EXHIBIT 3.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
GREY GLOBAL GROUP INC.
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Pursuant to Section 245 of the General
Corporation Law of the State of Delaware
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INTRODUCTORY. The present name of the corporation is "Grey
Global Group 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 in its entirety, as follows:
FIRST: The name of the corporation (hereinafter called the
"Company") is GREY GLOBAL GROUP 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 sixty million five
hundred thousand ("60,500,000"), consisting of fifty million ("50,000,000")
shares of Common Stock, par value $.01 per share ("Common Stock"), and ten
million ("10,000,000") shares of Limited Duration Class B Common Stock, par
value $.01 per share ("Class B Common Stock"), and five hundred thousand
(500,000) shares of Preferred Stock, par value $.01 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. In
addition, the holders of Series I Preferred Stock shall not be entitled to
participate in any dividend on the Common Equity to the extent payable in
additional shares of Common Equity. 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 Equity, 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) 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) reduction in the Original Holder's rate of
compensation not agreed to in writing by him; or
(5) 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) 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) 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) 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 (which number shall be equitably and automatically adjusted,
following the payment of any dividend with respect to the Common Equity in
additional shares of Common Equity, in a manner which corresponds in a
direct manner to the relative increase in the number of outstanding shares
of Common Equity as a result of the stock dividend) 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 (which number shall be equitably and
automatically adjusted, following the payment of any dividend with respect
to the Common Equity in additional shares of Common Equity, in a manner
which corresponds in a direct manner to the relative increase in the number
of outstanding shares of Common Equity as a result of the stock dividend)
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. The
foregoing notwithstanding, the holders of Series I Preferred Stock shall
not be entitled to participate in any dividend on the Common Equity to the
extent payable in additional shares of Common Equity.
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 (which number shall be
equitably and automatically adjusted, following the payment of any dividend
with respect to the Common Equity in additional shares of Common Equity, in
a manner which corresponds (but in an inverse manner) to the relative
increase in the number of outstanding shares of Common Equity as a result
of the stock dividend) of the Liquidation Preference and for each share of
Class B Common Stock, an amount equal to one-half (which number shall be
equitably and automatically adjusted, following the payment of any dividend
with respect to the Common Equity in additional shares of Common Equity, in
a manner which corresponds (but in an inverse manner) to the relative
increase in the number of outstanding shares of Common Equity as a result
of the stock dividend) the 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 (which number shall
be equitably and automatically adjusted, following the payment of any
dividend with respect to the Common Equity in additional shares of Common
Equity, in a manner which corresponds in a direct manner to the relative
increase in the number of outstanding shares of Common Equity as a result
of the stock dividend) 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. 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 (which corresponds to the total number of
votes entitled to be cast by a holder of one share of Common Stock and one
share of Class B Common Stock and which number shall be automatically
increased should the Company pay a dividend on its Common Equity in
additional shares of Common Equity by the number of additional votes which
such a holder of one share of Common Stock and one share of Class B Common
Stock would be entitled to cast as a result of the stock dividend or any
future stock dividends) 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 (which corresponds to the
total number of votes entitled to be cast by a holder of two shares of
Common Stock and which number shall be automatically increased should the
Company pay a dividend on its Common Equity in additional shares of Common
Equity by the number of additional votes which such a holder of two shares
of Common Stock would be entitled to cast as a result of the stock dividend
or any future stock dividends) 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 unenforceability 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 (which number shall be equitably and automatically
adjusted, following the payment of any dividend with respect to the Common
Equity in additional shares of Common Equity, in a manner which corresponds
in a direct manner to the relative increase in the number of outstanding
shares of Common Equity as a result of the stock dividend) 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 (which number shall be equitably and
automatically adjusted, following the payment of any dividend with respect
to the Common Equity in additional shares of Common Equity, in a manner
which corresponds in a direct manner to the relative increase in the number
of outstanding shares of Common Equity as a result of the stock dividend)
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 (which number shall be
equitably and automatically adjusted following the payment of any dividend
with respect to the Common Equity in additional shares of Common Equity, in
a manner which corresponds (but in an inverse manner) to the relative
increase in the number of outstanding shares of Common Equity as a result
of the stock dividend) 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 (which number shall be equitably and automatically
adjusted following the payment of any dividend with respect to the Common
Equity in additional shares of Common Equity, in a manner which corresponds
in a direct manner to the relative increase in the number of outstanding
shares of Common Equity as a result of the stock dividend) 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 (which corresponds to the total number of
votes entitled to be cast by a holder of one share of Common Stock and one
share of Class B Common Stock and which number shall be automatically
increased should the Company pay a dividend on its Common Equity in
additional shares of Common Equity by the number of additional votes which
such a holder of one share of Common Stock and one share of Class B Common
Stock would be entitled to cast as a result of the stock dividend or any
future stock dividends) 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 (which corresponds to
the total number of votes entitled to be cast by a holder of two shares of
Common Stock and which number shall be automatically increased should the
Company pay a dividend on its Common Equity in additional shares of Common
Equity by the number of additional votes which such a holder of two shares
of Common Stock would be entitled to cast as a result of the stock dividend
or any future stock dividends) 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 unenforceability 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 (which number shall be equitably and automatically
adjusted, following the payment of any dividend with respect to the Common
Equity in additional shares of Common Equity, in a manner which corresponds
in a direct manner to the relative increase in the number of outstanding
shares of Common Equity as a result of the stock dividend) 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 four (which number shall be adjusted,
following the payment of any dividend with respect to the Common Equity in
additional shares of Common Equity, in a manner which corresponds in a
direct manner to the relative increase in the number of outstanding shares
of Common Equity as a result of the stock dividend) 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 (which number shall be
equitably and automatically adjusted, following the payment of any dividend
with respect to the Common Equity in additional shares of Common Equity, in
a manner which corresponds (but in an inverse manner) to the relative
increase in the number of outstanding shares of Common Equity as a result
of the stock dividend) 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 (which number shall be
equitably and automatically adjusted, following the payment of any dividend
with respect to the Common Equity in additional shares of Common Equity, in
a manner which corresponds in a direct manner to the relative increase in
the number of outstanding shares of Common Equity as a result of the stock
dividend) 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 (which corresponds to the total number of
votes entitled to be cast by a holder of one share of Common Stock and one
share of Class B Common Stock and which number shall be automatically
increased should the Company pay a dividend on its Common Equity in
additional shares of Common Equity by the number of additional votes which
such a holder of one share of Common Stock and one share of Class B Common
Stock would be entitled to cast as a result of the stock dividend or any
future stock dividends) 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 (which corresponds to
the total number of votes entitled to be cast by a holder of two shares of
Common Stock and which number shall be automatically increased should the
Company pay a dividend on its Common Equity in additional shares of Common
Equity by the number of additional votes which such a holder of two shares
of Common Stock would be entitled to cast as a result of the stock dividend
or any future stock dividends) 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 unenforceability 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, Grey Global Group Inc. has caused this
Restated Certificate of Incorporation to be duly executed in its name, this
13th day of July, 2000.
GREY GLOBAL GROUP INC.
By: /s/ Steven G. Felsher
----------------------------
Name: Steven G. Felsher
Title: Executive Vice President
