SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_______________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended March 29, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Commission file number 1-5480
_______________
TEXTRON INC.
(Exact name of registrant as specified in its charter)
_______________
Delaware 05-0315468
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
40 Westminster Street, Providence, RI 02903
401-421-2800
(Address and telephone number of principal executive offices)
_______________
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Common stock outstanding at April 26, 1997 - 82,505,000 shares
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<TABLE>
TEXTRON INC.
Condensed Consolidated Statement of Income (unaudited)
(Dollars in millions except per share amounts)
<CAPTION>
Three months ended
March 29, March 30,
1997 1996
Revenues
<S> <C> <C>
Manufacturing sales $ 2,021 $ 1,700
Finance revenues 530 514
Total revenues 2,551 2,214
Costs and expenses
Cost of sales 1,656 1,393
Selling and administrative 362 331
Interest 183 183
Provision for losses on collection of finance receivables 64 53
Other 70 70
Total costs and expenses 2,335 2,030
Income from continuing operations before income taxes and
distributions on preferred securities of subsidiary trust 216 184
Income taxes (85) (72)
Distributions on preferred securities of subsidiary trust, net
of income taxes (6) (3)
Income from continuing operations 125 109
Discontinued operation, net of income taxes - (74)
Net income $ 125 $ 35
Per common share*:
Income from continuing operations $ .73 $ .63
Discontinued operation - (.43)
Net income $ .73 $ .20
Average shares outstanding* 170,454,000 173,360,000
Dividends per share:
$2.08 Preferred stock, Series A $ .52 $ .52
$1.40 Preferred stock, Series B $ .35 $ .35
Common stock* $ .25 $ .22
</TABLE>
*Reflects the effect of the two-for-one stock split in the form of a stock
dividend payable May 30, 1997 to shareholders of record on May 9, 1997.
See notes to consolidated financial statements.
Item 1. FINANCIAL STATEMENTS (Continued)
<TABLE>
TEXTRON INC.
Condensed Consolidated Balance Sheet (unaudited)
(Dollars in millions)
<CAPTION>
March 29, December 28,
1997 1996
Assets
<S> <C> <C>
Cash $ 140 $ 47
Investments 1,057 820
Receivables - net:
Finance 10,074 9,856
Commercial and U.S. government 975 882
11,049 10,738
Inventories 1,373 1,192
Investment in discontinued operation - 770
Property, plant, and equipment, less accumulated
depreciation of $1,758 and $1,664 1,701 1,539
Goodwill, less accumulated amortization of $412 and
$404 1,801 1,609
Other (including net prepaid income taxes) 1,568 1,520
Total assets $ 18,689 $ 18,235
Liabilities and shareholders' equity
Liabilities
Accounts payable $ 900 $ 850
Accrued postretirement benefits other than pensions 820 817
Other accrued liabilities (including income taxes) 2,708 2,556
Debt:
Parent Group 1,464 1,507
Finance Group 9,099 8,839
10,563 10,346
Total liabilities 14,991 14,569
Textron - obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely Textron junior subordinated debt securities 483 483
Shareholders' equity
Capital stock:
Preferred stock 14 14
Common stock* 12 12
Capital surplus 811 793
Retained earnings 3,053 2,969
Other (28) 7
3,862 3,795
Less cost of treasury shares 647 612
Total shareholders' equity 3,215 3,183
Total liabilities and shareholders' equity $ 18,689 $ 18,235
*Common shares outstanding before stock split 83,091,000 82,809,000
</TABLE>
See notes to consolidated financial statements.
Item 1. FINANCIAL STATEMENTS (Continued)
<TABLE>
TEXTRON INC.
Condensed Consolidated Statement of Cash Flows (Unaudited)
(In millions)
<CAPTION>
Three Months Ended
March 29, March 30,
1997 1996
Cash flows from operating activities:
<S> <C> <C>
Income from continuing operations $ 125 $ 109
Adjustments to reconcile income from continuing operations to net
cash provided by operating activities:
Depreciation and amortization 102 92
Provision for losses on receivables 66 54
Changes in assets and liabilities excluding those related to
acquisitions and divestitures:
Increase in commercial and U.S. government receivables (8) (31)
Increase in inventories (138) (82)
Increase in other assets (8) (27)
Increase (decrease) in accounts payable 14 (18)
Decrease in accrued liabilities (23) (1)
Other - net (25) 3
Net cash provided by operating activities 105 99
Cash flows from investing activities:
Purchases of investments (50) (34)
Proceeds from disposition of investments 34 12
Maturities and calls of investments 9 10
Finance receivables:
Originated or purchased (1,776) (1,461)
Repaid or sold 1,582 1,432
Cash used in acquisitions (348) (3)
Cash received from dispositions 571 -
Capital expenditures (88) (52)
Other investing activities - net 13 (1)
Net cash used by investing activities (53) (97)
Cash flows from financing activities:
Increase in short-term debt 240 130
Proceeds from issuance of long-term debt 798 456
Principal payments on long-term debt (966) (955)
Issuance of Textron-obligated mandatorily redeemable preferred
securities of subsidiary trust holding solely Textron junior
subordinated debt securities - 483
Proceeds from exercise of stock options 16 18
Purchases of Textron common stock (6) (110)
Dividends paid (41) (37)
Net cash provided (used) by financing activities 41 (15)
Net increase (decrease) in cash 93 (13)
Cash at beginning of period 47 84
Cash at end of period $ 140 $ 71
</TABLE>
See notes to consolidated financial statements.
TEXTRON INC.
Notes to Consolidated Financial Statements (unaudited)
Note 1: Basis of presentation
The financial statements should be read in conjunction with the
financial statements included in Textron's Annual Report on Form 10-K
for the year ended December 28, 1996. The financial statements
reflect all adjustments (consisting only of normal recurring
adjustments) which are, in the opinion of management, necessary for a
fair presentation of Textron's consolidated financial position at
March 29, 1997, and its consolidated results of operations and cash
flows for each of the respective three month periods ended March 29,
1997 and March 30, 1996. Textron completed the sale of Paul Revere to
Provident Companies, Inc. on March 27, 1997. See Management's
Discussion and Analysis for additional information.
Note 2: Stock split in the form of a stock dividend
At Textron's Annual Meeting on April 23,
1997, Textron's shareholders approved an increase in the authorized
number of common shares from 250 to 500 million in connection with a
two-for-one stock split of Textron common stock to be effected in the
form of a stock dividend. The new shares will be distributed on May
30, 1997 to shareholders of record on the close of business on May 9,
1997. Average shares outstanding and per share amounts have been
restated to reflect the stock split for all periods presented.
Note 3: Earnings per Share
In February 1997, the Financial
Accounting Standards Board issued Statement No. 128, "Earnings per
Share," (FAS 128) which is effective for financial statements for both
interim and annual periods ending after December 15, 1997. FAS 128
will require the presentation of "Basic" and "Diluted" EPS. On a
proforma basis, Diluted EPS calculated in accordance with FAS 128 does
not differ significantly from EPS as currently reported for the
quarter ended March 29, 1997. The Basic EPS calculation does not
consider the potential effects of potentially dilutive securities and
on a proforma basis, is approximately $.02 per share higher then
Diluted EPS for the first quarter of 1997 (post-split).
Note 4: Inventories
<TABLE>
<CAPTION>
March 29, December 28,
1997 1996
(In millions)
<S> <C> <C>
Finished goods $ 408 $ 364
Work in process 825 769
Raw materials 297 259
1,530 1,392
Less progress payments and customer deposits 157 200
$ 1,373 $ 1,192
</TABLE>
Note 5: Textron-obligated mandatorily redeemable preferred securities of
subsidiary trust holding solely Textron junior subordinated debt
securities
In 1996, a trust sponsored and wholly-owned by Textron issued
preferred securities to the public (for $500 million) and shares of
its common securities to Textron (for $15.5 million), the proceeds of
which were invested by the trust in $515.5 million aggregate principal
amount of Textron's newly issued 7.92% Junior Subordinated Deferrable
Interest Debentures, due 2045. The debentures are the sole asset of
the trust. The amounts due to the trust under the debentures and the
related income statement amounts have been eliminated in Textron's
consolidated financial statements.
The preferred securities accrue and pay cash distributions quarterly
at a rate of 7.92% per annum. Textron has guaranteed, on a
subordinated basis, distributions and other payments due on the
preferred securities. The guarantee, when taken together with
Textron's obligations under the debentures and in the indenture
pursuant to which the debentures were issued and Textron's obligations
under the Amended and Restated Declaration of Trust governing the
trust, provides a full and unconditional guarantee of amounts due on
the preferred securities.
The preferred securities are mandatorily redeemable upon the maturity
of the debentures on March 31, 2045, or earlier to the extent of any
redemption by Textron of any debentures. The redemption price in
either such case will be $25 per share plus accrued and unpaid
distributions to the date fixed for redemption.
Note 6: Contingencies
Lawsuits and other proceedings are pending or threatened against
Textron and its subsidiaries. Some allege violations of federal
government procurement regulations, involve environmental matters, or
are or purport to be class actions. Some seek compensatory, treble or
punitive damages in substantial amounts; fines, penalties or
restitution; or remediation of contamination. Under federal
government procurement regulations, some could result in suspension or
debarment of Textron or its subsidiaries from U.S. government
contracting for a period of time. On the basis of information
presently available, Textron believes that these suits and proceedings
will not have a material effect on Textron's net income or financial
condition.
Note 7: Financial information by borrowing group
Textron consists of two borrowing groups - the Textron Parent Company
Borrowing Group (Parent Group) and Textron's finance subsidiaries
(Finance Group). The Parent Group consists of all entities of Textron
(primarily manufacturing) other than its wholly-owned finance
subsidiaries. The Finance Group consists of Avco Financial Services
(AFS) and Textron Financial Corporation (TFC). Summarized financial
information for the Parent Group includes the Finance Group on a one-
line basis under the equity method of accounting.
Item 1 FINANCIAL STATEMENTS (Continued)
Note 7: Financial information by borrowing group (continued)
<TABLE>
PARENT GROUP
(unaudited) (In millions)
<CAPTION>
Three Months Ended
March 29, March 30,
Condensed Statement of Income 1997 1996
<S> <C> <C>
Sales $ 2,021 $ 1,700
Costs and expenses
Cost of sales 1,656 1,393
Selling and administrative 206 177
Interest 39 38
Total costs and expenses 1,901 1,608
120 92
Pretax income of Finance Group 96 92
Income from continuing operations before income taxes and
distribution on preferred securities of subsidiary trust 216 184
Income taxes (85) (72)
Distributions on preferred securities of subsidiary trust, net of
income taxes (6) (3)
Income from continuing operations 125 109
Discontinued operation, net of income taxes - (74)
Net income $ 125 $ 35
</TABLE>
<TABLE>
<CAPTION>
March 29, December 28,
Condensed Balance Sheet 1997 1996
Assets
<S> <C> <C>
Cash $ 88 $ 24
Receivables - net 975 882
Inventories 1,373 1,192
Investments in Finance Group 1,595 1,600
Investment in discontinued operation - 770
Property, plant and equipment - net 1,615 1,454
Goodwill 1,648 1,466
Other assets (including net prepaid income taxes) 1,568 1,269
Total assets $ 8,862 $ 8,657
Liabilities and shareholders' equity
Accounts payable and accrued liabilities (including income taxes) $ 3,700 $ 3,484
Debt 1,464 1,507
Textron - obligated mandatorily redeemable preferred securities of
subsidiary trust holding solely Textron junior subordinated debt
securities 483 483
Shareholders' equity 3,215 3,183
Total liabilities and shareholders' equity $ 8,862 $ 8,657
</TABLE>
Item 1. FINANCIAL STATEMENTS (Continued)
Note 7: Financial information by borrowing group (continued)
<TABLE>
PARENT GROUP (continued)
(Unaudited) (In millions)
<CAPTION>
Three Months Ended
March 29, March 30,
Condensed Statement of Cash Flows 1997 1996
Cash flows from operating activities:
<S> <C> <C>
Income from continuing operations $ 125 $ 109
Adjustments to reconcile income from continuing operations to net
cash provided (used) by operating activities:
Undistributed earnings of Finance Group (11) (26)
Depreciation and amortization 70 60
Changes in assets and liabilities excluding those related to
acquisitions and divestitures:
Increase in receivables (8) (31)
Increase in inventories (138) (82)
Increase in other assets (25) (56)
Increase (decrease) in accounts payable and accrued
liabilities (6) 6
Other - net (8) 11
Net cash used by operating activities (1) (9)
Cash flows from investing activities:
Capital expenditures (81) (47)
Cash used in acquisitions (324) (3)
Cash received from dispositions 571 -
Other investing activities - net 14 7
Net cash provided (used) by investing activities 180 (43)
Cash flows from financing activities:
Increase (decrease) in short-term debt 8 (5)
Proceeds from issuance of long-term debt 690 328
Principal payments on long-term debt (781) (630)
Issuance of Textron - obligated mandatorily redeemable preferred
securities of subsidiary trust holding solely Textron junior
subordinated debt securities - 483
Proceeds from exercise of stock options 16 18
Purchases of Textron common stock (6) (110)
Dividends paid (42) (37)
Net cash provided (used) by financing activities (115) 47
Net increase (decrease) in cash 64 (5)
Cash at beginning of period 24 56
Cash at end of period $ 88 $ 51
</TABLE>
Item 1 FINANCIAL STATEMENTS (Continued)
Note 7: Financial information by borrowing group (continued)
<TABLE>
FINANCE GROUP
(unaudited) (In millions)
<CAPTION>
Three Months Ended
March 31, March 31,
Condensed Statement of Income 1997 1996
<S> <C> <C>
Revenues $ 530 $ 514
Costs and expenses
Selling and administrative 156 154
Interest 144 145
Provision for losses on collection of finance receivables 64 53
Other 70 70
Total costs and expenses 434 422
Income before income taxes 96 92
Income taxes (37) (36)
Net income $ 59 56
</TABLE>
<TABLE>
<CAPTION>
March 31, December 31,
Condensed Balance Sheet 1997 1996
Assets
<S> <C> <C>
Cash $ 52 $ 23
Investments 808 814
Finance receivables - net 10,076 9,860
Other 750 712
Total assets $ 11,686 $ 11,409
Liabilities and equity
Accounts payable and accrued liabilities (including income
taxes) $ 992 $ 970
Debt 9,099 8,839
Equity 1,595 1,600
Total liabilities and equity $ 11,686 $ 11,409
</TABLE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
<TABLE>
TEXTRON INC.
Revenues and Income by Business Segment
(In millions)
<CAPTION>
Three Months Ended
March 29, March 30,
1997 1996
REVENUES
<S> <C> <C>
MANUFACTURING:
Aircraft $ 706 $ 654
Automotive 557 405
Industrial 620 477
Systems and Components 138 164
2,021 1,700
FINANCE 530 514
Total revenues $ 2,551 $ 2,214
INCOME
MANUFACTURING:
Aircraft $ 64 $ 56
Automotive 50 37
Industrial 67 54
Systems and Components 11 11
192 158
FINANCE 96 92
Segment operating income 288 250
Corporate expenses and other - net (33) (28)
Interest expense - net (39) (38)
Income from continuing operations before income
taxes and distributions on preferred securities of
subsidiary trust $ 216 $ 184
</TABLE>
Financial Condition
Parent Group: During the three months ended March 29, 1997, the Parent Group's
cash flows used in operating activities were approximately the same as they were
in the corresponding period of 1996. Operating cash flows for 1997 were
affected by income from continuing operations offset by inventory buildup at
Cessna on the Citation X, Bravo and Single Engine programs. The Group's debt
decreased by $43 million principally as a result of cash from the sale of Paul
Revere ($571 million) exceeding cash used for (a) acquisitions ($324 million),
(b) capital expenditures ($81 million), and (c) payments of dividends ($42
million).
The Parent Group's credit facilities not used or reserved as support for
outstanding commercial paper or bank borrowings at March 29, 1997 were $1.2
billion. Textron had $511 million available at March 29,1997 under its shelf
registration statements filed with the Securities and Exchange Commission.
At March 29, 1997, approximately 35% and 32% of total foreign currency
borrowings of $496 million under Textron's multi-currency credit agreements were
denominated in Deutsche marks and French francs, respectively.
On March 27, 1997, Textron completed the sale of its 83.3% owned subsidiary, The
Paul Revere Corporation, to Provident Companies, Inc. Net proceeds to Textron
after adjustments and contingent payments were approximately $800 million
(including shares of Provident common stock valued at $245 million). Proceeds
will be used to finance acquisitions, repurchase Textron common shares and
reduce debt.
In the first quarter of 1997, the Parent Group acquired the Germany-based Kautex
Group, a worldwide supplier of blow-molded plastic fuel tanks and other
automotive components and systems and Switzerland-based Maag Pump Systems AG and
Italy-based Maag Italia S.p.A., manufacturers of gears, gear pumps and gear
systems for an aggregate of approximately $390 million.
Management believes that the Parent Group will continue to have adequate access
to credit markets and that its credit facilities and cash flows from operations
- --including dividends received from Textron's Finance Group-- will continue to
be more than sufficient to meet its operating needs and to finance growth.
Finance Group: The Finance Group paid dividends of $48 million and $30 million
to the Parent Group during the three month periods ended March 29, 1997 and
March 30, 1996, respectively.
During the three months ended March 29, 1997, the Finance Group had $157 million
of interest rate exchange agreements expire and $48 million of interest rate
exchange agreements go into effect. The new agreements, which have a weighted
average original term of 2.8 years and expire through 2000, had the effect of
fixing the rate of interest at approximately 7.0% on $48 million of variable
rate borrowings at March 29, 1997.
Results of Operations - Three months ended March 29, 1997 vs. Three months ended
March 30, 1996
Textron reported first quarter 1997 earnings per share from continuing
operations of $0.73 per share, up 16% from first quarter 1996 earnings per share
from continuing operations of $0.63. Income from continuing operations in 1997
of $125 million was up 15% from the 1996 amount of $109 million. Revenues
increased 15% to $2.6 billion in 1997 from $2.2 billion in 1996. Net income in
the first quarter 1997 was $125 million vs $35 million in 1996, which reflected
the impact of a $74 million loss from a discontinued operation.
The Aircraft segment's revenues and income increased $52 million (8%) and $8
million (14%), respectively, due to stronger results at Cessna Aircraft.
Cessna's revenues and income increased due to higher sales of business jets,
including the recently introduced Citation X and Citation Bravo. Bell
Helicopter's revenues and income were slightly below last year as a result of
lower revenues on the V-22 program ($46 million), partially offset by higher
domestic and international commercial helicopter sales ($27 million), primarily
its new model 407.
The Automotive segment's revenues increased $152 million (38%), primarily as a
result of the first quarter 1997 acquisition of Kautex and the 1996 acquisitions
of Valeo Wiper Systems and the remaining 50% of a joint venture in Born,
Netherlands. Stronger light truck sales to U.S. OEMs also contributed to the
improved results. Income increased $13 million (35%), primarily as a result of
the higher sales.
Excluding the impact of the 1997 acquisition of Kautex, automotive sales are
expected to be lower in 1997 than in 1996 as a result of the timing of
replacement business and customer launches beginning in the second quarter 1997.
In addition, second quarter 1997 income will be lower than last year's second
quarter reflecting the impact of a strike at a U.S. OEM plant.
The Industrial segment's revenues and income increased $143 million (30%) and
$13 million (24%), respectively. These increases were due principally to higher
sales in the fastening systems business ($108 million), including the second
quarter 1996 acquisition of Textron Industries. In addition, results benefited
from the first quarter 1997 acquisition of Maag Pump Systems and Maag Italia
S.p.A., and higher sales and improved performance at E-Z-GO.
The Systems and Components segment's revenues decreased $26 million (16%),
reflecting the third quarter 1996 divestiture of Textron Aerostructures. This
revenue decrease was partially offset by an increase in demand for aerospace
components at Turbine Engine Components. Income remained unchanged as the
benefit of the higher revenues and improved performance at Turbine Engine
Components was partially offset by startup costs on a new program at Textron
Systems.
The Finance segment's revenues increased $16 million (3%), while income
increased $4 million (4%). AFS' revenues increased $13 million, primarily as a
result of an increase in average finance receivables ($7.179 billion in the
first quarter 1997 vs $6.821 billion in the first quarter 1996), partially
offset by a decrease in yields on finance receivables (18.08% in the first
quarter 1997 vs 18.56% in the first quarter 1996). Income increased $3 million,
due to those factors, a decrease in the average cost of borrowed funds (6.62% in
first quarter 1997 vs 7.01% in the first quarter 1996) and a decrease in the
ratio of insurance losses to earned insurance premiums. This favorable impact
was partially offset by an increase in the provision for losses, resulting from
the higher level of net credit losses to average finance receivables (3.06% in
the first quarter 1997 vs 2.61% in the first quarter 1996). The general
proliferation of credit cards has provided the consumer with an alternative
source of funds, and as a result the increase in consumer debt in the U.S. and
Canada has continued to burden the consumer finance customer, resulting in
higher delinquencies and charge-offs. TFC's income increased by $1 million on
higher revenues of $3 million, due to a higher level of average finance
receivables ($3.139 billion in the first quarter 1997 vs $2.974 billion in the
first quarter 1996) and higher other income, due principally to increases in
arrangement fee income, partially offset by lower yields of finance receivables
(9.84% in the first quarter 1997 vs 10.00% in the first quarter 1996), primarily
on floating rate receivables. The income increase reflected the higher revenues
in 1997 and a provision for real estate owned valuation allowance in 1996.
Corporate expenses and other - net increased $5 million, due to litigation
expenses related to a divested operation. Interest expense - net for the Parent
Group approximated last year's level. A decreased average cost of borrowing was
offset by a higher level of average borrowing, primarily related to
acquisitions.
PART II. OTHER INFORMATION
Item 5. OTHER INFORMATION
On February 26, Textron's Board of Directors declared a two-for-
one split of Textron common stock in the form of a stock
dividend, subject to shareholder approval of an increase in
Textron's authorized number of common shares from 250 million to
500 million. Textron's shareholders approved this increase on
April 23, 1997. Pursuant to the Board's action, Textron will, on
May 30, 1997, distribute to Textron shareholders one additional
share of Textron Common Stock for every share of Textron Common
Stock owned at the close of business on May 9, 1997.
Effective May 10, 1997, the number of shares of Common Stock
issuable upon conversion of shares of Textron's outstanding
Series A and Series B Preferred Stock is increased
proportionately to reflect the two-for-one Common Stock split.
Equitable adjustments also will be made by Textron under its
employee benefit plans to reflect the split. Also, pursuant to
Textron's shareholder rights plan, each share of Textron Common
Stock will be accompanied by one-half of a preferred stock
purchase right ("Right") instead of a full Right, but the
exercise price of one full Right will be unchanged.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3 Restated Certificate of Incorporation of Textron Inc.
12.1 Computation of ratio of income to combined fixed charges
and preferred securities dividends of the Parent Group
12.2 Computation of ratio of income to combined fixed
charges and preferred securities dividends of
Textron Inc. including all majority-owned subsidiaries
27 Financial Data Schedule (filed electronically only)
(b) Reports on Form 8-K
During the quarter ended March 29, 1997, Textron filed the
following reports on Form 8-K:
(i) Current Report on Form 8-K filed with Securities and
Exchange Commission dated March 28, 1997, filing, under Item 5
(Other Events) information concerning the completion of the sale
of Textron's 83%-owned subsidiary, The Paul Revere Corporation,
to Provident Companies, Inc. and under Item 7 (Financial
Statements and Exhibits) a copy of a press release announcing
the completion of such sale.
(ii) Current Report on Form 8-K/A filed with Securities and
Exchange Commission dated April 4, 1997, amending the above
mentioned Current Report to report, under Item 2 (Acquisition or
Disposition of Assets) and Item 7 (Financial Statements and
Exhibits) additional information concerning the completion of
the sale of Textron's 83%-owned subsidiary, The Paul Revere
Corporation, to Provident Companies, Inc.
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.
TEXTRON INC.
Date: May 12, 1997 s/R. L. Yates
R. L. Yates
Vice President and Controller
(principal accounting officer)
LIST OF EXHIBITS
The following exhibits are filed as part of this report on Form 10-Q:
Name of Exhibit
3 Restated Certificate of Incorporation of Textron Inc.
12.1 Computation of ratio of income to combined fixed charges and
preferred securities dividends of the Parent Group
12.2 Computation of ratio of income to combined fixed charges and
preferred securities dividends of Textron Inc. including all
majority-owned subsidiaries
27 Financial Data Schedule (filed electronically only)
NOTE: THE FOLLOWING RESTATED CERTIFICATE OF INCORPORATION HAS BEEN FURTHER
RESTATED, FOR PURPOSES OF FILING THE SAME WITH THE SECURITIES AND EXCHANGE
COMMISSION ONLY, TO GIVE EFFECT TO ALL AMENDMENTS OF AND ADDITIONS TO THE
RESTATED CERTIFICATE OF INCORPORATION OF TEXTRON INC. FILED WITH THE
SECRETARY OF STATE OF THE STATE OF DELAWARE PRIOR TO THE DATE THIS RESTATED
CERTIFICATE OF INCORPORATION IS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. SIGNATURES FROM THE ORIGINAL HAVE BEEN OMITTED.
Exhibit 3
RESTATED CERTIFICATE OF INCORPORATION
OF
TEXTRON INC.
* * * * * *
UNDER SECTION 245 OF THE GENERAL CORPORATION LAW
* * * * * *
TEXTRON INC., a corporation organized and existing under the laws of the
State of Delaware, hereby certifies as follows:
1. The name of the corporation is TEXTRON INC. The name under which it
was originally incorporated is American Textron Inc.
2. The original Certificate of Incorporation of the corporation was
filed with the Secretary of State on July 31, 1967.
3. This Restated Certificate of Incorporation was duly adopted by the
Board of Directors in accordance with the provisions of Section 245 of the
General Corporation Law of the State of Delaware and only restates and
integrates and does not further amend the provisions of the corporation's
Certificate of Incorporation as heretofore amended or supplemented. There
is no discrepancy between those provisions and the provisions of this
Restated Certificate of Incorporation.
4. The text of the Certificate of Incorporation of said TEXTRON INC., as
heretofore amended or supplemented, is hereby restated and integrated,
without further amendment, to read as follows:
FIRST: The name of the corporation (hereinafter called the
"Corporation") is
TEXTRON INC.
SECOND: The respective names of the county and of the city within the
county in which the registered office of the Corporation is to be located
in the State of Delaware are the County of New Castle and the City of
Wilmington. The name of the registered agent of the Corporation is The
Corporation Trust Company. The street and number of said principal office
and the address by street and number of said registered agent is No. 1209
Orange Street, in the City of Wilmington, State of Delaware.
THIRD: The nature of the business of the Corporation and the objects or
purposes to be transacted, promoted or carried on by it are as follows:
1. To make, manufacture, produce, prepare, process, purchase or
otherwise acquire, and to hold, use, sell, import, export or otherwise
trade or deal in and with goods, wares, products, merchandise, machines,
machinery, appliances and apparatus, of every kind, nature and description,
and, in general, to engage or participate in any manufacturing or other
business of any kind or character whatsoever, including, but not by way of
limitation, importing, exporting, mining, quarrying, producing, farming,
agriculture, forestry, construction, management, advisory, mercantile,
financial or investment business, any business engaged in rendering any
manner of services and any business of buying, selling, leasing or dealing
in properties of any and all kinds, whether any such business is located in
the United States of America or any foreign country, and whether or not
related to, conducive to, incidental to, or in any way connected with, the
foregoing business.
2. To engage in research, exploration, laboratory and development work
relating to any material, substance, compound or mixture now known or which
may hereafter be known, discovered or developed and to perfect, develop,
manufacture, use, apply and generally to deal in and with any such
material, substance, compound or mixture.
3. To purchase, lease or otherwise acquire, to hold, own, use, develop,
maintain, manage and operate, to sell, transfer, lease, assign, convey,
exchange or otherwise turn to account or dispose of, and generally, to deal
in and with, personal and real property, tangible or intangible, of every
kind and description, wheresoever situated, and any and all rights,
concessions, interests and privileges therein.
4. To adopt, apply for, obtain, register, purchase, lease or otherwise
acquire, to maintain, protect, hold, use, own, exercise, develop,
manufacture under, operate and introduce and to sell and grant licenses or
other rights in respect of, assign or otherwise dispose of, turn to
account, or in any manner deal with and contract with reference to, any
trademarks, trade names, patents, patent rights, concessions, franchises,
designs, copyrights and distinctive marks and rights analogous thereto and
inventions, devices, improvements, processes, recipes, formulae and the
like, including, but not by way of limitation, such thereof as may be
covered by, used in connection with, or secured or received under, Letters
Patent of the United States of America or elsewhere, and any licenses and
rights in respect thereof, in connection therewith or appertaining thereto.
5. To purchase or otherwise acquire and to hold, pledge, sell, exchange
or otherwise dispose of securities (which term includes any shares of
stock, bonds, debentures, notes, mortgages or other obligations and any
certificates, receipts or other instruments representing rights to receive,
purchase or subscribe for the same or representing any other rights or
interests therein or in any property or assets) created or issued by any
person, firm, association, corporation (including, to the extent permitted
by the laws of the State of Delaware, the Corporation) or government or
subdivision, agency or instrumentality thereof; to make payment therefor in
any lawful manner; and to exercise, as owner or holder thereof, any and all
rights, powers and privileges in respect thereof (to the extent aforesaid).
6. To make, enter into, perform and carry out contracts of every kind
and description with any person, firm, association, corporation or
government or subdivision, agency or instrumentality thereof; to endorse or
guarantee the payment of principal, interest or dividends upon, and to
guarantee the performance of sinking fund or other obligations of, any
securities or the payment of a certain amount per share in liquidation of
the capital stock of any other corporation; and to guarantee in any way
permitted by law the performance of any of the contracts or other
undertakings of any person, firm, association, corporation or government or
subdivision, agency or instrumentality thereof.
7. To acquire by purchase, exchange or otherwise, all, or any part of,
or any interest in, the properties, assets, business and good will of any
one or more persons, firms, associations or corporations heretofore or
hereafter engaged in any business whatsoever; to pay for the same in cash,
property or its own or other securities; to hold, operate, lease,
reorganize, liquidate, sell or in any manner dispose of the whole or any
part thereof; to assume or guarantee, in connection therewith, the
performance of any liabilities, obligations or contracts of such persons,
firms, associations or corporations; and to conduct the whole or any part
of any business thus acquired.
8. To lend its uninvested funds from time to time to such extent, to
such persons, firms, associations, corporations or governments or
subdivisions, agencies or instrumentalities thereof, and on such terms and
on such security, if any, as the Board of Directors of the Corporation
(hereinafter called the "Board of Directors") may determine.
9. To borrow money for any of the purposes of the Corporation, from time
to time, and without limit as to amount; to issue and sell from time to
time, its own securities in such amounts, on such terms and conditions, for
such purposes and for such consideration, as may now be or hereafter shall
be permitted by the laws of the State of Delaware; and to secure such
securities by mortgage upon, or the pledge of, or the conveyance or
assignment in trust of, the whole or any part of the properties, assets,
business and good will of the Corporation then owned or thereafter
acquired.
10. To promote, organize, manage, aid or assist, financially or
otherwise, persons, firms, associations or corporations engaged in any
business whatsoever; and to assume or underwrite the performance of all or
any of their obligations.
11. To organize or cause to be organized under the laws of the State of
Delaware, any other state or states of the United States of America, the
District of Columbia, any territory, dependency, colony or possession of
the United States of America or of any foreign country, a corporation or
corporations for the
purpose of transacting, promoting or carrying on any or all objects or
purposes for which the Corporation is organized; to dissolve, wind up,
liquidate, merge or consolidate any such corporation or corporations or to
cause the same to be dissolved, wound up, liquidated, merged or
consolidated; and, subject to the laws of the State of Delaware, to
consolidate or merge with or into one or more other corporations organized
under the laws of the State of Delaware or under the laws of any other
state or states in the United States of America, the District of Columbia,
any territory, dependency, colony or possession of the United States of
America or of any foreign country if the laws under which said other
corporation or corporations are formed shall permit such consolidation or
merger.
12. To conduct its business in any and all of its branches and maintain
offices both within and without the State of Delaware in any and all states
of the United States of America, in the District of Columbia, in any or all
territories, dependencies, colonies or possessions of the United States of
America and in foreign countries.
13. To such extent as a business corporation organized under the laws of
the State of Delaware may now or hereafter lawfully do, to do, either as
principal or agent and either alone or through subsidiaries or in
connection with other persons, firms, associations or corporations, all and
everything necessary, suitable, convenient or proper for, or in connection
with, or incident to, the accomplishment of any of the purposes or the
attainment of any one or more of the objects herein enumerated or designed
directly or indirectly to promote the interests of the Corporation or to
enhance the value of its properties; and in general to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of Delaware and to do any and all things and exercise any
and all powers, rights and privileges which a business corporation may now
or hereafter be organized or authorized to do or to exercise under the laws
of the State of Delaware.
14. Whenever the context permits, the following provisions shall govern
the construction of the paragraphs of these purposes; no specified
enumeration shall be construed as restricting in any way any general
language; any word, whether in the singular or plural shall be construed to
mean both the singular and the plural; any phrase in the conjunctive or in
the disjunctive shall include both the conjunctive and disjunctive; the
mention of the whole shall include any part or parts; any one or more or
all of the purposes set forth may be pursued from time to time and whenever
deemed desirable; verbs in the present or future tense shall be construed
to include both the present and future tenses or either of them.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 515,000,000 of which
15,000,000 shares, without par value, are to be of a class designated
"Preferred Stock" and 500,000,000 shares of the par value of $.125 each are
to be of a class designated "Common Stock".
The voting powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof, of the classes of stock of the Corporation which are
fixed by this Certificate of Incorporation, and the authority vested in the
Board of Directors to fix by resolution or resolutions providing for the
issue of Preferred Stock the voting powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the shares of
Preferred Stock which are not fixed by this Certificate of Incorporation
are as follows:
(a) The Preferred Stock may be issued from time to time in one or more
series of any number of shares; provided that the aggregate number of
shares issued and not canceled of any and all such series shall not
exceed the total number of shares of Preferred Stock hereinabove
authorized. Each series of Preferred Stock shall be distinctively
designated by letter or descriptive words. All series of Preferred Stock
shall rank equally and be identical in all respects except as permitted
by the provisions of paragraphs (b) and (f) of this Article FOURTH.
(b) Authority is hereby vested in the Board of Directors from time to
time to issue the Preferred Stock as Preferred Stock of any series and in
connection with the creation of each such series to fix by resolution or
resolutions providing for the issue of shares thereof the voting powers,
if any, the designation, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof, of such series to the full extent now or hereafter
permitted by this
Certificate of Incorporation and the laws of the State of Delaware, in
respect of the matters set forth in the following subparagraphs (1) to
(8), inclusive:
(1) The distinctive designation of such series and the number of shares
which shall constitute such series, which number may be increased or
decreased (but not below the number of shares thereof then outstanding)
from time to time by action of the Board of Directors;
(2) The dividend rate of such series, any preferences to or provisions
in relation to the dividends payable on any other class or classes or of
any other series of stock, and any limitations, restrictions or
conditions on the payment of dividends;
(3) The price or prices at which, and the terms and conditions on
which, the shares of such series may be redeemed by the Corporation;
(4) The amount or amounts payable upon the shares of such series in the
event of any liquidation, dissolution or winding up of the Corporation;
(5) Whether or not the shares of such series shall be entitled to the
benefit of a sinking fund to be applied to the purchase or redemption of
shares of such series and, if so entitled, the amount of such fund and
the manner of its application;
(6) Whether or not the shares of such series shall be made convertible
into, or exchangeable for, shares of any other class or classes of stock
of the Corporation or shares of any other series of Preferred Stock, and,
if made so convertible or exchangeable, the conversion price or prices,
or the rate or rates of exchange, and the adjustments thereof, if any, at
which such conversion or exchange may be made, and any other terms and
conditions of such conversion or exchange;
(7) Whether or not the shares of such series shall have any voting
powers and, if voting powers are so granted, the extent of such voting
powers; and
(8) Whether or not the issue of any additional shares of such series or
of any future series in addition to such series shall be subject to
restrictions in addition to the restrictions, if any, on the issue of
additional shares imposed in the resolution or resolutions fixing the
terms of and outstanding series of Preferred Stock theretofore issued
pursuant to this Article FOURTH and, if subject to additional
restrictions, the extent of such additional restrictions.
(c) The holders of Preferred Stock of each series shall be entitled to
receive, when and as declared by the Board of Directors, dividends in
cash at the rate for such series fixed by the Board of Directors as
provided in paragraph (b) of this Article FOURTH, and no more, payable
quarterly on the first days of January, April, July and October or of
such other months as may be designated by the Board of Directors (each of
the quarterly periods ending on the first day of January, April, July and
October in each year, or on the first days of such other months,
respectively, being hereinafter called a dividend period), in each case
from the date of cumulation (as defined in paragraph (h) of this Article
FOURTH) of such series. Except as may otherwise be provided in the
resolution or resolutions providing for the issue of any given series of
Preferred Stock, dividends on Preferred Stock shall be cumulative
(whether or not there shall be net profits or net assets of the
Corporation legally available for the payment of such dividends), so
that, if at any time full cumulative dividends (as defined in paragraph
(h) of this Article FOURTH) upon the Preferred Stock of all series to the
end of the last completed dividend period shall not have been paid or
declared and a sum sufficient for payment thereof set apart, the amount
of the deficiency shall be fully paid, but without interest, or dividends
in such amount shall have been declared on each such series and a sum
sufficient for the payment thereof shall have been set apart for such
payment, before any sum or sums shall be set aside for or applied to the
purchase or redemption of Preferred Stock of any series (either pursuant
to any applicable sinking fund provisions or any redemptions authorized
pursuant to paragraph (g) of this Article FOURTH or otherwise) or set
aside for or applied to the purchase of Common Stock and before any
dividend shall be declared or paid or any other distribution ordered or
made upon the Common Stock (other than a dividend payable in Common
Stock); provided, however, that any moneys deposited in the sinking fund
provided for any series of Preferred Stock in the resolution or
resolutions providing for the issue of shares of said series, in
compliance with the provisions of such sinking fund and of this paragraph
(c), may thereafter be applied to the purchase or redemption of
Preferred Stock in accordance with the terms of such sinking fund whether
or not at the time of such application full cumulative dividends upon the
outstanding Preferred Stock of all series to the end of the last
completed dividend period shall have been paid or declared and set apart
for payment. All dividends declared upon the Preferred Stock of the
respective series outstanding shall be declared pro rata, so that the
amounts of dividends declared per share on the Preferred Stock of
different series shall in all cases bear to each other the same ratio
that accrued dividends per share on the shares of such respective series
bear to each other.
(d) Before any sum or sums shall be set aside for or applied to the
purchase of Common Stock and before any dividends shall be declared or
paid or any distribution ordered or made upon the Common Stock (other
than a dividend payable in Common Stock), the Corporation shall comply
with the sinking fund provisions, if any, of any resolution or
resolutions providing for the issue of any series of Preferred Stock any
shares of which shall at the time be outstanding.
(e) Subject to the provisions of paragraphs (c) and (d) of this Article
FOURTH, the holders of Common Stock shall be entitled, to the exclusion
of the holders of Preferred Stock of any and all series, to receive such
dividends as from time to time may be declared by the Board of Directors.
(f) In the event of any liquidation, dissolution or winding up of the
Corporation, the holders of Preferred Stock of each series then
outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders, whether from
capital, surplus or earnings, before any payment shall be made to the
holders of Common Stock, an amount determined as provided in paragraph
(b) of this Article FOURTH for every share of their holdings of Preferred
Stock of such series. If upon any liquidation, dissolution or winding up
of the Corporation the assets of the Corporation available for
distribution to its stockholders shall be insufficient to pay the holders
of Preferred Stock of all series the full account to which they
respectively shall be entitled, the holders of Preferred Stock of all
series shall share ratably in any distribution of assets according to the
respective amounts which would be payable in respect of the shares of
Preferred Stock held by them upon such distribution if all amounts
payable on or with respect to Preferred Stock of all series were paid in
full. In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after payment shall have
been made to the holders of Preferred Stock of the full amount to which
they shall be entitled as aforesaid, the holders of Common Stock shall be
entitled, to the exclusion of the holders of Preferred Stock of any and
all series, to share, ratably according to the number of shares of Common
Stock held by them, in all remaining assets of the Corporation available
for distribution to its stockholders. Neither the merger or consolidation
of the Corporation into or with another corporation nor the merger or
consolidation of any other corporation into or with the Corporation, nor
the sale, transfer or lease of all or substantially all the assets of the
Corporation, shall be deemed to be a liquidation, dissolution or winding
up of the Corporation. Notwithstanding the foregoing provisions of this
paragraph (f), it may be provided as to any one or more series of
Preferred Stock that upon liquidation, dissolution or winding up of the
Corporation the shares of such series shall not have any preference,
other than to be paid out of the assets of the Corporation available for
distribution to its stockholders, an amount equal to accrued dividends
[as defined in paragraph (h) hereof] and thereafter to share ratably with
the holders of Common Stock (and any other class or series having a
similar right) in all distributions of assets as they would have shared
if all of the shares of such series had been converted into Common Stock
immediately before such distribution or to share, in such event, upon
such other terms and conditions as may be provided.
(g) Subject to any requirements which may be applicable to the
redemption of any given series of Preferred Stock as provided in any
resolution or resolutions providing for the issue of such series of
Preferred Stock, the Preferred Stock of all series, or of any series
thereof, or any part of any series thereof, at any time outstanding, may
be redeemed by the Corporation, at its election expressed by resolution
of the Board of Directors, at any time or from time to time, upon not
less than 30 days, but not more than 90 days, previous notice to the
holders of record of Preferred Stock to be redeemed, given by mail in
such manner as may be prescribed by resolution or resolutions of the
Board of Directors:
(1) if such redemption shall be otherwise than by the application of
moneys in any sinking fund referred to in paragraph (d) of this Article
FOURTH, at the redemption price, fixed as provided
in paragraph (b) of this Article FOURTH, at which shares of Preferred
Stock of the particular series may then be redeemed at the option of
the Corporation and
(2) if such redemption shall be by the application of moneys in any
sinking fund referred to in paragraph (d) of this Article FOURTH, at the
redemption price, fixed as provided in paragraph (b) of this Article
FOURTH, at which shares of Preferred Stock of the particular series may
then be redeemed for such sinking fund;
provided, however, that, before any Preferred Stock of any series
shall be redeemed at said redemption price thereof specified in clause (1)
of this paragraph (g), all moneys at the time in the sinking fund, if any,
for Preferred Stock of that series shall first be applied, as nearly as may
be, to the purchase or redemption of Preferred Stock of that series as
provided in the resolution or resolutions of the Board of Directors
providing for such sinking fund. If less than all the outstanding shares of
Preferred Stock of any series are to be redeemed, the redemption may be
made either by lot or pro rata in such manner as may be prescribed by
resolution of the Board of Directors. The Corporation may, if it shall so
elect, provide moneys for the payment of the redemption price by depositing
the amount thereof for the account of the holders of Preferred Stock
entitled thereto with a bank or trust company doing business in the City of
New York, in the State of New York, and having capital and surplus of at
least $5,000,000. The date upon which such deposit may be made by the
Corporation (hereinafter called the "date of deposit") shall be prior to
the date fixed as the date of redemption. In any such case there shall be
included in the notice of redemption a statement of the date of deposit and
of the name and address of the bank or trust company with which the deposit
has been or will be made. On and after the date fixed in any such notice of
redemption as the date of redemption (unless default shall be made by the
Corporation in providing moneys for the payment of the redemption price
pursuant to such notice) or, if the Corporation shall have made such
deposit on or before the date specified therefor in the notice, then on and
after the date of deposit all rights of the holders of the Preferred Stock
to be redeemed as stockholders of the Corporation, except the right to
receive the redemption price as hereinafter provided and, in the case of
such deposit, any conversion rights not theretofore expired, shall cease
and terminate. Such conversion rights, however, in any event shall cease
and terminate upon the date fixed for redemption or upon any earlier date
fixed by the Board of Directors pursuant to paragraph (b) of this Article
FOURTH for termination of such conversion rights. Anything herein contained
to the contrary notwithstanding, said redemption price shall include an
amount equal to accrued dividends on the Preferred Stock to be redeemed to
the date fixed for the redemption thereof and the Corporation shall not be
required to declare or pay on such Preferred Stock to be redeemed, and the
holders thereof shall not be entitled to receive, any dividends in addition
to those thus included in the redemption price; provided, however, that the
Corporation may pay in regular course any dividends thus included in the
redemption price either to the holders of record on the record date fixed
for the determination of stockholders entitled to receive such dividend (in
which event, anything herein to the contrary notwithstanding, the amount so
deposited need not include any dividends so paid or to be paid) or as a
part of the redemption price upon surrender of the certificates for the
shares redeemed. At any time on or after the date fixed as aforesaid for
such redemption or, if the Corporation shall elect to deposit the moneys
for such redemption as herein provided, then at any time on or after the
date of deposit and without awaiting the date fixed as aforesaid for such
redemption, the respective holders of record of the Preferred Stock to be
redeemed shall be entitled to receive the redemption price upon actual
delivery to the Corporation, or, in the event of such deposit, to the bank
or trust company with which such deposit shall be made, of certificates for
the shares to be redeemed, such certificates, if required, to be properly
stamped for transfer and duly endorsed in blank or accompanied by proper
instruments of assignment and transfer thereof duly executed in blank. Any
moneys so deposited which shall remain unclaimed by the holders of such
Preferred Stock at the end of six years after the redemption date shall be
paid by such bank or trust company to the Corporation and any interest
accrued on moneys so deposited shall belong to the Corporation and shall be
paid to it from time to time. Preferred Stock redeemed pursuant to the
provisions of this paragraph (g) shall be canceled and shall thereafter
have the status of authorized and unissued shares of Preferred Stock.
(h) The term "date of cumulation" as used with reference to any series
of Preferred Stock shall be deemed to mean the date fixed by the Board of
Directors as the date of cumulation of such series at the time of the
creation thereof or, if no date shall have been so fixed, the date on which
shares of such series
are first issued. Whenever used with reference to any share of any series
of Preferred Stock, the term "full cumulative dividends" shall be deemed
to mean (whether or not in any dividend period, or any part thereof, in
respect of which such term is used there shall have been net profits or
net assets of the Corporation legally available for the payment of such
dividends) that amount which shall be equal to dividends at the full rate
fixed for such series as provided in paragraph (b) of this Article FOURTH
for the period of time elapsed from the date of cumulation of such series
to the date as of which full cumulative dividends are to be computed
(including an amount equal to the dividend at such rate for any fraction
of a dividend period included in such period of time); and the term
"accrued dividends" shall be deemed to mean full cumulative dividends to
the date as of which accrued dividends are to be computed, less the
amount of all dividends paid, or deemed paid as hereinafter in this
paragraph (h) provided, upon said share. In the event of the issue of
additional shares of Preferred Stock of any series after the original
issue of shares of Preferred Stock of such series, all dividends paid or
accrued on Preferred Stock of such series prior to the date of issue of
such additional Preferred Stock and all dividends declared and payable to
holders of Preferred Stock of such series of record on any date prior to
the issue of any such additional Preferred Stock shall be deemed to have
been paid on the additional Preferred Stock so issued.
(i) No holder of stock of any class of the Corporation, whether now or
hereafter authorized, shall have any preemptive, preferential or other
rights to subscribe for or purchase or acquire any shares of any class or
any other securities of the Corporation, whether now or hereafter
authorized, and whether or not convertible into, or evidencing or carrying
the right to purchase, shares of any class or any other securities now or
hereafter authorized, and whether the same shall be issued for cash,
services or property, or by way of dividend or otherwise.
(j) Subject to the provisions of this Certificate of Incorporation and
except as otherwise provided by law, the shares of stock of the
Corporation, regardless of class, may be issued for such consideration and
for such corporate purposes as the Board of Directors may from time to time
determine.
(k) Except as otherwise provided by law, or this Certificate of
Incorporation or by the resolution or resolutions providing for the issue
of any series of Preferred Stock, the holders of shares of Preferred Stock,
as such holders, shall not have any right to vote, and are hereby
specifically excluded from the right to vote, in the election of directors
or for any other purpose. Except as aforesaid, the holders of Preferred
Stock, as such holders, shall not be entitled to notice of any meeting of
stockholders.
(l) Subject to the provisions of any applicable law, or of the By-laws
of the Corporation as from time to time amended, with respect to the
closing of the transfer books or the fixing of a record date for the
determination of stockholders entitled to vote and except as otherwise
provided by law, or by this Certificate of Incorporation or by the
resolution or resolutions providing for the issue of any series of
Preferred Stock, the holders of outstanding shares of Common Stock shall
exclusively possess voting power for the election of directors and for all
other purposes, each holder of record of shares of Common Stock being
entitled to one vote for each share of Common Stock standing in his name on
the books of the Corporation.
$2.08 CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES A
RESOLVED that, pursuant to the authority expressly granted to and
vested in the Board of Directors by the provisions of the Certificate of
Incorporation of the Corporation, the Board of Directors hereby creates a
series of the Preferred Stock of the Corporation to consist of 3,076,223
shares, and the Board of Directors hereby fixes the voting powers,
designation, preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or restrictions
thereof, of the shares of such series (in addition to the designation,
preferences and relative, participating, optional or other special rights,
and the qualifications, limitations or restrictions thereof, set forth in
the Certificate of Incorporation which are applicable to the Preferred
Stock of all series) as follows:
(1) Designation. The designation of said series of Preferred Stock
created by this resolution shall be "$2.08 Cumulative Convertible Preferred
Stock, Series A" (hereinafter called "Series A").
(2) Dividend Rate. The dividend rate of the shares of Series A shall be
$2.08 per share per annum, cumulative (entitled to "full cumulative
dividends", as defined in the Certificate of Incorporation) from
January 1, 1968, payable quarterly on the first days of January, April,
July and October in each year. Holders of shares of Series A shall not
be entitled to any dividends, whether payable in cash, property or
stock, in excess of the "full cumulative dividends" at said rate.
(3) Optional Redemption. Subject to paragraph (4) below, shares of
Series A shall not be redeemable by the Corporation for any purpose until
after December 31, 1972. On and after December 31, 1972, shares of Series A
may be redeemed upon not less than 40 days' notice to the holders of Series
A shares and otherwise on the terms and conditions specified in paragraph
(g) of Article FOURTH of the Certificate of Incorporation during the
following periods at the following per share redemption prices:
Redemption
Price Period
$55 Calendar Year 1973
$54 Calendar Year 1974
$53 Calendar Year 1975
$52 Calendar Year 1976
$51 Calendar Year 1977
$50 At all times after December 31, 1977
plus, in each case, an amount equal to "accrued dividends" (as defined in
the Certificate of Incorporation). Any redemption after December 31, 1972
and prior to January 1, 1978 shall only be made as to all of the Series A
shares outstanding. On and after January 1, 1978 redemption may be made as
to all or any part of such shares from time to time outstanding.
(4) Rights on Liquidation, Dissolution, Winding Up. In the event of any
liquidation, dissolution or winding up of the Corporation, the holders of
shares of Series A then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to its stockholders an
amount equal to $50 per share, plus an amount equal to "accrued dividends"
(as defined in the Certificate of Incorporation). Notwithstanding the
foregoing, in the event of any voluntary liquidation of the Corporation
prior to January 1, 1978, the holders of shares of Series A shall be
entitled to be paid an amount per share equal to the redemption price as
set forth in paragraph 3 currently in effect at the date of such
liquidation plus accrued dividends.
(5) Sinking Fund. Shares of Series A are not subject or entitled to the
benefit of a sinking fund.
(6) Conversion of Convertible Preferred Stock Into Common Stock.
(a) Conversion Right. Shares of Series A shall be convertible at the
option of the holder thereof at any time into shares of Common Stock at a
conversion price of $45.45 per share based upon a value of $50.00 per share
of Series A stock so that initially Series A shares shall be convertible at
the rate of one and one tenth share (1.1) of Common Stock for each one (1)
share of Series A stock. Such price of $45.45 per Common share (based on
$50.00 per share of Series A stock), adjusted as hereinafter provided, is
hereinafter referred to as the "Conversion Price". Such right of conversion
shall cease and terminate, as to shares of Series A called for redemption,
at the close of business on the tenth business day prior to the date fixed
for redemption unless default shall be made in the payment of the
redemption price. Upon conversion the Corporation shall make no payment or
adjustment on account of dividends accrued or in arrears on shares of
Series A surrendered for conversion; provided, however, that any holder who
converts his shares of Series A after the record date for any quarterly
dividend payment on shares of Series A but prior to such quarterly dividend
payment date shall nonetheless be entitled to receive any such quarterly
dividend.
The Common Stock issuable upon conversion of shares of Series A shall be
Common Stock, $.125 par value, as constituted at the date hereof, except as
otherwise provided in division (E) of subparagraph (c) of this paragraph
(6).
(b) Method of Conversion. In order to convert shares of Series A into
Common Stock, the holder thereof shall surrender the certificate or
certificates for such shares of Series A, duly endorsed to the Corporation
or in blank, at the office of any Transfer Agent for Series A (or at such
other place as may be designated by the Corporation) shall give written
notice to the Corporation at said office that he elects to convert said
shares of
Series A, and shall state in writing therein the name or names in which he
wishes the certificate or certificates for shares of Common Stock to be
issued. As soon as practicable thereafter, the Corporation shall issue or
deliver at said office to the person for whose account such shares of
Series A were so surrendered, or to his nominee or nominees, certificates
for the number of full shares of Common Stock to which he shall be entitled
as aforesaid, together with a cash adjustment in respect of any fraction of
a share as hereinafter provided if not convertible into a number of whole
shares. Subject to the following provisions of this paragraph (6), such
conversion shall be deemed to have been made as of the date of such
surrender of certificates for the shares of Series A to be converted; and
the person or persons entitled to receive Common Stock issuable upon the
conversion of such shares of Series A shall be treated for all purposes as
the record holder or holders of such Common Stock on such date.
(c) Adjustments of Conversion Price. The Conversion Price of shares of
Series A shall be subject to adjustment from time to time as follows:
(A) If the Corporation shall sell for cash any shares of its Common Stock
or any securities convertible into Common Stock (other than Excluded Stock,
as defined in division (B) of this subparagraph (c)) without consideration
or for a consideration per share less than the Conversion Price in effect
immediately prior to the sale of such Stock, the Conversion Price in effect
immediately prior to each such sale shall forthwith (except as provided
below in this division (A) and in division (K) of this subparagraph (c)) be
adjusted to a price equal to a quotient obtained by dividing:
(i) an amount equal to the sum of
(x) the total number of shares of Common Stock outstanding (excluding
Excluded Stock but including the shares of Common Stock deemed to have
been issued pursuant to subdivision (2) of this division (A)) immediately
prior to such sale multiplied by the Conversion Price in effect
immediately prior to such sale, plus
(y) the consideration received by the Corporation upon such sale, plus
(z) the excess of (1) the aggregate consideration received by the
Corporation upon all issuances of Common Stock after the date of first
issuance of shares of Series A (other than Excluded Stock) over (2) the
Conversion Price in effect at the time of the respective issuance
multiplied by the number of shares so issued; provided, however, that
such excess shall not be taken into account to the extent such excess has
previously been taken into account in adjusting such Conversion Price
pursuant hereto,
by
(ii) the total number of shares of Common Stock outstanding (excluding
Excluded Stock but including the shares of Common Stock deemed to have
been issued pursuant to subdivision (2) of this division (A)) immediately
after the sale of such Common Stock;
provided, however, that such adjustment shall be made only if and to the
extent that the aforesaid quotient shall be less than the Conversion Price
in effect immediately prior to such sale.
For the purposes of any adjustment of the Conversion Price pursuant to this
subparagraph (c), the following provision shall be applicable:
(1) In the case of the sale of Common Stock (or convertible or
exchangeable securities referred to in subdivision (2) of this Division
(A)), the consideration shall be deemed to be the amount of cash paid
therefor without deduction for any discounts, commissions or other
expenses allowed, paid or incurred by the Corporation for any
underwriting or otherwise in connection with the issuance and sale
thereof.
(2) In the case of the sale of any securities (other than shares of
Series A) by their terms convertible into or exchangeable for Common
Stock:
(i)the aggregate number of shares of Common Stock initially deliverable
upon conversion of or in exchange for any such convertible or
exchangeable securities shall be considered to have been issued at the
time such securities were issued and for a consideration equal to the
consideration received by the Corporation for any such securities,
plus the additional consideration, if any, to be received by the
Corporation upon the conversion or exchange thereof (the consideration
in each case to be determined in the same manner as provided in
subdivision (1) above);
(ii) in the event that, after the sale of any such securities, (x) a
change shall be made in the price or rate at which such securities which
remain outstanding shall be convertible or exchangeable so that the
aggregate number of shares of Common Stock thereafter deliverable shall
decrease and (y) such increase in price or decrease in shares deliverable
is in accordance with the provisions of such securities (other than
provisions designed to protect against dilution such as this subparagraph
(c)), the Conversion Price shall forthwith be readjusted to such
Conversion Price as would have been obtained if such decreased number of
shares had been the number of shares of Common Stock initially
deliverable upon the conversion or exchange of such outstanding
securities; and
(iii) on the termination of such right to convert or exchange, the
Conversion Price shall forthwith be readjusted to such Conversion Price
as would have been obtained had the adjustment made upon the sale of such
securities been made upon the basis of the issuance or sale of only the
number of shares of Common Stock actually issued upon the conversion or
exchange of such securities.
(B) "Excluded Stock" shall mean:
(1) Common Stock or stock convertible into Common Stock sold pursuant to
any present or future stock option plan, stock purchase plan, or other
benefit plan for employees (including officers) of the Corporation or of
its subsidiaries or present or future agreement to substitute options for
stock of the Corporation for existing stock options of a business
acquired by or merged into or consolidated with the Corporation;
(2) Shares of Common Stock sold upon exercise of warrants issued pursuant
to the terms of the Warrant Agreement, dated as of May 1, 1959, between
the Corporation and Morgan Guaranty Trust Company.
(C) If the number of shares of Common Stock outstanding at any time is
increased by a stock dividend payable in shares of Common Stock or by a
subdivision or split-up of shares of Common Stock, then, on the day
following the date fixed for the determination of holders of Common Stock
entitled to receive such stock dividend, subdivision or split-up, the
number of shares of Common Stock issuable on conversion of each share of
Series A shall be increased in proportion to such increase in outstanding
shares of Common Stock and the Conversion Price shall be correspondingly
decreased.
(D) If the number of shares of Common Stock outstanding at any time is
decreased by a combination of the outstanding shares of Common Stock, then,
on the day following the effective date of such combination, the number of
shares issuable on conversion of each share of Series A shall be decreased
in proportion to such decrease in outstanding shares and the Conversion
Price shall be correspondingly increased.
(E) In the case this Corporation shall be recapitalized or shall be
consolidated with or merged into, or shall sell or transfer its property
and assets as, or substantially as, an entirety, proper provisions shall be
made as part of the terms of such recapitalization, consolidation, merger,
sale or transfer whereby the holder of any shares of the Series A stock
convertible into Common Stock outstanding immediately prior to such event
shall thereafter be entitled to such conversion rights with respect to
securities of the Corporation resulting from such recapitalization,
consolidation or merger, or to which such sale or transfer shall be made,
as shall be substantially equivalent to the conversion rights, if any,
provided for with respect to such Series A stock; provided, however, that
no such provisions with respect to conversion rights need be made if (i)
provision is made for the redemption of such Series A stock in accordance
with redemption provisions then applicable to such Series A stock, and (ii)
the effect of such redemption is to terminate such conversion rights prior
to such recapitalization, consolidation, merger, sale or transfer.
(F) All calculations under this paragraph (6) shall be made to the nearest
cent or to the nearest one one hundredth (1/100) of a share, as the case
may be.
(G) Whenever the Conversion Price shall be adjusted as in this subparagraph
(c) provided, the Corporation shall forthwith file, at each office
designated for the conversion of shares of Series A as provided in this
paragraph (6), a statement, signed by the Chairman of the Board, President
or any Vice President of the Corporation, and by its Treasurer, Assistant
Treasurer, Secretary or an Assistant Secretary, showing in detail the facts
requiring such adjustment and the Conversion Price that shall be in effect
after such adjustment. The Corporation shall also cause a notice setting
forth any such adjustment to be sent by mail, first class, postage prepaid,
to each registered holder of shares of Series A at his address appearing on
the stock register.
(H) Irrespective of any adjustments in the Conversion Price, certificates
representing shares of Series A theretofore or thereafter issued which
express the initial Conversion Price shall nevertheless be valid for all
purposes.
(I) No fraction of a share of Common Stock shall be issued upon any
conversion but, in lieu thereof, there shall be paid an amount in cash
equal to the same fraction of the market value of a full share of Common
Stock. For such purpose, the market value of a share of Common Stock shall
be the last recorded sale price of such a share on the New York Stock
Exchange on the day immediately preceding the date upon which such shares
are surrendered for conversion or, if there be no such recorded sale price
on such day, the last quoted bid price per share on the Common Stock on
such Exchange on the close of trading on such date. If the Common Stock
shall not at the time be dealt in on the New York Stock Exchange, such
market value shall be the prevailing market value of the Common Stock on
any other securities exchange, or in the open market, as determined by this
Corporation, which determination shall be conclusive.
(J) The Corporation shall at all times reserve and keep available, out of
its treasury stock or authorized and unissued stock, or both, solely for
the purpose of effecting the conversion of shares of Series A, such number
of shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all shares of Series A from time to time
outstanding.
(K) Anything in this paragraph (6) to the contrary notwithstanding, the
Corporation shall not be required to make any adjustment of the Conversion
Price in any case in which the amount by which such Conversion Price would
be reduced in accordance with the foregoing provisions would be less than
$1.00 per share of Common Stock, but in such case any adjustment that would
otherwise be required then to be made will be carried forward and made at
the time and together with the next subsequent adjustment which, together
with any and all such adjustments so carried forward, shall amount to $1.00
or more per share of Common Stock. In the event of any stock dividend,
subdivision, split-up or combination of shares of Common Stock, said amount
of $1.00 (as theretofore decreased or increased) shall be proportionately
decreased or increased.
(L) No adjustment of the conversion rate shall be made by reason of the
issuance of Common Stock or stock convertible into Common Stock in exchange
for property or services. Any Common Stock or stock convertible into Common
Stock issued in a tax free reorganization shall be deemed to be issued
solely for property.
(7) Voting. Subject to the provisions of any applicable law, or of the
By-laws of the Corporation as from time to time amended, with respect to
the fixing of a record date for the determination of stockholders entitled
to vote, at each meeting of stockholders each holder of record of shares of
Series A shall be entitled to one vote per share on each matter on which
the holders of record of the Common Stock shall be entitled to vote, voting
together with the holders of record of the Common Stock and any other
series of Preferred Stock entitled to vote with the Common Stock and not by
classes, and each such record holder of shares of Series A shall be
entitled to notice of any such meeting of stockholders. However, so long as
any shares of Series A are outstanding, if at the time of any annual
meeting of stockholders for the election of directors a default in
preferred dividends (as defined in this paragraph (7)) shall exist, the
holders of shares of Preferred Stock, voting separately as a class without
regard to series (with each share of Preferred Stock being entitled to one
vote), shall have the right to elect two members of the Board of Directors
of the Corporation. The holders of Common Stock shall not be entitled to
vote in the election of the two directors so to be elected by the holders
of shares of Preferred Stock. Any director elected by the holders of shares
of Preferred Stock, voting as a class as aforesaid, shall continue to serve
as such director for the full term for which he shall have been elected
notwithstanding that prior to the end of such term a default in preferred
dividends shall cease to exist. If, prior to the end of the term of any
director elected by the holders of the Preferred Stock, voting as a class
as aforesaid, a vacancy in the office of such director shall occur by
reason of death, resignation, removal or disability, or for any other
cause, such vacancy shall be filled for the unexpired term in the manner
provided in
the By-laws of the Corporation, provided that, if such vacancy shall be
filled by election by the stockholders at a meeting thereof, the right to
fill such vacancy shall be vested in the holders of Preferred Stock, voting
as a class as aforesaid, unless, in any such case, no default in preferred
dividends shall exist at the time of such election.
For the purposes of this paragraph (7), a default in preferred dividends
shall be deemed to have occurred whenever the amount of dividends in
arrears upon any series of Preferred Stock shall be equivalent to six full
quarter-yearly dividends or more and, having so occurred, such default in
preferred dividends shall be deemed to exist thereafter until all accrued
dividends on all shares of Preferred Stock then outstanding shall have been
paid to the end of the last preceding quarterly dividend period. Nothing
herein contained shall be deemed to prevent an amendment of the By-laws of
the Corporation, in the manner therein provided, which shall increase the
number of directors so as to provide as additional places on the Board of
Directors either of or both the directorships to be filled by the two
directors so to be elected by the holders of the Preferred Stock or to
prevent any other change in the number of directors of the Corporation.
(8) Reacquired Shares. Shares of Series A which have been issued and
reacquired by the Corporation through redemption or purchase, or which have
been converted into shares of any other class or classes of stock of the
Corporation, shall upon compliance with any applicable provision of the
General Corporation Law of the State of Delaware have the status of
authorized and unissued shares of Preferred Stock and may be reissued as
part of the Series A or as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors.
(9) Restricted Activities. (a) So long as any shares of Series A are
outstanding,
(A) without the written consent or affirmative vote of the holders of at
least two-thirds of the aggregate number of shares of Series A at the time
outstanding given in writing or by vote at a meeting, consenting or voting
(as the case may be) separately as a class, the Corporation shall not
amend, alter or repeal the preferences, special rights or other powers of
the Series A shares so as to affect the rights of the holders of Series A
shares adversely (and the authorization and issuance of any class of stock
prior to the Series A shares as to either dividends or liquidation
preferences shall be deemed to affect the Series A shares adversely);
(B) without the written consent or affirmative vote of the holders of at
least a majority of the aggregate number of shares of Preferred Stock at
the time outstanding given in writing or by vote at a meeting, consenting
or voting (as the case may be) separately as a class, without regard to
series, the Corporation will not (i) increase the authorized amount of
Preferred Stock beyond the 5,000,000 shares presently authorized or (ii)
create any other class or classes of stock ranking on a parity with the
Preferred Stock as to either dividends or liquidation preferences; and
(C) except as expressly set forth in division (B) of this subparagraph (a),
nothing in this paragraph (9) shall be deemed to restrict the issuance of
any additional shares of Series A or of any series of Preferred Stock which
may be issued in the future.
(b) For the purposes of this paragraph (9) any class or classes of stock
of the Corporation shall be deemed to rank,
(A) prior to the Series A shares either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to
the holders of the Series A shares;
(B) on a parity with the Preferred Stock either as to dividends or upon
liquidation, whether or not the dividend rates, dividend payment dates, or
redemption or liquidation prices per share thereof be different from those
of the Preferred Stock, if the holders of such class or classes of stock
shall be entitled to the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or liquidation prices,
without preference or priority one over the other as between the holders of
such class or classes of stock and the holders of the Preferred Stock; and
(C) junior to the Preferred Stock either as to dividends or upon
liquidation if the rights of the holders of such class or classes shall be
subject or subordinate to the rights of the holders of the Preferred Stock
in respect of
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be.
$1.40 CONVERTIBLE PREFERRED DIVIDEND STOCK, SERIES B
(PREFERRED ONLY AS TO DIVIDENDS)
RESOLVED that, pursuant to the authority expressly granted to and vested
in the Board of Directors by the provisions of the Certificate of
Incorporation of the Corporation, the Board of Directors hereby creates a
series of the Preferred Stock of the Corporation to consist of 4,856,628
shares, and the Board of Directors hereby fixes the voting powers,
designation, preferences and relative, participating option or other
special rights, and the qualifications, limitations or restrictions
thereof, of the shares of such series (in addition to the designation,
preferences and relative, participating, optional or other special rights,
and the qualifications, limitations or restrictions thereof, set forth in
the Certificate of Incorporation which are applicable to the Preferred
Stock of all series) as follows:
(1) Designation. The designation of said series of Preferred Stock
created by this resolution shall be "$1.40 Convertible Preferred Dividend
Stock, Series B (preferred only as to dividends)" (hereinafter called
"Series B").
(2) Dividend Rate. The dividend rate of the shares of Series B shall be
$1.40 per share per annum, cumulative (entitled to "full cumulative
dividends", as defined in the Certificate of Incorporation) from July 1,
1968, payable quarterly on the first days of January, April, July and
October in each year. Holders of shares of Series B shall not be entitled
to any dividends, whether payable in cash, property or stock, in excess of
the "full cumulative dividends" at said rate.
(3) Optional Redemption. Subject to paragraph (4) below, shares of
Series B shall not be redeemable by the Corporation for any purpose until
after December 31, 1973. After December 31, 1973, shares of Series B may be
redeemed upon not less than 40 days (but not more than 90 days) notice to
the holders of Series B shares and otherwise on the terms and conditions
specified in paragraph (g) of Article FOURTH of the Certificate of
Incorporation at forty-five dollars ($45.00) per share plus an amount equal
to "accrued dividends" (as defined in the Certificate of Incorporation).
After December 31, 1973, redemption may be made as to all or any part of
such shares from time to time outstanding.
(4) Rights on Liquidation, Dissolution, Winding Up. In the event of any
liquidation, dissolution or winding up of the Corporation, the holders of
shares of Series B then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to its stockholders an
amount equal to "accrued dividends" (as defined in the Certificate of
Incorporation) and thereafter to share ratably with the holders of Common
Stock (and any other class or series having a similar right) in all
distributions of assets as they would have shared if all of the shares of
Series B outstanding on the date of distribution had been converted into
Common Stock immediately before such distribution.
(5) Sinking Fund. Shares of Series B are not subject or entitled to the
benefit of a sinking fund.
(6) Conversion of Convertible Preferred Stock Into Common Stock.
(a) Conversion Right. Shares of Series B shall be convertible at the
option of the holder thereof at any time into shares of Common Stock at a
conversion price of $50.00 per share based upon a value of $45.00 per share
of Series B stock so that initially Series B shares shall be convertible at
the rate of nine tenths of one share (0.9) of Common Stock for each one (1)
share of Series B stock. Such price of $50.00 per Common share (based on
$45.00 per share of Series B stock), adjusted as hereinafter provided, is
hereinafter referred to as the "Conversion Price". Such right of conversion
shall cease and terminate, as to shares of Series B called for redemption,
at the close of business on the tenth business day prior to the date fixed
for redemption, unless default shall be made in the payment of the
redemption price. Upon conversion the Corporation shall make no payment or
adjustment on account of dividends accrued or in arrears on shares of
Series B surrendered for conversion; provided, however, that any holder who
converts his shares of Series B after the record date for any
quarterly dividend payment on shares of Series B but prior to such
quarterly dividend payment date shall nonetheless be entitled to receive
any such quarterly dividend.
The Common Stock issuable upon conversion of shares of Series B shall
be Common Stock, $.125 par value, as constituted at the date hereof, except
as otherwise provided in division (E) of subparagraph (c) of this paragraph
(6).
(b) Method of Conversion. In order to convert shares of Series B into
Common Stock, the holder thereof shall surrender the certificate or
certificates for such shares of Series B, duly endorsed to the Corporation
or in blank, at the office of any Transfer Agent for Series B (or at such
other place as may be designated by the Corporation); shall give written
notice to the Corporation at said office that he elects to convert said
shares of Series B, and shall state in writing therein the name or names in
which he wishes the certificate or certificates for shares of Common Stock
to be issued. As soon as practicable thereafter, the Corporation shall
issue or deliver at said office to the person for whose account such shares
of Series B were so surrendered, or to his nominee or nominees,
certificates for the number of full shares of Common Stock to which he
shall be entitled as aforesaid, together with a cash adjustment in respect
of any fraction of a share as hereinafter provided if not convertible into
a number of whole shares. Subject to the following provisions of this
paragraph (6), such conversion shall be deemed to have been made as of the
date of such surrender of certificates for the shares of Series B to be
converted; and the person or persons entitled to receive Common Stock
issuable upon the conversion of such shares of Series B shall be treated
for all purposes as the record holder or holders of such Common Stock on
such date.
(c) Adjustments of Conversion Price. The Conversion Price of shares
of Series B shall be subject to adjustment from time to time as follows:
(A) If the Corporation shall sell for cash any shares of its Common
Stock or any securities convertible into Common Stock (other than Excluded
Stock, as defined in division (B) of this subparagraph (c)) without
consideration or for a consideration per share less than the Conversion
Price in effect immediately prior to the sale of such Stock, the Conversion
Price in effect immediately prior to each such sale shall forthwith (except
as provided below in this division (A) and in division (K) of this
subparagraph (c)) be adjusted to a price equal to a quotient obtained by
dividing:
(i)an amount equal to the sum of
(x) the total number of shares of Common Stock outstanding (excluding
Excluded Stock but including the shares of Common Stock deemed to have been
issued pursuant to subdivision (2) of this division (A)) immediately prior
to such sale multiplied by the Conversion Price in effect immediately prior
to such sale, plus
(y) the consideration received by the Corporation upon such sale, plus
(z) the excess of (1) the aggregate consideration received by the
Corporation upon all issuances of Common Stock after the date of first
issuance of shares of Series B (other than Excluded Stock) over (2) the
Conversion Price in effect at the time of the respective issuance
multiplied by the number of shares so issued; provided, however, that such
excess shall not be taken into account to the extent such excess has
previously been taken into account in adjusting such Conversion Price
pursuant hereto,
by
(ii) the total number of shares of Common Stock outstanding (excluding
Excluded Stock but including the shares of Common Stock deemed to have been
issued pursuant to subdivision (2) of this division (A)) immediately after
the sale of such Common Stock;
provided, however, that such adjustment shall be made only if and to
the extent that the aforesaid quotient shall be less than the Conversion
Price in effect immediately prior to such sale.
For the purposes of any adjustment of the Conversion Price pursuant to
this subparagraph (c), the following provisions shall be applicable:
(1) In the case of the sale of Common Stock (or convertible or
exchangeable securities referred to in subdivision (2) of this division
(A)), the consideration shall be deemed to be the amount of cash paid
therefor without deduction for any discounts, commissions or other expenses
allowed, paid or incurred by the Corporation for any underwriting or
otherwise in connection with the issuance and sale thereof.
(2) In the case of the sale of any securities (other than shares of
Series A or Series B) by their terms convertible into or exchangeable for
Common Stock:
(i) the aggregate number of shares of Common Stock initially
deliverable upon conversion of or in exchange for any such convertible or
exchangeable securities shall be considered to have been issued at the time
such securities were issued and for a consideration equal to the
consideration received by the Corporation for any such securities, plus the
additional consideration, if any, to be received by the Corporation upon
the conversion or exchange thereof (the consideration in each case to be
determined in the same manner as provided in subdivision (1), above;
(ii) in the event that, after the sale of any such securities, (x) a
change shall be made in the price or rate at which such securities which
remain outstanding shall be convertible or exchangeable so that the
aggregate number of shares of Common Stock thereafter deliverable shall
decrease and (y) such increase in price or decrease in shares deliverable
is in accordance with the provisions of such securities (other than
provisions designed to protect against dilution such as this subparagraph
(c)), the Conversion Price shall forthwith be readjusted to such Conversion
Price as would have been obtained if such decreased number of shares had
been the number of shares of Common Stock initially deliverable upon the
conversion or exchange of such outstanding securities; and
(iii) on the termination of such right to convert or exchange, the
Conversion Price shall forthwith be readjusted to such Conversion Price as
would have been obtained had the adjustment made upon the sale of such
securities been made upon the basis of the issuance or sale of only the
number of shares of Common Stock actually issued upon the conversion or
exchange of such securities.
(B) "Excluded Stock" shall mean:
(1) Common Stock or stock convertible into Common Stock sold pursuant
to any present or future stock option plan, stock purchase plan, or other
benefit plan for employees (including officers) of the Corporation or of
its subsidiaries or present or future agreement to substitute options for
stock of the Corporation for existing stock options of a business acquired
by or merged into or consolidated with the Corporation;
(2) Shares of Common Stock sold upon exercise of warrants issued
pursuant to the terms of the Warrant Agreement, dated as of May 1, 1959,
between the Corporation and Morgan Guaranty Trust Company.
(C) If the number of shares of Common Stock outstanding at any time is
increased by a stock dividend payable in shares of Common Stock or by a
subdivision or split-up of shares of Common Stock, then, on the day
following the date fixed for the determination of holders of Common Stock
entitled to receive such stock dividend, subdivision or split-up, the
number of shares of Common Stock issuable on conversion of each share of
Series B shall be increased in proportion to such increase in outstanding
shares of Common Stock and the Conversion Price shall be correspondingly
decreased.
(D) If the number of shares of Common Stock outstanding at any time is
decreased by a combination of the outstanding shares of Common Stock, then,
on the day following the effective date of such combination, the number of
shares issuable on conversion of each share of Series B shall be decreased
in proportion to such decrease in outstanding shares and the Conversion
Price shall be correspondingly increased.
(E) In the case this Corporation shall be recapitalized or shall be
consolidated with or merged into, or shall sell or transfer its property
and assets as, or substantially as, an entirety, proper provisions shall be
made as part of the terms of such recapitalization, consolidation, merger,
sale or transfer whereby the holder of any shares of the Series B stock
convertible into Common Stock outstanding immediately prior to such event
shall thereafter be entitled to such conversion rights with respect to
securities of the Corporation resulting from such recapitalization,
consolidation or merger, or to which such sale or transfer shall be made,
as shall be
substantially equivalent to the conversion rights provided for with
respect to such Series B stock; provided, however, that no such provisions
with respect to conversion rights need be made if (i) provision is made for
the redemption of such Series B stock in accordance with redemption
provisions then applicable to such Series B stock, and (ii) the effect of
such redemption is to terminate such conversion rights prior to such
recapitalization, consolidation, merger, sale or transfer.
(F) All calculations under this paragraph (6) shall be made to the
nearest cent or to the nearest one one hundredth (1/100) of a share, as the
case may be.
(G) Whenever the Conversion Price shall be adjusted as in this
subparagraph (c) provided, the Corporation shall forthwith file, at each
office designated for the conversion of shares of Series B as provided in
this paragraph (6), a statement, signed by the Chairman of the Board,
President or any Vice President of the Corporation, and by its Treasurer,
Assistant Treasurer, Secretary or an Assistant Secretary, showing in detail
the facts requiring such adjustment and the Conversion Price that shall be
in effect after such adjustment. The Corporation shall also cause a notice
setting forth any such adjustment to be sent by mail, first class, postage
prepaid, to each registered holder of shares of Series B at his address
appearing on the stock register.
(H) Irrespective of any adjustments in the Conversion Price,
certificates representing shares of Series B theretofore or thereafter
issued which express the initial Conversion Price shall nevertheless be
valid for all purposes.
(I) No fraction of a share of Common Stock shall be issued upon any
conversion but, in lieu thereof, there shall be paid an amount in cash
equal to the same fraction of the market value of a full share of Common
Stock. For such purpose, the market value of a share of Common Stock shall
be the last recorded sale price of such a share on the New York Stock
Exchange on the day immediately preceding the date upon which such shares
are surrendered for conversion or, if there be no such recorded sale price
on such day, the last quoted bid price per share on the Common Stock on
such Exchange on the close of trading on such date. If the Common Stock
shall not at the time be dealt in on the New York Stock Exchange, such
market value shall be the prevailing market value of the Common Stock on
any other securities exchange, or in the open market, as determined by this
Corporation, which determination shall be conclusive.
(J) The Corporation shall at all times reserve and keep available, out
of its treasury stock or authorized and unissued stock, or both, solely for
the purpose of effecting the conversion of shares of Series B, such number
of shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all shares of Series B from time to time
outstanding.
(K) Anything in this paragraph (6) to the contrary notwithstanding,
the Corporation shall not be required to make any adjustment of the
Conversion Price in any case in which the amount by which such Conversion
Price would be reduced in accordance with the foregoing provisions would be
less than $1.00 per share of Common Stock, but in such case any adjustment
that would otherwise be required then to be made will be carried forward
and made at the time and together with the next subsequent adjustment
which, together with any and all such adjustments so carried forward, shall
amount to $1.00 or more per share of Common Stock. In the event of any
stock dividend, subdivision, split-up or combination of shares of Common
Stock, said amount of $1.00 (as theretofore decreased or increased) shall
be proportionately decreased or increased.
(L) No adjustment of the conversion rate shall be made by reason of
the issuance of Common Stock or stock convertible into Common Stock in
exchange for property or services. Any Common Stock or stock convertible
into Common Stock issued in a tax free reorganization shall be deemed to be
issued solely for property.
(7) Voting. Subject to the provisions of any applicable law, or of
the By-laws of the Corporation as from time to time amended, with respect
to the fixing of a record date for the determination of stockholders
entitled to vote, at each meeting of stockholders each holder of record of
shares of Series B shall be entitled to one vote per share on each matter
on which the holders of record of the Common Stock shall be entitled to
vote, voting together with the holders of record of the Common Stock and
any other series of Preferred Stock entitled to vote with the Common Stock
and not by classes, and each such record holder of shares of Series B shall
be entitled to notice of any such meeting of stockholders. However, so long
as any shares of Series B are outstanding, if at the time of any annual
meeting of stockholders for the election of directors a default in
preferred dividends (as defined in this paragraph (7)) shall exist, the
holders of shares of Preferred Stock voting separately as a class without
regard to series (with each share of Preferred Stock being entitled to one
vote), shall have the right to elect two members of the Board of Directors
of the Corporation. The holders of Common Stock shall not be entitled to
vote in the election of the two directors so to be elected by the holders
of shares of Preferred Stock. Any director elected by the holders of shares
of Preferred Stock, voting as a class as aforesaid, shall continue to serve
as such director for the full term for which he shall have been elected
notwithstanding that prior to the end of such term a default in preferred
dividends shall cease to exist. If, prior to the end of the term of any
director elected by the holders of the Preferred Stock, voting as a class
as aforesaid, a vacancy in the office of such director shall occur by
reason of death, resignation, removal or disability, or for any other
cause, such vacancy shall be filled for the unexpired term in the manner
provided in the By-laws of the Corporation, provided that, if such vacancy
shall be filled by election by the stockholders at a meeting thereof, the
right to fill such vacancy shall be vested in the holders of Preferred
Stock, voting as a class as aforesaid, unless, in any such case, no default
in preferred dividends shall exist at the time of such election.
For the purposes of this paragraph (7), a default in preferred
dividends shall be deemed to have occurred whenever the amount of dividends
in arrears upon any series of Preferred Stock shall be equivalent to six
full quarter-yearly dividends or more and, having so occurred, such default
in preferred dividends shall be deemed to exist thereafter until all
accrued dividends on all shares of Preferred Stock then outstanding shall
have been paid to the end of the last preceding quarterly dividend period.
Nothing herein contained shall be deemed to prevent an amendment of the By-
laws of the Corporation, in the manner therein provided, which shall
increase the number of directors so as to provide as additional places on
the Board of Directors either of or both the directorships to be filled by
the two directors so to be elected by the holders of the Preferred Stock or
to prevent any other change in the number of directors of the Corporation.
(8) Reacquired Shares. Shares of Series B which have been issued and
reacquired by the Corporation through redemption or purchase, or which have
been converted into shares of any other class or classes of stock of the
Corporation, shall upon compliance with any applicable provision of the
General Corporation Law of the State of Delaware have the status of
authorized and unissued shares of Preferred Stock and may be reissued as
part of the Series B or as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors.
(9) Restricted Activities. (a) So long as any shares of Series B are
outstanding,
(A) without the written consent or affirmative vote of the holders of
at least two-thirds of the aggregate number of shares of Series B at the
time outstanding given in writing or by vote at a meeting, consenting or
voting (as the case may be) separately as a class, the Corporation shall
not amend, alter or repeal the preferences, special rights or other powers
of the Series B shares so as to affect the rights of the holders of Series
B shares adversely (and the authorization and issuance of any class of
stock prior to the Series B shares as to dividend preference shall be
deemed to affect the Series B shares adversely);
(B) without the written consent or affirmative vote of the holders of
at least a majority of the aggregate number of shares of Preferred Stock at
the time outstanding given in writing or by vote at a meeting, consenting
or voting (as the case may be) separately as a class, without regard to
series, the Corporation will not (i) increase the authorized amount of
Preferred Stock beyond the 15,000,000 shares presently authorized or (ii)
create any other class or classes of stock ranking on a parity with the
Preferred Stock as to dividend preference; and
(C) except as expressly set forth in division (B) of this subparagraph
(a), nothing in this paragraph (9) shall be deemed to restrict the issuance
of any additional shares of Series B or of any series of Preferred Stock
which may be issued in the future.
(b) For the purposes of this paragraph (9) any class or classes of
stock of the Corporation shall be deemed to rank,
(A) prior to the Series B shares as to dividends, if the holders of
such class or classes shall be entitled to the receipt of dividends in
preference or priority to the holders of the Series B shares;
(B) on a parity with the Series B shares as to dividends whether or
not the dividend rates or dividend payment dates thereof be different from
those of the Series B, if the holders of such class or classes of stock
shall be entitled to the receipt of dividends in proportion to their
respective dividend rates without preference or priority one over the other
as between the holders of such class or classes of stock and the holders of
the Series B shares; and
(C) junior to the Series B shares as to dividends if the rights of the
holders of such class or classes shall be subject or subordinate to the
rights of the holders of the Series B shares in respect of the receipt of
dividends.
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Restated Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and
amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such
series, and the qualifications, limitations or restrictions thereof are as
follows:
(1) Designation and Amount. The shares of such series shall be
designated as "Series C Junior Participating Preferred Stock" ("Series C
Stock") and the number of shares constituting such series shall be
2,000,000.
(2) Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series C Stock with respect to dividends, the holders of shares
of Series C Stock shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of January, April,
July and October in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series C Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $10.00 or (b) subject to the provision
for adjustment hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock, par value $.125 per share, of the Corporation
(the "Common Stock") since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series C Stock. In the event the Corporation shall at any time after
September 27, 1995 (the "Rights Declaration Date") (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount to which
holders of shares of Series C Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series C Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share
on the Series C Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series C Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series C Stock, unless the
date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the
date of
issue is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series C Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series C
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a share-
by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares
of Series C Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to
the date fixed for the payment thereof.
(3) Voting Rights. The holders of shares of Series C Stock shall have
the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series C Stock shall entitle the holder thereof to 100 votes
on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the number of votes per share to which holders of shares of Series C
Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series C Stock and the holders of shares of Common Stock and any
other series of Preferred Stock entitled to vote with the Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at the time of any annual meeting of stockholders for the
election of directors a default in preferred dividends (as hereinafter
defined) shall exist, the holders of shares of Preferred Stock voting
separately as a class without regard to series (with each share of
Preferred Stock being entitled to that number of votes to which it is
entitled on matters submitted to stockholders generally, or, if it is not
entitled to vote with respect to such matters, to one vote), shall have the
right to elect two members of the Board of Directors of the Corporation.
The holders of Common Stock shall not be entitled to vote in the election
of the two directors so to be elected by the holders of shares of Preferred
Stock. Any director elected by the holders of shares of Preferred Stock,
voting as a class as aforesaid, shall continue to serve as such director
for the full term for which he shall have been elected notwithstanding that
prior to the end of such term a default in preferred dividends shall cease
to exist. If, prior to the end of the term of any director elected by the
holders of the Preferred Stock, voting as a class as aforesaid, a vacancy
in the office of such director shall occur by reason of death, resignation,
removal or disability, or for any other cause, such vacancy shall be filled
for the unexpired term in the manner provided in the By-laws of the
Corporation, provided that, if such vacancy shall be filled by election by
the stockholders at a meeting thereof, the right to fill such vacancy shall
be vested in the holders of Preferred Stock, voting as a class as
aforesaid, unless, in any such case, no default in preferred dividends
shall exist at the time of such election.
(ii) For the purposes of paragraph (C)(i) of this Section 3, a default
in preferred dividends shall be deemed to have occurred whenever the amount
of dividends in arrears upon any series of Preferred Stock shall be
equivalent to six full quarterly dividends or more and, having so occurred,
such default in preferred dividends shall be deemed to exist thereafter
until all accrued dividends on all shares of Preferred Stock then
outstanding shall have been paid to the end of the last preceding quarterly
dividend period. Nothing herein contained shall be deemed to prevent an
amendment of the By-laws of the Corporation, in the manner therein
provided, which shall increase the number of directors so as to provide as
additional places on the Board of Directors either or both the
directorships to be filled by the two directors so to be elected by the
holders of the Preferred Stock or to prevent any other change in the number
of directors of the Corporation.
(D) Except as set forth herein or required by law, holders of Series C
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
(4) Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series C Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series C Stock outstanding shall have
been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series C Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series C Stock, except
dividends paid ratably on the Series C Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series C Stock, provided
that the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series C Stock;
(iv) purchase or otherwise acquire for consideration any shares of
Series C Stock, or any shares of stock ranking on a parity with the Series
C Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors, after consideration
of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
(5) Reacquired Shares. Any shares of Series C Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein.
(6) Liquidation, Dissolution or Winding Up. (A) Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to
the Series C Stock unless, prior thereto, the holders of shares of Series C
Stock shall have received $100.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series C Liquidation
Preference"). Following the payment of the full amount of the Series C
Liquidation Preference, no additional distributions shall be made to the
holders of shares of Series C Stock unless, prior thereto, the holders of
shares of Common Stock (which expression shall include, for the purposes
only of this Section 6, any series of the Corporation's Preferred Stock
ranking on a parity with the Common Stock upon liquidation, dissolution or
winding up) shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series C
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth
in subparagraph C below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock) (such
number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the
Series C Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series C Stock and Common Stock, respectively,
holders of Series C Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to one (1) with respect
to such Series C Stock and Common Stock, on a per share basis,
respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series C Liquidation Preference
and the liquidation preferences of all other series of Preferred Stock, if
any, which rank on a parity with the Series C Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event,
however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(7) Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the
shares of Series C Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then
in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series C Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(8) Redemption. The shares of Series C Stock may be purchased by the
Corporation at such times and on such terms as may be agreed to between the
Corporation and the selling stockholder, subject to any limitations which
may be imposed by law or this Certificate of Incorporation.
(9) Ranking. The Series C Stock shall rank junior to all other series
of the Corporation's Preferred Stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall provide
otherwise. Notwithstanding the foregoing, upon liquidation, dissolution or
winding up, the Series C Stock shall rank senior in accordance with Section
6 hereof to any series of the Corporation's Preferred Stock ranking on a
parity with the Common Stock upon liquidation, dissolution or winding up.
(10) Amendment. The Certificate of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or change
the powers, preferences or special rights of the Series C Stock so as to
affect them adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series C Stock, voting
separately as a class.
(11) Fractional Shares. Series C Stock may be issued in fractions of
a share which shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series C Stock.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: The private property of the stockholders of the Corporation
shall not be subject to the payment of corporate debts to any extent
whatsoever.
SEVENTH: Notwithstanding any other provisions of this Certificate of
Incorporation or the By-laws of the Corporation to the contrary, no action
required to be taken or which may be taken at any annual or special meeting
of stockholders of the Corporation may be taken by written consent without
a meeting, except:
(a) any action which may be taken solely upon the vote or consent of
holders of Preferred Stock or any series thereof, or
(b) any action taken upon the signing of a consent in writing, setting
forth the action so taken, by all the stockholders of the Corporation
entitled to vote thereon.
EIGHTH: The Board of Directors shall have power, without stockholder
action:
1. To make By-laws for the Corporation, and to amend, alter or repeal
any By-laws.
2. To set apart out of any of the funds of the Corporation available
for dividends a reserve or reserves for any proper purpose and to abolish
any such reserve or reserves.
The powers and authorities herein conferred upon the Board of
Directors are in furtherance and not in limitation of those conferred by
the laws of the State of Delaware. In addition to the powers and
authorities herein or by statute expressly conferred upon it, the Board of
Directors may exercise all such powers and do all such acts and things as
may be exercised or done by the Corporation, subject, nevertheless, to the
provisions of the laws of the State of Delaware, of this Certificate of
Incorporation and of the By-laws of the Corporation.
NINTH: The Corporation reserves the right at any time and from time to
time to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation, and other provisions authorized by the laws
of the State of Delaware at the time in force may be added or inserted in
this Certificate of Incorporation, in the manner now or hereafter
prescribed by law; and all rights, preferences and privileges of whatsoever
nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its
present form or as hereafter amended are granted subject to the right
reserved in this Article NINTH.
TENTH: (a) The number of directors constituting the whole Board shall
be as fixed from time to time by vote of a majority of the whole Board,
provided, however, that the number of directors shall not be less than
three and that the number shall not be reduced so as to shorten the term of
any director at the time in office. The number of directors constituting
the whole Board shall hereafter be fourteen until otherwise fixed by a
majority of the whole Board in accordance with the preceding sentence.
The Board of Directors shall be divided into three classes, designated
Class I, Class II and Class III, as nearly equal in number as the then
total number of directors constituting the whole Board permits, with the
term of office of one class expiring each year. At the annual meeting of
stockholders in 1984, directors of Class I shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors of
Class II shall be elected to hold office for a term expiring at the second
succeeding annual meeting, and directors of Class III shall be elected to
hold office for a term expiring at the third succeeding annual meeting. At
each annual meeting of stockholders the successors to the class of
directors whose term shall then expire shall be elected to hold office for
a term expiring at the third succeeding annual meeting. Any vacancies in
the Board of Directors for any reasons, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, or by a
sole remaining director. Any directors so chosen shall hold office until
the next election of the class for which such directors shall have been
chosen and until their successors shall be elected and qualified, subject,
however, to prior death, resignation, retirement, disqualification or
removal from office. Any newly created or eliminated directorships
resulting from an increase or decrease in the authorized number of
directors shall be apportioned by the Board of Directors among the three
classes of directors so as to maintain such classes as nearly equal as
possible. Notwithstanding any other provision of this Article TENTH, and
except as otherwise required by law, whenever the holders of any one or
more series of Preferred Stock shall have the right, voting separately as a
class, to elect one or more directors of the Corporation, the term of
office, the filling of vacancies and other features of such directorships
shall be governed by the terms of this Certificate of Incorporation
applicable thereto.
ELEVENTH: 1. The Affirmative vote of the holders of not less than two-
thirds of the outstanding shares of "Voting Stock" (as hereinafter defined)
shall be required for the approval or authorization of any "Business
Combination" (as hereinafter defined) of the Corporation or any subsidiary
of the Corporation with any "Related Person" (as hereinafter defined),
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified by law, in any agreement with any national
securities exchange or otherwise; provided, however, that the two-thirds
voting requirement shall not be applicable and such Business Combination
shall require only such affirmative vote as is required by law, any
agreement with any national securities exchange or otherwise if:
(a) The "Continuing Directors" (as hereinafter defined) of the
Corporation by at least a majority vote have expressly approved such
Business Combination either in advance of or subsequent to such Related
Person becoming a Related Person; or
(b) All of the following conditions are met:
(i) The cash or "Fair Market Value" (as hereinafter defined) as of the
date of the consummation of the Business Combination (the "Combination
Date") of the property, securities or other consideration to be received
per share by holders of a particular class or series of capital stock, as
the case may be, of the Corporation in the Business Combination is not
less than the highest of:
(A) the highest per share price (including brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by or on behalf of the
Related Person in acquiring beneficial ownership of any of its holdings
of such class or series of capital stock of the Corporation (i) within
the two-year period immediately prior to the Combination Date or (ii) in
the transaction or series of transactions in which the Related Person
became a Related Person, whichever is higher; or
(B) the Fair Market Value per share of the shares of capital stock
being acquired in the Business Combination (i) as at the Combination Date
or (ii) the date on which the Related Person became a Related Person,
whichever is higher; or
(C) in the case of Common Stock, the per share book value of the Common
Stock as reported at the end of the fiscal quarter immediately prior to
the Combination Date, and in the case of Preferred Stock, the highest
preferential amount per share to which the holders of shares of such
class or series of Preferred Stock would be entitled in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, regardless of whether the Business
Combination to be consummated constitutes such an event.
The provisions of this paragraph 1(b)(i) shall be required to be met
with respect to every class or series of outstanding capital stock,
whether or not the Related Person has previously acquired any shares of a
particular class or series of capital stock. In all above instances,
appropriate adjustments shall be made for recapitalizations and for stock
dividends, stock splits and like distributions; and
(ii) The consideration to be received by holders of a particular class
or series of capital stock shall be in cash or in the same form as
previously has been paid by or on behalf of the Related Person in
connection with its direct or indirect acquisition of beneficial
ownership of shares of such class or series of stock. If the
consideration so paid for any such share varies as to form, the form of
consideration for such shares shall be either cash or the form used to
acquire beneficial ownership of the largest number of shares of such
class or series of capital stock previously acquired by the Related
Person.
2. For purposes of this Article ELEVENTH:
(a) The term "Business Combination" shall mean any (i) merger or
consolidation of the Corporation or a subsidiary of the Corporation with
a Related Person or any other corporation which is or
after such merger or consolidation would be an "Affiliate" or "Associate"
(as hereinafter defined) of a Related Person, (ii) sale, lease, exchange,
mortgage, pledge, transfer or other disposition (in one transaction or a
series of transactions) with any Related Person or any affiliate of any
Related Person, of all or any "Substantial Part" (as hereinafter defined)
of the assets of the Corporation or of a subsidiary of the Corporation to
a Related Person or any Affiliate or Associate of any Related Person,
(iii) adoption of any plan or proposal for the liquidation or dissolution
of the Corporation proposed by or on behalf of a Related Person or any
Affiliate or Associate of any Related Person, (iv) sale, lease, exchange
or other disposition, including without limitation a mortgage or other
security device, of all or any Substantial Part of the assets of a
Related Person or any Affiliate or Associate of any Related Person to the
Corporation or a subsidiary of the Corporation, (v) issuance or pledge of
securities of the Corporation or a subsidiary of the Corporation to or
with a Related Person or any Affiliate or Associate of any Related
Person, (vi) reclassification of securities (including any reverse stock
split) or recapitalization of the Corporation or any other transaction
that would have the effect, either directly or indirectly, of increasing
the proportionate share of any class of equity or convertible securities
of the Corporation or any subsidiary of the Corporation which is directly
or indirectly beneficially owned by any Related Person or any Affiliate
or Associate of any Related Person, and (vii) agreement, contract or
other arrangement providing for any of the transactions described in this
definition of Business Combination.
(b) The term "person" shall mean any individual, firm, corporation or
other entity and shall include any group comprised of any person and any
other person with whom such person or any Affiliate or Associate of such
person has any agreement, arrangement or understanding, directly or
indirectly, for the purpose of acquiring, holding, voting or disposing of
Voting Stock of the Corporation.
(c) The term "Related Person" shall mean any person (other than the
Corporation, or any Subsidiary and other than any profit-sharing,
employee stock ownership or other employee benefit plan of the
Corporation or any Subsidiary or any trustee of or fiduciary with respect
to any such plan when acting in such capacity) who or which:
(i) is the beneficial owner (as hereinafter defined) of ten percent
(10%) or more of the Voting Stock;
(ii) is an Affiliate or Associate of the Corporation and at any time
within the two-year period immediately prior to the date in question was
the beneficial owner of ten percent (10%) or more of the Voting Stock; or
(iii) is at such time an assignee of or has otherwise succeeded to the
beneficial ownership of any shares of Voting Stock which were at any time
within the two-year period immediately prior to such time beneficially
owned by any Related Person, if such assignment or succession shall have
occurred in the course of a transaction or series of transactions not
involving a public offering within the meaning of the Securities Act of
1933.
(d) A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) which such person or any of its Affiliates or Associates has,
directly or indirectly, (a) the right to acquire (whether such right is
exercisable immediately or only after the passage of time), pursuant to
any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise, or
(b) the right to vote pursuant to any agreement, arrangement or
understanding; or
(iii) which are beneficially owned, directly or indirectly, by any
other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares of
Voting Stock.
(e) For the purposes of determining whether a person is a Related
Person pursuant to sub-paragraph (c) of this paragraph 2, the number of
shares of Voting Stock deemed to be outstanding shall include shares
deemed owned through application of subparagraph (d) of this paragraph 2
but shall not
include any other shares of Voting Stock which may be issuable pursuant
to any agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.
(f) The terms "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on
January 1, 1984.
(g) The term "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition
of Related Person set forth in subparagraph (c) of this paragraph 2, the
term "Subsidiary" shall mean only a corporation of which a majority of
each class of equity security is owned, directly or indirectly, by the
Corporation.
(h) The term "Continuing Director" means any member of the Board of
Directors, while such person is a member of the Board of Directors, who
is not an Affiliate, Associate or a representative of the Related Person
and was a member of the Board of Directors prior to the time that the
Related Person became a Related Person, and any successor of a Continuing
Director, while such successor is a member of the Board of Directors, who
is not an Affiliate, Associate or a representative of the Related Person
and is recommended or elected to succeed a Continuing Director by a
majority of Continuing Directors.
(i) The term "Substantial Part" shall mean more than twenty percent
(20%) of the Fair Market Value, as determined by a majority of the
Continuing Directors, of the total consolidated assets of the Corporation
and its Subsidiaries taken as a whole as of the end of its most recent
fiscal year ended prior to the time the determination is being made.
(j) For the purposes of paragraph 1(b)(i) of this Article ELEVENTH, the
term "other consideration to be received" shall include, without
limitation, capital stock retained by the stockholders.
(k) The term "Voting Stock" shall mean all of the outstanding shares of
Common Stock and the outstanding shares of Preferred Stock entitled to
vote on each matter on which the holders of record of Common Stock shall
be entitled to vote, and each reference to a proportion of shares of
Voting Stock shall refer to such proportion of the votes entitled to be
cast by such shares voting as one class.
(l) The term "Fair Market Value" means: (i) in the case of stock, the
highest closing sale price during the 30-day period immediately preceding
the date in question of a share of such stock on the Composite Tape for
the New York Stock Exchange _ Listed Stocks, or, if such stock is not
quoted on the Composite Tape, on the New York Stock Exchange, or, if such
stock is not listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934
on which such stock is listed, or, if such stock is not listed on any
such stock exchange, the highest closing bid quotation with respect to a
share of such stock during the 30-day period preceding the date in
question on the National Association of Securities Dealers, Inc.
Automated Quotations System or any successor system then in use, or if no
such quotations are available, the fair market value on the date in
question of a share of such stock as determined in good faith by a
majority of the Continuing Directors; and (ii) in the case of property
other than cash or stock, the fair market value of such property on the
date in question as determined in good faith by a majority of the
Continuing Directors.
(m) A Related Person shall be deemed to have acquired a share of the
Voting Stock of the Corporation at the time when such Related Person
became the beneficial owner thereof. If a majority of the Continuing
Directors is not able to determine the price at which a Related Person
has acquired a share of Voting Stock of the Corporation, such price shall
be deemed to be the Fair Market Value of the shares in question at the
time when the Related Person became the beneficial owner thereof. With
respect to shares owned by Affiliates, Associates or other persons whose
ownership is attributed to a Related Person under the foregoing
definition of Related Person, the price deemed to be paid therefor by
such Related Person shall be the price paid upon the acquisition thereof
by such Affiliate, Associate or other person, or, if such price is not
determinable by a majority of the Continuing Directors, the Fair Market
Value of the shares in question at the time when the Affiliate, Associate
or other such person became the beneficial owner thereof.
3. The fact that any Business Combination complies with the provisions
of paragraph 1(b) of this Article ELEVENTH shall not be construed to impose
any fiduciary duty, obligation or responsibility on the Board of Directors,
or any member thereof, to approve such Business Combination or recommend
its adoption or approval to the stockholders of the Corporation, nor shall
such compliance limit, prohibit or otherwise restrict in any manner the
Board of Directors, or any member thereof, with respect to evaluations of
or actions and responses taken with respect to such Business Combination.
TWELFTH: No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that this Article TWELFTH
shall not eliminate or limit the liability of a director to the extent
provided by applicable law (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation Law of
Delaware (as in effect and as hereafter amended), or (iv) for any
transaction from which the director derived an improper personal benefit.
If the Delaware General Corporation Law is amended after approval by the
stockholders of this Article TWELFTH to authorize corporate action further
eliminating or limiting the personal liability of directors, then the
liability of each director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware General Corporation
Law, as so amended. Neither the amendment nor repeal of this Article
TWELFTH nor the adoption of any provision of this Certificate of
Incorporation inconsistent with this Article TWELFTH shall eliminate or
reduce the effect of this Article TWELFTH in respect of any matter
occurring, or any cause of action, suit or claim that, but for this Article
TWELFTH, would accrue or arise, prior to such amendment, repeal or adoption
of an inconsistent provision.
EXHIBIT 12.1
<TABLE>
PARENT GROUP
COMPUTATION OF RATIO OF INCOME TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(unaudited)
(In millions except ratio)
<CAPTION>
Three Months
Ended
March 29, 1997
<S> <C>
Fixed charges:
Interest expense $ 39
Distributions on preferred securities of subsidiary trust, net of income taxes 6
Estimated interest portion of rents 4
Total fixed charges $ 49
Income:
Income from continuing operations before income taxes and distributions $ 216
on preferred securities of subsidiary trust
Eliminate equity in undistributed pretax income of Finance Group (48)
Fixed charges 49
Adjusted income $ 217
Ratio of income to fixed charges 4.43
</TABLE>
EXHIBIT 12.2
<TABLE>
TEXTRON INC. INCLUDING ALL MAJORITY-OWNED SUBSIDIARIES
COMPUTATION OF RATIO OF INCOME TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(unaudited)
(In millions except ratio)
<CAPTION>
Three Months
Ended
March 29, 1997
<S> <C>
Fixed charges:
Interest expense $ 183
Distributions on preferred securities of subsidiary trust, net of income taxes 6
Estimated interest portion of rents 9
Total fixed charges $ 198
Income:
Income from continuing operations before income taxes and distributions $ 216
on preferred securities of subsidiary trust
Fixed charges 198
Adjusted income $ 414
Ratio of income to fixed charges 2.09
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from Textron Inc.'s Consolidated Balance Sheet as
of March 29, 1997 and Consolidated Statement of Income for
the quarter ended March 29, 1997 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-END> MAR-29-1997
<CASH> 140
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 1,373
<CURRENT-ASSETS> 0
<PP&E> 3,459
<DEPRECIATION> 1,758
<TOTAL-ASSETS> 18,689
<CURRENT-LIABILITIES> 0
<BONDS> 10,563
<COMMON> 12
0
14
<OTHER-SE> 3,189
<TOTAL-LIABILITY-AND-EQUITY> 18,689
<SALES> 2,021
<TOTAL-REVENUES> 2,551
<CGS> 1,656
<TOTAL-COSTS> 1,726
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 64
<INTEREST-EXPENSE> 183
<INCOME-PRETAX> 216
<INCOME-TAX> 85
<INCOME-CONTINUING> 125
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 125
<EPS-PRIMARY> .73
<EPS-DILUTED> .73
</TABLE>
