shares of any Parity Stock or
- -------
Junior Stock for conversion into Junior Stock and (2) the Corporation may at
any time redeem, purchase or otherwise acquire shares of any Parity Stock
pursuant to any mandatory redemption, put, sinking fund or other similar
obligation contained in such Parity Stock, pro rata with the Series H
Preferred Stock in proportion to the total amount then required to be applied
by the Corporation to redeem, repurchase, or otherwise acquire shares of
Series H Preferred Stock and shares of such Parity Stock.
(d) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to purchase or otherwise acquire for
consideration any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(c), purchase such shares at such time
and in such manner.
Section 5. Optional Redemption.
-------------------
(a) (i) The Corporation shall not have any right to redeem any
shares of Series H Preferred Stock prior to December 30, 1999. Thereafter,
subject to the restrictions contained in Section 4, the Corporation shall have
the right, at its sole option and election, to redeem (the "Optional
Redemption") all or a portion of the shares of Series H Preferred Stock, on
not more than 45 nor less than 30 days' notice of the date of redemption (any
such date, an "Optional Redemption Date") at a price per share (the "Optional
Redemption Price") equal to the sum of (A) the following prices per share
(stated as a percentage of the Liquidation Preference of such share) and (B)
an amount per share equal to all accrued and unpaid dividends thereon, whether
or not declared or payable, to the applicable Optional Redemption Date in
immediately available funds:
99<PAGE>
<PAGE>
Optional Redemption Price
If Redeemed as a Percentage of
During the Period Liquidation Preference
- ----------------- -------------------------
December 30, 1999 to 106%
December 29, 2000
December 30, 2000 to 104.8%
December 29, 2001
December 30, 2001 to 103.6%
December 29, 2002
December 30, 2002 to 102.4%
December 29, 2003
December 30, 2003 to 101.2%
December 29, 2004
(ii) If the Corporation shall have the right to, or shall
determine to, redeem less than all the shares of Series H Preferred Stock then
outstanding pursuant to paragraph (i), the shares to be redeemed shall be
selected pro rata (as nearly as may be) so that the number of shares redeemed
from each holder shall be the same proportion of all the shares to be redeemed
that the total number of shares of Series H Preferred Stock then held by such
holder bears to the total number of shares of Series H Preferred Stock then
outstanding.
(iii) Notwithstanding the foregoing, any shares of Series H
Preferred Stock redeemed pursuant to this Section 5(a) at any time when the
holders of shares of Series H Preferred Stock have the right to require the
Corporation to redeem the shares of Series H Preferred Stock pursuant to
Section 6 or an event giving rise to such a right has occurred shall be
redeemed at a price equal to higher of the price to be paid in Section 5(a)
and the price to be paid pursuant to Section 6.
(b) Notice of any Optional Redemption shall specify the
Optional Redemption Date fixed for redemption, the Optional Redemption Price,
the place or places of payment, that payment will be made upon presentation
and surrender of the shares of Series H Preferred Stock and that on and after
the date of such Optional Redemption dividends will cease to accrue on such
shares and be given by publication in a newspaper of general circulation in
the Borough of Manhattan, The City of New York (if such publication shall be
required by applicable law, rule, regulation or securities exchange
requirement), not less than 30, nor more than 45, days prior to the Optional
Redemption
100<PAGE>
<PAGE>
Date; and, in any case, a similar notice shall be mailed at least 30, but not
more than 45, days prior to the Optional Redemption Date to each holder of
shares of Series H Preferred Stock, at such holder's address as it appears on
the transfer books of the Corporation. In order to facilitate the redemption
of shares o@ Series H Preferred Stock, the Board of Directors may fix a record
date for the determination of shares of Series H Preferred Stock to be
redeemed, or may cause the transfer books of the Corporation for the Series H
Preferred Stock to be closed, not more than 60 days or less than 45 days prior
to the Optional Redemption Date.
(c) on the date of any Optional Redemption that is specified in
a notice given pursuant to Section 5(b), the Corporation shall, and at any
time after such notice shall have been mailed and before the Optional
Redemption Date the Corporation may, deposit for the benefit of the holders of
shares of Series H Preferred Stock the funds necessary for such redemption
with a bank or trust company in the Borough of Manhattan, The City of New
York, that is "well capitalized" within the meaning of applicable bank
regulations and having a capital and surplus of at least $500,000,000. Any
moneys so deposited by the Corporation and unclaimed at the end of two years
from the Optional Redemption Date shall revert to the general funds of the
Corporation. After such reversion, any such bank or trust company shall, upon
demand, pay over to the Corporation such unclaimed amounts and thereupon such
bank or trust company shall be relieved of all responsibility in respect
thereof and any holder of shares of Series H Preferred Stock to be redeemed
shall look only to the Corporation for the payment of the Optional Redemption
Price. Any interest accrued on funds deposited pursuant to this Section 5(c)
shall be paid from time to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid, upon
the deposit of funds pursuant to Section 5(c) in respect of shares of Series H
Preferred Stock to be redeemed pursuant to Section 5(a), notwithstanding that
any certificates for such shares shall not have been surrendered for
cancellation, from and after the Optional Redemption Date (i) the shares
represented thereby shall no longer be deemed outstanding, (ii) the rights to
receive dividends thereon shall cease to accrue, and (iii) all rights of the
holders of shares of Series H Preferred Stock to be redeemed shall cease and
terminate, excepting only the right to receive the Optional Redemption Price
therefor; provided, however, that if the Corporation shall default in the
-------- -------
payment of the Optional Redemption Price, the shares of Series H Preferred
Stock shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series H Preferred
101<PAGE>
<PAGE>
Stock until such time as such default or failure shall no longer be continuing
or shall have been waived by holders of at least 66-2/3% of the then
outstanding shares of Series H Preferred Stock.
(e) Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of
shares of Series H Preferred Stock receives such notice, and failure to give
such notice by mail, or any defect in such notice, to the holders of any
shares designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Series H Preferred
Stock. On or after the Optional Redemption Date fixed for redemption as
stated in such notice, each holder of the shares called for redemption shall
surrender the certificate evidencing such shares to the Corporation at the
place designated in such notice and shall thereupon be entitled to receive
payment of the optional Redemption Price. If less than all the shares
evidenced by any such surrendered certificate are redeemed, a new certificate
shall be issued evidencing the unredeemed shares.
Section 6. Mandatory Redemption at the Option
of the Holder.
----------------------------------
(a) (i) If one or more events constituting a Specified
Corporate Action shall occur, each holder of shares of the Series H Preferred
Stock shall have the right, at such holder's option on the date or dates
specified in Section 6(a)(ii) (the "Specified Corporate Action Redemption
Date"), to require the Corporation to redeem (a "Specified Corporate Action
Redemption") all or any part of the shares of Series H Preferred Stock then
held by such holder as such holder may elect at a price per share equal to the
sum of (A) the Liquidation Preference of such share and (B) an amount per
share equal to all accrued and unpaid dividends thereon, whether or not
declared or payable, to the applicable Specified Corporate Action Redemption
Date, in immediately available funds (the "Specified Corporate Action
Redemption Price").
(ii) The date fixed for each Specified Corporate Action
Redemption shall be fixed by the Corporation and shall be not less than 60
days nor more than 90 days following the occurrence of any Specified Corporate
Action giving rise thereto (or, in the case of a Specified Corporate Action as
described in clause (iii) of the definition of "Specified Corporate Action,"
not less than 60 days nor more than 90 days following the date on which the
Corporation obtains actual knowledge of such Specified Corporate Action);
provided, however, that in the event of a Specified Corporate Action that
- -------- -------
102<PAGE>
<PAGE>
constitutes a Control Transaction, in addition to the dates fixed for a
Specified Corporate Action Redemption as specified above, an additional
Specified Corporate Action Redemption Date shall be set for the date and
time immediately preceding the consummation of any such Control Transaction;
provided, further, that, upon the request of a holder, the Board of Directors
- -------- -------
shall agree to extend the date of redemption in respect of any such Specified
Corporate Action (without changing the consideration that is otherwise payable
in respect of such redemption other than with respect to adjustments to the
amount of accrued and unpaid dividends included in such redemption price) to
the extent necessary for any holder of shares of Series H Preferred Stock to
avoid liability under Section 16(b) of the Exchange Act, provided that no
--------
such redemption extension shall be for a period greater than six months. The
Corporation shall, within 5 days of the occurrence of a Specified Corporate
Action (or, in the case of a Specified Corporate Action described in clause
(iii) of the definition of "Specified Corporate Action," within 5 days of the
date on which the Corporation obtains actual knowledge of such Specified
Corporate Action), give notice thereof by publication in a newspaper of
general circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or
securities exchange requirement), and, in any case, a similar notice shall be
mailed to each holder of shares of the Series H Preferred Stock, at such
holder's address as it appears on the transfer books of the Corporation. Each
such notice shall specify the Specified Corporate Action that has occurred
and the date of such occurrence, the place or places of payment, the then
effective Specified Corporate Action Redemption Price and the date the right
of such holder to require a Specified Corporate Action Redemption shall
terminate.
(iii) If the notice sent by the Corporation pursuant to
Section 6(a)(ii) shall contain (i) a form inquiring as to whether a holder of
shares of Series H Preferred Stock intends to surrender the certificate(s)
representing such shares for redemption pursuant to this Section 6(a) and (ii)
a stamped self-addressed envelope for return of such form to the Corporation
or its designee, within ten Business Days of such notice, each holder shall
return such inquiry form to the Corporation and shall indicate in such form
the proportion of such holder's shares of Series H Preferred Stock that will
be surrendered for redemption pursuant to this Section 6(a). If such notice
shall indicate that if a holder does not respond prior to ten Business Days
after the date of such notice that such holder will be deemed to have notified
the Corporation that it will not require the redemption of the shares of
Series H Preferred Stock held by such holder for purposes of Section
103<PAGE>
<PAGE>
3(b) and such holder does not respond to the Corporation's inquiry prior to
ten Business Days after the date of such notice, such holder will be deemed
to have notified the Corporation that it will not require the redemption of
the shares of Series H Preferred Stock held by such holder for purposes of
Section 3(b). Nothing contained in this Section 6(a)(iii) shall affect the
right of a holder of Series H Preferred Stock to require the Corporation to
redeem such shares pursuant to Section 6(a)(i).
(b) On the date fixed for any Specified Corporate Action
Redemption, each holder of shares of Series H Preferred Stock who elects to
have shares of Series H Preferred Stock held by it redeemed shall surrender
the certificate representing such shares to the Corporation at the place
designated in such notice, together with an election to have such redemption
made and shall thereupon be entitled to receive payment therefor provided in
this Section 6. If less than all the shares represented by any such
surrendered certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares. From and after the date of such
redemption (i) the rights to receive dividends thereon shall cease to accrue
and (ii) all rights of the holders of shares of Series H Preferred Stock so
redeemed shall cease and terminate, excepting only the right to receive the
Specified Corporate Action Redemption Price therefor; provided, however, that
-------- -------
if the Corporation shall default in the payment of the applicable redemption
price the shares of Series H Preferred Stock that were to be redeemed shall
thereafter be deemed to be outstanding and the holders thereof shall have all
of the rights of a holder of Series H Preferred Stock until such time as such
default shall no longer be continuing or shall have been waived by holders of
at least 66-2/3% of the then outstanding shares of Series H Preferred Stock.
Section 7. Redemption Upon Maturity.
------------------------
(a) On December 30, 2004 (the "Maturity Date"), the Corporation
shall redeem (the "Maturity Redemption") the remaining outstanding shares of
the Series H Preferred Stock at a price per share (the "Maturity Redemption
Price") equal to the sum of (A) 100% of the Liquidation Preference per share,
and (B) an amount equal to accrued and unpaid dividends thereon, whether or
not declared or payable, to the Maturity Date in immediately available funds.
(b) Notice of the Maturity Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication
104<PAGE>
<PAGE>
shall be required by applicable law, rule, regulation or securities exchange
requirement), not less than 30, nor more than 60, days prior to the Maturity
Date and, in any case, a similar notice shall be mailed at least 30, but not
more than 60, days prior to the Maturity Date to each holder of shares of
Series H Preferred Stock, at such holder's address as it appears on the
transfer books of the Corporation.
(c) On the Maturity Date, the Corporation shall, and at any
time after such notice shall have been mailed and before the Maturity Date the
Corporation may, deposit for the benefit of the holders of shares of Series H
Preferred Stock the funds necessary for such redemption with a bank or trust
company in the Borough of Manhattan, The City of New York, that is "well
capitalized within the meaning of applicable banking regulations and having a
capital and surplus of at least $500,000,000. Any moneys so deposited by the
Corporation and unclaimed at the end of two years from the date designated for
such redemption shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust
company shall be relieved of all responsibility in respect thereof and any
holder of shares of Series H Preferred Stock to be redeemed shall look only to
the Corporation for the payment of the Maturity Redemption Price. Any
interest accrued and unpaid on funds deposited pursuant to this Section 5(c)
shall be paid from time to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid, upon
the deposit of funds pursuant to Section 7(c) in respect of shares of Series H
Preferred Stock to be redeemed pursuant to Section 7(a), notwithstanding that
any certificates for such shares shall not have been surrendered for
cancellation, from and after the Maturity Date, (i) the rights to receive
dividends thereon shall cease to accrue and (ii) all rights of the holders of
shares of Series H Preferred Stock shall cease and terminate, excepting only
the right to receive the Maturity Redemption Price therefor; provided,
--------
however, that if the Corporation shall default in the payment of the Maturity
- -------
Redemption Price, the shares of Series H Preferred Stock that were to be
redeemed shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series H Preferred Stock until
such time as such default shall no longer be continuing.
Section 8. Acquired Shares.
---------------
Any shares of Series H Preferred Stock exchanged, redeemed,
purchased or otherwise acquired by the Corporation or
105<PAGE>
<PAGE>
any of its Subsidiaries in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such shares of Series H
Preferred Stock shall upon their cancellation become authorized but unissued
shares of preferred stock, par value $4.00 per share, of the Corporation and,
upon the filing of an appropriate certificate with the Department of State of
the State of New York, may be reissued as part of another series of preferred
stock, par value $4.00 per share, of the Corporation subject to the conditions
or restrictions of issuance set forth herein, but in any event may not be
reissued as shares of Series H Preferred Stock or Parity Stock unless all of
the shares of Series H Preferred Stock issued on the Issue Date shall have
already been redeemed or exchanged.
Section 9. Liquidation, Dissolution or Winding Up.
--------------------------------------
(a) If the Corporation shall commence a voluntary case under the
United States bankruptcy laws or any applicable bankruptcy, insolvency or
similar law of any other country, or consent to the entry of an order for
relief in an involuntary case under any such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its
property, or make an assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due (any such
event, a "Voluntary Liquidation Event"), or if a decree or order for relief in
respect of the Corporation shall be entered by a court having jurisdiction-in
the premises in an involuntary case under the United States bankruptcy laws or
any applicable bankruptcy, insolvency or similar law of any other country, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Corporation or of any substantial part of
its property, or ordering the winding up or liquidation of its affairs, and on
account of any such event the Corporation shall liquidate, dissolve or wind
up, or if the Corporation shall otherwise liquidate, dissolve or wind up, no
distribution shall be made (i) to the holders of shares of Junior Stock
unless, prior thereto, the holders of shares of Series H Preferred Stock shall
have received (A) if a Voluntary Liquidation Event shall have occurred, the
Optional Redemption Price with respect to each share and (B) if a Voluntary
Liquidation Event shall not have occurred, the Liquidation Preference and
all accrued and unpaid dividends, whether or not declared or currently
payable, to the date of distribution, with respect to each share, or (ii) to
the holders of shares of Parity Stock, except distributions made ratably on
the Series H Preferred Stock and all Parity Stock in proportion to the total
amounts to which the holders of all shares of the Series H Preferred Stock
(which
106<PAGE>
<PAGE>
amounts are set forth in clauses (A) and (B) above) and Parity Stock are
entitled upon such liquidation, dissolution or winding up.
(b) Neither the consolidation or merger of the Corporation with
or into any other Person nor the sale or transfer of all or any part of the
Corporation's assets for cash, securities or other property shall be deemed to
be a liquidation, dissolution or winding up of the Corporation for purposes of
this Section 9.
Section 10. Exchange.
--------
(a) Subject to the provisions of this Section 10, the
Corporation shall have the right, with the consent of the holders of all of
the outstanding shares of Series H Preferred Stock (which consent may be
withheld for any reason whatsoever), at any time but on only one occasion, to
exchange all (but not less than all) of the shares of Series H Preferred Stock
for Subordinated Notes of the Corporation ("Subordinated Notes"), at a price
per share equal to the Liquidation Preference per share, with the Subordinated
Notes valued for such purpose at their face value. Simultaneously with such
exchange the Corporation shall pay to each holder of Series H Preferred Stock
an amount per share in cash equal to all accrued and unpaid dividends thereon,
whether or not declared or currently payable, to the date fixed for exchange
thereof. The Subordinated Notes shall have an annual interest rate equal to
the annual dividend rate on Series H Preferred Stock and shall contain other
terms substantially similar to the Series H Preferred Stock, including the
date of maturity thereof.
(b) Notice of an exchange of shares of Series H Preferred Stock
pursuant to Section 10(a) shall be given by publication in a newspaper of
general circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or
securities exchange requirement), not less than 30, nor more than 60, days
prior to the date fixed for exchange; and, in any case, a similar notice shall
be mailed at least 30, but not more than 60, days prior to the date fixed for
exchange to each holder at such holder's address as it appears on the transfer
books of the Corporation. In order to facilitate the exchange of shares of
Series H Preferred Stock hereunder the Board of Directors may fix a record
date for the determination of shares of Series H Preferred Stock to be
exchanged, or may cause the transfer books of the Corporation for the Series H
Preferred Stock to be closed, not more than 60 days or less than 30 days prior
to the date fixed for exchange.
107<PAGE>
<PAGE>
(c) On the date of any exchange being made pursuant to Section
10(a) that is specified in a notice given Pursuant to Section 10(b), the
Corporation shall, and at any time after the date that is 10 days prior to the
date of exchange the Corporation may, deposit for the benefit of the holders
of shares of Series H Preferred Stock to be exchanged (i) the Subordinated
Notes necessary for such exchange and (ii) an amount in cash equal to all
dividends payable with respect thereto upon such exchange with a bank or trust
company in the Borough of Manhattan, The City of New York, that is "well
capitalized" within the meaning of applicable banking regulations and having a
capital and surplus of at least $500,000,000. Any Subordinated Notes so
deposited by the Corporation and unclaimed at the end of two years from the
date designated for such exchange shall revert to the Corporation. After such
reversion, any such bank or trust company shall, upon demand, return to the
Corporation such unclaimed Subordinated Notes and thereupon such bank or trust
company shall be relieved of all responsibility in respect thereof and any
holder of shares of Series H Preferred Stock to be exchanged shall look only
to the Corporation for the delivery of the Subordinated Notes. Any interest
accrued on Subordinated Notes deposited pursuant to this Section 10(c) shall
accrue for the accounts of, and be payable to, the holders of shares of Series
H Preferred Stock to be exchanged therefor.
(d) Notice of exchange having been given as aforesaid and not
having been deemed terminated as aforesaid, upon the deposit of Subordinated
Notes pursuant to clause (i) of Section 10(c) and the deposit of the cash
referred to in clause (ii) of Section 10(c) in respect of shares of Series H
Preferred Stock to be exchanged pursuant to Section 10(a), notwithstanding
that any certificates for such shares shall not have been surrendered for
cancellation, from and after the date of exchange designated in the notice of
exchange (i) the shares represented thereby shall no longer be deemed
outstanding, (ii) the rights to receive dividends thereon (except as provided
in paragraph (b) above) shall cease to accrue, and (iii) all rights of the
holders of shares of Series H Preferred Stock to be exchanged shall cease and
terminate, excepting only the right to receive the Subordinated Notes therefor
and the right to receive the dividends described in paragraph (b) above;
provided, however, that if the Corporation shall default in the execution and
- -------- -------
delivery of the Convertible Notes, the shares of Series H Preferred Stock that
were to be exchanged shall thereafter be deemed to be outstanding and the
holders thereof shall have all of the rights of a holder of Series H Preferred
Stock until such time as such default shall no longer be continuing or shall
have been waived by holders of at least
108<PAGE>
<PAGE>
66-2/3% of the then outstanding shares of Series H Preferred Stock.
Article 5. Series T Preferred Stock.
------------------------
Section 1. Designation and Number.
----------------------
(a) The shares of such series shall be designated as
"Cumulative Preferred Stock, Series T" (the "Series T Preferred Stock"). The
number of shares initially constituting the Series T Preferred Stock shall be
828,100, which number may be decreased (but not increased) by the Board of
Directors without a vote of stockholders; provided, however, that such number
may not be decreased below the number of then outstanding shares of Series T
Preferred Stock.
(b) The Series T Preferred Stock shall, with respect to
dividend rights and rights on liquidation, dissolution or winding up, rank
pari passu with the Corporation's $2.50 Cumulative Convertible Preferred
- ---- -----
Stock, Series A (the "Series A Preferred Stock"), $2.50 Cumulative Preferred
Stock, Series B (the "Series B Preferred Stock"), Cumulative Convertible
Preferred Stock, Series E (the "Series E Preferred Stock"), Cumulative
Preferred Stock, Series G (the "Series G Preferred Stock"), Cumulative
Preferred Stock, Series H (the "Series H Preferred Stock"), Cumulative
Preferred Stock, Series F (the "Series F Preferred Stock" and together with
the Series E Preferred Stock, Series F Preferred Stock, Series G Preferred
Stock and Series H Preferred Stock, the "Chicago Preferred Stock") and the New
Preferred Stock (if any) (the Series A Preferred Stock, Series B Preferred
Stock, Chicago Preferred Stock (other than the Series T Preferred Stock) and
New Preferred Stock (if any) are collectively defined for the purposes of this
Article 5 as the "Other Preferred Stock") and prior to all other classes and
series of capital stock of the Corporation now or hereafter authorized
including, without limitation, the Common Stock, par value $1.00 per share, of
the Corporation (the "Common Stock").
(c) Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Article 6 below.
Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series T Preferred Stock, in
preference to the holders of shares of Common Stock and of any shares of other
capital stock of the Corporation other than the Other Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors, out
of the assets of the Corporation at the time legally available
109<PAGE>
<PAGE>
therefor, cumulative cash dividends at an annual rate on the Liquidation
Preference thereof equal to 9.75% (subject to increase pursuant to Section
2(b)), calculated on the basis of a 360-day year consisting of twelve 30-day
months, accruing and payable in equal quarterly payments, in immediately
available funds, on the Business Day immediately preceding the last day of
March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date") commencing on the
Business Day immediately preceding December 31, 1994; provided, however, that
-------- -------
with respect to such first Quarterly Dividend Payment Date, the holders of
shares of Series T Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors, out of the assets of the Corporation at
the time legally available therefor, a cumulative cash dividend in respect of
each share of Series T Preferred Stock in the amount of (i) 9.75% (or the then
effective annual rate) of the Liquidation Preference multiplied by (ii) a
fraction equal to (A) the number of days from (and including) the Issue Date
to (but excluding) such Quarterly Dividend Payment Date divided by (B) 360.
No interest shall be payable in respect of any dividend payment on the Series
T Preferred Stock that may be in arrears.
(b) If (i) a private placement or public offering of the New
Preferred Stock or the New Senior Notes pursuant to which the Corporation
shall receive at least $100,000,000 in gross proceeds is not consummated
within 360 days after the termination of the Merger Agreement or (ii) the
annual dividend rate on the New Preferred Stock or the annual interest rate on
the New Senior Notes, as applicable, exceeds 13%, then the annual rate of the
cumulative cash dividends shall be increased to a rate of 10.75%, effective
(x) in the case of clause (i), the date that is 360 days after the termination
of the Merger Agreement and (y) in the case of clause (ii), the date of the
issuance of the New Preferred Stock or the New Senior Notes, as applicable.
If on any date (A) all of the Purchaser Designees shall not have been elected
to the Corporation's Board of Directors or any such Purchaser Designees shall
not have been appointed to the committees of the Corporation's Board of
Directors, in accordance with the provisions of Section 6.17 of the Securities
Purchase Agreement, (B) the Corporation shall have failed to declare, or shall
have failed to pay, the full amount of dividends payable on the Series T
Preferred Stock for six quarterly dividend periods, (C) the Corporation shall
have failed to satisfy its obligation to convert shares of Series E Preferred
Stock pursuant to Article 1, Section 10 or (D) a breach of any of the Material
Provisions of the Securities Purchase Agreement or any of the Corporation's
material obligations under the Registration Rights Agreement shall have
occurred then, effective as of the date of such failure or
110<PAGE>
<PAGE>
breach, the annual rate of the cumulative cash dividends shall be increased to
a rate of 11.75% and shall remain at such rate until such time as (1) the
Purchaser Designees shall have been elected to the Corporation's Board of
Directors and appointed to the committees of the Corporation's Board of
Directors in accordance with the provisions of Section 6.17 of the Securities
Purchase Agreement, (2) all dividends accrued to date on the Series T
Preferred Stock shall have been declared and paid in full, (3) any conversion
obligations in respect of the Chicago Preferred Stock that have become due
shall have been fully satisfied and (4) there shall exist no breach of any of
the Material Provisions of the Securities Purchase Agreement or any of the
Corporation's material obligations under the Registration Rights Agreement, as
the-case may be, at which time the annual rate of the cumulative cash
dividends shall be reduced to a rate of 9.75%, subject to being increased to
a rate of 11.75% in the event of each and every subsequent event of the
character indicated above.
(c) Dividends payable pursuant to Section 2(a) shall begin to
accrue and be cumulative from the Issue Date, and shall accrue on a daily
basis, in each case whether or not declared. Dividends paid on the shares of
Series T Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares of Series T Preferred
Stock at the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series T Preferred Stock
entitled to receive payment of a dividend declared thereon, which record date
shall be not more than 60 days nor less than 10 days prior to the date fixed
for the payment thereof. Accumulated but unsaid dividends for any past
quarterly dividend periods may be declared and paid at any time, without
reference to any regular Quarterly Dividend Payment Date, to holders of record
on such date, not more than 60 nor less than 10 days preceding the payment
date thereof, as may be fixed by the Board of Directors.
(d) The holders of shares of Series T Preferred Stock shall not
be entitled to receive any dividends or other distributions except as provided
herein.
Section 3. Voting Rights.
-------------
In addition to any voting rights provided by law, the holders of
shares of Series T Preferred Stock shall have the following voting rights:
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(a) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders of
at least 66-2/3% of the outstanding shares of Series T Preferred Stock,
voting separately as a single class, in person or by proxy, at a special or
annual meeting of stockholders called for the purpose, shall be necessary to
(i) authorize, adopt or approve an amendment to the Certificate of
Incorporation that would increase or decrease the par value of the shares of
Series T Preferred Stock, or alter or change the powers, preferences or
special rights of the shares of Series T Preferred Stock, (ii) amend, alter or
repeal the Certificate of Incorporation so as to affect the shares of Series T
Preferred Stock adversely or (iii) effect the voluntary liquidation,
dissolution, winding up, recapitalization or reorganization of the
Corporation, or the consolidation or merger of the Corporation with or into
any other Person, or the sale or other distribution to another Person of all or
substantially all of the assets of the Corporation; provided, however, that no
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separate vote of the holders of Series T Preferred Stock shall be required to
effect any of the transactions described in clause (iii) above unless such
transaction would either require a class vote pursuant to clause (i) or (ii)
above or would require a vote by any shareholders of the Corporation (other
than pursuant to this sentence); provided further, that no separate vote of
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the holders of the Series T Preferred Stock as a class shall be required in
the case of a recapitalization, reorganization, consolidation or merger of, or
sale by, the Corporation if (A) (a) such recapitalization, reorganization,
consolidation, merger or sale constitutes a Specified Corporate Action, (b)
the Corporation has sufficient funds legally available to it (after giving
effect to such transaction) to redeem, at the then applicable price hereunder
and pursuant to the terms hereof, all the outstanding shares of Series T
Preferred Stock, (c) such redemption shall not be prohibited by any agreement
to which the Corporation or any of its Subsidiaries is a party, by applicable
law or otherwise, (d) the Board of Directors of the Corporation, including a
majority of the directors who are not officers or employees of the
Corporation, shall have adopted a resolution confirming that such funds are
available and that the holders of Series T Preferred Stock have the right to
require such redemption and (e) the Corporation shall have set aside
sufficient funds through the Specified Corporation Action Redemption Date to
redeem the shares of Series T Preferred Stock held by such holders (except
that no funds need be set aside with respect to such shares held by any such
holder who has theretofore notified the Corporation (whether pursuant to
Section 6(a)(iii) or otherwise) that it will not require redemption of such
shares) or (B) (1) the Corporation shall be the resulting or surviving
corporation, (2) the resulting or
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surviving corporation will have after such recapitalization, reorganization,
consolidation or merger no Senior Stock or Parity Stock either authorized or
outstanding (except such Parity Stock of the Corporation as may have been
authorized or outstanding immediately preceding such consolidation or merger)
or such stock of the resulting or surviving corporation (having the same
powers, preferences and special rights of any such Parity Stock) as may be
issued in exchange therefor), (3) each holder of shares of Series T Preferred
Stock immediately preceding such recapitalization, reorganization,
consolidation or merger will receive in exchange therefor the same number of
shares of stock, with the same preferences, rights and powers, of the
resulting or surviving corporation, (4) after such recapitalization,
reorganization, consolidation.or merger the resulting or surviving corporation
shall not be in breach of any of the terms hereof, any of the Material
Provisions of the Securities Purchase Agreement or any of its material
obligations under the Registration Rights Agreement and (5) all or
substantially all the holders of the outstanding shares of capital stock of
the Corporation immediately prior to such consolidation or merger are entitled
to receive shares representing 50% or more of the then outstanding shares of
capital stock of the resulting or surviving corporation entitled to vote
generally in the election of directors.
(b) If on any date (i) the Corporation shall have failed to
declare, or shall have failed to pay, the full amount of dividends payable on
any series of Chicago Preferred Stock for six quarterly dividend periods or
(ii) a breach of any of the Material Provisions of the Securities Purchase
Agreement or any of the Corporation's material obligations under the
Registration Rights Agreement shall have occurred, then the number of
directors constituting the Board of Directors shall, without further action,
be increased by two and the holders of shares of Series T Preferred Stock
shall have, in addition to the other voting rights set forth herein with
respect to the Series T Preferred Stock, the exclusive right, together with
the holders of all other series of Chicago Preferred Stock, voting separately
as a single class together with the holders of such other series of Chicago
Preferred Stock, to elect two directors of the Corporation to fill such newly
created directorship, by written consent as provided herein, or at a special
meeting of such holders called as provided herein. Any such additional
directors shall continue as directors (subject to reelection or removal as
provided in Section 3(c)(ii)) and the holders of Series T Preferred Stock
shall have such additional voting rights until such time as (A) dividends
then payable on all series of Chicago Preferred Stock shall have been declared
and paid in full and (B) there shall exist no breach of any of the Material
Provisions of the Securities Purchase Agreement or any
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of the Corporation's material obligations under the Registration Rights
Agreement, as the case may be, at which time such additional directors shall
cease to be directors, the number of directors constituting the Board of
Directors shall be reduced by two and such additional voting rights of the
holders of all series of Chicago Preferred Stock shall terminate, subject to
revesting in the event of each and every subsequent event of the character
indicated above.
(c) (i) The foregoing right of holders of shares of Series T
Preferred Stock to take any action as provided in Section 3(b) may be
exercised at any annual meeting of stockholders or at a special meeting of
holders of shares of Chicago Preferred Stock, held for such purpose as
hereinafter provided or at any adjournment thereof, or by the written consent,
delivered to the Secretary of the Corporation, of the holders of the minimum
number of shares required to take such action.
So long as such right to vote continues (and unless such right has
been exercised by written consent of the minimum number of shares required to
take such action), the President of the Corporation may call, and upon the
written request of holders of record of at least 5% of the aggregate
outstanding shares of Chicago Preferred Stock, addressed to the Secretary of
the Corporation at the principal office of the Corporation, shall call, a
special meeting of the holders of shares entitled to vote as provided herein.
Such meeting shall be held within 30 days after delivery of such request to
the Secretary, at the place and upon the notice provided by law and in the by-
laws of the Corporation for the holding of meetings of stockholders.
(ii) At each meeting of stockholders at which the holders of
shares of Series T Preferred Stock shall have the right, voting separately as
a single class together with the holders of all other series of Chicago
Preferred Stock, to elect two directors of the Corporation as provided in
Section 3(b) or to take any action, the presence in person or by proxy of the
holders of record of one-third of the total aggregate number of shares of
Chicago Preferred Stock then outstanding and entitled to vote on the matter
shall be necessary.and sufficient to constitute a quorum. At any such meeting
or at any adjournment thereof:
(A) the absence of a quorum of the holders of shares of Chicago
Preferred Stock shall not prevent the election of directors other
than those to be elected by the holders of shares of Chicago
Preferred Stock, and the absence of a quorum of the holders of
shares of any other class or series of capital stock shall not
prevent the election of
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directors to be elected by the holders of shares of Chicago
Preferred Stock, or the taking of any action as provided in
Section 3(b); and
(B) in the absence of a quorum of the holders of shares
of Chicago Preferred Stock, a majority of the holders of such
shares present in person or by proxy shall have the power to
adjourn the meeting as to the actions to be taken by the holders
of shares of Chicago Preferred Stock, from time to time and place
to place without notice other than announcement at the meeting
until a quorum shall be present.
For taking of any action as provided in Section 3(a) or Section
3(b) by the holders of shares of Series T Preferred Stock, each such holder
shall have one vote for each share of such stock standing in his name on the
transfer books of the Corporation as of any record date fixed for such purpose
or, if no such date be fixed, at the close of business on the Business Day
next preceding the day on which notice is given, or if notice is waived, at
the close of business on the Business Day next preceding the day on which the
meeting is held; provided, however, that shares of Chicago Preferred Stock
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held by the Corporation or any Subsidiary of the Corporation shall not be
deemed to be outstanding for purposes of taking any action as provided in this
Section 3.
Each director elected by the holders of shares of Chicago
Preferred Stock, as provided in Section 3(b) shall, unless his term shall
expire earlier in accordance with the Provisions thereof, hold office until
the annual meeting of stockholders next succeeding his election or until his
successor, if any, is elected and qualified.
If any director so elected by the holders of Chicago Preferred
Stock shall cease to serve as a director before his term shall expire (except
by reason of the termination of the voting rights accorded to the holders of
Chicago Preferred Stock, in accordance with Section 3(b)), the holders of the
Chicago Preferred Stock then outstanding and entitled to vote for such
director may, by written consent as provided herein, or at a special meeting
of such holders called as provided herein, elect a successor to hold office
for the unexpired term of the director whose place shall be vacant.
Any director elected by the holders of shares of Chicago Preferred
Stock, voting together as a separate class, may be removed from office with or
without cause only by the vote or written consent of the holders of at least a
majority of the aggregate outstanding shares of Chicago Preferred Stock
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at the time of removal. A special meeting of the holders of shares of Chicago
Preferred Stock, may be called in accordance with the procedures set forth in
Section 3(c)(i).
Section 4. Certain Restrictions.
--------------------
(a) So long as any shares of Series T Preferred Stock remain
outstanding, the Corporation shall not declare or make any Restricted Payment.
(b) Whenever quarterly dividends payable on shares of Series T
Preferred Stock as provided in Section 2(a) are not paid in full, at such time
and thereafter until all unpaid dividends payable, whether or not declared, on
the outstanding shares of Series T Preferred Stock shall have been paid in
full or declared and set apart for payment at such time and thereafter until
all necessary funds have been set apart for payment, or whenever the
Corporation shall not have paid the Optional Redemption Price, the Specified
Corporate Action Redemption Price, the Conversion Redemption Price, the
Special Redemption Price or the Maturity Redemption Price when due, at such
time and thereafter until all such amounts have been paid in full or set apart
for payment, the Corporation shall not: (A) declare or pay dividends, or make
any other distributions, on any shares of Junior Stock, or (B) declare or pay
dividends, or make any other distributions, on any shares of Parity Stock,
except dividends or distributions paid ratably on the Series T Preferred Stock
and all Parity Stock on which dividends are payable and in arrears, in
proportion to the total amounts to which the holders of all shares of the
Series T Preferred Stock and Parity Stock are then entitled.
(c) Whenever dividends payable on shares of Series T Preferred
Stock as provided in Section 2 are not paid in full, at such time and
thereafter until all unpaid dividends payable, whether or not declared, on the
outstanding shares of Series T Preferred Stock shall have been paid in full or
declared and set apart for payment, at such time and thereafter until all
necessary funds have been set apart for payment, or whenever the Corporation
shall not have paid the Optional Redemption Price, the Specified Corporate
Action Redemption Price, the Conversion Redemption Price, the Special
Redemption Price or the Maturity Redemption Price when due, at such time and
thereafter until all such amounts have been paid in full or set apart for
payment, the Corporation shall not redeem, purchase or otherwise acquire for
consideration any shares of Junior Stock or Parity Stock; provided, however,
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that (A) the Corporation may accept shares of any Parity Stock or Junior Stock
for conversion into Junior Stock and (B) the Corporation may at any time
redeem, purchase or otherwise acquire shares of any
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Parity Stock pursuant to any mandatory redemption, put, sinking fund or other
similar obligation contained in such Parity Stock, pro rata with the Series T
Preferred Stock in proportion to the total amount then required to be applied
by the Corporation to redeem, repurchase, or otherwise acquire shares of
Series T Preferred Stock and shares of such Parity Stock.
(d) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to purchase or otherwise acquire for
consideration any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(c), purchase such shares at such
time and in such manner.
Section 5. Optional Redemption.
-------------------
(a) (i) The Corporation shall not have any right to redeem any
shares of Series T Preferred Stock prior to December 30, 2001. Thereafter,
(A) at any time, so long as shares of Common Stock shall have traded on the
New York Stock Exchange (or another national securities exchange or on Nasdaq)
on each trading day during a 30-consecutive trading day period (each of which
trading days shall be after December 30, 2001 and no more than 5 Business Days
prior to the date notice is given of an Optional Redemption (as defined
below)) and had a Closing Price on at least 20 of such trading days in excess
of 150% of the Conversion Amount in effect on such trading day as determined
pursuant to Section 11, subject to the restrictions contained in Section 4 or
(B) at any time after December 30, 2009, the Corporation shall have the right,
at its sole option and election, to redeem (the "Optional Redemption") all or
a portion of the shares of Series T Preferred Stock, on not more than 45 nor
less than 30 days, notice of the date of redemption (any such date, an
"Optional Redemption Date") at a price per share (the "Optional Redemption
Price") equal to the sum of (A) the following prices per share (stated as a
percentage of the Liquidation Preference of such share), (B) an amount per
share equal to all accrued and unpaid dividends thereon, whether or not
declared or payable, to the applicable Optional Redemption Date and (C) the
Additional Amount (as defined in Section 11), in immediately available funds:
Optional Redemption Price
If Redeemed as a Percentage of
During the Period Liquidation Preference
- ----------------- --------------------------
December 30, 2001 to 102.775%
December 29, 2002
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December 30, 2002 to 101.850%
December 29, 2003
December 30, 2003 to 100.925%
December 29, 2004
December 30, 2004 and 100%
thereafter
(ii) If the Corporation shall have the right to, or shall
determine to, redeem less than all the shares of Series T Preferred Stock then
outstanding pursuant to paragraph (i), the shares to be redeemed shall be
selected pro rata (as nearly as may be) so that the number of shares redeemed
from each holder shall be the same proportion of all the shares to be redeemed
that the total number of shares of Series T Preferred Stock then held by such
holder bears to the total number of shares of Series T Preferred Stock then
outstanding.
(iii) Notwithstanding the foregoing, any shares of Series T
Preferred Stock redeemed pursuant to this Section 5(a) at any time when the
holders of shares of Series T Preferred Stock have the right to require the
Corporation to redeem the shares of Series T Preferred Stock pursuant to
Section 6 or an event giving rise to such a right has occurred shall be
redeemed at a price equal to higher of the price to be paid in Section 5(a)
and the price to be paid pursuant to Section 6.
(b) Notice of any Optional Redemption shall specify the
Optional Redemption Date fixed for redemption, the Optional Redemption Price,
the place or places of payment, that payment will be made upon presentation
and surrender of the shares of Series T Preferred Stock and that on and after
the date of such Optional Redemption dividends will cease to accrue on such
shares and be given by publication in a newspaper of general circulation in
the Borough of Manhattan, The City of New York (if such publication shall be
required by applicable law, rule, regulation or securities exchange
requirement), not less than 30, nor more than 45, days prior to the Optional
Redemption Date; and, in any case, a similar notice shall be mailed at least
30, but not more than 45, days prior to the Optional Redemption Date to each
holder of shares of Series T Preferred Stock, at such holder's address as it
appears on the transfer books of the Corporation. In order to facilitate the
redemption of shares of Series T Preferred Stock, the Board of Directors may
fix a record date for the determination of shares of Series T Preferred Stock
to be redeemed, or may cause the transfer books of the Corporation for the
Series T Preferred
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Stock to be closed, not more than 60 days or less than 45 days ,prior to the
optional Redemption Date.
(c) On the date of any Optional Redemption that is specified
in a notice given pursuant to Section 5(b), the Corporation shall, and at any
time after such notice shall have been mailed and before the optional
Redemption Date the Corporation may, deposit for the benefit of the holders of
shares' of Series T Preferred Stock the funds necessary for such redemption
with a bank or trust company in the Borough of Manhattan, The City of New
York, that is "well capitalized" within the meaning of the applicable bank
regulations and having a capital and surplus of at least $500,000,000. Any
moneys so deposited by the Corporation and unclaimed at the end of two years
from the Optional Redemption Date shall revert to the general funds of the
Corporation. After such reversion, any such bank or trust company shall, upon
demand, pay over to the Corporation such unclaimed amounts and thereupon such
bank or trust company shall be relieved of all responsibility in respect
thereof and any holder of shares of Series T Preferred Stock to be redeemed
shall look only to the Corporation for the payment of the Optional Redemption
Price. Any interest accrued on funds deposited pursuant to this Section 5(c)
shall be paid from time to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid, upon
the deposit of funds pursuant to Section 5(c) in respect of shares of Series T
Preferred Stock to be redeemed pursuant to Section 5(a), notwithstanding that
any certificates for such shares shall not have been surrendered for
cancellation, from and after the Optional Redemption Date (i) the shares
represented thereby shall no longer be deemed outstanding, (ii) the rights to
receive dividends thereon shall cease to accrue, and (iii) all rights of the
holders of shares of Series T Preferred Stock to be redeemed shall cease and
terminate, excepting only the right to receive the Optional Redemption Price
therefor; provided, however, that if the Corporation shall default in the
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payment of the Optional Redemption Price, the shares of Series T Preferred
Stock shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series T Preferred Stock until
such time as such default or failure shall no longer be continuing or shall
have been waived by holders of at least 66-2/3% of the then outstanding
shares of Series T Preferred Stock.
(e) Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of
shares of Series T Preferred Stock receives such notice, and failure to give
such notice by mail, or
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any defect in such notice, to the holders of any shares designated for
redemption shall not affect the validity of the proceedings for the redemption
of any other shares of Series T Preferred Stock. On or after the Optional
Redemption Date fixed for redemption as stated in such notice, each holder of
the shares called for redemption shall surrender the certificate evidencing
such shares to the Corporation at the place designated in such notice and
shall thereupon be entitled to receive payment of the Optional Redemption
Price. If less than all the shares evidenced by any such surrendered
certificate are redeemed, a new certificate shall be issued evidencing the
unredeemed shares.
Section 6. Mandatory Redemption at the Option
of the Holder.
----------------------------------
(a) (i) If one or more events constituting a Specified
Corporate Action shall occur, each holder of shares of the Series T Preferred
Stock shall have the right, at such holder's option on the date or dates
specified in Section 6(a)(ii) (the "Specified Corporate Action Redemption
Date"), to require the Corporation to redeem (a "Specified Corporate Action
Redemption") all or any part of the shares of Series T Preferred Stock then
held by such holder as such holder may elect at a price per share equal to the
greater of (I) the sum of (A) the following prices per share (stated as a
percentage of the Liquidation Preference of such share) and (B) an amount per
share equal to all accrued and unpaid dividends thereon, whether or not
declared or payable, to the applicable Specified Corporate Action Redemption
Date
If the Specified Corporate Specified Corporate Action
Action Redemption Date Redemption as a Percentage of
Occurs During the Period Liquidation Preference
------------------------ ------------------------------
December 30, 1994 to 110.4%
June 29, 1995
June 30, 1995 to 116.8%
December 29, 1995
December 30, 1995 to 126.7%
June 29, 1996
June 30, 1996 and 138.0%
thereafter
and (II) the sum of (x) 100% of the Liquidation Preference of such share,
(y) an amount per share equal to all accrued and
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unpaid dividends thereon whether or not declared or payable to the Specified
Corporate Action Redemption Date and (z) the Additional Amount-- measured as
of the date of any such redemption, in either case in immediately available
funds (the "Specified Corporate Action Redemption Price").
(ii) The date fixed for each Specified Corporate Action
Redemption shall be fixed by the Corporation and shall be not less than 60
days nor more than 90 days following the occurrence of any Specified Corporate
Action giving rise thereto (or, in the case of a Specified Corporate Action as
described in clause (iii) of the definition of "Specified Corporate Action,"
not less than 60 days nor more than 90 days following the date on which the
Corporation obtains actual knowledge of such Specified Corporate Action);
provided, however, that in the event of a Specified Corporate Action that
- -------- -------
constitutes a Control Transact@ion, in addition to the dates fixed for a
Specified Corporate Action Redemption as specified above, an additional
Specified Corporate Action Redemption Date shall be set for the date and time
immediately preceding the consummation of any such Control Transaction (and
the Market Price utilized in determining the Additional Amount for the
purposes of such Specified Corporate Action Redemption shall be the highest
price per share of Common Stock paid by any acquiror in such Control
Transaction); provided, further, that, upon the request of a holder, the Board
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of Directors shall agree to extend the date of redemption in respect of any
such Specified Corporate Action (without changing the consideration that is
otherwise payable in respect of such redemption other than with respect to
adjustments to the amount of accrued and unpaid dividends included in such
redemption price) to the extent necessary for any holder of shares of Series T
Preferred Stock to avoid liability under Section 16(b) of the Exchange Act,
provided that no such redemption extension shall be for a period greater than
- --------
six months. The Corporation shall, within 5 days of the occurrence of a
Specified Corporate Action (or, in the case of a Specified Corporate Action
described in clause (iii) of the definition of "Specified Corporate Action,"
within 5 days of the date on which the Corporation obtains actual knowledge of
such Specified Corporate Action), give notice thereof by publication in a
newspaper of general circulation in the Borough of Manhattan, The City of New
York (if such publication shall be required by applicable law, rule,
regulation or securities exchange requirement), and, in any case, a similar
notice shall be mailed to each holder of shares of the Series T Preferred
Stock, at such holder's address as it appears on the transfer books of the
Corporation. Each such notice shall specify the Specified Corporate Action
that has occurred and the date of such occurrence, the place or places
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of payment, the then effective Specified Corporate Action Redemption Price
and the date the right of such holder to require a Specified Corporate Action
Redemption shall terminate.
(iii) if the notice sent by the Corporation pursuant to
Section 6(a)(ii) shall contain (i) a form inquiring as to whether a holder of
shares of Series T Preferred Stock intends to surrender the certificate(s)
representing such shares for redemption pursuant to this Section 6(a) and (ii)
a stamped self-addressed envelope for return of such form to the Corporation
or its designee, within ten Business Days of such notice, each holder shall
return such inquiry form to the Corporation and shall indicate in such form
the proportion of such holder's shares of Series T Preferred Stock that will
be surrendered for redemption pursuant to this Section 6(a). If such notice
shall indicate that if a holder does not respond prior to ten Business Days
after the date of such notice that such holder will be deemed to have notified
the Corporation that it will not require the redemption of the shares of
Series T Preferred Stock held by such holder for purposes of Section 3(b) and
such holder does not respond to the Corporation's inquiry prior to ten
Business Days after the date of such notice, such holder will be deemed to
have notified the Corporation that it will not require the redemption of the
shares of Series T Preferred Stock held by such holder for purposes of Section
3(b). Nothing contained in this Section 6(a)(iii) shall affect the right of a
holder of Series T Preferred Stock to require the Corporation to redeem such
shares pursuant to Section 6(a)(i).
(b) If at any time the Additional Amount is greater than 0, then
each holder of shares of the Series T Preferred Stock shall have the right, at
such holder's option exercisable at any time (such time, the "Conversion
Date") on 30 days' notice to the Corporation, to require the Corporation to
redeem (a "Conversion Redemption") all or any part of the shares of Series T
Preferred Stock then held by such holder at a price per share (the "Conversion
Redemption Price") equal to the sum of (A) 100% of the Liquidation Preference
of such shares, (B) an amount per share equal to all accrued and unpaid
dividends thereon, whether or not declared or payable, to the applicable
Conversion Redemption Date and (C) the Additional Amount, in immediately
available funds. Notwithstanding the foregoing, if the redemption of any
portion of such shares would in the judgment of the Board of Directors of the
Corporation have a material adverse effect on the Corporation, then the
Corporation may elect to deliver with respect to such shares, in lieu of cash,
notes, including subordinated notes, of the Corporation ("Notes") (x) having a
final maturity date no later than ten years from the date of issuance, and (y)
having such other
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terms and conditions as shall result in a determination that such Notes have a
fair market value as of the date of their proposed issuance at least equal to
the sum of (1) the Conversion Redemption Price with respect to such shares and
(2) customary underwriting discounts and commissions payable with respect to
the sale of securities of a type comparable to the Notes, or shares of
nonconvertible preferred stock ("Redemption Preferred Stock") having the terms
and conditions described in clauses (x) and (y) in lieu of Notes. The
Corporation shall use its best efforts to cause the Notes or the Redemption
Preferred Stock to be registered for immediate resale pursuant to an effective
registration statement under the Securities Act prior to the issuance thereof.
If such registration statement is not effective within 120 days of the date of
such issuance then the annual interest rate of the Notes or the annual
dividend rate of the Redemption Preferred Stock, as applicable, shall be
increased by 0.5% per annum until such securities are sold pursuant to an
effective registration statement under the Securities Act. For purposes of
this Section 6(b), "fair market value" shall mean the fair market value of
the Notes or Redemption Preferred Stock, as the case may be, as determined by
an investment banking firm of national standing selected by the Corporation
and reasonably acceptable to the holders of a majority of the shares of Series
T Preferred Stock electing to effect such Conversion Redemption. In the case
that the Corporation shall be entitled to deliver either Notes or Redemption
Preferred Stock, it shall be the election of the Corporation whether to
deliver such Notes or Redemption Preferred Stock, except that, if, the sale of
the security to be delivered by the Corporation to effect a Conversion
Redemption would give rise to an additional liability on the part of such
holder upon the sale thereof and it shall so notify the Corporation in
writing, the Corporation shall deliver to such holder the other type of
security specified in such notice.
(c) Each holder of shares of the Series T Preferred Stock.shall
have the right, at such holder's option exercisable at any time on 30 days'
notice to the Corporation on or after December 30, 2009 (the date of any such
exercise, the "Special Redemption Date"), to require the Corporation to redeem
(a "Special Redemption") all or any part of the shares of Series T Preferred
Stock then held by such holder as such holder may elect by written notice
delivered at least 30 days prior to the Special Redemption Date at a price per
share equal to the sum of (A) 100% of the Liquidation Preference of such
share, (B) an amount per share equal to all accrued and unpaid dividends
thereon whether or not declared or payable to the Special Redemption Date and
(C) the Additional Amount, determined as of the date immediately prior to the
Special Redemption Date (the "Special Redemption Price") in immediately
available funds.
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(d) On the date fixed for any Specified Corporate Action
Redemption or on any Conversion Redemption Date or Special Redemption Date,
each holder of shares of Series T Preferred Stock who elects to have shares of
Series T Preferred Stock held by it redeemed shall surrender the certificate
representing such shares to the Corporation (i) at the place designated in
such notice in the case of a Specified Corporate Action Redemption or (ii) at
the Corporation's principal place of business to be maintained by it, in the
case of a Conversion Redemption or Special Redemption, together with an
election to have such redemption made and shall thereupon be entitled to
receive payment therefor provided in this Section 6. If less than all the
shares represented by any such surrendered certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares. From and
after the date of such redemption (i) the rights to receive dividends thereon
shall cease to accrue and (ii) all rights of the holders of shares of Series T
Preferred Stock so redeemed shall cease and terminate, excepting only the
right to receive the Specified Corporate Action Redemption Price or Conversion
Redemption Price or Special Redemption Price therefor, as applicable;
provided, however, that if the Corporation shall default in the payment of the
- -------- -------
applicable redemption price the shares of Series T Preferred Stock that were
to be redeemed shall thereafter be deemed to be outstanding and the holders
thereof shall have all of the rights of a holder of Series T Preferred Stock
until such time as such default shall no longer be continuing or shall have
been waived by holders of at least 66-2/3% of the then outstanding shares of
Series T Preferred Stock.
Section 7. Redemption Upon Maturity.
------------------------
(a) On December 30, 2034 (the "Maturity Date"), the Corporation
shall redeem (the "Maturity Redemption") the remaining outstanding shares of
the Series T Preferred Stock at a price per share (the "Maturity Redemption
Price") equal to the sum of (A) 100% of the Liquidation Preference per share,
(B) an amount equal to accrued and unpaid dividends thereon, whether or not
declared or payable, to the Maturity Date and (C) the Additional Amount,
determined as of the date immediately prior to the Maturity Date, in
immediately available funds.
(b) Notice of the Maturity Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication shall be required by applicable law,
rule, regulation or securities exchange requirement), not less than 30, nor
more than 60, days prior to the Maturity Date and, in any case, a similar
notice shall be mailed at least 30, but not more than 60, days prior to the
Maturity Date to each holder of shares of Series T
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Preferred Stock, at such holder's address as it appears on the transfer books
of the Corporation.
(c) on the Maturity Date, the Corporation shall, and at any time
after such notice shall have been mailed and before the Maturity Date the
Corporation may, deposit for the benefit of the holders of shares of Series T
Preferred Stock the funds necessary for such redemption with a bank or trust
company in the Borough of Manhattan, The City of New York, that is "well
capitalized" within the meaning of the applicable banking regulations and
having a capital and surplus of at least $500,000,000. Any moneys so
deposited by the Corporation and unclaimed at the end of two years from the
date designated for such redemption shall revert to the general funds of the
Corporation. After such reversion, any such bank or trust company shall, upon
demand, pay over to the Corporation such unclaimed amounts and thereupon such
bank or trust company shall be relieved of all responsibility in respect
thereof and any holder of shares of Series T Preferred Stock to be redeemed
shall look only to the Corporation for the payment of the Maturity Redemption
Price. Any interest accrued and unpaid on funds deposited pursuant to this
Section 5(c) shall be paid from time to time to the Corporation for its own
account.
(d) Notice of redemption having been given as aforesaid, upon
the deposit of funds pursuant to Section 7(c) in respect of shares of Series T
Preferred Stock to be redeemed pursuant to Section 7(a), notwithstanding that
any certificates for such shares shall not have been surrendered for
cancellation, from and after the Maturity Date, (i) the rights to receive
dividends thereon shall cease to accrue and (ii) all rights of the holders of
shares of Series T Preferred Stock shall cease and terminate, excepting only
the right to receive the Maturity Redemption Price therefor; provided,
--------
however, that if the Corporation shall default in the payment of the Maturity
- -------
Redemption Price, the shares of Series T Preferred Stock that were to be
redeemed shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series T Preferred Stock until
such time as such default shall no longer be continuing.
Section 8. Acquired Shares.
---------------
Any shares of Series T Preferred Stock exchanged, redeemed,
purchased or otherwise acquired by the Corporation or any of its Subsidiaries
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares of Series T Preferred Stock shall upon
their cancellation become authorized but unissued shares of preferred stock,
par value $4.00 per share, of the Corporation and, upon
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the filing of an appropriate certificate with the Department of State of the
State of New York, may be reissued as part of another series of preferred
stock, par value $4.00 Per share, of the Corporation subject to the conditions
or restrictions on issuance set forth herein, but in any event may not be
reissued as shares of Series T Preferred Stock or Parity Stock unless all of
the shares of Series T Preferred Stock issued on the Issue Date shall have
already been redeemed or exchanged.
Section 9. Liquidation, Dissolution or Winding Up.
--------------------------------------
(a) If the Corporation shall commence a voluntary case under the
United States bankruptcy laws or any applicable bankruptcy, insolvency or
similar law of any other country, or consent to the entry of an order for
relief in an involuntary case under any such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its
property, or make an assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due (any such
event, a "Voluntary Liquidation Event"), or if a decree or order for relief in
respect of the Corporation shall be entered by a court having jurisdiction in
the premises in an involuntary case under the United States bankruptcy laws or
any applicable bankruptcy, insolvency or similar law of any other country, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Corporation or of any substantial part of
its property, or ordering the winding up or liquidation of its affairs, and on
account of any such event the Corporation shall liquidate, dissolve or wind
up, or if the Corporation shall otherwise liquidate, dissolve or wind up, no
distribution shall be made (i) to the holders of shares of Junior Stock
unless, prior thereto, the holders of shares of Series T Preferred Stock shall
have received (A) if a Voluntary Liquidation Event shall have occurred, the
Optional Redemption Price with respect to each share and (B) if a Voluntary
Liquidation Event shall not have occurred, the Liquidation Preference and all
accrued and unpaid dividends, whether or not declared or currently payable, to
the date of distribution, with respect to each share, or (ii) to the holders
of shares of Parity Stock, except distributions made ratably on the Series T
Preferred Stock and all Parity Stock in proportion to the total amounts to
which the holders of all shares of the Series T Preferred Stock (which amounts
are set forth in clauses (A) and (B) above) and Parity Stock are entitled upon
such liquidation, dissolution or winding up.
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(b) Neither the consolidation or merger of the Corporation with
or into any other Person nor the sale or transfer of all or any part of the
Corporation's assets for cash, securities or other property shall be deemed to
be a liquidation, dissolution or winding up of the Corporation for purposes of
this Section 9.
Section 10. [Intentionally omitted.]
Section 11. Additional Amount.
-----------------
(a) For the purposes of this Article 5, "Additional Amount"
shall mean an amount per share equal to the product of (i) the excess of the
sum of (1) the Market Price of a share of Common Stock and (2) if the
Corporation shall have issued a right or rights with respect to its
outstanding shares of Common Stock pursuant to a shareholder rights plan,
"poison pill" or similar arrangement, during the period commencing on the
"distribution date" of such right or rights (i.e., the date on which such
----
right or rights commence to trade separately from the Common Stock) and ending
on the "triggering date" of such right or rights (i.e., the date on which
----
such right or rights commence to be exercisable), the Market Price of such
right or rights over the Conversion Amount, in effect as hereinafter
determined and (ii) (x) the Liquidation Preference divided by (y) such
Conversion Amount, in all cases calculated as of the applicable determination
date. The Additional Amount shall in no event be less than zero. The
Conversion Amount initially shall be $15.75, and shall thereafter be subject
to adjustment as set forth in Section 11(b). For the purpose of calculating
the Additional Amount in connection with an Optional Redemption, Specified
Corporate Action Redemption, Special Redemption or Conversion Redemption,
except as otherwise set forth in Section 6(a)(ii), the Market Price of the
Common Stock and, if applicable, rights shall be the average of the Market
Price of such securities on the five trading days immediately preceding and
the five trading days immediately following the date of notice of such
redemption.
(b) The Conversion Amount shall be subject to adjustment as
follows:
(i) In case the Corporation shall at any time or from time
to time (A) pay a dividend or make a distribution on the outstanding shares of
Common Stock in Common Stock (other than pursuant to a dividend reinvestment
plan approved by the Corporation's Board of Directors), (B) subdivide the
outstanding shares of Common Stock into a larger number of shares, (C) combine
the outstanding shares of Common Stock into a smaller number of shares or (D)
issue any shares of its
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capital stock in a reclassification of the Common Stock, then, and in each
such case, the Conversion Amount in effect immediately prior to such event
shall be adjusted so that if the holder of any share of Series T Preferred
Stock were entitled to convert such share into such number of shares of Common
Stock as equals the Liquidation Preference divided by the Conversion Amount
and such holder thereafter surrendered such share for conversion, such holder
would be entitled to receive the number of shares of Common Stock or other
securities of the Corporation that such holder would have owned or would have
been entitled to receive upon or by reason of any of the events described
above had such share of Series T Preferred Stock been converted immediately
prior to the occurrence of such event. An adjustment made pursuant to this
Section 11(b)(i) shall become effective retroactively (A) in the case of any
such dividend or distribution, to the opening of business on the day
immediately following the close of business on the record date for the
determination of holders of Common Stock entitled to receive such dividend or
distribution or (B) in the case of any such subdivision, combination or
reclassification, to the close of business on the day upon which such
corporate action becomes effective.
(ii) In case the Corporation shall at any time or from time
to time issue or sell shares of Common Stock (or securities convertible into
or exchangeable for shares of Common Stock, or any options, warrants or other
rights to acquire shares of Common Stock (other than options granted to any
employee or director of the Corporation pursuant to a stock option plan
approved by the shareholders of the Corporation)) for a consideration per
share less than the Conversion Amount then in effect at the record date or
issuance date, as the case may be (the "Date") referred to in the following
sentence, including, without limitation, upon exercise of rights issued
pursuant to a shareholder rights plan, "poison pill" or similar arrangement
(treating the price per share of any security convertible or exchangeable or
exercisable into Common Stock as equal to (A) the sum of the price for such
security convertible, exchangeable or exercisable into Common Stock plus any
additional consideration payable (without regard to any antidilution
adjustments) upon the conversion, exchange or exercise of such security into
Common Stock divided by (B) the number of shares of Common Stock initially
underlying such convertible, exchangeable or exercisable security), other than
issuances or sales for which an adjustment is made pursuant to another
paragraph of this Section 11(b), then, and in each such case, the Conversion
Amount then in effect shall be adjusted by dividing the Conversion Amount in
effect on the day immediately prior to the Date by a fraction (x) the
numerator of which
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shall he the sum of the number of shares of Common Stock outstanding
immediately prior to the Date plus the number of additional shares of Common
stock issued or to be issued (or the maximum number into which such
convertible or exchangeable securities initially may convert or exchange or
for which such options, warrants or other rights initially may be exercised)
and (y) the denominator of which shall be the sum of the number of shares of
Common Stock outstanding immediately prior to the Date plus the number of
shares of Common Stock that the aggregate consideration (if any of such
aggregate consideration is other than cash, as valued by the Board of
Directors including a majority of the Directors who are not officers or
employees of the Corporation or any of its Subsidiaries, which determination
shall be conclusive and described in a resolution of the Board of Directors)
for the total number of such additional shares of Common Stock so issued (or
into which such convertible or exchangeable securities may convert or exchange
or for which such options, warrants or other rights may be exercised plus the
aggregate amount of any additional consideration initially payable upon
conversion, exchange or exercise of such security) would purchase at the
Conversion Amount. Such adjustment shall be made whenever such shares,
securities, options, warrants or other rights are issued, and shall become
effective retroactively to a date immediately following the close of business
(i) in the case of issuance to stockholders of the Corporation, as such, on
the record date for the determination of stockholders entitled to receive such
shares, securities, options, warrants or other rights and (ii) in all other
cases, on the date ("issuance date") of such issuance; provided, however,
-------- -------
that the determination as to whether an adjustment is required to be made
pursuant to this Section 11(b)(ii) shall only be made upon the issuance of
such shares or such convertible or exchangeable securities, options, warrants
or other rights, and not upon the issuance of the security into which such
convertible or exchangeable security converts or exchanges, or the security
underlying such option, warrants or other right; provided, further, that if
-------- -------
any convertible or exchangeable securities, options, warrants or other rights
(or any portions thereof) that shall have given rise to an adjustment pursuant
to this Section 11(b)(ii) shall have expired or terminated without the
exercise thereof and/or if by reason of the terms of such convertible or
exchangeable securities, options, warrants or other rights there shall have
been an increase or increases, with the passage of time or otherwise, in the
price payable upon the exercise or conversion thereof, then the Conversion
Amount hereunder shall be readjusted (but to no greater extent than originally
adjusted) on the basis of (x) eliminating from the computation any additional
shares of Common Stock corresponding to such convertible or exchangeable
securities, options, warrants or other rights
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as shall have expired or terminated, (y) treating the additional shares of
Common Stock, if any, actually issued or issuable pursuant to the previous
exercise of such convertible or exchangeable securities, options, warrants or
other rights as having been issued for the consideration actually received and
receivable therefor and (z) treating any of such convertible or exchangeable
securities, options, warrants or other rights that remain outstanding as being
subject to exercise or conversion on the basis of such exercise or conversion
price as shall be in effect at the time.
(iii) In case the Corporation shall at any time or from time
to time distribute to all holders of shares of its Common Stock (including any
such distribution made in connection with a consolidation or merger in which
the Corporation is the resulting or surviving corporation and the Common Stock
is not changed or exchanged or a redemption of any rights or other securities
issued pursuant to a shareholder rights plan, "poison pill" or similar
arrangement) cash, evidences of indebtedness of the Corporation or another
issuer, securities of the Corporation or another issuer or other assets
(excluding (A) Permitted Dividends described in clause (B) of the definition
thereof and (B) securities for which adjustment is made under Section 11(b)(i)
or Section 11(b)(ii)), then, and in each such case, the Conversion Amount then
in effect shall be adjusted by dividing the Conversion Amount in effect
immediately prior to the date of such distribution by a fraction (x) the
numerator of which shall be the Current Market Price of the Common Stock on
the record date referred to below and (y) the denominator of which shall be
such Current Market Price of the Common Stock less the then Fair Market Value
(as determined by the Board of Directors of the Corporation, which
determination shall be conclusive) of the portion of the cash, evidences of
indebtedness, securities or other assets so distributed or of such
subscription rights or warrants applicable to one share of Common Stock (but
such denominator not to be less than one). Such adjustment shall be made
whenever any such distribution is made and shall become effective
retroactively to a date immediately following the close of business on the
record date for the determination of stockholders entitled to receive such
distribution.
(iv) In the case the Corporation at any time or from time
to time shall take any action affecting its Common Stock, other than an action
described in any of Section 11(b)(i) through Section 11(b)(iii), inclusive,
then, the Conversion Amount shall be adjusted in such manner and at such time
as the Board of Directors of the Corporation (other than Purchaser Designees
or directors elected pursuant to Section
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3(b)) in good faith determines to be equitable in the circumstances (such
determination to be evidenced in a resolution, a certified copy of which shall
be mailed to the holders of the Series T Preferred Stock).
(v) The Corporation may make such reductions in the
Conversion Amount, in addition to those required by subparagraphs (i), (ii),
(iii) or (iv) of this Section 11(b), as the Board of Directors considers to be
advisable in order to avoid or to diminish any income tax to holders of Common
Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes.
(vi) Notwithstanding anything contained in this Section
11(b), no adjustment to the Conversion Amount shall be made with respect to
any rights issued pursuant to a shareholder rights plan, "poison pill" or
similar arrangement unless the "triggering date" (i.e., the date on which
----
such rights commence to be exercisable) shall have occurred or such rights
shall have been redeemed, in which event adjustments under clause (ii) and
clause (iii), respectively, shall be made.
(c) if the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such dividend
or distribution, then thereafter no adjustment in the Conversion Amount then
in effect shall be required by reason of the taking of such record.
(d) upon any increase or decrease in the Conversion Amount,
then, and in each such case, the Corporation promptly shall deliver to each
registered holder of Series T Preferred Stock at least 10 Business Days prior
to effecting any of the foregoing transactions a certificate, signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary of the Corporation, setting forth
in reasonable detail the event requiring the adjustment and the method by
which such adjustment was calculated and specifying the increased or decreased
Conversion Amount then in effect following such adjustment.
Section 12. Sinking Fund.
------------
(a) So long as any shares of Series T Preferred Stock shall be
outstanding, the Corporation shall, on the final business day (any such date,
the "Sinking Fund Date") of each calendar year after 2003, (i) set aside a
sum of money equal to
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3-1/3% of the aggregate liquidation preference of the shares of Series T
Preferred Stock then outstanding, and (ii) apply such money to redeem such
number of shares of Series T Preferred stock at the Sinking Fund Redemption
Price (the Corporation's obligations described in this paragraph in respect of
any Sinking Fund Date being hereinafter referred to as the "Sinking Fund
Obligation" for such date) at a price per share (the "Sinking Fund Redemption
Price") equal to the sum of (A) the Liquidation Preference of such share, (B)
an amount per share equal to all accrued and unpaid dividends thereon, whether
or not declared or payable, to the applicable Sinking Fund Date and (C) the
Additional Amount (as defined in Section 11), determined as of the date
immediately prior to the Sinking Fund Date, in immediately available funds;
provided, however, that if the Corporation for any reason fails to discharge
- -------- -------
its Sinking Fund Obligation on any Sinking Fund Date, such Sinking Fund
Obligation, to the extent not discharged, shall become an additional Sinking
Fund Obligation for each succeeding Sinking Fund Date until fully discharged;
provided, further, that no shares of Series T Preferred Stock purchased or
- -------- -------
acquired by the Corporation otherwise than through redemption pursuant to this
paragraph or pursuant to an Optional Redemption may be credited against the
Sinking Fund obligation in respect of any Sinking Fund Date.
(b) Notice of the Sinking Fund Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication shall be required by applicable law,
rule, regulation or securities exchange requirement), not less than 30, nor
more than 60, days prior to the Sinking Fund Date and, in any case, a similar
notice shall be mailed at least 30, but not more than 60, days prior to the
Sinking Fund Date to each holder of shares of Series T Preferred Stock, at
such holder's address as it appears on the transfer books of the Corporation.
(c) The shares to be redeemed pursuant to paragraph (a) shall
be selected pro rata (as nearly as may be) so that the number of shares
redeemed from each holder shall be the same proportion of all the shares to be
redeemed that the total number of shares of Series T Preferred Stock then held
by such holder bears to the total number of shares of Series T Preferred Stock
then outstanding.
(d) On the Sinking Fund Date, the Corporation shall, and at any
time after such notice shall have been mailed and before the Sinking Fund Date
the Corporation may, deposit for the benefit of the holders of shares of
Series T Preferred Stock the funds necessary for such redemption with a bank
or trust company in the Borough of Manhattan, The City of New
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York, that is "well capitalized" within the meaning of the applicable banking
regulations and having a capital and surplus of at least $500,000,000. Any
moneys so deposited by the Corporation and unclaimed at the end of two years
from the date designated for such redemption shall revert to the general funds
of the Corporation. After such reversion, any such bank or trust company
shall, upon demand, pay over to the Corporation such unclaimed amounts and
thereupon such bank or trust company shall be relieved of all responsibility
in respect thereof and any holder of shares of Series T Preferred Stock to be
redeemed shall look only to the Corporation for the payment of the Sinking
Fund Redemption Price. Any interest accrued and unpaid on funds deposited
pursuant to this Section 12(c) shall be paid from time to time to the
Corporation for its own account.
(e) Notice of redemption having been given as aforesaid, upon
the deposit of funds pursuant to Section 12(c) in respect of shares of Series
T Preferred Stock to be redeemed pursuant to Section 12(a), notwithstanding
that any certificates for such shares shall not have been surrendered for
cancellation, from and after the Sinking Fund Date, (i) the rights to receive
dividends thereon shall cease to accrue and (ii) all rights of the holders of
shares of Series T Preferred Stock shall cease and terminate, excepting only
the right to receive the Sinking Fund Redemption Price therefor; provided,
--------
however, that if the Corporation shall default in the payment of the Sinking
- -------
Fund Redemption Price, the shares of Series T Preferred Stock that were to be
redeemed shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series T Preferred Stock until
such time as such default shall no longer be continuing.
Section 13. Exchange for Series E Preferred Stock.
--------------------------------------
(a) Exchange. Outstanding shares of Series T Preferred Stock
--------
shall be exchangeable at any time and from time to time by the holder thereof
into shares of Series E Preferred Stock having the same aggregate liquidation
preference as the shares of Series T Preferred Stock exchanged therefor, upon
two business days' written notice by such holder of the election to effect
such exchange (each such exchange, an "Exchange" and all such Exchanges
collectively, the "Exchange"), subject to the satisfaction or waiver of all
applicable conditions set forth in Section 13(b), and, upon any such Exchange,
any accrued and unpaid dividends with respect to the shares of Series T
Preferred Stock exchanged shall become accrued and unpaid dividends on the
shares of Series E Preferred Stock exchanged therefor.
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(b) Conditions to Exchange. The obligations of the Corporation
----------------------
to effect an Exchange are subject to satisfaction of the following conditions
at or prior to such Exchange (unless expressly waived in writing by such
parties at or prior to such Exchange):
(i) Hart-Scott-Rodino. The waiting period under the Hart-
-----------------
Scott-Rodino Antitrust Improvements Act of 1976 shall have expired or been
terminated, to the extent applicable.
(ii) Regulatory Matters. There shall have been received,
------------------
and shall be in full force and effect, all requisite approvals under the
statutes and regulations of each jurisdiction (x) in the United States of
America or any state, territory or possession thereof and (y) each other
jurisdiction wherever located that is material to the issuance by the
Corporation and the conduct of the business conducted by the Corporation and
its subsidiaries, taken as a whole, in each case with respect to the holding
by the holder of the shares of Series E Preferred Stock to be issued upon the
Exchange of the shares of Series T Preferred Stock.
Article 6. Definitions.
-----------
For the purposes of this Certificate of Amendment of Certificate
of Incorporation, the following terms shall have the meanings indicated:
"Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized or
required by law or executive order to close.
"Chicago Preferred Stock" shall mean the Series E Preferred Stock,
the Series F Preferred Stock, the Series G Preferred Stock, the Series H
Preferred Stock and the Series T Preferred Stock.
"Closing Price" on any day shall mean the closing sale price of
the Common Stock regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices of the
Common Stock 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, on the
principal national securities exchange on
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which it is then traded or, if the Common Stock is not listed or admitted to
trading on such an exchange, on Nasdaq.
"Control Transaction" shall mean any of (i) a merger,
consolidation or business combination to which the Corporation is a party that
would result in a change in ownership of more than 50% of the securities of
the Corporation entitled to vote generally in the election of directors, (ii)
the sale of all or substantially all of the Corporation's assets, and (iii)
the sale of more than 50% of the outstanding securities of the Corporation
entitled to vote generally in the election of directors; in any case, other
than pursuant to a transaction between the Corporation and CNA Financial
Corporation or its Affiliates.
"Current Market Price" per share shall mean, on any date specified
herein for the determination thereof, (a) the average daily Market Price of
the Common Stock for those days during the period of 30 days, ending on such
date, on which the national securities exchanges were open for trading, and
(b) if the Common Stock is not then listed or admitted to trading on any
national securities exchange or quoted in the over-counter market, the Market
Price on such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange
Commission thereunder.
"Fair Market Value" shall mean the amount that a willing buyer
would pay a willing seller in an arm's-length transaction.
"Issue Date" shall mean the first date of issuance of any shares
of Chicago Preferred Stock in December, 1994.
"Junior Stock" shall mean any capital stock of the Corporation
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) (a) for the purposes of Article 1, to the Series E Preferred
Stock, (b) for the purposes of Article 2, to the Series F Preferred Stock, (c)
for the purposes of Article 3, to the Series G Preferred Stock, (d) for the
purposes of Article 4, to the Series H Preferred Stock (c) for the purposes of
Article 5, to the Series T Preferred Stock.
"Liquidation Preference" with respect to a share of Chicago
Preferred Stock shall mean $200.
"Market Price" shall mean, per share of Common Stock, on any date
specified herein: (a) the closing price per share
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of the Common Stock on such date published in The Wall Street Journal or, if
no such closing price on such date is published in The Wall Street Journal,
the average of the closing bid and asked prices on such date, as officially
reported on the principal national securities exchange on which the Common
Stock is then listed or admitted to trading; or (b) if the Common Stock is not
then listed or admitted to trading on any national securities exchange but is
designated as a national market system security by the NASD, the last trading
price of the Common Stock on such date; or (c) if there shall have been no
trading on such date or if the Common Stock is not so designated, the average
of the reported closing bid and asked prices of the Common Stock, on such date
as shown by Nasdaq and reported by any member firm of the New York Stock
Exchange selected by the Corporation; or (d) if none of (a), (b) or (c) is
applicable, a market price per share determined at the Corporation's expense
by an appraiser chosen by the holders of a majority of the shares of Series E
Preferred Stock or, if such calculations shall also be utilized in connection
with the Series F Preferred Stock, Series G Preferred Stock or Series T
Preferred Stock, the holders of a majority of the aggregate shares of Series E
Preferred Stock and, as applicable, Series F Preferred Stock, Series G
Preferred Stock and Series T Preferred Stock or, if no such appraiser is so
chosen more than twenty Business Days after notice of the necessity of such
calculation shall have been delivered by the Corporation to the holders of
Series E Preferred Stock or, if such calculation shall also be utilized in
connection with the Series F Preferred Stock or Series G Preferred Stock, the
holders of Series E Preferred Stock and, as applicable, Series F Preferred
Stock and Series G Preferred Stock, then by an appraiser chosen by the
Corporation.
"Material Provision of the Securities Purchase Agreement" shall
mean any of the provisions contained in any of Sections 6.6, 6.13, 6.14, 6.16,
6.17, 6.18 or 14.1 of the Securities Purchase Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger,
dated as of December 6, 1994, by and among the Corporation, Chicago Financial
Corporation and CNA Acquisition Corp.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"Nasdaq" shall mean the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System.
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"New Preferred Stock" means nonconvertible nonexchangeable shares
of Preferred Stock to be issued by the Corporation that have an aggregate
liquidation preference not exceeding $100,000,000.
"New Senior Notes" means senior notes to be issued by the
Corporation that have an aggregate principal amount not exceeding
$100,000,000.
"Parity Stock" shall mean, with respect to any series of the
Chicago Preferred Stock, any capital stock of the Corporation, including any
other series of Chicago Preferred Stock, the Other Preferred Stock and the New
Preferred Stock (if any), ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with such series of Chicago Preferred
Stock.
"Permitted Dividend" shall mean (A) a dividend on the Common Stock
payable solely in shares of Junior Stock or (B) a dividend on the Common Stock
payable solely in cash that has been declared by the Board of Directors
subsequent to the third anniversary of the Issue Date; provided, however, that
-------- -------
if at the time of the declaration of such dividend (i) each series of Chicago
Preferred Stock or Parity Stock is not rated at least BBB- by Standard &
Poor's and at least based by Moody's Investor Services or (ii) the Corporation
has received written notice from either such rating agency that (x) the rating
issued thereby with respect to any such capital stock is likely to be
downgraded by such rating agency or (y) such rating agency has placed the
Corporation on credit watch with negative implications of a downgrade of the
rating issued with respect to any such capital stock by Standard & Poor's to
below BBB- or by Moody's Investor Services to below Baa-3 (the time during
which such minimum ratings are not in effect or such time after the
Corporation has received such written notice until such time as the
Corporation has received written notice from such rating agency that it no
longer intends to downgrade such rating or that the Corporation has been
removed from such credit watch shall be referred to as the "Dividend Maximum
Period"), then the aggregate per share amount of cash dividends on the Common
Stock that may thereafter be declared or paid in such fiscal year and each
fiscal year thereafter during the Dividend Maximum Period (including cash
dividends declared or paid prior to the commencement of the Dividend Maximum
Period) shall not exceed an amount equal to 25% of the average of consolidated
net operating income of the Corporation and its Subsidiaries (excluding
capital gains or loss either realized or unrealized) per share of Common Stock
(as determined in accordance with generally accepted accounting principles)
for the two immediately preceding fiscal years (the "Dividend
137<PAGE>
<PAGE>
Maximum Amount") provided further, that (x) if in any fiscal year in which
-------- -------
there is a Dividend Maximum Period cash dividends in excess of the Dividend
Maximum Amount (the "Excess Amount") shall have been paid prior to the
commencement of the Dividend Maximum Period, such dividends shall nevertheless
be considered Permitted Dividends so long as (I) no other cash dividends
shall have been declared or paid during the portion of such fiscal year that
was a Dividend Maximum Period and (II) in the next succeeding fiscal year, if
a Dividend Maximum Period exists the aggregate per share amount of cash
dividends on the Common Stock shall not exceed the excess of the Dividend
Maximum Amount for such year over the Excess Amount.
"Person" shall mean any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind, and shall include any successor (by
merger or otherwise) of such entity.
"Preferred Stock" shall mean preferred stock, par value $4.00 per
share, of the Corporation.
"Purchaser Designee" shall have the meaning specified in the
Securities Purchase Agreement.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of the Issue Date, between the Corporation and the
original holders of the Chicago Preferred Stock and the option to purchase the
shares of Series G Preferred Stock, as the same may be amended from time to
time.
"Restricted Payment" shall mean any dividend payment (other than a
Permitted Dividend) or other distribution of assets, properties, cash, rights,
obligations or securities by the Corporation on account of any shares of
Common Stock or any other class of Junior Stock or the purchase, redemption or
other acquisition for value by the Corporation or any Subsidiary of the
Corporation of any shares of Common Stock or any other class of Junior Stock
or any warrants, rights or options to acquire such shares, now or hereafter
outstanding.
"Securities Purchase Agreement" shall mean the Securities Purchase
Agreement, dated as of December 6, 1994, by and between the Corporation and
CNA Financial Corporation as the same may be amended from time to time.
138<PAGE>
<PAGE>
"Senior Stock" shall mean, with respect to any series of Chicago
Preferred Stock, any capital stock of the Corporation ranking senior (either
as to dividends or upon liquidation, dissolution or winding up) to such series
of Chicago Preferred Stock.
"Specified Corporate Action" shall mean such time as: (i) the
Corporation shall consent or agree to the acquisition of, or the commencement
of a tender offer for, or the Board of Directors of the Corporation shall
make a statement that the Board of Directors recommends, or is neutral with
respect to, a tender offer for, "beneficial ownership" (as defined in Rule
13d-3 under the Exchange Act) by any "Person" or "group" (within the meaning
of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) other than Chicago Financial Corporation and its
Affiliates, of securities of the Corporation entitled to vote generally in the
election of directors, or securities convertible into, exchangeable for or
exercisable into such securities (collectively, "Designated Securities"),
representing, when added to the Designated Securities already owned by any
such Person or group, thirty percent (30%) or more of such Designated
Securities; (ii) the Board of Directors of the Corporation shall take any
action under Section 912 of the Business Corporation Law of the State of New
York to exempt from the provisions of Section 912 of the Business Corporation
Law of the State of New York any transaction between the Corporation and any
of its Subsidiaries, on the one hand, and any Person or group (other than
Chicago Financial Corporation and its Affiliates or any transferee thereof),
or any Affiliates of any such Person or group, on the other hand, who (A)
acquire, own or hold beneficial ownership of Designated Securities
representing thirty percent (30%) or more of such Designated Securities or
(B) acquire, own or hold beneficial ownership of Designated Securities
representing ten percent (10%) or more of such Designated Securities unless
such other Person or group, or any Affiliate of such Person or group, enters
into a standstill agreement with the Corporation limiting the acquisition of
Designated Securities by such other Person or group, or any Affiliates of such
Person or group, to less than thirty percent (30%) of the Designated
Securities and such standstill agreement remains in full force and effect;
(iii) any Person or group (other than Chicago Financial Corporation and its
Affiliates or any transferee thereof) shall acquire, or shall have the then
contractual right to acquire through conversion, exercise of warrants or
otherwise, more than thirty percent (30%) of the Designated Securities; (iv)
the Corporation shall agree to merge or consolidate with or into any Person,
(other than Chicago Financial Corporation and its Affiliates or any transferee
thereof) or shall agree to sell all or substantially
139<PAGE>
<PAGE>
all its assets to any such Person other than (a) a merger or consolidation of
one Subsidiary of the Corporation into another or the Corporation, or (b) a
merger or consolidation immediately subsequent to which all or substantially
all the holders of the outstanding shares of capital stock immediately prior
to such consolidation or merger are entitled to receive shares representing
50% or more of the then outstanding shares of capital stock of the resulting
or surviving corporation entitled to vote generally in the election of
directors; or (v) a majority of the Board of Directors of the Corporation
shall consist of Persons other than Continuing Directors (and such term shall
not include the transactions contemplated by the Merger Agreement). The term
"Continuing Director" shall mean any member of the Board of Directors on the
Issue Date and any directors elected pursuant to Sections 3.1.18 and 6.17 of
the Securities Purchase Agreement and any other member of the Board of
Directors who shall be recommended or elected to succeed a Continuing Director
by a majority of Continuing Directors who are then members of the Board of
Directors. "Specified Corporate Action" shall not include the execution of
the Merger Agreement or the consummation of the Merger (as defined in the
Merger Agreement).
"Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
Article 7. Preemptive Rights.
-----------------
None of the holders of any series of Chicago Preferred Stock,
shall be entitled to any preemptive or subscription rights in respect of
any securities of the Corporation.
140<PAGE>
<PAGE>
IN WITNESS WHEREOF, The Continental Corporation has caused this
certificate to be signed by John P. Mascotte, it, Chairman of the Board and
Chief Executive Officer, and by William F. Gleason, Jr., its Secretary, and
Chicago Acquisition Corp. has caused this certificate to be signed by Donald
M. Lowry, its Senior Vice President, Secretary and General Counsel, and
Patricia L. Kubera, its Vice President and Controller, on this 10th day of May,
1995.
THE CONTINENTAL CORPORATION
By: /s/ John P.Mascotte
----------------------------
John P. Mascotte
Chairman of the Board and
Chief Executive Officer
BY: /s/ William F. Gleason, Jr.
----------------------------
William F. Gleason, Jr.
Secretary
CHICAGO ACQUISITION CORP.
BY: /s/ Donald M. Lowry
----------------------------
Donald M. Lowry
Senior Vice President,
Secretary and General Counsel
By: /s/ Patricia L. Kubera
---------------------------
Patricia L. Kubera
Vice President and Controller
Each of the undersigned hereby affirms under penalty of perjury
that the matters set forth in the foregoing certificate are true of his own
knowledge. Executed in New York, New York on the 10th day of May, 1995.
/s/ John P. Mascotte
-------------------------------
John P. Mascotte
/s/ Donald M. Lowry
-------------------------------
Donald M. Lowry
141<PAGE>
<PAGE>
CERTIFICATE OF MERGER
OF
CHICAGO ACQUISITION CORP.
WITH AND INTO
THE CONTINENTAL CORPORATION
UNDER SECTION 904 OF THE BUSINESS CORPORATION LAW
FILED BY:
WACHTELL, LIPTON, ROSEN & KATZ
561 West 52nd Street
New York, New York 10019-6150
142
<PAGE>
Exhibit 23.01
Consent of Independent Certified Public Accountants
The Board of Directors
CNA Financial Corporation:
We consent to incorporation by reference in Form 8-K/A of CNA Financial
Corporation of our report dated February 16, 1995, with respect to the
consolidated financial statements of The Continental Corporation and
subsidiaries as of December 31, 1994 and 1993, and for each of the years in
the three-year period ended December 31, 1994, which report appears in the
Proxy Statement dated March 29, 1995 of The Continental Corporation.
Our report refers to The Continental Corporation and subsidiaries' change in
methods of accounting for multiple-year retrospectively rated reinsurance
contracts and for the adoption of the provisions of the Financial Accounting
Standards Board's Statements of Financial Accounting Standards ("SFAS") No.
112, "Employers' Accounting for Postemployment Benefits," No. 113,
"Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration
Contracts," and No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," in 1993. SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," and No. 109, "Accounting
for Income Taxes," were adopted in 1992.
KPMG Peat Marwick LLP
New York, New York
July 21, 1995
<PAGE>
EXHIBIT 99.03
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited Pro Forma Consolidated Financial Information gives
effect to the acquisition of The Continental Corporation ("Continental") share
as more fully described in Item 2. The unaudited Pro Forma Consolidated
Balance Sheet has been prepared as if the acquisition had been consummated on
March 31, 1995. The unaudited Pro Forma Statement of Consolidated Operations
for the year ended December 31, 1994 and for the three month period ended
March 31, 1995 have been prepared as if the acquisition had been consummated
at the beginning of the period, January 1, 1994 and January 1, 1995,
respectively. Such Pro Forma Consolidated Financial Information is not
necessarily indicative of the results of operations or financial position of
the Company that would have been reported had the acquisition been consummated
on the dates indicated, nor is it necessarily indicative of the future
consolidated results of operations.
The acquisition of Continental is accounted for as a purchase, therefore, the
Pro Forma Consolidated Financial Information reflects the preliminary
purchase price allocation based on relative fair values. These fair values
are based on appraisals and other studies which are not yet completed.
Although the final allocation may be different than the amounts reflected
herein, the Pro forma Condensed Financial Information reflects management's
best estimate based on currently available information.
The unaudited Pro Forma Consolidated Financial Information should be read in
conjunction with the accompanying Notes to Pro Forma Consolidated Financial
Information; the audited consolidated financial statements and the unaudited
consolidated interim financial statements of Continental incorporated herein
by reference; and CNA's Annual Report on Form 10-K for the year ended
December 31, 1994 and Quarterly Report on Form 10-Q for the first quarter of
1995.
(1)<PAGE>
<PAGE>
CNA FINANCIAL CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
HISTORICAL
------------------------
CNA THE PRO FORMA
FINANCIAL CONTINENTAL ADJUSTMENTS PRO FORMA
(In millions of dollars) CORPORATION CORPORATION (Note 1) CONSOLIDATED
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments:
Fixed maturities available for sale . . . . . . . . . . . . . . . $19,478.0 $ 6,237.4 ($ 275.0) (a) $25,440.4
Equity securities available for sale. . . . . . . . . . . . . . . 802.3 75.4 877.7
Mortgage loans and real estate (less accumulated depreciation). . 44.1 88.6 132.7
Policy loans. . . . . . . . . . . . . . . . . . . . . . . . . . . 176.5 176.5
Other invested assets . . . . . . . . . . . . . . . . . . . . . . 111.1 419.4 530.5
Short-term investments. . . . . . . . . . . . . . . . . . . . . . 7,313.3 980.1 8,293.4
--------- --------- -------- ---------
TOTAL INVESTMENTS. . . . . . . . . . . . . . . . . . . . . . 27,925.3 7,800.9 (275.0) 35,451.2
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122.5 122.1 244.6
Insurance receivables:
Reinsurance receivables . . . . . . . . . . . . . . . . . . . . 3,159.8 4,022.5 7,182.3
Other insurance receivables . . . . . . . . . . . . . . . . . . 3,997.8 815.2 4,813.0
Less allowance for doubtful accounts. . . . . . . . . . . . . . (127.4) (153.3) (280.7)
Deferred acquisition costs . . . . . . . . . . . . . . . . . . . 1,054.6 315.1 1,369.7
Accrued investment income . . . . . . . . . . . . . . . . . . . . 269.7 102.9 372.6
Receivables for securities sold . . . . . . . . . . . . . . . . . 1,071.2 1,071.2
Federal income taxes recoverable. . . . . . . . . . . . . . . . . 105.8 105.8
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . 1,394.8 509.7 227.9 (b) 2,132.4
Property and equipment at cost (less accumulated depreciation). . 264.0 392.0 (120.0) (b) 536.0
Prepaid reinsurance premiums . . . . . . . . . . . . . . . . . . 160.7 433.5 594.2
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . 487.7 673.1 302.2 (b) 1,463.0
Separate Account business . . . . . . . . . . . . . . . . . . . . 6,004.4 6,004.4
- -------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $45,890.9 $15,033.7 $ 135.1 $61,059.7
=========================================================================================================================
</TABLE>
<PAGE>
<PAGE>
CNA FINANCIAL CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET-continued
MARCH 31, 1995
(unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
HISTORICAL
------------------------
CNA THE PRO FORMA
FINANCIAL CONTINENTAL ADJUSTMENTS PRO FORMA
(In millions of dollars) CORPORATION CORPORATION (Note 1) CONSOLIDATED
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Insurance reserves:
Claim and claim expense . . . . . . . . . . . . . . . . . . . . $22,590.1 $ 9,547.1 $ 160.0 (c) $32,297.2
Future policy benefits . . . . . . . . . . . . . . . . . . . . . 3,161.9 3,161.9
Unearned premiums . . . . . . . . . . . . . . . . . . . . . . . 2,754.1 1,749.8 4,503.9
Policyholders' funds . . . . . . . . . . . . . . . . . . . . . . 617.9 29.6 647.5
Participating policyholders' equity . . . . . . . . . . . . . . . 111.9 111.9
Securities sold under repurchase agreements . . . . . . . . . . . 2,825.0 2,825.0
Payables for securities purchased . . . . . . . . . . . . . . . . 532.5 532.5
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . 2.0 211.2 (205.0) (d) 8.2
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . 911.2 776.7 1,324.1 (d) 3,008.1
(3.9) (b)
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . 1,248.3 1,287.2 292.0 (b) 2,827.5
Separate Account business . . . . . . . . . . . . . . . . . . . . 6,004.4 6,004.4
--------- --------- -------- ---------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . 40,759.3 13,601.6 1,567.2 55,928.1
--------- --------- -------- ---------
Commitments and contingent liabilities
Redeemable preferred stocks . . . . . . . . . . . . . . . . . . . . . -- 275.0 (275.0) (a) --
--------- --------- -------- ---------
Stockholders' equity:
Common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . 154.6 65.7 (65.7) (e) 154.6
Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . 150.0 150.0
Additional paid-in capital . . . . . . . . . . . . . . . . . . . 434.7 612.9 (612.9) (e) 434.7
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . 4,466.5 1,020.9 (1,020.9) (e) 4,466.5
Net unrealized investment gains . . . . . . . . . . . . . . . . . (71.7) (116.3) 116.3 (e) (71.7)
Cumulative transition adjustment. . . . . . . . . . . . . . . . . -- (61.2) 61.2 (e) --
Treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . (2.5) (364.9) 364.9 (e) (2.5)
---------- --------- -------- ---------
TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . 5,131.6 1,157.1 (1,157.1) 5,131.6
- -------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $45,890.9 $15,033.7 $ 135.1 $61,059.7
=========================================================================================================================
See notes to Pro Forma Consolidated Financial Information (unaudited).
</TABLE>
(2)<PAGE>
<PAGE>
CNA FINANCIAL CORPORATION
PRO FORMA STATEMENT OF CONSOLIDATED OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
HISTORICAL
------------------------
CNA THE PRO FORMA
FINANCIAL CONTINENTAL ADJUSTMENTS PRO FORMA
(In millions of dollars, except per share data) CORPORATION CORPORATION (Note 1) CONSOLIDATED
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Premiums ........................................................... $2,516.0 $ 831.2 $3,347.2
Net investment income .............................................. 430.9 130.8 ($9.4) (f) 553.7
1.4 (g)
Realized investment gains .......................................... 35.8 92.9 128.7
Other............................................................... 70.1 20.7 90.8
-------- -------- ------- --------
3,052.8 1,075.6 (8.0) 4,120.4
-------- -------- ------- --------
Benefits and expenses:
Insurance claims and policyholders' benefits ....................... 2,155.7 669.8 (2.1) (i) 2,823.4
Amortization of deferred acquisition costs.......................... 361.0 269.5 630.5
Other operating expenses............................................ 316.3 22.0 8.0 (g) 334.4
(11.9) (j)
Interest expense.................................................... 17.7 13.8 (0.1) (g) 61.5
18.2 (h)
11.9 (j)
-------- -------- ------- --------
2,850.7 975.1 24.0 3,849.8
-------- -------- ------- --------
Income (loss) from continuing operations before income tax....... 202.1 100.5 (32.0) 270.6
Income tax benefit(expense).......................................... (49.3) (51.6) 9.9 (k) (91.0)
-------- -------- ------- --------
Income (loss) from continuing operations $ 152.8 $ 48.9 ($22.1) $ 179.6
=========================================================================================================================
EARNINGS PER SHARE
- ------------------
Income from continuing operations................................ $ 2.44 $ 2.88
======== ========
Weighted average outstanding shares of
common stock (in millions of shares)................................ 61.8 61.8
=========================================================================================================================
See notes to Pro Forma Consolidated Financial Information (unaudited).
</TABLE>
(3)<PAGE>
<PAGE>
CNA FINANCIAL CORPORATION
PRO FORMA STATEMENT OF CONSOLIDATED OPERATIONS
YEAR ENDED DECEMBER 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
HISTORICAL
------------------------
CNA THE PRO FORMA
FINANCIAL CONTINENTAL ADJUSTMENTS PRO FORMA
(In millions of dollars, except per share data) CORPORATION CORPORATION (Note 1) CONSOLIDATED
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Premiums ........................................................... $ 9,474.4 $4,429.1 $13,903.5
Net investment income .............................................. 1,551.2 504.2 ($0.1) (f) 2,061.0
5.7 (g)
Realized investment gains (losses) ................................. (246.2) 76.0 (170.2)
Other............................................................... 220.1 92.1 312.2
--------- -------- ------- ---------
10,999.5 5,101.4 5.6 16,106.5
--------- -------- ------- ---------
Benefits and expenses:
Insurance claims and policyholders' benefits ....................... 8,450.3 4,400.9 (8.5) (i) 12,842.7
Amortization of deferred acquisition costs.......................... 1,377.5 1,383.4 2,760.9
Other operating expenses............................................ 1,235.2 283.7 32.0 (g) 1,498.9
(52.0) (j)
Interest expense.................................................... 70.5 40.9 (0.4) (g) 237.0
74.0 (h)
52.0 (j)
--------- -------- ------- ---------
11,133.5 6,108.9 97.1 17,339.5
--------- -------- ------- ---------
Loss from continuing operations before income tax................ (134.0) (1,007.5) (91.5) (1,233.0)
Income tax benefit................................................... 170.5 365.1 26.7 562.3
-------- -------- ------- --------
Income (loss) from continuing operations $ 36.5 ($642.4) ($64.8) (k) ($670.7)
=========================================================================================================================
EARNINGS PER SHARE
- ------------------
Income (loss) from continuing operations......................... $ 0.51 ($10.93)
======== ========
Weighted average outstanding shares of
common stock (in millions of shares)................................ 61.8 61.8
=========================================================================================================================
See notes to Pro Forma Consolidated Financial Information (unaudited).
</TABLE>
(4)<PAGE>
<PAGE>
CNA FINANCIAL CORPORATION
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(In millions of dollars)
Note 1
The unaudited Pro Forma Consolidated Balance Sheet gives effect to the pro
forma adjustments necessary to reflect the acquisition of Continental as if
the acquisition been consummated on March 31, 1995, and as if Continental's
assets and liabilities were adjusted to fair value in accordance with generally
accepted accounting principles as of March 31, 1995. The fair value
adjustments reflected in the Pro Forma Consolidated Balance Sheet are based
on the fair value adjustments expected to be made as of the actual acquisition
date.
(a) To eliminate CNA's investment in Continental redeemable preferred stock.
(b) To reflect adjustments arising from the allocation of purchase price to
the fair value of Continental's assets and liablities. The principal
adjustments are as follows:
Debit
(Credit)
--------
Assets:
Reduction of carrying amount of property
and equipment, primarily real estate $ (120.0)
Intangible assets, including excess
of purchase price over fair value of net
assets acquired 302.2
Net deferred tax benefit 227.9
Liabilities:
Discount allocated to long-term debt based
on current interest rates 3.9
Increase of other liabilities, primarily
for pension and postretirement obligations (42.5)
Liability established for the estimated cost
of severance and employee relocation, leased
facilities to be closed, and significantly
underutilized leased properties (249.5)
(5)<PAGE>
<PAGE>
(c) To conform Continental's accounting policy by adjusting the discount
rates used to establish Continentals reserves for workers' compensation
lifetime claims to the rates used by CNA. Such rates are also used
for CNA's statutory reporting.
(d) To establish long-term debt used to fund the acquisition of
Continental's common stock ($1,125) and refinance short-term debt
($205). CNA borrowed $1,325 under a five-year revolving credit
facility. The borrowings under the credit facility are classified as
long-term debt as it is the Company's intention to maintain the credit
facility or to arrange for longer-term financing on more favorable
terms. There is no prepayment penalty on borrowings under the credit
facility.
(e) To eliminate Continental's shareholders' equity.
The unaudited Pro Forma Statements of Consolidated Operations give effect to
the pro forma adjustments necessary to reflect the acquisition of Continental
as if it had been consummated as of the beginning of the pro forma periods.
The adjustments reflected in the Pro Forma Statements of Consolidated
Operations are based on the fair value adjustments expected to be made as of
the actual acquisition date.
(f) To eliminate dividends on the Continental preferred stock owned
by CNA.
(g) To reflect adjustments relating to the allocation of purchase price
based on relative fair value of the acquired net assets as follows:
Amortization of discount allocated to investments using the
interest method over the estimated life of the investments
($5.7 in 1994 and $1.4 in 1995)
Reduction of depreciation expense ($3.1 in 1994 and $ .8 in 1995)
Amortization of intangible assets, including excess of
purchase price over the fair value of net assets acquired, over
20 years ($15.1 in 1994 and $3.8 in 1995)
Amortization of discount allocated to long-term debt using the
interest method ($ .4 in 1994 and $ .1 in 1995)
Accretion of the liability established for future lease obligations
on closed or to be closed and significantly underutilized facilities
using the interest method ($20.0 in 1994 and $5.0 in 1995)
(h) To record interest on acquisition borrowings at the weighted average
rate of 6.583% and to eliminate interest expense on the Continental
debt refinanced through these borrowings. Interest on borrowings under
the credit facility is based on LIBOR plus 35 basis points. CNA has
entered interest rate swap agreements which effectively fix the
interest rate on $950 of these borrowings.
(6)<PAGE>
<PAGE>
(i) To reduce the accretion on workers' compensation lifetime claims based
on discount rates, adjusted to conform to CNA accounting policies.
(j) To reclassify interest expense to conform to CNA reporting.
(k) To record the income tax effect of the pro forma adjustments above.
Note 2
As stated in the introduction to the Pro Forma Consolidated Financial
Information, the pro forma information is not necessarily indicative of the
future consolidated results of operations. As the organizational integration
of CNA and Continental is completed, management expects to begin to realize
significant cost savings from market efficiencies and economies of scale.
These future cost savings are not reflected in the Pro Forma Consolidated
Financial Information.
(7)
