Draft--December 13, 1994
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event
reported: December 7, 1994
THE CONTINENTAL CORPORATION
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(Exact name of registrant as specified in its charter)
New York 1-5686 13-2610607
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(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
180 Maiden Lane New York, New York 10038
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(Address of principal executive offices) (Zip Code)
(212) 440-3000
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(Registrant's telephone number)
Page 1 of ___ Pages
Exhibit Index is at Page 6
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Item 5. Other Events.
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On December 9, 1994, The Continental Corporation
(the "Company") consummated its sale of certain of its
securities to Continental Casualty Company ("CCC"), a subsidiary
of CNA Financial Corporation ("CNA Financial"), for a cash
purchase price of $275 million, pursuant to a previously
announced securities purchase agreement, dated as of December 6,
1994, with CNA Financial (the "Securities Purchase Agreement").
CCC acquired approximately $166 million in liquidation
value of the Company's 9.75% Cumulative Preferred Stock, Series
T (the "Series T Stock"), and approximately $34 million in
liquidation value of the Company's 9.75% Cumulative Preferred
Stock, Series F. The Series T Stock is redeemable under certain
circumstances at a price reflecting any increase in the per
share price of the Company's common stock over $15.75. CCC also
received an option to acquire $125 million in liquidation
preference of another series of the Company's 9.75% Cumulative
Preferred Stock, Series G. The option and its underlying
preferred stock will be redeemable under certain circumstances
at a price reflecting any increase in the per share price of the
common stock over $17.75. The 9.75% preferred stock will mature
in 40 years, with a right of the holders to require redemption
in 15 years, and may be redeemed by the Company under certain
circumstances. In addition, CCC acquired $75 million in
liquidation value of the Company's 12% Cumulative Preferred
Stock, Series H, maturing in 10 years and redeemable under
certain circumstances.
As previously announced, the Company, CNA Financial
and Chicago Acquisition Corp. ("Acquisition") have entered into
a merger agreement, dated as of December 6, 1994 (the "Merger
Agreement"), pursuant to which Acquisition will be merged with
and into the Company and the Company will become a subsidiary of
CNA Financial. If that merger is not consummated, CCC may,
subject to regulatory approvals, exchange the Series T Stock for
another series of preferred stock that would be convertible into
approximately 19% of the Company's currently outstanding common
shares, at a conversion price of $15.75, subject to adjustment.
Following such exchange, CCC would be entitled to nominate up to
four
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directors to serve on the Company's Board of Directors. CCC
would also be subject to certain standstill agreements and
restrictions on transfer.
The discussion herein is qualified in its entirety by
reference to the Securities Purchase Agreement and the Merger
Agreement, each of which is incorporated herein by reference.
* * *
On December 7, 1994, an amendment (the "Amendment") to
the Company's Certificate of Incorporation to designate the
provisions relating to the five series of the Company's
preferred stock that are the subject of the Securities Purchase
Agreement, became effective, upon the filing of a Certificate of
Amendment with the Secretary of State of the State of New York.
* * *
On December 7, 1994, three purported class actions
were filed in New York State Supreme Court, New York County,
against the Company and directors of the Company by persons
claiming to be stockholders of the Company. The plaintiffs in
these actions allege that directors of the Company breached
their fiduciary duties by agreeing to enter into a merger with
CNA Financial and its affiliates, as described above. Among
other things, the plaintiffs in these actions allege that the
defendant directors failed to exercise due diligence, failed
adequately to "shop" the Company and failed to maximize value
for the Company's stockholders. The plaintiffs in one or more
of these purported class actions seek, among other relief,
certification of a class; an injunction prohibiting the merger
of Acquisition with and into the Company and a declaration that
the merger is void; injunctive relief requiring the directors to
explore and evaluate alternatives for the Company and to appoint
a disinterested committee or stockholder committee to review
bona fide offers for the Company; a declaration that the
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defendant directors have committed abuse of trust and breach of
fiduciary duty; and monetary damages.
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* * *
Item 7. Exhibits.
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Exhibit 3 Certificate of Amendment of the Company as filed
with the Secretary of State of the State of New
York on December 7, 1994.
Exhibit 4 Certificate of Amendment of the Company as filed
with the Secretary of State of the State of New
York on December 7, 1994. (Filed as Exhibit 3.)
Exhibit 10(a) Merger Agreement, dated as of December 6, 1994,
by and among CNA Financial Acquisition Corp. and
The Continental Corporation (Previously filed as
Exhibit 2 and Exhibit 10(a) to the Company's
Report on Form 8-K, dated December 9, 1994, and
incorporated herein by reference.
Exhibit 10(b) Securities Purchase Agreement, dated as of
December 6, 1994, between The Continental
Corporation and CNA Financial Corporation, a
Delaware corporation, with Schedule 1 and
Exhibits A through D (Filed as Exhibit 10(b) to
the Company's Report on Form 8-K, dated December
9, 1994, and incorporated herein by reference.)
Exhibit 10(c) Option, dated December 9, 1994.
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SIGNATURE
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 hereunto duly
authorized.
Dated: December 14, 1994
THE CONTINENTAL CORPORATION
By/s/ William F. Gleason, Jr.
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William F. Gleason, Jr.
Senior Vice President,
General Counsel and
Secretary
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Exhibit Index
Exhibit 3 Certificate of Amendment of the Company as filed
with the Secretary of State of the State of New
York on December 7, 1994.
Exhibit 4 Certificate of Amendment of the Company as filed
with the Secretary of State of the State of New
York on December 7, 1994. (Filed as Exhibit 3.)
Exhibit 10(a) Merger Agreement, dated as of December 6, 1994,
by and among CNA Financial Acquisition Corp. and
The Continental Corporation (Previously filed as
Exhibit 2 and Exhibit 10(a) to the Company's
Report on Form 8-K, dated December 9, 1994.
Exhibit 10(b) Securities Purchase Agreement, dated as of
December 6, 1994, between The Continental
Corporation and CNA Financial Corporation, a
Delaware corporation, with Schedule 1 and
Exhibits A through D (Filed as Exhibit 10(b) to
the Company's Report on Form 8-K, dated December
9, 1994).
Exhibit 10(c) Option, dated December 9, 1994.
5
EXHIBIT A
CERTIFICATE OF AMENDMENT OF
THE CERTIFICATE OF INCORPORATION
OF THE CONTINENTAL CORPORATION
UNDER SECTION 805 OF THE BUSINESS
CORPORATION LAW
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The undersigned, being the President and the Secretary,
respectively, of The Continental Corporation, hereby certify and set forth:
1. The name of the corporation is THE CONTINENTAL
CORPORATION (the "Corporation").
2. The certificate of incorporation of the Corporation was
filed by the Department of State on the 15th day of May, 1968.
3. The certificate of incorporation of the Corporation is
hereby amended, pursuant to section 502 of the Business Corporation Law, by the
addition of a provision stating the number, designation, relative rights,
preferences and limitations of the shares of (i) a series of Cumulative
Convertible Preferred Stock, Series E (the "Series E Preferred Stock"), (ii) a
series of Cumulative Preferred Stock, Series F (the "Series F Preferred Stock")
and (iii) a series of Cumulative Preferred Stock, Series G (the "Series G
Preferred Stock"), (iv) a series of Cumulative Preferred Stock, Series H (the
"Series H Preferred Stock") and (v) a series of Cumulative Preferred Stock,
Series T (the "Series T Preferred Stock"). Each of the Series E Preferred
Stock, the Series F Preferred Stock, the Series G Preferred Stock, the Series H
Preferred Stock and the Series T Preferred Stock was established by a resolution
adopted by a majority vote of the board of directors of The Continental
Corporation at a meeting of the board duly called and held on December 6, 1994.
The text of that resolution is set forth below:
RESOLVED that, pursuant to the authority vested in the Board
of Directors of the Corporation in accordance with the provisions of Article 5
of the Certificate of Incorporation, five series of the class of authorized
Preferred Stock, par value $4.00 per share, of the Corporation are hereby cre-
ated and that the number of shares and the designations, relative rights
preferences and limitations of the shares of each such series, and the
qualifications, limitations and restrictions thereof are as follows:
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Article 1. Series E Preferred Stock.
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Section 1. Designation and Number.
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(a) The shares of such series shall be designated as
"Cumulative Convertible Preferred Stock, Series E" (the "Series E Preferred
Stock"). The number of shares initially constituting the Series E Preferred
Stock shall be 828,100, which number may be decreased (but not increased) by the
Board of Directors without a vote of stockholders; provided, however, that such
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number may not be decreased below the sum of (x) the number of then outstanding
shares of Series E Preferred Stock and (y) the number of shares of Series E
Preferred Stock into which the outstanding shares of Series T Preferred Stock
are exchangeable.
(b) The Series E Preferred Stock shall, with respect to
dividend rights and rights on liquidation, dissolution or winding up, rank pari
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passu with the Corporation's $2.50 Cumulative Convertible Preferred Stock,
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Series A (the "Series A Preferred Stock"), $2.50 Cumulative Preferred Stock,
Series B (the "Series B Preferred Stock"), Cumulative Preferred Stock, Series F
(the "Series F Preferred Stock"), Cumulative Preferred Stock, Series G (the
"Series G Preferred Stock"), Cumulative Preferred Stock, Series H (the "Series H
Preferred Stock"), Cumulative Preferred Stock, Series T (the "Series T Preferred
Stock" and together with the Series E Preferred Stock, Series F Preferred Stock,
Series G Preferred Stock and Series H Preferred Stock, the "Chicago Preferred
Stock") and the New Preferred Stock (if any) (the Series A Preferred Stock,
Series B Preferred Stock, Chicago Preferred Stock (other than the Series E
Preferred Stock) and New Preferred Stock (if any) are collectively defined for
the purposes of this Article 1 as the "Other Preferred Stock") and prior to all
other classes and series of capital stock of the Corporation now or hereafter
authorized including, without limitation, the Common Stock, par value $1.00 per
share, of the Corporation (the "Common Stock").
(c) Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Article 6 below.
Section 2. Dividends and Distributions.
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(a) The holders of shares of Series E Preferred Stock, in
preference to the holders of shares of Common Stock and of any shares of other
capital stock of the Corporation other than the Other Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
the assets of the Corporation at the time legally available therefor, cumulative
cash dividends at an annual rate on the
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Liquidation Preference thereof equal to 9.75% (subject to increase pursuant to
Section 2(b)), calculated on the basis of a 360-day year consisting of twelve
30-day months, accruing and payable in equal quarterly payments, in immediately
available funds, on the Business Day immediately preceding the last day of
March, June, September and December in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date") commencing on the Business Day
immediately preceding December 31, 1994, provided, however, that with respect to
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such first Quarterly Dividend Payment Date, the holders of shares of Series E
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors, out of the assets of the Corporation at the time legally
available therefor, a cumulative cash dividend in respect of each share of
Series E Preferred Stock in the amount of (i) 9.75% (or the then effective
annual rate) of the Liquidation Preference multiplied by (ii) a fraction equal
to (A) the number of days from (and including) the Issue Date to (but excluding)
such Quarterly Dividend Payment Date divided by (B) 360. No interest shall be
payable in respect of any dividend payment on the Series E Preferred Stock that
may be in arrears.
(b) If (i) a private placement or public offering of the
New Preferred Stock or the New Senior Notes, pursuant to which the Corporation
shall receive at least $100,000,000 in gross proceeds is not consummated within
360 days after the termination of the Merger Agreement or (ii) the annual
dividend rate on the New Preferred Stock or the annual interest rate on the New
Senior Notes, as applicable, exceeds 13%, then the annual rate of the cumulative
cash dividends shall be increased to a rate of 10.75%, effective (x) in the case
of clause (i), the date that is 360 days after the termination of the Merger
Agreement, and (y) in the case of clause (ii), the date of the issuance of the
New Preferred Stock or the New Senior Notes, as applicable. If on any date (A)
all of the Purchaser Designees shall not have been elected to the Corporation's
Board of Directors or any such Purchaser Designees shall not have been appointed
to the committees of the Corporation's Board of Directors, in accordance with
the provisions of Section 6.17 of the Securities Purchase Agreement, (B) the
Corporation shall have failed to declare, or shall have failed to pay, the full
amount of dividends payable on the Series E Preferred Stock for six quarterly
dividend periods, (C) the Corporation shall have failed to satisfy its
obligation to convert shares of Series E Preferred Stock pursuant to Section 10
or (D) a breach of any of the Material Provisions of the Securities Purchase
Agreement or any of the Corporation's material obligations under the
Registration Rights Agreement shall have occurred then, effective as of the date
of such failure or breach, the annual rate of the cumulative cash dividends
shall be increased to a
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rate of 11.75% and shall remain at such rate until such time as (1) the Pur-
chaser Designees shall have been elected to the Corporation's Board of Directors
and appointed to the committees of the Corporation's Board of Directors in
accordance with the provisions of Section 6.17 of the Securities Purchase
Agreement, (2) all dividends accrued to date on the Series E Preferred Stock
shall have been declared and paid in full, (3) any conversion obligations in
respect of the Chicago Preferred Stock that have become due shall have been
fully satisfied and (4) there shall exist no breach of any of the Material
Provisions of the Securities Purchase Agreement or any of the Corporation's
material obligations under the Registration Rights Agreement, as the case may
be, at which time the annual rate of the cumulative cash dividends shall be
reduced to a rate of 9.75%, subject to being increased to a rate of 11.75% in
the event of each and every subsequent event of the character indicated above.
(c) Dividends payable pursuant to Section 2(a) shall begin
to accrue and be cumulative from the Issue Date, and shall accrue on a daily
basis, in each case whether or not declared. Dividends paid on the shares of
Series E Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares of Series E Preferred Stock
at the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series E Preferred Stock entitled to
receive payment of a dividend declared thereon, which record date shall be not
more than 60 days, nor less than 10 days, prior to the date fixed for the
payment thereof. Accumulated but unpaid dividends for any past quarterly
dividend periods may be declared and paid at any time, without reference to any
regular Quarterly Dividend Payment Date, to holders of record on such date, not
more than 60 nor less than 10 days preceding the payment date thereof, as may be
fixed by the Board of Directors.
(d) The holders of shares of Series E Preferred Stock shall
not be entitled to receive any dividends or other distributions except as
provided herein.
Section 3. Voting Rights.
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In addition to any voting rights provided by law, the
holders of shares of Series E Preferred Stock shall have the following voting
rights:
(a) Except as otherwise required by applicable law so long
as the Series E Preferred Stock is outstanding, each
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share of Series E Preferred Stock shall entitle the holder thereof to vote, in
person or by proxy, at a special or annual meeting of stockholders, on all
matters voted on by holders of Common Stock voting together as a single class
with other shares entitled to vote thereon. With respect to any such vote, each
share of Series E Preferred Stock shall entitle the holder thereof to cast that
number of votes per share as is equal to the number of votes that such holder
would be entitled to cast had such holder converted his shares of Series E Pre-
ferred Stock into Common Stock on the record date for determining the
stockholders of the Corporation eligible to vote on any such matters.
(b) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders of at
least 66-2/3% of the outstanding shares of Series E Preferred Stock, voting
separately as a single class, in person or by proxy, at a special or annual
meeting of stockholders called for the purpose, shall be necessary to (i)
authorize, adopt or approve an amendment to the Certificate of Incorporation
that would increase or decrease the par value of the shares of Series E
Preferred Stock, or alter or change the powers, preferences or special rights of
the shares of Series E Preferred Stock, (ii) amend, alter or repeal the
Certificate of Incorporation so as to affect the shares of Series E Preferred
Stock adversely or (iii) effect the voluntary liquidation, dissolution, winding
up, recapitalization or reorganization of the Corporation, or the consolidation
or merger of the Corporation with or into any other Person, or the sale or other
distribution to another Person of all or substantially all of the assets of the
Corporation; provided, however, that no separate vote of the holders of Series E
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Preferred Stock shall be required to effect any of the transactions described in
clause (iii) above unless such transaction would either require a class vote
pursuant to clause (i) or (ii) above or would require a vote by any shareholders
of the Corporation (other than pursuant to this sentence); provided further,
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that no separate vote of the holders of the Series E Preferred Stock as a class
shall be required in the case of a recapitalization, reorganization,
consolidation or merger of, or sale by, the Corporation if (A)(a) such
recapitalization, reorganization, consolidation, merger or sale constitutes a
Specified Corporate Action, (b) the Corporation has sufficient funds legally
available to it (after giving effect to such transaction) to redeem, at the then
applicable price hereunder and pursuant to the terms hereof, all the outstanding
shares of Series E Preferred Stock, (c) such redemption shall not be prohibited
by any agreement to which the Corporation or any of its Subsidiaries is a party,
by applicable law or otherwise, (d) the Board of Directors of the
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Corporation, including a majority of the directors who are not officers or
employees of the Corporation, shall have adopted a resolution confirming that
such funds are available and that the holders of Series E Preferred Stock have
the right to require such redemption and (e) the Corporation shall have set
aside sufficient funds to redeem through the Mandatory Redemption Date the
shares of Series E Preferred Stock held by such holders (except that no funds
need be set aside with respect to such shares held by any such holder who has
theretofore notified the Corporation (whether pursuant to Section 6(c) or
otherwise) that it will not require redemption of such shares) or (B) (1) the
Corporation shall be the resulting or surviving corporation, (2) the resulting
or surviving corporation will have after such recapitalization, reorganization,
consolidation or merger no Senior Stock or Parity Stock either authorized or
outstanding (except such Parity Stock of the Corporation as may have been
authorized or outstanding immediately preceding such consolidation or merger) or
such stock of the resulting or surviving corporation (having the same powers,
preferences and special rights of any such Parity Stock) as may be issued in
exchange therefor), (3) each holder of shares of Series E Preferred Stock
immediately preceding such recapitalization, reorganization, consolidation or
merger will receive in exchange therefor the same number of shares of stock,
with the same preferences, rights and powers, of the resulting or surviving
corporation, (4) after such recapitalization, reorganization, consolidation or
merger the resulting or surviving corporation shall not be in breach of any of
the terms hereof, any of the Material Provisions of the Securities Purchase
Agreement or any of its material obligations under the Registration Rights
Agreement and (5) all or substantially all the holders of the outstanding shares
of capital stock of the Corporation immediately prior to such consolidation or
merger are entitled to receive shares representing 50% or more of the then
outstanding shares of capital stock of the resulting or surviving corporation
entitled to vote generally in the election of directors.
(c) If on any date (i) the Corporation shall have failed to
declare, or shall have failed to pay, the full amount of dividends payable on
any series of Chicago Preferred Stock, for six quarterly dividend periods or
(ii) a breach of any of the Material Provisions of the Securities Purchase
Agreement or any of the Corporation's material obligations under the Reg-
istration Rights Agreement shall have occurred, then the number of directors
constituting the Board of Directors shall, without further action, be increased
by two and the holders of shares of Series E Preferred Stock shall have, in
addition to the other voting rights set forth herein with respect to the Series
E Preferred Stock, the exclusive right, together with the
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holders of all other series of Chicago Preferred Stock, voting separately as a
single class together with the holders of such other series of Chicago Preferred
Stock, to elect two directors of the Corporation to fill such newly created
directorship, by written consent as provided herein, or at a special meeting of
such holders called as provided herein. Any such additional directors shall
continue as directors (subject to reelection or removal as provided in Section
3(d)(ii)) and the holders of Series E Preferred Stock shall have such additional
voting rights until such time as (A) dividends then payable on all series of
Chicago Preferred Stock shall have been declared and paid in full and (B) there
shall exist no breach of any of the Material Provisions of the Securities
Purchase Agreement or any of the Corporation's material obligations under the
Registration Rights Agreement, as the case may be, at which time such additional
directors shall cease to be directors, the number of directors constituting the
Board of Directors shall be reduced by two and such additional voting rights of
the holders of all series of Chicago Preferred Stock shall terminate, subject to
revesting in the event of each and every subsequent event of the character
indicated above.
(d) (i) The foregoing right of holders of shares of Series
E Preferred Stock to take any action as provided in Section 3(c) may be
exercised at any annual meeting of stockholders or at a special meeting of
holders of shares of Chicago Preferred Stock held for such purpose as
hereinafter provided or at any adjournment thereof, or by the written consent,
delivered to the Secretary of the Corporation, of the holders of the minimum
number of shares required to take such action.
So long as such right to vote continues (and unless such
right has been exercised by written consent of the minimum number of shares
required to take such action), the President of the Corporation may call, and
upon the written request of holders of record of at least 5% of the aggregate
outstanding shares of Chicago Preferred Stock addressed to the Secretary of the
Corporation at the principal office of the Corporation, shall call, a special
meeting of the holders of shares entitled to vote as provided herein. Such
meeting shall be held within 30 days after delivery of such request to the
Secretary, at the place and upon the notice provided by law and in the by-laws
of the Corporation for the holding of meetings of stockholders.
(ii) At each meeting of stockholders at which the holders of
shares of Series E Preferred Stock shall have the right, voting separately as a
single class together with the holders of all other series of Chicago Preferred
Stock, to elect two directors of the Corporation as provided in Section 3(c) or
to take any action, the presence in person or by proxy
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of the holders of record of one-third of the total aggregate number of shares of
Chicago Preferred Stock then outstanding and entitled to vote on the matter
shall be necessary and sufficient to constitute a quorum. At any such meeting
or at any adjournment thereof:
(A) the absence of a quorum of the holders of shares
of Chicago Preferred Stock shall not prevent the election of
directors other than those to be elected by the holders of shares
of Chicago Preferred Stock, and the absence of a quorum of the
holders of shares of any other class or series of capital stock
shall not prevent the election of directors to be elected by the
holders of shares of Chicago Preferred Stock or the taking of any
action as provided in Section 3(c); and
(B) in the absence of a quorum of the holders of
shares of Chicago Preferred Stock, a majority of the holders of
such shares present in person or by proxy shall have the power to
adjourn the meeting as to the actions to be taken by the holders
of shares of Chicago Preferred Stock from time to time and place
to place without notice other than announcement at the meeting
until a quorum shall be present.
For taking of any action as provided in Section 3(b) or
Section 3(c) by the holders of shares of Series E Preferred Stock, each such
holder shall have one vote for each share of such stock standing in his name on
the transfer books of the Corporation as of any record date fixed for such
purpose or, if no such date be fixed, at the close of business on the Business
Day next preceding the day on which notice is given, or if notice is waived, at
the close of business on the Business Day next preceding the day on which the
meeting is held; provided, however, that shares of Chicago Preferred Stock held
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by the Corporation or any Subsidiary of the Corporation shall not be deemed to
be outstanding for purposes of taking any action as provided in this Section 3.
Each director elected by the holders of shares of Chicago
Preferred Stock as provided in Section 3(c) shall, unless his term shall expire
earlier in accordance with the provisions thereof, hold office until the annual
meeting of stockholders next succeeding his election or until his successor, if
any, is elected and qualified.
If any director so elected by the holders of Chicago
Preferred Stock shall cease to serve as a director before his term shall expire
(except by reason of the termination of the voting rights accorded to the
holders of Chicago Preferred
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Stock in accordance with Section 3(c)), the holders of the Chicago Preferred
Stock then outstanding and entitled to vote for such director may, by written
consent as provided herein, or at a special meeting of such holders called as
provided herein, elect a successor to hold office for the unexpired term of the
director whose place shall be vacant.
Any director elected by the holders of shares of Chicago
Preferred Stock, voting together as a separate class, may be removed from office
with or without cause only by the vote or written consent of the holders of at
least a majority of the aggregate outstanding shares of Chicago Preferred Stock
at the time of removal. A special meeting of the holders of shares of Chicago
Preferred Stock may be called in accordance with the procedures set forth in
Section 3(d)(i).
Section 4. Certain Restrictions.
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(a) So long as any shares of Series E Preferred Stock
remain outstanding, the Corporation shall not declare or make any Restricted
Payment.
(b) Whenever quarterly dividends payable on shares of
Series E Preferred Stock as provided in Section 2(a) are not paid in full, at
such time and thereafter until all unpaid dividends payable, whether or not
declared, on the outstanding shares of Series E Preferred Stock shall have been
paid in full or declared and set apart for payment, or whenever the Corporation
shall not have converted shares of Series E Preferred Stock at a time required
by Section 10, at such time and thereafter until all conversion obligations
provided in Section 10 that have come due shall have been satisfied or all
necessary funds have been set apart for payment, or whenever the Corporation
shall not have paid the Optional Redemption Price, the Mandatory Redemption
Price, Special Redemption Price or the Maturity Redemption Price when due, at
such time and thereafter until all such amounts have been paid in full or set
apart for payment, the Corporation shall not: (A) declare or pay dividends, or
make any other distributions, on any shares of Junior Stock, or (B) declare or
pay dividends, or make any other distributions, on any shares of Parity Stock,
except dividends or distributions paid ratably on the Series E Preferred Stock
and all Parity Stock on which dividends are payable and in arrears, in pro-
portion to the total amounts to which the holders of all shares of the Series E
Preferred Stock and Parity Stock are then entitled.
(c) Whenever dividends payable on shares of Series E
Preferred Stock as provided in Section 2 are not paid in full, at such time
and thereafter until all unpaid dividends payable,
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whether or not declared, on the outstanding shares of Series E Preferred Stock
shall have been paid in full or declared and set apart for payment, or whenever
the Corporation shall not have converted shares of Series E Preferred Stock at
a time required by Section 10, at such time and thereafter until all conversion
obligations provided in Section 10 that have come due shall have been satisfied
or all necessary funds have been set apart for payment, or whenever the
Corporation shall not have paid the Optional Redemption Price, the Mandatory
Redemption Price, Special Redemption Price or the Maturity Redemption Price
when due, at such time and thereafter until all such amounts have been paid in
full or set apart for payment, the Corporation shall not redeem, purchase or
otherwise acquire for consideration any shares of Junior Stock or Parity Stock;
provided, however, that (A) the Corporation may accept shares of Parity Stock
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or Junior Stock for conversion into Junior Stock and (B) the Corporation may at
any time redeem, purchase or otherwise acquire shares of Parity Stock pursuant
to any mandatory redemption, put, sinking fund or other similar obligation
contained in such Parity Stock, pro rata with the Series E Preferred Stock in
proportion to the total amount then required to be applied by the Corporation
to redeem, repurchase, or otherwise acquire shares of Series E Preferred Stock
and shares of such Parity Stock.
(d) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to purchase or otherwise acquire for
consideration any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(c), purchase such shares at such time
and in such manner.
Section 5. Optional Redemption.
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(a) (i) The Corporation shall not have any right to redeem
any shares of Series E Preferred Stock prior to December 30, 2001. Thereafter
(A) at any time after December 31, 2001 or (B) at any time, so long as shares of
Common Stock shall have traded on the New York Stock Exchange (or another
national securities exchange or on Nasdaq) on each trading day during a 30-
consecutive trading day period (each of which trading days shall be after
December 30, 2001 and no more than 5 Business Days prior to the date notice is
given of an Optional Redemption (as defined below)) and had a Closing Price on
at least 20 of such trading days in excess of 150% of the Conversion Price in
effect on such trading day, subject to the restrictions contained in Section 4,
the Corporation shall have the right, at its sole option and election, to redeem
(the "Optional Redemption") all or a portion of the shares of Series E Preferred
Stock, on not more than 45 nor less than 30 days' notice of the
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date of redemption (any such date an "Optional Redemption Date") at a price per
share (the "Optional Redemption Price") equal to (A) the following prices per
share (stated as a percentage of the Liquidation Preference of such share) plus
(B) an amount per share equal to all accrued and unpaid dividends thereon,
whether or not declared or payable, to the applicable Optional Redemption Date,
in immediately available funds:
Optional Redemption Price
If Redeemed as a Percentage of
During the Period Liquidation Preference
----------------- -------------------------
December 30, 2001 to 102.775%
December 29, 2002
December 30, 2002 to 101.850%
December 29, 2003
December 30, 2003 to 100.925%
December 29, 2004
December 30, 2004 and 100%
thereafter
(ii) If the Corporation shall determine to redeem less than
all the shares of Series E Preferred Stock then outstanding pursuant to
paragraph (i), the shares to be redeemed shall be selected pro rata (as nearly
as may be) so that the number of shares redeemed from each holder shall be the
same proportion of all the shares to be redeemed that the total number of shares
of Series E Preferred Stock then held by such holder bears to the total number
of shares of Series E Preferred Stock then outstanding.
(iii) Notwithstanding the foregoing, any shares of Series E
Preferred Stock redeemed pursuant to this Section 5(a) at any time when holders
of shares of Series E Preferred Stock have the right to require the Corporation
to redeem the shares of Series E Preferred Stock pursuant to Section 6 or an
event giving rise to such a right has occurred shall be redeemed at a price
equal to higher of the price to be paid pursuant to Section 5(a) and the price
to be paid pursuant to Section 6.
(b) Notice of any Optional Redemption shall specify the
Optional Redemption Date, the Optional Redemption Price, the place or places of
payment, that payment will be made upon presentation and surrender of the shares
of Series E Preferred Stock, that on and after the date of such Optional
Redemption
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dividends will cease to accrue on such shares, the then effective Conversion
Price and that the right of holders to convert shares of Series E Preferred
Stock shall terminate at the close of business on the Business Day immediately
preceding the Optional Redemption Date (unless the Corporation defaults in the
payment of the Optional Redemption Price) and be given by publication in a
newspaper of general circulation in the Borough of Manhattan, The City of New
York (if such publication shall be required by applicable law, rule, regulation
or securities exchange requirement), not less than 30, nor more than 45, days
prior to the Optional Redemption Date; and, in any case, a similar notice shall
be mailed at least 30, but not more than 45, days prior to the Optional
Redemption Date to each holder of shares of Series E Preferred Stock, at such
holder's address as it appears on the transfer books of the Corporation. In
order to facilitate the redemption of shares of Series E Preferred Stock, the
Board of Directors may fix a record date for the determination of shares of
Series E Preferred Stock to be redeemed, or may cause the transfer books of the
Corporation for the Series E Preferred Stock to be closed, not more than 60 days
or less than 45 days prior to the Optional Redemption Date.
(c) On the date of any Optional Redemption that is
specified in a notice given pursuant to Section 5(b), the Corporation shall, and
at any time after such notice shall have been mailed and before the Optional
Redemption Date the Corporation may, deposit for the benefit of the holders of
shares of Series E Preferred Stock the funds necessary for such redemption with
a bank or trust company in the Borough of Manhattan, The City of New York, that
is "well capitalized" within the meaning of the applicable bank regulations and
having a capital and surplus of at least $500,000,000. Any moneys so deposited
by the Corporation and unclaimed at the end of two years from the Optional
Redemption Date shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and any holder of
shares of Series E Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Optional Redemption Price. In the event that
moneys are deposited pursuant to this Section 5(c) in respect of shares of
Series E Preferred Stock that are converted in accordance with the provisions of
Section 10, such moneys shall, upon such conversion, revert to the general funds
of the Corporation and, upon demand, such bank or trust company shall pay over
to the Corporation such moneys and shall be relieved of all responsibilities to
the holders of such converted shares in respect thereof. Any interest accrued
on funds deposited
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pursuant to this Section 5(c) shall be paid from time to time to the Corporation
for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 5(c) in respect of shares of
Series E Preferred Stock to be redeemed pursuant to Section 5(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Optional Redemption Date (i)
the shares represented thereby shall no longer be deemed outstanding, (ii) the
rights to receive dividends thereon shall cease to accrue, and (iii) all rights
of the holders of shares of Series E Preferred Stock to be redeemed shall cease
and terminate, excepting only the right to receive the Optional Redemption Price
therefor and the right to convert such shares into shares of Common Stock until
the close of business on the Business Day immediately preceding the Optional
Redemption Date (and to receive accrued and unpaid dividends thereon), in ac-
cordance with Section 10; provided, however, that if the Corporation shall
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default in the payment of the Optional Redemption Price the shares of Series E
Preferred Stock shall thereafter be deemed to be outstanding and the holders
thereof shall have all of the rights of a holder of Series E Preferred Stock
until such time as such default shall no longer be continuing or shall have been
waived by holders of at least 66-2/3% of the then outstanding shares of Series E
Preferred Stock.
(e) Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of
shares of Series E Preferred Stock receives such notice, and failure to give
such notice by mail, or any defect in such notice, to the holders of any shares
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Series E Preferred Stock. On or after the
Optional Redemption Date, each holder of the shares called for redemption,
subject to their right to convert shares of Series E Preferred Stock as provided
in section 10, shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the Optional Redemption Price. If less than all
the shares evidenced by any such surrendered certificate are redeemed, a new
certificate shall be issued evidencing the unredeemed shares.
Section 6. Mandatory Redemption at the Option of the Holder.
------------------------------------------------
(a) If one or more events constituting a Specified
Corporate Action shall occur, each holder of shares of the
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Series E Preferred Stock shall have the right, on the date or dates specified in
Section 6(b) (the "Mandatory Redemption Date"), to require the Corporation to
redeem (a "Mandatory Redemption") all or any part of the shares of Series E Pre-
ferred Stock then held by such holder as such holder may elect at a price per
share (the "Mandatory Redemption Price") equal to (A) the following prices per
share (stated as a percentage of the Liquidation Preference of such share) plus
(B) an amount per share equal to all accrued and unpaid dividends thereon,
whether or not declared or payable, to the applicable Mandatory Redemption Date,
in immediately available funds:
If the Mandatory
Redemption Date Mandatory Redemption Price
Occurs During the as a Percentage of
Period Liquidation Preference
---------------- -------------------------
December 30, 1994 to 110.4%
June 29, 1995
June 30, 1995 to 116.8%
December 29, 1995
December 30, 1995 to 126.7%
June 29, 1996
June 30, 1996 and 138.0%
thereafter
(b) The date fixed for each Mandatory Redemption shall be
fixed by the Corporation and shall be not less than 60 days nor more than 90
days following the occurrence of any Specified Corporate Action giving rise
thereto (or, in the case of a Specified Corporate Action described in clause
(iii) of the definition of "Specified Corporate Action," not less than 60 days
nor more than 90 days following the date on which the Corporation obtains actual
knowledge of such Specified Corporate Action); provided, however, that in the
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event of a Specified Corporate Action that constitutes a Control Transaction, in
addition to the dates fixed for a Specified Corporate Action Redemption as
specified above, an additional Specified Corporate Action Redemption Date shall
be set for the date and time immediately preceding the consummation of any such
Control Transaction; provided, further, that, upon the request of a holder, the
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Board of Directors shall agree to extend the date of redemption in respect of
any such Specified Corporate Action (without changing the consideration that is
otherwise payable
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<PAGE>
in respect of such redemption other than with respect to adjustments to the
amount of accrued and unpaid dividends included in such redemption price) to the
extent necessary for any holder of shares of Series E Preferred Stock to avoid
liability under Section 16(b) of the Exchange Act, provided, that no such
redemption extension shall be for a period greater than six months. The
Corporation shall, within 5 days of the occurrence of a Specified Corporate
Action (or, in the case of a Specified Corporate Action described in clause
(iii) of the definition of "Specified Corporate Action," within 5 days of the
date on which the Corporation obtains actual knowledge of such Specified
Corporate Action), give notice thereof by publication in a newspaper of general
circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or securities
exchange requirement), and, in any case, a similar notice shall be mailed to
each holder of shares of the Series E Preferred Stock, at such holder's address
as it appears on the transfer books of the Corporation. Each such notice shall
specify the Specified Corporate Action that has occurred and the date of such
occurrence, the place or places of payment, the then effective Mandatory
Redemption Price and Conversion Price and the date the right of such holder to
require a Mandatory Redemption shall terminate.
(c) If the notice sent by the Corporation pursuant to
Section 6(b) shall contain (i) a form inquiring as to whether a holder of shares
of Series E Preferred Stock intends to surrender the certificate(s) representing
such shares for redemption pursuant to this Section 6 and (ii) a stamped self-
addressed envelope for return of such form to the Corporation or its designee,
within ten Business Days of such notice, each holder shall return such inquiry
form to the Corporation and shall indicate in such form the proportion of such
holder's shares of Series E Preferred Stock that will be surrendered for
redemption pursuant to this Section 6. If such notice shall indicate that if a
holder does not respond prior to ten Business Days after the date of such notice
that such holder will be deemed to have notified the Corporation that it will
not require the redemption of the shares of Series E Preferred Stock held by
such holder for purposes of Section 3(b) and such holder does not respond to the
Corporation's inquiry prior to ten Business Days after the date of such notice,
such holder will be deemed to have notified the Corporation that it will not
require the redemption of the shares of Series E Preferred Stock held by such
holder for purposes of Section 3(b). Nothing contained in this Section 6(c)
shall affect the right of a holder of Series E Preferred Stock to require the
Corporation to redeem such shares pursuant to Section 6(a).
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<PAGE>
(d) Each holder of shares of the Series E Preferred Stock
shall have the right, at such holder's option exercisable at any time on 30
days' notice to the Corporation on or after December 30, 2009 (the date of any
such exercise, the "Special Redemption Date"), to require the Corporation to
redeem (a "Special Redemption") all or any part of the shares of Series E
Preferred Stock then held by such holder as such holder may elect by written
notice delivered at least 30 days prior to the Special Redemption Date at a
price per share equal to the sum of (A) 100% of the Liquidation Preference of
such share and (B) an amount per share equal to all accrued and unpaid dividends
thereon whether or not declared or payable to the Special Redemption Date (the
"Special Redemption Price") in immediately available funds.
(e) On the date fixed for any Mandatory Redemption or on
any Special Redemption Date, each holder of shares of Series E Preferred Stock
who elects to have shares of Series E Preferred Stock held by it redeemed shall
surrender the certificate representing such shares to the Corporation at the
place designated in such notice together with an election to have such
redemption made and shall thereupon be entitled to receive payment therefor
provided in this Section 6. If less than all the shares represented by any such
surrendered certificate are redeemed, a new certificate shall be issued rep-
resenting the unredeemed shares. From and after the date of such redemption (i)
the rights to receive dividends thereon shall cease to accrue and (ii) all
rights of the holders of shares of Series E Preferred Stock so redeemed shall
cease and terminate, excepting only the right to receive the Mandatory
Redemption Price or Special Redemption Price therefor; provided, however, that
-------- -------
if the Corporation shall default in the payment of the Mandatory Redemption
Price the shares of Series E Preferred Stock that were to be redeemed shall
thereafter be deemed to be outstanding and the holders thereof shall have all of
the rights of a holder of Series E Preferred Stock until such time as such
default shall no longer be continuing or shall have been waived by holders of at
least 66-2/3% of the then outstanding shares of Series E Preferred Stock.
Section 7. Redemption Upon Maturity.
------------------------
(a) On December 30, 2034 (the "Maturity Date"), the
Corporation shall redeem (the "Maturity Redemption") the remaining outstanding
shares of the Series E Preferred Stock at a price per share (the "Maturity
Redemption Price") equal to (A) 100% of the Liquidation Preference per share
plus (B) an amount equal to accrued and unpaid dividends thereon, whether or not
declared or payable, to the Maturity Date, in immediately available funds.
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(b) Notice of the Maturity Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication shall be required by applicable law,
rule, regulation or securities exchange requirement), not less than 30, nor more
than 60, days prior to the Maturity Date and, in any case, a similar notice
shall be mailed at least 30, but not more than 60, days prior to the Maturity
Date to each holder of shares of Series E Preferred Stock, at such holder's
address as it appears on the transfer books of the Corporation.
(c) On the Maturity Date, the Corporation shall, and at any
time after such notice shall have been mailed and before the Maturity Date the
Corporation may, deposit for the benefit of the holders of shares of Series E
Preferred Stock the funds necessary for such redemption with a bank or trust
company in the Borough of Manhattan, The City of New York, that is "well
capitalized" within the meaning of the applicable banking regulations and having
a capital and surplus of at least $500,000,000. Any moneys so deposited by the
Corporation and unclaimed at the end of two years from the date designated for
such redemption shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and any holder of
shares of Series E Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Maturity Redemption Price. In the event that
moneys are deposited pursuant to this Section 7(c) in respect of shares of
Series E Preferred Stock that are converted in accordance with the provisions of
Section 10, such moneys shall, upon such conversion, revert to the general funds
of the Corporation and, upon demand, such bank or trust company shall pay over
to the Corporation such moneys and shall be relieved of all responsibilities to
the holders of such converted shares in respect thereof. Any interest accrued
and unpaid on funds deposited pursuant to this Section 5(c) shall be paid from
time to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 7(c) in respect of shares of
Series E Preferred Stock to be redeemed pursuant to Section 7(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Maturity Date, (i) the rights
to receive dividends thereon shall cease to accrue and (ii) all rights of the
holders of shares of Series E Preferred Stock shall cease and terminate,
excepting only the right to receive the Maturity Redemption Price therefor;
provided, however, that
- -------- -------
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<PAGE>
if the Corporation shall default in the payment of the Maturity Redemption
Price, the shares of Series E Preferred Stock that were to be redeemed shall
thereafter be deemed to be outstanding and the holders thereof shall have all of
the rights of a holder of Series E Preferred Stock until such time as such
default shall no longer be continuing.
Section 8. Acquired Shares.
---------------
Any shares of Series E Preferred Stock converted, exchanged,
redeemed, purchased or otherwise acquired by the Corporation or any of its
Subsidiaries in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares of Series E Preferred Stock
shall upon their cancellation become authorized but unissued shares of preferred
stock, par value $4.00 per share, of the Corporation and, upon the filing of an
appropriate certificate with the Department of State of the State of New York,
may be reissued as part of another series of preferred stock, par value $4.00
per share, of the Corporation subject to the conditions or restrictions on
issuance set forth herein, but in any event may not be reissued as shares of
Series E Preferred Stock or Parity Stock unless all of the shares of Series E
Preferred Stock issued on the Issue Date shall have already been redeemed,
converted or exchanged.
Section 9. Liquidation, Dissolution or Winding Up.
--------------------------------------
(a) If the Corporation shall commence a voluntary case
under the United States bankruptcy laws or any applicable bankruptcy, insolvency
or similar law of any other country, or consent to the entry of an order for
relief in an involuntary case under any such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or make an assignment for the benefit of its creditors, or admit in writing its
inability to pay its debts generally as they become due (any such event, a
"Voluntary Liquidation Event"), or if a decree or order for relief in respect of
the Corporation shall be entered by a court having jurisdiction in the premises
in an involuntary case under the United States bankruptcy laws or any applicable
bankruptcy, insolvency or similar law of any other country, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and on account of any
such event the Corporation shall liquidate, dissolve or wind up, or if the
Corporation shall otherwise liquidate, dissolve or wind up, no distribution
shall be made
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<PAGE>
(i) to the holders of shares of Junior Stock unless, prior thereto, the holders
of shares of Series E Preferred Stock, subject to Section 10, shall have
received (A) if a Voluntary Liquidation Event shall have occurred, the Optional
Redemption Price with respect to each share and (B) if a Voluntary Liquidation
Event shall not have occurred, the Liquidation Preference, plus all accrued and
unpaid dividends, whether or not declared or currently payable, to the date of
distribution, with respect to each share, or (ii) to the holders of shares of
Parity Stock, except distributions made ratably on the Series E Preferred Stock
and all Parity Stock in proportion to the total amounts to which the holders of
all shares of the Series E Preferred Stock (which amounts are set forth in
clauses (A) and (B) above) and Parity Stock are entitled upon such liquidation,
dissolution or winding up.
(b) Neither the consolidation or merger of the Corporation
with or into any other Person nor the sale or transfer of all or any part of the
Corporation's assets for cash, securities or other property shall be deemed to
be a liquidation, dissolution or winding up of the Corporation for purposes of
this Section 9.
Section 10. Conversion.
----------
(a) Any holder of Series E Preferred Stock shall have the
right, at its option, at any time and from time to time prior to the Maturity
Date (but subject to the provisions of Section 10(b)) to convert, subject to the
terms and provisions of this Section 10, each share of Series E Preferred Stock
into such number of fully paid and nonassessable shares of Common Stock
(calculated as to each conversion to the nearest 1/100th of a share of Common
Stock) for each full share of Series E Preferred Stock as is equal, subject to
Section 10(g), to the quotient of (i) the Liquidation Preference divided by (ii)
the Conversion Price (as defined below) then in effect, except that with respect
to any share that shall be called for redemption, such right shall terminate at
the close of business on the date of redemption for such share, unless in any
such case the Corporation shall default in performance or payment due upon
redemption thereof. The Conversion Price initially shall be $15.75, and
thereafter shall be subject to adjustment as set forth in Section 10(d). Such
conversion right shall be exercised by the surrender of the shares of Series E
Preferred Stock to be converted to the Corporation at any time during usual
business hours at its principal place of business to be maintained by it,
accompanied by written notice that the holder elects to convert such shares and
specifying the name or names (with addresses) in which a certificate or
certificates for shares of Common Stock are to be issued and
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(if so required by the Corporation) by a written instrument or instruments of
transfer in form reasonably satisfactory to the Corporation duly executed by the
holder or its duly authorized legal representative and transfer tax stamps or
funds therefor, if required pursuant to Section 10(k). All shares of Series E
Preferred Stock surrendered for conversion shall be delivered to the Corporation
for cancellation and cancelled by it and no shares shall be issued in lieu
thereof.
(b) As promptly as practicable after the surrender, as
herein provided, of any shares of Series E Preferred Stock for conversion
pursuant to Section 10(a), the Corporation shall deliver to or upon the written
order of the holder of the shares so surrendered a certificate or certificates
representing the number of fully paid and nonassessable shares of Common Stock
into which such shares may be or have been converted in accordance with the
provisions of this Section 10. Subject to the following provisions of this
paragraph and of Section 10(d), such conversion shall be deemed to have been
made immediately prior to the close of business on the date that such shares
shall have been surrendered in satisfactory form for conversion, and the Person
or Persons entitled to receive the Common Stock deliverable upon conversion of
such shares shall be treated for all purposes as having become the record holder
or holders of such Common Stock at such appropriate time, and such conversion
shall be at the Conversion Price in effect at such time; provided, however, that
-------- -------
no surrender shall be effective to constitute the Person or Persons entitled to
receive the Common Stock deliverable upon such conversion as the record holder
or holders of such Common Stock while the share transfer books of the
Corporation shall be closed (but not for any period in excess of five days), but
such surrender shall be effective to constitute the Person or Persons entitled
to receive such Common Stock as the record holder or holders thereof for all
purposes immediately prior to the close of business on the next succeeding day
on which such share transfer books are open, and such conversion shall be deemed
to have been made at, and shall be made at the Conversion Price in effect at,
such time on such next succeeding day. In case of any Optional Redemption,
Special Redemption or Maturity Redemption of any shares of Series E Preferred
Stock, the right of conversion shall cease and terminate, as to the shares to be
redeemed, at the close of business on (A) the Business Day immediately preceding
the Optional Redemption Date, in the case of an Optional Redemption, (B) the
Business Day immediately preceding the Special Redemption Date, in the case of
the Special Redemption, and (C) the Business Day immediately preceding the
Maturity Date, in the case of a Maturity Redemption, unless the Corporation
shall default in the
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payment of the applicable redemption price for the shares to be redeemed.
If the last day for the exercise of the conversion right
shall not be a Business Day, then such conversion right may be exercised on the
next preceding Business Day.
(c) To the extent permitted by law, when shares of Series E
Preferred Stock are converted, all dividends accrued and unpaid (whether or not
declared or currently payable) on the Series E Preferred Stock so converted to
the date of conversion shall be immediately due and payable and must accompany
the shares of Common Stock issued upon such conversion; provided, however, that
-------- -------
if shares being converted are held by a Person other than the original holder or
any of its Affiliates and such shares are not "restricted securities" (as
defined in Rule 144 under the Securities Act of 1933, as amended), then no such
accrued and unpaid dividends shall be payable when such shares are converted.
(d) The Conversion Price shall be subject to adjustment as
follows:
(i) In case the Corporation shall at any time or from
time to time (A) pay a dividend or make a distribution on the outstanding shares
of Common Stock in Common Stock (other than pursuant to a dividend reinvestment
plan approved by the Corporation's Board of Directors), (B) subdivide the
outstanding shares of Common Stock into a larger number of shares, (C) combine
the outstanding shares of Common Stock into a smaller number of shares or (D)
issue any shares of its capital stock in a reclassification of the Common Stock,
then, and in each such case, the Conversion Price in effect immediately prior to
such event shall be adjusted (and any other appropriate actions shall be taken
by the Corporation) so that the holder of any share of Series E Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the number of
shares of Common Stock or other securities of the Corporation that such holder
would have owned or would have been entitled to receive upon or by reason of any
of the events described above, had such share of Series E Preferred Stock been
converted immediately prior to the occurrence of such event. An adjustment made
pursuant to this Section 10(d)(i) shall become effective retroactively (A) in
the case of any such dividend or distribution, to the opening of business on the
day immediately following the close of business on the record date for the
determination of holders of Common Stock entitled to receive such dividend or
distribution or (B) in the case of any such subdivision, combination or
reclassification,
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to the close of business on the day upon which such corporate action becomes
effective.
(ii) In case the Corporation shall at any time or from
time to time issue or sell shares of Common Stock (or securities convertible
into or exchangeable for shares of Common Stock, or any options, warrants or
other rights to acquire shares of Common Stock (other than (x) options granted
to any employee or director of the Corporation pursuant to a stock option plan
approved by the shareholders of the Corporation or (y) rights issued pursuant to
a shareholder rights plan, "poison pill" or similar arrangement that complies
with Section 10(k))) for a consideration per share less than the Conversion
Price then in effect at the record date or issuance date, as the case may be
(the "Date") referred to in the following sentence (treating the price per share
of any security convertible or exchangeable or exercisable into Common Stock as
equal to (A) the sum of the price for such security convertible, exchangeable or
exercisable into Common Stock plus any additional consideration payable (without
regard to any anti-dilution adjustments) upon the conversion, exchange or
exercise of such security into Common Stock divided by (B) the number of shares
of Common Stock initially underlying such convertible, exchangeable or
exercisable security), other than issuances or sales for which an adjustment is
made pursuant to another paragraph of this Section 10(d), then, and in each such
case, the Conversion Price then in effect shall be adjusted by dividing the
Conversion Price in effect on the day immediately prior to the Date by a
fraction (x) the numerator of which shall be the sum of the number of shares of
Common Stock outstanding immediately prior to the Date plus the number of ad-
ditional shares of Common Stock issued or to be issued (or the maximum number
into which such convertible or exchangeable securities initially may convert or
exchange or for which such options, warrants or other rights initially may be
exercised) and (y) the denominator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to the Date plus the number
of shares of Common Stock that the aggregate consideration (if any of such
aggregate consideration is other than cash, as valued by the Board of Directors
including a majority of the Directors who are not officers or employees of the
Corporation or any of its Subsidiaries, which determination shall be conclusive
and described in a resolution of the Board of Directors) for the total number of
such additional shares of Common Stock so issued (or into which such convertible
or exchangeable securities may convert or exchange or for which such options,
warrants or other rights may be exercised plus the aggregate amount of any
additional consideration initially payable upon conversion, exchange or exercise
of such security) would purchase at the Conversion Price. Such
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adjustment shall be made whenever such shares, securities, options, warrants or
other rights are issued, and shall become effective retroactively to a date
immediately following the close of business (i) in the case of issuance to
stockholders of the Corporation, as such, on the record date for the de-
termination of stockholders entitled to receive such shares, securities,
options, warrants or other rights and (ii) in all other cases, on the date
("issuance date") of such issuance; provided, however, that the determination as
-------- -------
to whether an adjustment is required to be made pursuant to this Section
10(d)(ii) shall only be made upon the issuance of such shares or such
convertible or exchangeable securities, options, warrants or other rights, and
not upon the issuance of the security into which such convertible or
exchangeable security converts or exchanges, or the security underlying such
option, warrants or other right; provided, further, that if any convertible or
-------- -------
exchangeable securities, options, warrants or other rights (or any portions
thereof) that shall have given rise to an adjustment pursuant to this Section
10(d)(ii) shall have expired or terminated without the exercise thereof and/or
if by reason of the terms of such convertible or exchangeable securities,
options, warrants or other rights there shall have been an increase or
increases, with the passage of time or otherwise, in the price payable upon the
exercise or conversion thereof, then the Conversion Price hereunder shall be
readjusted (but to no greater extent than originally adjusted) on the basis of
(x) eliminating from the computation any additional shares of Common Stock cor-
responding to such convertible or exchangeable securities, options, warrants or
other rights as shall have expired or terminated, (y) treating the additional
shares of Common Stock, if any, actually issued or issuable pursuant to the
previous exercise of such convertible or exchangeable securities, options,
warrants or other rights as having been issued for the consideration actually
received and receivable therefor and (z) treating any of such convertible or
exchangeable securities, options, warrants or other rights that remain
outstanding as being subject to exercise or conversion on the basis of such
exercise or conversion price as shall be in effect at the time.
(iii) In case the Corporation shall at any time or from
time to time distribute to all holders of shares of its Common Stock (including
any such distribution made in connection with a consolidation or merger in which
the Corporation is the resulting or surviving corporation and the Common Stock
is not changed or exchanged or a redemption of any rights or other securities
issued pursuant to a shareholder rights plan, "poison pill" or similar
arrangement) cash, evidences of indebtedness of the Corporation or another
issuer, securities of the Corporation or another issuer or other assets
(excluding
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(A) Permitted Dividends described in clause (B) of the definition thereof and
(B) securities for which adjustment is made under Section 10(d)(i) or Section
10(d)(ii)), then, and in each such case, the Conversion Price then in effect
shall be adjusted by dividing the Conversion Price in effect immediately prior
to the date of such distribution by a fraction (x) the numerator of which shall
be the Current Market Price of the Common Stock on the record date referred to
below and (y) the denominator of which shall be such Current Market Price of the
Common Stock less the then Fair Market Value (as determined by the Board of
Directors of the Corporation, which determination shall be conclusive) of the
portion of the cash, evidences of indebtedness, securities or other assets so
distributed or of such subscription rights or warrants applicable to one share
of Common Stock (but such denominator not to be less than one); provided,
--------
however, that no adjustment shall be made with respect to any distribution of
- -------
rights to purchase securities of the Corporation if the holder of shares of
Series E Preferred Stock would otherwise be entitled to receive such rights upon
conversion at any time of shares of Series E Preferred Stock into Common Stock
unless such rights are subsequently redeemed by the Corporation, in which case
such redemption shall be treated for purposes of this Section 10(d)(iii) as a
dividend on the Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective retroactively to a date
immediately following the close of business on the record date for the
determination of stockholders entitled to receive such distribution.
(iv) In the case the Corporation at any time or from
time to time shall take any action affecting its Common Stock, other than an
action described in any of Section 10(d)(i) through Section 10(d)(iii),
inclusive, or Section 10(h), then, the Conversion Price shall be adjusted in
such manner and at such time as the Board of Directors of the Corporation (other
than Purchaser Designees or directors elected pursuant to Section 3(c)) in good
faith determines to be equitable in the circumstances (such determination to be
evidenced in a resolution, a certified copy of which shall be mailed to the
holders of the Series E Preferred Stock).
(v) The Corporation may make such reductions in the
Conversion Price, in addition to those required by subparagraphs (i), (ii),
(iii) and (iv) of this Section 10(d), as the Board of Directors considers to be
advisable in order to avoid or to diminish any income tax to holders of Common
Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes.
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(vi) Notwithstanding anything herein to the contrary,
no adjustment under this Section 10(d) need be made to the Conversion Price
unless such adjustment would require an increase or decrease of at least 1% of
the Conversion Price then in effect. Any lesser adjustment shall be carried
forward and shall be made at the time of and together with the next subsequent
adjustment, which, together with any adjustment or adjustments so carried
forward, shall amount to an increase or decrease of at least 1% of such
Conversion Price. Any adjustment to the Conversion Price carried forward and
not theretofore made shall be made immediately prior to the conversion of any
shares of Series E Preferred Stock pursuant hereto; provided, however, that any
-------- -------
such adjustment shall in any event be made no later than three years after the
occurrence of the event giving rise to such adjustment.
(e) If the Corporation shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the Conversion Price then in
effect shall be required by reason of the taking of such record.
(f) Upon any increase or decrease in the Conversion Price,
then, and in each such case, the Corporation promptly shall deliver to each
registered holder of Series E Preferred Stock at least 10 Business Days prior to
effecting any of the foregoing transactions a certificate, signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Corporation, setting forth in
reasonable detail the event requiring the adjustment and the method by which
such adjustment was calculated and specifying the increased or decreased Con-
version Price then in effect following such adjustment.
(g) No fractional shares or scrip representing fractional
shares shall be issued upon the conversion of any shares of Series E Preferred
Stock. If more than one share of Series E Preferred Stock shall be surrendered
for conversion at one time by the same holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate Liquidation Preference of the shares of Series E Preferred Stock
so surrendered. If the conversion of any share or shares of Series E Preferred
Stock results in a fraction, an amount equal to such fraction multiplied by the
Current Market Price of the Common Stock on the Business Day preceding the day
of conversion shall be paid to such holder in cash by the Corporation on the
date of issuance
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of the certificates representing the shares issued by the Corporation upon such
conversion.
(h) In case of any capital reorganization or re-
classification or other change of outstanding shares of Common Stock (other than
a change in par value, or from par value to no par value, or from no par value
to par value), or in case of any consolidation or merger of the Corporation with
or into another Person (other than a consolidation or merger in which the
Corporation is the resulting or surviving Person and which does not result in
any reclassification or change of outstanding Common Stock), or in case of any
sale or other disposition to another Person of all or substantially all of the
assets of the Corporation (any of the foregoing, a "Transaction"), the
Corporation, or such successor or purchasing Person, as the case may be, shall
execute and deliver to each holder of Series E Preferred Stock at least 10
Business Days prior to effecting any of the foregoing Transactions a certificate
that the holder of each share of Series E Preferred Stock then outstanding shall
have the right thereafter to convert such share of Series E Preferred Stock into
the kind and amount of shares of stock or other securities (of the Corporation
or another issuer) or property or cash receivable upon such Transaction by a
holder of the number of shares of Common Stock into which such share of Series E
Preferred Stock could have been converted immediately prior to such Transaction.
Such certificate shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
10. If, in the case of any such Transaction, the stock, other securities, cash
or property receivable thereupon by a holder of Common Stock includes shares of
stock or other securities of a Person other than the successor or purchasing
Person and other than the Corporation, which controls or is controlled by the
successor or purchasing Person or which, in connection with such Transaction,
issues stock, securities, other property or cash to holders of Common Stock,
then such certificate also shall be executed by such Person, and such Person
shall, in such certificate, specifically acknowledge the obligations of such
successor or purchasing Person and acknowledge its obligations to issue such
stock, securities, other property or cash to the holders of Series E Preferred
Stock upon conversion of the shares of Series E Preferred Stock as provided
above. The provisions of this Section 10(h) and any equivalent thereof in any
such certificate similarly shall apply to successive Transactions. The
provisions of this Section 10(h) and any equivalent thereof in any such
certificate are and shall be in addition to, and not in lieu of, the
requirements with respect to a Mandatory Redemption.
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<PAGE>
(i) In case at any time or from time to time:
(A) the Corporation shall declare a dividend (or any
other distribution) on its Common Stock (other than a Permitted Dividend);
(B) the Corporation shall authorize the granting to
the holders of its Common Stock of rights or warrants to subscribe for or
purchase any shares of stock of any class or of any other rights or warrants;
(C) there shall be any reclassification of the Common
Stock (other than a subdivision or combination of the outstanding Common Stock,
or a change in par value, or from par value to no par value, or from no par
value to par value), or any consolidation or merger to which the Corporation is
a party and for which approval of any shareholders of the Corporation is
required, or any sale or other disposition of all or substantially all of the
assets of the Corporation; or
(D) the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation; then the Corporation shall mail to
each holder of shares of Series E Preferred Stock at such holder's address as it
appears on the transfer books of the Corporation, as promptly as possible but in
any event at least ten days prior to the applicable date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution or rights or warrants or, if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights are to be determined, or (y)
the date on which such reclassification, consolidation, merger, sale,
conveyance, dissolution, liquidation or winding up is expected to become effec-
tive; provided that in the case of any event to which Section 10(h) applies, the
--------
Corporation shall give at least 10 days' prior written notice as aforesaid.
Such notice also shall specify the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their Common Stock for
shares of stock or other securities or property or cash deliverable upon such
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding up.
(j) The Corporation shall at all times reserve and keep
available for issuance upon the conversion of the Series E Preferred Stock, such
number of its authorized but unissued shares of Common Stock as will from time
to time be sufficient to permit the conversion of all outstanding shares of
Series E Preferred Stock, and shall take all action required to increase
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the authorized number of shares of Common Stock if at any time there shall be
insufficient authorized but unissued shares of Common Stock to permit such
reservation or to permit the conversion of all outstanding shares of Series E
Preferred Stock.
(k) The Corporation shall not adopt a shareholders right
plan, "poison pill" or similar arrangement unless such plan or arrangement shall
provide that (i) each holder of a share of Series E Preferred Stock shall be
entitled to receive thereunder, upon conversion of a share of Series E Preferred
Stock (in accordance with the terms hereof) prior to the earlier to occur of
either the date of redemption of the rights issued under such plan or the date
of expiration of the rights issued under such plan, rights for each share of
Common Stock issued upon conversion of such share of Series E Preferred Stock in
an amount equal to the amount of rights issued with respect to each outstanding
share of Common Stock pursuant to such plan and (ii) if such rights are redeemed
prior to the conversion of any share of Series E Preferred Stock into Common
Stock, then upon conversion of such share of Series E Preferred Stock the holder
thereof shall receive an amount in cash equal to the amount in cash that such
holder would have received had he converted such share of Series E Preferred
Stock prior to such redemption (unless prior to such conversion the Conversion
Price applicable to such share of Series E Preferred Stock shall have been
adjusted pursuant to Section 10(d)(iii) as a result of such redemption).
(1) The issuance or delivery of certificates for Common
Stock upon the conversion of shares of Series E Preferred Stock shall be made
without charge to the converting holder of shares of Series E Preferred Stock
for such certificates or for any tax in respect of the issuance or delivery of
such certificates or the securities represented thereby, and such certificates
shall be issued or delivered in the respective names of, or in such names as may
be directed by, the holders of the shares of Series E Preferred Stock converted;
provided, however, that the Corporation shall not be required to pay any tax
- -------- -------
that may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate in a name other than that of the holder of the
shares of Series E Preferred Stock converted, and the Corporation shall not be
required to issue or deliver such certificate unless or until the Person or
Persons requesting the issuance or delivery thereof shall have paid to the
Corporation the amount of such tax or shall have established to the reasonable
satisfaction of the Corporation that such tax has been paid.
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Section 11. Exchange.
--------
(a) Subject to the provisions of this Section 11, the
Corporation shall have the right, with the consent of the holders of all of the
outstanding shares of Series E Preferred Stock (which consent may be withheld
for any reason whatsoever), at any time but on only one occasion, to exchange
all (but not less than all) of the shares of Series E Preferred Stock for
Convertible Subordinated Notes of the Corporation ("Convertible Notes"), at a
price per share equal to the Liquidation Preference per share, with the
Convertible Notes valued for such purpose at their face value. Simultaneously
with such exchange the Corporation shall pay to each holder of Series E
Preferred Stock an amount per share in cash equal to all accrued and unpaid
dividends thereon, whether or not declared or currently payable, to the date
fixed for exchange thereof. The Convertible Notes shall have an annual
interest rate equal to the annual dividend rate on Series E Preferred Stock and
shall contain other terms substantially similar to the Series E Preferred Stock,
including the date of maturity thereof and the right to convert such notes into
shares of Common Stock.
(b) Notice of an exchange of shares of Series E Preferred
Stock pursuant to Section 11(a) shall be given by publication in a newspaper of
general circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or securities
exchange requirement), not less than 30, nor more than 60, days prior to the
date fixed for exchange; and, in any case, a similar notice shall be mailed at
least 30, but not more than 60, days prior to the date fixed for exchange to
each holder at such holder's address as it appears on the transfer books of the
Corporation. In order to facilitate the exchange of shares of Series E
Preferred Stock hereunder the Board of Directors may fix a record date for the
determination of shares of Series E Preferred Stock to be exchanged, or may
cause the transfer books of the Corporation for the Series E Preferred Stock to
be closed, not more than 60 days or less than 30 days prior to the date fixed
for exchange.
(c) On the date of any exchange being made pursuant to
Section 11(a) that is specified in a notice given pursuant to Section 11(b), the
Corporation shall, and at any time after the date that is 10 days prior to the
date of exchange the Corporation may, deposit for the benefit of the holders of
shares of Series E Preferred Stock to be exchanged (i) the Convertible Notes
necessary for such exchange and (ii) an amount in cash equal to all dividends
payable with respect thereto upon such exchange with a bank or trust company in
the
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Borough of Manhattan, The City of New York, that is "well capitalized" within
the meaning of the applicable banking regulations and having a capital and
surplus of at least $500,000,000. Any Convertible Notes so deposited by the
Corporation and unclaimed at the end of two years from the date designated for
such exchange shall revert to the Corporation. After such reversion, any such
bank or trust company shall, upon demand, return to the Corporation such
unclaimed Convertible Notes and thereupon such bank or trust company shall be
relieved of all responsibility in respect thereof and any holder of shares of
Series E Preferred Stock to be exchanged shall look only to the Corporation for
the delivery of the Convertible Notes. In the event that Convertible Notes and
moneys are deposited pursuant to this Section 11(c) in respect of shares of
Series E Preferred Stock that are converted in accordance with the provisions of
Section 10, such Convertible Notes and moneys shall, upon such conversion,
revert to the Corporation and, upon demand, such bank or trust company shall
return to the Corporation such Convertible Notes and moneys and shall be
relieved of all responsibilities to the holders of such converted shares in re-
spect thereof. Any interest accrued on Convertible Notes deposited pursuant to
this Section 11(c) shall accrue for the accounts of, and be payable to, the
holders of shares of Series E Preferred Stock to be exchanged therefor.
(d) Notice of exchange having been given as aforesaid and
not having been deemed terminated as aforesaid, upon the deposit of Convertible
Notes pursuant to clause (i) of Section 11(c) and the deposit of the cash
referred to in clause (ii) of Section 11(c) in respect of shares of Series E
Preferred Stock to be exchanged pursuant to Section 11(a), notwithstanding that
any certificates for such shares shall not have been surrendered for
cancellation, from and after the date of exchange designated in the notice of
exchange (i) the shares represented thereby shall no longer be deemed
outstanding, (ii) the rights to receive dividends thereon (except as provided in
paragraph (b) above) shall cease to accrue, and (iii) all rights of the holders
of shares of Series E Preferred Stock to be exchanged shall cease and terminate,
excepting only the right to receive the Convertible Notes therefor, the right to
receive the dividends described in paragraph (b) above and the right to convert
such shares into shares of Common Stock until the close of business on the
Business Day preceding the date of exchange, in accordance with Section 10;
provided, however, that if the Corporation shall default in the execution and
- -------- -------
delivery of the Convertible Notes, the shares of Series E Preferred Stock that
were to be exchanged shall thereafter be deemed to be outstanding and the
holders thereof shall have all of the rights of a holder of Series E Preferred
Stock until
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<PAGE>
such time as such default shall no longer be continuing or shall have been
waived by holders of at least 66-2/3% of the then outstanding shares of Series E
Preferred Stock.
Section 12. Sinking Fund.
-------------
(a) So long as any shares of Series E Preferred Stock shall
be outstanding, the Corporation shall, on the final business day (any such date,
the "Sinking Fund Date") of each calendar year after 2003, (i) set aside a sum
of money equal to 3-1/3% of the aggregate liquidation preference of the shares
of Series E Preferred Stock then outstanding, and (ii) apply such money to
redeem such number of shares of Series E Preferred Stock at the Sinking Fund
Redemption Price (the Corporation's obligations described in this paragraph in
respect of any Sinking Fund Date being hereinafter referred to as the "Sinking
Fund Obligation" for such date) at a price per share (the "Sinking Fund
Redemption Price") equal to the sum of (A) the Liquidation Preference of such
share and (B) an amount per share equal to all accrued and unpaid dividends
thereon, whether or not declared or payable, to the applicable Sinking Fund
Date, in immediately available funds; provided, however, that if the Corporation
-------- -------
for any reason fails to discharge its Sinking Fund Obligation on any Sinking
Fund Date, such Sinking Fund Obligation, to the extent not discharged, shall
become an additional Sinking Fund Obligation for each succeeding Sinking Fund
Date until fully discharged; provided, further, that no shares of Series E
-------- -------
Preferred Stock purchased or acquired by the Corporation otherwise than through
redemption pursuant to this paragraph or pursuant to an Optional Redemption may
be credited against the Sinking Fund Obligation in respect of any Sinking Fund
Date.
(b) The shares to be redeemed pursuant to paragraph (a)
shall be selected pro rata (as nearly as may be) so that the number of shares
redeemed from each holder shall be the same proportion of all the shares to be
redeemed that the total number of shares of Series E Preferred Stock then held
by such holder bears to the total number of shares of Series E Preferred Stock
then outstanding.
(c) Notice of the Sinking Fund Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication shall be required by applicable law,
rule, regulation or securities exchange requirement), not less than 30, nor more
than 60, days prior to the Sinking Fund Date and, in any case, a similar notice
shall be mailed at least 30, but not more than 60, days prior to the Sinking
Fund Date to each holder of
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shares of Series E Preferred Stock, at such holder's address as it appears on
the transfer books of the Corporation.
(d) On the Sinking Fund Date, the Corporation shall, and at
any time after such notice shall have been mailed and before the Sinking Fund
Date the Corporation may, deposit for the benefit of the holders of shares of
Series E Preferred Stock the funds necessary for such redemption with a bank or
trust company in the Borough of Manhattan, The City of New York, that is "well
capitalized" within the meaning of the applicable banking regulations and having
a capital and surplus of at least $500,000,000. Any moneys so deposited by the
Corporation and unclaimed at the end of two years from the date designated for
such redemption shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and any holder of
shares of Series E Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Sinking Fund Redemption Price. Any interest
accrued and unpaid on funds deposited pursuant to this Section 12(c) shall be
paid from time to time to the Corporation for its own account.
(e) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 12(c) in respect of shares of
Series E Preferred Stock to be redeemed pursuant to Section 12(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Sinking Fund Date, (i) the
rights to receive dividends thereon shall cease to accrue and (ii) all rights of
the holders of shares of Series E Preferred Stock shall cease and terminate,
excepting only the right to receive the Sinking Fund Redemption Price therefor;
provided, however, that if the Corporation shall default in the payment of the
- -------- -------
Sinking Fund Redemption Price, the shares of Series E Preferred Stock that were
to be redeemed shall thereafter be deemed to be outstanding and the holders
thereof shall have all of the rights of a holder of Series E Preferred Stock
until such time as such default shall no longer be continuing.
Article 2. Series F Preferred Stock.
------------------------
Section 1. Designation and Number.
----------------------
(a) The shares of such series shall be designated as
"Cumulative Preferred Stock, Series F" (the "Series F Preferred Stock"). The
number of shares initially constituting the Series F Preferred Stock shall be
171,900 which number may be
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decreased (but not increased) by the Board of Directors without a vote of
stockholders; provided, however, that such number may not be decreased below the
number of then outstanding shares of Series F Preferred Stock.
(b) The Series F Preferred Stock shall, with respect to
dividend rights and rights on liquidation, dissolution or winding up, rank pari
----
passu with the Corporation's $2.50 Cumulative Convertible Preferred Stock,
- -----
Series A (the "Series A Preferred Stock"), $2.50 Cumulative Preferred Stock,
Series B (the "Series B Preferred Stock"), Cumulative Convertible Preferred
Stock, Series E (the "Series E Preferred Stock"), Cumulative Preferred Stock,
Series G (the "Series G Preferred Stock"), Cumulative Preferred Stock, Series H
(the "Series H Preferred Stock"), Cumulative Preferred Stock, Series T (the
"Series T Preferred Stock" and together with the Series E Preferred Stock,
Series F Preferred Stock, Series G Preferred Stock and Series H Preferred Stock,
the "Chicago Preferred Stock") and the New Preferred Stock (if any) (the Series
A Preferred Stock, Series B Preferred Stock, Chicago Preferred Stock (other than
the Series F Preferred Stock) and New Preferred Stock (if any) are collectively
defined for the purposes of this Article 3 as the "Other Preferred Stock") and
prior to all other classes and series of capital stock of the Corporation now or
hereafter authorized including, without limitation, the Common Stock, par value
$1.00 per share, of the Corporation (the "Common Stock").
(c) Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Article 6 below.
Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series F Preferred Stock, in
preference to the holders of shares of Common Stock and of any shares of other
capital stock of the Corporation other than the Other Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
the assets of the Corporation at the time legally available therefor, cumulative
cash dividends at an annual rate on the Liquidation Preference thereof equal to
9.75% (subject to increase pursuant to Section 2(b)), calculated on the basis of
a 360-day year consisting of twelve 30-day months, accruing and payable in equal
quarterly payments, in immediately available funds, on the Business Day
immediately preceding the last day of March, June, September and December in
each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date") commencing on the Business Day immediately preceding December 31,
1994; provided, however, that with respect to such first Quarterly Dividend
-------- -------
Payment Date, the holders of shares of
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Series F Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors, out of the assets of the Corporation at the time
legally available therefor, a cumulative cash dividend in respect of each share
of Series F Preferred Stock in the amount of (i) 9.75% (or the then effective
annual rate) of the Liquidation Preference multiplied by (ii) a fraction equal
to (A) the number of days from (and including) the Issue Date to (but excluding)
such Quarterly Dividend Payment Date divided by (B) 360. No interest shall be
payable in respect of any dividend payment on the Series F Preferred Stock that
may be in arrears.
(b) If (i) a private placement or public offering of the
New Preferred Stock or the New Senior Notes pursuant to which the Corporation
shall receive at least $100,000,000 in gross proceeds is not consummated within
360 days after the termination of the Merger Agreement or (ii) the annual
dividend rate on the New Preferred Stock or the annual interest rate on the New
Senior Notes, as applicable, exceeds 13%, then the annual rate of the cumulative
cash dividends shall be increased to a rate of 10.75%, effective (x) in the case
of clause (i), the date that is 360 days after the termination of the Merger
Agreement and (y) in the case of clause (ii), the date of the issuance of the
New Preferred Stock or the New Senior Notes, as applicable. If on any date (A)
all of the Purchaser Designees shall not have been elected to the Corporation's
Board of Directors or any such Purchaser Designees shall not have been appointed
to the committees of the Corporation's Board of Directors, in accordance with
the provisions of Section 6.17 of the Securities Purchase Agreement, (B) the
Corporation shall have failed to declare, or shall have failed to pay, the full
amount of dividends payable on the Series F Preferred Stock for six quarterly
dividend periods, (C) the Corporation shall have failed to satisfy its
obligation to convert shares of Series E Preferred Stock pursuant to Article 1,
Section 10 or (D) a breach of any of the Material Provisions of the Securities
Purchase Agreement or any of the Corporation's material obligations under the
Registration Rights Agreement shall have occurred then, effective as of the date
of such failure or breach, the annual rate of the cumulative cash dividends
shall be increased to a rate of 11.75% and shall remain at such rate until such
time as (1) the Purchaser Designees shall have been elected to the Corporation's
Board of Directors and appointed to the committees of the Corporation's Board of
Directors in accordance with the provisions of Section 6.17 of the Securities
Purchase Agreement, (2) all dividends accrued to date on the Series F Preferred
Stock shall have been declared and paid in full, (3) any conversion obligations
in respect of the Chicago Preferred Stock that have become due shall have been
fully satisfied and (4) there shall exist no breach of any of
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the Material Provisions of the Securities Purchase Agreement or any of the
Corporation's material obligations under the Registration Rights Agreement, as
the case may be, at which time the annual rate of the cumulative cash dividends
shall be reduced to a rate of 9.75%, subject to being increased to a rate of
11.75% in the event of each and every subsequent event of the character
indicated above.
(c) Dividends payable pursuant to Section 2(a) shall begin
to accrue and be cumulative from the Issue Date, and shall accrue on a daily
basis, in each case whether or not declared. Dividends paid on the shares of
Series F Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares of Series F Preferred Stock
at the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series F Preferred Stock entitled to
receive payment of a dividend declared thereon, which record date shall be not
more than 60 days nor less than 10 days prior to the date fixed for the payment
thereof. Accumulated but unpaid dividends for any past quarterly dividend
periods may be declared and paid at any time, without reference to any regular
Quarterly Dividend Payment Date, to holders of record on such date, not more
than 60 nor less than 10 days preceding the payment date thereof, as may be
fixed by the Board of Directors.
(d) The holders of shares of Series F Preferred Stock shall
not be entitled to receive any dividends or other distributions except as
provided herein.
Section 3. Voting Rights.
-------------
In addition to any voting rights provided by law, the
holders of shares of Series F Preferred Stock shall have the following voting
rights:
(a) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders of at
least 66-2/3% of the outstanding shares of Series F Preferred Stock, voting
separately as a single class, in person or by proxy, at a special or annual
meeting of stockholders called for the purpose, shall be necessary to (i)
authorize, adopt or approve an amendment to the Certificate of Incorporation
that would increase or decrease the par value of the shares of Series F
Preferred Stock, or alter or change the powers, preferences or special rights of
the shares of Series F Preferred Stock, (ii) amend, alter or repeal the
Certificate of Incorporation so as to affect the
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shares of Series F Preferred Stock adversely or (iii) effect the voluntary
liquidation, dissolution, winding up, recapitalization or reorganization of the
Corporation, or the consolidation or merger of the Corporation with or into any
other Person, or the sale or other distribution to another Person of all or
substantially all of the assets of the Corporation; provided, however, that no
-------- -------
separate vote of the holders of Series F Preferred Stock shall be required to
effect any of the transactions described in clause (iii) above unless such
transaction would either require a class vote pursuant to clause (i) or (ii)
above or would require a vote by any shareholders of the Corporation (other than
pursuant to this sentence); provided further, that no separate vote of the
-------- -------
holders of the Series F Preferred Stock as a class shall be required in the case
of a recapitalization, reorganization, consolidation or merger of, or sale by,
the Corporation if (A) (a) such recapitalization, reorganization, consolidation,
merger or sale constitutes a Specified Corporate Action, (b) the Corporation has
sufficient funds legally available to it (after giving effect to such
transaction) to redeem, at the then applicable price hereunder and pursuant to
the terms hereof, all the outstanding shares of Series F Preferred Stock, (c)
such redemption shall not be prohibited by any agreement to which the
Corporation or any of its Subsidiaries is a party, by applicable law or
otherwise, (d) the Board of Directors of the Corporation, including a majority
of the directors who are not officers or employees of the Corporation, shall
have adopted a resolution confirming that such funds are available and that
the holders of Series F Preferred Stock have the right to require such
redemption and (e) the Corporation shall have set aside sufficient
funds through the Specified Corporation Action Redemption Date to redeem the
shares of Series F Preferred Stock held by such holders (except that no funds
need be set aside with respect to such shares held by any such holder who has
theretofore notified the Corporation (whether pursuant to Section 6(a)(iii) or
otherwise) that it will not require redemption of such shares) or (B) (1) the
Corporation shall be the resulting or surviving corporation, (2) the resulting
or surviving corporation will have after such recapitalization, reorganization,
consolidation or merger no Senior Stock or Parity Stock either authorized or
outstanding (except such Parity Stock of the Corporation as may have been
authorized or outstanding immediately preceding such consolidation or merger) or
such stock of the resulting or surviving corporation (having the same powers,
preferences and special rights of any such Parity Stock) as may be issued in
exchange therefor), (3) each holder of shares of Series F Preferred Stock
immediately preceding such recapitalization, reorganization, consolidation or
merger will receive in exchange therefor the same number of shares of stock,
with the same preferences, rights and powers,
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of the resulting or surviving corporation, (4) after such recapitalization,
reorganization, consolidation or merger the resulting or surviving corporation
shall not be in breach of any of the terms hereof, any of the Material
Provisions of the Securities Purchase Agreement or any of its material obliga-
tions under the Registration Rights Agreement and (5) all or substantially all
the holders of the outstanding shares of capital stock of the Corporation
immediately prior to such consolidation or merger are entitled to receive shares
representing 50% or more of the then outstanding shares of capital stock of the
resulting or surviving corporation entitled to vote generally in the election of
directors.
(b) If on any date (i) the Corporation shall have failed to
declare, or shall have failed to pay, the full amount of dividends payable on
any series of Chicago Preferred Stock for six quarterly dividend periods or (ii)
a breach of any of the Material Provisions of the Securities Purchase Agreement
or any of the Corporation's material obligations under the Registration Rights
Agreement shall have occurred, then the number of directors constituting the
Board of Directors shall, without further action, be increased by two and the
holders of shares of Series F Preferred Stock shall have, in addition to the
other voting rights set forth herein with respect to the Series F Preferred
Stock, the exclusive right, together with the holders of all other series of
Chicago Preferred Stock, voting separately as a single class together with the
holders of such other series of Chicago Preferred Stock, to elect two directors
of the Corporation to fill such newly created directorship, by written consent
as provided herein, or at a special meeting of such holders called as provided
herein. Any such additional directors shall continue as directors (subject to
reelection or removal as provided in Section 3(c)(ii)) and the holders of
Series F Preferred Stock shall have such additional voting rights
until such time as (A) dividends then payable on all series of Chicago Preferred
Stock shall have been declared and paid in full and (B) there shall exist no
breach of any of the Material Provisions of the Securities Purchase Agreement or
any of the Corporation's material obligations under the Registration Rights
Agreement, as the case may be, at which time such additional directors shall
cease to be directors, the number of directors constituting the Board of Di-
rectors shall be reduced by two and such additional voting rights of the holders
of all series of Chicago Preferred Stock shall terminate, subject to revesting
in the event of each and every subsequent event of the character indicated
above.
(c) (i) The foregoing right of holders of shares of Series
F Preferred Stock to take any action as provided in
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Section 3(b) may be exercised at any annual meeting of stockholders or at a
special meeting of holders of shares of Chicago Preferred Stock, held for such
purpose as hereinafter provided or at any adjournment thereof, or by the written
consent, delivered to the Secretary of the Corporation, of the holders of the
minimum number of shares required to take such action.
So long as such right to vote continues (and unless such
right has been exercised by written consent of the minimum number of shares
required to take such action), the President of the Corporation may call, and
upon the written request of holders of record of at least 5% of the aggregate
outstanding shares of Chicago Preferred Stock, addressed to the Secretary of the
Corporation at the principal office of the Corporation, shall call, a special
meeting of the holders of shares entitled to vote as provided herein. Such
meeting shall be held within 30 days after delivery of such request to the
Secretary, at the place and upon the notice provided by law and in the by-laws
of the Corporation for the holding of meetings of stockholders.
(ii) At each meeting of stockholders at which the holders of
shares of Series F Preferred Stock shall have the right, voting separately as a
single class together with the holders of all other series of Chicago Preferred
Stock, to elect two directors of the Corporation as provided in Section 3(b) or
to take any action, the presence in person or by proxy of the holders of record
of one-third of the total aggregate number of shares of Chicago Preferred Stock
then outstanding and entitled to vote on the matter shall be necessary and
sufficient to constitute a quorum. At any such meeting or at any adjournment
thereof:
(A) the absence of a quorum of the holders of shares of
Chicago Preferred Stock shall not prevent the election of
directors other than those to be elected by the holders of shares
of Chicago Preferred Stock, and the absence of a quorum of the
holders of shares of any other class or series of capital stock
shall not prevent the election of directors to be elected by the
holders of shares of Chicago Preferred Stock, or the taking of
any action as provided in Section 3(b); and
(B) in the absence of a quorum of the holders of shares of
Chicago Preferred Stock, a majority of the holders of such shares
present in person or by proxy shall have the power to adjourn the
meeting as to the actions to be taken by the holders of shares of
Chicago Preferred Stock, from time to time and place to place
without notice other than announcement at the meeting until a
quorum shall be present.
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For taking of any action as provided in Section 3(a) or
Section 3(b) by the holders of shares of Series F Preferred Stock, each such
holder shall have one vote for each share of such stock standing in his name on
the transfer books of the Corporation as of any record date fixed for such
purpose or, if no such date be fixed, at the close of business on the Business
Day next preceding the day on which notice is given, or if notice is waived, at
the close of business on the Business Day next preceding the day on which the
meeting is held; provided, however, that shares of Chicago Preferred Stock held
-------- -------
by the Corporation or any Subsidiary of the Corporation shall not be deemed to
be outstanding for purposes of taking any action as provided in this Section 3.
Each director elected by the holders of shares of Chicago
Preferred Stock, as provided in Section 3(b) shall, unless his term shall expire
earlier in accordance with the provisions thereof, hold office until the annual
meeting of stockholders next succeeding his election or until his successor,
if any, is elected and qualified.
If any director so elected by the holders of Chicago Pre-
ferred Stock shall cease to serve as a director before his term shall expire
(except by reason of the termination of the voting rights accorded to the
holders of Chicago Preferred Stock, in accordance with Section 3(b)), the
holders of the Chicago Preferred Stock then outstanding and entitled to vote for
such director may, by written consent as provided herein, or at a special
meeting of such holders called as provided herein, elect a successor to hold
office for the unexpired term of the director whose place shall be vacant.
Any director elected by the holders of shares of Chicago
Preferred Stock, voting together as a separate class, may be removed from office
with or without cause only by the vote or written consent of the holders of at
least a majority of the aggregate outstanding shares of Chicago Preferred Stock
at the time of removal. A special meeting of the holders of shares of Chicago
Preferred Stock, may be called in accordance with the procedures set forth in
Section 3(c)(i).
Section 4. Certain Restrictions.
--------------------
(a) So long as any shares of Series F Preferred Stock
remain outstanding, the Corporation shall not declare or make any Restricted
Payment.
(b) Whenever quarterly dividends payable on shares of
Series F Preferred Stock as provided in Section 2(a) are not paid in full, at
such time and thereafter until all unpaid
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dividends payable, whether or not declared, on the outstanding shares of
Series F Preferred Stock shall have been paid in full or declared and set apart
for payment at such time and thereafter until all necessary funds have been
set apart for payment, or whenever the Corporation shall not have paid the
Optional Redemption Price, the Specified Corporate Action Redemption Price,
the Conversion Redemption Price, the Special Redemption Price or the Maturity
Redemption Price when due, at such time and thereafter until all such amounts
have been paid in full or set apart for payment, the Corporation shall not:
(A) declare or pay dividends, or make any other distributions, on any shares
of Junior Stock, or (B) declare or pay dividends, or make any other
distributions, on any shares of Parity Stock, except dividends or
distributions paid ratably on the Series F Preferred Stock and all Parity
Stock on which dividends are payable and in arrears, in proportion to the
total amounts to which the holders of all shares of the Series F Preferred
Stock and Parity Stock are then entitled.
(c) Whenever dividends payable on shares of Series F
Preferred Stock as provided in Section 2 are not paid in full, at such time and
thereafter until all unpaid dividends payable, whether or not declared, on the
outstanding shares of Series F Preferred Stock shall have been paid in full or
declared and set apart for payment, at such time and thereafter until all
necessary funds have been set apart for payment, or whenever the Corporation
shall not have paid the Optional Redemption Price, the Specified Corporate
Action Redemption Price, the Conversion Redemption Price, the Special Redemption
Price or the Maturity Redemption Price when due, at such time and thereafter
until all such amounts have been paid in full or set apart for payment, the
Corporation shall not redeem, purchase or otherwise acquire for consideration
any shares of Junior Stock or Parity Stock; provided, however, that (A) the
-------- -------
Corporation may accept shares of any Parity Stock or Junior Stock for conversion
into Junior Stock and (B) the Corporation may at any time redeem, purchase or
otherwise acquire shares of any Parity Stock pursuant to any mandatory
redemption, put, sinking fund or other similar obligation contained in such
Parity Stock, pro rata with the Series F Preferred Stock in proportion to the
total amount then required to be applied by the Corporation to redeem, repur-
chase, or otherwise acquire shares of Series F Preferred Stock and shares of
such Parity Stock.
(d) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to purchase or otherwise acquire for
consideration any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(c), purchase such shares at such time
and in such manner.
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Section 5. Optional Redemption.
-------------------
(a) (i) The Corporation shall not have any right to redeem
any shares of Series F Preferred Stock prior to December 30, 2001. Thereafter,
(A) at any time so long as shares of Common Stock shall have traded on the New
York Stock Exchange (or another national securities exchange or on Nasdaq) on
each trading day during a 30-consecutive trading day period (each of which
trading days shall be after December 30, 2001 and no more than 5 Business Days
prior to the date notice is given of an Optional Redemption (as defined below))
and had a Closing Price on at least 20 of such trading days in excess of 150% of
the Conversion Amount in effect on such trading day as determined pursuant to
Section 11, subject to the restrictions contained in Section 4 or (B) at any
time after December 30, 2009, the Corporation shall have the right, at its sole
option and election, to redeem (the "Optional Redemption") all or a portion of
the shares of Series F Preferred Stock, on not more than 45 nor less than 30
days' notice of the date of redemption (any such date, an "Optional Redemption
Date") at a price per share (the "Optional Redemption Price") equal to the sum
of (A) the following prices per share (stated as a percentage of the Liquidation
Preference of such share), (B) an amount per share equal to all accrued and
unpaid dividends thereon, whether or not declared or payable, to the applicable
Optional Redemption Date and (C) the Additional Amount (as defined in Section
11), in immediately available funds:
Optional Redemption Price
If Redeemed as a Percentage of
During the Period Liquidation Preference
----------------- -------------------------
December 30, 2001 to 102.775%
December 29, 2002
December 30, 2002 to 101.850%
December 29, 2003
December 30, 2003 to 100.925%
December 29, 2004
December 30, 2004 and 100%
thereafter
(ii) If the Corporation shall have the right to, or shall
determine to, redeem less than all the shares of Series F Preferred Stock then
outstanding pursuant to paragraph (i), the shares to be redeemed shall be
selected pro rata (as nearly as may be) so that the number of shares redeemed
from each holder
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shall be the same proportion of all the shares to be redeemed that the total
number of shares of Series F Preferred Stock then held by such holder bears to
the total number of shares of Series F Preferred Stock then outstanding.
(iii) Notwithstanding the foregoing, any shares of Series F
Preferred Stock redeemed pursuant to this Section 5(a) at any time when the
holders of shares of Series F Preferred Stock have the right to require the
Corporation to redeem the shares of Series F Preferred Stock pursuant to Section
6 or an event giving rise to such a right has occurred shall be redeemed at a
price equal to higher of the price to be paid pursuant to Section 5(a) and the
price to be paid pursuant to Section 6.
(b) Notice of any Optional Redemption shall specify the
Optional Redemption Date fixed for redemption, the Optional Redemption Price,
the place or places of payment, that payment will be made upon presentation and
surrender of the shares of Series F Preferred Stock and that on and after the
date of such Optional Redemption dividends will cease to accrue on such shares
and be given by publication in a newspaper of general circulation in the Borough
of Manhattan, The City of New York (if such publication shall be required by
applicable law, rule, regulation or securities exchange requirement), not less
than 30, nor more than 45, days prior to the Optional Redemption Date; and, in
any case, a similar notice shall be mailed at least 30, but not more than 45,
days prior to the Optional Redemption Date to each holder of shares of Series F
Preferred Stock, at such holder's address as it appears on the transfer books of
the Corporation. In order to facilitate the redemption of shares of Series F
Preferred Stock, the Board of Directors may fix a record date for the
determination of shares of Series F Preferred Stock to be redeemed, or may cause
the transfer books of the Corporation for the Series F Preferred Stock to be
closed, not more than 60 days or less than 45 days prior to the Optional
Redemption Date.
(c) On the date of any Optional Redemption that is
specified in a notice given pursuant to Section 5(b), the Corporation shall, and
at any time after such notice shall have been mailed and before the Optional
Redemption Date the Corporation may, deposit for the benefit of the holders of
shares of Series F Preferred Stock the funds necessary for such redemption with
a bank or trust company in the Borough of Manhattan, The City of New York, that
is "well capitalized" within the meaning of the applicable bank regulations and
having a capital and surplus of at least $500,000,000. Any moneys so deposited
by the Corporation and unclaimed at the end of two years from the Optional
Redemption Date shall revert to the
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general funds of the Corporation. After such reversion, any such bank or trust
company shall, upon demand, pay over to the Corporation such unclaimed amounts
and thereupon such bank or trust company shall be relieved of all responsibility
in respect thereof and any holder of shares of Series F Preferred Stock to be
redeemed shall look only to the Corporation for the payment of the Optional Re-
demption Price. Any interest accrued on funds deposited pursuant to this
Section 5(c) shall be paid from time to time to the Corporation for its own
account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 5(c) in respect of shares of
Series F Preferred Stock to be redeemed pursuant to Section 5(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Optional Redemption Date (i)
the shares represented thereby shall no longer be deemed outstanding, (ii) the
rights to receive dividends thereon shall cease to accrue, and (iii) all rights
of the holders of shares of Series F Preferred Stock to be redeemed shall cease
and terminate, excepting only the right to receive the Optional Redemption Price
therefor; provided, however, that if the Corporation shall default in the
-------- -------
payment of the Optional Redemption Price, the shares of Series F Preferred Stock
shall thereafter be deemed to be outstanding and the holders thereof shall have
all of the rights of a holder of Series F Preferred Stock until such time as
such default or failure shall no longer be continuing or shall have been waived
by holders of at least 66-2/3% of the then outstanding shares of Series F Pre-
ferred Stock.
(e) Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of
shares of Series F Preferred Stock receives such notice, and failure to give
such notice by mail, or any defect in such notice, to the holders of any shares
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Series F Preferred Stock. On or after the
Optional Redemption Date fixed for redemption as stated in such notice, each
holder of the shares called for redemption shall surrender the certificate
evidencing such shares to the Corporation at the place designated in such notice
and shall thereupon be entitled to receive payment of the Optional Redemption
Price. If less than all the shares evidenced by any such surrendered
certificate are redeemed, a new certificate shall be issued evidencing the
unredeemed shares.
Section 6. Mandatory Redemption at the Option
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of the Holder.
---------------------------------
(a) (i) If one or more events constituting a Specified
Corporate Action shall occur, each holder of shares of the Series F Preferred
Stock shall have the right, at such holder's option on the date or dates
specified in Section 6(a)(ii) (the "Specified Corporate Action Redemption
Date"), to require the Corporation to redeem (a "Specified Corporate Action
Redemption") all or any part of the shares of Series F Preferred Stock then held
by such holder as such holder may elect at a price per share equal to the
greater of (I) the sum of (A) the following prices per share (stated as a
percentage of the Liquidation Preference of such share) and (B) an amount per
share equal to all accrued and unpaid dividends thereon, whether or not declared
or payable, to the applicable Specified Corporate Action Redemption Date
If the Specified Corporate Specified Corporate Action
Action Redemption Date Redemption as a Percentage of
Occurs During the Period Liquidation Preference
------------------------ ----------------------------
December 30, 1994 to 110.4%
June 29, 1995
June 30, 1995 to 116.8%
December 29, 1995
December 30, 1995 to 126.7%
June 29, 1996
June 30, 1996 and 138.0%
thereafter
and (II) the sum of (x) 100% of the Liquidation Preference of such share, (y) an
amount per share equal to all accrued and unpaid dividends thereon whether or
not declared or payable to the Specified Corporate Action Redemption Date and
(z) the Additional Amount measured as of the date of any such redemption, in
either case in immediately available funds (the "Specified Corporate Action
Redemption Price").
(ii) The date fixed for each Specified Corporate Action
Redemption shall be fixed by the Corporation and shall be not less than 60 days
nor more than 90 days following the occurrence of any Specified Corporate Action
giving rise thereto (or, in the case of a Specified Corporate Action as
described in clause (iii) of the definition of "Specified Corporate Action," not
less than 60 days nor more than 90 days following the date on which the
Corporation obtains actual
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knowledge of such Specified Corporate Action); provided, however, that in the
-------- -------
event of a Specified Corporate Action that constitutes a Control Transaction, in
addition to the dates fixed for a Specified Corporate Action Redemption as
specified above, an additional Specified Corporate Action Redemption Date shall
be set for the date and time immediately preceding the consummation of any such
Control Transaction (and the Market Price utilized in determining the Additional
Amount for the purposes of such Specified Corporate Action Redemption shall be
the highest price per share of Common Stock paid by any acquiror in such Control
Transaction); provided, further, that, upon the request of a holder, the Board
-------- -------
of Directors shall agree to extend the date of redemption in respect of any such
Specified Corporate Action (without changing the consideration that is otherwise
payable in respect of such redemption other than with respect to adjustments to
the amount of accrued and unpaid dividends included in such redemption price) to
the extent necessary for any holder of shares of Series F Preferred Stock to
avoid liability under Section 16(b) of the Exchange Act, provided that no such
--------
redemption extension shall be for a period greater than six months. The
Corporation shall, within 5 days of the occurrence of a Specified Corporate
Action (or, in the case of a Specified Corporate Action described in clause
(iii) of the definition of "Specified Corporate Action," within 5 days of the
date on which the Corporation obtains actual knowledge of such Specified Corpo-
rate Action), give notice thereof by publication in a newspaper of general
circulation in the Borough of Manhattan, The City of New York (if such pub-
lication shall be required by applicable law, rule, regulation or securities
exchange requirement), and, in any case, a similar notice shall be mailed to
each holder of shares of the Series F Preferred Stock, at such holder's address
as it appears on the transfer books of the Corporation. Each such notice shall
specify the Specified Corporate Action that has occurred and the date of such
occurrence, the place or places of payment, the then effective Specified
Corporate Action Redemption Price and the date the right of such holder to
require a Specified Corporate Action Redemption shall terminate.
(iii) If the notice sent by the Corporation pursuant to
Section 6(a)(ii) shall contain (i) a form inquiring as to whether a holder of
shares of Series F Preferred Stock intends to surrender the certificate(s)
representing such shares for redemption pursuant to this Section 6(a) and (ii) a
stamped self-addressed envelope for return of such form to the Corporation or
its designee, within ten Business Days of such notice, each holder shall return
such inquiry form to the Corporation and shall indicate in such form the
proportion of such holder's shares of Series F Preferred Stock that will be
surrendered for redemption pursuant to this Section 6(a). If
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such notice shall indicate that if a holder does not respond prior to ten
Business Days after the date of such notice that such holder will be deemed to
have notified the Corporation that it will not require the redemption of the
shares of Series F Preferred Stock held by such holder for purposes of Section
3(b) and such holder does not respond to the Corporation's inquiry prior to ten
Business Days after the date of such notice, such holder will be deemed to have
notified the Corporation that it will not require the redemption of the shares
of Series F Preferred Stock held by such holder for purposes of Section 3(b).
Nothing contained in this Section 6(a)(iii) shall affect the right of a holder
of Series F Preferred Stock to require the Corporation to redeem such shares
pursuant to Section 6(a)(i).
(b) (i) If at any time the Additional Amount is greater
than 0, then each holder of shares of the Series F Preferred Stock shall have
the right, at such holder's option exercisable at any time (such time, the
"Conversion Date") on 30 days' notice to the Corporation, to require the
Corporation to redeem (a "Conversion Redemption") all or any part of the shares
of Series F Preferred Stock then held by such holder at a price per share (the
"Conversion Redemption Price") equal to the sum of (A) 100% of the Liquidation
Preference of such shares, (B) an amount per share equal to all accrued and
unpaid dividends thereon, whether or not declared or payable, to the applicable
Conversion Redemption Date and (C) the Additional Amount, in immediately
available funds. Notwithstanding the foregoing, if the redemption of any
portion of such shares occurs during the first two years following the Issue
Date or would in the judgment of the Board of Directors of the Corporation have
a material adverse effect on the Corporation, then the Corporation may elect to
deliver with respect to such shares, in lieu of cash, notes, including
subordinated notes, of the Corporation ("Notes") (x) having a final maturity
date no later than ten years from the date of issuance, and (y) having such
other terms and conditions as shall result in a determination that such Notes
have a fair market value as of the date of their proposed issuance at least
equal to the sum of (1) the Conversion Redemption Price with respect to such
shares and (2) customary underwriting discounts and commissions payable with
respect to the sale of securities of a type comparable to the Notes, or shares
of nonconvertible preferred stock ("Redemption Preferred Stock") having the
terms and conditions described in clauses (x) and (y) in lieu of Notes. The
Corporation shall use its best efforts to cause the Notes or the Redemption
Preferred Stock to be registered for immediate resale pursuant to an effective
registration statement under the Securities Act prior to the issuance thereof.
If such registration statement is not effective within 120 days of
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the date of such issuance then the annual interest rate of the Notes or the
annual dividend rate of the Redemption Preferred Stock, as applicable, shall be
increased by 0.5% per annum until such securities are sold pursuant to an
effective registration statement under the Securities Act. For purposes of this
Section 6(b), "fair market value" shall mean the fair market value of the Notes
or Redemption Preferred Stock, as the case may be, as determined by an
investment banking firm of national standing selected by the Corporation and
reasonably acceptable to the holders of a majority of the shares of Series F
Preferred Stock electing to effect such Conversion Redemption. In the case that
the Corporation shall be entitled to deliver either Notes or Redemption
Preferred Stock, it shall be the election of the Corporation whether to deliver
such Notes or Redemption Preferred Stock, except that, if, the sale of the
security to be delivered by the Corporation to effect a Conversion Redemption
would give rise to an additional liability on the part of such holder upon the
sale thereof and it shall so notify the Corporation in writing, the Corporation
shall deliver to such holder the other type of security specified in such
notice.
(c) Each holder of shares of the Series F Preferred Stock
shall have the right, at such holder's option exercisable at any time on 30
days' notice to the Corporation on or after December 30, 2009 (the date of any
such exercise, the "Special Redemption Date"), to require the Corporation to
redeem (a "Special Redemption") all or any part of the shares of Series F
Preferred Stock then held by such holder as such holder may elect by written
notice delivered at least 30 days prior to the Special Redemption Date at a
price per share equal to the sum of (A) 100% of the Liquidation Preference of
such share, (B) an amount per share equal to all accrued and unpaid dividends
thereon whether or not declared or payable to the Special Redemption Date and
(C) the Additional Amount, determined as of the date immediately prior to the
Special Redemption Date (the "Special Redemption Price") in immediately
available funds.
(d) On the date fixed for any Specified Corporate Action
Redemption or on any Conversion Redemption Date or Special Redemption Date, each
holder of shares of Series F Preferred Stock who elects to have shares of Series
F Preferred Stock held by it redeemed shall surrender the certificate
representing such shares to the Corporation (i) at the place designated in such
notice in the case of a Specified Corporate Action Redemption or (ii) at the
Corporation's principal place of business to be maintained by it, in the case of
a Conversion Redemption or Special Redemption, together with an election to have
such redemption made and shall thereupon be entitled to receive payment therefor
provided in this Section 6. If less
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than all the shares represented by any such surrendered certificate are
redeemed, a new certificate shall be issued representing the unredeemed shares.
From and after the date of such redemption (i) the rights to receive dividends
thereon shall cease to accrue and (ii) all rights of the holders of shares of
Series F Preferred Stock so redeemed shall cease and terminate, excepting only
the right to receive the Specified Corporate Action Redemption Price or
Conversion Redemption Price or Special Redemption Price therefor, as applicable;
provided, however, that if the Corporation shall default in the payment of the
- -------- -------
applicable redemption price the shares of Series F Preferred Stock that were to
be redeemed shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series F Preferred Stock until such
time as such default shall no longer be continuing or shall have been waived by
holders of at least 66-2/3% of the then outstanding shares of Series F Preferred
Stock.
Section 7. Redemption Upon Maturity.
------------------------
(a) On December 30, 2034 (the "Maturity Date"), the
Corporation shall redeem (the "Maturity Redemption") the remaining outstanding
shares of the Series F Preferred Stock at a price per share (the "Maturity
Redemption Price") equal to the sum of (A) 100% of the Liquidation Preference
per share, (B) an amount equal to accrued and unpaid dividends thereon, whether
or not declared or payable, to the Maturity Date and (C) the Additional Amount,
determined as of the date immediately prior to the Maturity Date, in immediately
available funds.
(b) Notice of the Maturity Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication shall be required by applicable law,
rule, regulation or securities exchange requirement), not less than 30, nor more
than 60, days prior to the Maturity Date and, in any case, a similar notice
shall be mailed at least 30, but not more than 60, days prior to the Maturity
Date to each holder of shares of Series F Preferred Stock, at such holder's
address as it appears on the transfer books of the Corporation.
(c) On the Maturity Date, the Corporation shall, and at any
time after such notice shall have been mailed and before the Maturity Date the
Corporation may, deposit for the benefit of the holders of shares of Series F
Preferred Stock the funds necessary for such redemption with a bank or trust
company in the Borough of Manhattan, The City of New York, that is "well
capitalized" within the meaning of the applicable banking regulations and having
a capital and surplus of at least $500,000,000. Any moneys so deposited by the
Corporation and
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unclaimed at the end of two years from the date designated for such redemption
shall revert to the general funds of the Corporation. After such reversion, any
such bank or trust company shall, upon demand, pay over to the Corporation such
unclaimed amounts and thereupon such bank or trust company shall be relieved of
all responsibility in respect thereof and any holder of shares of Series F
Preferred Stock to be redeemed shall look only to the Corporation for the
payment of the Maturity Redemption Price. Any interest accrued and unpaid on
funds deposited pursuant to this Section 5(c) shall be paid from time to time to
the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 7(c) in respect of shares of
Series F Preferred Stock to be redeemed pursuant to Section 7(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Maturity Date, (i) the rights
to receive dividends thereon shall cease to accrue and (ii) all rights of the
holders of shares of Series F Preferred Stock shall cease and terminate,
excepting only the right to receive the Maturity Redemption Price therefor;
provided, however, that if the Corporation shall default in the payment of the
- -------- -------
Maturity Redemption Price, the shares of Series F Preferred Stock that were to
be redeemed shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series F Preferred Stock until such
time as such default shall no longer be continuing.
Section 8. Acquired Shares.
---------------
Any shares of Series F Preferred Stock exchanged, redeemed,
purchased or otherwise acquired by the Corporation or any of its Subsidiaries in
any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares of Series F Preferred Stock shall upon
their cancellation become authorized but unissued shares of preferred stock, par
value $4.00 per share, of the Corporation and, upon the filing of an appropriate
certificate with the Department of State of the State of New York, may be
reissued as part of another series of preferred stock, par value $4.00 per
share, of the Corporation subject to the conditions or restrictions on issuance
set forth herein, but in any event may not be reissued as shares of Series F
Preferred Stock or Parity Stock unless all of the shares of Series F Preferred
Stock issued on the Issue Date shall have already been redeemed or exchanged.
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Section 9. Liquidation, Dissolution or Winding Up.
--------------------------------------
(a) If the Corporation shall commence a voluntary case
under the United States bankruptcy laws or any applicable bankruptcy, insolvency
or similar law of any other country, or consent to the entry of an order for
relief in an involuntary case under any such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or make an assignment for the benefit of its creditors, or admit in writing its
inability to pay its debts generally as they become due (any such event, a
"Voluntary Liquidation Event"), or if a decree or order for relief in respect of
the Corporation shall be entered by a court having jurisdiction in the premises
in an involuntary case under the United States bankruptcy laws or any applicable
bankruptcy, insolvency or similar law of any other country, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and on account of any
such event the Corporation shall liquidate, dissolve or wind up, or if the
Corporation shall otherwise liquidate, dissolve or wind up, no distribution
shall be made (i) to the holders of shares of Junior Stock unless, prior
thereto, the holders of shares of Series F Preferred Stock shall have received
(A) if a Voluntary Liquidation Event shall have occurred, the Optional Redemp-
tion Price with respect to each share and (B) if a Voluntary Liquidation Event
shall not have occurred, the Liquidation Preference and all accrued and unpaid
dividends, whether or not declared or currently payable, to the date of
distribution, with respect to each share, or (ii) to the holders of shares of
Parity Stock, except distributions made ratably on the Series F Preferred Stock
and all Parity Stock in proportion to the total amounts to which the holders of
all shares of the Series F Preferred Stock (which amounts are set forth in
clauses (A) and (B) above) and Parity Stock are entitled upon such liquidation,
dissolution or winding up.
(b) Neither the consolidation or merger of the Corporation
with or into any other Person nor the sale or transfer of all or any part of the
Corporation's assets for cash, securities or other property shall be deemed to
be a liquidation, dissolution or winding up of the Corporation for purposes of
this Section 9.
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Section 10. Exchange.
--------
(a) Subject to the provisions of this Section 10, the
Corporation shall have the right, with the consent of the holders of all of the
outstanding shares of Series F Preferred Stock (which consent may be withheld
for any reason whatsoever), at any time but on only one occasion, to exchange
all (but not less than all) of the shares of Series F Preferred Stock for
Subordinated Notes of the Corporation ("Subordinated Notes"), at a price per
share equal to the Liquidation Preference per share, with the Subordinated Notes
valued for such purpose at their face value. Simultaneously with such exchange
the Corporation shall pay to each holder of Series F Preferred Stock an amount
per share in cash equal to all accrued and unpaid dividends thereon, whether or
not declared or currently payable, to the date fixed for exchange thereof. The
Subordinated Notes shall have an annual interest rate equal to the annual
dividend rate on Series F Preferred Stock and shall contain other terms
substantially similar to the Series F Preferred Stock, including the date of
maturity thereof.
(b) Notice of an exchange of shares of Series F Preferred
Stock pursuant to Section 10(a) shall be given by publication in a newspaper of
general circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or securities
exchange requirement), not less than 30, nor more than 60, days prior to the
date fixed for exchange; and, in any case, a similar notice shall be mailed at
least 30, but not more than 60, days prior to the date fixed for exchange to
each holder at such holder's address as it appears on the transfer books of the
Corporation. In order to facilitate the exchange of shares of Series F
Preferred Stock hereunder the Board of Directors may fix a record date for the
determination of shares of Series F Preferred Stock to be exchanged, or may
cause the transfer books of the Corporation for the Series F Preferred Stock to
be closed, not more than 60 days or less than 30 days prior to the date fixed
for exchange.
(c) On the date of any exchange being made pursuant to
Section 10(a) that is specified in a notice given pursuant to Section 10(b), the
Corporation shall, and at any time after the date that is 10 days prior to the
date of exchange the Corporation may, deposit for the benefit of the holders of
shares of Series F Preferred Stock to be exchanged (i) the Subordinated Notes
necessary for such exchange and (ii) an amount in cash equal to all dividends
payable with respect thereto upon such exchange with a bank or trust company in
the Borough of Manhattan, The City of New York, that is "well capitalized"
within the meaning of the applicable banking
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regulations and having a capital and surplus of at least $500,000,000. Any
Subordinated Notes so deposited by the Corporation and unclaimed at the end of
two years from the date designated for such exchange shall revert to the Corpo-
ration. After such reversion, any such bank or trust company shall, upon
demand, return to the Corporation such unclaimed Subordinated Notes and
thereupon such bank or trust company shall be relieved of all responsibility in
respect thereof and any holder of shares of Series F Preferred Stock to be ex-
changed shall look only to the Corporation for the delivery of the Subordinated
Notes. Any interest accrued on Subordinated Notes deposited pursuant to this
Section 10(c) shall accrue for the accounts of, and be payable to, the holders
of shares of Series F Preferred Stock to be exchanged therefor.
(d) Notice of exchange having been given as aforesaid and
not having been deemed terminated as aforesaid, upon the deposit of Subordinated
Notes pursuant to clause (i) of Section 10(c) and the deposit of the cash
referred to in clause (ii) of Section 10(c) in respect of shares of Series F
Preferred Stock to be exchanged pursuant to Section 10(a), notwithstanding that
any certificates for such shares shall not have been surrendered for
cancellation, from and after the date of exchange designated in the notice of
exchange (i) the shares represented thereby shall no longer be deemed
outstanding, (ii) the rights to receive dividends thereon (except as provided in
paragraph (b) above) shall cease to accrue, and (iii) all rights of the holders
of shares of Series F Preferred Stock to be exchanged shall cease and terminate,
excepting only the right to receive the Subordinated Notes therefor and the
right to receive the dividends described in paragraph (b) above; provided,
--------
however, that if the Corporation shall default in the execution and delivery of
- -------
the Convertible Notes, the shares of Series F Preferred Stock that were to be
exchanged shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series F Preferred Stock until such
time as such default shall no longer be continuing or shall have been waived by
holders of at least 66-2/3% of the then outstanding shares of Series F Preferred
Stock.
Section 11. Additional Amount.
-----------------
(a) For the purposes of this Article 2, "Additional Amount"
shall mean an amount per share equal to the product of (i) the excess of the sum
of (1) the Market Price of a share of Common Stock and (2) if the Corporation
shall have issued a right or rights with respect to its outstanding shares of
Common Stock pursuant to a shareholder rights plan, "poison pill" or similar
arrangement, during the period commencing on
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the "distribution date" of such right or rights (i.e., the date on which such
----
right or rights commence to trade separately from the Common Stock) and ending
on the "triggering date" of such right or rights (i.e., the date on which such
----
right or rights commence to be exercisable), the Market Price of such right or
rights over the Conversion Amount, in effect as hereinafter determined and (ii)
(x) the Liquidation Preference divided by (y) such Conversion Amount, in all
cases calculated as of the applicable determination date. The Additional Amount
shall in no event be less than zero. The Conversion Amount initially shall be
$15.75, and shall thereafter be subject to adjustment as set forth in Section
11(b). For the purpose of calculating the Additional Amount in connection with
an Optional Redemption, Specified Corporate Action Redemption, Special
Redemption or Conversion Redemption, except as otherwise set forth in Section
6(a)(ii), the Market Price of the Common Stock and, if applicable, rights shall
be the average of the Market Price of such securities on the five trading days
immediately preceding and the five trading days immediately following the date
of notice of such redemption.
(b) The Conversion Amount shall be subject to adjustment as
follows:
(i) In case the Corporation shall at any time or from
time to time (A) pay a dividend or make a distribution on the outstanding shares
of Common Stock in Common Stock (other than pursuant to a dividend reinvestment
plan approved by the Corporation's Board of Directors), (B) subdivide the out-
standing shares of Common Stock into a larger number of shares, (C) combine the
outstanding shares of Common Stock into a smaller number of shares or (D) issue
any shares of its capital stock in a reclassification of the Common Stock, then,
and in each such case, the Conversion Amount in effect immediately prior to such
event shall be adjusted so that if the holder of any share of Series F Preferred
Stock were entitled to convert such share into such number of shares of Common
Stock as equals the Liquidation Preference divided by the Conversion Amount and
such holder thereafter surrendered such share for conversion, such holder would
be entitled to receive the number of shares of Common Stock or other securities
of the Corporation that such holder would have owned or would have been entitled
to receive upon or by reason of any of the events described above had such share
of Series F Preferred Stock been converted immediately prior to the occurrence
of such event. An adjustment made pursuant to this Section 11(b)(i) shall
become effective retroactively (A) in the case of any such dividend or distri-
bution, to the opening of business on the day immediately following the close of
business on the record date for the determination of holders of Common Stock
entitled to
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<PAGE>
receive such dividend or distribution or (B) in the case of any such
subdivision, combination or reclassification, to the close of business on the
day upon which such corporate action becomes effective.
(ii) In case the Corporation shall at any time or from
time to time issue or sell shares of Common Stock (or securities convertible
into or exchangeable for shares of Common Stock, or any options, warrants or
other rights to acquire shares of Common Stock (other than options granted to
any employee or director of the Corporation pursuant to a stock option plan
approved by the shareholders of the Corporation)) for a consideration per share
less than the Conversion Amount then in effect at the record date or issuance
date, as the case may be (the "Date") referred to in the following sentence,
including, without limitation, upon exercise of rights issued pursuant to a
shareholder rights plan, "poison pill" or similar arrangement (treating the
price per share of any security convertible or exchangeable or exercisable into
Common Stock as equal to (A) the sum of the price for such security convertible,
exchangeable or exercisable into Common Stock plus any additional consideration
payable (without regard to any antidilution adjustments) upon the conversion,
exchange or exercise of such security into Common Stock divided by (B) the
number of shares of Common Stock initially underlying such convertible,
exchangeable or exercisable security), other than issuances or sales for which
an adjustment is made pursuant to another paragraph of this Section 11(b), then,
and in each such case, the Conversion Amount then in effect shall be adjusted by
dividing the Conversion Amount in effect on the day immediately prior to the
Date by a fraction (x) the numerator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to the Date plus the number
of additional shares of Common Stock issued or to be issued (or the maximum
number into which such convertible or exchangeable securities initially may
convert or exchange or for which such options, warrants or other rights
initially may be exercised) and (y) the denominator of which shall be the sum of
the number of shares of Common Stock outstanding immediately prior to the Date
plus the number of shares of Common Stock that the aggregate consideration (if
any of such aggregate consideration is other than cash, as valued by the Board
of Directors including a majority of the Directors who are not officers or
employees of the Corporation or any of its Subsidiaries, which determination
shall be conclusive and described in a resolution of the Board of Directors) for
the total number of such additional shares of Common Stock so issued (or into
which such convertible or exchangeable securities may convert or exchange or for
which such options, warrants or other rights may be
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<PAGE>
exercised plus the aggregate amount of any additional consideration initially
payable upon conversion, exchange or exercise of such security) would purchase
at the Conversion Amount. Such adjustment shall be made whenever such shares,
securities, options, warrants or other rights are issued, and shall become
effective retroactively to a date immediately following the close of business
(i) in the case of issuance to stockholders of the Corporation, as such, on the
record date for the determination of stockholders entitled to receive such
shares, securities, options, warrants or other rights and (ii) in all other
cases, on the date ("issuance date") of such issuance; provided, however, that
-------- -------
the determination as to whether an adjustment is required to be made pursuant to
this Section 11(b)(ii) shall only be made upon the issuance of such shares or
such convertible or exchangeable securities, options, warrants or other rights,
and not upon the issuance of the security into which such convertible or
exchangeable security converts or exchanges, or the security underlying such
option, warrants or other right; provided, further, that if any convertible or
-------- -------
exchangeable securities, options, warrants or other rights (or any portions
thereof) that shall have given rise to an adjustment pursuant to this Section
11(b)(ii) shall have expired or terminated without the exercise thereof and/or
if by reason of the terms of such convertible or exchangeable securities,
options, warrants or other rights there shall have been an increase or
increases, with the passage of time or otherwise, in the price payable upon the
exercise or conversion thereof, then the Conversion Amount hereunder shall be
readjusted (but to no greater extent than originally adjusted) on the basis of
(x) eliminating from the computation any additional shares of Common Stock cor-
responding to such convertible or exchangeable securities, options, warrants or
other rights as shall have expired or terminated, (y) treating the additional
shares of Common Stock, if any, actually issued or issuable pursuant to the
previous exercise of such convertible or exchangeable securities, options,
warrants or other rights as having been issued for the consideration actually
received and receivable therefor and (z) treating any of such convertible or
exchangeable securities, options, warrants or other rights that remain
outstanding as being subject to exercise or conversion on the basis of such
exercise or conversion price as shall be in effect at the time.
(iii) In case the Corporation shall at any time or from
time to time distribute to all holders of shares of its Common Stock (including
any such distribution made in connection with a consolidation or merger in which
the Corporation is the resulting or surviving corporation and the Common Stock
is not changed or exchanged or a redemption of any rights or other securities
issued pursuant to a shareholder rights plan,
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"poison pill" or similar arrangement) cash, evidences of indebtedness of the
Corporation or another issuer, securities of the Corporation or another issuer
or other assets (excluding (A) Permitted Dividends described in clause (B) of
the definition thereof and (B) securities for which adjustment is made under
Section 11(b)(i) or Section 11(b)(ii)), then, and in each such case, the
Conversion Amount then in effect shall be adjusted by dividing the Conversion
Amount in effect immediately prior to the date of such distribution by a
fraction (x) the numerator of which shall be the Current Market Price of the
Common Stock on the record date referred to below and (y) the denominator of
which shall be such Current Market Price of the Common Stock less the then Fair
Market Value (as determined by the Board of Directors of the Corporation, which
determination shall be conclusive) of the portion of the cash, evidences of
indebtedness, securities or other assets so distributed or of such subscription
rights or warrants applicable to one share of Common Stock (but such denominator
not to be less than one). Such adjustment shall be made whenever any such
distribution is made and shall become effective retroactively to a date im-
mediately following the close of business on the record date for the
determination of stockholders entitled to receive such distribution.
(iv) In the case the Corporation at any time or from
time to time shall take any action affecting its Common Stock, other than an
action described in any of Section 11(b)(i) through Section 11(b)(iii),
inclusive, then, the Conversion Amount shall be adjusted in such manner and at
such time as the Board of Directors of the Corporation (other than Purchaser
Designees or directors elected pursuant to Section 3(b)) in good faith
determines to be equitable in the circumstances (such determination to be
evidenced in a resolution, a certified copy of which shall be mailed to the
holders of the Series F Preferred Stock).
(v) The Corporation may make such reductions in the
Conversion Amount, in addition to those required by subparagraphs (i), (ii),
(iii) or (iv) of this Section 11(b), as the Board of Directors considers to be
advisable in order to avoid or to diminish any income tax to holders of Common
Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes.
(vi) Notwithstanding anything contained in this Section
11(b), no adjustment to the Conversion Amount shall be made with respect to any
rights issued pursuant to a shareholder rights plan, "poison pill" or similar
arrangement unless the "triggering date" (i.e., the date on which such rights
----
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commence to be exercisable) shall have occurred or such rights shall have been
redeemed, in which event adjustments under clause (ii) and clause (iii),
respectively, shall be made.
(c) If the Corporation shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the Conversion Amount then in
effect shall be required by reason of the taking of such record.
(d) Upon any increase or decrease in the Conversion Amount,
then, and in each such case, the Corporation promptly shall deliver to each
registered holder of Series F Preferred Stock at least 10 Business Days prior to
effecting any of the foregoing transactions a certificate, signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Corporation, setting forth in
reasonable detail the event requiring the adjustment and the method by which
such adjustment was calculated and specifying the increased or decreased Con-
version Amount then in effect following such adjustment.
Section 12. Sinking Fund.
-------------
(a) So long as any shares of Series F Preferred Stock shall
be outstanding, the Corporation shall, on the final business day (any such date,
the "Sinking Fund Date") of each calendar year after 2003, (i) set aside a sum
of money equal to 3-1/3% of the aggregate liquidation preference of the shares
of Series F Preferred Stock then outstanding, and (ii) apply such money to
redeem such number of shares of Series F Preferred Stock at the Sinking Fund
Redemption Price (the Corporation's obligations described in this paragraph in
respect of any Sinking Fund Date being hereinafter referred to as the "Sinking
Fund Obligation" for such date) at a price per share (the "Sinking Fund
Redemption Price") equal to the sum of (A) the Liquidation Preference of such
share, (B) an amount per share equal to all accrued and unpaid dividends
thereon, whether or not declared or payable, to the applicable Sinking Fund Date
and (C) the Additional Amount (as defined in Section 11), determined as of the
date immediately prior to the Sinking Fund Date, in immediately available funds;
provided, however, that if the Corporation for any reason fails to discharge its
- -------- -------
Sinking Fund Obligation on any Sinking Fund Date, such Sinking Fund Obligation,
to the extent not discharged, shall become an additional Sinking Fund Obligation
for each succeeding Sinking Fund Date until fully discharged; provided, further,
-------- -------
that no
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shares of Series F Preferred Stock purchased or acquired by the Corporation
otherwise than through redemption pursuant to this paragraph or pursuant to an
Optional Redemption may be credited against the Sinking Fund Obligation in
respect of any Sinking Fund Date.
(b) Notice of the Sinking Fund Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication shall be required by applicable law,
rule, regulation or securities exchange requirement), not less than 30, nor more
than 60, days prior to the Sinking Fund Date and, in any case, a similar notice
shall be mailed at least 30, but not more than 60, days prior to the Sinking
Fund Date to each holder of shares of Series F Preferred Stock, at such holder's
address as it appears on the transfer books of the Corporation.
(c) The shares to be redeemed pursuant to paragraph (a)
shall be selected pro rata (as nearly as may be) so that the number of shares
redeemed from each holder shall be the same proportion of all the shares to be
redeemed that the total number of shares of Series F Preferred Stock then held
by such holder bears to the total number of shares of Series F Preferred Stock
then outstanding.
(d) On the Sinking Fund Date, the Corporation shall, and at
any time after such notice shall have been mailed and before the Sinking Fund
Date the Corporation may, deposit for the benefit of the holders of shares of
Series F Preferred Stock the funds necessary for such redemption with a bank or
trust company in the Borough of Manhattan, The City of New York, that is "well
capitalized" within the meaning of the applicable banking regulations and having
a capital and surplus of at least $500,000,000. Any moneys so deposited by the
Corporation and unclaimed at the end of two years from the date designated for
such redemption shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and any holder of
shares of Series F Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Sinking Fund Redemption Price. Any interest
accrued and unpaid on funds deposited pursuant to this Section 12(c) shall be
paid from time to time to the Corporation for its own account.
(e) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 12(c) in respect of shares of
Series F Preferred Stock to be redeemed
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pursuant to Section 12(a), notwithstanding that any certificates for such
shares shall not have been surrendered for cancellation, from and after the
Sinking Fund Date, (i) the rights to receive dividends thereon shall cease to
accrue and (ii) all rights of the holders of shares of Series F Preferred Stock
shall cease and terminate, excepting only the right to receive the Sinking Fund
Redemption Price therefor; provided, however, that if the Corporation shall
-------- -------
default in the payment of the Sinking Fund Redemption Price, the shares of
Series F Preferred Stock that were to be redeemed shall thereafter be deemed
to be outstanding and the holders thereof shall have all of the rights of a
holder of Series F Preferred Stock until such time as such default shall no
longer be continuing.
Article 3. Series G Preferred Stock.
------------------------
Section 1. Designation and Number.
----------------------
(a) The shares of such series shall be designated as
"Cumulative Preferred Stock, Series G" (the "Series G Preferred Stock"). The
number of shares initially constituting the Series G Preferred Stock shall be
625,000, which number may be decreased (but not increased) by the Board of
Directors without a vote of stockholders; provided, however, that such number
-------- -------
may not be decreased below the number of then outstanding shares of Series G
Preferred Stock or the number of shares of Series G Preferred Stock issuable
upon exercise of the Option (as defined in the Securities Purchase Agreement).
(b) The Series G Preferred Stock shall, with respect to
dividend rights and rights on liquidation, dissolution or winding up, rank pari
----
passu with the Corporation's $2.50 Cumulative Convertible Preferred Stock,
- -----
Series A (the "Series A Preferred Stock"), $2.50 Cumulative Preferred Stock,
Series B (the "Series B Preferred Stock"), Cumulative Convertible Preferred
Stock, Series E (the "Series E Preferred Stock"), Cumulative Preferred Stock,
Series F (the "Series F Preferred Stock"), Cumulative Preferred Stock, Series H
(the "Series H Preferred Stock"), Cumulative Preferred Stock, Series T (the
"Series T Preferred Stock" and together with the Series E Preferred Stock,
Series G Preferred Stock, the Series G Preferred Stock and the Series H
Preferred Stock, the "Chicago Preferred Stock") and the New Preferred Stock (if
any) (the Series A Preferred Stock, Series B Preferred Stock, Chicago Preferred
Stock (other than the Series G Preferred Stock) and New Preferred Stock (if any)
are collectively defined for the purposes of this Article 2 as the "Other
Preferred Stock") and prior to all other classes and series of capital stock of
the Corporation now or hereafter authorized including, without
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limitation, the Common Stock, par value $1.00 per share, of the Corporation
(the "Common Stock").
(c) Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Article 6 below.
Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series G Preferred Stock, in
preference to the holders of shares of Common Stock and of any shares of other
capital stock of the Corporation other than the Other Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
the assets of the Corporation at the time legally available therefor, cumulative
cash dividends at an annual rate on the Liquidation Preference thereof equal to
9.75% (subject to increase pursuant to Section 2(b)), calculated on the basis of
a 360-day year consisting of twelve 30-day months, accruing and payable in equal
quarterly payments, in immediately available funds, on the Business Day
immediately preceding the last day of March, June, September and December in
each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date") commencing on the Business Day immediately preceding the date of
the issuance of such shares of Series G Preferred Stock; provided, however, that
-------- -------
with respect to such first Quarterly Dividend Payment Date with respect to any
shares of Series G Preferred Stock, the holders of shares of Series G Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors, out of the assets of the Corporation at the time legally available
therefor, a cumulative cash dividend in respect of each share of Series G Pre-
ferred Stock in the amount of (i) 9.75% (or the then effective annual rate) of
the Liquidation Preference multiplied by (ii) a fraction equal to (A) the number
of days from (and including) the date of the issuance of such shares of Series G
Preferred Stock to (but excluding) such Quarterly Dividend Payment Date divided
by (B) 360. No interest shall be payable in respect of any dividend payment on
the Series G Preferred Stock that may be in arrears.
(b) If (i) a private placement or public offering of the
New Preferred Stock or the New Senior Notes, pursuant to which the Corporation
shall receive at least $100,000,000 in gross proceeds is not consummated within
360 days after the termination of the Merger Agreement or (ii) the annual
dividend rate on the New Preferred Stock or the annual interest rate on the New
Senior Notes, as applicable, exceeds 13%, then the annual rate of the cumulative
cash dividends shall be increased to a rate of 10.75%, effective (x) in the case
of clause (i), the date that is 360 days after the termination of the Merger
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Agreement, and (y) in the case of clause (ii) the date of the issuance of the
New Preferred Stock or the New Senior Notes, as applicable. If on any date (A)
all of the Purchaser Designees shall not have been elected to the Corporation's
Board of Directors or any such Purchaser Designees shall not have been appointed
to the committees of the Corporation's Board of Directors, in accordance with
the provisions of Section 6.17 of the Securities Purchase Agreement, (B) the
Corporation shall have failed to declare, or shall have failed to pay, the full
amount of dividends payable on the Series G Preferred Stock for six quarterly
dividend periods, (C) the Corporation shall have failed to satisfy its
obligation to convert shares of Series E Preferred Stock pursuant to Article 1,
Section 10 or (D) a breach of any of the Material Provisions of the Securities
Purchase Agreement or any of the Corporation's material obligations under the
Registration Rights Agreement shall have occurred then, effective as of the date
of such failure or breach, the annual rate of the cumulative cash dividends
shall be increased to a rate of 11.75% and shall remain at such rate until such
time as (1) the Purchaser Designees shall have been elected to the Corporation's
Board of Directors and appointed to the committees of the Corporation's Board of
Directors in accordance with the provisions of Section 6.17 of the Securities
Purchase Agreement, (2) all dividends accrued to date on the Series G Preferred
Stock shall have been declared and paid in full, (3) any conversion obligations
in respect of the Chicago Preferred Stock that have become due shall have been
fully satisfied and (4) there shall exist no breach of any of the Material
Provisions of the Securities Purchase Agreement or any of the Corporation's
material obligations under the Registration Rights Agreement, as the case may
be, at which time the annual rate of the cumulative cash dividends shall be re-
duced to a rate of 9.75%, subject to being increased to a rate of 11.75% in the
event of each and every subsequent event of the character indicated above.
(c) Dividends payable on a share of Series G Preferred
Stock pursuant to Section 2(a) shall begin to accrue and be cumulative from the
date of issuance of such share of Series G Preferred Stock, and shall accrue on
a daily basis, in each case whether or not declared. Dividends paid on the
shares of Series G Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares of Series G
Preferred Stock at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series G Preferred Stock
entitled to receive payment of a dividend declared thereon, which record date
shall be not more than 60 days nor less than 10 days prior to the date fixed for
the payment
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thereof. Accumulated but unpaid dividends for any past quarterly
dividend periods may be declared and paid at any time, without reference to any
regular Quarterly Dividend Payment Date, to holders of record on such date, not
more than 60 nor less than 10 days preceding the payment date thereof, as may be
fixed by the Board of Directors.
(d) The holders of shares of Series G Preferred Stock shall
not be entitled to receive any dividends or other distributions except as
provided herein.
Section 3. Voting Rights.
-------------
In addition to any voting rights provided by law, the
holders of shares of Series G Preferred Stock shall have the following voting
rights:
(a) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders of at
least 66-2/3% of the outstanding shares of Series G Preferred Stock, voting
separately as a single class, in person or by proxy, at a special or annual
meeting of stockholders called for the purpose, shall be necessary to (i)
authorize, adopt or approve an amendment to the Certificate of Incorporation
that would increase or decrease the par value of the shares of Series G
Preferred Stock, or alter or change the powers, preferences or special rights of
the shares of Series G Preferred Stock, (ii) amend, alter or repeal the
Certificate of Incorporation so as to affect the shares of Series G Preferred
Stock adversely or (iii) effect the voluntary liquidation, dissolution, winding
up, recapitalization or reorganization of the Corporation, or the consolidation
or merger of the Corporation with or into any other Person, or the sale or other
distribution to another Person of all or substantially all of the assets of the
Corporation; provided, however, that no separate vote of the holders of Series G
-------- -------
Preferred Stock shall be required to effect any of the transactions described in
clause (iii) above unless such transaction would either require a class vote
pursuant to clause (i) or (ii) above or would require a vote by any shareholders
of the Corporation (other than pursuant to this sentence); provided further,
-------- -------
that no separate vote of the holders of the Series G Preferred Stock as a class
shall be required in the case of a recapitalization, reorganization,
consolidation or merger of, or sale by, the Corporation if (A) (a) such
recapitalization, reorganization, consolidation, merger or sale constitutes a
Specified Corporate Action, (b) the Corporation has sufficient funds legally
available to it (after giving effect to such transaction) to redeem, at the then
applicable price hereunder and pursuant to the terms
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hereof, all the outstanding shares of Series G Preferred Stock, (c) such
redemption shall not be prohibited by any agreement to which the Corporation
or any of its Subsidiaries is a party, by applicable law or otherwise, (d) the
Board of Directors of the Corporation, including a majority of the directors
who are not officers or employees of the Corporation, shall have adopted a
resolution confirming that such funds are available and that the holders of
Series G Preferred Stock have the right to require such redemption and (e)
the Corporation shall have set aside sufficient funds through the Specified
Corporation Action Redemption Date to redeem the shares of Series G Preferred
Stock held by such holders (except that no funds need be set aside with respect
to such shares held by any such holder who has theretofore notified the
Corporation (whether pursuant to Section 6(a)(iii) or otherwise) that it will
not require redemption of such shares) or (B) (1) the Corporation shall be the
resulting or surviving corporation, (2) the resulting or surviving corporation
will have after such recapitalization, reorganization, consolidation or merger
no Senior Stock or Parity Stock either authorized or outstanding (except such
Parity Stock of the Corporation as may have been authorized or outstanding
immediately preceding such consolidation or merger) or such stock of the
resulting or surviving corporation (having the same powers, preferences and
special rights of any such Parity Stock) as may be issued in
exchange therefor), (3) each holder of shares of Series G Preferred Stock
immediately preceding such recapitalization, reorganization, consolidation or
merger will receive in exchange therefor the same number of shares of stock,
with the same preferences, rights and powers, of the resulting or surviving
corporation, (4) after such recapitalization, reorganization, consolidation or
merger the resulting or surviving corporation shall not be in breach of any of
the terms hereof, any of the Material Provisions of the Securities Purchase
Agreement or any of its material obligations under the Registration Rights
Agreement and (5) all or substantially all the holders of the outstanding shares
of capital stock of the Corporation immediately prior to such consolidation or
merger are entitled to receive shares representing 50% or more of the then
outstanding shares of capital stock of the resulting or surviving corporation
entitled to vote generally in the election of directors.
(b) If on any date (i) the Corporation shall have failed to
declare, or shall have failed to pay, the full amount of dividends payable on
any series of Chicago Preferred Stock for six quarterly dividend periods or (ii)
a breach of any of the Material Provisions of the Securities Purchase Agreement
or any of the Corporation's material obligations under the Registration Rights
Agreement shall have occurred, then the number of directors constituting the
Board of Directors shall, without
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further action, be increased by two and the holders of shares of Series G
Preferred Stock shall have, in addition to the other voting rights set forth
herein with respect to the Series G Preferred Stock, the exclusive right,
together with the holders of all other series of Chicago Preferred Stock
voting separately as a single class together with the holders of such other
series of Chicago Preferred Stock, to elect two directors of the Corporation
to fill such newly created directorship, by written consent as provided herein,
or at a special meeting of such holders called as provided herein. Any such
additional directors shall continue as directors (subject to reelection or
removal as provided in Section 3(c)(ii)) and the holders of Series
G Preferred Stock shall have such additional voting rights until such time as
(A) dividends then payable on all series of Chicago Preferred Stock shall have
been declared and paid in full and (B) there shall exist no breach of any of the
Material Provisions of the Securities Purchase Agreement or any of the
Corporation's material obligations under the Registration Rights Agreement, as
the case may be, at which time such additional directors shall cease to be
directors, the number of directors constituting the Board of Directors shall be
reduced by two and such additional voting rights of the holders of all series of
Chicago Preferred Stock shall terminate, subject to revesting in the event of
each and every subsequent event of the character indicated above.
(c) (i) The foregoing right of holders of shares of Series
G Preferred Stock to take any action as provided in Section 3(b) may be
exercised at any annual meeting of stockholders or at a special meeting of
holders of shares of Chicago Preferred Stock, held for such purpose as
hereinafter provided or at any adjournment thereof, or by the written consent,
delivered to the Secretary of the Corporation, of the holders of the minimum
number of shares required to take such action.
So long as such right to vote continues (and unless such
right has been exercised by written consent of the minimum number of shares
required to take such action), the President of the Corporation may call, and
upon the written request of holders of record of at least 5% of the aggregate
outstanding shares of Chicago Preferred Stock, addressed to the Secretary of the
Corporation at the principal office of the Corporation, shall call, a special
meeting of the holders of shares entitled to vote as provided herein. Such
meeting shall be held within 30 days after delivery of such request to the
Secretary, at the place and upon the notice provided by law and in the by-laws
of the Corporation for the holding of meetings of stockholders.
(ii) At each meeting of stockholders at which the
holders of shares of Series G Preferred Stock shall have
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the right, voting separately as a single class together with the holders of
all other series of Chicago Preferred Stock, to elect two directors of the
Corporation as provided in Section 3(b) or to take any action, the presence in
person or by proxy of the holders of record of one-third of the total aggregate
number of shares of Chicago Preferred Stock then outstanding and entitled to
vote on the matter shall be necessary and sufficient to constitute a quorum.
At any such meeting or at any adjournment thereof:
(A) the absence of a quorum of the holders of shares
of Chicago Preferred Stock, shall not prevent the election of
directors other than those to be elected by the holders of shares
of Chicago Preferred Stock, and the absence of a quorum of the
holders of shares of any other class or series of capital stock
shall not prevent the election of directors to be elected by the
holders of shares of Chicago Preferred Stock, or the taking of
any action as provided in Section 3(b); and
(B) in the absence of a quorum of the holders of
shares of Chicago Preferred Stock, a majority of the holders of
such shares present in person or by proxy shall have the power to
adjourn the meeting as to the actions to be taken by the holders
of shares of Chicago Preferred Stock, from time to time and place
to place without notice other than announcement at the meeting
until a quorum shall be present.
For taking of any action as provided in Section 3(a) or
Section 3(b) by the holders of shares of Series G Preferred Stock, each such
holder shall have one vote for each share of such stock standing in his name on
the transfer books of the Corporation as of any record date fixed for such
purpose or, if no such date be fixed, at the close of business on the Business
Day next preceding the day on which notice is given, or if notice is waived, at
the close of business on the Business Day next preceding the day on which the
meeting is held; provided, however, that shares of Chicago Preferred Stock held
-------- -------
by the Corporation or any Subsidiary of the Corporation shall not be deemed to
be outstanding for purposes of taking any action as provided in this Section 3.
Each director elected by the holders of shares of Chicago
Preferred Stock, as provided in Section 3(b) shall, unless his term shall expire
earlier in accordance with the provisions thereof, hold office until the annual
meeting of stockholders next succeeding his election or until his successor,
if any, is elected and qualified.
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If any director so elected by the holders of Chicago
Preferred Stock shall cease to serve as a director before his term shall expire
(except by reason of the termination of the voting rights accorded to the
holders of Chicago Preferred Stock, in accordance with Section 3(b)), the
holders of the Chicago Preferred Stock then outstanding and entitled to vote for
such director may, by written consent as provided herein, or at a special
meeting of such holders called as provided herein, elect a successor to hold
office for the unexpired term of the director whose place shall be vacant.
Any director elected by the holders of shares of Chicago
Preferred Stock, voting together as a separate class, may be removed from office
with or without cause only by the vote or written consent of the holders of at
least a majority of the aggregate outstanding shares of Chicago Preferred Stock
at the time of removal. A special meeting of the holders of shares of Chicago
Preferred Stock may be called in accordance with the procedures set forth in
Section 3(c)(i).
Section 4. Certain Restrictions.
--------------------
(a) So long as any shares of Series G Preferred Stock
remain outstanding, the Corporation shall not declare or make any Restricted
Payment.
(b) Whenever quarterly dividends payable on shares of
Series G Preferred Stock as provided in Section 2(a) are not paid in full, at
such time and thereafter until all unpaid dividends payable, whether or not
declared, on the outstanding shares of Series G Preferred Stock shall have been
paid in full or declared and set apart for payment at such time and thereafter
until all necessary funds have been set apart for payment, or whenever the
Corporation shall not have paid the Optional Redemption Price, the Specified
Corporate Action Redemption Price, the Conversion Redemption Price, the Holder's
Election Redemption Price, the Special Redemption Price or the Maturity
Redemption Price when due, at such time and thereafter from and until all such
amounts have been paid in full or set apart for payment, the Corporation shall
not: (A) declare or pay dividends, or make any other distributions, on any
shares of Junior Stock, or (B) declare or pay dividends, or make any other
distributions, on any shares of Parity Stock, except dividends or distributions
paid ratably on the Series G Preferred Stock and all Parity Stock on which
dividends are payable and in arrears, in proportion to the total amounts to
which the holders of all shares of the Series G Preferred Stock and Parity Stock
are then entitled.
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(c) Whenever dividends payable on shares of Series G
Preferred Stock as provided in Section 2 are not paid in full, at such time and
thereafter until all unpaid dividends payable, whether or not declared, on the
outstanding shares of Series G Preferred Stock shall have been paid in full or
declared and set apart for payment, at such time and thereafter until all
necessary funds have been set apart for payment, or whenever the Corporation
shall not have paid the Optional Redemption Price, the Specified Corporate
Action Redemption Price, the Conversion Redemption Price, the Holder's Election
Redemption Price, the Special Redemption Price or the Maturity Redemption Price
when due, at such time and thereafter until all such amounts have been paid in
full or set apart for payment, the Corporation shall not redeem, purchase or
otherwise acquire for consideration any shares of Junior Stock or Parity Stock;
provided, however, that (A) the Corporation may accept shares of any Parity
- -------- -------
Stock or Junior Stock for conversion into Junior Stock and (B) the Corporation
may at any time redeem, purchase or otherwise acquire shares of any Parity Stock
pursuant to any mandatory redemption, put, sinking fund or other similar ob-
ligation contained in such Parity Stock, pro rata with the Series G Preferred
Stock in proportion to the total amount then required to be applied by the
Corporation to redeem, repurchase, or otherwise acquire shares of Series G
Preferred Stock and shares of such Parity Stock.
(d) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to purchase or otherwise acquire for
consideration any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(c), purchase such shares at such time
and in such manner.
Section 5. Optional Redemption.
-------------------
(a) (i) The Corporation shall not have any right to redeem
any shares of Series G Preferred Stock prior to December 30, 2001. Thereafter,
(A) at any time, if no shares of the Series E Preferred Stock remain
outstanding, so long as shares of Common Stock shall have traded on the New York
Stock Exchange (or another national securities exchange or on Nasdaq) on each
trading day during a 30-consecutive trading day period (each of which trading
days shall be after December 30, 2001 and no more than 5 Business Days prior to
the date notice is given of an Optional Redemption (as defined below)) and had
a Closing Price on at least 20 of such trading days in excess of 150% of the
Conversion Amount in effect on such trading day as determined pursuant to
Section 11, subject to the restrictions contained in Section 4 or (B) at any
time after December 30, 2009, the Corporation shall have the right, at its sole
option
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and election, to redeem (the "Optional Redemption") all or a portion of
the shares of Series G Preferred Stock, on not more than 45 nor less than 30
days' notice of the date of redemption (any such date an "Optional Redemption
Date") at a price per share (the "Optional Redemption Price") equal to the sum
of (A) the following prices per share (stated as a percentage of the Liquidation
Preference of such share), (B) an amount per share equal to all accrued and
unpaid dividends thereon, whether or not declared or payable, to the applicable
Optional Redemption Date and (C) the Additional Amount (as defined in Section
11), in immediately available funds:
Optional Redemption Price
If Redeemed as a Percentage of
During the Period Liquidation Preference
----------------- -------------------------
December 30, 2001 to 102.775%
December 29, 2002
December 30, 2002 to 101.850%
December 29, 2003
December 30, 2003 to 100.925%
December 29, 2004
December 30, 2004 and 100%
thereafter
(ii) If the Corporation shall have the right to, or shall
determine to, redeem less than all the shares of Series G Preferred Stock then
outstanding pursuant to paragraph (i), the shares to be redeemed shall be
selected pro rata (as nearly as may be) so that the number of shares redeemed
from each holder shall be the same proportion of all the shares to be redeemed
that the total number of shares of Series G Preferred Stock then held by such
holder bears to the total number of shares of Series G Preferred Stock then
outstanding.
(iii) Notwithstanding the foregoing, any shares of Series G
Preferred Stock redeemed pursuant to this Section 5(a) at any time when holders
of shares of Series G Preferred Stock have the right to require the Corporation
to redeem the shares of Series G Preferred Stock pursuant to Section 6 or an
event giving rise to such a right has occurred shall be redeemed at a price
equal to the higher of the price to be paid pursuant to Section 5(a) and the
price to be paid pursuant to Section 6.
(b) Notice of any Optional Redemption shall specify the
Optional Redemption Date fixed for redemption, the Optional
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Redemption Price, the place or places of payment, that payment will be made
upon presentation and surrender of the shares of Series G Preferred Stock and
that on and after the date of such Optional Redemption dividends will cease
to accrue on such shares and be given by publication in a newspaper of general
circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or
securities exchange requirement), not less than 30, nor more than 45, days
prior to the Optional Redemption Date; and, in any case, a similar notice
shall be mailed at least 30, but not more than 45, days prior to the Optional
Redemption Date to each holder of shares of Series G Preferred Stock, at such
holder's address as it appears on the transfer books of the Corporation. In
order to facilitate the redemption of shares of Series G Preferred Stock,
the Board of Directors may fix a record date for the determination of shares
of Series G Preferred Stock to be redeemed, or may cause the transfer books
of the Corporation for the Series G Preferred Stock to be closed, not more
than 60 days or less than 45 days prior to the Optional Redemption Date.
(c) On the date of any Optional Redemption that is
specified in a notice given pursuant to Section 5(b), the Corporation shall, and
at any time after such notice shall have been mailed and before the Optional
Redemption Date the Corporation may, deposit for the benefit of the holders of
shares of Series G Preferred Stock the funds necessary for such redemption with
a bank or trust company in the Borough of Manhattan, The City of New York, that
is "well capitalized" within the meaning of the applicable bank regulations and
having a capital and surplus of at least $500,000,000. Any moneys so deposited
by the Corporation and unclaimed at the end of two years from the Optional
Redemption Date shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and any holder of
shares of Series G Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Optional Redemption Price. Any interest
accrued on funds deposited pursuant to this Section 5(c) shall be paid from time
to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 5(c) in respect of shares of
Series G Preferred Stock to be redeemed pursuant to Section 5(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Optional Redemption Date (i)
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the shares represented thereby shall no longer be deemed outstanding, (ii) the
rights to receive dividends thereon shall cease to accrue, and (iii) all rights
of the holders of shares of Series G Preferred Stock to be redeemed shall cease
and terminate, excepting only the right to receive the Optional Redemption Price
therefor; provided, however, that if the Corporation shall default in the
-------- -------
payment of the Optional Redemption Price, the shares of Series G Preferred Stock
shall thereafter be deemed to be outstanding and the holders thereof shall have
all of the rights of a holder of Series G Preferred Stock until such time as
such default or failure shall no longer be continuing or shall have been waived
by holders of at least 66-2/3% of the then outstanding shares of Series G Pre-
ferred Stock.
(e) Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of
shares of Series G Preferred Stock receives such notice, and failure to give
such notice by mail, or any defect in such notice, to the holders of any shares
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Series G Preferred Stock. On or after the
Optional Redemption Date fixed for redemption as stated in such notice, each
holder of the shares called for redemption shall surrender the certificate
evidencing such shares to the Corporation at the place designated in such notice
and shall thereupon be entitled to receive payment of the Optional Redemption
Price. If less than all the shares evidenced by any such surrendered
certificate are redeemed, a new certificate shall be issued evidencing the
unredeemed shares.
Section 6. Mandatory Redemption at the
Option of the Holder.
--------------------------
(a) (i) If one or more events constituting a Specified
Corporate Action shall occur, each holder of shares of the Series G Preferred
Stock shall have the right, at such holder's option on the date or dates
specified in Section 6(a)(ii) (the "Specified Corporate Action Redemption
Date"), to require the Corporation to redeem (a "Specified Corporate Action
Redemption") all or any part of the shares of Series G Preferred Stock then held
by such holder as such holder may elect at a price per share equal to the
greater of (I) the sum of (A) the following prices per share (stated as a
percentage of the Liquidation Preference of such share) and (B) an amount per
share equal to all accrued and unpaid dividends thereon, whether or not declared
or payable, to the applicable Specified Corporate Action Redemption Date
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If the Specified Corporate Specified Corporate Action
Action Redemption Date Redemption as a Percentage of
Occurs During the Period Liquidation Preference
------------------------ ----------------------------
December 30, 1994 to 110.4%
June 29, 1995
June 30, 1995 to 116.8%
December 29, 1995
December 30, 1995 to 126.7%
June 29, 1996
June 30, 1996 and 138.0%
thereafter
and (II) the sum of (x) 100% of the Liquidation Preference of such share, (y) an
amount per share equal to all accrued and unpaid dividends thereon, whether or
not declared or payable, to the Specified Corporate Action Redemption Date and
(z) the Additional Amount measured as of the date of any such redemption, in
either case in immediately available funds (the "Specified Corporate Action
Redemption Price"); provided, however, that the holder of any share of Series G
-------- -------
Preferred Stock that was not outstanding for at least ten Business Days prior to
the date of the notice of the Specified Corporate Action shall only be entitled
to receive upon such Specified Corporate Action Redemption the amount specified
in clause (II) above.
(ii) The date fixed for each Specified Corporate Action
Redemption shall be fixed by the Corporation and shall be not less than 60 days
nor more than 90 days following the occurrence of any Specified Corporate Action
giving rise thereto (or, in the case of a Specified Corporate Action as
described in clause (iii) of the definition of "Specified Corporate Action," not
less than 60 days nor more than 90 days following the date on which the
Corporation obtains actual knowledge of such Specified Corporate Action);
provided, however, that in the event of a Specified Corporate Action that
- -------- -------
constitutes a Control Transaction, in addition to the dates fixed for a
Specified Corporate Action Redemption as specified above, an additional
Specified Corporate Action Redemption Date shall be set for the date and time
immediately preceding the consummation of any such Control Transaction (and the
Market Price utilized in determining the Additional Amount for the purposes of
such Specified Corporate Action Redemption shall be the highest price per share
of Common Stock paid by any acquiror in such Control Transaction); provided,
--------
further, that,
- -------
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upon the request of a holder, the Board of Directors shall agree
to extend the date of redemption in respect of any such Specified Corporate
Action (without changing the consideration that is otherwise payable in respect
of such redemption other than with respect to adjustments to the amount of
accrued and unpaid dividends included in such redemption price) to the extent
necessary for any holder of shares of Series G Preferred Stock to avoid
liability under Section 16(b) of the Exchange Act, provided that no such
--------
redemption extension shall be for a period greater than six months. The
Corporation shall, within 5 days of the occurrence of a Specified Corporate
Action (or, in the case of a Specified Corporate Action described in clause
(iii) of the definition of "Specified Corporate Action," within 5 days of the
date on which the Corporation obtains actual knowledge of such Specified Corpo-
rate Action), give notice thereof by publication in a newspaper of general
circulation in the Borough of Manhattan, The City of New York (if such pub-
lication shall be required by applicable law, rule, regulation or securities
exchange requirement), and, in any case, a similar notice shall be mailed to
each holder of shares of the Series G Preferred Stock, at such holder's address
as it appears on the transfer books of the Corporation. Each such notice shall
specify the Specified Corporate Action that has occurred and the date of such
occurrence, the place or places of payment, the then effective Specified
Corporate Action Redemption Price and the date the right of such holder to
require a Specified Corporate Action Redemption shall terminate.
(iii) If the notice sent by the Corporation pursuant to
Section 6(a)(ii) shall contain (i) a form inquiring as to whether a holder of
shares of Series G Preferred Stock intends to surrender the certificate(s)
representing such shares for redemption pursuant to this Section 6(a) and (ii) a
stamped self-addressed envelope for return of such form to the Corporation or
its designee, within ten Business Days of such notice, each holder shall return
such inquiry form to the Corporation and shall indicate in such form the
proportion of such holder's shares of Series G Preferred Stock that will be sur-
rendered for redemption pursuant to this Section 6. If such notice shall
indicate that if a holder does not respond prior to ten Business Days after the
date of such notice that such holder will be deemed to have notified the
Corporation that it will not require the redemption of the shares of Series G
Preferred Stock held by such holder for purposes of Section 3(b) and such
holder does not respond to the Corporation's inquiry prior to ten Business Days
after the date of such notice, such holder will be deemed to have notified the
Corporation that it will not require the redemption of the shares of Series G
Preferred Stock held by such holder for purposes of Section 3(b). Nothing
contained in this Section 6(a)(iii)
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shall effect the right of a holder of Series G Preferred Stock to require the
Corporation to redeem such shares pursuant to Section 6(a)(i).
(b) At any time after December 30, 1995, the holder of any
shares of Series G Preferred Stock shall have the right, at such holder's option
exercisable at any time upon 30 days' notice to the Corporation, to require the
Corporation to redeem (a "Holder's Election Redemption") all or any part of the
shares of Series G Preferred Stock then held by such holder at a price per share
(the "Holder's Election Redemption Price") equal to the sum of (A) 100% of the
Liquidation Preference of such share, (B) an amount per share equal to all
accrued and unpaid dividends thereon, whether or not declared or payable, to the
date specified for such Holder's Election Redemption and (C) the Additional
Amount measured as of the date of any such redemption, in immediately available
funds. Notwithstanding the foregoing, if the redemption of any portion of such
shares would in the judgment of the Board of Directors of the Corporation have a
material adverse effect on the Corporation, then the Corporation may elect to
deliver with respect to such shares, in lieu of cash, notes, including
subordinated notes, of the Corporation ("Notes") (x) having a final maturity
date no later than ten years from the date of issuance, and (y) having such
other terms and conditions as shall result in a determination that such Notes
have a fair market value as of the date of their proposed issuance at least
equal to the sum of (1) the Holder's Election Redemption Price with respect to
such shares and (2) customary underwriting discounts and commissions payable
with respect to the sale of securities of a type comparable to the Notes or
shares of nonconvertible preferred stock ("Redemption Preferred Stock") having
the terms and conditions described in clauses (x) and (y) in lieu of Notes. The
Corporation shall use its best efforts to cause the Notes or the Redemption
Preferred Stock to be registered for immediate resale pursuant to an effective
registration statement under the Securities Act prior to the issuance thereof.
If such registration statement is not effective within 120 days of the date of
such issuance then the annual interest rate of the Notes or the annual dividend
rate of the Redemption Preferred Stock, as applicable, shall be increased by
0.5% per annum until such securities are sold pursuant to an effective
registration statement under the Securities Act. For purposes of this Section
6(b), "fair market value" shall mean the fair market value of the Notes or Re-
demption Preferred Stock, as the case may be, as determined by an investment
banking firm of national standing selected by the Corporation and reasonably
acceptable to the holders of a majority of the shares of Series G Preferred
Stock electing to effect such Holder's Election Redemption. In the case that
the Corporation shall be entitled
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to deliver either Notes or Redemption Preferred Stock, it shall be the
election of the Corporation whether to deliver such Notes or Redemption
Preferred Stock, except that, if, the sale of the security to be delivered
by the Corporation to effect a Holder's Election Redemption would give rise
to an additional liability on the part of such holder upon the sale thereof
and it shall so notify the Corporation in writing, the Corporation shall
deliver to such holder the other type of security specified in such notice.
(c) Each holder of shares of the Series G Preferred Stock
shall have the right, at such holder's option exercisable at any time on 30
days' notice to the Corporation on or after December 30, 2009 (the date of any
such exercise, the "Special Redemption Date"), to require the Corporation to
redeem (a "Special Redemption") all or any part of the shares of Series G
Preferred Stock then held by such holder as such holder may elect by written
notice delivered at least 30 days prior to the Special Redemption Date at a
price per share equal to the sum of (A) 100% of the Liquidation Preference of
such share, (B) an amount per share equal to all accrued and unpaid dividends
thereon whether or not declared or payable to the Special Redemption Date and
(C) the Additional Amount, determined as of the date immediately prior to the
Special Redemption Date (the "Special Redemption Price") in immediately
available funds.
(d) On the date fixed for any Specified Corporate Action
Redemption, Holder's Election Redemption or Special Redemption, each holder of
shares of Series G Preferred Stock who elects to have shares of Series G
Preferred Stock held by it redeemed shall surrender the certificate representing
such shares to the Corporation (i) at the place designated in such notice in the
case of a Specified Corporate Action Redemption or (ii) at the Corporation's
principal place of business to be maintained by it, in the case of a Holder's
Election Redemption or Special Redemption, together with an election to have
such redemption made and shall thereupon be entitled to receive payment therefor
provided in this Section 6. If less than all the shares represented by any such
surrendered certificate are redeemed, a new certificate shall be issued rep-
resenting the unredeemed shares. From and after the date of such redemption (i)
the rights to receive dividends thereon shall cease to accrue and (ii) all
rights of the holders of shares of Series G Preferred Stock so redeemed shall
cease and terminate, excepting only the right to receive the Specified Corporate
Action Redemption Price or Holder's Election Redemption Price or Special
Redemption Price therefor, as applicable; provided, however, that if the
-------- -------
Corporation shall default in the payment of the applicable redemption price or,
in the case of a Holder's Election Redemption, elect to postpone payment thereof
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in accordance with Section 6(b), the shares of Series G Preferred Stock that
were to be redeemed shall thereafter be deemed to be outstanding and the holders
thereof shall have all of the rights of a holder of Series G Preferred Stock
until such time as such default shall no longer be continuing or shall have been
waived by holders of at least 66-2/3% of the then outstanding shares of Series G
Preferred Stock or, in the case of a Holder's Election Redemption, so postponed,
the date on which the Holder's Election Redemption Price is paid.
Section 7. Redemption Upon Maturity.
------------------------
(a) On December 30, 2034 (the "Maturity Date"), the
Corporation shall redeem (the "Maturity Redemption") the remaining outstanding
shares of the Series G Preferred Stock at a price per share (the "Maturity
Redemption Price") equal to the sum of (A) 100% of the Liquidation Preference
per share, (B) an amount equal to accrued and unpaid dividends thereon, whether
or not declared or payable, to the Maturity Date and (C) the Additional Amount,
determined as of the date immediately prior to the Maturity Date, in immediately
available funds.
(b) Notice of the Maturity Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication shall be required by applicable law,
rule, regulation or securities exchange requirement), not less than 30, nor more
than 60, days prior to the Maturity Date and, in any case, a similar notice
shall be mailed at least 30, but not more than 60, days prior to the Maturity
Date to each holder of shares of Series G Preferred Stock, at such holder's
address as it appears on the transfer books of the Corporation.
(c) On the Maturity Date, the Corporation shall, and at any
time after such notice shall have been mailed and before the Maturity Date the
Corporation may, deposit for the benefit of the holders of shares of Series G
Preferred Stock the funds necessary for such redemption with a bank or trust
company in the Borough of Manhattan, The City of New York, that is "well
capitalized" within the meaning of the applicable banking regulations and having
a capital and surplus of at least $500,000,000. Any moneys so deposited by the
Corporation and unclaimed at the end of two years from the date designated for
such redemption shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and any holder of
shares of Series G Preferred Stock to be redeemed shall look
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only to the Corporation for the payment of the Maturity Redemption Price. Any
interest accrued and unpaid on funds deposited pursuant to this Section 5(c)
shall be paid from time to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 7(c) in respect of shares of
Series G Preferred Stock to be redeemed pursuant to Section 7(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Maturity Date, (i) the rights
to receive dividends thereon shall cease to accrue and (ii) all rights of the
holders of shares of Series G Preferred Stock shall cease and terminate,
excepting only the right to receive the Maturity Redemption Price therefor;
provided, however, that if the Corporation shall default in the payment of the
- -------- -------
Maturity Redemption Price, the shares of Series G Preferred Stock that were to
be redeemed shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series G Preferred Stock until such
time as such default shall no longer be continuing.
Section 8. Acquired Shares.
---------------
Any shares of Series G Preferred Stock exchanged, redeemed,
purchased or otherwise acquired by the Corporation or any of its Subsidiaries in
any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares of Series G Preferred Stock shall upon
their cancellation become authorized but unissued shares of preferred stock, par
value $4.00 per share, of the Corporation and, upon the filing of an appropriate
certificate with the Department of State of the State of New York, may be
reissued as part of another series of preferred stock, par value $4.00 per
share, of the Corporation subject to the conditions or restrictions on issuance
set forth herein, but in any event may not be reissued as shares of Series G
Preferred Stock or Parity Stock unless all of the issued and outstanding shares
of Series G Preferred Stock shall have already been redeemed or exchanged.
Section 9. Liquidation, Dissolution or Winding Up.
--------------------------------------
(a) If the Corporation shall commence a voluntary case
under the United States bankruptcy laws or any applicable bankruptcy,
insolvency or similar law of any other country, or consent to the entry of an
order for relief in an involuntary case under any such law or to the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
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other similar official) of the Corporation or of any substantial part of its
property, or make an assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due (any such
event, a "Voluntary Liquidation Event"), or if a decree or order for relief in
respect of the Corporation shall be entered by a court having jurisdiction in
the premises in an involuntary case under the United States bankruptcy laws or
any applicable bankruptcy, insolvency or similar law of any other country, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Corporation or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and on
account of any such event the Corporation shall liquidate, dissolve or wind up,
or if the Corporation shall otherwise liquidate, dissolve or wind up, no
distribution shall be made (i) to the holders of shares of Junior Stock unless,
prior thereto, the holders of shares of Series G Preferred Stock shall have
received (A) if a Voluntary Liquidation Event shall have occurred, the Optional
Redemption Price with respect to each share and (B) if a Voluntary Liquidation
Event shall not have occurred, the Liquidation Preference and all accrued and
unpaid dividends, whether or not declared or currently payable, to the date of
distribution, with respect to each share, or (ii) to the holders of shares of
Parity Stock, except distributions made ratably on the Series G Preferred Stock
and all Parity Stock in proportion to the total amounts to which the holders of
all shares of the Series G Preferred Stock (which amounts are set forth in
clauses (A) and (B) above) and Parity Stock are entitled upon such liquidation,
dissolution or winding up.
(b) Neither the consolidation or merger of the Corporation
with or into any other Person nor the sale or transfer of all or any part of the
Corporation's assets for cash, securities or other property shall be deemed to
be a liquidation, dissolution or winding up of the Corporation for purposes of
this Section 9.
Section 10. Exchange.
--------
(a) Subject to the provisions of this Section 10, the
Corporation shall have the right, with the consent of the holders of all of the
outstanding shares of Series G Preferred Stock (which consent may be withheld
for any reason whatsoever), at any time but on only one occasion, to exchange
all (but not less than all) of the shares of Series G Preferred Stock for
Subordinated Notes of the Corporation ("Subordinated Notes"), at a price per
share equal to the Liquidation Preference per share, with the Subordinated Notes
valued for such
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purpose at their face value. Simultaneously with such exchange the Corporation
shall pay to each holder of Series G Preferred Stock an amount per share in cash
equal to all accrued and unpaid dividends thereon, whether or not declared or
currently payable, to the date fixed for exchange thereof. The Subordinated
Notes shall have an annual interest rate equal to the annual dividend rate on
Series G Preferred Stock and shall contain other terms substantially similar to
the Series G Preferred Stock, including the date of maturity thereof.
(b) Notice of an exchange of shares of Series G Preferred
Stock pursuant to Section 10(a) shall be given by publication in a newspaper of
general circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or securities
exchange requirement), not less than 30, nor more than 60, days prior to the
date fixed for exchange; and, in any case, a similar notice shall be mailed at
least 30, but not more than 60, days prior to the date fixed for exchange to
each holder at such holder's address as it appears on the transfer books of the
Corporation. In order to facilitate the exchange of shares of Series G
Preferred Stock hereunder the Board of Directors may fix a record date for the
determination of shares of Series G Preferred Stock to be exchanged, or may
cause the transfer books of the Corporation for the Series G Preferred Stock to
be closed, not more than 60 days or less than 30 days prior to the date fixed
for exchange.
(c) On the date of any exchange being made pursuant to
Section 10(a) that is specified in a notice given pursuant to Section 10(b), the
Corporation shall, and at any time after the date that is 10 days prior to the
date of exchange the Corporation may, deposit for the benefit of the holders of
shares of Series G Preferred Stock to be exchanged (i) the Subordinated Notes
necessary for such exchange and (ii) an amount in cash equal to all dividends
payable with respect thereto upon such exchange with a bank or trust company in
the Borough of Manhattan, The City of New York, that is "well capitalized"
within the meaning of the applicable banking regulations and having a capital
and surplus of at least $500,000,000. Any Subordinated Notes so deposited by
the Corporation and unclaimed at the end of two years from the date designated
for such exchange shall revert to the Corporation. After such reversion, any
such bank or trust company shall, upon demand, return to the Corporation such
unclaimed Subordinated Notes and thereupon such bank or trust company shall be
relieved of all responsibility in respect thereof and any holder of shares of
Series G Preferred Stock to be exchanged shall look only to the Corporation for
the delivery of the Subordinated Notes. Any interest accrued on Subordinated
Notes
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deposited pursuant to this Section 10(c) shall accrue for the accounts of, and
be payable to, the holders of shares of Series G Preferred Stock to be exchanged
therefor.
(d) Notice of exchange having been given as aforesaid and
not having been deemed terminated as aforesaid, upon the deposit of Subordinated
Notes pursuant to clause (i) of Section 10(c) and the deposit of the cash
referred to in clause (ii) of Section 10(c) in respect of shares of Series G
Preferred Stock to be exchanged pursuant to Section 10(a), notwithstanding that
any certificates for such shares shall not have been surrendered for
cancellation, from and after the date of exchange designated in the notice of
exchange (i) the shares represented thereby shall no longer be deemed
outstanding, (ii) the rights to receive dividends thereon (except as provided in
paragraph (b) above) shall cease to accrue, and (iii) all rights of the holders
of shares of Series G Preferred Stock to be exchanged shall cease and terminate,
excepting only the right to receive the Subordinated Notes therefor and the
right to receive the dividends described in paragraph (b) above; provided,
--------
however, that if the Corporation shall default in the execution and delivery of
- -------
the Convertible Notes, the shares of Series G Preferred Stock that were to be
exchanged shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series G Preferred Stock until such
time as such default shall no longer be continuing or shall have been waived by
holders of at least 66-2/3% of the then outstanding shares of Series G Preferred
Stock.
Section 11. Additional Amount.
-----------------
(a) For the purposes of this Article 3, "Additional Amount"
shall mean an amount per share equal to the product of (i) the excess of the sum
of (1) the Market Price of a share of Common Stock and (2) if the Corporation
shall have issued a right or rights with respect to its outstanding shares of
Common Stock pursuant to a shareholder rights plan, "poison pill" or similar
arrangement, during the period commencing on the "distribution date" of such
right or rights (i.e., the date on which such right or rights commence to trade
----
separately from the Common Stock) and ending on the "triggering date" of such
right or rights (i.e., the date on which such right or rights commence to be
----
exercisable), the Market Price of such right or rights over the Conversion
Amount, in effect as hereinafter determined and (ii) (x) the Liquidation
Preference divided by (y) such Conversion Amount, in all cases calculated as of
the applicable determination date. The Additional Amount shall in no event be
less than zero. The Conversion Amount initially shall be $17.75, and shall
thereafter be subject to adjustment as set forth in Section 11(b). For the
purpose of calculating
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the Additional Amount in connection with an Optional Redemption, Specified
Corporate Action Redemption, Special Redemption or Holder's Election Redemption,
except as otherwise set forth in Section 6(a)(ii), the Market Price of the
Common Stock and, if applicable, rights shall be the average of the Market Price
of such securities on the five trading days immediately preceding and the five
trading days immediately following the date of notice of such redemption.
(b) The Conversion Amount shall be subject to adjustment as
follows:
(i) In case the Corporation shall at any time or from
time to time (A) pay a dividend or make a distribution on the outstanding shares
of Common Stock in Common Stock (other than pursuant to a dividend reinvestment
plan approved by the Corporation's Board of Directors), (B) subdivide the
outstanding shares of Common Stock into a larger number of shares, (C) combine
the outstanding shares of Common Stock into a smaller number of shares or (D)
issue any shares of its capital stock in a reclassification of the Common Stock,
then, and in each such case, the Conversion Amount in effect immediately prior
to such event shall be adjusted so that if the holder of any share of Series G
Preferred Stock were entitled to convert such share into such number of shares
of Common Stock as equals the Liquidation Preference divided by the Conversion
Amount and such holder thereafter surrendered such share for conversion, such
holder would be entitled to receive the number of shares of Common Stock or
other securities of the Corporation that such holder would have owned or would
have been entitled to receive upon or by reason of any of the events described
above had such share of Series G Preferred Stock been converted immediately
prior to the occurrence of such event. An adjustment made pursuant to this
Section 11(b)(i) shall become effective retroactively (A) in the case of any
such dividend or distribution, to the opening of business on the day immediately
following the close of business on the record date for the determination of
holders of Common Stock entitled to receive such dividend or distribution or (B)
in the case of any such subdivision, combination or reclassification, to the
close of business on the day upon which such corporate action becomes effective.
(ii) In case the Corporation shall at any time or from
time to time issue or sell shares of Common Stock (or securities convertible
into or exchangeable for shares of Common Stock, or any options, warrants or
other rights to acquire shares of Common Stock (other than options granted to
any employee or director of the Corporation pursuant to a stock option plan
approved by the shareholders of the Corporation))
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for a consideration per share less than the Conversion Amount then in effect at
the record date or issuance date, as the case may be (the "Date") referred to in
the following sentence, including, without limitation, upon exercise of rights
issued pursuant to a shareholder rights plan, "poison pill" or similar
arrangement (treating the price per share of any security convertible or
exchangeable or exercisable into Common Stock as equal to (A) the sum of the
price for such security convertible, exchangeable or exercisable into Common
Stock plus any additional consideration payable (without regard to any anti-
dilution adjustments) upon the conversion, exchange or exercise of such security
into Common Stock divided by (B) the number of shares of Common Stock initially
underlying such convertible, exchangeable or exercisable security), other than
issuances or sales for which an adjustment is made pursuant to another paragraph
of this Section 11(b), then, and in each such case, the Conversion Amount then
in effect shall be adjusted by dividing the Conversion Amount in effect on the
day immediately prior to the Date by a fraction (x) the numerator of which shall
be the sum of the number of shares of Common Stock outstanding immediately prior
to the Date plus the number of additional shares of Common Stock issued or to be
issued (or the maximum number into which such convertible or exchangeable
securities initially may convert or exchange or for which such options, warrants
or other rights initially may be exercised) and (y) the denominator of which
shall be the sum of the number of shares of Common Stock outstanding immediately
prior to the Date plus the number of shares of Common Stock that the aggregate
consideration (if any of such aggregate consideration is other than cash, as
valued by the Board of Directors including a majority of the Directors who are
not officers or employees of the Corporation or any of its Subsidiaries, which
determination shall be conclusive and described in a resolution of the Board of
Directors) for the total number of such additional shares of Common Stock so
issued (or into which such convertible or exchangeable securities may convert or
exchange or for which such options, warrants or other rights may be exercised
plus the aggregate amount of any additional consideration initially payable upon
conversion, exchange or exercise of such security) would purchase at the
Conversion Amount. Such adjustment shall be made whenever such shares,
securities, options, warrants or other rights are issued, and shall become
effective retroactively to a date immediately following the close of business
(i) in the case of issuance to stockholders of the Corporation, as such, on the
record date for the determination of stockholders entitled to receive such
shares, securities, options, warrants or other rights and (ii) in all other
cases, on the date ("issuance date") of such issuance; provided, however, that
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the determination as to whether an adjustment is required to be made pursuant to
this Section
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11(b)(ii) shall only be made upon the issuance of such shares or
such convertible or exchangeable securities, options, warrants or other rights,
and not upon the issuance of the security into which such convertible or
exchangeable security converts or exchanges, or the security underlying such
option, warrants or other right; provided, further, that if any convertible or
-------- -------
exchangeable securities, options, warrants or other rights (or any portions
thereof) that shall have given rise to an adjustment pursuant to this Section
11(b)(ii) shall have expired or terminated without the exercise thereof and/or
if by reason of the terms of such convertible or exchangeable securities,
options, warrants or other rights there shall have been an increase or
increases, with the passage of time or otherwise, in the price payable upon the
exercise or conversion thereof, then the Conversion Amount hereunder shall be
readjusted (but to no greater extent than originally adjusted) on the basis of
(x) eliminating from the computation any additional shares of Common Stock
corresponding to such convertible or exchangeable securities, options, warrants
or other rights as shall have expired or terminated, (y) treating the additional
shares of Common Stock, if any, actually issued or issuable pursuant to the
previous exercise of such convertible or exchangeable securities, options,
warrants or other rights as having been issued for the consideration actually
received and receivable therefor and (z) treating any of such convertible or
exchangeable securities, options, warrants or other rights that remain
outstanding as being subject to exercise or conversion on the basis of such
exercise or conversion price as shall be in effect at the time.
(iii) In case the Corporation shall at any time or from
time to time distribute to all holders of shares of its Common Stock (including
any such distribution made in connection with a consolidation or merger in which
the Corporation is the resulting or surviving corporation and the Common Stock
is not changed or exchanged or a redemption of any rights or other securities
issued pursuant to a shareholder rights plan, "poison pill" or similar arrange-
ment) cash, evidences of indebtedness of the Corporation or another issuer,
securities of the Corporation or another issuer or other assets (excluding (A)
Permitted Dividends described in clause (B) of the definition thereof and (B)
securities for which adjustment is made under Section 11(b)(i) or Section
11(b)(ii)), then, and in each such case, the Conversion Amount then in effect
shall be adjusted by dividing the Conversion Amount in effect immediately prior
to the date of such distribution by a fraction (x) the numerator of which shall
be the Current Market Price of the Common Stock on the record date referred to
below and (y) the denominator of which shall be such Current Market Price of the
Common Stock less the then Fair Market Value (as determined by
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the Board of Directors of the Corporation, which determination shall be
conclusive) of the portion of the cash, evidences of indebtedness, securities or
other assets so distributed or of such subscription rights or warrants
applicable to one share of Common Stock (but such denominator not to be less
than one). Such adjustment shall be made whenever any such distribution is made
and shall become effective retroactively to a date immediately following the
close of business on the record date for the determination of stockholders
entitled to receive such distribution.
(iv) In the case the Corporation at any time or from
time to time shall take any action affecting its Common Stock, other than an
action described in any of Section 11(b)(i) through Section 11(b)(iii),
inclusive, then, the Conversion Amount shall be adjusted in such manner and at
such time as the Board of Directors of the Corporation (other than Purchaser
Designees or directors elected pursuant to Section 3(b)) in good faith
determines to be equitable in the circumstances (such determination to be
evidenced in a resolution, a certified copy of which shall be mailed to the
holders of the Series G Preferred Stock).
(v) The Corporation may make such reductions in the
Conversion Amount, in addition to those required by subparagraphs (i), (ii),
(iii) or (iv) of this Section 11(b), as the Board of Directors considers to be
advisable in order to avoid or to diminish any income tax to holders of Common
Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes.
(vi) Notwithstanding anything contained in this Section
11(b), no adjustment to the Conversion Amount shall be made with respect to any
rights issued pursuant to a shareholder rights plan, "poison pill" or similar
arrangement unless the "triggering date" (i.e. the date on which such rights
----
commence to be exercisable) shall have occurred or such rights shall have been
redeemed, in which event adjustments under clause (ii) and clause (iii),
respectively, shall be made.
(c) If the Corporation shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the Conversion Amount then in
effect shall be required by reason of the taking of such record.
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(d) Upon any increase or decrease in the Conversion Amount,
then, and in each such case, the Corporation promptly shall deliver to each
registered holder of Series G Preferred Stock at least 10 Business Days prior to
effecting any of the foregoing transactions a certificate, signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Corporation, setting forth in
reasonable detail the event requiring the adjustment and the method by which
such adjustment was calculated and specifying the increased or decreased Con-
version Amount then in effect following such adjustment.
Section 12. Sinking Fund.
-------------
(a) So long as any shares of Series G Preferred Stock shall
be outstanding, the Corporation shall, on the final business day (any such date,
the "Sinking Fund Date") of each calendar year after 2003, (i) set aside a sum
of money equal to 3-1/3% of the aggregate liquidation preference of the shares
of Series G Preferred Stock then outstanding, and (ii) apply such money to
redeem such number of shares of Series G Preferred Stock at the Sinking Fund
Redemption Price (the Corporation's obligations described in this paragraph in
respect of any Sinking Fund Date being hereinafter referred to as the "Sinking
Fund Obligation" for such date) at a price per share (the "Sinking Fund
Redemption Price") equal to the sum of (A) the Liquidation Preference of such
share, (B) an amount per share equal to all accrued and unpaid dividends
thereon, whether or not declared or payable, to the applicable Sinking Fund Date
and (C) the Additional Amount (as defined in Section 11), determined as of the
date immediately prior to the Sinking Fund Date, in immediately available funds;
provided, however, that if the Corporation for any reason fails to discharge its
- -------- -------
Sinking Fund Obligation on any Sinking Fund Date, such Sinking Fund Obligation,
to the extent not discharged, shall become an additional Sinking Fund Obligation
for each succeeding Sinking Fund Date until fully discharged; provided, further,
-------- -------
that no shares of Series G Preferred Stock purchased or acquired by the
Corporation otherwise than through redemption pursuant to this paragraph or
pursuant to an Optional Redemption may be credited against the Sinking Fund
Obligation in respect of any Sinking Fund Date.
(b) The shares to be redeemed pursuant to paragraph (a)
shall be selected pro rata (as nearly as may be) so that the number of shares
redeemed from each holder shall be the same proportion of all the shares to be
redeemed that the total number of shares of Series G Preferred Stock then held
by such holder bears to the total number of shares of Series G Preferred Stock
then outstanding.
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(c) Notice of the Sinking Fund Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication shall be required by applicable law,
rule, regulation or securities exchange requirement), not less than 30, nor more
than 60, days prior to the Sinking Fund Date and, in any case, a similar notice
shall be mailed at least 30, but not more than 60, days prior to the Sinking
Fund Date to each holder of shares of Series G Preferred Stock, at such holder's
address as it appears on the transfer books of the Corporation.
(d) The shares to be redeemed pursuant to paragraph (a)
shall be selected pro rata (as nearly as may be) so that the number of shares
redeemed from each holder shall be the same proportion of all the shares to be
redeemed that the total number of shares of Series G Preferred Stock then held
by such holder bears to the total number of shares of Series G Preferred Stock
then outstanding.
(e) On the Sinking Fund Date, the Corporation shall, and at
any time after such notice shall have been mailed and before the Sinking Fund
Date the Corporation may, deposit for the benefit of the holders of shares of
Series G Preferred Stock the funds necessary for such redemption with a bank or
trust company in the Borough of Manhattan, The City of New York, that is "well
capitalized" within the meaning of the applicable banking regulations and having
a capital and surplus of at least $500,000,000. Any moneys so deposited by the
Corporation and unclaimed at the end of two years from the date designated for
such redemption shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and any holder of
shares of Series G Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Sinking Fund Redemption Price. Any interest
accrued and unpaid on funds deposited pursuant to this Section 5(c) shall be
paid from time to time to the Corporation for its own account.
(f) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 12(c) in respect of shares of
Series G Preferred Stock to be redeemed pursuant to Section 12(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Sinking Fund Date, (i)
the rights to receive dividends thereon shall cease to accrue and (ii) all
rights of the holders of shares of Series G Preferred Stock shall cease
and terminate, excepting only the right to
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receive the Sinking Fund Redemption Price therefor; provided, however, that
-------- -------
if the Corporation shall default in the payment of the Sinking Fund Redemption
Price, the shares of Series G Preferred Stock that were to be redeemed shall
thereafter be deemed to be outstanding and the holders thereof shall have all
of the rights of a holder of Series G Preferred Stock until such time as such
default shall no longer be continuing.
Article 4. Series H Preferred Stock.
------------------------
Section 1. Designation and Number.
----------------------
(a) The shares of such series shall be designated as
"Cumulative Preferred Stock, Series H" (the "Series H Preferred Stock"). The
number of shares initially constituting the Series H Preferred Stock shall be
400,000 which number may be decreased (but not increased) by the Board of
Directors without a vote of stockholders; provided, however, that such number
may not be decreased below the sum of (x) the number of then outstanding shares
of Series H Preferred Stock and (y) such number of shares as may be necessary to
satisfy the dividend payments referenced in Section 2 hereof.
(b) The Series H Preferred Stock shall, with respect to
dividend rights and rights on liquidation, dissolution or winding up, rank pari
----
passu with the Corporation's $2.50 Cumulative Convertible Preferred Stock,
- -----
Series A (the "Series A Preferred Stock"), $2.50 Cumulative Preferred Stock,
Series B (the "Series B Preferred Stock"), Cumulative Convertible Preferred
Stock, Series E (the "Series E Preferred Stock"), Cumulative Preferred Stock,
Series F (the "Series F Preferred Stock"), Cumulative Preferred Stock, Series G
(the "Series G Preferred Stock"), Cumulative Preferred Stock, Series T (the
"Series T Preferred Stock" and together with the Series E Preferred Stock,
Series F Preferred Stock, Series G Preferred Stock and Series H Preferred Stock,
the "Chicago Preferred Stock") and the New Preferred Stock (if any) (the Series
A Preferred Stock, Series B Preferred Stock, Chicago Preferred Stock (other than
the Series H Preferred Stock) and New Preferred Stock (if any) are collectively
defined for the purposes of this Article 4 as the "Other Preferred Stock") and
prior to all other classes and series of capital stock of the Corporation now or
hereafter authorized including, without limitation, the Common Stock, par
value $1.00 per share, of the Corporation (the "Common Stock").
(c) Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Article 6 below.
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Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series H Preferred Stock, in
preference to the holders of shares of Common Stock and of any shares of other
capital stock of the Corporation other than the Other Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
the assets of the Corporation at the time legally available therefor, cumulative
cash dividends at an annual rate on the Liquidation Preference thereof equal to
12%, calculated on the basis of a 360-day year consisting of twelve 30-day
months, accruing and payable in equal quarterly payments, in immediately
available funds or, with respect to any dividends declared before the third
anniversary of the Issue Date, in additional shares of Series H Preferred Stock
having an aggregate Liquidation Preference equal to the aggregate amount of such
dividends (provided, however, that to the extent the amount of any such dividend
-------- -------
payable to any holder, valued at the Liquidation Preference thereof, does not
equal an integral multiple of one one-twentieth (1/20th) of a share of Series H
Preferred Stock, such fractional amount shall be paid in cash to such holder),
on the Business Day immediately preceding the last day of March, June, September
and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date") commencing on the Business Day immediately
preceding December 31, 1994; provided, however, that with respect to such first
-------- -------
Quarterly Dividend Payment Date, the holders of shares of Series H Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors, out of the assets of the Corporation at the time legally available
therefor, a cumulative dividend in respect of each share of Series H Preferred
Stock in the amount of (i) 12% of the Liquidation Preference multiplied by (ii)
a fraction equal to (A) the number of days from (and including) the Issue Date
to (but excluding) such Quarterly Dividend Payment Date divided by (B) 360. No
interest shall be payable in respect of any dividend payment on the Series H
Preferred Stock that may be in arrears.
(b) Dividends payable pursuant to Section 2(a) shall begin
to accrue and be cumulative from the Issue Date, and shall accrue on a daily
basis, in each case whether or not declared. Dividends paid on the shares of
Series H Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares of Series H Preferred Stock
at the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series H Preferred Stock entitled to
receive payment of a dividend declared thereon, which record date shall be not
more than 60 days nor less than 10
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days prior to the date fixed for the payment thereof. Accumulated but unpaid
dividends for any past quarterly dividend periods may be declared and paid at
any time, without reference to any regular Quarterly Dividend Payment Date, to
holders of record on such date, not more than 60 nor less than 10 days preceding
the payment date thereof, as may be fixed by the Board of Directors.
(c) The holders of shares of Series H Preferred Stock shall
not be entitled to receive any dividends or other distributions except as
provided herein.
Section 3. Voting Rights.
-------------
In addition to any voting rights provided by law, the
holders of shares of Series H Preferred Stock shall have the following voting
rights:
(a) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders of at
least 66-2/3% of the outstanding shares of Series H Preferred Stock, voting
separately as a single class, in person or by proxy, at a special or annual
meeting of stockholders called for the purpose, shall be necessary to (i)
authorize, adopt or approve an amendment to the Certificate of Incorporation
that would increase or decrease the par value of the shares of Series H
Preferred Stock, or alter or change the powers, preferences or special rights of
the shares of Series H Preferred Stock, (ii) amend, alter or repeal the
Certificate of Incorporation so as to affect the shares of Series H Preferred
Stock adversely or (iii) effect the voluntary liquidation, dissolution, winding
up, recapitalization or reorganization of the Corporation, or the consolidation
or merger of the Corporation with or into any other Person, or the sale or other
distribution to another Person of all or substantially all of the assets of the
Corporation; provided, however, that no separate vote of the holders of Series H
-------- -------
Preferred Stock shall be required to effect any of the transactions described in
clause (iii) above unless such transaction would either require a class vote
pursuant to clause (i) or (ii) above or would require a vote by any shareholders
of the Corporation (other than pursuant to this sentence); provided further,
-------- -------
that no separate vote of the holders of the Series H Preferred Stock as a class
shall be required in the case of a recapitalization, reorganization,
consolidation or merger of, or sale by, the Corporation if (A) (a) such re-
capitalization, reorganization, consolidation, merger or sale constitutes a
Specified Corporate Action, (b) the Corporation has sufficient funds legally
available to it (after giving effect to such transaction) to redeem, at the then
applicable
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price hereunder and pursuant to the terms hereof, all the outstanding
shares of Series H Preferred Stock, (c) such redemption shall not be prohibited
by any agreement to which the Corporation or any of its Subsidiaries is a party,
by applicable law or otherwise, (d) the Board of Directors of the Corporation,
including a majority of the directors who are not officers or employees of the
Corporation, shall have adopted a resolution confirming that such funds are
available and that the holders of Series H Preferred Stock have the right to re-
quire such redemption and (e) the Corporation shall have set aside sufficient
funds through the Specified Corporation Action Redemption Date to redeem the
shares of Series H Preferred Stock held by such holders (except that no funds
need be set aside with respect to such shares held by any such holder who has
theretofore notified the Corporation (whether pursuant to Section 6(a)(iii) or
otherwise) that it will not require redemption of such shares) or (B) (1) the
Corporation shall be the resulting or surviving corporation, (2) the resulting
or surviving corporation will have after such recapitalization, reorganization,
consolidation or merger no Senior Stock or Parity Stock either authorized or
outstanding (except such Parity Stock of the Corporation as may have been
authorized or outstanding immediately preceding such consolidation or merger) or
such stock of the resulting or surviving corporation (having the same powers,
preferences and special rights of any such Parity Stock) as may be issued in
exchange therefor), (3) each holder of shares of Series H Preferred Stock
immediately preceding such recapitalization, reorganization, consolidation or
merger will receive in exchange therefor the same number of shares of stock,
with the same preferences, rights and powers, of the resulting or surviving
corporation, (4) after such recapitalization, reorganization, consolidation or
merger the resulting or surviving corporation shall not be in breach of any of
the terms hereof, any of the Material Provisions of the Securities Purchase
Agreement or any of its material obligations under the Registration Rights
Agreement and (5) all or substantially all the holders of the outstanding shares
of capital stock of the Corporation immediately prior to such consolidation or
merger are entitled to receive shares representing 50% or more of the then
outstanding shares of capital stock of the resulting or surviving corporation
entitled to vote generally in the election of directors.
(b) If on any date (i) the Corporation shall have failed to
declare, or shall have failed to pay, the full amount of dividends payable on
any series of Chicago Preferred Stock for six quarterly dividend periods or (ii)
a breach of any of the Material Provisions of the Securities Purchase Agreement
or any of the Corporation's material obligations under the Registration Rights
Agreement shall have occurred, then the number
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of directors constituting the Board of Directors shall, without further
action, be increased by two and the holders of shares of Series H Preferred
Stock shall have, in addition to the other voting rights set forth herein
with respect to the Series H Preferred Stock, the exclusive right, together
with the holders of all other series of Chicago Preferred Stock, voting
separately as a single class together with the holders of such other series
of Chicago Preferred Stock, to elect two directors of the Corporation to
fill such newly created directorship, by written consent as provided herein,
or at a special meeting of such holders called as provided herein. Any such
additional directors shall continue as directors (subject to reelection or
removal as provided in Section 3(c)(ii)) and the holders of Series H Preferred
Stock shall have such additional voting rights until such time as (A)
dividends then payable on all series of Chicago Preferred Stock shall have
been declared and paid in full and (B) there shall exist no breach of any of the
Material Provisions of the Securities Purchase Agreement or any of the Corpora-
tion's material obligations under the Registration Rights Agreement, as the case
may be, at which time such additional directors shall cease to be directors, the
number of directors constituting the Board of Directors shall be reduced by two
and such additional voting rights of the holders of all series of Chicago
Preferred Stock shall terminate, subject to revesting in the event of each and
every subsequent event of the character indicated above.
(c) (i) The foregoing right of holders of shares of Series
H Preferred Stock to take any action as provided in Section 3(b) may be
exercised at any annual meeting of stockholders or at a special meeting of
holders of shares of Chicago Preferred Stock, held for such purpose as
hereinafter provided or at any adjournment thereof, or by the written consent,
delivered to the Secretary of the Corporation, of the holders of the minimum
number of shares required to take such action.
So long as such right to vote continues (and unless such
right has been exercised by written consent of the minimum number of shares
required to take such action), the President of the Corporation may call, and
upon the written request of holders of record of at least 5% of the aggregate
outstanding shares of Chicago Preferred Stock, addressed to the Secretary of the
Corporation at the principal office of the Corporation, shall call, a special
meeting of the holders of shares entitled to vote as provided herein. Such
meeting shall be held within 30 days after delivery of such request to the
Secretary, at the place and upon the notice provided by law and in the by-laws
of the Corporation for the holding of meetings of stockholders.
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(ii) At each meeting of stockholders at which the holders of
shares of Series H Preferred Stock shall have the right, voting separately as a
single class together with the holders of all other series of Chicago Preferred
Stock, to elect two directors of the Corporation as provided in Section 3(b) or
to take any action, the presence in person or by proxy of the holders of record
of one-third of the total aggregate number of shares of Chicago Preferred Stock
then outstanding and entitled to vote on the matter shall be necessary and suf-
ficient to constitute a quorum. At any such meeting or at any adjournment
thereof:
(A) the absence of a quorum of the holders of shares of
Chicago Preferred Stock, shall not prevent the election of
directors other than those to be elected by the holders of shares
of Chicago Preferred Stock, and the absence of a quorum of the
holders of shares of any other class or series of capital stock
shall not prevent the election of directors to be elected by the
holders of shares of Chicago Preferred Stock, or the taking of
any action as provided in Section 3(b); and
(B) in the absence of a quorum of the holders of shares of
Chicago Preferred Stock, a majority of the holders of such shares
present in person or by proxy shall have the power to adjourn the
meeting as to the actions to be taken by the holders of shares of
Chicago Preferred Stock, from time to time and place to place
without notice other than announcement at the meeting until a
quorum shall be present.
For taking of any action as provided in Section 3(a) or
Section 3(b) by the holders of shares of Series H Preferred Stock, each such
holder shall have one vote for each share of such stock standing in his name on
the transfer books of the Corporation as of any record date fixed for such
purpose or, if no such date be fixed, at the close of business on the Business
Day next preceding the day on which notice is given, or if notice is waived, at
the close of business on the Business Day next preceding the day on which the
meeting is held; provided, however, that shares of Chicago Preferred Stock held
-------- -------
by the Corporation or any Subsidiary of the Corporation shall not be deemed to
be outstanding for purposes of taking any action as provided in this Section 3.
Each director elected by the holders of shares of Chicago
Preferred Stock, as provided in Section 3(b) shall, unless his term shall expire
earlier in accordance with the provisions thereof, hold office until the annual
meeting of
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<PAGE>
stockholders next succeeding his election or until his successor, if
any, is elected and qualified.
If any director so elected by the holders of Chicago
Preferred Stock shall cease to serve as a director before his term shall expire
(except by reason of the termination of the voting rights accorded to the
holders of Chicago Preferred Stock, in accordance with Section 3(b)), the
holders of the Chicago Preferred Stock then outstanding and entitled to vote for
such director may, by written consent as provided herein, or at a special
meeting of such holders called as provided herein, elect a successor to hold
office for the unexpired term of the director whose place shall be vacant.
Any director elected by the holders of shares of Chicago
Preferred Stock, voting together as a separate class, may be removed from office
with or without cause only by the vote or written consent of the holders of at
least a majority of the aggregate outstanding shares of Chicago Preferred Stock
at the time of removal. A special meeting of the holders of shares of Chicago
Preferred Stock, may be called in accordance with the procedures set forth in
Section 3(c)(i).
Section 4. Certain Restrictions.
--------------------
(a) So long as any shares of Series H Preferred Stock
remain outstanding, the Corporation shall not declare or make any Restricted
Payment.
(b) Whenever quarterly dividends payable on shares of
Series H Preferred Stock as provided in Section 2(a) are not paid in full, at
such time and thereafter until all unpaid dividends payable, whether or not
declared, on the outstanding shares of Series H Preferred Stock shall have been
paid in full or declared and set apart for payment at such time and thereafter
until all necessary funds have been set apart for payment, or whenever the
Corporation shall not have paid the Optional Redemption Price, the Specified
Corporate Action Redemption Price or the Maturity Redemption Price when due, at
such time and thereafter until all such amounts have been paid in full or set
apart for payment, the Corporation shall not: (A) declare or pay dividends, or
make any other distributions, on any shares of Junior Stock, or (B) declare or
pay dividends, or make any other distributions, on any shares of Parity Stock,
except dividends or distributions paid ratably on the Series H Preferred Stock
and all Parity Stock on which dividends are payable and in arrears, in
proportion to the total amounts to which the holders of all shares of the Series
H Preferred Stock and Parity Stock are then entitled.
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(c) Whenever dividends payable on shares of Series H
Preferred Stock as provided in Section 2 are not paid in full, at such time and
thereafter until all unpaid dividends payable, whether or not declared, on the
outstanding shares of Series H Preferred Stock shall have been paid in full or
declared and set apart for payment, at such time and thereafter until all
necessary funds have been set apart for payment, or whenever the Corporation
shall not have paid the Optional Redemption Price, the Specified Corporate
Action Redemption Price or the Maturity Redemption Price when due, at such time
and thereafter until all such amounts have been paid in full or set apart for
payment, the Corporation shall not redeem, purchase or otherwise acquire for
consideration any shares of Junior Stock or Parity Stock; provided, however,
-------- -------
that (A) the Corporation may accept shares of any Parity Stock or Junior Stock
for conversion into Junior Stock and (B) the Corporation may at any time redeem,
purchase or otherwise acquire shares of any Parity Stock pursuant to any
mandatory redemption, put, sinking fund or other similar obligation contained in
such Parity Stock, pro rata with the Series H Preferred Stock in proportion to
the total amount then required to be applied by the Corporation to redeem,
repurchase, or otherwise acquire shares of Series H Preferred Stock and shares
of such Parity Stock.
(d) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to purchase or otherwise acquire for
consideration any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(c), purchase such shares at such time
and in such manner.
Section 5. Optional Redemption.
-------------------
(a) (i) The Corporation shall not have any right to redeem
any shares of Series H Preferred Stock prior to December 30, 1999. Thereafter,
subject to the restrictions contained in Section 4, the Corporation shall have
the right, at its sole option and election, to redeem (the "Optional Redemp-
tion") all or a portion of the shares of Series H Preferred Stock, on not more
than 45 nor less than 30 days' notice of the date of redemption (any such date,
an "Optional Redemption Date") at a price per share (the "Optional Redemption
Price") equal to the sum of (A) the following prices per share (stated as a per-
centage of the Liquidation Preference of such share) and (B) an amount per share
equal to all accrued and unpaid dividends thereon, whether or not declared or
payable, to the applicable Optional Redemption Date in immediately available
funds:
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Optional Redemption Price
If Redeemed as a Percentage of
During the Period Liquidation Preference
- ----------------- ------------------------
December 30, 1999 to 106%
December 29, 2000
December 30, 2000 to 104.8%
December 29, 2001
December 30, 2001 to 103.6%
December 29, 2002
December 30, 2002 to 102.4%
December 29, 2003
December 30, 2003 to 101.2%
December 29, 2004
(ii) If the Corporation shall have the right to, or shall
determine to, redeem less than all the shares of Series H Preferred Stock then
outstanding pursuant to paragraph (i), the shares to be redeemed shall be
selected pro rata (as nearly as may be) so that the number of shares redeemed
from each holder shall be the same proportion of all the shares to be redeemed
that the total number of shares of Series H Preferred Stock then held by such
holder bears to the total number of shares of Series H Preferred Stock then
outstanding.
(iii) Notwithstanding the foregoing, any shares of Series H
Preferred Stock redeemed pursuant to this Section 5(a) at any time when the
holders of shares of Series H Preferred Stock have the right to require the
Corporation to redeem the shares of Series H Preferred Stock pursuant to Section
6 or an event giving rise to such a right has occurred shall be redeemed at a
price equal to higher of the price to be paid in Section 5(a) and the price to
be paid pursuant to Section 6.
(b) Notice of any Optional Redemption shall specify the
Optional Redemption Date fixed for redemption, the Optional Redemption Price,
the place or places of payment, that payment will be made upon presentation and
surrender of the shares of Series H Preferred Stock and that on and after the
date of such Optional Redemption dividends will cease to accrue on such shares
and be given by publication in a newspaper of general circulation in the Borough
of Manhattan, The City of New York (if such publication shall be required by
applicable law, rule, regulation or securities exchange requirement), not less
than 30, nor more than 45, days prior to the Optional Redemption
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Date; and, in any case, a similar notice shall be mailed at least 30, but not
more than 45, days prior to the Optional Redemption Date to each holder of
shares of Series H Preferred Stock, at such holder's address as it appears on
the transfer books of the Corporation. In order to facilitate the redemption of
shares of Series H Preferred Stock, the Board of Directors may fix a record date
for the determination of shares of Series H Preferred Stock to be redeemed, or
may cause the transfer books of the Corporation for the Series H Preferred Stock
to be closed, not more than 60 days or less than 45 days prior to the Optional
Redemption Date.
(c) On the date of any Optional Redemption that is
specified in a notice given pursuant to Section 5(b), the Corporation shall, and
at any time after such notice shall have been mailed and before the Optional
Redemption Date the Corporation may, deposit for the benefit of the holders of
shares of Series H Preferred Stock the funds necessary for such redemption with
a bank or trust company in the Borough of Manhattan, The City of New York, that
is "well capitalized" within the meaning of applicable bank regulations and
having a capital and surplus of at least $500,000,000. Any moneys so deposited
by the Corporation and unclaimed at the end of two years from the Optional
Redemption Date shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and any holder of
shares of Series H Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Optional Redemption Price. Any interest
accrued on funds deposited pursuant to this Section 5(c) shall be paid from time
to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 5(c) in respect of shares of
Series H Preferred Stock to be redeemed pursuant to Section 5(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Optional Redemption Date (i)
the shares represented thereby shall no longer be deemed outstanding, (ii) the
rights to receive dividends thereon shall cease to accrue, and (iii) all rights
of the holders of shares of Series H Preferred Stock to be redeemed shall cease
and terminate, excepting only the right to receive the Optional Redemption Price
therefor; provided, however, that if the Corporation shall default in the
-------- -------
payment of the Optional Redemption Price, the shares of Series H Preferred Stock
shall thereafter be deemed to be outstanding and the holders thereof shall have
all of the rights of a holder of Series H Preferred
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Stock until such time as such default or failure shall no longer be continuing
or shall have been waived by holders of at least 66-2/3% of the then outstanding
shares of Series H Preferred Stock.
(e) Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of
shares of Series H Preferred Stock receives such notice, and failure to give
such notice by mail, or any defect in such notice, to the holders of any shares
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Series H Preferred Stock. On or after the
Optional Redemption Date fixed for redemption as stated in such notice, each
holder of the shares called for redemption shall surrender the certificate
evidencing such shares to the Corporation at the place designated in such notice
and shall thereupon be entitled to receive payment of the Optional Redemption
Price. If less than all the shares evidenced by any such surrendered
certificate are redeemed, a new certificate shall be issued evidencing the
unredeemed shares.
Section 6. Mandatory Redemption at the Option
of the Holder.
---------------------------------
(a) (i) If one or more events constituting a Specified
Corporate Action shall occur, each holder of shares of the Series H Preferred
Stock shall have the right, at such holder's option on the date or dates
specified in Section 6(a)(ii) (the "Specified Corporate Action Redemption
Date"), to require the Corporation to redeem (a "Specified Corporate Action
Redemption") all or any part of the shares of Series H Preferred Stock then held
by such holder as such holder may elect at a price per share equal to the sum of
(A) the Liquidation Preference of such share and (B) an amount per share equal
to all accrued and unpaid dividends thereon, whether or not declared or payable,
to the applicable Specified Corporate Action Redemption Date, in immediately
available funds (the "Specified Corporate Action Redemption Price").
(ii) The date fixed for each Specified Corporate Action
Redemption shall be fixed by the Corporation and shall be not less than 60 days
nor more than 90 days following the occurrence of any Specified Corporate Action
giving rise thereto (or, in the case of a Specified Corporate Action as
described in clause (iii) of the definition of "Specified Corporate Action,"
not less than 60 days nor more than 90 days following the date on which the
Corporation obtains actual knowledge of such Specified Corporate Action);
provided, however, that in the event of a Specified Corporate Action that
- -------- -------
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<PAGE>
constitutes a Control Transaction, in addition to the dates fixed for a
Specified Corporate Action Redemption as specified above, an additional
Specified Corporate Action Redemption Date shall be set for the date and time
immediately preceding the consummation of any such Control Transaction;
provided, further, that, upon the request of a holder, the Board of Directors
- -------- -------
shall agree to extend the date of redemption in respect of any such Specified
Corporate Action (without changing the consideration that is otherwise payable
in respect of such redemption other than with respect to adjustments to the
amount of accrued and unpaid dividends included in such redemption price) to the
extent necessary for any holder of shares of Series H Preferred Stock to avoid
liability under Section 16(b) of the Exchange Act, provided that no such
--------
redemption extension shall be for a period greater than six months. The
Corporation shall, within 5 days of the occurrence of a Specified Corporate
Action (or, in the case of a Specified Corporate Action described in clause
(iii) of the definition of "Specified Corporate Action," within 5 days of the
date on which the Corporation obtains actual knowledge of such Specified Corpo-
rate Action), give notice thereof by publication in a newspaper of general
circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or securities
exchange requirement), and, in any case, a similar notice shall be mailed to
each holder of shares of the Series H Preferred Stock, at such holder's address
as it appears on the transfer books of the Corporation. Each such notice shall
specify the Specified Corporate Action that has occurred and the date of such
occurrence, the place or places of payment, the then effective Specified
Corporate Action Redemption Price and the date the right of such holder to
require a Specified Corporate Action Redemption shall terminate.
(iii) If the notice sent by the Corporation pursuant to
Section 6(a)(ii) shall contain (i) a form inquiring as to whether a holder of
shares of Series H Preferred Stock intends to surrender the certificate(s)
representing such shares for redemption pursuant to this Section 6(a) and (ii) a
stamped self-addressed envelope for return of such form to the Corporation or
its designee, within ten Business Days of such notice, each holder shall return
such inquiry form to the Corporation and shall indicate in such form the
proportion of such holder's shares of Series H Preferred Stock that will be
surrendered for redemption pursuant to this Section 6(a). If such notice shall
indicate that if a holder does not respond prior to ten Business Days after the
date of such notice that such holder will be deemed to have notified the
Corporation that it will not require the redemption of the shares of Series H
Preferred Stock held by such holder for purposes of Section
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3(b) and such holder does not respond to the Corporation's inquiry prior to ten
Business Days after the date of such notice, such holder will be deemed to have
notified the Corporation that it will not require the redemption of the shares
of Series H Preferred Stock held by such holder for purposes of Section 3(b).
Nothing contained in this Section 6(a)(iii) shall affect the right of a holder
of Series H Preferred Stock to require the Corporation to redeem such shares
pursuant to Section 6(a)(i).
(b) On the date fixed for any Specified Corporate Action
Redemption, each holder of shares of Series H Preferred Stock who elects to have
shares of Series H Preferred Stock held by it redeemed shall surrender the
certificate representing such shares to the Corporation at the place designated
in such notice, together with an election to have such redemption made and shall
thereupon be entitled to receive payment therefor provided in this Section 6.
If less than all the shares represented by any such surrendered certificate are
redeemed, a new certificate shall be issued representing the unredeemed shares.
From and after the date of such redemption (i) the rights to receive dividends
thereon shall cease to accrue and (ii) all rights of the holders of shares of
Series H Preferred Stock so redeemed shall cease and terminate, excepting only
the right to receive the Specified Corporate Action Redemption Price therefor;
provided, however, that if the Corporation shall default in the payment of the
- -------- -------
applicable redemption price the shares of Series H Preferred Stock that were to
be redeemed shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series H Preferred Stock until such
time as such default shall no longer be continuing or shall have been waived by
holders of at least 66-2/3% of the then outstanding shares of Series H Preferred
Stock.
Section 7. Redemption Upon Maturity.
------------------------
(a) On December 30, 2004 (the "Maturity Date"), the
Corporation shall redeem (the "Maturity Redemption") the remaining outstanding
shares of the Series H Preferred Stock at a price per share (the "Maturity
Redemption Price") equal to the sum of (A) 100% of the Liquidation Preference
per share, and (B) an amount equal to accrued and unpaid dividends thereon,
whether or not declared or payable, to the Maturity Date in immediately
available funds.
(b) Notice of the Maturity Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication
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shall be required by applicable law, rule, regulation or securities exchange
requirement), not less than 30, nor more than 60, days prior to the Maturity
Date and, in any case, a similar notice shall be mailed at least 30, but not
more than 60, days prior to the Maturity Date to each holder of shares of Series
H Preferred Stock, at such holder's address as it appears on the transfer books
of the Corporation.
(c) On the Maturity Date, the Corporation shall, and at any
time after such notice shall have been mailed and before the Maturity Date the
Corporation may, deposit for the benefit of the holders of shares of Series H
Preferred Stock the funds necessary for such redemption with a bank or trust
company in the Borough of Manhattan, The City of New York, that is "well
capitalized within the meaning of applicable banking regulations and having a
capital and surplus of at least $500,000,000. Any moneys so deposited by the
Corporation and unclaimed at the end of two years from the date designated for
such redemption shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and any holder of
shares of Series H Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Maturity Redemption Price. Any interest
accrued and unpaid on funds deposited pursuant to this Section 5(c) shall be
paid from time to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 7(c) in respect of shares of
Series H Preferred Stock to be redeemed pursuant to Section 7(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Maturity Date, (i) the rights
to receive dividends thereon shall cease to accrue and (ii) all rights of the
holders of shares of Series H Preferred Stock shall cease and terminate,
excepting only the right to receive the Maturity Redemption Price therefor;
provided, however, that if the Corporation shall default in the payment of the
- -------- -------
Maturity Redemption Price, the shares of Series H Preferred Stock that were to
be redeemed shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series H Preferred Stock until such
time as such default shall no longer be continuing.
Section 8. Acquired Shares.
---------------
Any shares of Series H Preferred Stock exchanged, redeemed,
purchased or otherwise acquired by the Corporation or
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any of its Subsidiaries in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares of Series H Preferred
Stock shall upon their cancellation become authorized but unissued shares of
preferred stock, par value $4.00 per share, of the Corporation and, upon the
filing of an appropriate certificate with the Department of State of the State
of New York, may be reissued as part of another series of preferred stock, par
value $4.00 per share, of the Corporation subject to the conditions or
restrictions of issuance set forth herein, but in any event may not be reissued
as shares of Series H Preferred Stock or Parity Stock unless all of the shares
of Series H Preferred Stock issued on the Issue Date shall have already been
redeemed or exchanged.
Section 9. Liquidation, Dissolution or Winding Up.
--------------------------------------
(a) If the Corporation shall commence a voluntary case
under the United States bankruptcy laws or any applicable bankruptcy, insolvency
or similar law of any other country, or consent to the entry of an order for
relief in an involuntary case under any such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or make an assignment for the benefit of its creditors, or admit in writing its
inability to pay its debts generally as they become due (any such event, a
"Voluntary Liquidation Event"), or if a decree or order for relief in respect of
the Corporation shall be entered by a court having jurisdiction in the premises
in an involuntary case under the United States bankruptcy laws or any applicable
bankruptcy, insolvency or similar law of any other country, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and on account of any
such event the Corporation shall liquidate, dissolve or wind up, or if the
Corporation shall otherwise liquidate, dissolve or wind up, no distribution
shall be made (i) to the holders of shares of Junior Stock unless, prior
thereto, the holders of shares of Series H Preferred Stock shall have received
(A) if a Voluntary Liquidation Event shall have occurred, the Optional
Redemption Price with respect to each share and (B) if a Voluntary Liquidation
Event shall not have occurred, the Liquidation Preference and all accrued and
unpaid dividends, whether or not declared or currently payable, to the date of
distribution, with respect to each share, or (ii) to the holders of shares of
Parity Stock, except distributions made ratably on the Series H Preferred Stock
and all Parity Stock in proportion to the total amounts to which the holders of
all shares of the Series H Preferred Stock (which
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amounts are set forth in clauses (A) and (B) above) and Parity Stock are
entitled upon such liquidation, dissolution or winding up.
(b) Neither the consolidation or merger of the Corporation
with or into any other Person nor the sale or transfer of all or any part of the
Corporation's assets for cash, securities or other property shall be deemed to
be a liquidation, dissolution or winding up of the Corporation for purposes of
this Section 9.
Section 10. Exchange.
--------
(a) Subject to the provisions of this Section 10, the
Corporation shall have the right, with the consent of the holders of all of the
outstanding shares of Series H Preferred Stock (which consent may be withheld
for any reason whatsoever), at any time but on only one occasion, to exchange
all (but not less than all) of the shares of Series H Preferred Stock for
Subordinated Notes of the Corporation ("Subordinated Notes"), at a price per
share equal to the Liquidation Preference per share, with the Subordinated Notes
valued for such purpose at their face value. Simultaneously with such exchange
the Corporation shall pay to each holder of Series H Preferred Stock an amount
per share in cash equal to all accrued and unpaid dividends thereon, whether or
not declared or currently payable, to the date fixed for exchange thereof. The
Subordinated Notes shall have an annual interest rate equal to the annual
dividend rate on Series H Preferred Stock and shall contain other terms
substantially similar to the Series H Preferred Stock, including the date of
maturity thereof.
(b) Notice of an exchange of shares of Series H Preferred
Stock pursuant to Section 10(a) shall be given by publication in a newspaper of
general circulation in the Borough of Manhattan, The City of New York (if such
publication shall be required by applicable law, rule, regulation or securities
exchange requirement), not less than 30, nor more than 60, days prior to the
date fixed for exchange; and, in any case, a similar notice shall be mailed at
least 30, but not more than 60, days prior to the date fixed for exchange to
each holder at such holder's address as it appears on the transfer books of the
Corporation. In order to facilitate the exchange of shares of Series H
Preferred Stock hereunder the Board of Directors may fix a record date for the
determination of shares of Series H Preferred Stock to be exchanged, or may
cause the transfer books of the Corporation for the Series H Preferred Stock to
be closed, not more than 60 days or less than 30 days prior to the date fixed
for exchange.
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(c) On the date of any exchange being made pursuant to
Section 10(a) that is specified in a notice given pursuant to Section 10(b), the
Corporation shall, and at any time after the date that is 10 days prior to the
date of exchange the Corporation may, deposit for the benefit of the holders of
shares of Series H Preferred Stock to be exchanged (i) the Subordinated Notes
necessary for such exchange and (ii) an amount in cash equal to all dividends
payable with respect thereto upon such exchange with a bank or trust company in
the Borough of Manhattan, The City of New York, that is "well capitalized"
within the meaning of applicable banking regulations and having a capital and
surplus of at least $500,000,000. Any Subordinated Notes so deposited by the
Corporation and unclaimed at the end of two years from the date designated for
such exchange shall revert to the Corporation. After such reversion, any such
bank or trust company shall, upon demand, return to the Corporation such
unclaimed Subordinated Notes and thereupon such bank or trust company shall be
relieved of all responsibility in respect thereof and any holder of shares of
Series H Preferred Stock to be exchanged shall look only to the Corporation for
the delivery of the Subordinated Notes. Any interest accrued on Subordinated
Notes deposited pursuant to this Section 10(c) shall accrue for the accounts of,
and be payable to, the holders of shares of Series H Preferred Stock to be
exchanged therefor.
(d) Notice of exchange having been given as aforesaid and
not having been deemed terminated as aforesaid, upon the deposit of Subordinated
Notes pursuant to clause (i) of Section 10(c) and the deposit of the cash
referred to in clause (ii) of Section 10(c) in respect of shares of Series H
Preferred Stock to be exchanged pursuant to Section 10(a), notwithstanding that
any certificates for such shares shall not have been surrendered for
cancellation, from and after the date of exchange designated in the notice of
exchange (i) the shares represented thereby shall no longer be deemed
outstanding, (ii) the rights to receive dividends thereon (except as provided in
paragraph (b) above) shall cease to accrue, and (iii) all rights of the holders
of shares of Series H Preferred Stock to be exchanged shall cease and terminate,
excepting only the right to receive the Subordinated Notes therefor and the
right to receive the dividends described in paragraph (b) above; provided,
--------
however, that if the Corporation shall default in the execution and delivery of
- -------
the Convertible Notes, the shares of Series H Preferred Stock that were to be
exchanged shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series H Preferred Stock until such
time as such default shall no longer be continuing or shall have been waived by
holders of at least
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66-2/3% of the then outstanding shares of Series H Preferred Stock.
Article 5. Series T Preferred Stock.
------------------------
Section 1. Designation and Number.
----------------------
(a) The shares of such series shall be designated as
"Cumulative Preferred Stock, Series T" (the "Series T Preferred Stock"). The
number of shares initially constituting the Series T Preferred Stock shall be
828,100, which number may be decreased (but not increased) by the Board of
Directors without a vote of stockholders; provided, however, that such number
may not be decreased below the number of then outstanding shares of Series T
Preferred Stock.
(b) The Series T Preferred Stock shall, with respect to
dividend rights and rights on liquidation, dissolution or winding up, rank pari
----
passu with the Corporation's $2.50 Cumulative Convertible Preferred Stock,
- -----
Series A (the "Series A Preferred Stock"), $2.50 Cumulative Preferred Stock,
Series B (the "Series B Preferred Stock"), Cumulative Convertible Preferred
Stock, Series E (the "Series E Preferred Stock"), Cumulative Preferred Stock,
Series G (the "Series G Preferred Stock"), Cumulative Preferred Stock, Series H
(the "Series H Preferred Stock"), Cumulative Preferred Stock, Series F (the
"Series F Preferred Stock" and together with the Series E Preferred Stock,
Series F Preferred Stock, Series G Preferred Stock and Series H Preferred Stock,
the "Chicago Preferred Stock") and the New Preferred Stock (if any) (the Series
A Preferred Stock, Series B Preferred Stock, Chicago Preferred Stock (other than
the Series T Preferred Stock) and New Preferred Stock (if any) are collectively
defined for the purposes of this Article 5 as the "Other Preferred Stock") and
prior to all other classes and series of capital stock of the Corporation now or
hereafter authorized including, without limitation, the Common Stock, par value
$1.00 per share, of the Corporation (the "Common Stock").
(c) Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Article 6 below.
Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series T Preferred Stock, in
preference to the holders of shares of Common Stock and of any shares of other
capital stock of the Corporation other than the Other Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
the assets of the Corporation at the time legally available
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therefor, cumulative cash dividends at an annual rate on the Liquidation
Preference thereof equal to 9.75% (subject to increase pursuant to Section
2(b)), calculated on the basis of a 360-day year consisting of twelve 30-day
months, accruing and payable in equal quarterly payments, in immediately
available funds, on the Business Day immediately preceding the last day of
March, June, September and December in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date") commencing on the Business Day
immediately preceding December 31, 1994; provided, however, that with respect to
-------- -------
such first Quarterly Dividend Payment Date, the holders of shares of Series T
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors, out of the assets of the Corporation at the time legally
available therefor, a cumulative cash dividend in respect of each share of
Series T Preferred Stock in the amount of (i) 9.75% (or the then effective
annual rate) of the Liquidation Preference multiplied by (ii) a fraction equal
to (A) the number of days from (and including) the Issue Date to (but excluding)
such Quarterly Dividend Payment Date divided by (B) 360. No interest shall be
payable in respect of any dividend payment on the Series T Preferred Stock that
may be in arrears.
(b) If (i) a private placement or public offering of the
New Preferred Stock or the New Senior Notes pursuant to which the Corporation
shall receive at least $100,000,000 in gross proceeds is not consummated within
360 days after the termination of the Merger Agreement or (ii) the annual
dividend rate on the New Preferred Stock or the annual interest rate on the New
Senior Notes, as applicable, exceeds 13%, then the annual rate of the cumulative
cash dividends shall be increased to a rate of 10.75%, effective (x) in the case
of clause (i), the date that is 360 days after the termination of the Merger
Agreement and (y) in the case of clause (ii), the date of the issuance of the
New Preferred Stock or the New Senior Notes, as applicable. If on any date (A)
all of the Purchaser Designees shall not have been elected to the Corporation's
Board of Directors or any such Purchaser Designees shall not have been appointed
to the committees of the Corporation's Board of Directors, in accordance with
the provisions of Section 6.17 of the Securities Purchase Agreement, (B) the
Corporation shall have failed to declare, or shall have failed to pay, the full
amount of dividends payable on the Series T Preferred Stock for six quarterly
dividend periods, (C) the Corporation shall have failed to satisfy its
obligation to convert shares of Series E Preferred Stock pursuant to Article 1,
Section 10 or (D) a breach of any of the Material Provisions of the Securities
Purchase Agreement or any of the Corporation's material obligations under the
Registration Rights Agreement shall have occurred then, effective as of the date
of such failure or
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breach, the annual rate of the cumulative cash dividends shall be increased to a
rate of 11.75% and shall remain at such rate until such time as (1) the Pur-
chaser Designees shall have been elected to the Corporation's Board of Directors
and appointed to the committees of the Corporation's Board of Directors in
accordance with the provisions of Section 6.17 of the Securities Purchase
Agreement, (2) all dividends accrued to date on the Series T Preferred Stock
shall have been declared and paid in full, (3) any conversion obligations in
respect of the Chicago Preferred Stock that have become due shall have been
fully satisfied and (4) there shall exist no breach of any of the Material
Provisions of the Securities Purchase Agreement or any of the Corporation's
material obligations under the Registration Rights Agreement, as the case may
be, at which time the annual rate of the cumulative cash dividends shall be re-
duced to a rate of 9.75%, subject to being increased to a rate of 11.75% in the
event of each and every subsequent event of the character indicated above.
(c) Dividends payable pursuant to Section 2(a) shall begin
to accrue and be cumulative from the Issue Date, and shall accrue on a daily
basis, in each case whether or not declared. Dividends paid on the shares of
Series T Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares of Series T Preferred Stock
at the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series T Preferred Stock entitled to
receive payment of a dividend declared thereon, which record date shall be not
more than 60 days nor less than 10 days prior to the date fixed for the payment
thereof. Accumulated but unpaid dividends for any past quarterly dividend
periods may be declared and paid at any time, without reference to any regular
Quarterly Dividend Payment Date, to holders of record on such date, not more
than 60 nor less than 10 days preceding the payment date thereof, as may be
fixed by the Board of Directors.
(d) The holders of shares of Series T Preferred Stock shall
not be entitled to receive any dividends or other distributions except as
provided herein.
Section 3. Voting Rights.
-------------
In addition to any voting rights provided by law, the
holders of shares of Series T Preferred Stock shall have the following voting
rights:
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(a) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders of at
least 66-2/3% of the outstanding shares of Series T Preferred Stock, voting
separately as a single class, in person or by proxy, at a special or annual
meeting of stockholders called for the purpose, shall be necessary to (i)
authorize, adopt or approve an amendment to the Certificate of Incorporation
that would increase or decrease the par value of the shares of Series T
Preferred Stock, or alter or change the powers, preferences or special rights of
the shares of Series T Preferred Stock, (ii) amend, alter or repeal the
Certificate of Incorporation so as to affect the shares of Series T Preferred
Stock adversely or (iii) effect the voluntary liquidation, dissolution, winding
up, recapitalization or reorganization of the Corporation, or the consolidation
or merger of the Corporation with or into any other Person, or the sale or other
distribution to another Person of all or substantially all of the assets of the
Corporation; provided, however, that no separate vote of the holders of Series T
-------- -------
Preferred Stock shall be required to effect any of the transactions described in
clause (iii) above unless such transaction would either require a class vote
pursuant to clause (i) or (ii) above or would require a vote by any shareholders
of the Corporation (other than pursuant to this sentence); provided further,
-------- -------
that no separate vote of the holders of the Series T Preferred Stock as a class
shall be required in the case of a recapitalization, reorganization,
consolidation or merger of, or sale by, the Corporation if (A) (a) such
recapitalization, reorganization, consolidation, merger or sale constitutes a
Specified Corporate Action, (b) the Corporation has sufficient funds legally
available to it (after giving effect to such transaction) to redeem, at the then
applicable price hereunder and pursuant to the terms hereof, all the
outstanding shares of Series T Preferred Stock, (c) such redemption shall not
be prohibited by any agreement to which the Corporation or any of its
Subsidiaries is a party, by applicable law or otherwise, (d) the Board of
Directors of the Corporation, including a majority of the directors who
are not officers or employees of the Corporation, shall have adopted a
resolution confirming that such funds are available and that the holders of
Series T Preferred Stock have the right to require such redemption and (e) the
Corporation shall have set aside sufficient funds through the Specified
Corporation Action Redemption Date to redeem the shares of Series T Preferred
Stock held by such holders (except that no funds need be set aside with respect
to such shares held by any such holder who has theretofore notified the Cor-
poration (whether pursuant to Section 6(a)(iii) or otherwise) that it will not
require redemption of such shares) or (B) (1) the Corporation shall be the
resulting or surviving corporation, (2) the resulting or
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surviving corporation will have after such recapitalization, reorganization,
consolidation or merger no Senior Stock or Parity Stock either authorized or
outstanding (except such Parity Stock of the Corporation as may have been
authorized or outstanding immediately preceding such consolidation or merger) or
such stock of the resulting or surviving corporation (having the same powers,
preferences and special rights of any such Parity Stock) as may be issued in
exchange therefor), (3) each holder of shares of Series T Preferred Stock
immediately preceding such recapitalization, reorganization, consolidation or
merger will receive in exchange therefor the same number of shares of stock,
with the same preferences, rights and powers, of the resulting or surviving
corporation, (4) after such recapitalization, reorganization, consolidation or
merger the resulting or surviving corporation shall not be in breach of any of
the terms hereof, any of the Material Provisions of the Securities Purchase
Agreement or any of its material obligations under the Registration Rights
Agreement and (5) all or substantially all the holders of the outstanding shares
of capital stock of the Corporation immediately prior to such consolidation or
merger are entitled to receive shares representing 50% or more of the then
outstanding shares of capital stock of the resulting or surviving corporation
entitled to vote generally in the election of directors.
(b) If on any date (i) the Corporation shall have failed to
declare, or shall have failed to pay, the full amount of dividends payable on
any series of Chicago Preferred Stock for six quarterly dividend periods or (ii)
a breach of any of the Material Provisions of the Securities Purchase Agreement
or any of the Corporation's material obligations under the Registration Rights
Agreement shall have occurred, then the number of directors constituting the
Board of Directors shall, without further action, be increased by two and the
holders of shares of Series T Preferred Stock shall have, in addition to the
other voting rights set forth herein with respect to the Series T
Preferred Stock, the exclusive right, together with the holders of all
other series of Chicago Preferred Stock, voting separately as a single
class together with the holders of such other series of Chicago
Preferred Stock, to elect two directors of the Corporation to fill such
newly created directorship, by written consent as provided herein, or
at a special meeting of such holders called as provided herein. Any
such additional directors shall continue as directors (subject to
reelection or removal as provided in Section 3(c)(ii)) and the holders
of Series T Preferred Stock shall have such additional voting rights
until such time as (A) dividends then payable on all series of Chicago
Preferred Stock shall have been declared and paid in full and (B) there
shall exist no breach of any of the Material Provisions of the
Securities Purchase Agreement or any
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of the Corporation's material obligations under the Registration Rights
Agreement, as the case may be, at which time such additional directors shall
cease to be directors, the number of directors constituting the Board of Di-
rectors shall be reduced by two and such additional voting rights of the holders
of all series of Chicago Preferred Stock shall terminate, subject to revesting
in the event of each and every subsequent event of the character indicated
above.
(c) (i) The foregoing right of holders of shares of Series
T Preferred Stock to take any action as provided in Section 3(b) may be
exercised at any annual meeting of stockholders or at a special meeting of
holders of shares of Chicago Preferred Stock, held for such purpose as
hereinafter provided or at any adjournment thereof, or by the written consent,
delivered to the Secretary of the Corporation, of the holders of the minimum
number of shares required to take such action.
So long as such right to vote continues (and unless such
right has been exercised by written consent of the minimum number of shares
required to take such action), the President of the Corporation may call, and
upon the written request of holders of record of at least 5% of the aggregate
outstanding shares of Chicago Preferred Stock, addressed to the Secretary of the
Corporation at the principal office of the Corporation, shall call, a special
meeting of the holders of shares entitled to vote as provided herein. Such
meeting shall be held within 30 days after delivery of such request to the
Secretary, at the place and upon the notice provided by law and in the by-laws
of the Corporation for the holding of meetings of stockholders.
(ii) At each meeting of stockholders at which the holders
of shares of Series T Preferred Stock shall have the right, voting
separately as a class together with the holders of all other series of
Chicago Preferred Stock, to elect two directors of the Corporation as provided
in Section 3(b) or to take any action, the presence in person or by proxy of
the holders of record of one-third of the total aggregate number of shares of
Chicago Preferred Stock then outstanding and entitled to vote on the matter
shall be necessary and to constitute a quorum. At any such meeting or at any
adjournment thereof:
(A) the absence of a quorum of the holders of shares of
Chicago Preferred Stock shall not prevent the election of
directors other than those to be elected by the holders of shares
of Chicago Preferred Stock, and the absence of a quorum of the
holders of shares of any other class or series of capital stock
shall not prevent the election of
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directors to be elected by the holders of shares of Chicago
Preferred Stock, or the taking of any action as provided in
Section 3(b); and
(B) in the absence of a quorum of the holders of shares of
Chicago Preferred Stock, a majority of the holders of such shares
present in person or by proxy shall have the power to adjourn the
meeting as to the actions to be taken by the holders of shares of
Chicago Preferred Stock, from time to time and place to place
without notice other than announcement at the meeting until a
quorum shall be present.
For taking of any action as provided in Section 3(a) or
Section 3(b) by the holders of shares of Series T Preferred Stock, each such
holder shall have one vote for each share of such stock standing in his name on
the transfer books of the Corporation as of any record date fixed for such
purpose or, if no such date be fixed, at the close of business on the Business
Day next preceding the day on which notice is given, or if notice is waived, at
the close of business on the Business Day next preceding the day on which the
meeting is held; provided, however, that shares of Chicago Preferred Stock held
-------- -------
by the Corporation or any Subsidiary of the Corporation shall not be deemed to
be outstanding for purposes of taking any action as provided in this Section 3.
Each director elected by the holders of shares of Chicago
Preferred Stock, as provided in Section 3(b) shall, unless his term shall expire
earlier in accordance with the provisions thereof, hold office until the annual
meeting of stockholders next succeeding his election or until his successor, if
any, is elected and qualified.
If any director so elected by the holders of Chicago Pre-
ferred Stock shall cease to serve as a director before his term shall expire
(except by reason of the termination of the voting rights accorded to the
holders of Chicago Preferred Stock, in accordance with Section 3(b)), the
holders of the Chicago Preferred Stock then outstanding and entitled to vote for
such director may, by written consent as provided herein, or at a special
meeting of such holders called as provided herein, elect a successor to hold
office for the unexpired term of the director whose place shall be vacant.
Any director elected by the holders of shares of Chicago
Preferred Stock, voting together as a separate class, may be removed from office
with or without cause only by the vote or written consent of the holders of at
least a majority of the aggregate outstanding shares of Chicago Preferred Stock
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at the time of removal. A special meeting of the holders of shares of Chicago
Preferred Stock, may be called in accordance with the procedures set forth in
Section 3(c)(i).
Section 4. Certain Restrictions.
--------------------
(a) So long as any shares of Series T Preferred Stock
remain outstanding, the Corporation shall not declare or make any Restricted
Payment.
(b) Whenever quarterly dividends payable on shares of
Series T Preferred Stock as provided in Section 2(a) are not paid in full, at
such time and thereafter until all unpaid dividends payable, whether or not
declared, on the outstanding shares of Series T Preferred Stock shall have been
paid in full or declared and set apart for payment at such time and thereafter
until all necessary funds have been set apart for payment, or whenever the
Corporation shall not have paid the Optional Redemption Price, the Specified
Corporate Action Redemption Price, the Conversion Redemption Price, the Special
Redemption Price or the Maturity Redemption Price when due, at such time and
thereafter until all such amounts have been paid in full or set apart for pay-
ment, the Corporation shall not: (A) declare or pay dividends, or make any
other distributions, on any shares of Junior Stock, or (B) declare or pay
dividends, or make any other distributions, on any shares of Parity Stock,
except dividends or distributions paid ratably on the Series T Preferred Stock
and all Parity Stock on which dividends are payable and in arrears, in
proportion to the total amounts to which the holders of all shares of the Series
T Preferred Stock and Parity Stock are then entitled.
(c) Whenever dividends payable on shares of Series T
Preferred Stock as provided in Section 2 are not paid in full, at such time and
thereafter until all unpaid dividends payable, whether or not declared, on the
outstanding shares of Series T Preferred Stock shall have been paid in full or
declared and set apart for payment, at such time and thereafter until all
necessary funds have been set apart for payment, or whenever the Corporation
shall not have paid the Optional Redemption Price, the Specified Corporate
Action Redemption Price, the Conversion Redemption Price, the Special Redemption
Price or the Maturity Redemption Price when due, at such time and thereafter
until all such amounts have been paid in full or set apart for payment, the
Corporation shall not redeem, purchase or otherwise acquire for consideration
any shares of Junior Stock or Parity Stock; provided, however, that (A) the
-------- -------
Corporation may accept shares of any
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Parity Stock or Junior Stock for conversion into Junior Stock and (B) the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
Parity Stock pursuant to any mandatory redemption, put, sinking fund or other
similar obligation contained in such Parity Stock, pro rata with the Series T
Preferred Stock in proportion to the total amount then required to be applied by
the Corporation to redeem, repurchase, or otherwise acquire shares of Series T
Preferred Stock and shares of such Parity Stock.
(d) The Corporation shall not permit any Subsidiary of the
Corporation, or cause any other Person, to purchase or otherwise acquire for
consideration any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(c), purchase such shares at such time
and in such manner.
Section 5. Optional Redemption.
-------------------
(a) (i) The Corporation shall not have any right to redeem
any shares of Series T Preferred Stock prior to December 30, 2001. Thereafter,
(A) at any time, so long as shares of Common Stock shall have traded on the New
York Stock Exchange (or another national securities exchange or on Nasdaq) on
each trading day during a 30-consecutive trading day period (each of which
trading days shall be after December 30, 2001 and no more than 5 Business Days
prior to the date notice is given of an Optional Redemption (as defined below))
and had a Closing Price on at least 20 of such trading days in excess of 150% of
the Conversion Amount in effect on such trading day as determined pursuant to
Section 11, subject to the restrictions contained in Section 4 or (B) at any
time after December 30, 2009, the Corporation shall have the right, at its sole
option and election, to redeem (the "Optional Redemption") all or a portion of
the shares of Series T Preferred Stock, on not more than 45 nor less than 30
days' notice of the date of redemption (any such date, an "Optional Redemption
Date") at a price per share (the "Optional Redemption Price") equal to the sum
of (A) the following prices per share (stated as a percentage of the Liquidation
Preference of such share), (B) an amount per share equal to all accrued and
unpaid dividends thereon, whether or not declared or payable, to the applicable
Optional Redemption Date and (C) the Additional Amount (as defined in Section
11), in immediately available funds:
Optional Redemption Price
If Redeemed as a Percentage of
During the Period Liquidation Preference
----------------- -------------------------
December 30, 2001 to 102.775%
December 29, 2002
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December 30, 2002 to 101.850%
December 29, 2003
December 30, 2003 to 100.925%
December 29, 2004
December 30, 2004 and 100%
thereafter
(ii) If the Corporation shall have the right to, or shall
determine to, redeem less than all the shares of Series T Preferred Stock then
outstanding pursuant to paragraph (i), the shares to be redeemed shall be
selected pro rata (as nearly as may be) so that the number of shares redeemed
from each holder shall be the same proportion of all the shares to be redeemed
that the total number of shares of Series T Preferred Stock then held by such
holder bears to the total number of shares of Series T Preferred Stock then
outstanding.
(iii) Notwithstanding the foregoing, any shares of Series T
Preferred Stock redeemed pursuant to this Section 5(a) at any time when the
holders of shares of Series T Preferred Stock have the right to require the
Corporation to redeem the shares of Series T Preferred Stock pursuant to Section
6 or an event giving rise to such a right has occurred shall be redeemed at a
price equal to higher of the price to be paid in Section 5(a) and the price to
be paid pursuant to Section 6.
(b) Notice of any Optional Redemption shall specify the
Optional Redemption Date fixed for redemption, the Optional Redemption Price,
the place or places of payment, that payment will be made upon presentation and
surrender of the shares of Series T Preferred Stock and that on and after the
date of such Optional Redemption dividends will cease to accrue on such shares
and be given by publication in a newspaper of general circulation in the Borough
of Manhattan, The City of New York (if such publication shall be required by
applicable law, rule, regulation or securities exchange requirement), not less
than 30, nor more than 45, days prior to the Optional Redemption Date; and, in
any case, a similar notice shall be mailed at least 30, but not more than 45,
days prior to the Optional Redemption Date to each holder of shares of Series T
Preferred Stock, at such holder's address as it appears on the transfer books
of the Corporation. In order to facilitate the redemption of shares of Series T
Preferred Stock, the Board of Directors may fix a record date for the
determination of shares of Series T Preferred Stock to be redeemed, or may cause
the transfer books of the Corporation for the Series T Preferred
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Stock to be closed, not more than 60 days or less than 45 days prior to the
Optional Redemption Date.
(c) On the date of any Optional Redemption that is
specified in a notice given pursuant to Section 5(b), the Corporation shall, and
at any time after such notice shall have been mailed and before the Optional
Redemption Date the Corporation may, deposit for the benefit of the holders of
shares of Series T Preferred Stock the funds necessary for such redemption with
a bank or trust company in the Borough of Manhattan, The City of New York, that
is "well capitalized" within the meaning of the applicable bank regulations and
having a capital and surplus of at least $500,000,000. Any moneys so deposited
by the Corporation and unclaimed at the end of two years from the Optional
Redemption Date shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and any holder of
shares of Series T Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Optional Redemption Price. Any interest
accrued on funds deposited pursuant to this Section 5(c) shall be paid from time
to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 5(c) in respect of shares of
Series T Preferred Stock to be redeemed pursuant to Section 5(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Optional Redemption Date (i)
the shares represented thereby shall no longer be deemed outstanding, (ii) the
rights to receive dividends thereon shall cease to accrue, and (iii) all rights
of the holders of shares of Series T Preferred Stock to be redeemed shall cease
and terminate, excepting only the right to receive the Optional Redemption Price
therefor; provided, however, that if the Corporation shall default in the
-------- -------
payment of the Optional Redemption Price, the shares of Series T Preferred Stock
shall thereafter be deemed to be outstanding and the holders thereof shall have
all of the rights of a holder of Series T Preferred Stock until such time as
such default or failure shall no longer be continuing or shall have been waived
by holders of at least 66-2/3% of the then outstanding shares of Series T Pre-
ferred Stock.
(e) Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of
shares of Series T Preferred Stock receives such notice, and failure to give
such notice by mail, or
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any defect in such notice, to the holders of any shares designated for
redemption shall not affect the validity of the proceedings for the redemption
of any other shares of Series T Preferred Stock. On or after the Optional
Redemption Date fixed for redemption as stated in such notice, each holder of
the shares called for redemption shall surrender the certificate evidencing such
shares to the Corporation at the place designated in such notice and shall
thereupon be entitled to receive payment of the Optional Redemption Price. If
less than all the shares evidenced by any such surrendered certificate are
redeemed, a new certificate shall be issued evidencing the unredeemed shares.
Section 6 Mandatory Redemption at the Option
of the Holder.
---------------------------------
(a) (i) If one or more events constituting a Specified
Corporate Action shall occur, each holder of shares of the Series T Preferred
Stock shall have the right, at such holder's option on the date or dates
specified in Section 6(a)(ii) (the "Specified Corporate Action Redemption
Date"), to require the Corporation to redeem (a "Specified Corporate Action
Redemption") all or any part of the shares of Series T Preferred Stock then held
by such holder as such holder may elect at a price per share equal to the
greater of (I) the sum of (A) the following prices per share (stated as a
percentage of the Liquidation Preference of such share) and (B) an amount per
share equal to all accrued and unpaid dividends thereon, whether or not declared
or payable, to the applicable Specified Corporate Action Redemption Date
If the Specified Corporate Specified Corporate Action
Action Redemption Date Redemption as a Percentage of
Occurs During the Period Liquidation Preference
------------------------ ----------------------------
December 30, 1994 to 110.4%
June 29, 1995
June 30, 1995 to 116.8%
December 29, 1995
December 30, 1995 to 126.7%
June 29, 1996
June 30, 1996 and 138.0%
thereafter
and (II) the sum of (x) 100% of the Liquidation Preference of such share, (y) an
amount per share equal to all accrued and
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unpaid dividends thereon whether or not declared or payable to the Specified
Corporate Action Redemption Date and (z) the Additional Amount measured as of
the date of any such redemption, in either case in immediately available funds
(the "Specified Corporate Action Redemption Price").
(ii) The date fixed for each Specified Corporate Action
Redemption shall be fixed by the Corporation and shall be not less than 60 days
nor more than 90 days following the occurrence of any Specified Corporate Action
giving rise thereto (or, in the case of a Specified Corporate Action as
described in clause (iii) of the definition of "Specified Corporate Action," not
less than 60 days nor more than 90 days following the date on which the
Corporation obtains actual knowledge of such Specified Corporate Action);
provided, however, that in the event of a Specified Corporate Action that
- -------- -------
constitutes a Control Transaction, in addition to the dates fixed for a
Specified Corporate Action Redemption as specified above, an additional
Specified Corporate Action Redemption Date shall be set for the date and time
immediately preceding the consummation of any such Control Transaction (and the
Market Price utilized in determining the Additional Amount for the purposes of
such Specified Corporate Action Redemption shall be the highest price per share
of Common Stock paid by any acquiror in such Control Transaction); provided,
--------
further, that, upon the request of a holder, the Board of Directors shall
- -------
agree to extend the date of redemption in respect of any such Specified
Corporate Action (without changing the consideration that is otherwise
payable in respect of such redemption other than with respect to
adjustments to the amount of accrued and unpaid dividends included in
such redemption price) to the extent necessary for any holder of
shares of Series T Preferred Stock to avoid liability under
Section 16(b) of the Exchange Act, provided that no such redemption extension
--------
shall be for a period greater than six months. The Corporation shall, within 5
days of the occurrence of a Specified Corporate Action (or, in the case of a
Specified Corporate Action described in clause (iii) of the definition of
"Specified Corporate Action," within 5 days of the date on which the Corporation
obtains actual knowledge of such Specified Corporate Action), give notice
thereof by publication in a newspaper of general circulation in the Borough of
Manhattan, The City of New York (if such publication shall be required by
applicable law, rule, regulation or securities exchange requirement), and, in
any case, a similar notice shall be mailed to each holder of shares of the
Series T Preferred Stock, at such holder's address as it appears on the transfer
books of the Corporation. Each such notice shall specify the Specified
Corporate Action that has occurred and the date of such occurrence, the place or
places
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of payment, the then effective Specified Corporate Action Redemption Price and
the date the right of such holder to require a Specified Corporate Action
Redemption shall terminate.
(iii) If the notice sent by the Corporation pursuant to
Section 6(a)(ii) shall contain (i) a form inquiring as to whether a holder of
shares of Series T Preferred Stock intends to surrender the certificate(s)
representing such shares for redemption pursuant to this Section 6(a) and (ii) a
stamped self-addressed envelope for return of such form to the Corporation or
its designee, within ten Business Days of such notice, each holder shall return
such inquiry form to the Corporation and shall indicate in such form the
proportion of such holder's shares of Series T Preferred Stock that will be
surrendered for redemption pursuant to this Section 6(a). If such notice shall
indicate that if a holder does not respond prior to ten Business Days after the
date of such notice that such holder will be deemed to have notified the
Corporation that it will not require the redemption of the shares of Series T
Preferred Stock held by such holder for purposes of Section 3(b) and such holder
does not respond to the Corporation's inquiry prior to ten Business Days after
the date of such notice, such holder will be deemed to have notified the Corpo-
ration that it will not require the redemption of the shares of Series T
Preferred Stock held by such holder for purposes of Section 3(b). Nothing
contained in this Section 6(a)(iii) shall affect the right of a holder of Series
T Preferred Stock to require the Corporation to redeem such shares pursuant to
Section 6(a)(i).
(b) If at any time the Additional Amount is greater than 0,
then each holder of shares of the Series T Preferred Stock shall have the right,
at such holder's option exercisable at any time (such time, the "Conversion
Date") on 30 days' notice to the Corporation, to require the Corporation to
redeem (a "Conversion Redemption") all or any part of the shares of Series T
Preferred Stock then held by such holder at a price per share (the "Conversion
Redemption Price") equal to the sum of (A) 100% of the Liquidation Preference of
such shares, (B) an amount per share equal to all accrued and unpaid dividends
thereon, whether or not declared or payable, to the applicable Conversion
Redemption Date and (C) the Additional Amount, in immediately available funds.
Notwithstanding the foregoing, if the redemption of any portion of such shares
would in the judgment of the Board of Directors of the Corporation have a
material adverse effect on the Corporation, then the Corporation may elect to
deliver with respect to such shares, in lieu of cash, notes, including
subordinated notes, of the Corporation ("Notes") (x) having a final maturity
date no later than ten years from the date of issuance, and (y) having such
other
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terms and conditions as shall result in a determination that such Notes have a
fair market value as of the date of their proposed issuance at least equal to
the sum of (1) the Conversion Redemption Price with respect to such shares and
(2) customary underwriting discounts and commissions payable with respect to the
sale of securities of a type comparable to the Notes, or shares of
nonconvertible preferred stock ("Redemption Preferred Stock") having the terms
and conditions described in clauses (x) and (y) in lieu of Notes. The
Corporation shall use its best efforts to cause the Notes or the Redemption
Preferred Stock to be registered for immediate resale pursuant to an effective
registration statement under the Securities Act prior to the issuance thereof.
If such registration statement is not effective within 120 days of the date of
such issuance then the annual interest rate of the Notes or the annual dividend
rate of the Redemption Preferred Stock, as applicable, shall be increased by
0.5% per annum until such securities are sold pursuant to an effective reg-
istration statement under the Securities Act. For purposes of this Section
6(b), "fair market value" shall mean the fair market value of the Notes or Re-
demption Preferred Stock, as the case may be, as determined by an investment
banking firm of national standing selected by the Corporation and reasonably
acceptable to the holders of a majority of the shares of Series T Preferred
Stock electing to effect such Conversion Redemption. In the case that the Cor-
poration shall be entitled to deliver either Notes or Redemption Preferred
Stock, it shall be the election of the Corporation whether to deliver such Notes
or Redemption Preferred Stock, except that, if, the sale of the security to be
delivered by the Corporation to effect a Conversion Redemption would give rise
to an additional liability on the part of such holder upon the sale thereof and
it shall so notify the Corporation in writing, the Corporation shall deliver to
such holder the other type of security specified in such notice.
(c) Each holder of shares of the Series T Preferred Stock
shall have the right, at such holder's option exercisable at any time on 30
days' notice to the Corporation on or after December 30, 2009 (the date of any
such exercise, the "Special Redemption Date"), to require the Corporation to
redeem (a "Special Redemption") all or any part of the shares of Series T
Preferred Stock then held by such holder as such holder may elect by written
notice delivered at least 30 days prior to the Special Redemption Date at a
price per share equal to the sum of (A) 100% of the Liquidation Preference of
such share, (B) an amount per share equal to all accrued and unpaid dividends
thereon whether or not declared or payable to the Special Redemption Date and
(C) the Additional Amount, determined as of the date immediately prior to the
Special Redemption Date (the "Special Redemption Price") in immediately
available funds.
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(d) On the date fixed for any Specified Corporate Action
Redemption or on any Conversion Redemption Date or Special Redemption Date, each
holder of shares of Series T Preferred Stock who elects to have shares of Series
T Preferred Stock held by it redeemed shall surrender the certificate
representing such shares to the Corporation (i) at the place designated in such
notice in the case of a Specified Corporate Action Redemption or (ii) at the
Corporation's principal place of business to be maintained by it, in the case of
a Conversion Redemption or Special Redemption, together with an election to have
such redemption made and shall thereupon be entitled to receive payment therefor
provided in this Section 6. If less than all the shares represented by any such
surrendered certificate are redeemed, a new certificate shall be issued rep-
resenting the unredeemed shares. From and after the date of such redemption (i)
the rights to receive dividends thereon shall cease to accrue and (ii) all
rights of the holders of shares of Series T Preferred Stock so redeemed shall
cease and terminate, excepting only the right to receive the Specified Corporate
Action Redemption Price or Conversion Redemption Price or Special Redemption
Price therefor, as applicable; provided, however, that if the Corporation shall
-------- -------
default in the payment of the applicable redemption price the shares of Series T
Preferred Stock that were to be redeemed shall thereafter be deemed to be
outstanding and the holders thereof shall have all of the rights of a holder of
Series T Preferred Stock until such time as such default shall no longer be
continuing or shall have been waived by holders of at least 66-2/3% of the then
outstanding shares of Series T Preferred Stock.
Section 7. Redemption Upon Maturity.
------------------------
(a) On December 30, 2034 (the "Maturity Date"), the
Corporation shall redeem (the "Maturity Redemption") the remaining outstanding
shares of the Series T Preferred Stock at a price per share (the "Maturity
Redemption Price") equal to the sum of (A) 100% of the Liquidation Preference
per share, (B) an amount equal to accrued and unpaid dividends thereon, whether
or not declared or payable, to the Maturity Date and (C) the Additional Amount,
determined as of the date immediately prior to the Maturity Date, in immediately
available funds.
(b) Notice of the Maturity Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication shall be required by applicable law,
rule, regulation or securities exchange requirement), not less than 30, nor more
than 60, days prior to the Maturity Date and, in any case, a similar notice
shall be mailed at least 30, but not more than 60, days prior to the Maturity
Date to each holder of shares of Series T
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Preferred Stock, at such holder's address as it appears on the transfer books
of the Corporation.
(c) On the Maturity Date, the Corporation shall, and at any
time after such notice shall have been mailed and before the Maturity Date the
Corporation may, deposit for the benefit of the holders of shares of Series T
Preferred Stock the funds necessary for such redemption with a bank or trust
company in the Borough of Manhattan, The City of New York, that is "well
capitalized" within the meaning of the applicable banking regulations and having
a capital and surplus of at least $500,000,000. Any moneys so deposited by the
Corporation and unclaimed at the end of two years from the date designated for
such redemption shall revert to the general funds of the Corporation. After
such reversion, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and any holder of
shares of Series T Preferred Stock to be redeemed shall look only to the
Corporation for the payment of the Maturity Redemption Price. Any interest
accrued and unpaid on funds deposited pursuant to this Section 5(c) shall be
paid from time to time to the Corporation for its own account.
(d) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 7(c) in respect of shares of
Series T Preferred Stock to be redeemed pursuant to Section 7(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Maturity Date, (i) the rights
to receive dividends thereon shall cease to accrue and (ii) all rights of the
holders of shares of Series T Preferred Stock shall cease and terminate,
excepting only the right to receive the Maturity Redemption Price therefor;
provided, however, that if the Corporation shall default in the payment of the
- -------- -------
Maturity Redemption Price, the shares of Series T Preferred Stock that were to
be redeemed shall thereafter be deemed to be outstanding and the holders thereof
shall have all of the rights of a holder of Series T Preferred Stock until such
time as such default shall no longer be continuing.
Section 8. Acquired Shares.
---------------
Any shares of Series T Preferred Stock exchanged, redeemed,
purchased or otherwise acquired by the Corporation or any of its Subsidiaries in
any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares of Series T Preferred Stock shall upon
their cancellation become authorized but unissued shares of preferred stock, par
value $4.00 per share, of the Corporation and, upon
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the filing of an appropriate certificate with the Department of State of the
State of New York, may be reissued as part of another series of preferred stock,
par value $4.00 per share, of the Corporation subject to the conditions or
restrictions on issuance set forth herein, but in any event may not be reissued
as shares of Series T Preferred Stock or Parity Stock unless all of the shares
of Series T Preferred Stock issued on the Issue Date shall have already been
redeemed or exchanged.
Section 9. Liquidation, Dissolution or Winding Up.
--------------------------------------
(a) If the Corporation shall commence a voluntary case
under the United States bankruptcy laws or any applicable bankruptcy, insolvency
or similar law of any other country, or consent to the entry of an order for
relief in an involuntary case under any such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or make an assignment for the benefit of its creditors, or admit in writing its
inability to pay its debts generally as they become due (any such event, a
"Voluntary Liquidation Event"), or if a decree or order for relief in respect of
the Corporation shall be entered by a court having jurisdiction in the premises
in an involuntary case under the United States bankruptcy laws or any applicable
bankruptcy, insolvency or similar law of any other country, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and on account of any
such event the Corporation shall liquidate, dissolve or wind up, or if the
Corporation shall otherwise liquidate, dissolve or wind up, no distribution
shall be made (i) to the holders of shares of Junior Stock unless, prior
thereto, the holders of shares of Series T Preferred Stock shall have received
(A) if a Voluntary Liquidation Event shall have occurred, the Optional Redemp-
tion Price with respect to each share and (B) if a Voluntary Liquidation Event
shall not have occurred, the Liquidation Preference and all accrued and unpaid
dividends, whether or not declared or currently payable, to the date of
distribution, with respect to each share, or (ii) to the holders of shares of
Parity Stock, except distributions made ratably on the Series T Preferred Stock
and all Parity Stock in proportion to the total amounts to which the holders of
all shares of the Series T Preferred Stock (which amounts are set forth in
clauses (A) and (B) above) and Parity Stock are entitled upon such liquidation,
dissolution or winding up.
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(b) Neither the consolidation or merger of the Corporation
with or into any other Person nor the sale or transfer of all or any part of the
Corporation's assets for cash, securities or other property shall be deemed to
be a liquidation, dissolution or winding up of the Corporation for purposes of
this Section 9.
Section 10. [Intentionally omitted.]
Section 11. Additional Amount.
-----------------
(a) For the purposes of this Article 5, "Additional Amount"
shall mean an amount per share equal to the product of (i) the excess of the sum
of (1) the Market Price of a share of Common Stock and (2) if the Corporation
shall have issued a right or rights with respect to its outstanding shares of
Common Stock pursuant to a shareholder rights plan, "poison pill" or similar
arrangement, during the period commencing on the "distribution date" of such
right or rights (i.e., the date on which such right or rights commence to trade
----
separately from the Common Stock) and ending on the "triggering date" of such
right or rights (i.e., the date on which such right or rights commence to be
----
exercisable), the Market Price of such right or rights over the Conversion
Amount, in effect as hereinafter determined and (ii) (x) the Liquidation
Preference divided by (y) such Conversion Amount, in all cases calculated as of
the applicable determination date. The Additional Amount shall in no event be
less than zero. The Conversion Amount initially shall be $15.75, and shall
thereafter be subject to adjustment as set forth in Section 11(b). For the
purpose of calculating the Additional Amount in connection with an Optional
Redemption, Specified Corporate Action Redemption, Special Redemption or
Conversion Redemption, except as otherwise set forth in Section 6(a)(ii), the
Market Price of the Common Stock and, if applicable, rights shall be the average
of the Market Price of such securities on the five trading days immediately
preceding and the five trading days immediately following the date of notice of
such redemption.
(b) The Conversion Amount shall be subject to adjustment as
follows:
(i) In case the Corporation shall at any time or from
time to time (A) pay a dividend or make a distribution on the outstanding shares
of Common Stock in Common Stock (other than pursuant to a dividend reinvestment
plan approved by the Corporation's Board of Directors), (B) subdivide the out-
standing shares of Common Stock into a larger number of shares, (C) combine the
outstanding shares of Common Stock into a smaller number of shares or (D) issue
any shares of its
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capital stock in a reclassification of the Common Stock, then, and in each such
case, the Conversion Amount in effect immediately prior to such event shall be
adjusted so that if the holder of any share of Series T Preferred Stock were
entitled to convert such share into such number of shares of Common Stock as
equals the Liquidation Preference divided by the Conversion Amount and such
holder thereafter surrendered such share for conversion, such holder would be
entitled to receive the number of shares of Common Stock or other securities of
the Corporation that such holder would have owned or would have been entitled to
receive upon or by reason of any of the events described above had such share of
Series T Preferred Stock been converted immediately prior to the occurrence of
such event. An adjustment made pursuant to this Section 11(b)(i) shall become
effective retroactively (A) in the case of any such dividend or distribution, to
the opening of business on the day immediately following the close of business
on the record date for the determination of holders of Common Stock entitled to
receive such dividend or distribution or (B) in the case of any such
subdivision, combination or reclassification, to the close of business on the
day upon which such corporate action becomes effective.
(ii) In case the Corporation shall at any time or from
time to time issue or sell shares of Common Stock (or securities convertible
into or exchangeable for shares of Common Stock, or any options, warrants or
other rights to acquire shares of Common Stock (other than options granted to
any employee or director of the Corporation pursuant to a stock option plan
approved by the shareholders of the Corporation)) for a consideration per share
less than the Conversion Amount then in effect at the record date or issuance
date, as the case may be (the "Date") referred to in the following sentence,
including, without limitation, upon exercise of rights issued pursuant to a
shareholder rights plan, "poison pill" or similar arrangement (treating the
price per share of any security convertible or exchangeable or exercisable into
Common Stock as equal to (A) the sum of the price for such security convertible,
exchangeable or exercisable into Common Stock plus any additional consideration
payable (without regard to any antidilution adjustments) upon the conversion,
exchange or exercise of such security into Common Stock divided by (B) the
number of shares of Common Stock initially underlying such convertible,
exchangeable or exercisable security), other than issuances or sales for which
an adjustment is made pursuant to another paragraph of this Section 11(b), then,
and in each such case, the Conversion Amount then in effect shall be adjusted by
dividing the Conversion Amount in effect on the day immediately prior to the
Date by a fraction (x) the numerator of which
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shall be the sum of the number of shares of Common Stock outstanding immediately
prior to the Date plus the number of additional shares of Common Stock issued or
to be issued (or the maximum number into which such convertible or exchangeable
securities initially may convert or exchange or for which such options, warrants
or other rights initially may be exercised) and (y) the denominator of which
shall be the sum of the number of shares of Common Stock outstanding immediately
prior to the Date plus the number of shares of Common Stock that the aggregate
consideration (if any of such aggregate consideration is other than cash, as
valued by the Board of Directors including a majority of the Directors who are
not officers or employees of the Corporation or any of its Subsidiaries, which
determination shall be conclusive and described in a resolution of the Board of
Directors) for the total number of such additional shares of Common Stock so
issued (or into which such convertible or exchangeable securities may convert or
exchange or for which such options, warrants or other rights may be exercised
plus the aggregate amount of any additional consideration initially payable upon
conversion, exchange or exercise of such security) would purchase at the
Conversion Amount. Such adjustment shall be made whenever such shares,
securities, options, warrants or other rights are issued, and shall become
effective retroactively to a date immediately following the close of business
(i) in the case of issuance to stockholders of the Corporation, as such, on the
record date for the determination of stockholders entitled to receive such
shares, securities, options, warrants or other rights and (ii) in all other
cases, on the date ("issuance date") of such issuance; provided, however, that
-------- -------
the determination as to whether an adjustment is required to be made pursuant to
this Section 11(b)(ii) shall only be made upon the issuance of such shares or
such convertible or exchangeable securities, options, warrants or other rights,
and not upon the issuance of the security into which such convertible or
exchangeable security converts or exchanges, or the security underlying such
option, warrants or other right; provided, further, that if any convertible or
-------- -------
exchangeable securities, options, warrants or other rights (or any portions
thereof) that shall have given rise to an adjustment pursuant to this Section
11(b)(ii) shall have expired or terminated without the exercise thereof and/or
if by reason of the terms of such convertible or exchangeable securities,
options, warrants or other rights there shall have been an increase or
increases, with the passage of time or otherwise, in the price payable upon the
exercise or conversion thereof, then the Conversion Amount hereunder shall be
readjusted (but to no greater extent than originally adjusted) on the basis of
(x) eliminating from the computation any additional shares of Common Stock cor-
responding to such convertible or exchangeable securities, options, warrants or
other rights
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<PAGE>
as shall have expired or terminated, (y) treating the additional shares of
Common Stock, if any, actually issued or issuable pursuant to the previous
exercise of such convertible or exchangeable securities, options, warrants or
other rights as having been issued for the consideration actually received and
receivable therefor and (z) treating any of such convertible or exchangeable
securities, options, warrants or other rights that remain outstanding as being
subject to exercise or conversion on the basis of such exercise or conversion
price as shall be in effect at the time.
(iii) In case the Corporation shall at any time or from
time to time distribute to all holders of shares of its Common Stock (including
any such distribution made in connection with a consolidation or merger in which
the Corporation is the resulting or surviving corporation and the Common Stock
is not changed or exchanged or a redemption of any rights or other securities
issued pursuant to a shareholder rights plan, "poison pill" or similar
arrangement) cash, evidences of indebtedness of the Corporation or another
issuer, securities of the Corporation or another issuer or other assets
(excluding (A) Permitted Dividends described in clause (B) of the definition
thereof and (B) securities for which adjustment is made under Section 11(b)(i)
or Section 11(b)(ii)), then, and in each such case, the Conversion Amount then
in effect shall be adjusted by dividing the Conversion Amount in effect
immediately prior to the date of such distribution by a fraction (x) the
numerator of which shall be the Current Market Price of the Common Stock on the
record date referred to below and (y) the denominator of which shall be such
Current Market Price of the Common Stock less the then Fair Market Value (as
determined by the Board of Directors of the Corporation, which determination
shall be conclusive) of the portion of the cash, evidences of indebtedness,
securities or other assets so distributed or of such subscription rights or
warrants applicable to one share of Common Stock (but such denominator not to be
less than one). Such adjustment shall be made whenever any such distribution is
made and shall become effective retroactively to a date immediately following
the close of business on the record date for the determination of stockholders
entitled to receive such distribution.
(iv) In the case the Corporation at any time or from
time to time shall take any action affecting its Common Stock, other than an
action described in any of Section 11(b)(i) through Section 11(b)(iii),
inclusive, then, the Conversion Amount shall be adjusted in such manner and at
such time as the Board of Directors of the Corporation (other than Purchaser
Designees or directors elected pursuant to Section
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<PAGE>
3(b)) in good faith determines to be equitable in the circumstances (such
determination to be evidenced in a resolution, a certified copy of which shall
be mailed to the holders of the Series T Preferred Stock).
(v) The Corporation may make such reductions in the
Conversion Amount, in addition to those required by subparagraphs (i), (ii),
(iii) or (iv) of this Section 11(b), as the Board of Directors considers to be
advisable in order to avoid or to diminish any income tax to holders of Common
Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes.
(vi) Notwithstanding anything contained in this Section
11(b), no adjustment to the Conversion Amount shall be made with respect to any
rights issued pursuant to a shareholder rights plan, "poison pill" or similar
arrangement unless the "triggering date" (i.e., the date on which such rights
----
commence to be exercisable) shall have occurred or such rights shall have been
redeemed, in which event adjustments under clause (ii) and clause (iii),
respectively, shall be made.
(c) If the Corporation shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the Conversion Amount then in
effect shall be required by reason of the taking of such record.
(d) Upon any increase or decrease in the Conversion Amount,
then, and in each such case, the Corporation promptly shall deliver to each
registered holder of Series T Preferred Stock at least 10 Business Days prior to
effecting any of the foregoing transactions a certificate, signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Corporation, setting forth in
reasonable detail the event requiring the adjustment and the method by which
such adjustment was calculated and specifying the increased or decreased Con-
version Amount then in effect following such adjustment.
Section 12. Sinking Fund.
-------------
(a) So long as any shares of Series T Preferred Stock shall
be outstanding, the Corporation shall, on the final business day (any such date,
the "Sinking Fund Date") of each calendar year after 2003, (i) set aside a sum
of money equal to
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<PAGE>
3-1/3% of the aggregate liquidation preference of the shares of Series T
Preferred Stock then outstanding, and (ii) apply such money to redeem such
number of shares of Series T Preferred Stock at the Sinking Fund Redemption
Price (the Corporation's obligations described in this paragraph in respect of
any Sinking Fund Date being hereinafter referred to as the "Sinking Fund
Obligation" for such date) at a price per share (the "Sinking Fund Redemption
Price") equal to the sum of (A) the Liquidation Preference of such share, (B) an
amount per share equal to all accrued and unpaid dividends thereon, whether or
not declared or payable, to the applicable Sinking Fund Date and (C) the
Additional Amount (as defined in Section 11), determined as of the date
immediately prior to the Sinking Fund Date, in immediately available funds;
provided, however, that if the Corporation for any reason fails to discharge its
- -------- -------
Sinking Fund Obligation on any Sinking Fund Date, such Sinking Fund Obligation,
to the extent not discharged, shall become an additional Sinking Fund Obligation
for each succeeding Sinking Fund Date until fully discharged; provided, further,
-------- -------
that no shares of Series T Preferred Stock purchased or acquired by the
Corporation otherwise than through redemption pursuant to this paragraph or
pursuant to an Optional Redemption may be credited against the Sinking Fund
Obligation in respect of any Sinking Fund Date.
(b) Notice of the Sinking Fund Redemption shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan,
The City of New York (if such publication shall be required by applicable law,
rule, regulation or securities exchange requirement), not less than 30, nor more
than 60, days prior to the Sinking Fund Date and, in any case, a similar notice
shall be mailed at least 30, but not more than 60, days prior to the Sinking
Fund Date to each holder of shares of Series T Preferred Stock, at such holder's
address as it appears on the transfer books of the Corporation.
(c) The shares to be redeemed pursuant to paragraph (a)
shall be selected pro rata (as nearly as may be) so that the number of shares
redeemed from each holder shall be the same proportion of all the shares to be
redeemed that the total number of shares of Series T Preferred Stock then held
by such holder bears to the total number of shares of Series T Preferred Stock
then outstanding.
(d) On the Sinking Fund Date, the Corporation shall, and at
any time after such notice shall have been mailed and before the Sinking Fund
Date the Corporation may, deposit for the benefit of the holders of shares of
Series T Preferred Stock the funds necessary for such redemption with a bank or
trust company in the Borough of Manhattan, The City of New
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<PAGE>
York, that is "well capitalized" within the meaning of the applicable banking
regulations and having a capital and surplus of at least $500,000,000. Any
moneys so deposited by the Corporation and unclaimed at the end of two years
from the date designated for such redemption shall revert to the general funds
of the Corporation. After such reversion, any such bank or trust company shall,
upon demand, pay over to the Corporation such unclaimed amounts and thereupon
such bank or trust company shall be relieved of all responsibility in respect
thereof and any holder of shares of Series T Preferred Stock to be redeemed
shall look only to the Corporation for the payment of the Sinking Fund Re-
demption Price. Any interest accrued and unpaid on funds deposited pursuant to
this Section 12(c) shall be paid from time to time to the Corporation for its
own account.
(e) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 12(c) in respect of shares of
Series T Preferred Stock to be redeemed pursuant to Section 12(a),
notwithstanding that any certificates for such shares shall not have been
surrendered for cancellation, from and after the Sinking Fund Date, (i) the
rights to receive dividends thereon shall cease to accrue and (ii) all rights of
the holders of shares of Series T Preferred Stock shall cease and terminate,
excepting only the right to receive the Sinking Fund Redemption Price therefor;
provided, however, that if the Corporation shall default in the payment of the
- -------- -------
Sinking Fund Redemption Price, the shares of Series T Preferred Stock that were
to be redeemed shall thereafter be deemed to be outstanding and the holders
thereof shall have all of the rights of a holder of Series T Preferred Stock
until such time as such default shall no longer be continuing.
Section 13. Exchange for Series E Preferred Stock.
--------------------------------------
(a) Exchange. Outstanding shares of Series T Preferred
--------
Stock shall be exchangeable at any time and from time to time by the holder
thereof into shares of Series E Preferred Stock having the same aggregate liqui-
dation preference as the shares of Series T Preferred Stock exchanged therefor,
upon two business days' written notice by such holder of the election to effect
such exchange (each such exchange, an "Exchange" and all such Exchanges
collectively, the "Exchange"), subject to the satisfaction or waiver of all
applicable conditions set forth in Section 13(b), and, upon any such Exchange,
any accrued and unpaid dividends with respect to the shares of Series T Pre-
ferred Stock exchanged shall become accrued and unpaid dividends on the shares
of Series E Preferred Stock exchanged therefor.
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<PAGE>
(b) Conditions to Exchange. The obligations of the
----------------------
Corporation to effect an Exchange are subject to satisfaction of the following
conditions at or prior to such Exchange (unless expressly waived in writing by
such parties at or prior to such Exchange):
(i) Hart-Scott-Rodino. The waiting period under the
-----------------
Hart-Scott-Rodino Antitrust Improvements Act of 1976 shall have expired or been
terminated, to the extent applicable.
(ii) Regulatory Matters. There shall have been re-
------------------
ceived, and shall be in full force and effect, all requisite approvals under the
statutes and regulations of each jurisdiction (x) in the United States of
America or any state, territory or possession thereof and (y) each other
jurisdiction wherever located that is material to the issuance by the Cor-
poration and the conduct of the business conducted by the Corporation and its
subsidiaries, taken as a whole, in each case with respect to the holding by the
holder of the shares of Series E Preferred Stock to be issued upon the Exchange
of the shares of Series T Preferred Stock.
Article 6. Definitions.
-----------
For the purposes of this Certificate of Amendment of
Certificate of Incorporation, the following terms shall have the meanings
indicated:
"Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which commercial banks in the City of New York are
authorized or required by law or executive order to close.
"Chicago Preferred Stock" shall mean the Series E Preferred
Stock, the Series F Preferred Stock, the Series G Preferred Stock, the Series H
Preferred Stock and the Series T Preferred Stock.
"Closing Price" on any day shall mean the closing sale price
of the Common Stock regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices of the
Common Stock regular way, in each case on the New York Stock Exchange or, if the
Common Stock is not listed or admitted to trading on such exchange, on the
principal national securities exchange on
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<PAGE>
which it is then traded or, if the Common Stock is not listed or admitted to
trading on such an exchange, on Nasdaq.
"Control Transaction" shall mean any of (i) a merger,
consolidation or business combination to which the Corporation is a party that
would result in a change in ownership of more than 50% of the securities of the
Corporation entitled to vote generally in the election of directors, (ii) the
sale of all or substantially all of the Corporation's assets, and (iii) the sale
of more than 50% of the outstanding securities of the Corporation entitled to
vote generally in the election of directors; in any case, other than pursuant to
a transaction between the Corporation and CNA Financial Corporation or its
Affiliates.
"Current Market Price" per share shall mean, on any date
specified herein for the determination thereof, (a) the average daily Market
Price of the Common Stock for those days during the period of 30 days, ending on
such date, on which the national securities exchanges were open for trading, and
(b) if the Common Stock is not then listed or admitted to trading on any
national securities exchange or quoted in the over-counter market, the Market
Price on such date.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Securities and Exchange
Commission thereunder.
"Fair Market Value" shall mean the amount that a willing
buyer would pay a willing seller in an arm's-length transaction.
"Issue Date" shall mean the first date of issuance of any
shares of Chicago Preferred Stock in December, 1994.
"Junior Stock" shall mean any capital stock of the
Corporation ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) (a) for the purposes of Article 1, to the Series E
Preferred Stock, (b) for the purposes of Article 2, to the Series F Preferred
Stock, (c) for the purposes of Article 3, to the Series G Preferred Stock, (d)
for the purposes of Article 4, to the Series H Preferred Stock (c) for the
purposes of Article 5, to the Series T Preferred Stock.
"Liquidation Preference" with respect to a share of Chicago
Preferred Stock shall mean $200.
"Market Price" shall mean, per share of Common Stock, on any
date specified herein: (a) the closing price per share
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<PAGE>
of the Common Stock on such date published in The Wall Street Journal or, if no
such closing price on such date is published in The Wall Street Journal, the
average of the closing bid and asked prices on such date, as officially reported
on the principal national securities exchange on which the Common Stock is then
listed or admitted to trading; or (b) if the Common Stock is not then listed or
admitted to trading on any national securities exchange but is designated as a
national market system security by the NASD, the last trading price of the
Common Stock on such date; or (c) if there shall have been no trading on such
date or if the Common Stock is not so designated, the average of the reported
closing bid and asked prices of the Common Stock, on such date as shown by
Nasdaq and reported by any member firm of the New York Stock Exchange selected
by the Corporation; or (d) if none of (a), (b) or (c) is applicable, a market
price per share determined at the Corporation's expense by an appraiser chosen
by the holders of a majority of the shares of Series E Preferred Stock or, if
such calculations shall also be utilized in connection with the Series F
Preferred Stock, Series G Preferred Stock or Series T Preferred Stock, the
holders of a majority of the aggregate shares of Series E Preferred Stock and,
as applicable, Series F Preferred Stock, Series G Preferred Stock and Series T
Preferred Stock or, if no such appraiser is so chosen more than twenty Business
Days after notice of the necessity of such calculation shall have been delivered
by the Corporation to the holders of Series E Preferred Stock or, if such
calculation shall also be utilized in connection with the Series F Preferred
Stock or Series G Preferred Stock, the holders of Series E Preferred Stock and,
as applicable, Series F Preferred Stock and Series G Preferred Stock, then by an
appraiser chosen by the Corporation.
"Material Provision of the Securities Purchase Agreement"
shall mean any of the provisions contained in any of Sections 6.6, 6.13, 6.14,
6.16, 6.17, 6.18 or 14.1 of the Securities Purchase Agreement.
"Merger Agreement" shall mean the Agreement and Plan of
Merger, dated as of December 6, 1994, by and among the Corporation, Chicago
Financial Corporation and CNA Acquisition Corp.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Nasdaq" shall mean the National Market System of the
National Association of Securities Dealers, Inc. Automated Quotations System.
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<PAGE>
"New Preferred Stock" means nonconvertible, non-exchangeable
shares of Preferred Stock to be issued by the Corporation that have an aggregate
liquidation preference not exceeding $100,000,000.
"New Senior Notes" means senior notes to be issued by the
Corporation that have an aggregate principal amount not exceeding $100,000,000.
"Parity Stock" shall mean, with respect to any series of the
Chicago Preferred Stock, any capital stock of the Corporation, including any
other series of Chicago Preferred Stock, the Other Preferred Stock and the New
Preferred Stock (if any), ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with such series of Chicago Preferred
Stock.
"Permitted Dividend" shall mean (A) a dividend on the Common
Stock payable solely in shares of Junior Stock or (B) a dividend on the Common
Stock payable solely in cash that has been declared by the Board of Directors
subsequent to the third anniversary of the Issue Date; provided, however, that
-------- -------
if at the time of the declaration of such dividend (i) each series of Chicago
Preferred Stock or Parity Stock is not rated at least BBB- by Standard & Poor's
and at least based by Moody's Investor Services or (ii) the Corporation has
received written notice from either such rating agency that (x) the rating is-
sued thereby with respect to any such capital stock is likely to be downgraded
by such rating agency or (y) such rating agency has placed the Corporation on
credit watch with negative implications of a downgrade of the rating issued with
respect to any such capital stock by Standard & Poor's to below BBB- or by
Moody's Investor Services to below Baa-3 (the time during which such minimum
ratings are not in effect or such time after the Corporation has received such
written notice until such time as the Corporation has received written notice
from such rating agency that it no longer intends to downgrade such rating or
that the Corporation has been removed from such credit watch shall be referred
to as the "Dividend Maximum Period"), then the aggregate per share amount of
cash dividends on the Common Stock that may thereafter be declared or paid in
such fiscal year and each fiscal year thereafter during the Dividend Maximum
Period (including cash dividends declared or paid prior to the commencement of
the Dividend Maximum Period) shall not exceed an amount equal to 25% of the
average of consolidated net operating income of the Corporation and its
Subsidiaries (excluding capital gains or loss either realized or unrealized) per
share of Common Stock (as determined in accordance with generally accepted
accounting principles) for the two immediately preceding fiscal years (the
"Dividend
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<PAGE>
Maximum Amount") provided further, that (x) if in any fiscal year in which there
-------- -------
is a Dividend Maximum Period cash dividends in excess of the Dividend Maximum
Amount (the "Excess Amount") shall have been paid prior to the commencement of
the Dividend Maximum Period, such dividends shall nevertheless be considered
Permitted Dividends so long as (I) no other cash dividends shall have been
declared or paid during the portion of such fiscal year that was a Dividend
Maximum Period and (II) in the next succeeding fiscal year, if a Dividend
Maximum Period exists the aggregate per share amount of cash dividends on the
Common Stock shall not exceed the excess of the Dividend Maximum Amount for such
year over the Excess Amount.
"Person" shall mean any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind, and shall include any successor (by merger or oth-
erwise) of such entity.
"Preferred Stock" shall mean preferred stock, par value
$4.00 per share, of the Corporation.
"Purchaser Designee" shall have the meaning specified in the
Securities Purchase Agreement.
"Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated as of the Issue Date, between the Corporation and the
original holders of the Chicago Preferred Stock and the option to purchase the
shares of Series G Preferred Stock, as the same may be amended from time to
time.
"Restricted Payment" shall mean any dividend payment (other
than a Permitted Dividend) or other distribution of assets, properties, cash,
rights, obligations or securities by the Corporation on account of any shares of
Common Stock or any other class of Junior Stock or the purchase, redemption or
other acquisition for value by the Corporation or any Subsidiary of the
Corporation of any shares of Common Stock or any other class of Junior Stock or
any warrants, rights or options to acquire such shares, now or hereafter
outstanding.
"Securities Purchase Agreement" shall mean the Securities
Purchase Agreement, dated as of December 6, 1994, by and between the Corporation
and CNA Financial Corporation as the same may be amended from time to time.
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<PAGE>
"Senior Stock" shall mean, with respect to any series of
Chicago Preferred Stock, any capital stock of the Corporation ranking senior
(either as to dividends or upon liquidation, dissolution or winding up) to such
series of Chicago Preferred Stock.
"Specified Corporate Action" shall mean such time as: (i)
the Corporation shall consent or agree to the acquisition of, or the
commencement of a tender offer for, or the Board of Directors of the Corporation
shall make a statement that the Board of Directors recommends, or is neutral
with respect to, a tender offer for, "beneficial ownership" (as defined in Rule
13d-3 under the Exchange Act) by any "Person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) other than Chicago Financial Corporation and its Affili-
ates, of securities of the Corporation entitled to vote generally in the
election of directors, or securities convertible into, exchangeable for or
exercisable into such securities (collectively, "Designated Securities"), repre-
senting, when added to the Designated Securities already owned by any such
Person or group, thirty percent (30%) or more of such Designated Securities;
(ii) the Board of Directors of the Corporation shall take any action under
Section 912 of the Business Corporation Law of the State of New York to exempt
from the provisions of Section 912 of the Business Corporation Law of the State
of New York any transaction between the Corporation and any of its Subsidiaries,
on the one hand, and any Person or group (other than Chicago Financial
Corporation and its Affiliates or any transferee thereof), or any Affiliates of
any such Person or group, on the other hand, who (A) acquire, own or hold ben-
eficial ownership of Designated Securities representing thirty percent (30%) or
more of such Designated Securities or (B) acquire, own or hold beneficial
ownership of Designated Securities representing ten percent (10%) or more of
such Designated Securities unless such other Person or group, or any Affiliate
of such Person or group, enters into a standstill agreement with the Corporation
limiting the acquisition of Designated Securities by such other Person or group,
or any Affiliates of such Person or group, to less than thirty percent (30%) of
the Designated Securities and such standstill agreement remains in full force
and effect; (iii) any Person or group (other than Chicago Financial Corporation
and its Affiliates or any transferee thereof) shall acquire, or shall have the
then contractual right to acquire through conversion, exercise of warrants or
otherwise, more than thirty percent (30%) of the Designated Securities; (iv) the
Corporation shall agree to merge or consolidate with or into any Person, (other
than Chicago Financial Corporation and its Affiliates or any transferee thereof)
or shall agree to sell all or substantially
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<PAGE>
all its assets to any such Person other than (a) a merger or consolidation of
one Subsidiary of the Corporation into another or the Corporation, or (b) a
merger or consolidation immediately subsequent to which all or substantially all
the holders of the outstanding shares of capital stock immediately prior to such
consolidation or merger are entitled to receive shares representing 50% or more
of the then outstanding shares of capital stock of the resulting or surviving
corporation entitled to vote generally in the election of directors; or (v) a
majority of the Board of Directors of the Corporation shall consist of Persons
other than Continuing Directors (and such term shall not include the
transactions contemplated by the Merger Agreement). The term "Continuing
Director" shall mean any member of the Board of Directors on the Issue Date and
any directors elected pursuant to Sections 3.1.18 and 6.17 of the Securities
Purchase Agreement and any other member of the Board of Directors who shall be
recommended or elected to succeed a Continuing Director by a majority of
Continuing Directors who are then members of the Board of Directors. "Specified
Corporate Action" shall not include the execution of the Merger Agreement or the
consummation of the Merger (as defined in the Merger Agreement).
"Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
Article 7. Preemptive Rights.
-----------------
None of the holders of any series of Chicago Preferred
Stock, shall be entitled to any preemptive or subscription rights in respect of
any securities of the Corporation.
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<PAGE>
IN WITNESS WHEREOF, we have signed this certificate on this
6th day of December, 1994. It is affirmed that the statements contained herein
are true under penalties of perjury.
/s/ Adrian Tocklin
-------------------------------
Name: Adrian Tocklin
Title: President
/s/ William F. Gleason, Jr.
-------------------------------
Name: William F. Gleason, Jr.
Title: Secretary
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EXHIBIT B
THIS OPTION AND SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, OR (ii) AN APPLICABLE EXEMPTION FROM
REGISTRATION THEREUNDER. ANY SALE PURSUANT TO CLAUSE (ii) OF THE PRECEDING
SENTENCE MUST BE ACCOMPANIED BY AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER OF THIS OPTION TO THE EFFECT THAT SUCH SALE IS
NOT IN VIOLATION OF THE ACT.
STOCK OPTION
------------
1. Grant of Option. Pursuant to the Securities Purchase Agreement,
---------------
dated as of December 6, 1994 (the "Securities Purchase Agreement"), between the
Continental Corporation, a New York corporation (the "Corporation"), and CNA
Financial Corporation, a Delaware corporation (the "Optionee"), the Corporation
hereby grants to the Optionee, for the period beginning on (x) if the Merger
-
Agreement terminates pursuant to Section 7.1(iv) or Section 7.1(vii) thereof,
the Termination Date or (y) if the Merger Agreement terminates other than
-
pursuant to Section 7.1(iv) or Section 7.1(vii) thereof, the earlier of the
120th day after the Termination Date or the date of the occurrence of a
Specified Corporate Action (the "Commencement Date"), and ending at
December 9, 2001 (the "Expiration Date"), the exclusive and irrevocable right
and option (this "Option")
<PAGE>
to purchase from the Corporation for cash in an amount equal to $125,000,000.00
(the "Exercise Price") a total of 62,500 shares (the "Shares") of Cumulative
Preferred Stock, Series G (the "Series G Preferred Stock"), par value $4.00 per
share, of the Corporation, as such Series G Preferred Stock is designated in the
Certificate of Incorporation of the Corporation. Accordingly, the exercise
price per Share shall be $200.00 (the "Exercise Price Per Share"). Notwith-
standing the foregoing, if, prior to the Commencement Date, all then outstanding
Chicago Preferred Stock is redeemed or purchased pursuant to Section 15 of the
Securities Purchase Agreement, the Option will terminate and such date of re-
demption or purchase will be deemed to be the Expiration Date.
2. Defined Terms. Capitalized terms used but not defined herein
-------------
shall have the meanings specified in the Securities Purchase Agreement.
3. Exercise of Option. This Option may be exercised in whole or in
------------------
part by the Optionee from time to time between the Commencement Date and the
Expiration Date. Upon any partial exercise of this Option, the remainder of
this Option shall remain in effect and may be exercised at any time or times
thereafter until the Expiration Date. If the Optionee wishes to exercise this
Option, the Optionee
2
<PAGE>
shall send a written notice to the Corporation specifying its intention to
exercise this Option and setting forth a date (not less than 5 business days and
not more than 10 business days from the date of such notice), time and place for
the closing of such purchase. The place specified in such notice shall be the
offices of the Corporation unless otherwise agreed to by the Optionee and the
Corporation. Each date on which the notice is sent to the Corporation by a
means provided for in Section 8.3 hereof shall be deemed to be the exercise date
with respect to such purchase and is referred to herein as the "Exercise Date."
The Option may be exercised only with respect to full shares of Series G
Preferred Stock. No fractional shares of Series G Preferred Stock shall be
issued.
4. Payment and Delivery of Certificates.
------------------------------------
a. Delivery of Funds and the Acknowledgement. Upon any
-----------------------------------------
exercise of all or any part of this Option, the Optionee shall on the Exercise
Date (i) deliver to the Corporation an Election to Exercise in the form of
Exhibit A hereto and (ii) make payment to the Corporation of the aggregate
Exercise Price Per Share for the Shares being purchased by delivery of a
certified or bank check or by wire transfer of immediately available funds to a
bank designated by the Corporation.
3
<PAGE>
b. Delivery of the Shares. Upon payment (or deemed payment in
----------------------
accordance with Section 4.1) of the Exercise Price Per Share for the Shares
being purchased, the Corporation shall deliver to the Optionee certificates
representing the number of Shares being purchased by the Optionee from the
Corporation, registered in the name of the Optionee. The issuance of any Shares
upon the exercise of this Option and the delivery of certificates representing
such Shares shall be made without charge to the Holder for any tax or other
charge in respect of such issuance.
c. Put Option. At any time that the Optionee would be entitled
----------
to cause the redemption of any Shares pursuant to Article 3, Section 6 of the
Certificate of Amendment if it were the holder of such Shares, in lieu of
exercising all or any part of this Option, the Optionee may, in the case of the
Holder's Election Redemption, the first anniversary of the Commencement Date or,
in the case of any other redemption, at any time on or after the Commencement
Date, instead require the Corporation to repurchase this Option (or any portion
thereof) for cash at a price equal to the Value (as hereinafter defined for pur-
poses of this Section 4.3) of this Option. For purposes of this Section 4.3,
the Value of this Option (or such portion) shall equal the product of (i) the
-
number of Shares for
4
<PAGE>
which this Option (or such portion) is exercisable, multiplied by (ii) the
--
excess, if any, of (A) the applicable redemption price per Share at such time
-
pursuant to Article 3, Section 6 of the Certificate of Amendment (which will be,
in each case hereunder, the sum of (x) 100% of the Liquidation Preference of
such share and (y) the Additional Amount), over (B) the Exercise Price Per
-
Share. Notwithstanding the foregoing, if the applicable redemption price is the
Holder's Election Redemption Price and the redemption of any portion of this
Option would (I) cause any two of Standard's & Poor's ("S&P"), Moody's Investor
-
Services ("Moody's") and A.M. Best Company ("A.M. Best") to downgrade the rating
of (a) the Corporation's securities, in the case of S&P or Moody's or (b) the
pooled rating of the Subsidiaries of the Corporation engaged in the insurance
business, in the case of A.M. Best or (II) in the reasonable judgment of the
--
Board of Directors of the Corporation have a material adverse effect on the
financial condition of the Corporation, then the Corporation may elect to
deliver with respect to such portion of this Option in lieu of cash senior non-
convertible notes of the Corporation ("Notes") (x) having a final maturity date
no later than December 31, 2006, and (y) having such other terms and conditions
as shall result in a determination that such Notes have a fair market value as
of
5
<PAGE>
the date of their proposed issuance at least equal to the sum of (1) the Value
of this Option (or such portion) and (2) customary underwriting discounts and
commissions payable with respect to the sale of securities of a type comparable
to the Notes; provided, however, that if the issuance of senior nonconvertible
-------- -------
notes would cause the event described in clause (I) of this sentence or in the
-
reasonable judgment of the Board of Directors of the Corporation have a material
adverse effect on the financial condition of the Corporation, then the
Corporation may elect to issue, in lieu of senior nonconvertible notes, subordi-
nated nonconvertible notes (in which case the term "Notes" shall mean such
subordinated nonconvertible notes) or shares of nonconvertible preferred stock
("Redemption Preferred Stock"), in each case having the terms and conditions
described in clauses (x) and (y) of this sentence. The Corporation shall use
its best efforts to cause the Notes or the Redemption Preferred Stock to be
registered for immediate resale pursuant to an effective registration under the
Act prior to the issuance thereof. If such registration statement is not
effective within 60 days of the date of such issuance then the annual interest
rate of the Notes or the annual dividend rate of the Redemption Preferred Stock,
as applicable, shall be increased by 0.5% per annum until such securities are
sold
6
<PAGE>
pursuant to an effective registration statement under the Act. For purposes of
this Section 4.3 "fair market value" shall mean the fair market value of the
Notes or Redemption Preferred Stock, as the case may be, as determined by an
investment banking firm of national standing selected by the Corporation and
reasonably acceptable to the Optionees electing to effect such Holder's Election
Redemption. In the case that the Corporation shall be entitled to deliver
either subordinated nonconvertible notes or Redemption Preferred Stock, it shall
be the election of the Corporation whether to deliver such Notes or Redemption
Preferred Stock, except that, if the sale of the security to be delivered by the
Corporation pursuant to the terms hereof would give rise to an additional
liability on the part of the Optionee and it shall so notify the Corporation in
writing, the Corporation shall deliver the type of security specified in such
notice.
5. Transfer.
--------
a. Restrictions on Transferability. The Optionee will not
-------------------------------
effect any sale, assignment, transfer, disposition by gift or distribution in
liquidation or otherwise ("Transfer") (including any Transfer upon foreclosure
of a pledge or other security interest), pledge, mortgage, hypothecation or
grant of a security interest of or in this
7
<PAGE>
Option or any of the Shares or any Subordinated Notes issued upon exchange for
the Shares (the "Exchange Notes") that under applicable law requires prior
regulatory approval until such regulatory approval has been obtained. The
Optionee agrees that, until the earlier of (i) the Effective Time (as such term
is defined in the Merger Agreement) and (ii) the Termination Date, it will not
Transfer any portion of the Option, except to an Affiliate of the Optionee who
agrees to be bound by the restrictions of this Section 5 and of Sections 6.1 and
6.4 of the Securities Purchase Agreement. The Optionee will not Transfer,
pledge, mortgage, hypothecate or grant a security interest in this Option, any
of the Shares or Exchange Notes (unless, with respect to such Shares or Exchange
Notes, such Shares or Exchange Notes were previously issued pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "Act")) except pursuant to (A) an effective registration statement under
the Act or (B) an applicable exemption from registration under the Act. In
connection with any Transfer by the Optionee pursuant to clause (B) of the
immediately preceding sentence, the Optionee shall furnish to the Corporation an
opinion of counsel reasonably satisfactory to the Corporation to the effect that
the proposed transfer or conveyance would not be in violation of the Act. The
8
<PAGE>
Optionee may not, during the period (the "Restricted Period") ending upon the
earliest to occur of (i) the third anniversary of the date hereof, (ii) a Change
of Control, (iii) a breach by the Corporation of any of its obligations under
any of Sections 6.6, 6.13, 6.14, 6.16, 6.17, 6.18 or Section 14 of the
Securities Purchase Agreement or any of its material obligations under the
Registration Rights Agreement or any of its material obligations under the
Merger Agreement giving rise to a right of termination under Section 7.1(iv)
thereof, and (iv) the date on which the full amount of dividends payable on the
Series E Preferred Stock, Series F Preferred Stock, Series G Preferred Stock,
Series H Preferred Stock or Series T Preferred Stock for any two quarterly
dividend periods shall not have been paid, the Optionee will not Transfer any
portion of the Option, the Shares or the Exchange Notes except (1) to an
Affiliate of the Purchaser, who agrees to be bound by the restrictions of this
Section 5.1 and Sections 6.1 and 6.4 of the Securities Purchase Agreement,
(2) to a person or entity who agrees to be bound by the restrictions of this
Section 5.1 and Sections 6.1 and 6.4 of the Securities Purchase Agreement, the
Transfer to whom has been approved in advance by the Board of Directors of the
Corporation, (3) to a person or entity who after such Transfer will beneficially
own (to the know
9
<PAGE>
ledge of the Optionee, based solely on the representation and warranty of such
person or entity, and knowledge available from a review of publicly available
filings made by such person or entity with respect to the beneficial ownership
of Common Stock under Section 13 of the Exchange Act) less than 5% of the Common
Stock on a fully diluted basis, (4) pursuant to Rule 144 under the Act, or (5)
pursuant to a tender offer (a) commenced by the Corporation or (b) commenced by
any other person or entity with respect to which the Board of Directors of the
Corporation shall send to shareholders a statement that the Board of Directors
(x) recommends approval of such tender offer, or (y) is neutral with respect to
such tender offer. Other than as set forth in the first sentence of this
Section 5.1, nothing contained in this Section 5.1 shall restrict or prohibit
the Purchaser from pledging, mortgaging, hypothecating or granting a security
interest in, or granting participation rights in, the Option, the Shares or the
Exchange Notes; provided, however, that if a pledgee, mortgagee or holder of
-------- -------
such security interest forecloses on the Option, the Shares or the Exchange
Notes during the Restricted Period, it may do so only if such pledgee, mortgagee
or holder of such security interest agrees to be bound by the restrictions of
this Section 5.1 and Sections 6.1 and 6.4 of the Securities
10
<PAGE>
Purchase Agreement. Notwithstanding the foregoing, if none of the events
specified in any of clauses (ii), (iii) or (iv) above has occurred (whether
before or after termination of the Restricted Period), then the Purchaser shall
not, prior to the fifth anniversary of December 9, 1994, Transfer any portion
of the Option, the Shares or the Exchange Notes to any person or entity who
after such Transfer will own (to the knowledge of the Purchaser, based solely on
the representations and warranty of the Person, and knowledge available from a
review of publicly available filings made by such person or entity with respect
to the beneficial ownership of Common Stock under Section 13 of the Exchange
Act) more than 5% of the Common Stock of the Company on a fully diluted basis,
unless such person or entity agrees to be bound by the terms and restrictions of
the penultimate sentence of Section 6.1, Section 6.4 and Section 7 of the
Purchase Agreement and this penultimate sentence of Section 6.1 of the Purchase
Agreement. Notwithstanding the foregoing, nothing contained herein shall
prohibit any Transfer, pledge, mortgage, hypothecation or grant of a security
interest of or in the Option by any insurance regulator acting as conservator or
receiver.
b. Restrictive Legend. Until such time as (i) a registration
------------------
statement with respect to the sale of
11
<PAGE>
this Option shall have become effective under the Act and the Option shall have
been disposed of in accordance with such registration statement, (ii) this
Option shall have been sold as permitted by Rule 144 under the Act and the
purchaser thereof does not receive "restricted securities" as defined in Rule
144 or (iii) this Option shall have been otherwise transferred, a new Option not
bearing a legend restricting further transfer shall have been delivered by the
Corporation and subsequent public distribution of this Option shall not in the
opinion of counsel to the Optionee require registration under the Act, this
Option shall be subject to a stop-transfer order and shall bear the legend set
forth hereon. So long as the Shares or Exchange Notes are Registrable
Securities, the Shares or Exchange Notes shall be subject to a stop-transfer
order and shall bear the following legend by which each holder thereof shall be
bound:
"[THE SHARES REPRESENTED BY THIS CERTIFICATE AND ANY SHARES OR OTHER
SECURITIES ISSUABLE UPON EXCHANGE HEREOF] [THIS NOTE] MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 OR (ii) AN APPLICABLE EXEMPTION FROM REGISTRATION
THEREOF. ANY SALE PURSUANT TO CLAUSE (ii) OF THE PRECEDING SENTENCE MUST
BE ACCOMPANIED BY AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
ISSUER OF THESE SECURITIES TO THE EFFECT SUCH SALE IS NOT IN VIOLATION OF
THE ACT."
c. Removal of Legends. After termination of the requirement
------------------
that all or part of such legend be placed
12
<PAGE>
upon this Option, a certificate representing the Shares or an Exchange Note, the
Corporation shall, upon receipt by the Corporation of evidence reasonably
satisfactory to it that such requirement has terminated and upon the written
request of the holder of this Option, such Shares or such Exchange Note, issue a
new Option, certificate for such Shares or Exchange Note that does not bear such
legend.
d. Transfer of Option. Subject to Section 5.1, this Option
-------------------
shall be transferable, in whole or in part, upon delivery thereof to the
Corporation accompanied by an Assignment substantially in the form of Exhibit B
hereto duly endorsed by the Optionee. Upon any registration of transfer, the
Corporation shall deliver a new Option to the person entitled thereto. This
Option may be exchanged, at the option of the Optionee, for another Option, or
other Options of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Shares upon surrender to the
Corporation.
6. Reservation of Shares. The Corporation shall retain and reserve
----------------------
a sufficient number of shares of Series G Preferred Stock in order to meet its
obligation hereunder. The Corporation agrees not to issue, sell, assign,
pledge, hypothecate, transfer or otherwise dispose of any shares of
13
<PAGE>
Series G Preferred Stock except in accordance with this Option.
7. Amendment of Certificate of Amendment. Prior to the issuance of
-------------------------------------
any Shares upon exercise of this Option, without the prior written consent of
the Optionee, the Corporation will not (i) alter or repeal the Certificate of
Incorporation so as to affect the holders of Series G Preferred Stock adversely
or (ii) authorize, adopt or approve an amendment to the Certificate of
Incorporation that would increase or decrease the par value of the Series G
Preferred Stock, or alter or change the powers, preference or special rights of
the Series G Preferred Stock. Notwithstanding the foregoing, nothing in this
Section 7 shall prohibit the Corporation from effecting a recapitalization,
reorganization, consolidation or merger of, or sale by, the Corporation prior to
the Commencement Date or, if after the Commencement Date, if (A)(a) such
recapitalization, reorganization, consolidation, merger or sale constitutes a
Specified Corporate Action, (b) the Corporation has sufficient funds legally
available to it (after giving effect to such transaction) to redeem, at the then
applicable price under Section 4.3 pursuant to the terms hereof, the Option,
(c) such redemption shall not be prohibited by any agreement to which the
Corporation or any of its Subsidiaries is a party, by
14
<PAGE>
applicable law or otherwise, (d) the Board of Directors of the Corporation,
including a majority of the directors who are not officers or employees of the
Corporation, shall have adopted a resolution confirming that such funds are
available and that the Optionee (pursuant to Section 4.3) has the right to
require such redemption and (e) the Corporation shall have set aside sufficient
funds to meet the applicable redemption payments through the Specified Corporate
Action Redemption Date (except that no funds need be set aside with respect to
any portion of the Option if the Optionee has notified the Corporation that it
will not require redemption of such portion under Section 4.3) or (B) (1) the
Corporation shall be the resulting or surviving corporation, (2) the resulting
or surviving corporation will have after such recapitalization, reorganization,
consolidation or merger no Senior Stock or Parity Stock (each as defined in the
Certificate of Amendment) either authorized or outstanding (except such Parity
Stock of the Corporation as may have been authorized or outstanding immediately
preceding such consolidation or merger) or such stock of the resulting or
surviving corporation (having the same powers, preferences and special rights of
any such Parity Stock) as may be issued in exchange therefor), (3) the Optionee
will receive in exchange for this Option an option to purchase the same
15
<PAGE>
number of shares of stock, with the same preferences, rights and powers, of the
resulting or surviving corporation, (4) after such recapitalization,
reorganization, consolidation or merger the resulting or surviving corporation
shall not be in breach of any of the terms hereof, any of the Material
Provisions of the Securities Purchase Agreement (as defined in the Certificate
of Amendment) or any of its material obligations under the Registration Rights
Agreement and (5) all or substantially all the holders of the outstanding shares
of capital stock of the Corporation immediately prior to such consolidation or
merger are entitled to receive shares representing 50% or more of the then
outstanding shares of capital stock of the resulting or surviving corporation
entitled to vote generally in the election of directors.
8. Miscellaneous.
-------------
a. Binding Effect and Assignment. This Option and all of the
-----------------------------
provisions hereof shall be binding upon and inure to the benefit of the Optionee
and the Corporation and their respective successors and assigns.
b. Amendments and Modifications. This Option may not be
----------------------------
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by the parties hereto.
16
<PAGE>
c. Notices. All notices or other communications given or made
-------
hereunder shall be validly given or made if in writing and delivered by
facsimile transmission or in person at, mailed by registered or certified mail,
return receipt requested, postage prepaid, or sent by a reputable overnight
courier to, the following addresses (and shall be deemed effective at the time
of receipt thereof).
If to the Corporation:
The Continental Corporation
180 Maiden Lane
New York, New York 10038
Telecopy: (212) 440-3857
Attention: Chief Executive Officer
with copies to:
The Continental Corporation
180 Maiden Lane
New York, New York 10038
Telecopy: (212) 440-3857
Attention: General Counsel
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Telecopy: (212) 909-6836
Attention: Edward A. Perell, Esq.
If to the Optionee:
CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
Telecopy: (312) 822-1297
Attention: General Counsel
17
<PAGE>
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy: (212) 403-2000
Attention: Craig M. Wasserman, Esq.
or to such other address as the person or entity to whom notice is to be given
may have previously furnished notice in writing to the other in the manner set
forth above.
d. Lost Options. Upon receipt of evidence satisfactory to the
-------------
Corporation of the loss, theft, destruction or mutilation of this Option and
upon reimbursement of the Corporation's reasonable incidental expenses, the Cor-
poration shall execute and deliver to the Optionee a new Option of like date,
tenor and denomination.
e. No Rights of a Shareholder. The Optionee shall not have,
--------------------------
solely on account of such status, any rights of a shareholder of the
Corporation, either at law or in equity, or to any notice of meetings of share-
holders or of any other proceedings of the Corporation. No adjustment shall be
made for dividends or other rights for which the record date is prior to the
issuance of a certificate or certificates for Shares upon each exercise of this
Option.
18
<PAGE>
f. Entire Agreement. This Option, together with the Securities
----------------
Purchase Agreement and the Certificate of Amendment, contains the entire
understanding of the Optionee and the Corporation in respect of the subject
matter hereof, and supersedes all prior negotiations and understandings between
the parties with respect to such subject matter. Subsequent to exercise of this
Option into Shares, all rights and preferences of such Shares shall be as
specified in the Certificate of Amendment.
g. Governing Law. The validity, construction, enforcement and
-------------
interpretation of this Option shall be governed by the laws of the State of New
York applicable to agreements made and to be performed entirely within such
State.
h. Captions. The captions, headings and arrangements used in
--------
this Option are for convenience only and do not in any way affect, limit,
amplify or modify the terms and provisions hereof.
19
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
duly executed on the 9th day of December, 1994.
THE CONTINENTAL CORPORATION
By: /s/ John P. Mascotte
____________________________
Name: John P. Mascotte
Title: Chairman
Attest:
/s/ William F. Gleason, Jr.
___________________________
Name: William F. Gleason, Jr.
Title: Secretary
20
<PAGE>
Exhibit A
---------
FORM OF ELECTION TO EXERCISE
The undersigned hereby exercises his or its rights to purchase ______
shares of Cumulative Preferred Stock, Series G ("Series G Preferred Stock"), par
value $4.00 per share, of The Continental Corporation covered by the within
Option and tenders payment herewith in the amount of $_____ in accordance with
the terms thereof, and requests that certificates for such securities be issued
in the name of, and delivered to:
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of shares of Series G Preferred Stock shall not be all the
shares of Series G Preferred Stock covered by the within Option, that a new
Option for the balance of the shares of Series G Preferred Stock covered by the
within Option be registered in the name of, and delivered to, the undersigned at
the address stated below.
Dated: ___________________
Signature:__________________________
Witness: __________________
21
<PAGE>
EXHIBIT B
---------
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, ___________________ hereby sells, assigns, and
transfers unto ______________________ an Option to purchase __________ shares of
Cumulative Preferred Stock, Series G, par value $4.00 per share, of The Conti-
nental Corporation
22
