SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 7, 1994
Grey Advertising Inc.
(Exact name of registrant as specified in its charter)
Delaware C-7897 13-0802840
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
777 Third Avenue, New York, New York 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 546-2000
(Former name or former address, if changed since last report)
Item 5. Other Events.
On April 7, 1994, Grey Advertising Inc. (the
"Company") and Mr. Edward H. Meyer exchanged Mr. Meyer's
shares of the Company's Series 1, Series 2 and Series 3
Preferred Stock for an equal number of shares of three new
series of the Company's Preferred Stock, designated as
Series I, Series II and Series III Preferred Stock. The
three new series of preferred stock were authorized by the
Company's Board of Directors and the powers, designations,
preferences and rights of such series are set forth in
resolutions adopted by the Board of Directors, which were
filed as Certificates of Designations with the Secretary of
State of the State of Delaware. The following summary of
certain provisions of such certificates and the agreement
effecting the exchange does not purport to be complete and
is qualified in its entirety by reference to the more
complete terms and provisions of such certificates and
agreement, attached as exhibits hereto.
The terms of the Company's new series of preferred
stock, including the basic economic terms relating thereto,
are essentially the same as the Company's existing series of
preferred stock, except that the redemption date of the
three series of new preferred stock is fixed at April 7,
2004, rather than on a date determined by reference to Mr.
Meyer's termination of full-time employment with the Company
as was the case with the existing series of preferred stock.
The terms of the new series of preferred stock also give Mr.
Meyer the option to require the Company to redeem his
preferred stock for a period of 12 months following his (i)
death, (ii) permanent disability or permanent mental
disability, (iii) termination of full-time employment for
good reason and (iv) termination of full-time employment by
the Company without cause. Previously, Mr. Meyer had the
option to require the Company to redeem his preferred stock
only upon the termination of his full-time employment with
the Company prior to his attainment of age 65.
In light of the change to the redemption
provisions described above, the voting rights of the three
new series of preferred stock, including the special voting
rights to which the new series of preferred stock is
entitled, would extend until April 7, 2004, unless
terminated earlier as a result of death or permanent mental
disability. The voting rights of the existing series of
preferred stock terminated upon the termination of Mr.
Meyer's full-time employment with the Company by reason of
cause or voluntary retirement, or upon Mr. Meyer's death or
permanent disability.
The exchange was effected pursuant to a
Stockholder Exchange Agreement between the Company and Mr.
Meyer. The Exchange Agreement contains customary
representations and warranties, as well as the following
contractual rights: (i) a put right exercisable by Mr.
Meyer at the time of redemption of the outstanding shares of
the three new series of preferred stock of certain shares of
the Company's Common Stock held by Mr. Meyer so that Mr.
Meyer does not suffer adverse tax consequences as a result
of the redemption (a similar provision was contained in the
agreement pursuant to which Mr. Meyer obtained his shares of
the existing series of preferred stock), (ii) an extension
of the maturity date of the promissory notes issued by Mr.
Meyer as partial consideration for his shares of the
existing series of preferred stock to April 7, 2004, and
(iii) after the outstanding shares of the three new series
of preferred stock are redeemed, an obligation by the
Company to use its best efforts to elect to its Board of
Directors that number of persons designated by Mr. Meyer (or
if he is no longer alive or is mentally disabled, a
representative of his family and/or his estate)
corresponding to the proportion of the capital stock of the
Company then owned by Mr. Meyer and his family, but in no
event less than one director so long as Mr. Meyer and his
family own at least five percent of the outstanding capital
stock of the Company.
Simultaneous with the exchange, the Company
retired the shares of the three series of existing preferred
stock received from Mr. Meyer and filed a certificate
eliminating the Company's Series 2 and Series 3 Preferred
Stock from its Restated Certificate of Incorporation.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
Exhibit No. Description
3(a) Restated Certificate of
Incorporation of the Company
10(a) Stockholder Exchange Agreement,
dated as of April 7, 1994, by and
between the Company and Edward H.
Meyer
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunto duly authorized.
GREY ADVERTISING INC.
Date______________________ By_________________________
Name:
Title:
RESTATED CERTIFICATE OF INCORPORATION
OF
GREY ADVERTISING INC.
INTRODUCTORY. The present name of the
corporation is "Grey Advertising Inc." The name under
which the corporation was originally incorporated was
"NGD CORP." Its original Certificate of Incorporation
was filed with the Secretary of State of the State of
Delaware on
March 22, 1974. This Restated Certificate of
Incorporation was duly adopted by the board of directors
of the corporation in accordance with the provisions of
Section 245 of the General Corporation Law of the State
of Delaware.
The text of the Restated Certificate of
Incorporation as amended or supplemented heretofore is
hereby restated and integrated, but not amended, to read
as herein set forth in full:
FIRST: The name of the corporation
(hereinafter called the "Company") is GREY ADVERTISING
INC.
SECOND: The registered office of the Company
is located at 1209 Orange Street, in the City of
Wilmington in the County of New Castle, in the State of
Delaware. The name of its registered agent at that
address is The Corporation Trust Company.
THIRD: The purpose of the Company is to engage
in any lawful act or activity for which corporations may
be organized under the General Corporation Law of the
State of Delaware.
FOURTH: The total number of shares of all
classes of stock which the Company shall have authority
to issue is twelve million five hundred thousand
(12,500,000), consisting of ten million (10,000,000)
shares of Common Stock, par value $1 per share ("Common
Stock"), and two million (2,000,000) shares of Limited
Duration Class B Common Stock, par value $1 per share
("Class B Common Stock"), and five hundred thousand
(500,000) shares of Preferred Stock, par value $1 per
share ("Preferred Stock").
The designations and the powers, preferences
and rights, and the qualifications, limitations or
restrictions thereof, of the Preferred Stock, Common
Stock and Class B Common Stock of the Company are set
forth in the following provisions:
A. Preferred Stock
I. The Board of Directors is authorized, subject
to limitations prescribed by law, to provide for the
issuance of the Preferred Stock in series and by filing a
Certificate pursuant to the General Corporation Law of
Delaware to establish the number of shares to be included
in each series. The Preferred Stock may be issued either
as a class without series, or if so determined from time
to time by the Board of Directors, either in whole or in
part in one or more series, each series to be
appropriately designated by a distinguishing number,
letter or title prior to the issuance of any shares
thereof. Whenever the term "Preferred Stock" is used in
this Certificate of Incorporation, it shall be deemed to
mean and include Preferred Stock issued as a class
without series, or one or more series thereof, or both
unless the context shall otherwise require.
II. There is hereby expressly granted to the Board
of Directors authority to fix, subject to restrictions,
if any, contained in Article SEVENTH and Article TENTH,
the voting power, the designations, preferences and
relative, participating, options, conversion, dividend or
other special rights, and the qualifications, limitations
or restrictions of the Preferred Stock and any
restrictions on the Company in connection with the
Preferred Stock in the resolution or resolutions adopted
by the Board of Directors providing for the issuance of
said Preferred Stock.
III. The voting power, preferences and relative,
participating, optional, dividend and other special
rights, and the qualifications, limitations and
restrictions of the Series 1 Preferred Stock and the
restrictions on the Corporation in connection with the
Series 1 Preferred Stock shall be as follows:
1. Dividends
1A. General Dividend Obligation. The holders
of record of Series 1 Preferred Stock shall be entitled,
equally and ratably, to receive, when and as declared by
the Board of Directors out of the surplus, profits or
other funds of the Corporation available for the payment
of dividends under the General Corporation Law of the
State of Delaware, Preferential Dividends and
Participating Dividends at the times, in the amounts and
under the conditions specified in this paragraph 1.
1B. Preferential Dividends. Preferential
Dividends on each share of Series 1 Preferred Stock
("Share") shall be payable in equal amounts quarterly on
the fifteenth day of March, June, September and December
(or, if such day is not a Business Day, the immediately
succeeding Business Day) ("Preferential Dividend Payment
Dates"), commencing on the first such Preferential
Dividend Payment Date occurring more than 30 days after
the original issuance of the first Share. Preferential
Dividends on Shares shall be calculated at the annual
rate of $.25 per Share ("Preferential Dividend Rate") and
shall be cumulative and shall accrue at the Preferential
Dividend Rate from and after the Preferential Dividend
Payment Date next preceding the respective dates of issue
of such Shares to and including the respective dates on
which payment of the Redemption Price of such Shares
shall have been made in accordance with paragraph 2
hereof, whether or not such dividends have been declared
and whether or not there shall be, at the time
Preferential Dividends are calculated or become payable
or at any other time, surplus, profits, or other funds of
the Corporation available for the payment of dividends
under the General Corporation Law of the State of
Delaware or under the terms of any agreement to which the
Corporation is a party or by which it is bound; provided,
however, that Preferential Dividends on Shares, which are
originally issued after a record date fixed by the Board
of Directors for the payment of Preferential Dividends
and on or before the next succeeding Preferential
Dividend Payment Date, shall be cumulative from and after
such succeeding Preferential Dividend Payment Date.
The Corporation shall not (a) declare or pay
any dividends whatsoever upon, (b) make any distribution
upon, (c) acquire or redeem, or (d) permit or cause any
Subsidiary to acquire or redeem, any shares of Common
Stock of the Corporation ("Common Stock") or any shares
of Limited Duration Class B Common Stock of the
Corporation ("Class B Common Stock") (where no
distinction is to be made between Common Stock and Class
B Common Stock, a share of either shall be referred to
collectively as "Common Equity") or any shares of any
other class or series of stock of the Corporation ranking
junior as to dividends or assets to the Series 1
Preferred Stock ("Junior Stock") unless, in each case,
the full cumulative Preferential Dividends (whether or
not earned or declared) on all Shares outstanding shall
have been paid for all past Dividend Periods and all
arrearages, if any, in the payment of the Redemption
Price for all Shares which have been presented and
surrendered for redemption shall have been paid unless,
in any such event, the holders of a majority of the then
outstanding Shares shall have consented thereto by
affirmative vote at an annual meeting or a special
meeting called for that purpose.
The amount of any Preferential Dividends
accrued on any Share at any Preferential Dividend Payment
Date shall be deemed to be the amount of any unpaid
Preferential Dividends accumulated thereon to and
including such Preferential Dividend Payment Date
(whether or not earned or declared) and the amount of
Preferential Dividends accrued on any Share at any date
other than at a Preferential Dividend Payment Date shall
be calculated as the amount of any unpaid Preferential
Dividends accumulated thereon to and including the last
preceding Preferential Dividend Payment Date (whether or
not earned or declared) plus an amount calculated on the
basis of the Preferential Dividend Rate for the period
after such last preceding Preferential Dividend Payment
Date to and including the date as of which the
calculation is made, based on a 360-day year of twelve
30-day months.
1C. Participating Dividends. Whenever there
is a declaration of a dividend upon the Common Equity,
there shall also be a declaration of a Participating
Dividend upon the Series 1 Preferred Stock if, at the
time of such declaration upon the Common Equity, the
Total Dividend Rate multiplied by two times the sum of
(i) any prior payment or payments of dividends upon
Common Equity during the Dividend Year per share of
Common Equity outstanding at the time of such payment or
payments ("Prior Common Equity Dividend Payments") and
(ii) the amount of any such declaration of a dividend
upon the Common Equity per share of Common Equity
outstanding at the time of such declaration ("Common
Equity Dividend Declaration"), is greater than the sum of
any prior payment or payments of Preferential Dividends
upon Series 1 Preferred Stock during the Dividend Year
per Share outstanding at the time of such payment or
payments ("Prior Preferential Dividend Payments") and any
prior payment or payments of Participating Dividends upon
Series 1 Preferred Stock during the Dividend Year per
Share outstanding at the time of such payment or payments
("Prior Participating Dividend Payments"). If there
shall be a declaration of a Participating Dividend as
aforesaid, (a) the amount of such Participating Dividend
during any Dividend Year shall be equal to the Total
Dividend Rate multiplied by two times the sum of the
Prior Common Equity Dividend Payments and the Common
Equity Dividend Declaration, minus the sum of the Prior
Preferential Dividend Payments and the Prior
Participating Dividend Payments; and (b) payment of such
Participating Dividend shall be made on the date that
payment of the corresponding dividend upon the Common
Equity is made. Notwithstanding the foregoing, in the
event that a dividend is paid during the Dividend Year
commencing March 15, 1986, but prior to April 3, 1986,
such dividend shall be multiplied by .50 for the purposes
of declaring the Participating Dividend payable during
the Dividend Year commencing March 15, 1986 as aforesaid.
2. Redemption
2A. Optional Redemption. Upon the termination
of an Original Holder's full-time employment with the
Corporation for any reason other than Cause prior to the
Original Holder's attainment of age 65, such Original
Holder and all Transferee Holders of such Original Holder
shall collectively have the option to present and
surrender the certificate or certificates representing
all, but not less than all, of their respective Shares
duly endorsed in blank or accompanied by an appropriate
form of assignment and, except as is otherwise provided
by subparagraph 2D hereof, upon the exercise of such
option, the Corporation shall redeem all of the Shares so
presented and surrendered; provided, however, that if the
termination of an Original Holder's full-time employment
with the Corporation was by reason of Voluntary
Retirement and within two years of such Original Holder's
Date of Termination, such Original Holder should become a
full-time employee of any other advertising agency, the
option granted to such Original Holder and all Transferee
Holders of such Original Holder by this subparagraph 2A
shall terminate and the Corporation shall have the option
to redeem all, but not less than all, of the Shares
issued to such Original Holder; and provided further,
however, that the option granted to an Original Holder
and all Transferee Holders of such Original Holder by
this subparagraph 2A and the option granted to the
Corporation by the first proviso of this subparagraph 2A
shall terminate upon the Original Holder's attainment of
age 65 or, in the event of the Original Holder's death
prior to his attainment of age 65, upon the date the
Original Holder would have attained age 65.
2B. Mandatory Redemption. Upon the
termination of the option granted to the Corporation by
the first proviso in subparagraph 2A or upon the
termination of an Original Holder's full-time employment
with the Corporation for Cause, the Original Holder and
every Transferee Holder of the Original Holder shall, on
the Redemption Date, present and surrender the
certificate or certificates representing all of their
respective Shares duly endorsed in blank or accompanied
by an appropriate form of assignment and, except as is
otherwise provided by subparagraph 2D hereof, the
Corporation shall redeem all of such Shares. In
addition, upon the termination of the option granted to
an Original Holder and all Transferee Holders of such
Original Holder by subparagraph 2A pursuant to the second
proviso therein or upon the termination of an Original
Holder's full-time employment with the Corporation for
any reason other than Cause on or subsequent to the
Original Holder's attainment of age 65, the Original
Holder and every Transferee Holder of the Original Holder
shall, on the Redemption Date, present and surrender the
certificate or certificates representing at least one-
third (1/3) of their respective Shares duly endorsed in
blank or accompanied by an appropriate form of assignment
and, except as is otherwise provided by subparagraph 2D
hereof, the Corporation shall redeem all of such Shares;
provided, however, that on each of the next two
Subsequent Redemption Dates, the Original Holder and
every Transferee Holder of the Original Holder shall
present and surrender, in equal amounts, the certificate
or certificates representing the remainder of their
respective Shares and, except as otherwise provided by
subparagraph 2D hereof, the Corporation shall redeem all
of such Shares.
2C. Notice of Redemption. Each holder of
Shares who shall be entitled to, and shall elect to,
present and surrender Shares for redemption pursuant to
the option granted by subparagraph 2A and each holder of
Shares who shall be required to present and surrender
Shares for redemption pursuant to subparagraph 2B shall,
no less than five days before a Redemption Date or
Subsequent Redemption Date, as the case may be, provide
the Corporation with written notice containing the name
of the Original Holder of the Shares to be redeemed, the
number of Shares to be redeemed and the number or numbers
of the certificate or certificates representing such
Shares and, subject to the limitations in subparagraph
2D, a statement as to the selected manner of payment.
If the Corporation should be entitled to, and
should elect to exercise, the option granted by the first
proviso of subparagraph 2A, it shall, no less than ten
days before the Redemption Date, provide the Original
Holder to whom the Shares to be redeemed were issued with
written notice designating the Redemption Date for such
Shares. Upon receipt of such notice, such Original
Holder shall, no less than five days before the
Redemption Date, provide the Corporation with written
notice containing, subject to the limitations in
subparagraph 2D, a statement as to the selected manner of
payment. If the Original Holder shall fail to provide
such notice, the Corporation shall be entitled to select
the manner of payment.
Each notice contemplated by this subparagraph
2C shall be sent by certified mail, return receipt
requested, if to the Corporation, to the President or the
Secretary of the Corporation at the address of the
principal executive offices of the Corporation and, if to
an Original Holder, to the address of the Original Holder
as shown on the stock ledger of the Corporation.
2D. Payment of Unpaid Dividends and the
Redemption Price. On each Redemption Date and each
Subsequent Redemption Date, the Corporation shall pay, in
cash, to each holder whose Shares are to be redeemed all
accrued and unpaid Preferential Dividends upon such
Shares, and all declared and unpaid Participating
Dividends upon such Shares as of a record date on or
before such Redemption Date or Subsequent Redemption
Date; provided, however, that if, on a Redemption Date or
a Subsequent Redemption Date, there should be
insufficient surplus, profits or other funds of the
Corporation available for the payment of such dividends
under the General Corporation Law of the State of
Delaware or due to the terms of any agreement to which
the Corporation is a party or by which it is bound, each
such holder shall receive, pro rata based on the number
of such holder's Shares to be redeemed, the amount of
such dividends for which surplus, profits or other funds
of the Corporation are available. Thereafter, any
surplus, profits or other funds of the Corporation
available for the payment of such dividends shall
immediately be so used by the Corporation and the
Corporation shall not pay the Redemption Price on any
Shares unless and until all of such dividends upon all
redeemed Shares shall have been paid.
On a Redemption Date or a Subsequent Redemption
Date, in addition to the Preferential Dividends and
Participating Dividends which the Corporation is required
to pay as aforesaid, the Corporation shall also pay to
each holder who presents and surrenders the certificate
or certificates representing those of his Shares which
are to be redeemed an amount equal to the number of such
holder's Shares which are to be redeemed multiplied by
the Redemption Price and such amount shall, subject to
the limitations in this subparagraph 2D, be paid 100% in
cash, or 100% in shares of Common Equity of equivalent
value equally divided between shares of Common Stock and
shares of Class B Common Stock (or, subsequent to the
Conversion Date, 100% in shares of Common Stock of
equivalent value), or 100% by a Promissory Note, or any
combination of the foregoing in the proportions specified
by the holder of Shares to be redeemed; provided,
however, that the Corporation shall not be required to
pay an amount in cash in excess of one third (1/3) of the
Aggregate Redemption Price in any fiscal year and, in the
event that the number of Shares presented and surrendered
for payment in cash exceeds such amount, the holder or
holders presenting and surrendering such Shares shall
receive a Promissory Note for such excess; provided
further, however, that if, on any Redemption Date, or
Subsequent Redemption Date, (a) the Corporation does not
have an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act") and
any applicable state securities or blue sky laws covering
the issuance of shares of Common Equity in payment for
Shares to be redeemed and, in the opinion of counsel to
the Corporation, the issuance of shares of Common Equity
for such payment is not exempt under the 1933 Act and any
applicable state securities or blue sky laws or (b) if,
in the opinion of counsel to the Corporation, the
issuance of shares of Common Equity in payment for Shares
to be redeemed would constitute a violation of Section 7
of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), or the Regulations of the Board of Governors
of the Federal Reserve System under Section 7 of the 1934
Act, a holder of Shares to be redeemed shall only be
entitled to payment in cash and a Promissory Note; and
provided further, however, that (a) if, in any fiscal
year of any Redemption Date or Subsequent Redemption
Date, or any Subsequent Redemption Payment Date, there
should be insufficient surplus, profits or other funds of
the Corporation available for the payment of any
Redemption Payment or Initial Redemption Payment, or any
Subsequent Redemption Payment, respectively, under the
General Corporation Law of the State of Delaware or due
to the terms of any agreement to which the Corporation is
a party or by which it is bound or (b) if, in the case of
any Redemption Payments or Initial Redemption Payments
which, pursuant to subparagraph 2A or subparagraph 2B,
would be due and payable in any fiscal year or in the
case of any Subsequent Redemption Payments which are due
and payable in any fiscal year, the aggregate of such
payments exceed 40% of the post-tax profits of the
Corporation for the next preceding fiscal year, then each
holder shall receive pro rata based on the number of such
holder's Shares to be redeemed or which have been
redeemed, as the case may be, the amount of the
Redemption Payment or Initial Redemption Payment, or
Subsequent Redemption Payment, for which funds of the
Corporation are available as provided in subclauses (a)
and (b) of this proviso and, in the case of Shares for
which a Redemption Payment or an Initial Redemption
Payment was to have been made, the holders of such Shares
shall be entitled to retain such Shares until such Shares
would otherwise be required to be presented and
surrendered for redemption and there is sufficient
surplus, profits or other funds of the Corporation
available for the Redemption Payment or the Initial
Redemption Payment therefor and, in the case of any
Shares which have been redeemed, any part of the
Subsequent Redemption Payment remaining unpaid shall be
added to the Subsequent Redemption Payment due and
payable on the next succeeding Subsequent Redemption
Payment Date.
If a holder of Shares specifies payment of any
Redemption Payment or Initial Redemption Payment, whether
in whole or in part, in shares of Common Equity, such
payment shall be made in an equal number of shares of
Common Stock and shares of Class B Common Stock (or,
subsequent to the Conversion Date, 100% in shares of
Common Stock) which are authorized but unissued or are
held in the treasury of the Corporation or any
combination thereof. The value of a share of Common
Equity as of a particular date shall be deemed to be the
closing sale price (or if no closing sales price is
available for such date, the average of the closing bid
and asked prices) for a share of Common Stock on the
Business Day next preceding such date as reported by the
National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), or if the shares of Common
Stock are not listed on NASDAQ, the average of such
closing bid and asked prices as reported by the National
Quotation Bureau, Inc. ("NQB"), or if such closing sale
or closing bid and asked prices are not available from
the NQB, the value as determined by a member of the New
York Stock Exchange selected by the Board of Directors.
2E. Dividends After Redemption Date or
Subsequent Redemption Date. Each Share which a holder
has elected to present and surrender for redemption
pursuant to the option granted by subparagraph 2A, and
each Share which a holder is required to present and
surrender for redemption pursuant to subparagraph 2A or
subparagraph 2B, shall not, after the Redemption Date or
the Subsequent Redemption Date therefor, be entitled to
any Preferential Dividends accrued after such Redemption
Date or Subsequent Redemption Date, or any Participating
Dividends declared as of a record date after such
Redemption Date or Subsequent Redemption Date, and on
such Redemption Date or Subsequent Redemption Date all
rights of a holder of such Share, as a stockholder of the
Corporation by reason of the ownership of such Share,
shall cease, except the right to receive any Preferential
Dividends accrued upon such Share up to and including
such Redemption Date or Subsequent Redemption Date, any
Participating Dividends declared upon such Share as of a
record date on or before such Redemption Date or
Subsequent Redemption Date and the Redemption Price of
such Share upon presentation and surrender of the
certificate representing such Share, and such Share shall
not, after such Redemption Date or Subsequent Redemption
Date, be deemed to be outstanding; provided, however,
that if the Corporation does not, upon presentation and
surrender of a certificate representing a Share, pay all
of such accrued and unpaid Preferential Dividends upon,
all of such declared and unpaid Participating Dividends
upon, and the Redemption Price for, such Share on the
Redemption Date or the Subsequent Redemption Date, as the
case may be, the rights of a holder of such Share as a
stockholder of the Corporation by reason of the ownership
of such Share shall not cease, and such Share shall be
deemed outstanding, until the Corporation shall pay all
of such dividends upon, and the Redemption Price for,
such Share.
2F. Adjustment of the Redemption Price. If
the Corporation purchases any shares of Common Equity at
an aggregate purchase price which is more than $100,000
in excess of the product of the Book Value per share of
Common Equity as of the date of such purchase and the
number of shares of Common Equity purchased (such excess
being herein called the "Excess Purchase Price"), for the
purpose of calculating the Redemption Price of any Share
issued prior to such purchase of Common Equity only, the
Book Value per share of Common Equity as of a Redemption
Date or a Subsequent Redemption Date shall be deemed to
be the Book Value per share of Common Equity as it would
have been had the Excess Purchase Price been amortized
over a ten year period beginning on the date on which the
purchase or purchases of Common Equity occurred. For
purposes of determining whether shares of Common Equity
repurchased subsequent to the Distribution Record Date
and on or prior to December 31, 1986 are repurchased at a
price in excess of the Book Value per share of Common
Equity and if so the amount of such excess, Book Value
per share of Common Equity shall be deemed to be one-half
of the Book Value per share of Common Equity at December
31, 1985. Furthermore, if there are (a) changes in the
number of shares of Common Equity outstanding as a result
of (i) stock dividends, splits, combinations or exchanges
of shares of Common Equity, (ii) issuances of shares of
Common Equity in acquisitions, (iii) merger,
consolidation or reorganization or (iv) any other unusual
and extraordinary items or events or (b) if there are any
disproportionate and material effects on the Common
Stockholders' Equity as a result of (i) any of the
foregoing, (ii) changes in the accounting policies of the
Corporation or (iii) any other unusual and extraordinary
items or events, for the purpose of calculating the
Redemption Price of any Share issued prior to any such
change or disproportionate and material effect only, the
Book Value per share of Common Equity as of a Redemption
Date or Subsequent Redemption Date may be adjusted to
such an extent and in such manner as the Board of
Directors or a duly designated committee thereof shall,
in its sole discretion, determine is necessary to
preserve the benefit of the redemption provisions in this
paragraph 2 for the holders of Series 1 Preferred Stock
and the Corporation.
2G. Status of Redeemed Shares. Upon the
redemption of any Shares, the Corporation shall, pursuant
to Section 151(g) of the General Corporation Law of the
State of Delaware as now or hereafter in effect, cause
the number of authorized shares of Series 1 Preferred
Stock to be decreased by the number of Shares redeemed
and the Corporation shall not thereafter issue any of
such Shares or any other shares of Preferred Stock as
shares of Series 1 Preferred Stock.
3. Liquidation.
3A. Liquidation Preference. Upon any
liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the
holders of the Series 1 Preferred Stock shall be entitled
to be paid out of the assets of the Corporation available
for distribution to its stockholders (whether from
capital, surplus or earnings) an amount in cash equal to
$1.00 per Share ("Liquidation Preference") plus all
accrued and unpaid Preferential Dividends, before any
distribution or payment is made upon any Common Equity or
any other Junior Stock of the Corporation, but subject to
the prior rights of the holders of shares of other series
of Preferred Stock which are by their terms expressly
made senior as to liquidation preferences to the Series 1
Preferred Stock. If upon such liquidation, dissolution
or winding up of the Corporation, whether voluntary or
involuntary, the assets of the Corporation should not be
sufficient to permit payment to the holders of Series 1
Preferred Stock of the amount which they are entitled to
be paid as aforesaid and the holders of any other series
of Preferred Stock ranking equally as to liquidation
preferences to the Series 1 Preferred Stock of the amount
to which they are entitled to be paid, then the entire
assets of the Corporation to be distributed to such
holders shall be distributed ratably among them.
3B. Liquidation Participation. Upon any such
liquidation, dissolution or winding up of the
Corporation, after the holders of the Series 1 Preferred
Stock shall have been paid in full the Liquidation
Preference and the accrued and unpaid Preferential
Dividends and the holders of any other series of
Preferred Stock have been paid their liquidation
preferences and any accrued and unpaid preferential
dividends, the holders of the Series 1 Preferred Stock
and the holders of any other series of Preferred Stock
shall not be entitled to any further payment unless and
until the holders of Common Equity shall have received
out of the assets of the Corporation available for
distribution to its stockholders (whether from capital,
surplus or earnings), for each share of Common Stock, an
amount in cash equal to one-half of the Liquidation
Preference and for each share of Class B Common Stock, an
amount equal to one-half of the Liquidation Preference;
but if, after the holders of Common Equity shall have
been paid in full such amounts, the value of the
remainder of the assets of the Corporation available for
distribution to its stockholders per share of Common
Equity, Series 1 Preferred Stock and any other series of
Preferred Stock entitled to a liquidation participation
is greater than the Original Discount for a share of
Series 1 Preferred Stock, the holder of any such share of
Series 1 Preferred Stock shall be entitled to receive a
liquidation participation such that the aggregate
liquidation payment for each share of Series 1 Preferred
Stock is equal to the difference between two times the
aggregate liquidation payment for each share of Common
Equity and the Original Discount at which the share of
Series 1 Preferred Stock was issued.
3C. Events Not Deemed a Liquidation,
Dissolution or Winding Up. Neither the consolidation or
merger of the Corporation into or with any other
corporation or corporations, nor the sale, lease,
exchange or other disposition by the Corporation of all
or any part of its property or assets, nor the reduction
of the capital stock of the Corporation, shall be deemed
to be a liquidation, dissolution or winding up of the
Corporation within the meaning of any of the provisions
of this paragraph 3.
4. Voting.
4A. General Right to Vote. The holders of
Series 1 Preferred Stock shall be entitled to eleven
votes for each Share held of record and, together with
the holders of any other series of Preferred Stock who
shall have the right and power to vote generally with the
holders of Common Equity, shall, together with the
holders of Common Equity, all voting as a single class,
possess voting power for the election of directors and
for all other purposes, except as is otherwise provided
in the Certificate of Incorporation or any certificate
amendatory thereof or supplemental thereto, this
paragraph 4 and in paragraph 6 hereof. The foregoing
notwithstanding, on and subsequent to the Conversion
Date, the holders of Series 1 Preferred Stock shall be
entitled to two votes for each Share held of record.
4B. Restrictions on Voting Rights. Upon the
termination of full-time employment of an Original Holder
by reason of Cause or Voluntary Retirement, the death of
an Original Holder or the Permanent Disability of an
Original Holder, the voting rights which such Original
Holder and any Transferee Holder of such Original Holder
would otherwise have, whether pursuant to this
Certificate of Designation, the Certificate of
Incorporation or any certificate amendatory thereof or
supplemental thereto, by virtue of the Shares held by
such Original Holder or such Transferee Holder, shall
terminate. In addition, upon the termination of full-
time employment of an Original Holder to whom at least
80% of the Shares outstanding at any time have been
issued by reason of Cause or Voluntary Retirement, the
death of such Original Holder or the Permanent Disability
of such Original Holder, the voting rights which all
Original Holders and Transferee Holders would otherwise
have, whether pursuant to this Certificate of
Designation, the Certificate of Incorporation or any
certificate amendatory thereof or supplemental thereto,
by virtue of the Shares held by such Original Holders or
Transferee Holders, shall terminate.
In the event of the commencement of an
involuntary receivership, liquidation, reorganization or
similar proceeding against an Original Holder or a
Transferee Holder, whether under the Federal Bankruptcy
Code or any other applicable federal or state law, and
the appointment of a receiver, interim trustee, trustee
or similar official of such Original Holder or Transferee
Holder or in the event of the commencement of a voluntary
receivership, liquidation, reorganization or similar
proceeding by an Original Holder or a Transferee Holder,
whether under the Federal Bankruptcy Code or any other
applicable federal or state law, the voting rights which
such Original Holder or such Transferee Holder or a
Transferee Holder of such Original Holder would otherwise
have, whether pursuant to this Certificate of
Designation, the Certificate of Incorporation or any
certificate amendatory thereof or supplemental thereto,
by virtue of Shares held by any such Original Holder or
Transferee Holder, shall terminate. In addition, in the
event of the commencement of an involuntary receivership,
liquidation, reorganization or similar proceeding against
an Original Holder to whom at least 80% of the Shares
outstanding at any time have been issued or a Substantial
Transferee Holder, whether under the Federal Bankruptcy
Code or any other applicable federal or state law, and
the appointment of a receiver, interim trustee, trustee
or similar official of such Original Holder or
Substantial Transferee Holder or in the event of the
commencement of a voluntary receivership, liquidation,
reorganization or similar proceeding by such Original
Holder or Substantial Transferee Holder, whether under
the Federal Bankruptcy Code or any other applicable
federal or state law, the voting rights which all
Original Holders and Transferee Holders would otherwise
have, whether pursuant to this Certificate of
Designation, the Certificate of Incorporation or any
certificate amendatory thereof or supplemental thereto,
by virtue of Shares held by any such Original Holders or
Transferee Holders, shall terminate.
5. Restrictions on Disposition of Shares. An
Original Holder shall only be entitled to assign, pledge,
transfer or otherwise dispose of his Shares, or an
interest in his Shares, to a Transferee Holder of the
Original Holder or the Corporation; and a Transferee
Holder of an Original Holder shall only be entitled to
assign, pledge, transfer or otherwise dispose of Shares,
or an interest in Shares, received from an Original
Holder or a Transferee Holder to another Transferee
Holder of such Original Holder or the Corporation.
6. Restrictions on Changes. In addition to any
other approvals or consents required by the General
Corporation Law of the State of Delaware, the Corporation
shall not, without the consent of the holders of record
of a majority of the Shares outstanding, given in person
or by proxy, either in writing without a meeting or by
affirmative vote at an annual meeting or a special
meeting called for that purpose at which the holders of
the Shares outstanding shall be entitled to vote as a
separate class, (a) create, authorize or issue (i) any
shares of any class or series of stock of the Corporation
ranking senior as to dividends or assets or otherwise to
the Series 1 Preferred Stock ("Senior Stock") or (ii) any
shares of any class or series of stock of the Corporation
ranking on a parity as to dividends or assets or
otherwise to the Series 1 Preferred Stock ("Parity
Stock"), (b) reclassify any authorized stock of the
Corporation into any shares of Senior Stock or Parity
Stock, (c) create, authorize or issue any obligation or
security convertible into or evidencing the right to
purchase any shares of Senior Stock or Parity Stock, or
(d) amend, alter, supplement or repeal any of the
provisions of the Certificate of Incorporation or of any
certificate (including this Certificate of Designation)
amendatory thereof or supplemental thereto so as to
affect adversely the preferences, rights, powers or
privileges given by this Certificate of Designation to
the Series 1 Preferred Stock.
7. Successors and Assigns. The provisions of this
Certificate of Designation shall be binding upon all
successors and assigns of an Original Holder, including,
without limitation, a Transferee Holder and any receiver,
interim trustee or trustee in bankruptcy or
representative of creditors of an Original Holder or a
Transferee Holder.
8. Definitions. The following terms shall have
the following meanings, which meanings shall be equally
applicable to the singular and plural forms of such
terms:
(a) "Additional Capital applicable to
Redeemable Preferred Stock" as of a particular date means
the amount thereof as shown on an Audited Consolidated
Balance Sheet as of such date.
(b) "Aggregate Redemption Price" means
for the purpose of the calculation required by
subparagraph 2D, the number of Shares issued to an
Original Holder, whether or not outstanding, multiplied
by the Redemption Price as of a Redemption Date or a
Subsequent Redemption Date, as the case may be.
(c) "Audited Consolidated Balance Sheet"
as of a particular date means the audited consolidated
balance sheet of the Corporation and its Subsidiaries
(all the financial information on which has been computed
in accordance with generally accepted accounting
principles by the regular independent auditors of the
Corporation) as of the last day of the applicable fiscal
year.
(d) "Book Value per share of Common
Equity" means as of a particular date the book value per
share of Common Equity (Common Stockholders' Equity
divided by the number of shares of Common Equity
outstanding), plus the cumulative amount per share of
Common Equity transferred from Common and Stockholders'
Equity to Additional Capital applicable to Redeemable
Preferred Stock since its issuance and as of such date as
shown on an Audited Consolidated Balance Sheet as of such
date.
(e) "Business Day" means any day which is
not a Saturday or a Sunday or a day on which the banks
are closed for business in New York, New York.
(f) "Cause" means a willful act or acts
committed by an Original Holder after the issuance of the
first Share to such Original Holder, which act or acts
constitute a gross abuse of trust or are deliberately,
directly and substantially injurious to the Corporation's
business or operations.
(g) "Common Stockholders' Equity" as of a
particular date means the common stockholders' equity as
derived from the Audited Consolidated Balance Sheet as of
such date.
(h) "Conversion Date" means the date upon
which all outstanding shares of Class B Common Stock
automatically convert into shares of Common Stock
pursuant to Section B.III.(D)(9) of Article Fourth of the
Corporation's Restated Certificate of Incorporation.
(i) "Date of Termination" means the date
of termination of an Original Holder's full-time
employment with the Corporation.
(j) "Distribution Record Date" means
April 3, 1986.
(k) "Dividend Period" means the quarterly
period ending on a Preferential Dividend Payment Date.
(l) "Dividend Year" means the period from
March 16 in one year to March 15 in the succeeding year
commencing with March 16, 1981.
(m) "Good Reason" means:
(1) a change in control of the
Corporation, which shall be conclusively
deemed to have occurred if any of the
following shall have taken place: (i) a
change in control of a nature that would
be required to be reported in response to
Item 5(f) of Schedule 14A of Regulation
14A under the 1934 Act, unless such change
in control results in control by the
Original Holder, his designee(s) or
"affiliate(s)" (as defined in Rule 12b-2
under the 1934 Act) or any combination
thereof; (ii) any "person" (as such term
is used in Sections 13(d) and 14(d)(2) of
the 1934 Act, other than the Original
Holder, his designee(s) or "affiliate(s)"
(as defined in Rule 12b-2 under the 1934
Act) or any combination thereof, is or
becomes the "beneficial owner" (as defined
in Rule 13d-3 under the 1934 Act),
directly or indirectly, of securities of
the Corporation representing 40% or more
of the combined voting power of the
Corporation's then outstanding securities;
or (iii) during any period of two (2)
consecutive years commencing after the
date of this Certificate of Designation,
individuals who at the beginning of such
period constitute the Board of Directors
cease for any reason to constitute at
least a majority thereof, unless the
election of each director who was not a
director at the beginning of such period
has been approved in advance by directors
representing at least a majority of the
directors then in office who were
directors at the beginning of the period;
or
(2) any assignment to the
Original Holder of any duties other than
those contemplated by, or a limitation of
the powers of an Original Holder not
contemplated by, the relevant provisions
of his employment agreement with the
Corporation, if any; or
(3) any removal of the Original
Holder from, or any failure to re-elect
the Original Holder to, any of the
positions which he may hold by virtue of
his employment agreement with the
Corporation, if any, except in connection
with his Permanent Disability or with the
termination of his full-time employment
with the Corporation for Cause; or
(4) a reduction in the Original
Holder's rate of compensation not agreed
to in writing by him; or
(5) a failure by the
Corporation to comply with any of the
provisions of the Original Holder's
employment agreement with the Corporation,
if any, concerning his compensation,
pension, life insurance, disability rights
or vacations; or
(6) failure by the Corporation
to require any successor (whether direct
or indirect, by purchase, merger,
consolidation or otherwise) to all or
substantially all of the business and/or
assets of the Corporation, by agreement in
form and substance satisfactory to the
Original Holder, expressly to assume and
agree to perform the Original Holder's
employment agreement, if any, in the same
manner and to the same extent that the
Corporation would be required to perform
it if no such succession had taken place.
(n) "Initial Redemption Payment" means
any redemption payment by the Corporation on a Redemption
Date or a Subsequent Redemption Date, which consists, at
least in part, of a Promissory Note.
(o) "Original Discount" for a share of
Series 1 Preferred Stock means the discount from the Book
Value per share of Common Equity as of the last day of
the then current fiscal year or of the next preceding
fiscal year, whichever is nearer the date on which an
Original Holder purchases such share of Series 1
Preferred Stock from the Corporation pursuant to that
certain Book Value Preferred Stock Plan dated as of April
2, 1981, as such plan may from time to time be amended or
supplemented in accordance with its terms (the "Plan").
(p) "Original Holder" means a senior
executive officer (whether or not a member of the Board
of Directors) of the Corporation or any Subsidiary to
whom any Shares have been sold pursuant to the Plan.
(q) "Participating Dividend" means the
dividend which, subject to the conditions in subparagraph
1C, the Corporation is required to declare on Shares
whenever a dividend is declared on shares of Common
Equity.
(r) "Permanent Disability" means (i) in
the case of an Original Holder to whom at least 80% of
the Shares outstanding at any time have been issued, an
illness or other disability of such Original Holder which
results in such Original Holder being unable regularly to
perform his duties as Chief Executive Officer and
President of the Corporation for a period of 18 months
and the termination of such Original Holder's full-time
employment as such Chief Executive Officer and President
and (ii) in the case of any other Original Holder, an
illness or other disability which results in any such
Original Holder being unable regularly to perform his
duties as an employee of the Corporation for a period of
18 months and the termination of any such Original
Holder's full-time employment with the Corporation.
(s) "Preferential Dividend" means the
dividend which will be calculated at the Preferential
Dividend Rate and which will accumulate and accrue as
provided in subparagraph 1B.
(t) "Promissory Note" means a promissory
note of the Corporation, such note to bear interest at an
annual rate equal to the higher of the prime rate charged
by Citibank, N.A. or the rate at which the Corporation is
entitled to borrow money from the principal banking
institution with which it does business, each as of the
Redemption Date or the Subsequent Redemption Date, as the
case may be, and such note shall be payable in cash on
the next two Subsequent Redemption Payment Dates.
(u) "Redemption Date" means:
(1) for the purposes of the
option granted to an Original Holder and
all Transferee Holders of such Original
Holder by subparagraph 2A, (i) the later
of (A) the third Business Day subsequent
to the date on which the Audited
Consolidated Balance Sheet is available
for the most recent fiscal year ended or
(B) the date on which an Original Holder
and all Transferee Holders of such
Original Holder collectively intend to
exercise such option as evidenced by their
provision of notice to the Corporation, if
the date of the notice referred to in
subclause (i)(B) is within the six month
period subsequent to the end of the most
recent fiscal year; or (ii)(A) the date on
which an Original Holder and all
Transferee Holders of such Original Holder
collectively intend to exercise such
option as evidenced by their provision of
notice to the Corporation or, at the
option of such Original Holder and all
such Transferee Holders collectively as
evidenced by their provision of notice to
the Corporation or, (B) the third Business
Day subsequent to the date on which the
Audited Consolidated Balance Sheet is
available for the then current fiscal
year, if the date of any notice referred
to in this subclause (ii) is within the
six month period prior to the end of the
then current fiscal year; or
(2) for the purposes of the
option granted to the Corporation by the
first proviso in subparagraph 2A, the
later of (i) the third Business Day
subsequent to the date on which the
Audited Consolidated Balance Sheet is
available for the most recent fiscal year
ended or (ii) the date on which the
Corporation intends to exercise such
option as evidenced by its provision of
notice to the Original Holder; or
(3) for the purposes of the
first sentence of subparagraph 2B, the
later of (i) the third Business Day
subsequent to the date on which the
Audited Consolidated Balance Sheet is
available for the most recent fiscal year
ended or (ii) the tenth Business Day
subsequent to the date of termination of
the option granted to the Corporation by
the first proviso in subparagraph 2A, if
applicable, or the tenth Business Day
subsequent to an Original Holder's Date of
Termination for Cause, if applicable; or
(4) for the purposes of the
second sentence of subparagraph 2(ii), (i)
the later of (A) the third Business Day
subsequent to the date on which the
Audited Consolidated Balance Sheet is
available for the most recent fiscal year
ended or (B) the tenth Business Day
subsequent to the date of termination of
the option granted to an Original Holder
and all Transferee Holders of such
Original Holder by subparagraph 2A
pursuant to the second proviso therein, if
applicable, or the tenth Business Day
subsequent to an Original Holder's Date of
Termination, if applicable, if the
applicable date (if any) in this subclause
(i)(B) is within the six month period
subsequent to the end of the most recent
fiscal year; or (ii)(A) the tenth Business
Day subsequent to the date of termination
of the option granted to an Original
Holder and all Transferee Holders of such
Original Holder by subparagraph 2A
pursuant to the second proviso therein, if
applicable, or the tenth Business Day
subsequent to an Original Holder's Date of
Termination, if applicable, or, at the
option of the Original Holder, (B) the
third Business Day subsequent to the date
on which the Audited Consolidated Balance
Sheet is available for the then current
fiscal year, if the applicable date (if
any) in subclause (ii)(A) is within the
six-month period prior to the end of the
then current fiscal year.
(v) "Redemption Payment" means any
redemption payment by the Corporation on a Redemption
Date or a Subsequent Redemption Date which consists
solely of cash, an equal number of shares of Common Stock
and shares of Class B Common Stock (or, subsequent to the
Conversion Date, 100% in shares of Common Stock), or a
combination thereof.
(w) "Redemption Price" for a Share
redeemed on or prior to December 31, 1986 means, except
as is otherwise provided below, the Book Value per share
of Common Equity as of the last day of the fiscal year
immediately preceding the Redemption Date or the
Subsequent Redemption Date, as the case may be, for such
Share minus the Original Discount on such Share.
Notwithstanding the foregoing, the Redemption Price for a
Share as of a Redemption Date shall be determined by
reference to the higher of the Book Value per share of
Common Equity as of the last day of the most recent
fiscal year ended or as of the end of the then current
fiscal year, if the Redemption Date for such Share is
determined pursuant to (u)(1)(ii)(B) or (u)(4)(ii)(B) of
this paragraph 8. For purposes of the preceding
sentence, Book Value per share of Common Equity if
measured at December 31, 1986 or thereafter shall be
deemed to be an amount equal to twice that of the Book
Value per share of Common Equity as of such date.
"Redemption Price" for a Share redeemed subsequent to
December 31, 1986 means, except as is otherwise provided,
an amount equal to twice that of the Book Value per share
of Common Equity as of the last day of the fiscal year
immediately preceding the Redemption Date or the
Subsequent Redemption Date, as the case may be, for such
Share minus the Original Discount on such Share.
Notwithstanding the foregoing sentence, the Redemption
Price for a Share as of a Redemption Date shall be
determined by reference to the higher of an amount equal
to twice that of the Book Value per share of Common
Equity as of the last day of the most recent fiscal year
ended or as of the end of the then current fiscal year,
if the Redemption Date for such Share is determined
pursuant to (u)(1)(ii)(B) or (u)(4)(ii)(B) of this
paragraph 8.
(x) "Subsequent Redemption Date" means
the anniversary date of any Redemption Date upon which at
least one-third (1/3) of the Shares issued to an Original
Holder are required, pursuant to subparagraph 2B, to be
presented and surrendered for redemption.
(y) "Subsequent Redemption Payment" means
any redemption payment by the Corporation in cash on
Shares for which an Initial Redemption Payment has been
made.
(z) "Subsequent Redemption Payment Date"
means, with respect to Shares for which an Initial
Redemption Payment has been made, the anniversary date of
the Initial Redemption Payment Date therefor.
(aa) "Subsidiary" means any corporation
at least a majority of the Voting Stock of which is, at
the time as of which any determination is being made,
owned by the Corporation either directly or indirectly
through one or more Subsidiaries.
(bb) "Substantial Transferee Holder"
means a Transferee Holder or Transferee Holders of an
Original Holder to whom at least 80% of the Shares
outstanding at any time have been issued, which
Transferee Holder holds, or which Transferee Holders in
the aggregate hold, that number of Shares which when
subtracted from the number of Shares issued to such an
Original Holder which remain outstanding would result in
such Original Holder and all other Transferee Holders of
such Original Holder collectively no longer owning a
majority of Shares outstanding at the time.
(cc) "Total Dividend Rate" means .75 for
the March 16, 1981 to March 15, 1982 Dividend Year, .875
for the March 16, 1982 to March 15, 1983 Dividend Year
and 1.00 for each Dividend Year thereafter.
(dd) "Transferee Holder" means a
corporation all the Voting Stock of which is wholly owned
by an Original Holder or, in the event of the death of an
Original Holder, the estate of an Original Holder, any
executor, administrator, legal representative or trustee
thereof and any heir, distributee, devisee or legatee
thereunder.
(ee) "Voluntary Retirement" means any
voluntary termination by an Original Holder of full-time
employment with the Corporation other than a termination
for Good Reason.
(ff) "Voting Stock" means any share of
stock having general voting power in electing the board
of directors, irrespective of whether or not at the time
stock of any other class or series has or might have
voting power by reason of the happening of any
contingency.
9. Miscellaneous
9A. Determination of Fact. Whenever a
determination of fact is required in connection with any
provision or provisions of this Certificate of
Designation, the Board of Directors shall make such
determination and its determination shall be conclusive.
9B. Headings. The headings of the paragraphs
and subparagraphs of this Certificate of Designation are
inserted for convenience only and shall not constitute a
part hereof.
9C. Validity. The invalidity or
unenforceability of any provision or provisions of this
Certificate of Designation shall not affect the validity
or enforceability of any other provision of this
Certificate, which shall remain in full force and effect.
IV. Series I Preferred Stock. The number of shares
constituting the Series I Preferred Stock shall be
20,000, which number may from time to time be decreased
(but not below the number then outstanding) by the Board
of Directors and the voting power, preferences and
relative, participating, optional, dividend and other
special rights, and the qualifications, limitations and
restrictions of the Series I Preferred Stock and the
restrictions on the Corporation in connection with the
Series I Preferred Stock shall be as follows:
1. Dividends.
1A. General Dividend Obligations. The holders
of record of Series I Preferred Stock shall be entitled,
equally and ratably, to receive, when and as declared by
the Board of Directors out of the surplus, profits or
other funds of the Corporation available for the payment
of dividends under the General Corporation Law of the
State of Delaware, Preferential Dividends and
Participating Dividends at the times, in the amounts and
under the conditions specified in this paragraph 1.
1B. Preferential Dividends. Preferential
Dividends on each share of Series I Preferred Stock
("Share") shall be payable in equal amounts quarterly on
the fifteenth day of March, June, September and December
(or, if such day is not a Business Day, the immediately
succeeding Business Day) ("Preferential Dividend Payment
Dates"), commencing on the first such Preferential
Dividend Payment Date occurring after the original
issuance of the first Share. Preferential Dividends on
Shares shall be calculated at the annual rate of $.25 per
Share ("Preferential Dividend Rate") and shall be
cumulative and shall accrue at the Preferential Dividend
Rate from and after the Preferential Dividend Payment
Date next preceding the respective dates of issue of such
Shares to and including the respective dates on which
payment of the Redemption Price of such Shares shall have
been made in accordance with paragraph 2 hereof, whether
or not such dividends have been declared and whether or
not there shall be, at the time Preferential Dividends
are calculated or become payable or at any other time,
surplus, profits, or other funds of the Corporation
available for the payment of dividends under the General
Corporation Law of the State of Delaware or under the
terms of any agreement to which the Corporation is a
party or by which it is bound; provided, however, that
Preferential Dividends on Shares, which are originally
issued after a record date fixed by the Board of
Directors for the payment of Preferential Dividends and
on or before the next succeeding Preferential Dividend
Payment Date, shall be cumulative from and after such
succeeding Preferential Dividend Payment Date.
The Corporation shall not (a) declare or pay
any dividends whatsoever upon, (b) make any distribution
upon, (c) acquire or redeem, or (d) permit or cause any
Subsidiary to acquire or redeem, any shares of Common
Stock of the Corporation ("Common Stock") or any shares
of Limited Duration Class B Common Stock ("Class B Common
Stock") (where no distinction is to be made between
Common Stock and Class B Common Stock, a share of either
shall be referred to collectively as "Common Equity") or
any shares of any other class or series of stock of the
Corporation ranking junior as to dividends or assets to
the Series I Preferred Stock ("Junior Stock") unless, in
each case, the full cumulative Preferential Dividends
(whether or not earned or declared) on all Shares
outstanding shall have been paid for all past Dividend
Periods and all arrearages, if any, in the payment of the
Redemption Price for all Shares which have been presented
and surrendered for redemption shall have been paid
unless, in any such event, the holders of a majority of
the then outstanding Shares shall have consented thereto
by affirmative vote at an annual meeting or a special
meeting called for that purpose.
The amount of any Preferential Dividends
accrued on any Share at any Preferential Dividend Payment
Date shall be deemed to be the amount of any unpaid
Preferential Dividends accumulated thereon to and
including such Preferential Dividend Payment Date
(whether or not earned or declared) and the amount of
Preferential Dividends accrued on any Share at any date
other than at a Preferential Dividend Payment Date shall
be calculated as the amount of any unpaid Preferential
Dividends accumulated thereon to and including the last
preceding Preferential Dividend Payment Date (whether or
not earned or declared) plus an amount calculated on the
basis of the Preferential Dividend Rate for the period
after such last preceding Preferential Dividend Payment
Date to and including the date as of which the
calculation is made, based on a 360-day year of twelve
30-day months.
1C. Participating Dividends. Whenever there
is a declaration of a dividend upon the Common Equity,
there shall also be a declaration of a Participating
Dividend upon the Series I Preferred Stock if, at the
time of such declaration upon the Common Equity, the
Total Dividend Rate multiplied by two times the sum of
(i) any prior payment or payments or dividends upon
Common Equity during the Dividend Year per share of
Common Equity outstanding at the time of such payment or
payments ("Prior Common Equity Dividend Payments") and
(ii) the amount of any such declaration of a dividend
upon the Common Equity per share of Common Equity
outstanding at the time of such declaration ("Common
Equity Dividend Declaration"), is greater than the sum of
any prior payment or payments of Preferential Dividends
upon Series I Preferred Stock during the Dividend Year
per Share outstanding at the time of such payment or
payments ("Prior Preferential Dividend Payments") and any
prior payment or payments of Participating Dividends upon
Series I Preferred Stock during the Dividend Year per
Share outstanding at the time of such payment or payments
("Prior Participating Dividend Payments"). If there
shall be a declaration of a Participating Dividend as
aforesaid, (a) the amount of such Participating Dividend
during any Dividend Year shall be equal to the Total
Dividend Rate multiplied by two times the sum of the
Prior Common Equity Dividend Payments and the Common
Equity Dividend Declaration, minus the sum of the Prior
Preferential Dividend Payments and the Prior
Participating Dividend Payments; and (b) payment of such
Participating Dividend shall be made on the date that
payment of the corresponding dividend upon the Common
Equity is made.
2. Redemption
2A. Optional Redemption. Upon (i) the death
of an Original Holder, (ii) the Permanent Disability or
the Permanent Mental Disability of an Original Holder,
(iii) the termination of an Original Holder's full-time
employment with the Corporation by the Original Holder
for Good Reason or (iv) termination of an Original
Holder's full-time employment with the Corporation by the
Corporation without Cause, such Original Holder and all
Transferee Holders of such Original Holder shall
collectively have the option for a period of twelve
months following any such event to present and surrender
the certificate or certificates representing all, but not
less than all, of their respective Shares duly endorsed
in blank or accompanied by an appropriate form of
assignment and, except as is otherwise provided by
subparagraph 2D hereof, upon the exercise of such option,
the Corporation shall redeem all of the Shares so
presented and surrendered; provided, however, that the
option granted to an Original Holder and all Transferee
Holders of such Original Holder by this subparagraph 2A
shall terminate upon the tenth anniversary of the
Exchange Date.
2B. Mandatory Redemption. Upon the
termination of an Original Holder's full-time employment
with the Corporation for Cause, the Original Holder and
every Transferee Holder of the Original Holder shall, on
the Redemption Date, present and surrender the
certificate or certificates representing all of their
respective Shares duly endorsed in blank or accompanied
by an appropriate form of assignment and, except as is
otherwise provided by subparagraph 2D hereof, the
Corporation shall redeem all of such Shares. In
addition, unless subject to redemption pursuant to the
immediately preceding sentence, upon the tenth
anniversary of the Exchange Date, the Original Holder and
every Transferee Holder of the Original Holder shall, on
the Redemption Date, present and surrender the
certificate or certificates representing at least one-
third (1/3) of their respective Shares duly endorsed in
blank or accompanied by an appropriate form of assignment
and, except as is otherwise provided by subparagraph 2D
hereof, the Corporation shall redeem all of such Shares;
provided, however, that on each of the next two
Subsequent Redemption Dates, the Original Holder and
every Transferee Holder of the Original Holder shall
present and surrender, in equal amounts, the certificate
or certificates representing the remainder, if any, of
their respective Shares and, except as otherwise provided
by subparagraph 2D hereof, the Corporation shall redeem
all of such Shares.
2C. Notice of Redemption. Each holder of
Shares who shall be entitled to, and shall elect to,
present and surrender Shares for redemption pursuant to
the option granted by subparagraph 2A and each holder of
Shares who shall be required to present and surrender
Shares for redemption pursuant to subparagraph 2B shall,
no less than five days before a Redemption Date or
Subsequent Redemption Date, as the case may be, provide
the Corporation with written notice containing the name
of the Original Holder of the Shares to be redeemed, the
number of Shares to be redeemed and the number or numbers
of the certificate or certificates representing such
Shares, and, subject to the limitations in subparagraph
2D, a statement as to the selected manner of payment.
Each notice to the Corporation contemplated by
this subparagraph 2C shall be sent by certified mail,
return receipt requested, to the President or the
Secretary of the Corporation at the address of the
principal executive offices of the Corporation.
2D. Payment of Unpaid Dividends and the
Redemption Price. On each Redemption Date and each
Subsequent Redemption Date, the Corporation shall pay, in
cash to each holder whose Shares are to be redeemed all
accrued and unpaid Preferential Dividends upon such
Shares, and all declared and unpaid Participating
Dividends upon such Shares as of a record date on or
before such Redemption Date or Subsequent Redemption
Date; provided, however, that if, on a Redemption Date or
a Subsequent Redemption Date, there should be
insufficient surplus, profits or other funds of the
Corporation available for the payment of such dividends
under the General Corporation Law of the State of
Delaware or due to the terms of any agreement to which
the Corporation is a party or by which it is bound, each
such holder shall receive, pro rata based on the number
of such holder's Shares to be redeemed, the amount of
such dividends for which surplus, profits or other funds
of the Corporation are available. Thereafter, any
surplus, profits or other funds of the Corporation
available for the payment of such dividends shall,
subject to any identical or substantially similar
obligation imposed upon the Corporation with respect to
shares of any other series of Redeemable Preferred Stock
of the Corporation having, as to dividends, parity with
the Shares, immediately be so used by the Corporation and
the Corporation shall not pay the Redemption Price on any
Shares unless and until all of such dividends upon all
redeemed Shares, and upon all redeemed shares of any
series of Redeemable Preferred Stock of the Corporation
having, as to dividends, parity with the Shares, shall
have been paid.
On a Redemption Date or a Subsequent Redemption
Date, in addition to the Preferential Dividends and
Participating Dividends which the Corporation is required
to pay as aforesaid, the Corporation shall also pay to
each holder who presents and surrenders the certificate
or certificates representing those of his Shares which
are to be redeemed an amount equal to the number of such
holder's Shares which are to be redeemed multiplied by
the Redemption Price and such amount shall, subject to
the limitation in this subparagraph 2D, be paid 100% in
cash, or 100% in shares of Common Equity of equivalent
value equally divided between shares of Common Stock and
shares of Class B Common Stock (or, subsequent to the
Conversion Date, 100% in shares of Common Stock of
equivalent value), or 100% by a Promissory Note, or any
combination of the foregoing in the proportions specified
by the holder of Shares to be redeemed; provided,
however, that the Corporation shall not be required to
pay an amount in cash in excess of one-third (1/3) of the
Aggregate Redemption Price in any fiscal year and, in the
event that the number of Shares presented and surrendered
for payment in cash exceeds such amount, the holder or
holders presenting and surrendering such Shares shall
receive a Promissory Note for such excess; provided
further, however, that if, on any Redemption Date, or
Subsequent Redemption Date, (a) the Corporation does not
have an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and
any applicable state securities or blue sky laws covering
the issuance of shares of Common Equity in payment for
Shares to be redeemed and, in the opinion of counsel to
the Corporation, the issuance of shares of Common Equity
for such payment is not exempt under the 1933 Act and any
applicable state securities or blue sky laws or (b) if,
in the opinion of counsel to the Corporation, the
issuance of shares of Common Equity in payment for Shares
to be redeemed would constitute a violation of Section 7
of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), or the Regulations of the Board of Governors
of the Federal Reserve System under Section 7 of the 1934
Act, a holder of Shares to be redeemed shall only be
entitled to payment in cash and a Promissory Note; and
provided further, however, that (a) if, in any fiscal
year of any Redemption Date or Subsequent Redemption
Date, or any Subsequent Redemption Payment Date, there
should be insufficient surplus, profits or other funds of
the Corporation available for the payment of any
Redemption Payment or Initial Redemption Payment, or any
Subsequent Redemption Payment, respectively, under the
General Corporation Law of the State of Delaware or due
to the terms of any agreement to which the Corporation is
a party or by which it is bound or (b) if, in the case of
any Redemption Payments or Initial Redemption Payments
which, pursuant to subparagraph 2A or subparagraph 2B,
would be due and payable in any fiscal year or in the
case of any Subsequent Redemption Payments which are due
and payable in any fiscal year, the aggregate of such
payments exceed 40% of the post-tax profits of the
Corporation for the next preceding fiscal year, then each
holder shall receive pro rata based on the number of such
holder's Shares to be redeemed or which have been
redeemed, as the case may be, the amount of the
Redemption Payment or Initial Redemption Payment, or
Subsequent Redemption Payment, for which funds of the
Corporation are available as provided in subclauses (a)
and (b) of this proviso and, in the case of Shares for
which a Redemption Payment or an Initial Redemption
Payment was to have been made, the holders of such Shares
shall be entitled to retain such Shares until such Shares
would otherwise be required to be presented and
surrendered for redemption and there is sufficient
surplus, profits or other funds of the Corporation
available for the Redemption Payment or the Initial
Redemption Payment therefor and, in the case of any
Shares which have been redeemed, any part of the
Subsequent Redemption Payment remaining unpaid shall be
added to the Subsequent Redemption Payment due and
payable on the next succeeding Subsequent Redemption
Payment Date.
If a holder of Shares specifies payment of any
Redemption Payment or Initial Redemption Payment, whether
in whole or in part, in shares of Common Equity, such
payment shall be made in an equal number of shares of
Common Stock and shares of Class B Common Stock (or,
subsequent to the Conversion Date, 100% in shares of
Common Stock) which are authorized but unissued or are
held in the treasury of the Corporation or any
combination thereof. The value of a share of Common
Equity as of a particular date shall be deemed to be the
closing sale price (or if no closing sales price is
available for such date, the average of the closing bid
and asked prices) for a share of Common Stock on the
Business Day next preceding such date as reported by the
National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), or if the shares of Common
Stock are not listed on NASDAQ, the average of such
closing bid and asked prices as reported by the National
Quotation Bureau, Inc. ("NQB"), or if such closing sale
or closing bid and asked prices are not available from
the NQB, the value as determined by a member of the New
York Stock Exchange selected by the Board of Directors.
2E. Dividends After Redemption Date or
Subsequent Redemption Date. Each Share which a holder
has elected to present and surrender for redemption
pursuant to the option granted by subparagraph 2A shall
not, after the Redemption Date or the Subsequent
Redemption Date therefor, be entitled to any Preferential
Dividends accrued after such Redemption Date or
Subsequent Redemption Date, or any Participating
Dividends declared as of a record date after such
Redemption Date or Subsequent Redemption Date, and on
such Redemption Date or Subsequent Redemption Date all
rights of a holder of such Share, as a stockholder of the
Corporation by reason of the ownership of such Share,
shall cease, except the right to receive any Preferential
Dividends accrued upon such Share up to and including
such Redemption Date or Subsequent Redemption Date, any
Participating Dividends declared upon such Share as of a
record date on or before such Redemption Date or
Subsequent Redemption Date and the Redemption Price of
such Share upon presentation and surrender of the
certificate representing such Share, and such Share shall
not, after such Redemption Date or Subsequent Redemption
Date, be deemed to be outstanding; provided, however,
that if the Corporation does not, upon presentation and
surrender of a certificate representing a Share, pay all
of such accrued and unpaid Preferential Dividends upon,
all of such declared and unpaid Participating Dividends
upon, and the Redemption Price for, such Share on the
Redemption Date or the Subsequent Redemption Date, as the
case may be, the rights of a holder of such Share as a
stockholder of the Corporation by reason of the ownership
of such Share shall not cease and such Share shall be
deemed outstanding, until the Corporation shall pay all
of such dividends upon, and the Redemption Price for,
such Share.
2F. Adjustment of the Redemption Price. If
the Corporation purchases any shares of Common Equity at
an aggregate purchase price which is more than $100,000
in excess of the product of the Book Value per share of
Common Equity as of the date of such purchase and the
number of shares of Common Equity purchased (such excess
being herein called the "Excess Purchase Price"), for the
purpose of calculating the Redemption Price of any Share
that was issued prior to such purchase of Common Equity
(provided that for these purposes, any share of Series I
Preferred Stock that was issued in exchange for a share
of Series 1 Preferred Stock shall be deemed to have been
issued as of the date of issuance of the share of Series
1 Preferred Stock for which it was exchanged), the Book
Value per share of Common Equity as of a Redemption Date
or a Subsequent Redemption Date shall be deemed to be the
Book Value per share of Common Equity as it would have
been had the Excess Purchase Price been amortized over a
ten year period beginning on the date on which the
purchase or purchases of Common Equity occurred. If
there are (a) changes in the number of shares of Common
Equity outstanding as a result of (i) stock dividends,
splits, combinations or exchanges of shares of Common
Equity, (ii) issuances of shares of Common Equity in
acquisitions, (iii) merger, consolidation or
reorganization or (iv) any other unusual and
extraordinary items or events or (b) if there are any
disproportionate and material effects on the Common
Stockholders' Equity as a result of (i) any of the
foregoing, (ii) changes in the accounting policies of the
Corporation or (iii) any other unusual and extraordinary
items or events, for the purpose of calculating the
Redemption Price of any Share issued prior to any such
change or disproportionate and material effect only, the
Book Value per share of Common Equity as of a Redemption
Date or Subsequent Redemption Date may be adjusted to
such an extent and in such manner as the Board of
Directors or a duly designated committee thereof shall,
in its sole discretion, determine is necessary to
preserve the benefit of the redemption provisions in this
paragraph 2 for the holders of Series I Preferred Stock
and the Corporation.
2G. Status of Redeemed Shares. Upon the
redemption of any Shares, the Corporation shall, pursuant
to Section 151(g) of the General Corporation Law of the
State of Delaware as now or hereafter in effect, cause
the number of authorized shares of Series I Preferred
Stock to be decreased by the number of Shares redeemed
and the Corporation shall not thereafter issue any of
such Shares or any other shares of Preferred Stock as
shares of Series I Preferred Stock.
3. Liquidation.
3A. Liquidation Preference. Upon any
liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the
holders of the Series I Preferred Stock shall be entitled
to be paid out of the assets of the Corporation available
for distribution to its stockholders (whether from
capital, surplus or earnings) an amount of cash equal to
$1.00 per Share ("Liquidation Preference") plus all
accrued and unpaid Preferential Dividends, before any
distribution or payment is made upon any Common Equity or
any other Junior Stock of the Corporation, but subject to
the prior rights of the holders of shares of other series
of Preferred Stock which are by their terms expressly
made senior as to liquidation preferences to the Series I
Preferred Stock. If upon such liquidation, dissolution
or winding up of the Corporation, whether voluntary or
involuntary, the assets of the Corporation should not be
sufficient to permit payment to the holders of Series I
Preferred Stock of the amount which they are entitled to
be paid as aforesaid and the holders of any other series
of Preferred Stock ranking equally as to liquidation
preferences to the Series I Preferred Stock of the amount
to which they are entitled to be paid, then the entire
assets of the Corporation to be distributed to such
holders shall be distributed ratably among them.
3B. Liquidation Participation. Upon any such
liquidation, dissolution or winding up of the
Corporation, after the holders of the Series I Preferred
Stock shall have been paid in full the Liquidation
Preference and the accrued and unpaid Preferential
Dividends and the holders of any other series of
Preferred Stock have been paid their liquidation
preferences and any accrued and unpaid preferential
dividends, the holders of the Series I Preferred Stock
and the holders of any other series of Preferred Stock
shall not be entitled to any further payment unless and
until the holders of Common Equity shall have received
out of the assets of the Corporation available for
distribution to its stockholders (whether from capital,
surplus or earnings), for each share of Common Stock, an
amount in cash equal to one-half of the Liquidation
Preference and for each share of Class B Common Stock, an
amount equal to one-half of the Liquidation Preference;
but if, after the holders of Common Equity shall have
been paid in full such amounts, the value of the
remainder of the assets of the Corporation available for
distribution to its stockholders per share of Common
Equity, Series I Preferred Stock, and any other series of
Preferred Stock entitled to a liquidation participation
is greater than the Original Discount for a share of
Series I Preferred Stock, the holder of any such share of
Series I Preferred Stock shall be entitled to receive a
liquidation participation such that the aggregate
liquidation payment for each share of Series I Preferred
Stock is equal to the difference between two times the
aggregate liquidation payment for each share of Common
Equity and the Original Discount at which the share of
Series I Preferred Stock was issued.
3C. Events Not Deemed a Liquidation,
Dissolution or Winding Up. Neither the consolidation or
merger of the Corporation into or with any other
corporation or corporations, nor the sale, lease,
exchange or other disposition by the Corporation of all
or any part of its property or assets, nor the reduction
of the capital stock of the Corporation, shall be deemed
to be a liquidation, dissolution or winding up of the
Corporation within the meaning of any of the provisions
of this paragraph 3.
4. Voting.
4A. General Right to Vote. The holders of
Series I Preferred Stock shall be entitled to eleven
votes for each Share held of record and, together with
the holders of any other series of Preferred Stock who
shall have the right and power to vote generally with the
holders of Common Equity, shall, together with the
holders of Common Equity, all voting as a single class,
possess voting power for the election of directors and
for all other purposes, except as is otherwise provided
in the Restated Certificate of Incorporation or any
certificate amendatory thereof or supplemental thereto,
this paragraph 4 and in paragraph 6 hereof. The
foregoing notwithstanding, on and subsequent to the
Conversion Date, the holders of Series I Preferred Stock
shall be entitled to two votes for each Share held of
record.
4B. Restrictions on Voting Rights. Upon the
earliest of (i) the tenth anniversary of the Exchange
Date, (ii) the death of an Original Holder or (iii) the
Permanent Mental Disability of an Original Holder, the
voting rights which such Original Holder and any
Transferee Holder of such Original Holder would otherwise
have, whether pursuant to this Certificate of
Designations, the Restated Certificate of Incorporation
or any certificate amendatory thereof or supplemental
thereto, by virtue of the Shares held by such Original
Holder or such Transferee Holder, shall terminate;
provided, however, that if such rights terminate as a
result of clauses (i), (ii) or (iii) above and if the
Corporation has issued a Promissory Note under
subparagraph 2D, then, if the Corporation subsequently
defaults in its obligations thereunder, from and after
such default such voting rights shall be reinstated for
such period of time as the Corporation is in default of
such obligations.
In the event of the commencement of an
involuntary receivership, liquidation, reorganization or
similar proceeding against an Original Holder or a
Transferee Holder, whether under the Federal Bankruptcy
Code or any other applicable federal or state law, and
the appointment of a receiver, interim trustee, trustee
or similar official of such Original Holder or Transferee
Holder or in the event of the commencement of a voluntary
receivership, liquidation, reorganization or similar
proceeding by an Original Holder or a Transferee Holder,
whether under the Federal Bankruptcy Code or any other
applicable federal or state law, the voting rights which
such Original Holder or such Transferee Holder or a
Transferee Holder of such Original Holder would otherwise
have, whether pursuant to this Certificate of
Designations, the Restated Certificate of Incorporation
or any certificate amendatory thereof or supplemental
thereto, by virtue of Shares held by any such Original
Holder or Transferee Holder, shall terminate. In
addition, in the event of the commencement of an
involuntary receivership, liquidation, reorganization or
similar proceeding against an Original Holder to whom at
least 80% of the Shares outstanding at any time have been
issued or a Substantial Transferee Holder, whether under
the Federal Bankruptcy Code or any other applicable
federal or state law, and the appointment of a receiver,
interim trustee, trustee or similar official of such
Original Holder or Substantial Transferee Holder or in
the event of the commencement of a voluntary
receivership, liquidation, reorganization or similar
proceeding by such Original Holder or Substantial
Transferee Holder, whether under the Federal Bankruptcy
Code or any other applicable federal or state law, the
voting rights which all Original Holders and Transferee
Holders would otherwise have, whether pursuant to this
Certificate of Designations, the Restated Certificate of
Incorporation or any certificate amendatory thereof or
supplemental thereto, by virtue of Shares held by any
such Original Holders or Transferee Holders, shall
terminate.
4C. Other Voting Rights - General. In
addition to the voting rights of the holders of the
Series I Preferred Stock provided pursuant to the
foregoing provisions of this paragraph 4 and subject to
the restrictions contained in this paragraph 4, the
holders of the Series I Preferred Stock shall have
additional voting rights as provided in Articles Seventh
and Tenth of the Corporation's Restated Certificate of
Incorporation and paragraphs 4D and 4E below. For
purposes of said Articles Seventh and Tenth, the holders
of Series I Preferred Stock shall be deemed to have the
right to vote with the holders of Series 1 Preferred
Stock pursuant to the fifth paragraph of said Article
Seventh and the second paragraph of said Article Tenth.
Such voting rights shall be afforded to the holders of
the Series I Preferred Stock as if they were named in
said Articles Seventh and Tenth, regardless of whether
the Series 1 Preferred Stock remains authorized or
outstanding. The voting rights set forth in this
paragraph 4C and in paragraphs 4D and 4E shall not be
affected by any redemption of the Series 1 Preferred
Stock or any amendment or modification of said Articles
Seventh and Tenth.
4D. Other Voting Rights - Directors. The
holders of the Shares, together with the holders of
shares of Common Stock, Class B Common Stock and Series 1
Preferred Stock and the holders of shares of any other
series of Preferred Stock who shall have the right and
power to vote with the holders of Common Stock, Class B
Common Stock, Series I Preferred Stock and Series 1
Preferred Stock as a single class on the election and
removal of directors, shall have the right and power, all
voting as a single class, (a) to elect a number of
directors ("Capital Stock Directors") equal to three-
quarters (3/4) of the number of directors which shall
constitute the entire Board of Directors (or, if such
number is a whole number and a fraction less than or
equal to one-half (1/2), the number of Capital Stock
Directors equal to such whole number, or if such number
is a whole number and a fraction greater than one-half
(1/2), the number of Capital Stock Directors equal to the
next higher whole number), and (b) to remove, whether
with or without cause, at any time, any of such Capital
Stock Directors. All rights with respect to cumulative
voting, removal of Capital Stock Directors and filling of
any vacancies so caused shall be governed by the terms of
Articles Seventh and Tenth of the Corporation's Restated
Certificate of Incorporation.
The holders of Shares and, to the extent so
authorized, the holders of Series 1 Preferred Stock
entitled to vote such shares, together with the holders
of shares of any other series of Preferred Stock with
similar voting rights, shall have the right and power,
all voting as a single class, (a) to elect a number of
directors ("Preferred Stock Directors") equal to one-
quarter (1/4) of the number of directors which shall
constitute the entire Board of Directors (or, if such
number is a whole number and a fraction less than one-
half (1/2), the number of Preferred Stock Directors equal
to such whole number, if such number is a whole number
and a fraction greater than or equal to one-half (1/2),
the number of Preferred Stock Directors equal to the next
higher whole number) and (b) to remove, whether with or
without cause, at any time, any of such Preferred Stock
Directors. The affirmative vote of the holders of not
less than a majority of the outstanding shares entitled
to vote thereon as aforesaid shall be required to elect a
Preferred Stock Director. Any Preferred Stock Director
may be removed by the affirmative vote of the holders of
not less than a majority of the shares entitled to vote
thereon as aforesaid, given at an annual meeting or a
special meeting of the holders of such shares called and
held for that purpose; and the vacancy in the Board of
Directors caused by such removal may be filled at any
such meeting and, if not so filled, shall be filled by
the remaining Preferred Stock Directors.
If at any time, there are no longer any holders
of Shares or holders of Series 1 Preferred Stock entitled
to vote such shares, and there are no longer any holders
of shares of any other series of Preferred Stock who have
the right and power to vote with the holders of Shares or
holders of Series 1 Preferred Stock (to the extent so
authorized and outstanding) as a single class on the
election and removal of Preferred Stock Directors, then
the term of office of all Preferred Stock Directors shall
terminate, and no additional Preferred Stock Directors
shall be elected. The vacancy or vacancies so created in
the Board of Directors shall be filled with Capital Stock
Directors and from such time the entire Board of
Directors shall be comprised of Capital Stock Directors.
The Board of Directors shall not adopt any
resolutions authorizing any other series of preferred
stock which shall be entitled to vote with the Series I
Preferred Stock as a single class to elect Preferred
Stock Directors, without the approval or consent of the
holders of a majority of the outstanding shares of Series
I Preferred Stock.
Any special meeting contemplated in this
paragraph 4D shall be called by the Board of Directors,
the Chairman of the Board or the President upon the
written request of the holders of not less than a
majority of the outstanding shares of Common Stock, Class
B Common Stock and Preferred Stock entitled to vote at
such meeting, and at such meeting, the presence, in
person or by proxy, of the holders of not less than a
majority of the outstanding shares entitled to vote at
such meeting shall constitute a quorum.
4E. Other Voting Rights - Certain
Transactions. Whenever the vote of stockholders is
required to be taken by any provision of the General
Corporation Law of the State of Delaware in connection
with a merger or consolidation of the Corporation or the
sale, lease, exchange or other disposition of all or
substantially all of the assets of the Corporation, the
holders of Shares together with the holders of any other
series of Preferred Stock who shall have similar power to
vote in connection therewith (including, if so authorized
and outstanding, the Series 1 Preferred Stock) shall have
the right and power to vote as a single class and the
affirmative vote of the holders of not less than a
majority of the outstanding shares entitled to vote
thereon as aforesaid shall be required to approve any
such action.
If the Board of Directors should adopt a
resolution or resolutions authorizing the issuance of
additional series of Preferred Stock and if such
resolution or resolutions should fix the voting power of
such additional series such that the holders of such
additional series would be entitled to vote with the
holders of Series 1 Preferred Stock as a single class
whenever the vote of the stockholders is required to be
taken by any provision of the General Corporation Law of
the State of Delaware in connection with a merger or
consolidation of the Corporation or the sale, lease,
exchange or other disposition of all or substantially all
of the assets of the Corporation, then upon the
affirmative vote of the holders of Shares together with
the holders of any other series of Preferred Stock who
shall have similar power to vote in connection therewith
(including, if so authorized and outstanding, the Series
1 Preferred Stock), voting as a single class, given at an
annual meeting or a special meeting called and held for
the purpose of considering such resolution or
resolutions, the holders of such additional series shall
be so entitled.
Any special meeting contemplated by this
paragraph 4E shall, upon the written request of the
holders of not less than a majority of the outstanding
shares of Preferred Stock entitled to vote at such
meeting, be called by the Board of Directors, the
Chairman of the Board or the President and at such
meeting, the presence, in person or by proxy, of the
holders of not less than a majority of the outstanding
Shares and the shares of Preferred Stock entitled to vote
at such meeting shall constitute a quorum.
5. Restrictions on Disposition of Shares. An
Original Holder shall only be entitled to assign, pledge,
transfer or otherwise dispose of his Shares, or an
interest in his Shares, to a Transferee Holder of the
Original Holder or the Corporation; and a Transferee
Holder of an Original Holder shall only be entitled to
assign, pledge, transfer or otherwise dispose of Shares,
or an interest in Shares, received from an Original
Holder or a Transferee Holder to another Transferee
Holder of such Original Holder or the Corporation.
6. Restrictions on Changes. In addition to any
other approvals or consents required by the General
Corporation Law of the State of Delaware or other
applicable law, the Corporation shall not, without the
consent of the holders of record of a majority of the
Shares outstanding, given in person or by proxy, either
in writing without a meeting or by affirmative vote at an
annual meeting or a special meeting called for that
purpose at which the holders of the Shares outstanding
shall be entitled to vote as a separate class, (a)
create, authorize or issue (i) any shares of any class or
series of stock of the Corporation ranking senior as to
dividends or assets or otherwise to the Series I
Preferred Stock ("Senior Stock") or (ii) any shares of
any class or series of stock of the Corporation ranking
on a parity as to dividends or assets or otherwise to the
Series I Preferred Stock ("Parity Stock"), (b)
reclassify any authorized stock of the Corporation into
any shares of Senior Stock or Parity Stock, (c) create,
authorize or issue any obligation or security convertible
into or evidencing the right to purchase any shares of
Senior Stock or Parity Stock, or (d) amend, alter,
supplement or repeal any of the provisions of the
Restated Certificate of Incorporation or of any
certificate (including this Certificate of Designations)
amendatory thereof or supplemental thereto so as to
affect adversely the preferences, rights, powers or
privileges given by this Certificate of Designations to
the Series I Preferred Stock.
7. Successors and Assigns. The provisions of this
Certificate of Designations shall be binding upon all
successors and assigns of an Original Holder, including,
without limitation, a Transferee Holder and any receiver,
interim trustee or trustee in bankruptcy or
representative of creditors of an Original Holder or a
Transferee Holder.
8. Definitions. The following terms shall have
the following meanings, which meanings shall be equally
applicable to the singular and plural forms of such
terms:
(a) "Additional Capital applicable to
Redeemable Preferred Stock" as of a particular date means
the amount thereof as shown on an Audited Consolidated
Balance Sheet as of such date.
(b) "Aggregate Redemption Price" means
for the purpose of the calculation required by
subparagraph 2D, the number of Shares issued to an
Original Holder, whether or not outstanding, multiplied
by the Redemption Price as of a Redemption Date or a
Subsequent Redemption Date, as the case may be.
(c) "Audited Consolidated Balance Sheet"
as of a particular date means the audited consolidated
balance sheet of the Corporation and its Subsidiaries
(all the financial information on which has been computed
in accordance with generally accepted accounting
principles by the regular independent auditors of the
Corporation) as of the last day of the applicable fiscal
year.
(d) "Book Value per share of Common
Equity" means as of a particular date the book value per
share of Common Equity (Common Stockholders' Equity
divided by the number of shares of Common Equity
outstanding), plus the cumulative amount per share of
Common Equity transferred from Common Stockholders'
Equity to Additional Capital applicable to Redeemable
Preferred Stock since the issuance of any shares of the
Series 1 Preferred Stock, and as of such date as shown on
an Audited Consolidated Balance Sheet as of such date.
(e) "Business Day" means any day which is
not a Saturday or a Sunday or a day on which the banks
are closed for business in New York, New York.
(f) "Cause" shall have the meaning set
forth in Section 22 of the Agreement, made as of
February 9, 1984, between the Corporation and Edward H.
Meyer (as amended).
(g) "Common Stockholders' Equity" as of a
particular date means the common stockholders' equity as
derived from the Audited Consolidated Balance Sheet as of
such date.
(h) "Conversion Date" means the date upon
which all outstanding shares of Class B Common Stock
automatically convert into shares of Common Stock
pursuant to subparagraph III.(D)(9) of the paragraph
entitled "Common Stock and Class B Common Stock" in
Article Fourth of the Corporation's Restated Certificate
of Incorporation.
(i) "Date of Termination" means the date
of termination of an Original Holder's full-time
employment with the Corporation.
(j) "Dividend Period" means the quarterly
period ending on a Preferential Dividend Payment Date.
(k) "Dividend Year" means the period from
March 16 in one year to March 15 in the succeeding year
commencing with the March 16 immediately preceding the
Exchange Date.
(l) "Exchange Date" means the date of
filing of this Certificate of Designations with the
Secretary of State of the State of Delaware.
(m) "Good Reason" means:
(1) a change in control of the
Corporation, which shall be conclusively deemed to have
occurred if any of the following shall have taken place:
(i) a change in control of a nature that would be
required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A under the 1934 Act, unless
such change in control results in control by the Original
Holder, his designee(s) or "affiliate(s)" (as defined in
Rule 12b-2 under the 1934 Act) or any combination
thereof; (ii) any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the 1934 Act), other than
the Original Holder, his designee(s) or "affiliate(s)"
(as defined in Rule 12b-2 under the 1934 Act) or any
combination thereof, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the 1934 Act), directly
or indirectly, of securities of the Corporation
representing 40% or more of the combined voting power of
the Corporation's then outstanding securities; or (iii)
during any period of two (2) consecutive years commencing
after the date of this Certificate of Designations,
individuals who at the beginning of such period
constitute the Board of Directors cease for any reason to
constitute at least a majority thereof, unless the
election of each director who was not a director at the
beginning of such period has been approved in advance by
directors representing at least a majority of the
directors then in office who were directors at the
beginning of the period; or
(2) any assignment to the Original
Holder of any duties other than those contemplated by, or
a limitation of the powers of an Original Holder not
contemplated by, the relevant provisions of his
employment agreement with the Corporation, if any; or
(3) any removal of the Original
Holder from, or any failure to re-elect the Original
Holder to, any of the positions which he may hold by
virtue of his employment agreement with the Corporation,
if any, except in connection with his Disability (as
defined in any such employment agreement) or with the
termination of his full-time employment with the
Corporation for Cause; or
(4) a reduction in the Original
Holder's rate of compensation not agreed to in writing by
him; or
(5) a failure by the Corporation to
comply with any of the provisions of the Original
Holder's employment agreement with the Corporation, if
any, concerning his compensation, pension, life
insurance, disability rights or vacations; or
(6) failure by the Corporation to
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Corporation, by agreement in form and substance
satisfactory to the Original Holder, expressly to assume
and agree to perform the Original Holder's employment
agreement, if any, in the same manner and to the same
extent that the Corporation would be required to perform
it if no such succession had taken place; or
(7) failure by the Corporation to
offer to continue to employ the Original Holder following
expiration of his employment agreement with the
Corporation in the same positions as those held by him
immediately prior to such expiration and on terms at
least as favorable to the Original Holder as the terms
set forth in his employment agreement.
(n) "Initial Redemption Payment" means
any redemption payment by the Corporation on a Redemption
Date or a Subsequent Redemption Date, which consists, at
least in part, of a Promissory Note.
(o) "Original Discount" for a share of
Series I Preferred Stock means the discount from the Book
Value per share of Common Equity as of the last day of
the then current fiscal year or of the next preceding
fiscal year, whichever is nearer the date on which an
Original Holder purchased such share or, if applicable,
the date on which an Original Holder purchased from the
Corporation the share of Series 1 Preferred Stock in
exchange for which such share of Series I Preferred Stock
was issued, pursuant to that certain Book Value Preferred
Stock Plan dated as of April 2, 1981, as amended on May
20, 1982 and as subsequently amended on June 13, 1983,
and as such plan may from time to time be amended or
supplemented in accordance with its terms (the "Plan").
(p) "Original Holder" means a senior
executive officer (whether or not a member of the Board
of Directors) of the Corporation or any Subsidiary to
whom any Shares or, if applicable, any shares of Series 1
Preferred Stock in exchange for which Shares have been
issued, have been sold pursuant to the Plan.
(q) "Participating Dividend" means the
dividend which, subject to the conditions in subparagraph
1C, the Corporation is required to declare on Shares
whenever a dividend is declared on shares of Common
Equity.
(r) "Permanent Disability" means (i) in
the case of an Original Holder to whom at least 80% of
the Shares outstanding at any time have been issued, an
illness or other disability (other than a Permanent
Mental Disability) of such Original Holder which results
in such Original Holder being unable regularly to perform
his duties as Chief Executive Officer and President of
the Corporation for a period of 18 months and the
termination of such Original Holder's full-time
employment as such Chief Executive Officer and President
and (ii) in the case of any Original Holder, an illness
or other disability (other than a Permanent Mental
Disability) which results in any such Original Holder
being unable regularly to perform his duties as an
employee of the Corporation for a period of 18 months and
the termination of any such Original Holder's full-time
employment with the Corporation.
(s) "Permanent Mental Disability" means a
mental illness or other mental disability of a person
which results in such person being incapable of
understanding and unable regularly to act with discretion
in the ordinary affairs of life for a period of at least
90 consecutive days, as determined by a written
certification of a qualified medical doctor agreed to by
the Corporation and such person or, in the event of such
person's incapacity to designate a doctor, such person's
legal representative. In the absence of an agreement
between the Corporation and such person (or his legal
representative), each shall nominate a qualified medical
doctor and the two doctors shall select a third doctor,
who shall make the determination as to the disability.
The appointment of a guardian or legal conservator for a
person shall create a presumption of the Permanent Mental
Disability of such person.
(t) "Preferential Dividend" means the
dividend which will be calculated at the Preferential
Dividend Rate and which will accumulate and accrue as
provided in subparagraph 1B.
(u) "Promissory Note" means a promissory
note of the Corporation, such note to bear interest at an
annual rate equal to the higher of the prime rate charged
by Citibank, N.A. or the rate at which the Corporation is
entitled to borrow money from the principal banking
institution with which it does business, each as of the
Redemption Date or the Subsequent Redemption Date, as the
case may be, and such note shall be payable in cash on
the next two Subsequent Redemption Payment Dates.
(v) "Redeemable Preferred Stock" means
any series of redeemable preferred stock of the
Corporation which is issued by the Corporation since the
issuance of any shares of the Series 1 Preferred Stock,
unless the Certificate of Designations fixing the voting
power, preferences and relative, participating, optional,
dividends and other special rights, and the
qualifications, limitations and restrictions of such
series of redeemable preferred stock expressly provides
otherwise.
(w) "Redemption Date" means:
(1) for the purposes of the option
granted to an Original Holder and all Transferee Holders
of such Original Holder by subparagraph 2A, (i) the later
of (A) the third Business Day subsequent to the date on
which the Audited Consolidated Balance Sheet is available
for the most recent fiscal year ended or (B) the date on
which an Original Holder and all Transferee Holders of
such Original Holder collectively intend to exercise such
option as evidenced by their provision of notice to the
Corporation, if the date of the notice referred to in
subclause (i)(B) is within the six-month period
subsequent to the end of the most recent fiscal year; or
(ii) the later of (A) the date on which an Original
Holder and all Transferee Holders of such Original Holder
collectively intend to exercise such option as evidenced
by their provision of notice to the Corporation or (B)
the third Business Day subsequent to the date on which
the Audited Consolidated Balance Sheet is available for
the then current fiscal year, if the date of any notice
referred to in this subclause (ii) is within the six-
month period prior to the end of the then current fiscal
year; or
(2) for the purposes of the first
sentence of subparagraph 2B, the later of (i) the third
Business Day subsequent to the date on which the Audited
Consolidated Balance Sheet is available for the most
recent fiscal year ended or (ii) the tenth Business Day
subsequent to an Original Holder's Date of Termination
for Cause; or
(3) for the purposes of the second
sentence of subparagraph 2B, (i) the later of (A) the
third Business Day subsequent to the date on which the
Audited Consolidated Balance Sheet is available for the
most recent fiscal year ended or (B) the third Business
Day subsequent to the tenth anniversary of the Exchange
Date.
(x) "Redemption Payment" means any
redemption payment by the Corporation on a Redemption
Date or a Subsequent Redemption Date which consists
solely of cash, an equal number of shares of Common Stock
and shares of Class B Common Stock (or, subsequent to the
Conversion Date, 100% in shares of Common Stock), or a
combination thereof.
(y) "Redemption Price" means, except as
is otherwise provided, an amount equal to twice that of
the Book Value per share of Common Equity as of the last
day of the fiscal year immediately preceding the
Redemption Date or the Subsequent Redemption Date, as the
case may be, for such Share minus the Original Discount
on such Share. Notwithstanding the foregoing sentence,
the Redemption Price for a Share as of a Redemption Date
shall be determined by reference to the higher of an
amount equal to twice that of the Book Value per share of
Common Equity as of the last day of the most recent
fiscal year ended or as of the end of the then current
fiscal year, if the Redemption Date for such Share is
determined pursuant to (w)(1)(ii)(B) of this paragraph 8.
(z) "Series 1 Certificate" means that
certain Amended Certificate of Designations and Terms of
Series 1 Preferred Stock dated April 15, 1986 which was
filed with the Secretary of State of the State of
Delaware pursuant to Sections 151(g) and 103 of the
General Corporation Law of the State of Delaware.
(aa) "Series 1 Preferred Stock" means the
Series 1 Preferred Stock of the Corporation designated as
such pursuant to the Series 1 Certificate.
(bb) "Subsequent Redemption Date" means
the anniversary date of any Redemption Date upon which at
least one-third (1/3) of the Shares issued to an Original
Holder are required, pursuant to subparagraph 2B, to be
presented and surrendered for redemption.
(cc) "Subsequent Redemption Payment"
means any redemption payment by the Corporation in cash
on Shares for which an Initial Redemption Payment has
been made.
(dd) "Subsequent Redemption Payment Date"
means, with respect to Shares for which an Initial
Redemption Payment has been made, the anniversary date of
the Initial Redemption Payment Date therefor.
(ee) "Subsidiary" means any corporation
at least a majority of the Voting Stock of which is, at
the time as of which any determination is being made,
owned by the Corporation either directly or indirectly
through one or more Subsidiaries.
(ff) "Substantial Transferee Holder"
means a Transferee Holder or Transferee Holders of an
Original Holder to whom at least 80% of the Shares
outstanding at any time have been issued, which
Transferee Holder holds, or which Transferee Holders in
the aggregate hold, that number of Shares which when
subtracted from the number of Shares issued to such an
Original Holder which remain outstanding would result in
such Original Holder and all other Transferee Holders of
such Original Holder collectively no longer owning a
majority of Shares outstanding at the time.
(gg) "Total Dividend Rate" means 100
percent for each Dividend Year.
(hh) "Transferee Holder" means a
corporation all the Voting Stock of which is wholly owned
by an Original Holder or, in the event of the death of an
Original Holder, the estate of an Original Holder, any
executor, administrator, legal representative or trustee
thereof and any heir, distributee, devisee or legatee
thereunder.
(ii) "Voting Stock" means any share of
stock having general voting power in electing the board
of directors, irrespective of whether or not at the time
stock of any other class or series has or might have
voting power by reason of the happening of any
contingency.
9. Miscellaneous.
9A. Determination of Fact. Whenever a
determination of fact is required in connection with any
provision or provisions of this Certificate of
Designations, the Board of Directors shall make such
determination and its determination shall be conclusive.
9B. Headings. The headings of the paragraphs
and subparagraphs of this Certificate of Designations are
inserted for convenience only and shall not constitute a
part hereof.
9C. Amendments. Whenever, in the joint
opinion of the Corporation, as evidenced in the case of
the Corporation by a resolution of the Board of
Directors, and of the holders of a majority of the
outstanding shares of Series I Preferred Stock, it is
deemed desirable or advisable to amend or restate this
Certificate of Designations to further the purposes of
the Corporation in the designation and issuance of the
Series I Preferred Stock, all as evidenced by an
instrument signed jointly by the Corporation and such
stockholders, this Certificate of Designations may be
amended or restated, to the extent permitted by law, by
the adoption by the Board of Directors of a resolution
implementing any such amendment or restatement and by
filing a certificate pursuant to the General Corporation
Law of the State of Delaware. This Certificate of
Designations may also be amended or restated in any other
manner permitted under the General Corporation Law of the
State of Delaware.
9D. Validity. The invalidity or unenforce-
ability of any provision or provisions of this
Certificate of Designations shall not affect the validity
or enforceability of any other provision of this
Certificate, which shall remain in full force and effect.
V. Series II Preferred Stock. The number of
shares constituting the Series II Preferred Stock shall
be 5,000, which number may from time to time be decreased
(but not below the number of shares then outstanding) by
the Board of Directors and the voting power, preferences
and relative, participating, optional, dividend and other
special rights, and the qualifications, limitations and
restrictions of the Series II Preferred Stock and the
restrictions on the Corporation in connection with the
Series II Preferred Stock shall be as follows:
1. Dividends.
1A. General Dividend Obligations. The holders
of record of Series II Preferred Stock shall be entitled,
equally and ratably, to receive, when and as declared by
the Board of Directors out of the surplus, profits or
other funds of the Corporation available for the payment
of dividends under the General Corporation Law of the
State of Delaware, Preferential Dividends and
Participating Dividends at the times, in the amounts and
under the conditions specified in this paragraph 1.
1B. Preferential Dividends. Preferential
Dividends on each share of Series II Preferred Stock
("Share") shall be payable in equal amounts quarterly on
the fifteenth day of March, June, September and December
(or, if such day is not a Business Day, the immediately
succeeding Business Day) ("Preferential Dividend Payment
Dates"), commencing on the first such Preferential
Dividend Payment Date occurring after the original
issuance of the first Share. Preferential Dividends on
Shares shall be calculated at the annual rate of $.25 per
Share ("Preferential Dividend Rate") and shall be
cumulative and shall accrue at the Preferential Dividend
Rate from and after the Preferential Dividend Payment
Date next preceding the respective dates of issue of such
Shares to and including the respective dates on which
payment of the Redemption Price of such Shares shall have
been made in accordance with paragraph 2 hereof, whether
or not such dividends have been declared and whether or
not there shall be, at the time Preferential Dividends
are calculated or become payable or at any other time,
surplus, profits, or other funds of the Corporation
available for the payment of dividends under the General
Corporation Law of the State of Delaware or under the
terms of any agreement to which the Corporation is a
party or by which it is bound.
The Corporation shall not (a) declare or pay
any dividends whatsoever upon, (b) make any distribution
upon, (c) acquire or redeem, or (d) permit or cause any
Subsidiary to acquire or redeem, any shares of Common
Stock of the Corporation ("Common Stock") or any shares
of Limited Duration Class B Common Stock ("Class B Common
Stock") (where no distinction is to be made between
Common Stock and Class B Common Stock, a share of either
shall be referred to collectively as "Common Equity") or
any shares of any other class or series of stock of the
Corporation ranking junior as to dividends or assets to
the Series II Preferred Stock ("Junior Stock") unless, in
each case, the full cumulative Preferential Dividends
(whether or not earned or declared) on all Shares
outstanding shall have been paid for all past Dividend
Periods and all arrearages, if any, in the payment of the
Redemption Price for all Shares which have been presented
and surrendered for redemption shall have been paid
unless, in any such event, the holders of a majority of
the then outstanding Shares shall have consented thereto
by affirmative vote at an annual meeting or a special
meeting called for that purpose.
The amount of any Preferential Dividends
accrued on any Share at any Preferential Dividend Payment
Date shall be deemed to be the amount of any unpaid
Preferential Dividends accumulated thereon to and
including such Preferential Dividend Payment Date
(whether or not earned or declared) and the amount of
Preferential Dividends accrued on any Share at any date
other than at a Preferential Dividend Payment Date shall
be calculated as the amount of any unpaid Preferential
Dividends accumulated thereon to and including the last
preceding Preferential Dividend Payment Date (whether or
not earned or declared) plus an amount calculated on the
basis of the Preferential Dividend Rate for the period
after such last preceding Preferential Dividend Payment
Date to and including the date as of which the
calculation is made, based on a 360-day year of twelve
30-day months.
1C. Participating Dividends. Whenever there
is a declaration of a dividend upon the Common Equity,
there shall also be a declaration of a Participating
Dividend upon the Series II Preferred Stock if, at the
time of such declaration upon the Common Equity, the
Total Dividend Rate multiplied by two times the sum of
(i) any prior payment or payments or dividends upon
Common Equity during the Dividend Year per share of
Common Equity outstanding at the time of such payment or
payments ("Prior Common Equity Dividend Payments") and
(ii) the amount of any such declaration of a dividend
upon the Common Equity per share of Common Equity
outstanding at the time of such declaration ("Common
Equity Dividend Declaration"), is greater than the sum of
any prior payment or payments of Preferential Dividends
upon Series II Preferred Stock during the Dividend Year
per Share outstanding at the time of such payment or
payments ("Prior Preferential Dividend Payments") and any
prior payment or payments of Participating Dividends upon
Series II Preferred Stock during the Dividend Year per
Share outstanding at the time of such payment or payments
("Prior Participating Dividend Payments"). If there
shall be a declaration of a Participating Dividend as
aforesaid, (a) the amount of such Participating Dividend
during any Dividend Year shall be equal to the Total
Dividend Rate multiplied by two times the sum of the
Prior Common Equity Dividend Payments and the Common
Equity Dividend Declaration, minus the sum of the Prior
Preferential Dividend Payments and the Prior
Participating Dividend Payments; and (b) payment of such
Participating Dividend shall be made on the date that
payment of the corresponding dividend upon the Common
Equity is made.
2. Redemption.
2A. Optional Redemption. Upon (i) the death
of an Original Holder, (ii) the Permanent Disability or
the Permanent Mental Disability of an Original Holder,
(iii) the termination of an Original Holder's full-time
employment with the Corporation by the Original Holder
for Good Reason or (iv) termination of an Original
Holder's full-time employment with the Corporation by the
Corporation without Cause, such Original Holder and all
Transferee Holders of such Original Holder shall
collectively have the option for a period of twelve
months following any such event to present and surrender
the certificate or certificates representing all, but not
less than all, of their respective Shares duly endorsed
in blank or accompanied by an appropriate form of
assignment and, except as is otherwise provided by
subparagraph 2E hereof, upon the exercise of such option,
the Corporation shall redeem all of the Shares so
presented and surrendered; provided, however, that the
option granted to an Original Holder and all Transferee
Holders of such Original Holder by this subparagraph 2A
shall terminate upon the tenth anniversary of the
Exchange Date.
2B. Mandatory Redemption. Upon the
termination of an Original Holder's full-time employment
with the Corporation for Cause, the Original Holder and
every Transferee Holder of the Original Holder shall, on
the Redemption Date, present and surrender the
certificate or certificates representing all of their
respective Shares duly endorsed in blank or accompanied
by an appropriate form of assignment and, except as is
otherwise provided by subparagraph 2E hereof, the
Corporation shall redeem all of such Shares. In
addition, unless subject to redemption pursuant to the
immediately preceding sentence, upon the tenth
anniversary of the Exchange Date, the Original Holder and
every Transferee Holder of the Original Holder shall, on
the Redemption Date, present and surrender the
certificate or certificates representing at least one-
third (1/3) of their respective Shares duly endorsed in
blank or accompanied by an appropriate form of assignment
and, except as is otherwise provided by subparagraph 2E
hereof, the Corporation shall redeem all of such Shares;
provided, however, that on each of the next two
Subsequent Redemption Dates, the Original Holder and
every Transferee Holder of the Original Holder shall
present and surrender, in equal amounts, the certificate
or certificates representing the remainder, if any, of
their respective Shares and, except as otherwise provided
by subparagraph 2E hereof, the Corporation shall redeem
all of such Shares.
2C. Condition Concurrent with Right of
Redemption. Notwithstanding the provisions of
subparagraphs 2A and 2B hereof, no Shares shall be
redeemed pursuant to the provisions of this Paragraph 2
unless, at the time of the surrender of any of such
Shares, the Original Holder thereof (and/or one or more
Transferee Holders of such Original Holder, acting in
concert) simultaneously therewith surrender(s) to the
Corporation for redemption pursuant to the provisions of
subparagraph 2A or 2B (whichever shall be applicable) of
Paragraph 2 of the Series I Certificate, such number of
shares of the Series I Preferred Stock as shall equal the
product of the aggregate number of Shares proposed to be
redeemed at such time multiplied by the aggregate number
of shares of the Series I Preferred Stock then
outstanding and held by any Series I Original Holder
(and/or any Transferee Holders of such Original Holder)
to whom at least 80% of the Series I Preferred Stock
outstanding at any time have been issued, divided by the
number of Shares then outstanding.
2D. Notice of Redemption. Each holder of
Shares who shall be entitled to, and shall elect to,
present and surrender Shares for redemption pursuant to
the option granted by subparagraph 2A and each holder of
Shares who shall be required to present and surrender
Shares for redemption pursuant to subparagraph 2B shall,
no less than five days before a Redemption Date or
Subsequent Redemption Date, as the case may be, provide
the Corporation with written notice containing the name
of the Original Holder of the Shares to be redeemed, the
number of Shares to be redeemed and the number or numbers
of the certificate or certificates representing such
Shares, and subject to the limitations in subparagraph
2E, a statement as to the selected manner of payment.
Each notice to the Corporation contemplated by
this subparagraph 2D shall be sent by certified mail,
return receipt requested, to the President or the
Secretary of the Corporation at the address of the
principal executive offices of the Corporation.
2E. Payment of Unpaid Dividends and the
Redemption Price. On each Redemption Date and each
Subsequent Redemption Date, the Corporation shall pay, in
cash to each holder whose Shares are to be redeemed all
accrued and unpaid Preferential Dividends upon such
Shares, and all declared and unpaid Participating
Dividends upon such Shares as of a record date on or
before such Redemption Date or Subsequent Redemption
Date; provided, however, that if, on a Redemption Date or
a Subsequent Redemption Date, there should be
insufficient surplus, profits or other funds of the
Corporation available for the payment of such dividends
under the General Corporation Law of the State of
Delaware or due to the terms of any agreement to which
the Corporation is a party or by which it is bound, each
such holder shall receive, pro rata based on the number
of such holder's Shares to be redeemed and subject to any
identical or substantially similar rights vested in the
holders of shares of any other series of redeemable
preferred stock of the Corporation having, as to
dividends, parity with the Shares, the amount of such
dividends for which surplus, profits or other funds of
the Corporation are available. Thereafter, any surplus,
profits or other funds of the Corporation available for
the payment of such dividends shall, subject to any
identical or substantially similar obligation imposed
upon the Corporation with respect to shares of any other
series of redeemable preferred stock of the Corporation
having, as to dividends, parity with the Shares,
immediately be so used by the Corporation and the
Corporation shall not pay the Redemption Price on any
Shares unless and until all of such dividends upon all
redeemed Shares, and upon all redeemed shares of any
series of redeemable preferred stock of the Corporation
having, as to dividends, parity with the Shares, shall
have been paid.
On a Redemption Date or a Subsequent Redemption
Date, in addition to the Preferential Dividends and
Participating Dividends which the Corporation is required
to pay as aforesaid, the Corporation shall also pay to
each holder who presents and surrenders the certificate
or certificates representing those of his Shares which
are to be redeemed an amount equal to the number of such
holder's Shares which are to be redeemed multiplied by
the Redemption Price and such amount shall, subject to
the limitation in this subparagraph 2E, be paid 100% in
cash, or 100% in shares of Common Equity of equivalent
value equally divided between shares of Common Stock and
shares of Class B Common Stock (or, subsequent to the
Conversion Date, 100% in shares of Common Stock of
equivalent value), or 100% by a Promissory Note, or any
combination of the foregoing in the proportions specified
by the holder of Shares to be redeemed; provided,
however, that the Corporation shall not be required to
pay an amount in cash in excess of one-third (1/3) of the
Aggregate Redemption Price in any fiscal year and, in the
event that the number of Shares presented and surrendered
for payment in cash exceeds such amount, the holder or
holders presenting and surrendering such Shares shall
receive a Promissory Note for such excess; provided
further, however, that if, on any Redemption Date or
Subsequent Redemption Date (a) the Corporation does not
have an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and
any applicable state securities or blue sky laws covering
the issuance of shares of Common Equity in payment for
Shares to be redeemed and, in the opinion of counsel to
the Corporation, the issuance of shares of Common Equity
for such payment is not exempt under the 1933 Act and any
applicable state securities or blue sky laws or (b) if,
in the opinion of counsel to the Corporation, the
issuance of shares of Common Equity in payment for Shares
to be redeemed would constitute a violation of Section 7
of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), or the Regulations of the Board of Governors
of the Federal Reserve System under Section 7 of the 1934
Act, a holder of Shares to be redeemed shall only be
entitled to payment in cash and a Promissory Note and
provided further, however, that (a) if, in any fiscal
year of any Redemption Date or Subsequent Redemption
Date, or any Subsequent Redemption Payment Date, there
should be insufficient surplus, profits or other funds of
the Corporation available for the payment of any
Redemption Payment, Initial Redemption Payment or any
Subsequent Redemption Payment, respectively, as herein
provided, or any redemption payment, initial redemption
payment or subsequent redemption payment in respect of
shares of the Series I Preferred Stock, under the General
Corporation Law of the State of Delaware or due to the
terms of any agreement to which the Corporation is a
party or by which it is bound or (b) if, in the case of
any Redemption Payment or Initial Redemption Payment
which, pursuant to subparagraph 2A or subparagraph 2B,
would be due and payable in any fiscal year or in the
case of any Subsequent Redemption Payment which is due
and payable in any fiscal year or, if, in the case of any
required redemption payment or initial redemption payment
in respect of shares of the Series I Preferred Stock
which, pursuant to subparagraph 2A or subparagraph 2B of
the Series I Certificate, would be due and payable in any
fiscal year or in the case of any subsequent redemption
payment in respect of shares of the Series I Preferred
Stock which is due and payable in any fiscal year, the
aggregate of all such payments would exceed 40% of the
post-tax profits of the Corporation for the next
preceding fiscal year, then each holder shall receive
pro-rata based on the number of such holder's Shares to
be redeemed or which have been redeemed, as the case may
be, and subject to any identical or substantially similar
rights vested in the holders of shares of the Series I
Preferred Stock, the amount of the Redemption Payment,
Initial Redemption Payment or Subsequent Redemption
Payment, as the case may be, for which funds of the
Corporation are available as provided in subclauses (a)
and (b) of this proviso and, in the case of Shares for
which a Redemption Payment or an Initial Redemption
Payment was to have been made, the holders of such Shares
shall be entitled to retain such Shares until such Shares
would otherwise be required to be presented and
surrendered for redemption and there is sufficient
surplus, profits or other funds of the Corporation
available for the Redemption Payment or the Initial
Redemption Payment therefor and, in the case of any
Shares which have been redeemed, any part of the
Subsequent Redemption Payment remaining unpaid shall be
added to the Subsequent Redemption Payment due and
payable on the next succeeding Subsequent Redemption
Payment Date.
If a holder of Shares specifies payment of any
Redemption Payment or Initial Redemption Payment, whether
in whole or in part, in shares of Common Equity, such
payment shall be made in an equal number of shares of
Common Stock and shares of Class B Common Stock (or,
subsequent to the Conversion Date, 100% in shares of
Common Stock) which are authorized but unissued or are
held in the treasury of the Corporation or any
combination thereof. The value of a share of Common
Equity as of a particular date shall be deemed to be the
closing sale price (or if no closing sales price is
available for such date, the average of the closing bid
and asked prices) for a share of Common Stock on the
Business Day next preceding such date as reported by the
National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), or if the shares of Common
Stock are not listed on NASDAQ, the average of such
closing bid and asked prices as reported by the National
Quotation Bureau, Inc. ("NQB"), or if such closing sale
or closing bid and asked prices are not available from
the NQB, the value as determined by a member of the New
York Stock Exchange selected by the Board of Directors.
2F. Dividends After Redemption Date or
Subsequent Redemption Date. Each Share which a holder
has elected to present and surrender for redemption
pursuant to the option granted by subparagraph 2A shall
not, after the Redemption Date or the Subsequent
Redemption Date therefor, be entitled to any Preferential
Dividends accrued after such Redemption Date or
Subsequent Redemption Date, or any Participating
Dividends declared as of a record date after such
Redemption Date or Subsequent Redemption Date, and on
such Redemption Date or Subsequent Redemption Date all
rights of a holder of such Share, as a stockholder of the
Corporation by reason of the ownership of such Share,
shall cease, except the right to receive any Preferential
Dividends accrued upon such Share up to and including
such Redemption Date or Subsequent Redemption Date, any
Participating Dividends declared upon such Share as of a
record date on or before such Redemption Date or
Subsequent Redemption Date and the Redemption Price of
such Share upon presentation and surrender of the
certificate representing such Share, and such Share shall
not, after such Redemption Date or Subsequent Redemption
Date, be deemed to be outstanding; provided, however,
that if the Corporation does not, upon presentation and
surrender of a certificate representing a Share, pay all
of such accrued and unpaid Preferential Dividends upon,
all of such declared and unpaid Participating Dividends
upon, and the Redemption Price for, such Share on the
Redemption Date or the Subsequent Redemption Date, as the
case may be, the rights of a holder of such Share as a
stockholder of the Corporation by reason of the ownership
of such Share shall not cease and such Share shall be
deemed outstanding, until the Corporation shall pay all
of such dividends upon, and the Redemption Price for,
such Share.
2G. Adjustment of the Redemption Price.
(a) If, at any time, during the period
from the commencement of the Corporation's fiscal year
ending December 31, 1982 through and including the last
day of the Corporation's fiscal year immediately
preceding a Redemption Date or any Subsequent Redemption
Date, as the case may be, the Corporation engages in any
Transfers at Other than Book Value, for the purpose of
calculating the Redemption Price of any Share to be
redeemed as of such Redemption Date or such Subsequent
Redemption Date, the Book Value per share of Common
Equity as of such Redemption Date or Subsequent
Redemption Date shall be deemed to be the following:
(i) the book value per share of
Common Equity as it would have been as of the last day of
the fiscal year immediately preceding such Redemption
Date or Subsequent Redemption Date, as the case may be
(such last day of the fiscal year immediately preceding
such Redemption Date or Subsequent Redemption Date being
hereinafter referred to as the "Computation Date"), had
there been during the period from the commencement of the
Corporation's fiscal year ending December 31, 1982,
through and including the Computation Date, no transfer
of any amount from Common Stockholders' Equity to
Additional Capital applicable to Series 1, Series 2,
Series I and Series II Preferred Stock multiplied by (x)
one, if the Computation Date is prior to the Distribution
Record Date, or (y) two, if the Computation Date is after
the Distribution Record Date; plus
(ii) (A) the difference between (1)
the book value per share of Common Equity as it would
have been as of the Computation Date: (a) had each share
of Common Equity transferred during the period from the
commencement of the Corporation's fiscal year ending
December 31, 1982 through and including the Computation
Date (such period being hereinafter referred to as the
"Computation Period") pursuant to a Transfer at Other
than Book Value, been transferred for an amount equal to
the book value per share of Common Equity as derived from
the Audited Consolidated Balance Sheet as of the last day
of the fiscal year immediately preceding the occurrence
of such Transfer at Other than Book Value, (b) had there
been no tax benefit to the Corporation for dividends paid
by the Corporation during the Computation Period in
respect of shares of Common Equity originally acquired
during the Computation Period by an employee of the
Corporation (or any Subsidiary) under any stock purchase
plan of the Corporation or upon exercise of an option
granted under any stock option plan of the Corporation
(to the extent such tax benefit results from the
treatment of such dividends as a deduction for the
Corporation in the computation of its tax liabilities),
and (c) had there been during the Computation Period no
Capital Account Adjustments nor any Reversals of Prior
Capital Account Adjustments on the accounting books and
records of the Corporation in respect of shares of Common
Equity issued by the Corporation during the Computation
Period; and (2) the book value per share of Common Equity
as of the Computation Date, as derived from the Audited
Consolidated Balance Sheet as of such date, multiplied
by,
(B) two times, if the
Computation Date is after the Distribution Record Date,
or one times, if the Computation Date is before the
Distribution Record Date, the sum of one, plus a
fraction, (1) the numerator of which is the aggregate
number of shares of the Series I Preferred Stock
outstanding on the Computation Date which were, as of
such date, held by any Series I Original Holder (and/or
any Series I Transferee Holders of such Series I Original
Holder) Preferred Stock outstanding at any time have been
issued, and (2) the denominator of which is the aggregate
number of Shares outstanding on the Computation Date;
minus,
(iii) two times, if the Computation
Date is after the Distribution Record Date, or one times,
if the Computation Date is before the Distribution Date,
the product of (A) a fraction, (1) the numerator of which
is the aggregate number of shares of the Series I
Preferred Stock outstanding on the Computation Date which
were, as of such date, held by any Series I Original
Holder (and/or any Series I Transferee Holders of such
Series I Original Holder), and (2) the denominator of
which is the aggregate number of Shares outstanding on
the Computation Date, multiplied by,
(B) the difference between (1)
the book value per share of Common Equity as it would
have been as of the Computation Date had each share of
Common Equity transferred to the Corporation at any time
during the Computation Period pursuant to a Transfer
Requiring Adjustment under the Series I Certificate, been
transferred to the Corporation for an amount equal to the
book value per share of Common Equity as derived from the
Audited Consolidated Balance Sheet as of the last day of
the fiscal year immediately preceding the occurrence of
the Transfer Requiring Adjustment under the Series I
Certificate pursuant to which such share of Common Equity
was transferred to the Corporation, and (2) the book
value per share of Common Equity as of the Computation
Date, as derived from the Audited Consolidated Balance
Sheet as of such date.
(b) In addition to the foregoing, if
there are (i) changes in the number of shares of Common
Equity outstanding as a result of (A) stock dividends,
splits, combinations or exchanges of shares of Common
Equity, (B) issuances of shares of Common Equity in
acquisitions, (C) merger, consolidation or reorganization
or (D) any other like or similar items or events or (ii)
any effects on the Common Stockholders' Equity as a
result of (A) any of the foregoing, (B) changes in the
accounting policies of the Corporation, (C) any unusual
and extraordinary items or events or (D) the issuance of
securities of a class not heretofore issued by the
Corporation, for the purpose of calculating the
Redemption Price of any Share issued prior to any such
change or effect only, the Book Value per share of Common
Equity as of a Redemption Date or Subsequent Redemption
Date may be adjusted to such an extent and in such manner
as the Board of Directors or a duly designated committee
thereof shall, in its sole discretion, determine is
necessary to preserve the benefit of the redemption
provisions of this paragraph 2 for the holders of Series
II Preferred Stock and the Corporation.
2H. Status of Redeemed Shares. Upon the
redemption of any Shares, the Corporation shall, pursuant
to Section 151(g) of the General Corporation Law of the
State of Delaware, as now or hereafter in effect, cause
the number of authorized shares of Series II Preferred
Stock to be decreased by the number of Shares redeemed
and the Corporation shall not thereafter issue any of
such Shares or any other shares of Preferred Stock as
shares of Series II Preferred Stock.
3. Liquidation.
3A. Liquidation Preference. Upon any
liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the
holders of the Series II Preferred Stock shall be
entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders (whether
from capital, surplus or earnings) an amount of cash
equal to $1.00 per Share ("Liquidation Preference") plus
all accrued and unpaid Preferential Dividends, before any
distribution or payment is made upon any Common Equity or
any other Junior Stock of the Corporation, but subject to
the prior rights of the holders of shares of other series
of Preferred Stock which are by their terms expressly
made senior as to liquidation preferences to the Series
II Preferred Stock. If upon such liquidation,
dissolution or winding up of the Corporation, whether
voluntary or involuntary, the assets of the Corporation
should not be sufficient to permit payment to the holders
of Series II Preferred Stock of the amount which they are
entitled to be paid as aforesaid and the holders of any
other series of Preferred Stock ranking equally as to
liquidation preferences to the Series II Preferred Stock
of the amount to which they are entitled to be paid, then
the entire assets of the Corporation to be distributed to
such holders shall be distributed ratably among them.
3B. Liquidation Participation. Upon any such
liquidation, dissolution or winding up of the
Corporation, after the holders of the Series II Preferred
Stock shall have been paid in full the Liquidation
Preference and the accrued and unpaid Preferential
Dividends and the holders of any other series of
Preferred Stock have been paid their liquidation
preferences and any accrued and unpaid preferential
dividends, the holders of the Series II Preferred Stock
and the holders of any other series of Preferred Stock
shall not be entitled to any further payment unless and
until the holders of Common Equity shall have received
out of the assets of the Corporation available for
distribution to its stockholders (whether from capital,
surplus or earnings), for each share of Common Stock, an
amount in cash equal to one-half of the Liquidation
Preference; but if, after the holders of Common Equity
shall have been paid in full such amount, the value of
the remainder of the assets of the Corporation available
for distribution to its stockholders per share of Common
Equity, Series I Preferred Stock, Series II Preferred
Stock and any other series of Preferred Stock entitled to
a liquidation participation is greater than the Original
Discount for a share of Series II Preferred Stock, the
holder of any such share of Series II Preferred Stock
shall be entitled to receive a liquidation participation
such that the aggregate liquidation payment for each
share of Series II Preferred Stock is equal to the
difference between the aggregate of two times the
liquidation payment for each share of Common Equity and
the Original Discount at which the share of Series II
Preferred Stock was issued.
3C. Events Not Deemed a Liquidation,
Dissolution or Winding Up. Neither the consolidation or
merger of the Corporation into or with any other
corporation or corporations, nor the sale, lease,
exchange or other disposition by the Corporation of all
or any part of its property or assets, nor the reduction
of the capital stock of the Corporation, shall be deemed
to be a liquidation, dissolution or winding up of the
Corporation within the meaning of any of the provisions
of this paragraph 3.
4. Voting.
4A. General Right to Vote. The holders of
Series II Preferred Stock shall be entitled to eleven
votes for each Share held of record and, together with
the holders of any other series of Preferred Stock who
shall have the right and power to vote generally with the
holders of Common Equity, shall, together with the
holders of Common Equity, all voting as a single class,
possess voting power for the election of directors and
for all other purposes, except as is otherwise provided
in this Certificate of Designations or the Restated
Certificate of Incorporation or any certificate
amendatory thereof or supplemental thereto. The
foregoing notwithstanding, on and subsequent to the
Conversion Date, the holders of Series II Preferred Stock
shall be entitled to two votes for each Share held of
record.
4B. Restrictions on Voting Rights. Upon the
earliest of (i) the tenth anniversary of the Exchange
Date, (ii) the death of an Original Holder or (iii) the
Permanent Mental Disability of an Original Holder, the
voting rights which such Original Holder and any
Transferee Holder of such Original Holder would otherwise
have, whether pursuant to this Certificate of
Designations, the Restated Certificate of Incorporation
or any certificate amendatory thereof or supplemental
thereto, by virtue of the Shares held by such Original
Holder or such Transferee Holder, shall terminate;
provided, however, that if such rights terminate as a
result of clauses (i), (ii) or (iii) above and if the
Corporation has issued a Promissory Note under
subparagraph 2D, then, if the Corporation subsequently
defaults in its obligations thereunder, from and after
such default such voting rights shall be reinstated for
such period of time as the Corporation is in default of
such obligations.
In the event of the commencement of an
involuntary receivership, liquidation, reorganization or
similar proceeding against an Original Holder or a
Transferee Holder, whether under the Federal Bankruptcy
Code or any other applicable federal or state law, and
the appointment of a receiver, interim trustee, trustee
or similar official of such Original Holder or Transferee
Holder or in the event of the commencement of a voluntary
receivership, liquidation, reorganization or similar
proceeding by an Original Holder or a Transferee Holder,
whether under the Federal Bankruptcy Code or any other
applicable federal or state law, the voting rights which
such Original Holder or such Transferee Holder or a
Transferee Holder of such Original Holder would otherwise
have, whether pursuant to this Certificate of
Designations, the Restated Certificate of Incorporation
or any certificate amendatory thereof or supplemental
thereto, by virtue of Shares held by any such Original
Holder or Transferee Holder, shall terminate.
5. Restrictions on Disposition of Shares. An
Original Holder shall only be entitled to assign, pledge,
transfer or otherwise dispose of his Shares, or an
interest in his Shares, to a Transferee Holder of the
Original Holder or the Corporation; and a Transferee
Holder of an Original Holder shall only be entitled to
assign, pledge, transfer or otherwise dispose of Shares,
or an interest in Shares, received from an Original
Holder or a Transferee Holder to another Transferee
Holder of such Original Holder or the Corporation.
6. Restrictions on Changes. In addition to any
other approvals or consents required by the General
Corporation Law of the State of Delaware or other
applicable law, the Corporation shall not, without the
consent of the holders of record of a majority of the
Shares outstanding, given in person or by proxy, either
in writing without a meeting or by affirmative vote at an
annual meeting or a special meeting called for that
purpose at which the holders of the Shares outstanding
shall be entitled to vote as a separate class, (a)
create, authorize or issue (i) any shares of any class or
series of stock of the Corporation ranking senior as to
dividends or assets or otherwise to the Series II
Preferred Stock ("Senior Stock") or (ii) any shares of
any class or series of stock of the Corporation ranking
on a parity as to dividends or assets or otherwise to the
Series II Preferred Stock ("Parity Stock"), (b)
reclassify any authorized stock of the Corporation into
any shares of Senior Stock or Parity Stock, (c) create,
authorize or issue any obligation or security convertible
into or evidencing the right to purchase any shares of
Senior Stock or Parity Stock, or (d) amend, alter,
supplement or repeal any of the provisions of the
Restated Certificate of Incorporation or of any
certificate (including this Certificate of Designations)
amendatory thereof or supplemental thereto so as to
affect adversely the preferences, rights, powers or
privileges given by this Certificate of Designations to
the Series II Preferred Stock.
7. Successors and Assigns. The provisions of this
Certificate of Designations shall be binding upon all
successors and assigns of an Original Holder, including,
without limitation, a Transferee Holder and any receiver,
interim trustee or trustee in bankruptcy or
representative of creditors of an Original Holder or a
Transferee Holder.
8. Definitions. The following terms shall have
the following meanings, which meanings shall be equally
applicable to the singular and plural forms of such
terms:
(a) "Additional Capital applicable to
Series I and Series II Preferred Stock" means the
Additional Capital applicable to Redeemable Preferred
Stock, as such term is defined in (a) of paragraph 8 of
the Series I Certificate, plus the Additional Capital
applicable to Series II Preferred Stock, as such term is
defined in (b) of paragraph 8 of this Certificate of
Designations.
(b) "Additional Capital applicable to
Series II Preferred Stock" as of a particular date means
the amount thereof as derived from an Audited
Consolidated Balance Sheet as of such date.
(c) "Aggregate Redemption Price" means
for the purpose of the calculation required by
subparagraph 2E, the number of Shares issued to an
Original Holder, whether or not outstanding, multiplied
by the Redemption Price as of a Redemption Date or a
Subsequent Redemption Date, as the case may be.
(d) "Audited Consolidated Balance Sheet"
as of a particular date means the audited consolidated
balance sheet of the Corporation and its Subsidiaries
(all the financial information on which has been computed
in accordance with generally accepted accounting
principles by the regular independent auditors of the
Corporation) as of the last day of the applicable fiscal
year.
(e) "Book Value per share of Common
Equity" means as of a particular date two times the sum
of the book value per share of Common Equity plus the
cumulative amount per share of Common Equity transferred
from Common Stockholders' Equity to Additional Capital
applicable to Series 2 Preferred Stock or Series II
Preferred Stock since their respective issuances and as
of such date as derived from an Audited Consolidated
Balance Sheet as of such date.
(f) "Business Day" means any day which is
not a Saturday or a Sunday or a day on which the banks
are closed for business in New York, New York.
(g) "Capital Account Adjustment" means
any change in one or more of the various component
accounts of the Common Stockholders' Equity, or in one or
more contra accounts thereto, as reflected on the
accounting books and records of the Corporation, which
affects Common Stockholders' Equity in such a manner as
to cause either an increase or decrease therein and which
results from:
(1) the periodic amortization of the
difference, if any, between the value (as determined in
accordance with the provisions of the last sentence of
subparagraph 2E of this Certificate of Designations) on
the date of issuance, and the purchase price upon
issuance, of shares of Common Equity issued by the
Corporation to one or more of its employees (or to one or
more employees of any Subsidiary) under a stock purchase
plan of the Corporation or upon exercise of an option
granted under any stock option plan of the Corporation;
or
(2) the lapse of all contractual
restrictions, and/or all restrictions imposed by virtue
of the terms of any stock purchase or stock option plan
of the Corporation, upon the free alienability of any
shares of Common Equity acquired under any such plan or
pursuant to exercise of an option granted thereunder.
(h) "Cause" shall have the meaning set
forth in Section 22 of the Agreement, made as of
February 9, 1984, between the Corporation and Edward H.
Meyer (as amended).
(i) "Common Stockholders' Equity" as of a
particular date means the common stockholders' equity as
derived from the Audited Consolidated Balance Sheet as of
such date.
(j) "Conversion Date" means the date upon
which all outstanding shares of Class B Common Stock
automatically convert into shares of Common Stock
pursuant to subparagraph III.(D)(9) of the paragraph
entitled "Common Stock and Class B Common Stock" in
Article Fourth of the Corporation's Restated Certificate
of Incorporation.
(k) "Distribution Record Date" means
April 3, 1986.
(l) "Dividend Period" means the quarterly
period ending on a Preferential Dividend Payment Date.
(m) "Dividend Year" means the period from
March 16 in one year to March 15 in the succeeding year
commencing with the March 16 immediately preceding the
Exchange Date.
(n) "Exchange Date" means the date of
filing of this Certificate of Designations with the
Secretary of State of the State of Delaware.
(o) "Good Reason" means:
(1) a change in control of the
Corporation, which shall be conclusively deemed to have
occurred if any of the following shall have taken place:
(i) a change in control of a nature that would be
required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A under the 1934 Act, unless
such change in control results in control by the Original
Holder, his designee(s) or "affiliate(s)" (as defined in
Rule 12b-2 under the 1934 Act) or any combination
thereof; (ii) any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the 1934 Act), other than
the Original Holder, his designee(s) or "affiliate(s)"
(as defined in Rule 12b-2 under the 1934 Act) or any
combination thereof, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the 1934 Act), directly
or indirectly, of securities of the Corporation
representing 40% or more of the combined voting power of
the Corporation's then outstanding securities; or (iii)
during any period of two (2) consecutive years commencing
after the date of this Certificate of Designations,
individuals who at the beginning of such period
constitute the Board of Directors cease for any reason to
constitute at least a majority thereof, unless the
election of each director who was not a director at the
beginning of such period has been approved in advance by
directors representing at least a majority of the
directors then in office who were directors at the
beginning of the period; or
(2) any assignment to the Original
Holder of any duties other than those contemplated by, or
a limitation of the powers of an Original Holder not
contemplated by, the relevant provisions of his
employment agreement with the Corporation, if any; or
(3) any removal of the Original
Holder from, or any failure to re-elect the Original
Holder to, any of the positions which he may hold by
virtue of his employment agreement with the Corporation,
if any, except in connection with his Disability (as
defined in any such employment agreement) or with the
termination of his full-time employment with the
Corporation for Cause; or
(4) a reduction in the Original
Holder's rate of compensation not agreed to in writing by
him; or
(5) a failure by the Corporation to
comply with any of the provisions of the Original
Holder's employment agreement with the Corporation, if
any, concerning his compensation, pension, life
insurance, disability rights or vacations; or
(6) failure by the Corporation to
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Corporation, by agreement in form and substance
satisfactory to the Original Holder, expressly to assume
and agree to perform the Original Holder's employment
agreement, if any, in the same manner and to the same
extent that the Corporation would be required to perform
it if no such succession had taken place; or
(7) failure by the Corporation to
offer to continue to employ the Original Holder following
expiration of his employment agreement with the
Corporation in the same positions as those held by him
immediately prior to such expiration and on terms at
least as favorable to the Original Holder as the terms
set forth in his employment agreement.
(p) "Initial Redemption Payment" means
any redemption payment by the Corporation on a Redemption
Date or a Subsequent Redemption Date, which consists, at
least in part, of a Promissory Note.
(q) "Original Discount" for a share of
Series II Preferred Stock means the discount from the
Book Value per share of Common Equity as of the last day
of the then current fiscal year or of the next preceding
fiscal year, whichever is nearer the date on which an
Original Holder purchased such share or, if applicable,
the date on which an Original Holder purchased from the
Corporation the share of Series 2 Preferred Stock in
exchange for which such share of Series II Preferred
Stock was issued, pursuant to that certain Book Value
Preferred Stock Plan dated as of April 2, 1981, as
amended on May 20, 1982 and as subsequently amended on
June 13, 1983, and as such plan may, from time to time,
be further amended or supplemented in accordance with its
terms (the "Plan").
(r) "Original Holder" means a senior
executive officer (whether or not a member of the Board
of Directors) of the Corporation or any Subsidiary to
whom any Shares or, if applicable, any shares of Series 2
Preferred Stock in exchange for which Shares have been
issued, have been sold pursuant to the Plan.
(s) "Participating Dividend" means the
dividend which, subject to the conditions in subparagraph
1C, the Corporation is required to declare on Shares
whenever a dividend is declared on shares of Common
Equity.
(t) "Permanent Disability" means in the
case of any Original Holder, an illness or other
disability (other than a Permanent Mental Disability)
which results in any such Original Holder being unable
regularly to perform his duties as an employee of the
Corporation, in the capacities in which such Original
Holder performed such duties prior to the onset of such
illness or other disability (other than a Permanent
Mental Disability), for a period of 18 months and the
termination of any such Original Holder's full-time
employment with the Corporation.
(u) "Permanent Mental Disability" means a
mental illness or other mental disability of a person
which results in such person being incapable of
understanding and unable regularly to act with discretion
in the ordinary affairs of life for a period of at least
90 consecutive days, as determined by a written
certification of a qualified medical doctor agreed to by
the Corporation and such person or, in the event of such
person's incapacity to designate a doctor, such person's
legal representative. In the absence of an agreement
between the Corporation and such person (or his legal
representative), each shall nominate a qualified medical
doctor and the two doctors shall select a third doctor,
who shall make the determination as to the disability.
The appointment of a guardian or legal conservator for a
person shall create a presumption of the Permanent Mental
Disability of such person.
(v) "Preferential Dividend" means the
dividend which will be calculated at the Preferential
Dividend Rate and which will accumulate and accrue as
provided in subparagraph 1B.
(w) "Promissory Note" means a promissory
note of the Corporation, such note to bear interest at an
annual rate equal to the higher of the prime rate charged
by Citibank, N.A. or the rate at which the Corporation is
entitled to borrow money from the principal banking
institution with which it does business, each as of the
Redemption Date or the Subsequent Redemption Date, as the
case may be, and such note shall be payable in cash on
the next two Subsequent Redemption Payment Dates.
(x) "Redemption Date" means,
(1) for the purposes of the option
granted to an Original Holder and all Transferee Holders
of such Original Holder by subparagraph 2A, (i) the later
of (A) the third Business Day subsequent to the date on
which the Audited Consolidated Balance Sheet is available
for the most recent fiscal year ended or (B) the date on
which an Original Holder and all Transferee Holders of
such Original Holder collectively intend to exercise such
option as evidenced by their provision of notice to the
Corporation, if the date of the notice referred to in
subclause (i)(B) is within the six-month period
subsequent to the end of the most recent fiscal year; or
(ii) the later of (A) the date on which an Original
Holder and all Transferee Holders of such Original Holder
collectively intend to exercise such option as evidenced
by their provision of notice to the Corporation or (B)
the third Business Day subsequent to the date on which
the Audited Consolidated Balance Sheet is available for
the then current fiscal year, if the date of any notice
referred to in this subclause (ii) is within the six-
month period prior to the end of the then current fiscal
year; or
(2) for the purposes of the first
sentence of subparagraph 2B, the later of (i) the third
Business Day subsequent to the date on which the Audited
Consolidated Balance Sheet is available for the most
recent fiscal year ended or (ii) the tenth Business Day
subsequent to an Original Holder's Date of Termination
for Cause, if applicable; or
(3) for the purposes of the second
sentence of subparagraph 2B, (i) the later of (A) the
third Business Day subsequent to the date on which the
Audited Consolidated Balance Sheet is available for the
most recent fiscal year ended or (B) the third Business
Day subsequent to the tenth anniversary of the Exchange
Date; or
(4) for the purpose of preparing
annual or periodic financial statements of the
Corporation and its Subsidiaries for presentation in any
of the Corporation's annual reports to its stockholders
or to the Securities and Exchange Commission, and for no
other purpose (including, but not limited to, the
redemption of one or more Shares), the first day of the
fiscal year or period succeeding the fiscal year or
period to which such financial statements are required.
(y) "Redemption Payment" means any
redemption payment by the Corporation on a Redemption
Date or a Subsequent Redemption Date which consists
solely of cash, an equal number of shares of Common Stock
and shares of Class B Common Stock (or, subsequent to the
Conversion Date, 100% in shares of Common Stock), or a
combination thereof.
(z) "Redemption Price" for a Share means,
except as is otherwise provided below, the Book Value per
share of Common Equity as of the last day of the fiscal
year immediately preceding the Redemption Date or the
Subsequent Redemption Date, as the case may be, for such
Share minus the Original Discount on such Share.
Notwithstanding the foregoing, the Redemption Price for a
Share as of a Redemption Date shall be determined by
reference to the higher of the Book Value per share of
Common Equity as of the last day of the most recent
fiscal year ended or as of the end of the then current
fiscal year, if the Redemption Date for such Share is
determined pursuant to (x)(1)(ii)(B) of this paragraph 8.
(aa) "Reversal of Prior Capital Account
Adjustment" means any change in one or more of the
various component accounts of the Common Stockholder's
Equity, or in one or more contra accounts thereto, as
reflected on the accounting books and records of the
Corporation, which affects Common Stockholders' Equity in
such a manner as to cause either an increase or a
decrease therein and which results from the complete or
partial reversal on the accounting books and records of
the Corporation of one or more prior Capital Account
Adjustments, as a consequence of either:
(1) the repurchase by the
Corporation, at a price less than the value (as
determined in accordance with the provisions of the last
sentence of subparagraph 2E of this Certificate of
Designations) on the date of such repurchase, of shares
of Common Equity previously issued by the Corporation to
one or more employees (or to one or more employees of any
Subsidiary) under any stock purchase plan of the
Corporation or upon exercise of an option granted under
any stock option plan of the Corporation at a price less
than the value (determined as aforesaid) thereof on the
date of such previous issuance; or
(2) the lapse of all contractual
restrictions, and/or all restrictions imposed by virtue
of the terms of any stock purchase or stock option plan
of the Corporation, upon the free alienability of any
shares of Common Equity acquired under any such plan or
pursuant to exercise of an option granted thereunder.
(bb) "Series I Certificate" means that
Certificate of Designations of Series I Preferred Stock
dated April 7, 1994 which was filed with the Secretary of
State of the State of Delaware pursuant to Sections
151(g) and 103 of the General Corporation Law of the
State of Delaware.
(cc) "Series I Original Holder" means a
senior executive officer (whether or not a member of the
Board of Directors) of the Corporation or any Subsidiary
to whom any shares of Series I Preferred Stock have been
sold under the Plan or issued in exchange for shares of
Series 1 Preferred Stock that were sold to such person
under the Plan.
(dd) "Series I Preferred Stock" means the
Series I Preferred Stock of the Corporation designated as
such pursuant to the Series I Certificate.
(ee) "Series I Transferee Holder of a
Series I Original Holder" means a corporation all the
Voting Stock of which is wholly owned by a Series I
Original Holder or, in the event of the death of a Series
I Original Holder, the estate of such Series I Original
Holder, any executor, administrator or trustee thereof
and any heir, distributee, devisee or legatee thereunder.
(ff) "Series 2 Certificate" means that
certain Amended Certificate of Designations and Terms of
Series 2 Preferred Stock dated April 15, 1986 which was
filed with the Secretary of State of the State of
Delaware pursuant to Sections 151(g) and 103 of the
General Corporation Law of the State of Delaware.
(gg) "Series 2 Preferred Stock" means the
Series 2 Preferred Stock of the Corporation designated as
such pursuant to the Series 2 Certificate.
(hh) "Subsequent Redemption Date" means
the anniversary date of any Redemption Date upon which at
least one-third (1/3) of the Shares issued to an Original
Holder are required, pursuant to subparagraph 2B, to be
presented and surrendered for redemption.
(ii) "Subsequent Redemption Payment" means
any redemption payment by the Corporation in cash,
Promissory Notes or shares of Common Equity for which an
Initial Redemption Payment has been made.
(jj) "Subsequent Redemption Payment Date"
means, with respect to Shares for which an Initial
Redemption Payment has been made, the anniversary date of
the Initial Redemption Payment Date therefor.
(kk) "Subsidiary" means any corporation at
least a majority of the Voting Stock of which is, at the
time as of which any determination is being made, owned
by the Corporation either directly or indirectly through
one or more Subsidiaries.
(ll) "Total Dividend Rate" means 100% for
each Dividend Year.
(mm) "Transfer Requiring Adjustment under
the Series I Certificate" means any purchase of shares of
Common Equity which falls within the category of
purchases described in the first sentence of subparagraph
2F of the Series I Certificate.
(nn) "Transferee Holder" means a
corporation all the Voting Stock of which is wholly owned
by an Original Holder or, in the event of the death of an
Original Holder, the estate of an Original Holder, any
executor, administrator, legal representative or trustee
thereof and any heir, distributee, devisee or legatee
thereunder.
(oo) "Transfer at Other than Book Value"
means any purchase or other acquisition by the
Corporation, and any issuance, sale, transfer or other
disposition by the Corporation, of its Common Equity at a
price per share which is either in excess of, or below,
the book value per share of Common Equity as derived from
the Audited Consolidated Balance Sheet as of the last day
of the fiscal year immediately preceding such purchase or
other acquisition, or such issuance, sale, transfer or
other disposition, as the case may be, and shall include,
but shall not be limited to, any transfer by the
Corporation of its Common Equity to one or more tax-
qualified employee stock ownership plans of the
Corporation in respect of contributions made by the
Corporation to such employee stock ownership plan(s).
Notwithstanding the foregoing, for purposes of
determining whether a transfer effected on or subsequent
to the Distribution Record Date and on or prior to
December 31, 1986 is a transfer at other than Book Value,
and for purposes of valuation of such transfer, book
value per share of Common Equity shall be one-half of the
book value per share of Common Equity at December 31,
1985.
(pp) "Voting Stock" means any share of
stock having general voting power in electing the board
of directors, irrespective of whether or not at the time
stock of any other class or series has or might have
voting power by reason of the happening of any
contingency.
9. Miscellaneous.
9A. Determination of Fact. Whenever a
determination of fact is required in connection with any
provision or provisions of this Certificate of
Designations, the Board of Directors shall make such
determination and its determination shall be conclusive.
9B. Headings. The headings of the paragraphs
and subparagraphs of this Certificate of Designations are
inserted for convenience only and shall not constitute a
part hereof.
9C. Amendments. Whenever, in the joint
opinion of the Corporation, as evidenced in the case of
the Corporation by a resolution of the Board of
Directors, and of the holders of a majority of the
outstanding shares of Series II Preferred Stock, it is
deemed desirable or advisable to amend or restate this
Certificate of Designations to further the purposes of
the Corporation in the designation and issuance of the
Series II Preferred Stock, all as evidenced by an
instrument signed jointly by the Corporation and such
stockholders, this Certificate of Designations may be
amended or restated, to the extent permitted by law and
with the consent in writing of the holders of a majority
of the shares of the Series I Preferred Stock then
outstanding, by the adoption by the Board of Directors of
a resolution implementing any such amendment or
restatement and by filing a Certificate pursuant to the
General Corporation Law of the State of Delaware. This
Certificate of Designations may also be amended or
restated in any other manner permitted under the General
Corporation Law of the State of Delaware.
9D. Validity. The invalidity or unenforce-
ability of any provision or provisions of this
Certificate of Designations shall not affect the validity
or enforceability of any other provision of this
Certificate, which shall remain in full force and effect.
VI. Series III Preferred Stock. The number of
shares constituting the Series III Preferred Stock shall
be 5,000, which number may from time to time be decreased
(but not below the number then outstanding) by the Board
of Directors and the voting power, preferences and
relative, participating, optional, dividend and other
special rights, and the qualifications, limitations and
restrictions of the Series III Preferred Stock and the
restrictions on the Corporation in connection with the
Series III Preferred Stock shall be as follows:
1. Dividends.
1A. General Dividend Obligations. The holders
of record of Series III Preferred Stock shall be
entitled, equally and ratably, to receive, when and as
declared by the Board of Directors out of the surplus,
profits or other funds of the Corporation available for
the payment of dividends under the General Corporation
Law of the State of Delaware, Preferential Dividends and
Participating Dividends at the times, in the amounts and
under the conditions specified in this paragraph 1.
1B. Preferential Dividends. Preferential
Dividends on each share of Series III Preferred Stock
("Share") shall be payable in equal amounts quarterly on
the fifteenth day of March, June, September and December
(or, if such day is not a Business Day, the immediately
succeeding Business Day) ("Preferential Dividend Payment
Dates"), commencing on the first such Preferential
Dividend Payment Date occurring after the original
issuance of the first Share. Preferential Dividends on
Shares shall be calculated at the annual rate of $.25 per
Share ("Preferential Dividend Rate") and shall be
cumulative and shall accrue at the Preferential Dividend
Rate from and after the Preferential Dividend Payment
Date next preceding the respective dates of issue of such
Shares to and including the respective dates on which
payment of the Redemption Price of such Shares shall have
been made in accordance with paragraph 2 hereof, whether
or not such dividends have been declared and whether or
not there shall be, at the time Preferential Dividends
are calculated or become payable or at any other time,
surplus, profits, or other funds of the Corporation
available for the payment of dividends under the General
Corporation Law of the State of Delaware or under the
terms of any agreement to which the Corporation is a
party or by which it is bound.
The Corporation shall not (a) declare or pay
any dividends whatsoever upon, (b) make any distribution
upon, (c) acquire or redeem, or (d) permit or cause any
Subsidiary to acquire or redeem, any shares of Common
Stock of the Corporation ("Common Stock") or any shares
of Limited Duration Class B Common Stock ("Class B Common
Stock") (where no distinction is to be made between
Common Stock and Class B Common Stock, a share of either
shall be referred to collectively as "Common Equity") or
any shares of any other class or series of stock of the
Corporation ranking junior as to dividends or assets to
the Series III Preferred Stock ("Junior Stock") unless,
in each case, the full cumulative Preferential Dividends
(whether or not earned or declared) on all Shares
outstanding shall have been paid for all past Dividend
Periods and all arrearages, if any, in the payment of the
Redemption Price for all Shares which have been presented
and surrendered for redemption shall have been paid
unless, in any such event, the holders of a majority of
the then outstanding Shares shall have consented thereto
by affirmative vote at an annual meeting or a special
meeting called for that purpose.
The amount of any Preferential Dividends
accrued on any Share at any Preferential Dividend Payment
Date shall be deemed to be the amount of any unpaid
Preferential Dividends accumulated thereon to and
including such Preferential Dividend Payment Date
(whether or not earned or declared) and the amount of
Preferential Dividends accrued on any Share at any date
other than at a Preferential Dividend Payment Date shall
be calculated as the amount of any unpaid Preferential
Dividends accumulated thereon to and including the last
preceding Preferential Dividend Payment Date (whether or
not earned or declared) plus an amount calculated on the
basis of the Preferential Dividend Rate for the period
after such last preceding Preferential Dividend Payment
Date to and including the date as of which the
calculation is made, based on a 360-day year of twelve
30-day months.
1C. Participating Dividends. Whenever there
is a declaration of a dividend upon the Common Equity,
there shall also be a declaration of a Participating
Dividend upon the Series III Preferred Stock if, at the
time of such declaration upon the Common Equity, the
Total Dividend Rate multiplied by two times the sum of
(i) any prior payment or payments or dividends upon
Common Equity during the Dividend Year per share of
Common Equity outstanding at the time of such payment or
payments ("Prior Common Equity Dividend Payments") and
(ii) the amount of any such declaration of a dividend
upon the Common Equity per share of Common Equity
outstanding at the time of such declaration ("Common
Equity Dividend Declaration"), is greater than the sum of
any prior payment or payments of Preferential Dividends
upon Series III Preferred Stock during the Dividend Year
per Share outstanding at the time of such payment or
payments ("Prior Preferential Dividend Payments") and any
prior payment or payments of Participating Dividends upon
Series III Preferred Stock during the Dividend Year per
Share outstanding at the time of such payment or payments
("Prior Participating Dividend Payments"). If there
shall be a declaration of a Participating Dividend as
aforesaid, (a) the amount of such Participating Dividend
during any Dividend Year shall be equal to the Total
Dividend Rate multiplied by two times the sum of the
Prior Common Equity Dividend Payments and the Common
Equity Dividend Declaration, minus the sum of the Prior
Preferential Dividend Payments and the Prior
Participating Dividend Payments; and (b) payment of such
Participating Dividend shall be made on the date that
payment of the corresponding dividend upon the Common
Equity is made.
2. Redemption.
2A. Optional Redemption. Upon (i) the death
of an Original Holder, (ii) the Permanent Disability or
the Permanent Mental Disability of an Original Holder,
(iii) the termination of an Original Holder's full-time
employment with the Corporation by the Original Holder
for Good Reason or (iv) termination of an Original
Holder's full-time employment with the Corporation by the
Corporation without Cause, such Original Holder and all
Transferee Holders of such Original Holder shall
collectively have the option for a period of twelve
months following any such event to present and surrender
the certificate or certificates representing all, but not
less than all, of their respective Shares duly endorsed
in blank or accompanied by an appropriate form of
assignment and, except as is otherwise provided by
subparagraph 2E hereof, upon the exercise of such option,
the Corporation shall redeem all of the Shares so
presented and surrendered; provided, however, that the
option granted to an Original Holder and all Transferee
Holders of such Original Holder by this subparagraph 2A
shall terminate upon the tenth anniversary of the
Exchange Date.
2B. Mandatory Redemption. Upon the
termination of an Original Holder's full-time employment
with the Corporation for Cause, the Original Holder and
every Transferee Holder of the Original Holder shall, on
the Redemption Date, present and surrender the
certificate or certificates representing all of their
respective Shares duly endorsed in blank or accompanied
by an appropriate form of assignment and, except as is
otherwise provided by subparagraph 2E hereof, the
Corporation shall redeem all of such Shares. In
addition, unless subject to redemption pursuant to the
immediately preceding sentence, upon the tenth
anniversary of the Exchange Date, the Original Holder and
every Transferee Holder of the Original Holder shall, on
the Redemption Date, present and surrender the
certificate or certificates representing at least one-
third (1/3) of their respective Shares duly endorsed in
blank or accompanied by an appropriate form of assignment
and, except as is otherwise provided by subparagraph 2E
hereof, the Corporation shall redeem all of such Shares;
provided, however, that on each of the next two
Subsequent Redemption Dates, the Original Holder and
every Transferee Holder of the Original Holder shall
present and surrender, in equal amounts, the certificate
or certificates representing the remainder, if any, of
their respective Shares and, except as otherwise provided
by subparagraph 2E hereof, the Corporation shall redeem
all of such Shares.
2C. Condition Concurrent with Right of
Redemption. Notwithstanding the provisions of
subparagraphs 2A and 2B hereof, no Shares shall be
redeemed pursuant to the provisions of this paragraph 2
unless, at the time of the surrender of any of such
Shares, the Original Holder thereof (and/or one or more
Transferee Holders of such Original Holder, acting in
concert) simultaneously therewith surrenders to the
Corporation for redemption pursuant to the provisions of
subparagraph 2A or 2B (whichever shall be applicable) of
paragraph 2 of the Series I Certificate and subparagraph
2A or 2B (whichever shall be applicable) of Paragraph 2
of the Series II Certificate (i) such number of shares of
the Series I Preferred Stock as shall equal the product
of the aggregate number of Shares proposed to be redeemed
at such time multiplied by the aggregate number of shares
of the Series I Preferred Stock then outstanding and held
by any Original Holder of shares of Series I Preferred
Stock (and/or any Transferee Holders of such Original
Holder) to whom at least 80% of the Series I Preferred
Stock outstanding at any time have been issued, divided
by the number of Shares then outstanding and (ii) such
number of shares of the Series II Preferred Stock as
shall equal the product of the aggregate number of Shares
proposed to be redeemed at such time multiplied by the
aggregate number of shares of the Series II Preferred
Stock then outstanding and held by any Original Holder of
shares of Series II Preferred Stock (and/or any
Transferee Holders of such Original Holder) divided by
the number of Shares then outstanding.
2D. Notice of Redemption. Each holder of
Shares who shall be entitled to, and shall elect to,
present and surrender Shares for redemption pursuant to
the option granted by subparagraph 2A and each holder of
Shares who shall be required to present and surrender
Shares for redemption pursuant to subparagraph 2B shall,
no less than five days before a Redemption Date or
Subsequent Redemption Date, as the case may be, provide
the Corporation with written notice containing the name
of the Original Holder of the Shares to be redeemed, the
number of Shares to be redeemed and the number or numbers
of the certificate or certificates representing such
shares, and subject to the limitations in subparagraph
2E, a statement as to the selected manner of payment.
Each notice to the Corporation contemplated by
this subparagraph 2D shall be sent by certified mail,
return receipt requested, to the President and the
Secretary of the Corporation at the address of the
principal executive offices of the Corporation.
2E. Payment of Unpaid Dividends and the
Redemption Price. On each Redemption Date and each
Subsequent Redemption Date, the Corporation shall pay, in
cash to each holder whose Shares are to be redeemed all
accrued and unpaid Preferential Dividends upon such
Shares, and all declared and unpaid Participating
Dividends upon such Shares as of a record date on or
before such Redemption Date or Subsequent Redemption
Date; provided, however, that if, on a Redemption Date or
a Subsequent Redemption Date, there should be
insufficient surplus, profits or other funds of the
Corporation available for the payment of such dividends
under the General Corporation Law of the State of
Delaware or due to the terms of any agreement to which
the Corporation is a party or by which it is bound, each
such holder shall receive, pro rata based on the number
of such holder's Shares to be redeemed and subject to any
identical or substantially similar rights vested in the
holders of shares of any other series of redeemable
preferred stock of the Corporation having, as to the
dividends, parity with the Shares, the amount of such
dividends for which surplus, profits or other funds of
the Corporation are available. Thereafter, any surplus,
profits or other funds of the Corporation available for
the payment of such dividends shall, subject to any
identical or substantially similar obligation imposed
upon the Corporation with respect to shares of any other
series of Redeemable Preferred Stock of the Corporation
having, as to dividends, parity with the Shares,
immediately be so used by the Corporation and the
Corporation shall not pay the Redemption Price on any
Shares unless and until all of such dividends upon all
redeemed Shares, and upon all redeemed shares of any
series of Redeemable Preferred Stock of the Corporation
having, as to dividends, parity with the Shares, shall
have been paid.
On a Redemption Date or a Subsequent Redemption
Date, in addition to the Preferential Dividends and
Participating Dividends which the Corporation is required
to pay as aforesaid, the Corporation shall also pay to
each holder who presents and surrenders the certificate
or certificates representing those of his Shares which
are to be redeemed an amount equal to the number of such
holder's Shares which are to be redeemed multiplied by
the Redemption Price and such amount shall, subject to
the limitation in this subparagraph 2E, be paid 100% in
cash, or 100% in shares of Common Equity of equivalent
value equally divided between shares of Common Stock and
shares of Class B Common Stock (or, subsequent to the
Conversion Date, 100% in shares of Common Stock of
equivalent value), or 100% by a Promissory Note, or any
combination of the foregoing in the proportions specified
by the holder of Shares to be redeemed; provided,
however, that the Corporation shall not be required to
pay an amount in cash in excess of one-third (1/3) of the
Aggregate Redemption Price in any fiscal year and, in the
event that the number of Shares presented and surrendered
for payment in cash exceeds such amount, the holder or
holders presenting and surrendering such Shares shall
receive a Promissory Note for such excess; provided,
further, however, that if, on any Redemption Date or
Subsequent Redemption Date (a) the Corporation does not
have an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and
any applicable state securities or blue sky laws covering
the issuance of shares of Common Equity in payment for
Shares to be redeemed and, in the opinion of counsel to
the Corporation, the issuance of shares of Common Equity
for such payment is not exempt under the 1933 Act and any
applicable state securities or blue sky laws or (b) if,
in the opinion of counsel to the Corporation, the
issuance of shares of Common Equity in payment for Shares
to be redeemed would constitute a violation of Section 7
of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), or the Regulations of the Board of Governors
of the Federal Reserve System under Section 7 of the 1934
Act, a holder of Shares to be redeemed shall only be
entitled to payment in cash and a Promissory Note; and
provided further, however, that (a) if, in any fiscal
year of any Redemption Date or Subsequent Redemption
Date, or any Subsequent Redemption Payment Date, there
should be insufficient surplus, profits or other funds of
the Corporation available for the payment of any
Redemption Payment, Initial Redemption Payment or any
Subsequent Redemption Payment, respectively, as herein
provided, or any redemption payment, initial redemption
payment or subsequent redemption payment in respect of
shares of the Series I Preferred Stock or Series II
Preferred Stock, under the General Corporation Law of the
State of Delaware or due to the terms of any agreement to
which the Corporation is a party or by which it is bound
or (b) if, in the case of any Redemption Payment or
Initial Redemption Payment which, pursuant to
subparagraph 2A or subparagraph 2B, would be due and
payable in any fiscal year or in the case of any
Subsequent Redemption Payment which is due and payable in
any fiscal year or, if, in the case of any required
redemption payment or initial redemption payment in
respect of shares of the Series I Preferred Stock or
Series II Preferred Stock which, pursuant to subparagraph
2A or subparagraph 2B of the Series I Certificate or
Series II Certificate, would be due and payable in any
fiscal year or in the case of any subsequent redemption
payment in respect of shares of the Series I Preferred
Stock or Series II Preferred Stock, respectively, which
is due and payable in any fiscal year, the aggregate of
all such payments would exceed 40% of the post-tax
profits of the Corporation for the next preceding fiscal
year, then each holder shall receive pro-rata based on
the number of such holder's Shares to be redeemed or
which have been redeemed, as the case may be, and subject
to any identical or substantially similar rights vested
in the holders of shares of the Series I Preferred Stock
and the Series II Preferred Stock, the amount of the
Redemption Payment, Initial Redemption Payment or
Subsequent Redemption Payment, as the case may be, for
which funds of the Corporation are available as provided
in subclauses (a) and (b) of this proviso and, in the
case of Shares for which a Redemption Payment or an
Initial Redemption Payment was to have been made, the
holders of such Shares shall be entitled to retain such
Shares until such Shares would otherwise be required to
be presented and surrendered for redemption and there is
sufficient surplus, profits or other funds of the
Corporation available for the Redemption Payment or the
Initial Redemption Payment therefor and, in the case of
any Shares which have been redeemed, any part of the
Subsequent Redemption Payment remaining unpaid shall be
added to the Subsequent Redemption Payment due and
payable on the next succeeding Subsequent Redemption
Payment Date.
If a holder of Shares specifies payment of any
Redemption Payment or Initial Redemption Payment, whether
in whole or in part, in shares of Common Equity, such
payment shall be made in an equal number of shares of
Common Stock and shares of Class B Common Stock (or,
subsequent to the Conversion Date, 100% in shares of
Common Stock) which are authorized but unissued or are
held in the treasury of the Corporation or any
combination thereof. The value of a share of Common
Equity as of a particular date shall be deemed to be the
closing sale price (or if no closing sales price is
available for such date, the average of the closing bid
and asked prices) for a share of Common Stock on the
Business Day next preceding such date as reported by the
National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), or if the shares of Common
Stock are not listed on NASDAQ, the average of such
closing bid and asked prices as reported by the National
Quotation Bureau, Inc. ("NQB"), or if such closing sale
or closing bid and asked prices are not available from
the NQB, the value as determined by a member of the New
York Stock Exchange selected by the Board of Directors.
2F. Dividends After Redemption Date or
Subsequent Redemption Date. Each Share which a holder
has elected to present and surrender for redemption
pursuant to the option granted by subparagraph 2A shall
not, after the Redemption Date or the Subsequent
Redemption Date therefor, be entitled to any Preferential
Dividends accrued after such Redemption Date or
Subsequent Redemption Date, or any Participating
Dividends declared as of a record date after such
Redemption Date or Subsequent Redemption Date, and on
such Redemption Date or Subsequent Redemption Date all
rights of a holder of such Share, as a stockholder of the
Corporation by reason of the ownership of such Share,
shall cease, except the right to receive any Preferential
Dividends accrued upon such Share up to and including
such Redemption Date or Subsequent Redemption Date, any
Participating Dividends declared upon such Share as of a
record date on or before such Redemption Date or
Subsequent Redemption Date and the Redemption Price of
such Share upon presentation and surrender of the
certificate representing such Share, and such Share shall
not, after such Redemption Date or Subsequent Redemption
Date, be deemed to be outstanding; provided, however,
that if the Corporation does not, upon presentation and
surrender of a certificate representing a Share, pay all
of such accrued and unpaid Preferential Dividends upon,
all of such declared and unpaid Participating Dividends
upon, and the Redemption Price for, such Share on the
Redemption Date or the Subsequent Redemption Date, as the
case may be, the rights of a holder of such Share as a
stockholder of the Corporation by reason of the ownership
of such Share shall not cease and such Share shall be
deemed outstanding, until the Corporation shall pay all
of such dividends upon, and the Redemption Price for,
such Share.
2G. Adjustment of the Redemption Price.
(a) If, at any time, during the period
from the commencement of the Corporation's fiscal year
ending December 31, 1983 through and including the last
day of the Corporation's fiscal year immediately
preceding a Redemption Date or any Subsequent Redemption
Date, as the case may be, the Corporation engages in any
Transfers at Other than Book Value, for the purpose of
calculating the Redemption Price of any Share to be
redeemed as of such Redemption Date or such Subsequent
Redemption Date, the Book Value per share of Common
Equity as of such Redemption Date or Subsequent
Redemption Date shall be deemed to be the following:
(i) the book value per share of
Common Equity as it would have been as of the last day of
the fiscal year immediately preceding such Redemption
Date or Subsequent Redemption Date, as the case may be
(such last day of the fiscal year immediately preceding
such Redemption Date or Subsequent Redemption Date being
hereinafter referred to as the "Computation Date"), had
there been during the period from the commencement of the
Corporation's fiscal year ending December 31, 1983,
through and including the Computation Date, no transfer
of any amount from Common Stockholders' Equity to
Additional Capital applicable to Redeemable Preferred
Stock multiplied by (x) one, if the Computation Date is
prior to the Distribution Record Date, or (y) two, if the
Computation Date is after the Distribution Record Date;
plus
(ii) two times, if the Computation
Date is after the Distribution Record Date, or one times,
if the Computation Date is before the Distribution Record
Date, the difference between (1) the book value per share
of Common Equity as it would have been as of the
Computation Date: (a) had each share of Common Equity
transferred during the period from the commencement of
the Corporation's fiscal year ending December 31, 1983
through and including the Computation Date (such period
being hereinafter referred to as the "Computation
Period") pursuant to a Transfer at Other than Book Value,
been transferred for an amount equal to the book value
per share of Common Equity as derived from the Audited
Consolidated Balance Sheet as of the last day of the
fiscal year immediately preceding the occurrence of such
Transfer at Other than Book Value, (b) had there been no
tax benefit to the Corporation for dividends paid by the
Corporation during the Computation Period in respect of
shares of Common Equity originally acquired during the
Computation Period by an employee of the Corporation (or
any Subsidiary) under any stock purchase plan of the
Corporation or upon exercise of an option granted under
any stock option plan of the Corporation (to the extent
such tax benefit results from the treatment of such
dividends as a deduction for the Corporation in the
computation of its tax liability), and (c) had there been
during the Computation Period no Capital Account
Adjustments nor any Reversals of Prior Capital Account
Adjustments on the accounting books and records of the
Corporation in respect of shares of Common Equity issued
by the Corporation during the Computation Period; and (2)
the book value per share of Common Equity as of the
Computation Date, as derived from the Audited
Consolidated Balance Sheet as of such date.
(b) In addition to the foregoing, if
there are (i) changes in the number of shares of Common
Equity outstanding as a result of (A) stock dividends,
splits, combinations or exchanges of shares of Common
Equity, (B) issuances of shares of Common Equity in
acquisitions, (C) merger, consolidation or reorganization
or (D) any other like or similar items or events or (ii)
any effects on the Common Stockholders' Equity as a
result of (A) any of the foregoing, (B) changes in the
accounting policies of the Corporation, (C) any unusual
and extraordinary items or events or (D) the issuance of
securities of a class not heretofore issued by the
Corporation, for the purpose of calculating the
Redemption Price of any Share issued prior to any such
change or effect only, the Book Value per share of Common
Equity as of a Redemption Date or Subsequent Redemption
Date may be adjusted to such an extent and in such manner
as the Board of Directors or a duly designated committee
thereof shall, in its sole discretion, determine is
necessary to preserve the benefit of the redemption
provisions of this paragraph 2 for the holders of Series
III Preferred Stock and the Corporation.
2H. Status of Redeemed Shares. Upon the
redemption of any Shares, the Corporation shall, pursuant
to Section 151(g) of the General Corporation Law of the
State of Delaware, as now or hereafter in effect, cause
the number of authorized shares of Series III Preferred
Stock to be decreased by the number of Shares redeemed
and the Corporation shall not thereafter issue any of
such Shares or any other shares of Preferred Stock as
shares of Series III Preferred Stock.
3. Liquidation.
3A. Liquidation Preference. Upon any
liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the
holders of the Series III Preferred Stock shall be
entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders (whether
from capital, surplus or earnings) an amount of cash
equal to $1.00 per Share ("Liquidation Preference") plus
all accrued and unpaid Preferential Dividends, before any
distribution or payment is made upon any Common Equity or
any other Junior Stock of the Corporation, but subject to
the prior rights of the holders of shares of other series
of Preferred Stock which are by their terms expressly
made senior as to liquidation preferences to the Series
III Preferred Stock. If upon such liquidation,
dissolution or winding up of the Corporation, whether
voluntary or involuntary, the assets of the Corporation
should not be sufficient to permit payment to the holders
of Series III Preferred Stock of the amount which they
are entitled to be paid as aforesaid and the holders of
any other series of Preferred Stock ranking equally as to
liquidation preferences to the Series III Preferred Stock
of the amount to which they are entitled to be paid, then
the entire assets of the Corporation to be distributed to
such holders shall be distributed ratably among them.
3B. Liquidation Participation. Upon any such
liquidation, dissolution or winding up of the
Corporation, after the holders of the Series III
Preferred Stock shall have been paid in full the
Liquidation Preference and the accrued and unpaid
Preferential Dividends and the holders of any other
series of Preferred Stock have been paid their
liquidation preferences and any accrued and unpaid
preferential dividends, the holders of the Series III
Preferred Stock and the holders of any other series of
Preferred Stock shall not be entitled to any further
payment unless and until the holders of Common Equity
shall have received out of the assets of the Corporation
available for distribution to its stockholders (whether
from capital, surplus or earnings), for each share of
Common Stock, an amount in cash equal to one-half of the
Liquidation Preference; but if, after the holders of
Common Equity shall have been paid in full such amount,
the value of the remainder of the assets of the
Corporation available for distribution to its
stockholders per share of Common Equity, Series I
Preferred Stock, Series II Preferred Stock, Series III
Preferred Stock and any other series of Preferred Stock
entitled to a liquidation participation is greater than
the Original Discount for a share of Series III Preferred
Stock, the holder of any such share of Series III
Preferred Stock shall be entitled to receive a
liquidation participation such that the aggregate
liquidation payment for each share of Series III
Preferred Stock is equal to the difference between the
aggregate of two times the liquidation payment for each
share of Common Equity and the Original Discount at which
the share of Series III Preferred Stock was issued.
3C. Events Not Deemed a Liquidation,
Dissolution or Winding Up. Neither the consolidation or
merger of the Corporation into or with any other
corporation or corporations, nor the sale, lease,
exchange or other disposition by the Corporation of all
or any part of its property or assets, nor the reduction
of the capital stock of the Corporation, shall be deemed
to be a liquidation, dissolution or winding up of the
Corporation within the meaning of any of the provisions
of this paragraph 3.
4. Voting.
4A. General Right to Vote. The holders of
Series III Preferred Stock shall be entitled to eleven
votes for each Share held of record and, together with
the holders of any other series of Preferred Stock who
shall have the right and power to vote generally with the
holders of Common Equity, shall, together with the
holders of Common Equity, all voting as a single class,
possess voting power for the election of directors and
for all other purposes, except as is otherwise provided
in this Certificate of Designations or the Restated
Certificate of Incorporation or any certificate
amendatory thereof or supplemental thereto. The
foregoing notwithstanding, on and subsequent to the
Conversion Date, the holders of Series III Preferred
Stock shall be entitled to two votes for each Share held
of record.
4B. Restrictions on Voting Rights. Upon the
earliest of (i) the tenth anniversary of the Exchange
Date, (ii) the death of an Original Holder or (iii) the
Permanent Mental Disability of an Original Holder, the
voting rights which such Original Holder and any
Transferee Holder of such Original Holder would otherwise
have, whether pursuant to this Certificate of
Designations, the Restated Certificate of Incorporation
or any certificate amendatory thereof or supplemental
thereto, by virtue of the Shares held by such Original
Holder or such Transferee Holder, shall terminate;
provided, however, that if such rights terminate as a
result of clauses (i), (ii) or (iii) above and if the
Corporation has issued a Promissory Note under
subparagraph 2D, then, if the Corporation subsequently
defaults in its obligations thereunder, from and after
such default such voting rights shall be reinstated for
such period of time as the Corporation is in default of
such obligations.
In the event of the commencement of an
involuntary receivership, liquidation, reorganization or
similar proceeding against an Original Holder or a
Transferee Holder, whether under the pertinent federal or
state bankruptcy or insolvency laws or any other
applicable federal or state law, and the appointment of a
receiver, interim trustee, trustee or similar official of
such Original Holder or Transferee Holder or in the event
of the commencement of a voluntary receivership,
liquidation, reorganization or similar proceeding by an
Original Holder or a Transferee Holder, whether under the
pertinent federal or state bankruptcy or insolvency laws
or any other applicable federal or state law, the voting
rights which such Original Holder or such Transferee
Holder or a Transferee Holder of such Original Holder
would otherwise have, whether pursuant to this
Certificate of Designations, the Restated Certificate of
Incorporation or any certificate amendatory thereof or
supplemental thereto, by virtue of Shares held by any
such Original Holder or Transferee Holder, shall
terminate.
5. Restrictions on Disposition of Shares. An
Original Holder shall only be entitled to assign, pledge,
transfer or otherwise dispose of his Shares, or an
interest in his Shares, to a Transferee Holder of the
Original Holder or the Corporation; and a Transferee
Holder of an Original Holder shall only be entitled to
assign, pledge, transfer or otherwise dispose of Shares,
or an interest in Shares, received from an Original
Holder or a Transferee Holder to another Transferee
Holder of such Original Holder or the Corporation.
6. Restrictions on Changes. In addition to any
other approvals or consents required by the General
Corporation Law of the State of Delaware or other
applicable law, the Corporation shall not, without the
consent of the holders of record of a majority of the
Shares outstanding, given in person or by proxy, either
in writing without a meeting or by affirmative vote at an
annual meeting or a special meeting called for that
purpose at which the holders of the Shares outstanding
shall be entitled to vote as a separate class, (a)
create, authorize or issue (i) any shares of any class or
series of stock of the Corporation ranking senior as to
dividends or assets or otherwise to the Series III
Preferred Stock ("Senior Stock") or (ii) any shares of
any class or series of stock of the Corporation ranking
on a parity as to dividends or assets or otherwise to the
Series III Preferred Stock ("Parity Stock"), (b)
reclassify any authorized stock of the Corporation into
any shares of Senior Stock or Parity Stock, (c) create,
authorize or issue any obligation or security convertible
into or evidencing the right to purchase any shares of
Senior Stock or Parity Stock, or (d) amend, alter,
supplement or repeal any of the provisions of the
Restated Certificate of Incorporation or of any
certificate (including this Certificate of Designations)
amendatory thereof or supplemental thereto so as to
affect adversely the preferences, rights, powers or
privileges given by this Certificate of Designations to
the Series III Preferred Stock.
7. Successors and Assigns. The provisions of this
Certificate of Designations shall be binding upon all
successors and assigns of an Original Holder, including,
without limitation, a Transferee Holder and any receiver,
interim trustee or trustee in bankruptcy or
representative of creditors or an Original Holder or a
Transferee Holder.
8. Definitions. The following terms shall have
the following meanings, which meanings shall be equally
applicable to the singular and plural forms of such
terms:
(a) "Additional Capital applicable to
Redeemable Preferred Stock" as of a particular date means
the amount thereof as derived from the Audited
Consolidated Balance Sheet as of such date.
(b) "Aggregate Redemption Price" means
for the purpose of the calculation required by
subparagraph 2E, the number of Shares issued to an
Original Holder, whether or not outstanding, multiplied
by the Redemption Price as of a Redemption Date or a
Subsequent Redemption Date, as the case may be.
(c) "Audited Consolidated Balance Sheet"
as of a particular date means the audited consolidated
balance sheet of the Corporation and its Subsidiaries
(all the financial information on which has been computed
in accordance with generally accepted accounting
principles by the regular independent auditors of the
Corporation) as of the last day of the applicable fiscal
year.
(d) Unless otherwise required by
subparagraph 2G(a) hereof, "Book Value per share of
Common Equity" means as of a particular date two times
the sum of the book value per share of Common Equity plus
the cumulative amount per share of Common Equity
transferred from Common Stockholders' Equity to
Additional Capital applicable to Redeemable Preferred
Stock since the issuance of any shares of any series of
capital stock of the Corporation in exchange for which
such Redeemable Preferred Stock was issued and as of such
date as derived from an Audited Consolidated Balance
Sheet as of such date.
(e) "Business Day" means any day which is
not a Saturday or a Sunday or a day on which the banks
are closed for business in New York, New York.
(f) "Capital Account Adjustment" means
any change in one or more of the various component
accounts of the Common Stockholders' Equity, or in one or
more contra accounts thereto, as reflected on the
accounting books and records of the Corporation, which
affects Common Stockholders' Equity in such a manner as
to cause either an increase or decrease therein and which
results from:
(1) the periodic amortization of the
difference, if any, between the value (as determined in
accordance with the provisions of the last sentence of
subparagraph 2E of this Certificate of Designations) on
the date of issuance, and the sales price upon issuance,
of shares of Common Equity issued by the Corporation to
one or more of its employees (or to one or more employees
of any Subsidiary) under a stock purchase plan of the
Corporation or upon exercise of an option granted under
any stock option plan of the Corporation; or
(2) the lapse of all contractual
restrictions, and/or all restrictions imposed by virtue
of the terms of any stock purchase or stock option plan
of the Corporation, upon the free alienability of any
shares of Common Equity acquired under any such plan or
pursuant to exercise of an option granted thereunder.
(g) "Cause" shall have the meaning set
forth in Section 22 of the Agreement, made as of
February 9, 1984, between the Corporation and Edward H.
Meyer (as amended).
(h) "Common Stockholders' Equity" as of a
particular date means the common stockholders' equity as
derived from the Audited Consolidated Balance Sheet as of
such date.
(i) "Conversion Date" means the date upon
which all outstanding shares of Class B Common Stock
automatically convert into shares of Common Stock
pursuant to subparagraph III.(D)(9) of the paragraph
entitled "Common Stock and Class B Common Stock" in
Article Fourth of the Corporation's Restated Certificate
of Incorporation.
(j) "Date of Termination" means the date
of termination of an Original Holder's full-time
employment with the Corporation.
(k) "Distribution Record Date" means
April 3, 1986.
(l) "Dividend Period" means the quarterly
period ending on a Preferential Dividend Payment Date.
(m) "Dividend Year" means the period from
March 15 in one year to March 14 in the succeeding year
commencing with the March 15 immediately preceding the
Exchange Date.
(n) "Exchange Date" means the date of
filing of this Certificate of Designations with the
Secretary of State of the State of Delaware.
(o) "Good Reason" means:
(1) a change in control of the
Corporation, which shall be conclusively deemed to have
occurred if any of the following shall have taken place:
(i) a change in control of a nature that would be
required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A under the 1934 Act, unless
such change in control results in control by the Original
Holder, his designee(s) or "affiliate(s)" (as defined in
Rule 12b-2 under the 1934 Act) or any combination
thereof; (ii) any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the 1934 Act), other than
the Original Holder, his designee(s) or "affiliate(s)"
(as defined in Rule 12b-2 under the 1934 Act) or any
combination thereof, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the 1934 Act), directly
or indirectly, of securities of the Corporation
representing 40% or more of the combined voting power of
the Corporation's then outstanding securities; or (iii)
during any period of two (2) consecutive years commencing
after the date of this Certificate of Designations,
individuals who at the beginning of such period
constitute the Board of Directors cease for any reason to
constitute at least a majority thereof, unless the
election of each director who was not a director at the
beginning of such period has been approved in advance by
directors representing at least a majority of the
directors then in office who were directors at the
beginning of the period; or
(2) any assignment to the Original
Holder of any duties other than those contemplated by, or
a limitation of the powers of an Original Holder not
contemplated by, the relevant provisions of his
employment agreement with the Corporation, if any; or
(3) any removal of the Original
Holder from, or any failure to re-elect the Original
Holder to, any of the positions which he may hold by
virtue of his employment agreement with the Corporation,
if any, except in connection with his Disability (as
defined in any such employment agreement) or with the
termination of his full-time employment with the
Corporation for Cause; or
(4) a reduction in the Original
Holder's rate of compensation not agreed to in writing by
him; or
(5) a failure by the Corporation to
comply with any of the provisions of the Original
Holder's employment agreement with the Corporation, if
any, concerning his compensation, pension, life
insurance, disability rights or vacations; or
(6) failure by the Corporation to
require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Corporation, by agreement in form and substance
satisfactory to the Original Holder, expressly to assume
and agree to perform the Original Holder's employment
agreement, if any, in the same manner and to the same
extent that the Corporation would be required to perform
it if no such succession had taken place; or
(7) failure by the Corporation to
offer to continue to employ the Original Holder following
expiration of his employment agreement with the
Corporation in the same positions as those held by him
immediately prior to such expiration and on terms at
least as favorable to the Original Holder as the terms
set forth in his employment agreement.
(p) "Initial Redemption Payment" means
any redemption payment by the Corporation on a Redemption
Date or a Subsequent Redemption Date, which consists, at
least in part, of a Promissory Note.
(q) "Original Discount" for a share of
Series III Preferred Stock means the discount from the
Book Value per share of Common Equity as derived from the
Audited Consolidated Balance Sheet as of the last day of
the then current fiscal year or of the next preceding
fiscal year, whichever is nearer the date on which an
Original Holder purchased such share or, if applicable,
the date on which an Original Holder purchased from the
Corporation the share of Series 3 Preferred Stock in
exchange for which such share of Series III Preferred
Stock was issued pursuant to that certain Book Value
Preferred Stock Plan dated as of April 2, 1981, as
amended on May 20, 1982 and as subsequently amended on
June 13, 1983, and as such plan may, from time to time,
be further amended or supplemented in accordance with its
terms (the "Plan").
(r) "Original Holder" means, with respect
to shares of Series III Preferred Stock, a senior
executive officer (whether or not a member of the Board
of Directors) of the Corporation or any Subsidiary to
whom any Shares or, if applicable, any shares of Series 3
Preferred Stock in exchange for which Shares have been
issued, have been sold pursuant to the Plan, and, with
respect to shares of any other series of Redeemable
Preferred Stock, a senior executive officer (whether or
not a member of the Board of Directors) of the
Corporation or any Subsidiary to whom any shares of such
series of Redeemable Preferred Stock (or of any shares
exchanged therefor) have been sold pursuant to the Plan.
(s) "Participating Dividend" means the
dividend which, subject to the conditions in subparagraph
1C, the Corporation is required to declare on Shares
whenever a dividend is declared on shares of Common
Equity.
(t) "Permanent Disability" means in the
case of any Original Holder, an illness or other
disability (other than a Permanent Mental Disability)
which results in any such Original Holder being unable
regularly to perform his duties as an employee of the
Corporation, in the capacities in which such Original
Holder performed such duties prior to the onset of such
illness or other disability (other than a Permanent
Mental Disability), for a period of 18 months and the
termination of any such Original Holder's full-time
employment with the Corporation.
(u) "Permanent Mental Disability" means a
mental illness or other mental disability of a person
which results in such person being incapable of
understanding and unable regularly to act with discretion
in the ordinary affairs of life for a period of at least
90 consecutive days, as determined by a written
certification of a qualified medical doctor agreed to by
the Corporation and such person or, in the event of such
person's incapacity to designate a doctor, such person's
legal representative. In the absence of an agreement
between the Corporation and such person (or his legal
representative), each shall nominate a qualified medical
doctor and the two doctors shall select a third doctor,
who shall make the determination as to the disability.
The appointment of a guardian or legal conservator for a
person shall create a presumption of the Permanent Mental
Disability of such person.
(v) "Preferential Dividend" means the
dividend which will be calculated at the Preferential
Dividend Rate and which will accumulate and accrue as
provided in subparagraph 1B.
(w) "Promissory Note" means a promissory
note of the Corporation, such note to bear interest at an
annual rate equal to the higher of the prime rate charged
by Citibank, N.A. or the rate at which the Corporation is
entitled to borrow money from the principal banking
institution with which it does business, each as of the
Redemption Date or the Subsequent Redemption Date, as the
case may be, and such note shall be payable in cash on
the next two Subsequent Redemption Payment Dates.
(x) "Redeemable Preferred Stock" means
any series of redeemable preferred stock of the
Corporation which is issued by the Corporation pursuant
to the Plan since the issuance of any Shares of the
Series 3 Preferred Stock, unless the Certificate of
Designations and Terms fixing the voting power,
preferences and relative, participating, options,
dividends and other special rights, and the
qualifications, limitations and restrictions of such
series of redeemable preferred stock expressly provides
otherwise.
(y) "Redemption Date" means:
(1) for the purposes of the option
granted to an Original Holder and all Transferee Holders
of such Original Holder by subparagraph 2A, (i) the later
of (A) the third Business Day subsequent to the date on
which the Audited Consolidated Balance Sheet is available
for the most recent fiscal year ended or (B) the date on
which an Original Holder and all Transferee Holders of
such Original Holder collectively intend to exercise such
option as evidenced by their provision of notice to the
Corporation, if the date of the notice referred to in
subclause (i)(B) is within the six-month period
subsequent to the end of the most recent fiscal year; or
(ii) the later of (A) the date on which an Original
Holder and all Transferee Holders of such Original Holder
collectively intend to exercise such option as evidenced
by their provision of notice to the Corporation or (B)
the third Business Day subsequent to the date on which
the Audited Consolidated Balance Sheet is available for
the then current fiscal year, if the date of any notice
referred to in this subclause (ii) is within the six-
month period prior to the end of the then current fiscal
year; or
(2) for the purposes of the first
sentence of subparagraph 2B, the later of (i) the third
Business Day subsequent to the date on which the Audited
Consolidated Balance Sheet is available for the most
recent fiscal year ended or (ii) the tenth Business Day
subsequent to an Original Holder's Date of Termination
for Cause, if applicable; or
(3) for the purposes of the second
sentence of subparagraph 2B, (i) the later of (A) the
third Business Day subsequent to the date on which the
Audited Consolidated Balance Sheet is available for the
most recent fiscal year ended or (B) the third Business
Day subsequent to the tenth anniversary of the Exchange
Date; or
(4) for the purpose of preparing
annual or periodic financial statements of the
Corporation and its Subsidiaries for presentation in any
of the Corporation's annual or periodic reports to its
stockholders or to the Securities and Exchange
Commission, and for no other purpose (including, but not
limited to, the redemption of one or more Shares), the
first day of the fiscal year or period succeeding the
fiscal year or period to which such financial statements
relate.
(z) "Redemption Payment" means any
redemption payment by the Corporation on a Redemption
Date or a Subsequent Redemption Date which consists
solely of cash, an equal number of shares of Common Stock
and shares of Class B Common Stock (or, subsequent to the
Conversion Date, 100% in shares of Common Stock), or a
combination thereof.
(aa) "Redemption Price" for a Share
means, except as is otherwise provided below, the Book
Value per share of Common Equity as of the last day of
the fiscal year immediately preceding the Redemption Date
or the Subsequent Redemption Date, as the case may be,
for such Share minus the Original Discount on such Share.
Notwithstanding the foregoing, the Redemption Price for a
Share as of a Redemption Date shall be determined by
reference to the higher of the Book Value per share of
Common Equity as of the last day of the most recent
fiscal year ended or as of the end of the then current
fiscal year, if the Redemption Date for such Share is
determined pursuant to (y)(1)(ii)(B) of this paragraph 8.
(bb) "Reversal of Prior Capital Account
Adjustment" means any change in one or more of the
various component accounts of the Common Stockholder's
Equity, or in one or more contra accounts thereto, as
reflected on the accounting books and records of the
Corporation, which affects Common Stockholders' Equity in
such a manner as to cause either an increase or a
decrease therein and which results from the complete or
partial reversal on the accounting books and records of
the Corporation of one or more prior Capital Account
Adjustments, as a consequence of either:
(1) the repurchase by the
Corporation, at a price less than the value (as
determined in accordance with the provisions of the last
sentence of subparagraph 2E of this Certificate of
Designations) on the date of such repurchase, of shares
of Common Equity previously issued by the Corporation to
one or more employees (or to one or more employees of any
Subsidiary) under any stock purchase plan of the
Corporation or upon exercise of an option granted under
any stock option plan of the Corporation at a price less
than the value (determined as aforesaid) thereof on the
date of such previous issuance; or
(2) the lapse of all contractual
restrictions, and/or all restrictions imposed by virtue
of the terms of any stock purchase or stock option plan
of the Corporation, upon the free alienability of any
shares of Common Equity acquired under any such plan or
pursuant to exercise of an option granted thereunder.
(cc) "Series I Certificate" and "Series
II Certificate" mean the Certificate of Designations of
Series I Preferred Stock, dated April 7, 1994, and the
Certificate of Designations of Series II Preferred Stock,
dated April 7, 1994, respectively, which were filed with
the Secretary of State of the State of Delaware pursuant
to Sections 151(g) and 103 of the General Corporation Law
of the State of Delaware.
(dd) "Series I Preferred Stock" and
"Series II Preferred Stock" mean the Series I Preferred
Stock and the Series II Preferred Stock of the
Corporation designated as such pursuant to the Series I
Certificate and the Series II Certificate, respectively.
(ee) "Series 3 Certificate" means that
certain Amended Certificate of Designations and Terms of
Series 3 Preferred Stock dated April 15, 1986 which was
filed with the Secretary of State of the State of
Delaware pursuant to Sections 151(g) and 103 of the
General Corporation Law of the State of Delaware.
(ff) "Series 3 Preferred Stock" means the
Series 3 Preferred Stock of the Corporation designated as
such pursuant to the Series 3 Certificate.
(gg) "Subsequent Redemption Date" means
the Anniversary date of any Redemption Date upon which at
least one-third (1/3) of the Shares issued to an Original
Holder are required, pursuant to subparagraph 2B, to be
presented and surrendered for redemption.
(hh) "Subsequent Redemption Payment"
means any redemption payment by the Corporation in cash,
Promissory Notes or shares of Common Equity for which an
Initial Redemption Payment has been made.
(ii) "Subsequent Redemption Payment Date"
means, with respect to Shares for which an Initial
Redemption Payment has been made, the anniversary date of
the Initial Redemption Payment Date therefor.
(jj) "Subsidiary" means any corporation
at least a majority of the Voting Stock of which is, at
the time as of which any determination is being made,
owned by the Corporation either directly or indirectly
through one or more Subsidiaries.
(kk) "Total Dividend Rate" means 100% for
each Dividend Year.
(ll) "Transferee Holder" means a
corporation all the Voting Stock of which is wholly owned
by an Original Holder or, in the event of the death of an
Original Holder, the estate of an Original Holder, any
executor, administrator, legal representative or trustee
thereof and any heir, distributee, devisee or legatee
thereunder.
(mm) "Transfer at Other than Book Value"
means any purchase or other acquisition by the
Corporation, and any issuance, sale, transfer or other
disposition by the Corporation, of its Common Equity at a
price per share which is either in excess of, or below,
the book value per share of Common Equity as derived from
the Audited Consolidated Balance Sheet as of the last day
of the fiscal year immediately preceding such purchase or
other acquisition, or such issuance, sale, transfer or
other disposition, as the case may be, and shall include,
but shall not be limited to, any transfer by the
Corporation of its Common Equity to one or more tax-
qualified employee stock ownership plans of the
Corporation in respect of contributions made by the
Corporation to such employee stock ownership plan(s).
Notwithstanding the foregoing, for purposes of
determining whether a transfer effected on or subsequent
to the Distribution Record Date and on or prior to
December 31, 1986 is a transfer at other than Book Value,
for purposes of valuation of such transfer, book value
per share of Common Equity shall be one-half of the book
value per share of Common Equity at December 31, 1985.
(nn) "Voting Stock" means any share of
stock having general voting power in electing the Board
of Directors, irrespective of whether or not at the time
stock of any other class or series has or might have
voting power by reason of the happening of any
contingency.
9. Miscellaneous.
9A. Determination of Fact. Whenever a
determination of fact is required in connection with any
provision or provisions of this Certificate of
Designations, the Board of Directors shall make such
determination and its determination shall be conclusive.
9B. Headings. The headings of the paragraphs
and subparagraphs of this Certificate of Designations are
inserted for convenience only and shall not constitute a
part hereof.
9C. Amendments. Whenever, in the joint
opinion of the Corporation, as evidenced in the case of
the Corporation by a resolution of the Board of
Directors, and of the holder of a majority of the
outstanding shares of Series III Preferred Stock, it is
deemed desirable or advisable to amend or restate this
Certificate of Designations to further the purposes of
the Corporation in the designation and issuance of the
Series III Preferred Stock, all as evidenced by an
instrument signed jointly by the Corporation and such
stockholders, this Certificate of Designations may be
amended or restated, to the extent permitted by law and
with the consent in writing of the holder of a majority
of the shares of the Series I Preferred Stock and Series
II Preferred Stock then outstanding, by the adoption by
the Board of Directors of a resolution implementing any
such amendment or restatement and by filing a Certificate
pursuant to the General Corporation Law of the State of
Delaware. This Certificate of Designations may also be
amended or restated in any other manner permitted under
the General Corporation Law of the State of Delaware.
9D. Validity. The invalidity or unenforce-
ability of any provision or provisions of this
Certificate of Designations shall not affect the validity
or enforceability of any other provision of this
Certificate, which shall remain in full force and effect.
B. Common Stock and Class B Common Stock
I. Subject to the provisions of law, the
preferences of the Preferred Stock and section III.(C)
herein, dividends may be paid on the Common Stock and
Class B Common Stock of the Company at such time and in
such amounts as the Board of Directors may deem
advisable.
II. The Board of Directors of the Company is
authorized to effect the elimination of shares of its
Common Stock or Class B Common Stock purchased or
otherwise reacquired by the Company from the authorized
capital stock or number of shares of the Company in the
manner provided for in the General Corporation Law of
Delaware.
III. (A) The powers, preferences and rights of the
Common Stock and Class B Common Stock, and the
qualifications, limitations or restrictions thereof,
shall be in all respects identical, except as otherwise
required by law or expressly provided in this Certificate
of Incorporation.
(B) At each annual or special meeting of
stockholders, each holder of Common Stock shall be
entitled to one (1) vote in person or by proxy for each
share of Common Stock standing in his name on the stock
transfer records of the Company and each holder of Class
B Common Stock shall be entitled to ten (10) votes in
person or by proxy for each share of Class B Common Stock
standing in his name on the stock transfer records of the
Company. Except as set forth below, all actions
submitted to a vote of stockholders shall be voted on by
the holders of Common Stock and Class B Common Stock (as
well as the holders of any series of Preferred Stock
entitled to vote thereon) voting together as a single
class. The holders of Common Stock and Class B Common
Stock shall vote separately as classes with respect to
amendments to this Certificate of Incorporation that
alter or change the powers, preferences or special rights
of their respective classes of stock so as to affect them
adversely, and with respect to such other matters as may
require class votes under the General Corporation Law of
Delaware. The holders of all outstanding shares of
capital stock of the Company entitled to vote shall vote
together as a single class upon any proposal to authorize
additional shares of Common Stock or Class B Common
Stock.
(C) If and when dividends on the Common Stock
and Class B Common Stock are declared payable from time
to time by the Board of Directors from funds legally
available therefor, whether payable in cash, in property
or in shares of stock of the Company, the holders of
Common Stock and the holders of Class B Common Stock
shall be entitled to share equally, share for share, in
such dividends, except that, if dividends are declared
that are payable in shares of Common Stock or Class B
Common Stock, dividends shall be declared that are
payable at the same rate on both classes of stock and the
dividends payable in shares of Common Stock shall be
payable to holders of that class of stock and the
dividends payable in shares of Class B Common Stock shall
be payable to holders of that class of stock. If the
Company shall in any manner subdivide or combine the
outstanding shares of Common Stock or Class B Common
Stock, the outstanding shares of the other such class of
stock shall be proportionally subdivided or combined in
the same manner and on the same basis as the outstanding
shares of Common Stock or Class B Common Stock, as the
case may be, have been subdivided or combined.
(D) (1) The holder of each outstanding share
of Class B Common Stock shall have the right at any time,
or from time to time, at such holder's option to convert
such share into one fully paid and nonassessable share of
Common Stock, on and subject to the terms and conditions
hereinafter set forth.
(2) In order to exercise his conversion
privilege, the holder of any shares of Class B Common
Stock to be converted shall present and surrender the
certificate representing such shares during usual
business hours at any office or agency of the Company
maintained for the transfer of Common Stock and Class B
Common Stock and shall deliver a written notice of the
election of the holder to convert the shares represented
by such certificate or any portion thereof specified in
such notice. Such notice shall also state the name or
names (with address) in which the certificate or
certificates for shares of Common Stock which shall be
issuable on such conversion shall be issued. If so
required by the Company, any certificate for shares
surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the
Company, duly executed by the holder of such shares or
his duly authorized representative. Each conversion of
shares of Class B Common Stock shall be deemed to have
been effected on the date (the "conversion date") on
which the certificate or certificates representing such
shares shall have been surrendered and such notice and
any required instruments of transfer shall have been
received as aforesaid, and the person or persons in whose
name or names any certificate or certificates for shares
of Common Stock shall be issuable on such conversion
shall be deemed to have become immediately prior to the
close of business on the conversion date the holder or
holders of record of the shares of Common Stock
represented thereby.
(3) As promptly as practicable after the
presentation and surrender for conversion, as herein
provided, of any certificate for shares of Class B Common
Stock, the Company shall issue and deliver at such office
or agency, to or upon the written order of the holder
thereof, certificates for the number of shares of Common
Stock issuable upon such conversion. In case any
certificate for shares of Class B Common Stock shall be
surrendered for conversion of a part only of the shares
represented thereby, the Company shall deliver at such
office or agency, to or upon the written order of the
holder thereof, a certificate or certificates for the
number of shares of Class B Common Stock represented by
such surrendered certificate, which are not being
converted. The issuance of certificates for shares of
Common Stock issuable upon the conversion of shares of
Class B Common Stock shall be made without charge to the
converting holder for any tax imposed upon the Company in
respect of the issue thereof. The Company shall not,
however, be required to pay any tax which may be payable
with respect to any transfer involved in the issue and
delivery of any certificate in a name other than that of
the holder of the shares being converted, and the Company
shall not be required to issue or deliver any such
certificate unless and until the person requesting the
issue thereof shall have paid to the Company the amount
of such tax or has established to the satisfaction of the
Company that such tax has been paid.
(4) Upon any conversion of shares of
Class B Common Stock into shares of Common Stock pursuant
hereto, no adjustment with respect to dividends shall be
made; only those dividends shall be payable on the shares
so converted as may be declared and may be payable to the
holder of record of shares of Class B Common Stock on a
date prior to the conversion date with respect to the
shares so converted; and only those dividends shall be
payable on shares of Common Stock issued upon such
conversion as may be declared and may be payable to
holders of record of shares of Common Stock on or after
such conversion date.
(5) In case of any consolidation or
merger of the Company as a result of which the holders of
Common Stock shall be entitled to receive stock, other
securities or other property with respect to or in
exchange for Common Stock or in case of any sale or
conveyance of all or substantially all of the property or
business of the Company as an entirety, a holder of a
share of Class B Common Stock shall have the right
thereafter, so long as the conversion right hereunder
shall exist, to convert such share into the kind and
amount of shares of stock and other securities and
properties receivable upon such consolidation, merger,
sale or conveyance by a holder of one share of Common
Stock and shall have no other conversion rights with
regard to such share. The provisions of this
subparagraph (5) shall similarly apply to successive
consolidations, mergers, sales or conveyances.
(6) All shares of Class B Common Stock
which shall have been surrendered for conversion as
herein provided shall no longer be deemed to be
outstanding, and all rights with respect to such shares,
including the rights, if any, to receive notices and to
vote, shall thereupon cease and terminate, except only
the right of the holders thereof, subject to the
provisions of subparagraph (3) of this subdivision (D),
to receive shares of Common Stock in exchange therefor.
(7) Such number of shares of Common Stock
as may from time to time be required for such purpose
shall be reserved for issuance upon conversion of
outstanding shares of Class B Common Stock.
(8) Such number of shares of Class B
Common Stock as may from time to time be required for
such purposes shall be reserved for issuance (i) pursuant
to stock dividends, stock splits and similar
distributions; (ii) upon exercise, conversion or
redemption of any outstanding securities; (iii) pursuant
to existing employee's benefit plans including, without
limitation, the Company's Restricted Stock Plan ("RSP")
and its stock option plans (collectively, the "Option
Plans"), pursuant to which options are on the
Distribution Record Date (as hereinafter defined)
outstanding or pursuant to which options may on the
Distribution Record Date be granted, with respect to
shares currently available for issuance under the RSP and
with respect to shares available for issuance upon
exercise of options currently available for grant under
the Option Plans, as are more fully set forth, with
respect to the RSP and the Option Plans, in clauses (iv)
and (v) hereof; (iv) under the RSP, as shall equal the
number of shares of Common Stock available for issuance
thereunder on the Distribution Record Date; and (v) under
the Option Plans, as shall equal the number of shares of
Common Stock issuable upon the exercise of the options
available for grant on the record date for the initial
distribution of shares of Class B Common Stock (the
"Distribution Record Date").
(9) All outstanding shares of Class B
Common Stock will automatically convert into shares of
Common Stock on the tenth anniversary of the Distribution
Record Date. Upon such conversion, certificates
evidencing previously outstanding shares of Class B
Common Stock will thereafter be deemed to evidence a like
number of shares of Common Stock. None of the provisions
of this subparagraph (9) may be amended, altered,
supplemented or repealed without the affirmative vote of
the holders of the Common Stock, of the Class B Common
Stock and of each series of the Preferred Stock entitled
to vote and outstanding on the Distribution Record Date.
(E) (1) No person holding shares of Class B
Common Stock (hereinafter called a "Class B Holder") may
transfer, and the Company shall not register the transfer
of, such shares of Class B Common Stock, whether by sale,
assignment, gift, bequest, appointment or otherwise,
except to a Permitted Transferee of such Class B Holder,
which term shall have the following meanings:
(a) In the case of a Class B Holder
who is a natural person and the holder of record and
beneficial owner of the shares of Class B Common Stock
subject to said proposed transfer, "Permitted Transferee"
means (A) the spouse of such Class B Holder, (b) a lineal
descendant of such Class B Holder (said descendants,
together with the Class B Holder and his or her spouse,
are hereinafter referred to as "such Class B Holder's
family members"), (C) an executor of the estate of such
deceased Class B Holder or a legal representative or
conservator of such legally incompetent Class B Holder,
(D) the trustee of a trust for the sole benefit of such
Class B Holder's family members, and for the benefit of
no other person, provided that such trust may grant a
general or special power of appointment to the spouse of
such Class B Holder, any lineal descendant of such Class
B Holder or the spouse of any such lineal descendant, and
may permit trust assets to be used to pay taxes, legacies
and other obligations of the trust or the estate of such
Class B Holder payable by reason of the death of such
Class B Holder and provided that such trust prohibits
transfer of shares of Class B Common Stock to persons
other than Permitted Transferees, as defined in clause
(b) below, (E) the voting trust created by the Voting
Trust Agreement, dated as of February 24, 1986 ("Voting
Agreement") among the several Beneficiaries, as defined
therein, the Corporation and Edward H. Meyer and Ronald
A. Nicholson, as Trustees.
(b) In the case of a Class B Holder
holding the shares of Class B Common Stock subject to
said proposed transfer as trustee pursuant to a trust
other than a trust described in clause (c) below,
"Permitted Transferee" means (A) the person or persons
who established such trust and (B) a Permitted Transferee
of such person or persons determined pursuant to clause
(a) above.
(c) In the case of a Class B Holder
holding the shares of Class B Common Stock subject to
said proposed transfer as trustee pursuant to a trust
which was irrevocable on the Distribution Record Date,
for determining the persons to whom the Class B Common
Stock is first issuable by the Company, "Permitted
Transferee" means any person to whom or for whose benefit
principal may be distributed either during or at the end
of the term of such trust whether by power of appointment
or otherwise or any "Permitted Transferee" of such person
determined pursuant to clause (a), (b), (e) or (f)
hereof, as the case may be.
(d) In the case of a Class B Holder
who holds shares as a result of the distribution of
shares of Class B Common Stock upon termination of the
Voting Agreement, "Permitted Transferee" means (A) the
Class B Holder who deposited such Class B Common Stock
pursuant to the Voting Agreement and (B) a Permitted
Transferee of such depositor.
(e) In the case of a Class B Holder
who is the record (but not the beneficial) owner of the
shares of Class B Common Stock subject to said proposed
transfer as nominee for the person who was the beneficial
owner thereof on the Distribution Record Date, "Permitted
Transferee" means such beneficial owner and a Permitted
Transferee of such beneficial owner determined pursuant
to clause (a), (b), (c) or (f) hereof, as the case may
be. A transfer of the beneficial ownership of the shares
of the Class B Common Stock held by such a record (but
not beneficial) holder of Class B Common Stock to another
beneficial owner, other than a Permitted Transferee of
such beneficial owner, notwithstanding that there is no
change in the record ownership of such shares of Class B
Common Stock by virtue of any such transfer, shall not be
permitted hereunder.
(f) In the case of a Class B Holder
which is a corporation and the holder of record and
beneficial owner of the shares of Class B Common Stock
subject to said proposed transfer, "Permitted Transferee"
means the survivor of a merger or consolidation of such
corporation.
(g) In the case of a Class B Holder
which is the estate of a deceased Class B Holder, or
which is the estate of a bankrupt or insolvent Class B
Holder, and provided such deceased, bankrupt or insolvent
Class B Holder, as the case may be, was the record and
beneficial owner of the shares of Class B Common Stock
subject to said proposed transfer, "Permitted Transferee"
means a Permitted Transferee of such deceased, bankrupt
or insolvent Class B Holder as determined pursuant to
clauses (a) or (f) above, as the case may be.
(2) Notwithstanding anything to the
contrary set forth herein, any Class B Holder may pledge
such Holder's shares of Class B Common Stock to a pledgee
pursuant to a bona fide pledge of such shares as
collateral security for indebtedness due to the pledgee,
provided that such shares shall not be transferred to or
registered in the name of the pledgee and shall remain
subject to the provisions of this subdivision (E). In
the event of foreclosure or other similar action by the
pledgee, such pledged shares of Class B Common Stock may
only be transferred to a Permitted Transferee of the
pledgor or converted into shares of Common Stock, as the
pledgee may elect.
(3) For purposes of this subdivision (E):
(a) The relationship of any person
that is derived by or through legal adoption shall be
considered a natural one.
(b) Each joint owner of shares of
Class B Common Stock shall be considered a "Class B
Holder" of such shares.
(c) A minor for whom shares of Class
B Common Stock are held pursuant to a Uniform Gifts to
Minors Act or similar law shall be considered a Class B
Holder of such shares.
(d) Unless otherwise specified, the
term "person" means both natural persons and legal
entities.
(4) Any purported transfer of shares of
Class B Common Stock not permitted hereunder shall result
in the automatic conversion of the transferee's shares of
Class B Common Stock into shares of Common Stock,
effective on the date of such purported transfer. The
Company may, as a condition to the transfer or the
registration of transfer of shares of Class B Common
Stock to a purported Permitted Transferee, require the
furnishing of such affidavits or other proof as it deems
necessary to establish that such transferee is a
Permitted Transferee.
(F) Certificates representing shares of
Class B Common Stock issued as a stock dividend on the
Company's then outstanding Common Stock may be registered
in the same name and manner as the certificates
representing the shares of Common Stock with respect to
which the shares of Class B Common Stock were issued.
(G) (1) For the purposes of this Article
FOURTH, the term "beneficial owner(s)" of any shares of
Class B Common Stock shall mean the person or persons who
possess the power to dispose, or to direct the
disposition, of such shares.
(2) The Company shall note on the
certificates representing the shares of Class B Common
Stock that there are restrictions on transfer and
registration imposed by subdivisions (E) and (F) above.
(H) Except as otherwise provided in
subdivisions (B), (C) and (D) above and except for shares
of Class B Common Stock contemplated or duly reserved for
issuance pursuant to subdivisions (B) and (D) of this
Article FOURTH, the Company shall not issue additional
shares of Class B Common Stock after the date shares of
Class B Common Stock are first issued by the Company.
All shares of Class B Common Stock surrendered for
conversion shall resume the status of authorized but
unissued shares of Class B Common Stock.
(I) The Common Stock and Class B Common
Stock are subject to all the powers, rights, privileges,
preferences and priorities of the Preferred Stock as may
be stated herein and as shall be stated and expressed in
any resolution or resolutions adopted by the Board of
Directors pursuant to authority expressly granted to and
vested in it by the provisions of this Article FOURTH.
C. General
Subject to the provisions of law and the
foregoing provisions of this Certificate of
Incorporation, the Company may issue shares of its
Preferred Stock or Common Stock, from time to time for
such consideration having a value not less than the par
value thereof as may be fixed by the Board of Directors,
which is expressly authorized to fix the same in its
absolute and uncontrolled discretion, subject as
aforesaid. Shares so issued, for which the consideration
has been paid or given to the Company, shall be deemed
fully paid stock and shall not be liable to any further
call or assessments thereon, and the holders of such
shares shall not be liable for any further payments in
respect of such shares.
FIFTH: In furtherance and not in limitation of
the powers conferred by statute, the Board of Directors
is expressly authorized to make, alter or repeal the By-
Laws of the Company.
SIXTH: Elections of Directors need not be by
written ballot unless the By-Laws of the Company shall so
provide.
SEVENTH: The holders of shares of Common
Stock, Class B Common Stock and Series 1 Preferred Stock
entitled to vote such shares together with the holders of
shares of any other series of Preferred Stock who shall
have the right and power to vote with the holders of
Common Stock, Class B Common Stock and Series 1 Preferred
Stock as a single class on the election and removal of
directors, shall have the right and power, all voting as
a single class, to elect a number of directors ("Capital
Stock Directors") equal to three-quarters (3/4) of the
number of directors which shall constitute the entire
Board of Directors (or, if such number is a whole number
and a fraction less than or equal to one-half (1/2), the
number of Capital Stock Directors equal to such whole
number, or if such number is a whole number and a
fraction greater than one-half (1/2), the number of
Capital Stock Directors equal to the next higher whole
number), and (b) to remove, whether with or without
cause, at any time, any of such Capital Stock Directors.
In all elections of Capital Stock Directors, each holder
of shares entitled to vote thereon as aforesaid shall
have the right of cumulative voting and consequently will
be entitled to as many votes as shall equal the number
votes which, except for provisions of cumulative voting,
he would be entitled to cast for the election of Capital
Stock Directors with respect to his shares multiplied by
the number of Capital Stock Directors to be elected, and
he may cast all of such votes for a single Capital Stock
Director or may distribute them among the number to be
voted for, or for any two or more of them, as he may see
fit. Any Capital Stock Director may be removed by the
affirmative vote of the holders of not less than the
number of shares entitled to vote thereon as aforesaid
which, if voted cumulatively, would be sufficient to
elect the entire class of Capital Stock Directors of
which such Capital Stock Director is a part, given at an
annual meeting or a special meeting of the holders of
shares entitled so to vote called and held for that
purpose; and the vacancy in the Board of Directors caused
by such removal may be filled at any such meeting and, if
not so filled, shall be filled by the remaining Capital
Stock Directors.
The holders of shares of Series 1 Preferred
Stock entitled to vote such shares, together with the
holders of shares of any other series of Preferred Stock
who shall have the right and power to vote with the
holders of Series 1 Preferred Stock as a single class on
the election and removal of directors, shall have the
right and power, all voting as a single class, (a) to
elect a number of directors ("Preferred Stock Directors")
equal to one-quarter (1/4) of the number of directors
which shall constitute the entire Board of Directors (or,
if such number is a whole number and a fraction less than
one-half (1/2), the number of Preferred Stock Directors
equal to such whole number, if such number is a whole
number and a fraction greater than or equal to one-half
(1/2), the number of Preferred Stock Directors equal to
the next higher whole number) and (b) to remove, whether
with or without cause, at any time, any of such Preferred
Stock Directors, the holders of not less than a majority
of the outstanding shares entitled to vote thereon as
aforesaid shall be required to elect a Preferred Stock
Director. Any Preferred Stock Director may be removed by
the affirmative vote of the holders of not less than a
majority of the shares entitled to vote thereon
aforesaid, given at an annual meeting or a special
meeting of the holders of such shares called and held for
that purpose; and the vacancy in the Board of Directors
caused by such removal may be filled at any such meeting
and, if not so filled, shall be filled by the remaining
Preferred Stock Directors.
The holder of shares of Series 1 Preferred
Stock entitled to vote such shares shall have the right
to exercise the rights and powers embodied in the
foregoing paragraph on the earlier of (a) a vacancy on
the Board of Directors by reason of resignation, removal
or otherwise, (b) an increase in the number of directors
which constitute the entire Board of Directors or (c) the
1982 annual meeting of stockholders.
If, at any time, there are no longer any
holders of shares of Series 1 Preferred Stock entitled to
vote such shares, and there are no longer any holders of
shares of any other series of Preferred Stock who have
the right and power to vote with the holders of Series 1
Preferred Stock as a single class on the election and
removal of Preferred Stock Directors, then, the term of
office of all Preferred Stock Directors shall terminate,
and no additional Preferred Stock Directors shall be
elected. The vacancy or vacancies so created in the
Board of Directors shall be filled with Capital Stock
Directors as provided in this Article SEVENTH, and from
such time the entire Board of Directors shall be
comprised of Capital Stock Directors.
If the Board of Directors should adopt a
resolution or resolutions authorizing the issuance of
additional series of Preferred Stock and if such
resolution or resolutions should fix the voting power of
such additional series such that the holders of such
additional series would be entitled (a) to vote with the
holders of Common Stock, Class B Common Stock and Series
1 Preferred Stock as a single class in all elections and
removals of Capital Stock Directors in accordance with
the first paragraph of this Article SEVENTH and/or (b) to
vote with the holders of Series 1 Preferred Stock as a
single class in all elections and removals of Preferred
Stock Directors in accordance with the second paragraph
of this Article SEVENTH, then upon the affirmative vote
of the holders of not less than a majority of the
outstanding shares of Series 1 Preferred Stock entitled
to vote such shares, given at an annual meeting or a
special meeting called and held for the purpose of
considering such resolution or resolutions, the holders
of such additional series shall be so entitled; provided,
that if there are no longer any such holders of Series 1
Preferred Stock, the affirmative vote of such holders
shall no longer be required.
Any special meeting contemplated by this
Article SEVENTH shall be called by the Board of
Directors, the Chairman of the Board or the President
upon the written request of the holders of not less than
a majority of the outstanding shares of Common Stock,
Class B Common Stock and Preferred Stock entitled to vote
at such meeting, and at such meeting, the presence, in
person or by proxy, of the holders of not less than a
majority of the outstanding shares entitled to vote at
such meeting shall constitute a quorum.
This Article SEVENTH shall not be altered,
amended or repealed without the affirmative vote of the
holders of not less than a majority of the outstanding
shares of Series 1 Preferred Stock entitled to vote such
shares, given at an annual meeting or a special meeting
called and held for that purpose, and at any such meeting
such holders shall be entitled to vote as a separate
class; provided, that if there are no longer any such
holders, this Article SEVENTH may be altered, amended or
repealed upon the affirmative vote of the holders of not
less than a majority of the outstanding shares of all
classes of stock who are entitled to vote such shares,
all voting as a single class, given at an annual meeting
or a special meeting called and held for that purpose.
EIGHTH: Whenever the vote of stockholders at a
meeting thereof is required or permitted to be taken for
or in connection with any corporate action by any
provision of the General Corporation Law of Delaware, the
meeting and vote of stockholders may be dispensed with if
the holders of stock having in the aggregate not less
than the number of votes required by statute or, if
greater, this Certificate, for the proposed corporate
action shall consent in writing to such corporate action
being taken, provided that prompt notice must be given to
all stockholders of the taking of such corporate action
without a meeting and by less than unanimous written
consent.
NINTH: Whenever the vote of stockholders is
required to be taken by any provision of the General
Corporation Law of Delaware in connection with a merger
or consolidation of the Company or the sale, lease,
exchange or other disposition of all or substantially all
of the assets of the Company, such action shall require
the concurrence of the holders of not less than two-
thirds (2/3rds) of the outstanding stock of the Company
entitled to vote thereon. This paragraph of Article
NINTH may not be amended except upon the vote of the
holders of not less than two-thirds (2/3rds) of the
outstanding stock of the Company entitled to vote upon
such amendment.
In order for stockholders of the Company to
amend the By-Laws for the purpose of changing the number
of directors, any such action shall require the
concurrence of not less than four-fifths (4/5ths) of the
outstanding stock of the Company entitled to vote
thereon. This paragraph of Article NINTH may not be
amended except upon the vote of the holders of not less
than four-fifths (4/5ths) of the outstanding stock of the
Company entitled to vote upon such amendment.
TENTH: Whenever the vote of stockholders is
required to be taken by any provision of the General
Corporation Law of Delaware in conjunction with a merger
or consolidation of the Company or the sale, lease,
exchange or other disposition of all or substantially all
of the assets of the Company, the holders of shares of
Series 1 Preferred Stock entitled to vote such shares,
together with the holders of shares of any other series
of Preferred Stock who shall have the right and power to
vote with the holders of Series 1 Preferred Stock as a
single class in connection with any such action, shall
have the right and power to vote as a single class and
the affirmative vote of the holders of not less than a
majority of the outstanding shares entitled to vote
thereon as aforesaid shall be required to approve any
such action.
If the Board of Directors should adopt a
resolution or resolutions authorizing the issuance of
additional series of Preferred Stock and if such
resolution or resolutions should fix the voting power of
such additional series such that the holders of such
additional series would be entitled to vote with the
holders of Series 1 Preferred Stock as a single class
whenever the vote of the stockholders is required to be
taken by any provision of the General Corporation Law of
Delaware in connection with a merger or consolidation of
the Company or the sale, lease, exchange or other
disposition of all or substantially all of the assets of
the Company, then upon the affirmative vote of the
holders of not less than a majority of the outstanding
shares of Series 1 Preferred Stock entitled to vote such
shares, given at an annual meeting or a special meeting
called and held for the purpose of considering such
resolution or resolutions, the holders of such additional
series shall be so entitled; provided, that if there are
no longer any such holders of Series 1 Preferred Stock,
the affirmative vote of such holders shall no longer be
required.
Any special meeting contemplated by this
Article TENTH shall, upon the written request of the
holders of not less than a majority of the outstanding
shares of Preferred Stock entitled to vote at such
meeting, be called by the Board of Directors, the
Chairman of the Board or the President and at such
meeting, the presence, in person or by proxy, of the
holders of not less than a majority of the outstanding
shares of Preferred Stock entitled to vote at such
meeting shall constitute a quorum.
This Article TENTH shall not be altered,
amended or repealed without the affirmative vote of the
holders of not less than a majority of the outstanding
shares of Series 1 Preferred Stock entitled to vote such
shares, given at an annual meeting or a special meeting
called and held for that purpose, and at any such meeting
such holders shall be entitled to vote as a separate
class; provided, that if there are no longer any such
holders, this Article TENTH may be altered, amended or
repealed upon the affirmative vote of the holders of not
less than a majority of the outstanding shares of all
classes of stock who are entitled to vote such shares,
all voting as a single class, given at an annual meeting
or a special meeting called and held for that purpose.
ELEVENTH: The Company shall to the fullest
extent permitted by the General Corporation Law of the
State of Delaware, as amended from time to time,
indemnify the members of its Board of Directors,
indemnify the officers of the Company and any and all
persons whom it shall have power to indemnify from and
against any and all expenses, liabilities or other
matters.
"No director of the Company shall be
personally liable to the Company or its
stockholders for monetary damages for
breach of fiduciary duty by such
director as a director; provided,
however, that this Article Eleventh
shall not eliminate or limit the
liability of a director to the extent
provided applicable law (i) for any
breach of the director's duty of loyalty
to the Company or its stockholders, (ii)
for acts or omissions not in good faith
or which involve intentional misconduct
or a knowing violation of law, (iii)
under Section 174 of the General
Corporation Law of Delaware or (iv) for
any transaction from which the director
derived an improper personal benefit.
No amendment to or repeal of this
Article Eleventh shall apply to, or have
any effect on, the liability or alleged
liability of any director of the Company
for or with respect to any acts or
omissions of such director occurring
prior to such amendment or repeal."
TWELFTH: Shares of stock of the Company may be
issued for such consideration, having a value not less
than the par value thereof, as is determined from time to
time by the Board of Directors of the Company or by a vote
of the majority of the outstanding stock entitled to vote
thereon.
IN WITNESS WHEREOF, the said Grey Advertising
Inc. has made under its corporate seal and the hand of
William P. Garvey, an Executive Vice President, and the
foregoing certificate, and the said Executive Vice
President, and the hand of Steven G. Felsher, its
Secretary, the foregoing certificate, and the said
Executive Vice President and the said Assistant Secretary
have hereunto severally set their hands and caused the
corporate seal of the corporation to be hereunto applied
this 11th day of April, 1994.
GREY ADVERTISING INC.
By:
William P. Garvey
Executive Vice President
Attest:
Steven G. Felsher
Secretary
STOCKHOLDER EXCHANGE AGREEMENT
STOCKHOLDER EXCHANGE AGREEMENT, dated as of April
7, 1994, by and between Grey Advertising Inc., a Delaware
corporation (the "Company"), and Mr. Edward H. Meyer,
Chairman of the Board, President and Chief Executive
Officer of the Company ("Meyer").
WHEREAS, Meyer is the owner of 20,000 shares of
Series 1 Preferred Stock, par value $1.00 per share (the
"Series 1 Shares"), 5,000 shares of Series 2 Preferred
Stock, par value $1.00 per share (the "Series 2 Shares"),
and 5,000 shares of Series 3 Preferred Stock, par value
$1.00 per share (the "Series 3 Shares"), of the Company,
(collectively, the "Outstanding Preferred Shares");
WHEREAS, Meyer and the Company desire to exchange
(i) the Series 1 Shares for an equal number of shares of
newly created Series I Preferred Stock, par value $1.00 per
share (the "Series I Shares"), of the Company, (ii) the
Series 2 Shares for an equal number of shares of newly
created Series II Preferred Stock, par value $1.00 per
share (the "Series II Shares"), of the Company, and (iii)
the Series 3 Shares for an equal number of shares of newly
created Series III Preferred Stock, par value $1.00 per
share (the "Series III Shares"), of the Company (the Series
I Shares, Series II Shares and Series III Shares are
referred to collectively herein as the "New Preferred
Shares").
NOW, THEREFORE, in order to implement the
foregoing and in consideration of the mutual agreements
contained herein, the parties agree as follows:
I. AUTHORIZATION AND EXCHANGE
OF PREFERRED STOCK
1.1 Authorization of Preferred Stock
The Company has authorized the issuance of (i)
the Series I Shares, having the rights and preferences set
forth in the Certificate of Designations attached as
Exhibit A hereto, (ii) the Series II Shares, having the
rights and preferences set forth in the Certificate of
Designations attached as Exhibit B hereto and (iii) the
Series III Shares, having the rights and preferences set
forth in the Certificate of Designations attached as
Exhibit C hereto.
1.2 Exchange of Preferred Stock. Subject to the
terms and conditions of this Agreement, Meyer hereby agrees
to acquire through the exchange of the Outstanding
Preferred Shares, and the Company agrees to issue to Meyer
in exchange for such shares, the New Preferred Shares (the
"Exchange").
1.3 Closing. Subject to the terms and condi-
tions of this Agreement, the closing (the "Closing") of the
transactions contemplated hereby shall take place at the
offices of Skadden, Arps, Slate, Meagher & Flom, 919 Third
Avenue, New York, New York 10022, or at such other place as
the parties hereto shall mutually agree, on the date on
which the Certificates of Designations referred to in
Section 1.1 hereof are filed with the Secretary of State of
the State of Delaware (the "Closing Date"), which date
shall occur upon or as soon as practicable after the
execution hereof. At the Closing, Meyer will deliver to
the Company stock certificates representing the Outstanding
Preferred Shares duly endorsed and in form for transfer to
the Company and accompanied by such supporting documents as
may be necessary to transfer title to the Company, and the
Company will issue and deliver to Meyer duly executed stock
certificates representing the New Preferred Shares, each
registered in the name of Meyer. The Company will pay any
applicable New York State transfer tax payable as a result
of the Exchange.
II. RESTRICTION ON TRANSFER OF PREFERRED STOCK
2.1 Transfer of the Shares. Meyer may not
transfer any or all of his New Preferred Shares, or an
interest therein, except as permitted in the applicable
Certificate of Designations and any such transfer shall be
void unless (i) Meyer provides prior written notification
to the Company of his intention to transfer any or all of
the New Preferred Shares or an interest in any or all of
the New Preferred Shares, and (ii) Meyer receives written
notification from the Company that, in the opinion of
counsel to the Company, no registration, or perfection of
an exemption from registration, under, the Securities Act
of 1933, as amended ("Securities Act"), is required with
respect to such transfer.
2.2 Certificates. Each of the certificates
representing the New Preferred Shares shall bear a printed
or typewritten legend in substantially the following form,
and/or such other form of legend relating to the Securities
Act or the transfer restrictions in the applicable
Certificate of Designation for the New Preferred Shares as
may be deemed appropriate by the Company's counsel:
"The transfer of this certificate and
the shares of [Series I] [Series II] [Series
III] Preferred Stock represented hereby is
restricted under, and is subject to the
terms and conditions contained in, the
Certificate of Designations of [Series I]
[Series II] [Series III] Preferred Stock of
the Company, dated April 7, 1994, (the
"Certificate of Designations") and a
Stockholder Exchange Agreement, dated as of
April 7, 1994, between the original
registered owner and the Company (the
"Exchange Agreement"). In particular, this
certificate and the shares of [Series I]
[Series II] [Series III] Preferred Stock
represented hereby may only be transferred
to a corporation all the voting stock of
which is wholly owned by the original
registered owner, or, in the event of the
death of the original registered owner, the
estate of such registered owner, any
executor, administrator, legal
representative or trustee thereof and any
heir, distributee, devisee or legatee
thereunder. Such shares may not be
transferred without an effective
registration statement under the Securities
Act of 1933, as amended, or an opinion of
counsel to the Company that registration is
not required."
"This certificate and the shares of
[Series I] [Series II] [Series III]
Preferred Stock represented hereby are, upon
the happening of certain events set forth in
the Certificate of Designations, subject to
mandatory redemption by the Company. In
addition, upon the happening of certain
events set forth in such Certificate of
Designations, the registered owner shall no
longer be entitled to exercise certain
voting rights which such owner would
otherwise be entitled to exercise by virtue
of his ownership of shares of [Series I]
[Series II] [Series III] Preferred Stock."
"Copies of the Certificate of
Designations and the Exchange Agreement are
on file and may be inspected at the office
of the Company at 777 Third Avenue, New
York, New York 10017."
Any certificate issued without consideration therefor in
connection with a stock split, stock dividend,
recapitalization, combination or exchange of shares,
merger, consolidation or other similar reorganization,
distribution or transaction of or by the Company,
subsequent to the date hereof, shall, if deemed
appropriate by the Company's counsel, bear the same
legend as the certificate with respect to which it was
issued.
III. REPRESENTATIONS AND WARRANTIES OF MEYER
Meyer represents and warrants to the Company as
follows:
3.1 Authorization. Meyer has all requisite
power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby.
3.2 Authorization of Agreement. This
Agreement has been duly executed and delivered by Meyer
and constitutes a valid and binding obligation of Meyer
enforceable against him in accordance with its terms.
3.3 Investment Intention/Information. Meyer
represents and warrants to the Company that he
understands and agrees that the Shares are not being
registered under the Securities Act, that the Shares are
being issued and sold by reason of an exemption pursuant
to the Securities Act as a transaction by an issuer not
involving a public offering, and that Meyer has received
from the Company, or otherwise obtained, information
concerning the Company, sufficient for the purpose of
forming an independent judgment concerning the purchase
of the Shares for investment, and hereby represents that
the Shares are being acquired for the account of Meyer
for investment and not with a view to the sale or
distribution thereof, and it is understood that the
reliance of the Company upon such exemption is predicated
upon such representation. Meyer further represents and
warrants to the Company that he understands and agrees
that the Company is under no obligation to register the
Shares under the Securities Act or to insure the
availability of an exemption from registration under the
Securities Act so as to permit the resale of the Shares.
Meyer has been granted the opportunity to ask questions
of, and receive answers from, representatives of the
Company concerning the terms and conditions of the
Outstanding Preferred Shares and the New Preferred Shares
and any additional information about the Company and has
reviewed other information about the Company, including
proxy statements, annual reports and other public filings
and internal financial reports and, as he has deemed
necessary, other reports about the Company, Meyer's
knowledge and experience in financial and business
matters is such that he is capable of evaluating the
merits and risks of an investment in the New Preferred
Shares and he can bear the economic risk of holding the
New Preferred Shares for an indefinite period of time and
in making the decision to exchange the Outstanding
Preferred Shares for the New Preferred Shares, Meyer has
relied upon the independent investigations made by him
and, to the extent believed by him to be appropriate, his
representatives, including his own legal, tax and other
advisors.
3.4 Disposition of Shares; Rule 144. Meyer
represents and warrants that he has read, understands and
agrees to the limitations on the transfer of shares
contained in the Certificates of Designations and this
Exchange Agreement. Meyer further represents and
warrants that he has been informed of Rule 144 under the
Securities Act, which provides that persons selling
securities in conformity with Rule 144, if applicable,
shall not be deemed to be engaged in a distribution of
securities, and that such securities may be sold without
registration under the Securities Act.
3.5 Not an Employment Agreement. Meyer
recognizes that this Agreement does not constitute an
employment agreement, or an agreement by the Company to
keep him in its employ for any period of time, or to
provide him with rights of any nature except as expressly
provided herein.
3.6 Transfer of Outstanding Preferred Shares.
Meyer has good and valid title to the Outstanding
Preferred Shares, free and clear of all pledges, security
interests, liens, encumbrances, claims, charges, options
or restrictions of whatever nature, except as otherwise
provided in the Restated Certificate of Incorporation of
the Company. At the Closing, good and valid title to the
Outstanding Preferred Shares will pass to the Company,
free and clear of any pledges, security interests, liens,
encumbrances, claims, charges, options or restrictions of
whatever nature, except as otherwise provided in the
Restated Certificate of Incorporation of the Company.
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Meyer as
follows:
4.1 Authorization. The Company has all
requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby.
4.2 Binding Nature of Agreement. This
Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and
binding obligation of the Company enforceable against it
in accordance with its terms.
4.3 Issuance of New Preferred Shares. The New
Preferred Shares, when issued and delivered in exchange
for the Outstanding Preferred Shares in accordance with
the terms hereof, will be duly authorized, validly
issued, fully paid and nonassessable, and will have the
voting power and the preferences and relative,
participating, optional, dividend and other special
rights, and the qualifications, limitations and
restrictions, set forth in the applicable Certificate of
Designations, and, except as set forth in the applicable
Certificate of Designations, will be free and clear of
any liabilities, obligations, claims, liens, options,
proxies, charges and encumbrances of any kind whatsoever.
4.4 Financial Condition. The Company makes no
representation or warranty with respect to its business
or financial condition or prospects. The Company
undertakes to furnish to Meyer information concerning the
business, financial affairs and condition of the Company
on a regular basis.
4.5 Resale of the Shares. The Company shall
provide Meyer with any information necessary to enable
Meyer to sell the shares under Rule 144 of the Securities
Act, if applicable, subject to the restrictions on
transfer set forth in the Restated Certificate of
Incorporation of the Company.
4.6 Directors. Following the redemption of
the Series I Preferred Stock, the Company shall use its
best efforts to effect the appointment to its Board of
Directors of person(s) designated by Meyer (or if he is
mentally disabled or no longer alive, a representative of
his immediate family members and/or his estate) up to
that number which represents a percentage (rounded down
to the nearest whole number) of the total number of
Directors equal to the percentage reflecting the number
of shares of capital stock of the Company beneficially
owned in the aggregate by Meyer and/or his immediate
family members and/or his estate to the total number of
outstanding shares of capital stock of the Company,
provided, however, that so long as Meyer and/or his
immediate family members and/or his estate own in the
aggregate over five percent of the total number of
outstanding shares of capital stock of the Company, Meyer
and/or his immediate family members and/or his estate
shall be entitled to so designate at least one member of
the Board.
V. MISCELLANEOUS
5.1 Meyer's Put Option. Except as is
otherwise provided in this Section 5.1, Meyer shall have
the Option (the "Put Option") to require the Company to
repurchase as part of the same transaction in which the
Company redeems any shares of redeemable preferred stock
pursuant to the Certificates of Designations referred to
in Section 1.1 hereof, that number of shares of common
stock, par value $1 per share ("Common Stock"), that
number of Series I Shares, that number of the Series II
Shares, and that number of Series III Shares, of the
Company which, when viewed as an integrated transaction
with each such redemption of shares of redeemable
preferred stock is, in the opinion of counsel to Meyer,
necessary to assure treatment of each such redemption of
shares of redeemable preferred stock as a payment in
exchange for such shares of redeemable preferred stock
within the meaning of Section 302(a) of the Internal
Revenue Code of 1986, as amended. The purchase price per
share ("Purchase Price") for shares of Common Stock,
Series I Shares, Series II Shares and Series III Shares
which the Company shall be obligated to repurchase
pursuant to this Section 5.1 shall be, respectively, (i)
the average of the closing bid and asked prices for a
share of Common Stock on the business day next preceding
the Redemption Date or Subsequent Redemption Date (both
as defined in the Certificates of Designations), as the
case may be, on which the shares of redeemable preferred
stock are to be redeemed, as such prices are reported by
the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), if the shares of Common
Stock are quoted thereon, or, if such shares of Common
Stock are not quoted on NASDAQ, then, as reported by the
National Quotation Bureau, Inc., (ii) the Redemption
Price for the Series I Shares as determined in accordance
with the applicable Certificate of Designations, (iii)
the Redemption Price for the Series II Shares as
determined in accordance with the applicable Certificate
of Designations, and (iv) the Redemption Price for the
Series III Shares as determined in accordance with the
applicable Certificate of Designations.
If Meyer shall elect to exercise the Put
Option, he shall, no more than ten nor less than five
days before a Redemption Date or Subsequent Redemption
Date, as the case may be, provide the Company with
written notice specifying the number of shares of Common
Stock, the number of Series I Shares, the number of
Series II Shares and the number of Series III Shares
which the Company is to repurchase.
Meyer shall only be entitled to exercise the
Put Option to the extent that there shall be, on a
Redemption Date or Subsequent Redemption Date, sufficient
surplus, profits or other funds of the Company available
for the payment of the Purchase Price under the General
Corporation Law of the State of Delaware, and only to the
extent that the payment of the Purchase Price does not
violate any term of any agreement to which the Company is
a party or by which it is bound.
5.2 Original Discount. Meyer and the Company
agree that the "Original Discount" applicable to the
Series 1 Shares, Series 2 Shares and Series 3 Shares
shall be applicable to the Series I Shares, Series II
Shares and Series III Shares, respectively.
5.3 Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the parties to
this Agreement, and their respective successors and
permitted assigns. Nothing in this Agreement, express or
implied, is intended or shall be construed to give any
person other than the parties to this Agreement or their
respective successors or permitted assigns any legal or
equitable right, remedy or claim under or in respect of
any agreement or any provisions contained herein.
5.4 Governing Law. This Agreement shall be
governed by, and construed and enforced in accordance
with, the laws of the State of Delaware, without regard
to its conflicts of law principles.
5.5 Notices. All notices and other
communications hereunder shall be deemed to have been
duly given if delivered personally or sent by registered
or certified mail (return receipt requested, postage
prepaid), to the parties at the following addresses (or
at such other address for a party as shall be specified
by like notice, provided that notices of a change of
address shall be effective only upon receipt thereof).
(a) If to the Company, to it at:
Grey Advertising Inc.
777 Third Avenue
New York, New York 10017
Attn: Corporate Secretary
with a copy to:
Skadden, Arps, Slate, Meagher &
Flom
919 Third Avenue
New York, New York 10022
Attn: Mark N. Kaplan, Esq.
(b) If to Meyer, to him at:
Mr. Edward H. Meyer
580 Park Avenue
New York, New York 10021
with a copy to:
Schulte Roth & Zabel
900 Third Avenue
New York, New York 10022
Attn: Stephen J. Schulte, Esq.
5.6 Waiver and Consent. The waiver by any
party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver
of any preceding or succeeding breach and no failure by
any party to exercise any right or privilege hereunder
shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such
party's rights to exercise the same at any subsequent
time or times.
5.7 Integration. This Agreement and the
Exhibits hereto contain the entire understanding of the
parties with respect to the subject matter hereof and
supersede all prior agreements and understandings,
written or oral, of the parties with respect to its
subject matter.
5.8 No Assignment. Neither this Agreement nor
the rights or obligations of the parties hereunder may be
assigned by either party without the prior written
consent of the other party, except to the extent such
assignment is in conjunction with a transfer of New
Preferred Shares permitted under the terms of the
applicable Certificate of Designations.
5.9 Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall
be deemed to be an original and all of which together
shall be deemed to constitute one and the same agreement.
5.10 Promissory Notes. Section 1 of each of
the Promissory Notes delivered by Meyer to the Company,
dated May 20, 1981, May 27, 1982, and June 13, 1983,
respectively, is hereby revised to read as follows:
"Subject to the provisions of Sections
2 and 3 hereof, the principal of this
Promissory Note shall become due and
payable on April 7, 2004."
IN WITNESS WHEREOF, the Company and Meyer have
executed this Agreement as of the date first written
above.
GREY ADVERTISING INC.
By: /s/ Stephen G. Felsher
Steven G. Felsher
Executive Vice President
/s/ Edward H. Meyer
Mr. Edward H. Meyer
