<PAGE> 1
As filed with the Securities and Exchange Commission on August 5, 1997
Registration No. ________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------
THE LAMSON & SESSIONS CO.
(Exact Name of Registrant as Specified in Its Charter)
Ohio 34-0349210
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
25701 Science Park Drive, Cleveland, Ohio 44122-7313
(Address of Principal Executive Offices Including Zip Code)
THE LAMSON & SESSIONS CO.
1988 INCENTIVE EQUITY PERFORMANCE PLAN
(AS AMENDED AS OF APRIL 26, 1996)
(Full Title of the Plan)
James J. Abel
Executive Vice President, Secretary,
Treasurer and Chief Financial Officer
25701 Science Park Drive
Cleveland, Ohio 44122-7313
(Name and Address of Agent For Service)
216/464-3400
(Telephone Number, Including Area Code, of Agent For Service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================================
Title of Proposed Maxi- Proposed Maxi- Amount of
Securities to Amount to be mum Offering mum Aggregate Registration
be Registered Registered(1) Price Per Share(2) Offering Price(2) Fee
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares
without par value 650,000 $ 8.000 $5,200,000 $1,575.76
============================================================================================================================
</TABLE>
(1) Pursuant to Rule 416 of the Securities Act of 1933 (the "Securities
Act"), this Registration Statement also covers such additional shares
of Common Shares without par value as may become issuable pursuant to
the anti-dilution provisions of The Lamson & Sessions Co. 1988
Incentive Equity Performance Plan (as Amended as of April 26, 1996)
(the "Plan").
(2) Estimated solely for calculating the amount of the registration fee,
pursuant to Rule 457(c) and (h) of the General Rules and Regulations
under the Securities Act, on the basis of the average of the high and
low sale prices of such securities on the New York Stock Exchange on
July 31, 1997 within five business days prior to filing.
Exhibit Index Appears on Page 5
<PAGE> 2
Part II
Pursuant to General Instruction E to Form S-8, the contents of
Registration Statement No. 33-28993 on Form S-8 as filed by The Lamson
& Sessions Co. (the "Registrant") with the Securities and Exchange Commission on
June 1, 1989, are incorporated herein by reference.
Item 8. Exhibits
The following Exhibits are being filed as part of this Registration
Statement:
4(a) Amended Articles of Incorporation of the Registrant.
4(b) Amended Code of Regulations of the Registrant (incorporated by
reference to Exhibit 3(b) to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994).
4(c) 1988 Incentive Equity Performance Plan (as Amended as of April
26, 1996).
4(d) Rights Agreement amended and restated as of February 14, 1990,
by and between the Registrant and National City Bank
(incorporated by reference to Exhibit 4(g) of the Registrant's
Annual Report on Form 10-K for the year ended December 30,
1995).
5 Opinion of Counsel.
23(a) Consent of Independent Auditors, Ernst & Young LLP.
23(b) Consent of Counsel (included in Exhibit 5).
24 Power of Attorney.
Page 2 of 5 Pages
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cleveland, State of Ohio, on August 5, 1997.
THE LAMSON & SESSIONS CO.
By: /s/ James J. Abel
---------------------------
James J. Abel
Executive Vice President, Secretary, Treasurer and
Chief Financial Officer
Page 3 of 5 Pages
<PAGE> 4
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Chairman of the Board, President August 5, 1997
- ------------------------------------------ and Chief Executive Officer
John B. Schulze (Principal Executive Officer);
Director
/s/ James J. Abel Executive Vice President, Secretary, August 5, 1997
- ------------------------------------------ Treasurer and Chief Financial
James J. Abel Officer;
(Principal Financial Officer)
/s/ Timothy A. Hibbard Vice President and Controller August 5, 1997
- ------------------------------------------
Timothy A. Hibbard
Director August 5, 1997
- ------------------------------------------
James T. Bartlett
* Director August 5, 1997
- ------------------------------------------
Francis H. Beam, Jr.
* Director August 5, 1997
- ------------------------------------------
Leigh Carter
* Director August 5, 1997
- ------------------------------------------
Martin J. Cleary
* Director August 5, 1997
- ------------------------------------------
William H. Coquillette
* Director August 5, 1997
- ------------------------------------------
John C. Dannemiller
* Director August 5, 1997
- ------------------------------------------
George R. Hill
* Director August 5, 1997
- ------------------------------------------
A. Malachi Mixon, III
* Director August 5, 1997
- ------------------------------------------
John C. Morley
* Director August 5, 1997
- ------------------------------------------
D. Van Skilling
</TABLE>
* James J. Abel, the undersigned attorney-in-fact, by signing his name
hereto, does hereby sign and execute this Registration Statement on behalf of
the above officers and directors (constituting a majority of the directors)
pursuant to a power of attorney filed with the Securities and Exchange
Commission as Exhibit 24 to this Registration Statement.
August 5, 1997 By: /s/ James J. Abel
------------------------------
James J. Abel, Attorney-in-Fact
Page 4 of 5 Pages
<PAGE> 5
EXHIBIT INDEX
-------------
The following Exhibits are being filed as part of this Registration
Statement:
4(a) Amended Articles of Incorporation of the Registrant.
4(b) Amended Code of Regulations of the Registrant (incorporated by
reference to Exhibit 3(b) to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994).
4(c) 1988 Incentive Equity Performance Plan (as Amended as of April
26, 1996).
4(d) Rights Agreement amended and restated as of February 14, 1990,
by and between the Registrant and National City Bank
(incorporated by reference to Exhibit 4(g) of the Registrant's
Annual Report on Form 10-K for the year ended December 30,
1995).
5 Opinion of Counsel.
23(a) Consent of Independent Auditors, Ernst & Young LLP.
23(b) Consent of Counsel (included in Exhibit 5).
24 Power of Attorney.
Page 5 of 5 Pages
<PAGE> 1
Exhibit 4(a)
AMENDED ARTICLES OF INCORPORATION
THE LAMSON & SESSIONS CO.
AS AMENDED AUGUST 22, 1988
FILED WITH SECRETARY OF STATE OF OHIO
ON SEPTEMBER 20, 1988
<PAGE> 2
AMENDED ARTICLES OF INCORPORATION
OF
THE LAMSON & SESSIONS CO.
CORPORATION CHARTER NO. 2235
ORGANIZED IN STATE OF OHIO, NOVEMBER 7, 1883
ARTICLE I. The name of the corporation is THE LAMSON & SESSIONS CO.
ARTICLE II. The place in the State of Ohio where the corporation's
principal office is located is the City of Cleveland, Cuyahoga County.
ARTICLE III. The purpose or purposes for which the corporation is formed
are:
(a) To manufacture, own, use, buy, sell, develop, lease,
distribute, market, install, repair and generally deal in, at wholesale
or retail, metal and non-metal fasteners, chaplets, bolts, nuts,
clamps, cap screws, tapping screws, cotter pins, pipe plugs, lock nuts,
aircraft and aerospace bolts, special aircraft and aerospace fasteners,
and other threaded products and hardware of all kinds and descriptions
and for every purpose, and concrete block-making and other machinery of
all kinds and descriptions and for every purpose; and to do any and all
acts and transact any and all business which shall or may be or become
incidental to or arise out of or be connected with such business, or
any part thereof.
(b) To engage generally in the business of the design,
manufacture, fabrication, assembly, finishing, processing,
distribution, sale, and otherwise to deal in aluminum, steel, brass,
plastic, and non-metallic products such as, but not limited to, name
plates, labels, seals, escutcheons and decorative metal trim, which are
printed, stamped, color-filled or screened, lithographed,
lithographed-embossed, and/or etched; and to do any and all acts and
transact any and all business which shall or may be or become
incidental to or arise out of or be connected with such business, or
any part thereof.
<PAGE> 3
(c) To engage in any mercantile, manufacturing or trading
business of any kind or character whatsoever, and to do all things
incidental to any such business.
(d) To purchase, acquire, subscribe for, own, hold, use, manage,
develop, improve, dispose of, lease, mortgage, pledge, exchange, sell
and otherwise deal in real and personal property of all kinds, wherever
situated, and any interest or right therein, including shares of stock,
bonds, debentures, notes, securities, evidences of indebtedness,
contracts and obligations of any corporation, association, partnership,
firm or individual, domestic or foreign, either for its own account
or for the account of others.
(e) To acquire, in any manner by purchase or otherwise, apply
for, or own, hold, register, use, sell, assign, lease, grant licenses
in respect of, mortgage, pledge or otherwise dispose of, letters patent
of the United States or any foreign country, patent rights, licenses,
concessions and privileges, inventions, improvements and processes,
copyrights, trade names, trademarks, and other trade symbols, formulas,
and secret processes relating to or useful in connection with any
business which the corporation carries on, acquires or has any
interest in.
(f) To buy, sell, acquire, lease, exchange, own or operate the
business, goodwill, rights, assets and other property, in whole or in
part, and/or to undertake or assume the obligations and liabilities, in
whole or in part, of any person, partnership, corporation, firm,
association, syndicate, entity, or governmental or public authority,
domestic or foreign, and to pay for the same in cash or in the stock,
notes, bonds, or debentures of this or any other corporation, or in any
other manner; and to guarantee the performance of and to liquidate and
pay the obligations and liabilities, and participate in any way in the
affairs of any such person, partnership, corporation, firm,
association, syndicate, entity, or governmental or public authority; to
operate or conduct in any lawful manner the whole or any part of any
business so acquired and to exercise all of the powers necessary or
convenient in connection with the conduct and management of said
business.
(g) To borrow or raise moneys for any of the purposes of the
corporation and from time to time, without limit as to amount, to draw,
make, accept, endorse, guarantee, execute and issue promissory notes,
drafts, bills of exchange, warrants, bonds, debentures and other
negotiable or non-negotiable instruments and evidences of
indebtedness, and to secure the
2
<PAGE> 4
payment thereof and of the interest thereon by mortgage on, or pledge,
conveyance or assignment in trust of, the whole or any part of the
assets of the corporation, real, personal or mixed, including contract
rights, whether at the time owned or thereafter acquired, and to sell,
pledge or otherwise dispose of such securities or other obligations of
the corporation for its corporate purposes; or to lend money, either
without any collateral security or on the security of real or
personal property.
(h) To enter into, make, perform and carry out, or cancel and
rescind contracts of every kind and for any lawful purpose with any
person, firm, association, corporation, syndicate, governmental,
municipal or public authority, domestic or foreign, or others; and to
act as agent or broker for the purchase or sale of the products or
property of any person, firm, association or other corporation engaged
in any business in which this corporation is authorized to engage.
(i) To have offices, conduct its business and promote its
purposes in the State of Ohio, and in any or all of the States of the
United States, in the District of Columbia, and the territories and
dependencies of the United States and in foreign countries, without any
restriction whatsoever, and to do all acts requisite or proper to
qualify under the laws of, domicile the corporation in, and to do
business in any other state, territory, dependency or foreign country.
(j) To conduct researches, investigations and examinations of
businesses and enterprises of every kind and description with the aim
of securing information and particulars for the investment and
employment of capital.
(k) To promote, cause to be organized, finance and aid by loan,
subsidy, guaranty, contribution of capital or surplus, or otherwise, any
corporation, association, partnership, syndicate, entity, person or
governmental, municipal or public authority, domestic or foreign, any
security of which is held directly or indirectly by or for the
corporation, or in the business, financing or welfare of which the
corporation shall have any interest, and in connection therewith to
guarantee or become surety for the performance of any undertaking or
obligation of the foregoing, and to guarantee by endorsement or
otherwise the payment of the principal of, or interest or dividends on,
any such security of the foregoing; and generally to do any acts or
things designed to protect, preserve, improve or enhance the value of
any such security.
3
<PAGE> 5
(l) To enter into, promote or conduct any other kind of
business, contract or undertaking permitted to corporations for profit
organized under the General Corporation Law of the State of Ohio and,
in connection therewith, to possess and exercise all express and
incidental powers and authorities normally conferred upon or permitted
such corporations whatsoever calculated directly or indirectly to
promote the purposes, business and general welfare of the corporation
or to enhance and/or protect the value of its properties.
The foregoing clauses shall be construed as powers and authorities
expressly granted the corporation as well as purposes and objects, and the
matters expressed in each clause shall, unless herein otherwise expressly
provided, be in no wise limited by reference in or inference from the terms of
any other clause, but shall be regarded as independent purposes, objects, powers
and authorities; and the enumeration of specific purposes, objects, powers and
authorities shall not be construed to limit or restrict in any manner the
meaning of general terms or the general capacity, authority, or powers of the
corporation conferred by the laws of the State of Ohio; nor shall the expression
of one thing be deemed to exclude another not expressed, although it be of like
nature.
ARTICLE IV. The maximum number of shares the corporation is authorized
to have outstanding is Twenty-four Million Two Hundred Thousand (24,200,000)
shares, classified as follows:
(a) One Million Two Hundred Thousand (1,200,000) shares of
Serial Preferred Stock of the par value of $10.00 per share ("Serial
Preferred Stock");
(b) Three Million (3,000,000) shares of Serial Preference Stock
without par value ("Serial Preference Stock"); and
(c) Twenty Million (20,000,000) Common Shares, without par value
("Common Shares").
SUBDIVISION A
SERIAL PREFERRED STOCK OF THE PAR VALUE OF $10.00 PER SHARE
The Serial Preferred Stock shall have the following express terms:
Section 1. Series. The Serial Preferred Stock may be issued from time to
time in one or more series. Subject to the provisions of Sections 2 and 4 herein
and except in respect of the matters
4
<PAGE> 6
that may be fixed by the Board of Directors as hereinafter provided, all shares
of Serial Preferred Stock shall have identical rights and each share of a series
shall be identical with all other shares of such series. Subject to the
provisions of Sections 2 to 6, both inclusive, of this Subdivision, which
provisions shall apply to all Serial Preferred Stock, the Board of Directors
hereby is authorized to cause such shares to be issued in one or more series and
with respect to each such series to determine and fix prior to the issuance
thereof (and thereafter, to the extent provided in clause (b) of this Section)
the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The number of shares of the series, which number the Board
of Directors may (except where otherwise provided in the creation of the
series) increase or decrease from time to time before or after the
issuance thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rights of the series which may be: cumulative
or noncumulative; at a specified rate, amount, or proportion; with or
without further participation rights; and in preference to, junior to,
or on a parity in whole or in part with, dividend rights of shares of
any other class or of any other series of Serial Preferred Stock;
(d) The dates on which dividends, if declared, shall be payable
and the dates from which dividends shall be cumulative;
(e) The redemption rights and price or prices, if any, for
shares of the series;
(f) The terms and amount of the sinking fund, if any, for the
purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in the event of
any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the corporation;
(h) Whether the shares of the series shall be convertible into
Common Shares or shares of any other class and, if so, the conversion
rate or rates or price or prices, any adjustments thereof and all other
terms and conditions upon which such conversion may be made; and
5
<PAGE> 7
(i) Restrictions (in addition to those set forth in Section 5(c)
of this Subdivision) on the issuance of shares of the same series or of
any other class or series.
The Board of Directors is authorized to adopt from time to time amendments to
the Amended Articles of Incorporation fixing, with respect to each such series,
the matters described in clauses (a) to (i), both inclusive, of this Section.
Section 2. Dividends.
(a) The holders of Serial Preferred Stock of each series, in
preference to the holders of Serial Preference Stock and Common Shares
and of any other class of shares ranking junior to the Serial Preferred
Stock, shall be entitled to receive out of any funds legally available
and when and as declared by the Board of Directors, dividends at the
rate for such series fixed in accordance with the provisions of Section
1 of this Subdivision and no more, payable on the dates fixed for such
series. Such dividends shall be cumulative, in the case of shares of
each particular series, from and after the date or dates fixed with
respect to such series. No dividends shall be paid upon or declared or
set apart for any series of the Serial Preferred Stock for any dividend
period unless at the same time all dividends for the dividend periods
terminating on the same or any earlier date for the Series A Preferred
Stock, if any, shall have been paid or declared or set apart for any
such Series A Preferred Stock then issued and outstanding and entitled
to receive such dividends. Accumulations of dividends shall not bear
interest. A "dividend period" in respect of any share is the period
between any two consecutive dividend payment dates, including the first
of such dates as fixed for the series to which such share shall belong.
(b) So long as any Serial Preferred Stock shall be outstanding
no dividend, except a dividend payable in Serial Preference Stock,
Common Shares or other shares ranking junior to the Serial Preferred
Stock, shall be paid or declared or any distribution be made, except as
aforesaid, in respect of the Serial Preference Stock, Common Shares or
any other shares ranking junior to the Serial Preferred Stock, nor shall
any Serial Preference Stock, Common Shares or any other shares ranking
junior to the Serial Preferred Stock be purchased, retired or otherwise
acquired by the corporation, unless: (1) all accrued and unpaid
dividends on Serial Preferred Stock, including the full dividends for
the current dividend period, shall have been declared and paid or a sum
(either in cash or Common Shares) sufficient for payment thereof set
apart; and
6
<PAGE> 8
(2) there shall be no arrearages with respect to the redemption of Serial
Preferred Stock of any series from any sinking fund provided for shares of such
series in accordance with the provisions of Section 1 of this Subdivision.
Section 3. Redemption.
(a) Subject to the express terms of each series and to the provisions of
Section 5(c)(3) of this Subdivision, the corporation:
(1) May, from time to time at the option of the Board of
Directors, redeem all or any part of any redeemable series of Serial
Preferred Stock at the time outstanding at the applicable redemption
price for such series fixed in accordance with the provisions of Section
1 of this Subdivision; and
(2) Shall, from time to time, make such redemptions of each
series of Serial Preferred Stock as may be required to fulfill the
requirements of any sinking fund provided for shares of such series at
the applicable sinking fund redemption price fixed in accordance with
the provisions of Section I of this subdivision;
and shall in each case pay all accrued and unpaid dividends to the redemption
date.
(b) (1) Notice of every such redemption shall be mailed, postage
prepaid, to the holders of record of the Serial Preferred Stock to be
redeemed at their respective addresses then appearing on the books of
the corporation, not less than 30 days nor more than 60 days prior to
the date fixed for such redemption. At any time after notice as provided
above has been deposited in the mail, the corporation shall irrevocably
deposit the aggregate redemption price of the shares of Serial Preferred
Stock to be redeemed, together with accrued and unpaid dividends thereon
to the redemption date, with any bank or trust company in Cleveland,
Ohio or New York, New York, having capital and surplus of not less than
$50,000,000,00, named in such notice, directed to be paid to the
respective holders of the shares of Serial Preferred Stock to be so
redeemed, in amounts equal to the redemption price of all shares of
Serial Preferred Stock to be so redeemed, on surrender of the stock
certificate or certificates held by such holders; and upon the deposit
of such notice in the mail and the making of such deposit of money with
such bank or trust
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<PAGE> 9
company, on the date set for such redemption, so long as sufficient
moneys are on deposit to effect the redemption, such holders shall cease
to be shareholders with respect to such shares; and from and after the
time such notice shall have been so deposited and such deposit of money
shall have been so made, on the date set for such redemption, so long as
sufficient moneys are on deposit to effect the redemption, such holders
shall have no interest or claim against the corporation with respect to
such shares, except only the right to receive promptly, upon
presentation and surrender of the shares of Serial Preferred Stock to be
so redeemed, such money from such bank or trust company without interest
or to exercise, before the redemption date, any unexpired privileges of
conversion. In the event less than all of the outstanding shares of
Serial Preferred Stock (or any series thereof) are to be redeemed, the
corporation shall select the shares to be so redeemed in such manner so
as to most closely make such redemption pro rata (on the basis of
percentage holdings) among the holders (such pro rata determination to
be made only in whole shares).
(2) If the holders of shares of Serial Preferred Stock which
have been called for redemption shall not, within six years after such
deposit, claim the amount deposited for the redemption thereof, any such
bank or trust company shall, upon demand, pay over to the corporation
such unclaimed amounts and thereupon such bank or trust company and the
corporation shall be relieved of all responsibility in respect thereof
and to such holders. In the event that the corporation shall, at such
time, no longer be existing as an operating corporation then all such
unclaimed amounts shall be paid over to any successor corporation or, if
no successor corporation shall exist, then to the State of Ohio.
(c) Any shares of Serial Preferred Stock which are (1) redeemed by the
corporation pursuant to the provisions of this Section, (2) purchased and
delivered in satisfaction of any sinking fund requirements provided for shares
of such series, (3) converted in accordance with the express terms thereof, or
(4) otherwise acquired by the corporation, shall be deemed retired and the
stated capital of the class to which such redeemed, purchased, converted or
otherwise acquired shares belong shall be reduced by an amount equal to the
stated capital of such shares.
Section 4. Liquidation.
(a) (1) The holders of Serial preferred Stock of any series shall, in
the event of voluntary or involuntary liquidation, dissolution or wind
up of the affairs of the
8
<PAGE> 10
corporation, be entitled to receive in full out of the net assets of the
corporation, including its capital, before any amount shall be paid or
distributed among the holders of Serial Preference Stock, Common Shares
or any other shares ranking junior to the Serial Preferred Stock, the
amounts fixed with respect to shares of such series in accordance with
Section 1 of this Subdivision, plus an amount equal to all dividends
accrued and unpaid thereon to the date of payment of the amount due
pursuant to such liquidation, dissolution or winding up of the affairs
of the corporation; provided, however, that the holders of the Series A
Preferred Stock, if any, shall receive in full all such preferential
amounts payable thereon before any amount shall be paid or distributed
among the holders of any other series of Serial A Preferred Stock. In
the event the net assets of the corporation legally available therefor
are insufficient to permit the payment upon all outstanding shares of
Serial Preferred Stock of the full preferential amount to which they are
respectively entitled, then, after payment in full to the holders of the
Series A Preferred Stock, such remaining net assets shall be distributed
ratably upon outstanding shares of any other Serial Preferred Stock in
proportion to the full preferential amount to which each such share is
entitled. In the event the net assets of the corporation legally
available therefor are insufficient to permit the payment upon all
outstanding shares of Series A Preferred Stock of the full preferential
amount to which the holders thereof are entitled, then such net assets
shall be distributed ratably upon the outstanding shares of Series A
Preferred Stock in proportion to the full preferential amount to which
each such shares is entitled.
(2) After payment to the holders of Serial Preferred Stock of
the full preferential amounts as aforesaid, the holders of Serial
Preferred Stock, as such, shall have no right or claim to any of the
remaining assets of the corporation.
(b) The merger or consolidation of the corporation into or with any
other corporation, the merger of any other corporation into it, or the sale,
lease or conveyance of all or substantially all the property or business of the
corporation, shall not be deemed to be a dissolution, liquidation or winding up
for the purposes of this Section.
Section 5. Voting.
(a) Except as provided by Sections 5(b), (c) and (d) hereof, the Serial
Preferred Stock shall not be accorded any voting privileges as long as such
stock is held, directly or
9
<PAGE> 11
indirectly, by the persons to whom it was initially issued (such persons
hereinafter referred to as the "Initial Recipients"). At such time, however, as
any Initial Recipient shall sell, assign, transfer or otherwise dispose of any
shares of Serial Preferred Stock for valuable consideration received and the
Initial Recipient shall no longer be the holder of record of such shares of
Serial Preferred Stock on the records of the corporation, such shares in the
possession of such transferee shall be accorded voting privileges identical to
the voting rights accorded the holders of Common Shares except where the holders
of Serial Preferred Stock shall have the right to vote on any issue as a class
(including with other series of Serial Preferred Stock), in which case, such
holders shall only vote on such issues as a class. The voting privileges
accorded to the transferee of an Initial Recipient shall be in addition to those
accorded by Sections 5(b), (c) and (d) hereof. Except when voting as a class,
the Serial Preferred Stock so transferred shall be deemed to be Common Shares
for purposes of determining the existence of a quorum or a sufficient
affirmative vote required to take any action which action is required by these
Amended Articles of Incorporation or the Amended Code of Regulations of the
corporation to be submitted to a vote by the shareholders.
(b) (1) If, and so often as, the corporation shall be in default
in the payment of the equivalent of six full quarterly dividends
(whether or not consecutive) on any series of Serial Preferred
Stock at the time outstanding, whether or not earned or
declared, or if the corporation fails to meet a payment, in
full, required under any sinking fund applicable to any series
of Serial Preferred Stock, the holders of Serial Preferred Stock
of all series, voting separately as a class, shall be entitled
to elect, as herein provided, two members of the Board of
Directors of the corporation; provided, however, that the
holders of shares of Serial Preferred Stock shall not have or be
entitled to exercise such special class voting rights except at
meetings of such shareholders for the election of Directors at
which the holders of not less than fifty percent (50%) of the
outstanding shares of Serial Preferred Stock of all series then
outstanding are present in person or by proxy; and provided
further that the special class voting rights provided for in
this paragraph when the same shall have become vested shall
remain so vested until all accrued and unpaid dividends and all
accrued and unpaid sinking fund payments on the Serial Preferred
Stock of all series then outstanding
10
<PAGE> 12
shall have been paid, whereupon the holders of Serial Preferred
Stock shall be divested of their special class voting rights in
respect of subsequent elections of Directors, subject to the
revesting of such special class voting rights in the event
hereinabove specified in this paragraph.
(2) In the event of default entitling the holders of
Serial Preferred Stock to elect two Directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such Directors shall be
called by the Secretary of the corporation upon written request
of, or may be called by, the holders of record of at least
twenty-five percent (25%) of the shares of Serial Preferred
Stock of all series at the time outstanding, and notice thereof
shall be given in the same manner as that required for the
annual meeting of shareholders; provided, however, that the
corporation shall not be required to call such special meeting
if the annual meeting of shareholders or any other special
meeting of shareholders called or to be called for a different
purpose shall be held within 120 days after the date of receipt
of the foregoing written request from the holders of Serial
Preferred Stock. At any meeting at which the holders of Serial
Preferred Stock shall be entitled to elect Directors, the
holders of fifty percent (50%) of the then outstanding shares of
Serial Preferred Stock of all series, present in person or by
proxy, shall be sufficient to constitute a quorum, and the vote
of the holders of a majority of such shares so present at any
such meeting at which there shall be such a quorum shall be
sufficient to elect the members of the Board of Directors which
the holders of Serial Preferred Stock are entitled to elect as
hereinabove provided. Notwithstanding any provision of these
Amended Articles of Incorporation or the Amended Code of
Regulations of the corporation or any action taken by the
holders of any class of shares fixing the number of Directors of
the corporation, the two Directors who may be elected by the
holders of Serial Preferred Stock pursuant to this Subsection
shall serve in proposed to be elected otherwise than pursuant to
this Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in the total number of Directors of
the corporation or require the resignation of any Director
elected otherwise than pursuant to this Subsection.
Notwithstanding any classification of the other Directors of the
corporation, the two Directors elected by the holders of Serial
Preferred Stock shall
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be elected annually for the terms expiring at the next
succeeding annual meeting of shareholders; provided, however,
that whenever the holders of Serial Preferred Stock shall be
divested of the voting power as above provided, the terms of
office of all persons elected as Directors by the holders of the
Serial Preferred Stock as a class shall immediately terminate
and the number of Directors shall be reduced accordingly.
(c) The affirmative vote or consent of the holders of at least
sixty percent (60%) of the shares of Serial Preferred Stock at the time
outstanding, voting or consenting separately as a class, given in person
or by proxy either in writing or at a meeting called for the purpose,
shall be necessary to effect any one or more of the following (but so
far as the holders of Serial Preferred Stock are concerned, such action
may be effected with such vote or consent):
(1) Any amendment, alteration or repeal of any of the
provisions of the Amended Articles of Incorporation or of the
Amended Code of Regulations of the corporation which affects
adversely the preferences or voting or other rights of the
holders of Serial Preferred Stock; provided, however, that for
the purpose of this paragraph 5(c) (1) only, neither the
amendment of the Amended Articles of Incorporation so as to
authorize, create or change the authorized or outstanding amount
of Serial Preferred Stock or of any shares of any class ranking
on a parity with or junior to the Serial Preferred Stock nor the
amendment of the provisions of the Amended Code of Regulations
so as to change the number of Directors of the corporation shall
be deemed to affect adversely the preferences or voting or other
rights of the holders of Serial Preferred Stock; and provided
further, that if such amendment, alteration or repeal affects
adversely the preferences or voting or other rights of one or
more but not all series of Serial Preferred Stock at the time
outstanding, only the affirmative vote or consent of the holders
of at least sixty percent (60%) of the number of shares at the
time outstanding of the series so affected shall be required;
(2) The authorization, creation or the increase in the
authorized amount of any shares of any class or any security
convertible into shares of any class, in either case ranking
prior to the Serial Preferred Stock;
(3) The purchase or redemption (for sinking fund purposes
or otherwise) of less than all of the Serial Preferred Stock
then outstanding except in accordance
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<PAGE> 14
with a stock purchase offer made to all holders of record of
Serial Preferred Stock, unless all dividends on all Serial
Preferred Stock then outstanding for all previous dividend
periods shall have been declared and paid or funds therefor set
apart and all accrued sinking fund obligations applicable
thereto shall have been complied with; or
(4) The consolidation of the corporation with or its
merger into any consolidation or merger any class of shares
either authorized or outstanding ranking prior to or on a parity
with any then outstanding Serial Preferred Stock except the same
number of shares ranking prior to or on a parity with any then
outstanding series of Serial Preferred Stock and having the same
rights and preferences as the shares of the corporation
authorized and outstanding immediately preceding such
consolidation or merger (and each holder of Serial Preferred
Stock immediately preceding such consolidation or merger shall
receive the same number of shares with the same rights and
preferences of the resulting or surviving corporation).
(d) Neither the vote, consent nor any adjustment of the voting
rights of holders of shares of Serial Preferred Stock shall be required
for an increase in the number of Common Shares or shares of Serial
Preference Stock authorized or issued or for stock splits of the Common
Shares or shares of Serial Preference Stock or for stock dividends on
any class of stock payable solely in Common Shares or shares of Serial
Preference Stock, and none of the foregoing actions shall be deemed to
affect adversely the preferences or voting or other rights of Serial
Preferred Stock within the meaning and for the purpose of this
Subdivision.
Section 6. Definitions. For the purposes of this Subdivision:
(a) Whenever reference is made to shares "ranking prior to the
Serial Preferred Stock", such reference shall mean and include all
shares of the corporation in respect of which the rights of the holders
thereof as to the payment of dividends or as to distribution in the
event of a voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the corporation are given preference over the
rights of the holders of Serial Preferred Stock;
(b) Whenever reference is made to shares "on a parity with (any
series of) Serial Preferred Stock", such reference shall mean and
include all shares of the corporation in respect of which the rights of
the holders thereof as to the
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<PAGE> 15
payment of dividends and as to distributions in the event of a voluntary
or involuntary liquidation, dissolution or winding up of the affairs of
the corporation rank on an equality (except as to the amounts fixed
therefor) with the rights of the holders of any series of Serial
Preferred Stock;
(c) Whenever reference is made to shares "ranking junior to the
Serial Preferred Stock", such reference shall mean and include all
shares of the corporation other than those defined under Subsections (a)
and (b) of this Section as shares "ranking prior to" or "on a parity
with" the Serial Preferred Stock; and
(d) Whenever reference is made to "Series A Preferred Stock",
such reference shall mean and include those shares of the corporation's
5% Cumulative Convertible Preferred Stock, Series A, authorized pursuant
to Subdivision A-l of this Article IV, and whenever reference is made to
shares "ranking junior to Series A Preferred Stock", such reference
shall mean and include the shares of any series of Serial Preferred
Stock, other than Series A Preferred Stock, and any shares ranking
junior to the Serial Preferred Stock.
SUBDIVISION A-1
EXPRESS TERMS OF THE 5% CUMULATIVE
CONVERTIBLE PREFERRED STOCK, SERIES A.
There is hereby established a series of Serial Preferred Stock to which
the following provisions shall be applicable:
Section 1. Designation of Series. The series shall be designated "5%
Cumulative Convertible Preferred Stock, Series A" (hereinafter called "Series A
Preferred Stock").
Section 2. Number of Shares. The number of shares of Series A Preferred
Stock is 1,200,000, which number the Board of Directors may decrease (but not
below the number of shares of the series then outstanding).
Section 3. Dividend Rate. The dividend rate for Series A Preferred Stock
is $0.50 per share per annum.
Section 4. Dividend Payments. No dividends shall accrue or be payable on
the Series A Preferred Stock for the calendar years ending on December 31, 1984
and December 31, 1985. The dividends which shall be payable on the Series A
Preferred Stock shall begin to accrue on January 1, 1986 and shall be payable,
for the twelve
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<PAGE> 16
month period ending on December 31, 1986, on April 15, 1987, and on each April
15th thereafter for each preceding calendar year, in cash or in an equivalent
amount of Common Shares of the corporation which shares, for purposes of this
Section 4, shall be valued at 90.909% of the average Market Price (as defined in
Section 7(d)(B)(6)(vi) of this Subdivision) for the ten (10) trading day period
ending two (2) trading days prior to the relevant dividend payment date. The
determination of whether such dividends shall be paid in cash or Common Shares
shall be made simultaneously with the declaration of such dividends.
Section 5. Redemption Prices. The Series A Preferred Stock shall not be
redeemable by the corporation prior to March 19, 1989. Thereafter the redemption
terms and prices for the Series A Preferred Stock shall be as follows:
(a) At any time from or after March 19, 1989 through and
including March 19, 1994 the corporation may redeem the Series A
Preferred Stock at the price of $15.00 per share if the Market Price of
the Common Shares has been greater than or equal to two hundred percent
(200%) of the Conversion Price (as defined in Section 7(a) of this
Subdivision) for a period of thirty (30) consecutive calendar days prior
to the redemption date.
(b) At any time from and after March 19, 1994 the corporation
may redeem the Series A Preferred Stock at the price of $15.00 per
share.
Section 6. Liquidation Rights. The holders of the Series A Preferred
Stock shall, in case of liquidation, dissolution or winding up of the affairs of
the corporation, be entitled to receive in full out of the net assets of the
corporation, including its capital, before any amount shall be paid to or
distributed among the holders of any other series of the Serial Preferred Stock,
the Serial Preference Stock, the Common Shares or any other shares ranking
junior to the Series A Preferred Stock, the amount of $10.00 per share, plus an
amount equal to all dividends accrued and unpaid thereon to the date of payment
of the amount due pursuant to such liquidation, dissolution or winding up of the
affairs of the corporation. In case the net assets of the corporation legally
available therefor are insufficient to permit the payment upon all outstanding
shares of Series A Preferred Stock of the full preferential amount to which they
are respectively entitled, then such net assets shall be distributed ratably
upon the outstanding shares of Series A preferred Stock in proportion to the
full preferential amount to which each such share is entitled.
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<PAGE> 17
After payment to holders of Series A Preferred Stock of the full
preferential amounts as aforesaid, holders of Series A Preferred Stock as such
shall have no right or claim to any of the remaining assets of the corporation.
Section 7. Conversion Rights.
(a) Subject to and upon compliance with the provisions of this
Section 7, the Series A Preferred Stock may at the option of the holder,
at any time, or in the case of shares called for redemption, then until
and including the third business day prior to the date fixed for
redemption (but not thereafter if payment of the redemption price has
been duly provided for by the date fixed for redemption), be converted
into Common Shares (as such shares shall be constituted at the
conversion date) at a ratio of one Series A Preferred Stock share to
$10.00 in value of Common Shares, each such Common Share valued at $4.50
per share (such amount, as it may hereafter be adjusted pursuant to this
Section 7, the "Conversion Price").
(b) The holder of each share of Series A Preferred Stock may
exercise the conversion privilege in respect thereof by delivering to
any transfer agent of the Series A Preferred Stock (A) the certificate
for the share to be converted and (B) written notice that the holder
elects to convert such share and stating the name or names (with
address) in which the certificate for Common Shares is to be issued.
Conversion shall be deemed to have been effected on the date when such
delivery is made, and such date is referred to in this Section 7 as the
"conversion date". On the conversion date or as promptly thereafter as
practicable the corporation shall issue and deliver to the holder of the
Series A Preferred Stock surrendered for conversion, or on his written
order, a certificate for the number of full Common Shares issuable upon
the conversion of such Series A Preferred Stock and a check or cash in
respect of any fraction of a share as provided in paragraph (c) of this
Section 7. The person in whose name the Common Share certificate is to
be issued shall be deemed to have become a holder of Common Shares of
record on the conversion date. No adjustment shall be made for any
dividends accrued on shares of Series A Preferred Stock surrendered for
conversion or for dividends on the Common Shares issued on conversion.
(c) The corporation shall not be required to issue fractional
Common Shares upon conversion of Series A Preferred Stock. If one or
more share(s) of Series A Preferred Stock
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<PAGE> 18
shall be surrendered for conversion number of shares so surrendered. If
any fractional interest in Common Shares would otherwise be deliverable
upon the conversion of any Series A Preferred Stock, the corporation
shall, in lieu of delivering a fractional share therefor, make an
adjustment therefor in cash at the Market Price (as defined in Section
7(d) (B) (6) (vi) hereof) thereof on the last business day before the
conversion date.
(d) Subject to waiver by the affirmative vote or consent of the
holders of at least sixty percent (60%) of the shares of Series A
Preferred Stock at the time outstanding, the Conversion Price shall be
adjusted from time to time as follows:
(A) Except as otherwise provided herein and in
subparagraphs (C) and (E) below, whenever the corporation shall
issue or sell any Additional Shares (as hereinafter defined) for
a consideration per share less than the Conversion Price then in
effect, or less than ninety percent (90%) of the average Market
Price for the five trading days ending two trading days
immediately prior to the date of such issuance, the Conversion
Price in effect immediately prior to such issuance shall
forthwith be adjusted as follows:
(1) Multiply the higher of such Conversion Price or
ninety percent (90%) of such average Market Price by the
total number of Common Shares outstanding or deemed by the
terms hereof to be outstanding immediately prior to the
date of issuance of such Additional Shares (all such
shares outstanding or deemed to be outstanding at such
time hereinafter called the '"Base Shares"), then
(2) Add to the result so obtained the total
consideration received or deemed to be received by the
corporation for all Additional Shares so issued or sold,
then
(3) Divide such result by the sum of the number of
Base Shares and the number of such Additional Shares, with
the quotient so obtained being rounded to the nearest one
cent in accordance with standard mathematical practices;
(4) If ninety percent (90%) of the Market Price is
greater than the Conversion Price, subtract from such
quotient the difference between ninety percent (90%) of
the Market Price and the Conversion Price.
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<PAGE> 19
The result so obtained shall thereupon and thereafter constitute
the Conversion Price until such time as another adjustment is required
pursuant to the terms hereof.
(B) For the purposes of subparagraph (A) above, the following
provisions shall be applicable:
(1) The term "Additional Shares" shall mean the Common
Shares issued by the corporation in excess of the Base Shares at
such date, other than:
(i) shares issued upon conversion of Series A
Preferred Stock; and
(ii) shares issued pursuant to any employee stock
plan now in effect or upon the exercise of options
outstanding immediately prior to March 19, 1984 or shares
issued or issuable subsequent to March 19, 1984 pursuant
to any employee stock plan in effect on March 19, 1984 or
upon the exercise of options hereafter granted to officers
or employees under any stock option plan of the
corporation in effect on March 19, 1984.
(2) In the case of issuance or sale of Additional Shares
for cash (including shares issued pursuant to the exercise of
options or rights expiring in less than sixty (60) days from the
date of issue thereof), the consideration shall be deemed to be
the cash proceeds received by the corporation without deducting
underwriting discounts or commissions and other expenses paid or
incurred by the corporation in connection therewith.
(3) In the case of issuance or sale of Additional Shares
for a consideration other than cash, the amount of such
consideration shall be deemed to be the fair value thereof as
determined by the Board of Directors of the corporation for
purposes of this subparagraph (B), irrespective of any
accounting treatment.
(4) In the case of issuance of Additional Shares as a
dividend (other than as a dividend on Series A Preferred Stock),
the shares shall be deemed to have been issued without
consideration at the opening of business on the day following
the dividend record date.
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<PAGE> 20
(5) In the case of issuance of Additional Shares as a
dividend on Series A Preferred Stock or as a payment upon
maturity of certain non-interest bearing notes of the
corporation or otherwise in lieu of any payments in cash by the
corporation, the shares shall be deemed to have been issued for
a consideration equal to the cash per share amount the Company
would have paid in cash but for its payment in Additional
Shares.
(6) If the corporation issues (a) any options or rights
(other than (i) options or rights issued pursuant to employee
stock plans in effect on March 19, 1984, or (ii) options or
rights expiring in less than sixty (60) days from the date of
issue thereof) to subscribe for Additional Shares or (b) any
securities (other than Series A Preferred Stock) convertible
into or exchangeable for Additional Shares, and the
consideration per share (determined as provided below) of the
Additional Shares deliverable upon the exercise of such options
or rights or upon such conversion or exchange is less than (x)
or convertible or exchangeable securities, or (y) ninety percent
(90%) of Market Price for the five trading days ending two
trading days immediately prior to the date of such issuance,
then:
(i) The aggregate number of Additional Shares
deliverable under such options or rights shall be deemed
to have been issued or sold at the time such options or
rights were issued, and for a consideration equal to the
purchase price provided for in such options or rights,
plus the consideration, if any (determined in the same
manner provided in paragraphs (2) and (3) next preceding
with respect to cash consideration and consideration other
than cash), received by the corporation for such options
or rights;
(ii) The maximum number of Additional Shares then
deliverable upon conversion of or in exchange for any such
securities shall be deemed to have been issued at the time
of issuance or sale of such securities and for a
consideration equal to the consideration received by the
corporation for such securities, without deducting
therefrom
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<PAGE> 21
underwriting discounts or commissions and other expenses
paid or incurred by the corporation in connection with the
issuance and sale of such securities, plus the additional
consideration, if any (determined in the same manner
provided in paragraphs (2) and (3) next preceding with
respect to cash consideration and consideration other than
cash), to be received by the corporation upon the
conversion or exchange thereof;
(iii) If at any time or from time to time prior to
the expiration of such options or rights or of such
conversion or exchange privileges, the number of
Additional Shares deliverable upon exercise of such
options, rights, or conversion or exchange privileges
shall be increased beyond or decreased below the number
used in making the last computation under (i) or (ii)
above with respect to such options, rights, or conversion
or exchange privileges, or the consideration per share
which was used in such computation shall be increased or
reduced, then the Conversion Price shall forthwith be
readjusted to such conversion price as would have been
obtained had the adjustment made upon the issuance of such
options, rights, or convertible or exchangeable securities
been on the basis of such increased or decreased number of
shares, or such increased or reduced consideration, or
both, as the case may be;
(iv) On the expiration of such options or rights or
the termination of such conversion or exchange privileges,
with respect in either case to any Additional Shares
involved in the computation previously made under (i),
obtained had the adjustment made upon the initial issuance
of such options, rights, or convertible or exchangeable
securities been made on the basis of the issuance or sale
of only the number of Additional Shares actually issued
upon the exercise, plus the number of Additional Shares
deliverable upon the subsequent exercise, of such options,
rights, or conversion or exchange privileges;
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(v) For the purpose of making the computation under
this Subsection (B)(6) with respect to options or rights
to acquire Additional Shares pursuant to employee stock
options intended to qualify as incentive stock options (or
any successor form of option available for special
treatment under the Internal Revenue Code of 1954, as
amended) other than such option or rights as may be issued
pursuant to employee stock plans in effect on March 19,
1984, notwithstanding the definition contained in Clause
(vi) of this Subsection (B)(6), "Market Price" shall be
the price determined by application of the requirements
contained in Section 422A of the Internal Revenue Code of
1954, as amended (or any successor provision), which
requirements must be satisfied if the options or rights
are to qualify as incentive stock options (or any
successor form of option available for special treatment);
(vi) For the purpose of making the computation under
this Subsection (B)(6) with respect to the issuance of
securities convertible into or exchangeable for Additional
Shares and for purposes of this Subdivision A-1, "Market
Price" for any day shall be the closing price per share of
the Common Shares on the New York Stock Exchange (or other
national exchange if the corporation's Common Shares are
not then traded on the New York Stock Exchange) on such
date, or, if there were no reported sales on such day, the
mean of the per share closing bid and asked quotations on
that exchange on any such day shall be used or, if the
Common Shares are not then listed on a national exchange
then the price of the Common Shares on any such day shall
be the per share closing bid price as reported by the
National Association of Securities Dealers Automated
Quotation System ("NASDAQ") in the event the Common Shares
are traded in the over-the-counter market. If any such day
shall not be a trading day, then the price for such day
shall be the price for the next preceding trading day. If
the Common Shares are not then
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<PAGE> 23
listed on a national exchange or reported by NASDAQ then
the Market Price per share for any such day shall be
deemed to be the higher of (a) the book value thereof, as
determined (in accordance with generally accepted
accounting principles consistent with those then being
applied by the corporation) by any firm of independent
public accountants of recognized standing selected by the
Board of Directors of the corporation, as of the last day
of the latest month ending are available and (b) the fair
value thereof as determined in good faith by an
independent brokerage firm or Standard & Poor's
Corporation or Moody's Investors Service, Inc. as of a
date which is within 15 days preceding the date as of
which determination is to be made.
(7) The phrase "deemed to be outstanding" shall mean and
include at any point in time, in addition to the shares, if any,
deemed to be outstanding pursuant to Subsection (B)(6) hereof,
the shares issuable as described in clauses (i) and (ii) of
Subsection (B)(1) hereof based upon the then existing
conversion or exercise formulas or stock option provisions.
(C) If the corporation splits or combines the outstanding Common
Shares, the Conversion Price then in effect shall be proportionately
decreased in the case of a split or increased in the case of a
combination, so as appropriately to reflect the same, in each case as of
the opening of business on the day following the day on which such split
or combination became effective. For this purpose, a stock dividend of
25% or more shall be considered a split of the outstanding shares.
(D) Whenever the Conversion Price is adjusted as herein
provided, the corporation shall forthwith place on file with each
transfer agent of the Series A Preferred Stock a statement signed by the
President or a Vice President of the corporation and by its Treasurer or
an Assistant Treasurer showing in detail the facts requiring such
adjustment and the Conversion Price after such adjustment and shall
cause the same to be sent to each holder of Series A Preferred Stock.
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<PAGE> 24
(E) No adjustment of the Conversion Price shall be made if the
amount of such adjustment shall be less than $0.15 but in such case any
adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with the
next subsequent adjustment, which, together with all adjustments so
carried forward, shall amount to not less than $0.15.
(e) In case of any reclassification or change of outstanding Common
Shares (except a split or combination, or a change in par value, or a change
from par value to no par value, or a change from no par value to par value), or
in case of any consolidation or merger to which the corporation is a party
(other than a merger in which the corporation is the surviving corporation and
which does not result in any reclassification or change of the outstanding
Common Shares of the corporation except as stated above), or in case of any sale
or conveyance to another corporation or non-corporate entity of the property of
the corporation as an entirety or substantially as an entirety, each such
transaction being hereinafter referred to as a "Transaction", (the corporation
(in the case of such a reclassification or change of the Common Shares) or such
other corporation or entity (in each other case) hereinafter referred to as the
"Acquirer's Common Stock"), then, prior to and as a condition of such
Transaction, lawful and adequate provision shall be made as part of the terms of
such Transaction that the holder of each share of Series A Preferred Stock then
outstanding shall thereafter have the right to receive, upon the conversion
thereof at any time after the consummation of the Transaction, upon the basis
and upon the terms and conditions herein specified and in lieu of the Common
Shares immediately theretofore receivable upon conversion, either:
(i) the number of shares of the Acquirer's Common Stock or, if
the Acquiring Company fails to meet the requirements set forth in
clauses (v) and (vi) set forth below, of the Parent's common stock
(subject to adjustments from and after the date of the consummation of
the Transaction (the "Consummation Date") as nearly equivalent as
possible to the adjustments provided for in this Section 7) determined
by dividing (a) an amount equal to the product obtained by multiplying
(w) the number of Common Shares to which such holder would have been
entitled upon conversion of such shares of Series A Preferred Stock
immediately prior to the consummation
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<PAGE> 25
of the Transaction times (x) the then effective Conversion Price, by (b)
the market price (determined in the same manner in which Market Price is
determined in Section 7(d) (B) (6) (vi) hereof) of the Acquirer's Common
Stock or the Parent's common stock, as the case may be, as of the
Consummation Date,
or at the election of the holder of Series A Preferred Stock pursuant to notice
given to the corporation on or before the later of (1) the day on which the
holders of the Common Shares of the corporation approve the Transaction, and (2)
the sixtieth day following the date of delivery or mailing to such holder of the
last proxy statement relating to the vote on the Transaction by the holders of
the Common Shares of the corporation;
(ii) the securities or other property to which such holder would
have been entitled upon the consummation of the Transaction if such
holder had converted such Series A Preferred Stock immediately prior
thereto (subject to adjustments from and after the Consummation Date as
nearly equivalent as possible to the adjustments provided for in this
Section 7).
The per-share conversion price for the number of shares of the
Acquirer's Common Stock or the Parent's Common Sack as the case may be, issuable
pursuant to clause (i) above upon conversion of the Series A Preferred Stock
(subject to adjustments from and after the Consummation Date as nearly
equivalent as possible to the adjustments provided for in this Section 7), shall
be determined by dividing (c) the amount equal to the product obtained by
multiplying (y) the number of Common Shares purchasable upon the conversion of
the Series A Preferred Stock immediately prior to the consummation of the
Transaction times (z) the then effective Conversion Price, by (d) such number of
shares of the Acquirer's Common Stock or the Parent's Common Stock, as the case
may be, so issuable upon such conversion pursuant to said clause (i).
For the purpose of the foregoing computations under clause (ii) above,
the number of Common Shares issuable upon conversion of Series A Preferred Stock
immediately prior to the consummation of the Transaction and the then Conversion
Price shall be such number of shares and such price as shall result from
adjustments thereto equal to the adjustments, if any, that would have been
required pursuant to paragraph (d) (A) if the Company had acquired all the
Acquirer's Common Stock outstanding (before giving effect to the Transaction) on
the Consummation Date in exchange for the issuance of a number of Common Shares
equal to the number obtained by dividing:
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<PAGE> 26
(iii) the aggregate market price (determined in the same manner
in which Market Price is determined in Section 7(d)(B)(b)(vi) hereof),
as of the Consummation Date, of all of the Acquirer's Common Stock so
outstanding, by
(iv) the consideration per share to be paid for or received by
the holders of the previously outstanding Common Shares in accordance
with the terms of the Transaction, determined (a) in the case where the
holders of the previously outstanding Common Shares received solely
shares of the Acquirer's Common Stock in the Transaction, by multiplying
the market price per share (determined in the same manner in which
Market Price is determined in Section 7(d)(B)(b)(vi) hereof) of the
Acquirer's Common Stock as of the Consummation Date by a fraction the
numerator of which shall be the aggregate number of shares of the
Acquirer's Common Stock to be received in the Transaction in exchange
for all of the previously outstanding Common Shares and the denominator
of which shall be the aggregate number of such previously outstanding
Common Shares, and (b) in any other case, by dividing the aggregate fair
market value, as of the Consummation Date, of the aggregate
consideration to be received by the holders of such previously
outstanding Common Shares by the number of such previously outstanding
Common Shares,
for the consideration per share referred to in clause (iv) above.
The corporation shall not enter into any Transaction unless immediately
after the Consummation Date all the following requirements are fulfilled as
to the Acquiring Company or are fulfilled as to a corporation (herein
referred to as a "Parent") which directly or indirectly controls the
Acquiring Company:
(v) its common stock is listed on national exchange or the
over-the-counter market and such common stock continues to meet such
requirements for listing thereon,
(vi) it is required to file reports with the Securities and
Exchange Commission pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, and
(vii) in the case of the Parent, such Parent is required to
include the Acquiring Company in the consolidated financial statements
contained in the Parent's Annual Report on Form 10-K and is not itself
included in the consolidated financial statements of any other person
(other than its consolidated subsidiaries).
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As evidence of the kind and amount of stock or other securities or
property into which the Series A Preferred Stock shall be convertible applicable
with respect thereto, the transfer agents may accept the certificate of any firm
of independent public accountants (who may be the regular auditors retained by
the corporation, but not an employee of the corporation) with respect thereto,
who as to questions of law may request and rely upon an opinion of counsel (who
may be counsel for the corporation, but not an employee of the corporation) and
in the absence of bad faith upon the part of the transfer agents, they may
conclusively rely thereon, and shall not be responsible or accountable to any
holder of Series A Preferred Stock for any provision in conformity therewith, or
approved by such firm of independent public accountants.
In the case of any such Transaction the corporation shall not effect any
such Transaction unless prior to or simultaneously with the consummation thereof
the survivor or successor corporation or other entity (if other than the
corporation) resulting from such Transaction shall (1) assume by written
instrument executed and delivered to each registered holder of the Series A
Preferred Stock, the obligation to deliver to such holder such shares of stock,
securities or properties as, in accordance with the foregoing provisions, such
holder may be entitled to receive, and containing the express assumption of such
successor corporation of the due and punctual performance and observance of each
of the foregoing provisions hereof to be performed and observed by the
corporation and of all liabilities and obligations of the corporation hereunder,
and (2) deliver to such holders an opinion of counsel, to the effect that such
written instrument has been duly authorized, executed and delivered by such
successor corporation and constitutes a legal, valid and binding instrument of
such successor corporation.
(f) The issue of stock certificates on conversions of Series A Preferred
Stock shall be without charge to the converting shareholder for any tax in
respect of the issue thereof. The corporation shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares in any name other than that of the holder of the
Series A Preferred Stock converted, and the corporation shall not be required to
issue or deliver any such stock certificate unless and until the person or
persons requesting the issue thereof shall have paid to the corporation the
amount of such tax or shall have established to the satisfaction of the
corporation that such tax has been paid.
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(g) The corporation hereby reserves and shall at all times
reserve and keep available, free from preemptive rights, out of its
authorized but unissued stock, for the purpose of effecting the
conversion of the Series A Preferred Stock, such number of its duly
authorized Common Shares as shall from time to time be sufficient to
effect the conversion of all outstanding Series A Preferred Stock.
(h) Upon conversion of Series A Preferred Stock the stated
capital of the Common Shares issued upon such conversion shall be the
aggregate stated value thereof, and the stated capital of the
corporation shall be correspondingly increased or reduced to reflect
the difference between the par value of the Series A Preferred Stock so
converted and the stated value of the Common Shares issued upon
conversion.
SUBDIVISION B
SERIAL PREFERENCE STOCK WITHOUT PAR VALUE
The Serial Preference Stock shall have the following express terms:
Section 1. Preferences; Series. The Serial Preference Stock shall rank
junior to the Serial Preferred Stock as to the payment of dividends and as to
distributions in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the corporation. The Serial
Preference Stock may be issued from time to time in one or more series. All
shares of Serial Preference Stock shall be of equal rank and shall be identical,
except in respect of the matters that may be fixed by the Board of Directors as
hereinafter provided and each share of a series shall be identical with all
other shares of such series except as to the date from which dividends are
cumulative. Subject to the provisions of Sections 2 to 6, both inclusive, of
this Subdivision, which provisions shall apply to all Serial Preference Stock,
the Board of Directors hereby is authorized to cause such shares to be issued in
one or more series and with respect to each such series to determine and fix
prior to the issuance thereof (and thereafter, to the extent provided in clause
(b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The number of shares of the series, which number the Board
of Directors may (except where otherwise provided in the creation of the
series) increase or decrease from time to time before or after the
issuance thereof (but not below the number of shares thereof then
outstanding);
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(c) The dividend rights of the series which may be: cumulative
or non-cumulative; at a specified rate, amount, or proportion; with or
without further participation rights; and in preference to, junior to,
or on a parity in whole or in part with, dividend rights of shares of
any other class or of any other series of Serial Preference Stock;
(d) The dates on which dividends, if declared, shall be payable
and the dates from which dividends shall be cumulative;
(e) The redemption rights and price or prices, if any, for
shares of the series;
(f) The terms and amount of the sinking fund, if any, for the
purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in the event of
any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the corporation;
(h) Whether the shares of the series shall be convertible into
Common Shares or shares of any other class and, if so, the conversion
rate or rates or price or prices, any adjustments thereof and all other
terms and conditions upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in Section 5(c)
of this Subdivision) on the issuance of shares of the same series or of
any other class or series.
The Board of Directors is authorized to adopt from time to time amendments to
the Amended Articles of Incorporation fixing, with respect to each such series,
the matters described in clauses (a) to (i), both inclusive, of this Section.
Section 2. Dividends.
(a) The holders of Serial Preference Stock of each series,
subject to the prior preference with respect to dividends upon Serial
Preferred Stock set forth in Section 2 of Subdivision A and in
preference to the holders of Common Shares and of any other class of
shares ranking junior to the Serial Preference Stock, shall be entitled
to receive out of any funds legally available and when and as declared
by the Board of Directors, dividends in cash at the rate for such series
fixed in accordance with the provisions of Section 1 of this Subdivision
and no more, payable on the dates fixed for such series. Such dividends
shall be cumulative, in the
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case of shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be paid upon
or declared or set apart for any series of the Serial Preference Stock
for any dividend period unless at the same time all dividends for the
dividend periods terminating on the same or any earlier date shall have
been paid or declared or set apart for all Serial Preference Stock then
issued and outstanding and entitled to receive such dividends.
Accumulations of dividends shall not bear interest. A "dividend period"
in respect of any share is the period between any two consecutive
dividend payment dates, including the first of such dates as fixed for
the series to which such share shall belong.
(b) So long as any Serial Preference Stock shall be outstanding
no dividend, except a dividend payable in Common Shares or other shares
ranking junior to the Serial Preference Stock, shall be paid or declared
or any distribution be made, except as aforesaid, in respect of the
Common Shares or any other shares ranking junior to the Serial
Preference Stock, nor shall any Common Shares or any other shares
ranking junior to the Serial Preference Stock be purchased, retired or
otherwise acquired by the corporation, except out of the proceeds of the
sale of Common Shares or other shares of the corporation ranking junior
to the Serial Preference Stock received by the corporation subsequent to
the date of first issuance of Serial Preference Stock of any series
unless: (1) all accrued and unpaid dividends on Serial Preference Stock,
including the full dividends for the current dividend period, shall have
been declared and paid or a sum sufficient for payment thereof set
apart; and (2) there shall be no arrearages with respect to the
redemption of Serial Preference Stock of any series from any sinking
fund provided for shares of such series in accordance with the
provisions of Section 1 of this Subdivision.
Section 3. Redemption.
(a) Subject to the express terms of each series and to the
provisions of Section 5(c)(3) of this Subdivision, the corporation:
(1) May, from time to time at the option of the Board of
Directors, redeem all or any part of any redeemable series of
Serial Preference Stock at the time outstanding at the
applicable redemption price for such series fixed in accordance
with the provisions of Section 1 of this Subdivision; and
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(2) Shall, from time to time, make such redemptions of
each series of Serial Preference Stock as may be required to
fulfill the requirements of any sinking fund provided for shares
of such series at the applicable sinking fund redemption price
fixed in accordance with the provisions of Section 1 of this
Subdivision;
and shall in each case pay all accrued and unpaid dividends to the
redemption date.
(b) (1) Notice of every such redemption shall be mailed, postage
prepaid, to the holders of record of the Serial Preference Stock
to be redeemed at their respective addresses then appearing on
the books of the corporation, not less than 30 days nor more
than 60 days prior to the date fixed for such redemption. At any
time after notice as provided above has been deposited in the
mail, the corporation shall irrevocably deposit the aggregate
redemption price of the shares of Serial Preference Stock to be
redeemed, together with accrued and unpaid dividends thereon to
the redemption date, with any bank or trust company in
Cleveland, Ohio or New York, New York, having capital and
surplus of not less than $50,000,000.00, named in such notice,
directed to be paid to the respective holders of the shares of
Serial Preference Stock to be so redeemed, in amounts equal to
the redemption price of all shares of Serial Preference Stock to
be so redeemed, on surrender of the stock certificate or
certificates held by such holders; and upon the deposit of such
notice in the mail and the making of such deposit of money with
such bank or trust company, on the date set for such redemption,
so long as sufficient moneys are on deposit to effect the
redemption, such holders shall cease to be shareholders with
respect to such shares; and from and after the time such notice
shall have been so deposited and such deposit of money shall
have been so made, on the date set for such redemption, so long
as sufficient moneys are on deposit to effect the redemption,
such holders shall have no interest or claim against the
corporation with respect to such shares, except only the right
to receive promptly, upon presentation and surrender of the
shares of Serial Preference Stock to be so redeemed, such money
from such bank or trust company without interest or to exercise,
before the redemption date, any unexpired privileges of
conversion. In the event less than all of the outstanding shares
of Serial Preference Stock (or any series thereof) are to be
redeemed, the corporation shall select by lot the shares to be
so redeemed in such manner as shall be prescribed by the Board
of Directors.
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(2) If the holders of shares of Serial Preference Stock which
have been called for redemption shall not, within six years after such
deposit, claim the amount deposited for the redemption thereof, any such
bank or trust company shall, upon demand, pay over to the corporation
such unclaimed amounts and thereupon such bank or trust company and the
corporation shall be relieved of all responsibility in respect thereof
and to such holders. In the event that the corporation shall, at such
time, no longer be existing as an operating corporation then all such
unclaimed amounts shall be paid over to any successor corporation or, if
no successor corporation shall exist, then to the State of Ohio.
(c) Any shares of Serial Preference Stock which are (1) redeemed by the
corporation pursuant to the provisions of this Section, (2) purchased and
delivered in satisfaction of any sinking fund requirements provided for shares
of such series, (3) converted in accordance with the express terms thereof, or
(4) otherwise acquired by the corporation, shall be deemed retired and the
stated capital of the class to which such redeemed, purchased, converted or
otherwise acquired shares belong shall be reduced by an amount equal to the
stated capital of such shares.
Section 4. Liquidation.
(a) Subject to the prior preference with respect to distributions to
holders of Serial Preferred Stock in the event of a voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the corporation:
(1) The holders of Serial Preference Stock of any series shall,
in the event of voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the corporation, be entitled to receive in
full out of the net assets of the corporation, including its capital,
before any amount shall be paid or distributed among the holders of the
Common Shares or any other shares ranking junior to the Serial
Preference Stock, the amounts fixed with respect to shares of such
series in accordance with Section 1 of this Subdivision, plus an amount
equal to all dividends accrued and unpaid thereon to the date of payment
of the amount due pursuant to such liquidation, dissolution or winding
up of the affairs of the corporation; and in the event the net assets of
the corporation legally available therefor are insufficient to permit
the payment upon all outstanding shares of Serial Preference Stock of
the full preferential amount to which they are respectively entitled,
then, such net assets shall be distributed ratably upon outstanding
shares of Serial Preference Stock in proportion to the
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full preferential amount to which each such share is entitled; and
(2) After payment to the holders of Serial Preference Stock of
the full preferential amounts as aforesaid, the holders of Serial
Preference Stock, as such, shall have no right or claim to any of the
remaining assets of the corporation.
(b) The merger or consolidation of the corporation into or with any
other corporation, the merger of any other corporation into it, or the sale,
lease or conveyance of all or substantially all the property or business of the
corporation, shall not be deemed to be a dissolution, liquidation or winding up
for the purposes of this Section.
Section 5. Voting.
(a) The holders of Serial Preference Stock shall have no voting rights,
except as provided in this Section and as required by law.
(b) (1) If, and so often as, the corporation shall be in default in the
payment of the equivalent of six full quarterly dividends (whether or
fails to meet a payment, in full, required under any sinking fund
applicable to any series of Serial Preference Stock, the holders of
Serial Preference Stock of all series, voting separately as a class,
shall be entitled to elect, as herein provided, two members of the Board
of Directors of the corporation; provided, however, that the holders of
shares of Serial Preference Stock shall not have or be entitled to
exercise such special class voting rights except at meetings of such
shareholders for the election of Directors at which the holders of not
less than fifty percent (50%) of the outstanding shares of Serial
Preference Stock of all series then outstanding are present in person or
by proxy; and provided further that the special class voting rights
provided for in this paragraph when the same shall have become vested
shall remain so vested until all accrued and unpaid dividends and all
accrued and unpaid sinking fund payments on the Serial Preference Stock
of all series then outstanding shall have been paid, whereupon the
holders of Serial Preference Stock shall be divested of their special
class voting rights in respect of subsequent elections of Directors,
subject to the revesting of such special class voting rights in the
event hereinabove specified in this paragraph.
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(2) In the event of default entitling the holders of Serial
Preference Stock to elect two Directors as specified in paragraph (1) of
this Subsection, a special meeting of such holders for the purpose of
electing such Directors shall be called by the Secretary of the
corporation upon written request of, or may be called by, the holders of
record of at least twenty-five percent (25%) of the shares of Serial
Preference Stock of all series at the time outstanding, and notice
thereof shall be given in the same manner as that required for the
annual meeting of shareholders; provided, however, that the corporation
shall not be required to call such special meeting if the annual meeting
of shareholders or any other special meeting of shareholders called or
to be called for a different purpose shall be held within 120 days after
the date of receipt of the foregoing written request from the holders of
Serial Preference Stock. At any meeting at which the holders of Serial
Preference Stock shall be entitled to elect Directors, the holders of
fifty percent (50%) of the then outstanding shares of Serial Preference
Stock of all series, present in person or by proxy, shall be sufficient
to constitute a quorum, and the vote of the holders of a majority of
such shares so present at any such meeting at which there shall be such
a quorum shall be sufficient to elect the members of the Board of
Directors which the holders of Serial Preference Stock are entitled to
elect as hereinabove provided. Notwithstanding any provision of these
Amended Articles of Incorporation or the Amended Code of Regulations of
the corporation or any action taken by the holders of any class of
shares fixing the number of Directors of the corporation, the two
Directors who may be elected by the holders of Serial Preference Stock
pursuant to this Subsection shall serve in addition to any other
Directors then in office or proposed to be elected otherwise than
pursuant to this Subsection. Nothing in this Subsection shall prevent
any change otherwise permitted in the total number of Directors of the
corporation or require the resignation of any Director elected otherwise
than pursuant to this Subsection. Notwithstanding any classification of
the other Directors of next succeeding annual meeting of shareholders;
provided, however, that whenever the holders of Serial Preference Stock
shall be divested of the voting power as above provided, the terms of
office of all persons elected as Directors by the holders of the Serial
Preference Stock as a class shall immediately terminate and the number
of Directors shall be reduced accordingly.
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(c) The affirmative vote or consent of the holders of at least
sixty percent (60%) of the shares of Serial Preference Stock at the time
outstanding, voting or consenting separately as a class, given in person
or by proxy either in writing or at a meeting called for the purpose,
shall be necessary to effect any one or more of the following (but so
far as the holders of Serial Preference Stock are concerned, such action
may be effected with such vote or consent):
(1) Any amendment, alteration or repeat of any of the
provisions of the Amended Articles of Incorporation or of the
Amended Code of Regulations of the corporation which affects
adversely the preferences or voting or other rights of the
holders of Serial Preference Stock; provided, however, that for
the purpose of this paragraph 5(c)(1) only, neither the
amendment of the Amended Articles of Incorporation so as to
authorize, create or change the authorized or outstanding amount
of Serial Preference Stock or of any shares of any class ranking
on a parity with or junior to the Serial Preference Stock nor
the amendment of the provisions of the Amended Code of
Regulations so as to change the number of Directors of the
corporation shall be deemed to affect adversely the preferences
or voting or other rights of the holders of Serial Preference
Stock; and provided further, that if such amendment, alteration
or repeal affects adversely the preferences or voting or other
rights of one or more but not all series of Serial Preference
Stock at the time outstanding, only the affirmative vote or
consent of the holders of at least sixty percent (60%) of the
number of shares at the time outstanding of the series so
affected shall be required;
(2) The authorization, creation or the increase in the
authorized amount of any shares of any class or any security
convertible into shares of any class, in either case ranking
prior to the Serial Preference Stock;
(3) The purchase or redemption (for sinking fund purposes
or otherwise) of less than all of the Serial Preference Stock
then outstanding except in accordance with a stock purchase
offer made to all holders of record of Serial Preference Stock,
unless all dividends on all Serial Preference Stock then
outstanding for all previous dividend periods shall have been
declared and paid or funds therefor set apart and all accrued
sinking fund obligations applicable thereto shall have been
complied with; or
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(4) The consolidation of the corporation with or its
merger into any other corporation, unless the corporation
resulting from such outstanding ranking prior to or on a parity
with any then outstanding Serial Preference Stock except the
same number of shares ranking prior to or on a parity with any
then outstanding series of Serial Preference Stock and having
the same rights and preferences as the shares of the corporation
authorized and outstanding immediately preceding such
consolidation or merger (and each holder of Serial Preference
Stock immediately preceding such consolidation or merger shall
receive the same number of shares with the same rights and
preferences of the resulting or surviving corporation).
(d) Neither the vote, consent nor any adjustment of the voting
rights of holders of shares of Serial Preference Stock shall be required
for an increase in the number of shares of Common Shares authorized or
issued or for stock splits of the Common Shares or for stock dividends
on any class of stock payable solely in Common Shares, and none of the
foregoing actions shall be deemed to affect adversely the preferences or
voting or other rights of Serial Preference Stock within the meaning and
for the purpose of this Subdivision.
Section 6. Definitions. For the purposes of this Subdivision:
(a) Whenever reference is made to shares "ranking prior to the
Serial Preference Stock", such reference shall mean and include all
shares of the corporation in respect of which the rights of the holders
thereof as to the payment of dividends or as to distribution in the
event of a voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the corporation are given preference over the
rights of the holders of Serial Preference Stock;
(b) Whenever reference is made to shares "on a parity with any
series of Serial Preference Stock", such reference shall mean and
include all shares of the corporation in respect of which the rights of
the holders thereof as to the payment of dividends and as to
distributions in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the corporation rank on an
equality (except as to the amounts fixed therefor) with the rights of
the holders of any series of Serial Preference Stock; and
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(c) Whenever reference is made to shares "ranking junior to the
Serial Preference Stock", such reference shall mean and include all
shares of the corporation other than those defined under Subsections (a)
and (b) of this Section as shares "ranking prior to" or "on a parity
with" the Serial Preference Stock.
SUBDIVISION B-1
$2.0625 CUMULATIVE CONVERTIBLE EXCHANGEABLE
SERIAL PREFERENCE STOCK, SERIES I, WITHOUT PAR VALUE
There is hereby established a series of Serial Preference Stock to which
the following provisions shall be applicable:
Section 1. Designation of Series. The series shall be designated
"$2.0625 Cumulative Convertible Exchangeable Serial Preference Stock Series I
"(hereinafter called "Series I Preference Stock").
Section 2. Number of Shares. The number of shares of Series I Preference
Stock is 1,150,000, which number the Board of Directors may decrease (but not
below the number of shares of the series then outstanding).
Section 3. Dividend Rate. The dividend rate for the Series I Preference
Stock is $2.0625 per share per annum.
Section 4. Dividend Payments. Dividends on shares of Series I Preference
Stock shall begin to accrue and shall be cumulative from the date of issuance.
The holders of Series I Preference Stock, subject to the prior preference with
respect to dividends on any series of Serial Preferred Stock set forth in
Section 2 of Subdivision A and in preference to holders of Common Shares and of
any other class of shares ranking junior to the Series I Preference Stock, shall
be entitled to receive dividends in cash, payable quarterly on the first day of
each January, April, July and October commencing on October 1, 1987.
Section 5. Optional Redemption. The corporation at its option may redeem
the Series I Preference Stock out of funds legally available for the purpose, at
any time in whole or in part, on and after June 1, 1989 at the redemption prices
referred to below. In order to facilitate the redemption of the Series I
Preference Stock, the Directors may fix a record date for the determination of
holders of Series I Preference Stock to be redeemed, or may
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cause the transfer books of the corporation to be closed for the transfer of
Series I Preference Stock, not more than 60 days prior to the date fixed for
such redemption. The redemption price payable shall be the then applicable rate
per share specified below in effect on the date fixed for redemption, plus
dividends accrued and unpaid on the shares of Series I Preference Stock to be
redeemed whether or not declared to the date fixed for redemption:
<TABLE>
<CAPTION>
If Redeemed During The Redemption Price
12-Month Period Beginning Per Share
------------------------- ----------------
<S> <C>
1989 $26.60
1990 26.38
1991 26.15
1992 25.92
1993 25.61
1994 25.40
1995 25.23
1996 (and thereafter) 25.00
</TABLE>
Section 6. Optional Redemption by Exchange.
(a) In addition to the optional redemption rights of the
corporation as set forth in Section 5 above, the corporation shall have
the right to redeem the Series I Preference Stock in whole on any
dividend payment date beginning July 1, 1990 in exchange for the
corporation's 8.25% Convertible Subordinated Debentures due 2007 (the
"Debentures") to be issued substantially in the form set forth in the
form of Indenture (the "Debenture Indenture") filed with the Securities
and Exchange Commission as an Exhibit to the corporation's Registration
Statement on Form S-2 relating to the Series I Preference Stock,
Registration No. 33-13574 (the "Registration Statement"). No such
redemption shall be made unless (i) all dividends accrued and payable on
the Series I Preference Stock have been paid or declared and such amount
set aside for their payment to the date fixed for such redemption, (ii)
all dividends accrued and payable on any series of Serial Preferred
Stock have been paid or declared and such amount set aside for their
payment, and (iii) no mandatory redemption of any series of Serial
Preferred Stock is in arrears. Each share of Series I Preference Stock
is exchangeable for $25.00 in principal amount of Debentures.
(b) Notice of such redemption of the Series I Preference Stock
shall be mailed at least 30 days, but not more than 60 days prior to the
date fixed for such redemption to each holder of Series I Preference
Stock to be so redeemed, at such holder's address as it appears on the
books of the corporation.
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(c) Prior to giving notice of intention to redeem pursuant to
subsection 6(b) above, the corporation and a bank or trust company
selected by the corporation shall execute and deliver an indenture
substantially in the form of the Debenture Indenture with such changes
as may required by law, stock exchange rule, or usage that do not
materially and adversely affect the rights of the holders of the
Debentures (the "Indenture"). Prior to any redemption of the Series I
Preference Stock pursuant to subsection 6(a) above, any amendments or
supplements to the Indenture which materially and adversely affect the
rights of the holders of the Debentures shall be consented to by the
holders of at least 60 percent of the outstanding Series I Preference
Stock. A copy of the Indenture may be inspected by the holders of any
shares of Series I Preference Stock at the offices of the corporation
during normal business hours. The corporation will not give notice of
its intention to redeem pursuant to subsection 6(b) above unless it
shall file at the office or agency of the corporation maintained for the
redemption of Series I Preference Stock an opinion of counsel (who may
be an employee of or regular counsel to the corporation), that the
Indenture has been duly authorized, executed and delivered by the
corporation, has been duly qualified under the Trust Indenture Act of
1939 (or that such qualification is not necessary) and constitutes a
valid and binding instrument enforceable against the corporation in
accordance with its terms (subject to bankruptcy, insolvency,
reorganization or other laws of general applicability relating to or
affecting creditors' rights and to the general principles of equity, and
subject to such other qualifications as are then customarily contained
in opinions of counsel experienced in such matters); and to the effect
that the Debentures have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered in exchange for the shares of Series I Preference Stock, will
constitute valid and binding obligations of the corporation entitled to
the benefits of the Indenture (subject as aforesaid); and that under the
law of the state of incorporation of the corporation, the Debentures
will be treated as on a parity with the indebtedness of the corporation
to its general unsecured creditors, except to the extent subordinated in
the Indenture, and that the redemption of Debentures for the Series I
Preference Stock will not violate the laws of the state of incorporation
of the corporation; and that neither the execution and delivery of the
Indenture or the Debentures nor compliance with the terms, conditions or
provisions of such instruments will result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or instrument,
known to such counsel, to which the corporation or any of its
subsidiaries is a party or by which it or any
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of them is bound, or any decree, judgment, order, rule or regulation,
known to counsel, of any court or governmental agency or body having
jurisdiction over the corporation and such subsidiaries or any of their
property; and that the Debentures have been duly registered with the
Securities and Exchange Commission under a Registration Statement that
has become effective under the Securities Act of 1933 (the "1933 Act")
or that issuance of the Debentures in exchange for the shares of Series
I Preference Stock is exempt from registration under the 1933 Act.
(d) If on the date fixed for redemption of the Series I
Preference Stock pursuant to subsection 6(a) above, the corporation has
taken all action required to authorize the issuance of the Debentures in
exchange for the Series I Preference Stock then, notwithstanding that
the certificates for such shares have not been surrendered for
cancellation, from and after the date fixed for redemption, all of the
shares of Series I Preference Stock shall no longer be deemed
outstanding and all rights with respect to such shares shall terminate,
except only the right to receive dividends accrued and unpaid to the
date fixed for such redemption and, upon surrender of certificates
therefore, the right to receive the Debentures, and the person or
persons entitled to receive the Debentures issuable upon the exchange
shall be treated for all purposes as the registered holder or holders of
such Debentures. Upon due surrender of a certificate representing shares
of Series I Preference Stock, the holder thereof shall receive the
principal amount of Debentures to which such holder is thereby entitled.
Section 7. Liquidation. Subject to the prior preference with respect to
distribution to holders of any series of Serial Preferred Stock of the full
amount of any liquidation preference to which such holders are entitled in the
event of a voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the corporation, the holders of shares of Series I Preference
Stock shall be entitled to receive in full out of the net assets of the
corporation, including its capital, before any amount shall be paid or
distributed among the holders of the Common Shares or any of the corporation's
shares ranking junior to the Series I Preference Stock, the amount of $25.00 per
share plus accrued and unpaid dividends to the date of payment of the amount due
as a result of such liquidation, dissolution or winding up of the affairs of the
corporation; PROVIDED, HOWEVER, all of such rights to receive such payments upon
liquidation, dissolution or winding up of the affairs of the corporation shall
be subject to and in accordance with the terms contained in Section 4 of
Subdivision B of Article IV hereof.
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Section 8. Voting. The holders of Series I Preference Stock shall have
no voting rights except as provided in Section 5 of Subdivision B of Article IV
hereof.
Section 9. Conversion at Option of Holder.
(a) Each share of Series I Preference Stock may be converted, at
the option of the holder thereof at any time or from time to time, into
fully paid, non-assessable Common Shares of the corporation on and
subject to the terms and conditions of this Section 9.
(b) The right of the holders of Series I Preference Stock to
convert shares of Series I Preference Stock with respect to which notice
of redemption (including redemption pursuant to Section 6 hereof) has
been given shall terminate at the close of business on the second
business day preceding the redemption date or the last business day
preceding the exchange date, as the case may be, unless default is made
in the payment of the applicable redemption price.
(c) Except as may be provided by the Directors, upon conversion
of the Series I Preference Stock, the corporation is not obligated to
make any payment or adjustment with respect to dividends accrued on the
Series I Preference Stock unless the holder of the shares of Series I
Preference Stock being converted was the record holder of such shares on
the record date for the payment of such dividends. Upon conversion of
the Series I Preference Stock, no payment or adjustment whatsoever will
be made with respect to dividends accrued on the Common Shares issuable
upon such conversion.
(d) Upon surrender to the corporation at the office of the
conversion agent, or conversion agents, or at such other place or
places, if any, as the Directors of the corporation may determine, of
certificates, duly endorsed to the corporation or in blank, for shares
of Series I Preference Stock to be converted, together with appropriate
evidence of the payment of any transfer or similar tax, if required, and
instructions in writing to the corporation requesting conversion of such
shares and specifying the name and address of the person, corporation,
firm or other entity to whom such shares are to be issued, the
corporation will issue (i) the number of full Common Shares issuable
upon conversion thereof as of the time of such surrender and as promptly
as practicable thereafter will deliver certificates for such Common
Shares, and (ii) cash for any remaining fraction of a Common Share, in
an amount equal to the Quoted Price (as
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<PAGE> 42
defined in subsection 9(i)) of the Common Shares on the last trading day
prior to the conversion date. Upon surrender of a certificate
representing shares of Series I Preference Stock to be converted in
part, in addition to the foregoing, the corporation shall also issue to
such holder a new certificate representing any unconverted shares of
Series I Preference Stock represented by the certificate surrendered for
conversion.
(e) The corporation shall pay all documentary, stamp or similar
issue or transfer tax due on the issue of Common Shares issuable upon
conversion of the Series I Preference Stock; PROVIDED, HOWEVER, that the
holder of shares of Series I Preference Stock so converted shall pay any
such tax which is due because such shares are to be issued in the name
other than that of such holder.
(f) The number of Common Shares issuable upon conversion of each
share of the Series I Preference Stock shall be equal to the quotient
obtained by dividing (i) $25. 00 by (ii) the Conversion Price (as
hereinafter defined) in effect on the date of conversion. The Conversion
Price shall initially equal $5.675; PROVIDED, HOWEVER, that such
Conversion Price shall be adjusted and readjusted from time to time as
provided in subsection 9(h) below and, as so adjusted and readjusted,
shall remain in effect (except as provided in subsection 9(g)) until a
further adjustment or readjustment thereof is required by subsection
9(h).
(g) The corporation from time to time may decrease the
Conversion Price by any amount for any period of time if the period is
at least 20 days and if the decrease is irrevocable during such period;
PROVIDED, HOWEVER, that in no event may the Conversion Price be less
than the par value of a Common Share. Whenever the Conversion Price is
decreased, the corporation shall give notice of the decrease at least 15
days prior to the date the decreased Conversion Price takes effect, in
the manner set forth in subsection 9 (n), which notice shall state the
decreased Conversion Price and the period it will be in effect. A
decrease in the Conversion Price pursuant to this subsection 9(g) shall
not otherwise change or adjust the Conversion Price otherwise in effect
for purposes of this Section 9.
(h) The Conversion Price in effect at any time shall be adjusted
as follows:
(i) On June 15, 1988, the Conversion Price will
automatically be reset to equal the lesser of (1)
the Conversion Price then in effect or (2) 122.7% of
the average daily closing price per Common Share on
the New York Stock Exchange (or
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<PAGE> 43
on such other national trading market if the
corporation's Common Shares are not then traded on
the New York Stock Exchange), for the 20 consecutive
trading days preceding the tenth trading day prior
to June 15, 1988.
(ii) If the corporation:
(1) declares a dividend or makes a distribution
on its Common Shares in its Common Shares;
(2) subdivides its outstanding Common Shares
into a greater number of shares;
(3) combines its outstanding Common Shares into
a smaller number of shares; or
(4) issues by reclassification of its Common
Shares any shares of its capital stock;
then the conversion privilege and the Conversion
Price in effect immediately prior to such action
shall be adjusted so that the holder of shares of
Series I Preference Stock thereafter converted may
receive the number of shares of capital stock of the
corporation which he would have owned immediately
following such action if he had converted such
shares immediately prior to such action. The
adjustment shall become effective immediately after
the record date in the case of a dividend or
distribution and immediately after the effective
date in the case of a subdivision, combination or
reclassification. Any Common Shares issuable in
payment of a dividend shall be deemed to have been
issued immediately prior to the time of the record
date for such dividend for purposes of calculating
the number of outstanding Common Shares under
subsections 9(h)(iii) and 9(h)(iv). Such adjustment
shall be made successively whenever any event
specified above shall occur. If after an adjustment
a holder of Series I Preference Stock may upon its
conversion receive shares of two or more classes of
capital stock of the corporation, the Directors
shall determine the allocation of the adjusted
conversion price between the classes of capital
stock (whose determination shall be conclusive and
shall be described in a resolution of the Directors
filed by the corporation with the conversion
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<PAGE> 44
agent for the Series I Preference Stock as soon as
practicable). After such allocation, the conversion
privilege and the Conversion Price of each class of
capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable
to the Common Shares in this Section 9.
(iii) If the corporation fixes a record date for the
distribution of any rights or warrants to all
holders of its Common Shares entitling them for a
period expiring within 60 days after the record date
mentioned below to purchase Common Shares (or
securities convertible into Common Shares) at a
price per share (or having an initial conversion
price per share) less than the current market price
per Common Share on that record date then the
Conversion Price shall be adjusted in accordance
with the formula:
N x P
-----
C'= C x O + M
-----
O + N
where:
C'= the adjusted Conversion Price.
C = the current Conversion Price.
O = the number of Common Shares outstanding on the record date.
N = the number of additional Common Shares offered directly or upon conversion
of the convertible securities.
P = the offering price per share of additional Common Shares or the Conversion
Price of the convertible securities, as the case may be.
M = the current market price per Common Share on the record date.
The adjustment shall become effective immediately
after the record date for the determination of
shareholders entitled to receive the rights or
warrants. Such adjustment shall be made successively
whenever such a record date is fixed. If such rights
or warrants are not issued, the Conversion Price
shall be immediately readjusted, effective as of the
date when the Directors determine not to issue such
rights or warrants, to the
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<PAGE> 45
Conversion Price which would then be in effect if
such record date had not been fixed. If such rights
or warrants are issued but, at the end of the period
during which such rights or warrants are
exercisable, not all rights or warrants shall have
been exercised, the Conversion Price shall be
immediately readjusted to what it would have been if
"N" in the above formula had been the number of
Common Shares actually issued.
(iv) If the corporation fixes a record date for the
making of a distribution to all holders of its
Common Shares of any of its assets, debt securities
or other securities (other than Common Shares), or
any rights or warrants to purchase any of the
foregoing, the Conversion Price shall be adjusted in
accordance with the formula:
C' = C x M-F
---
M
where:
C'= the adjusted Conversion Price.
C = the current Conversion Price.
M = the current market price per Common Share on the record date mentioned
below.
F = the fair market value on the record date of the assets, securities, rights
or warrants applicable to one Common Share. The Directors shall determine
such fair market value.
The adjustment shall become effective immediately
after the record date for the determination of
shareholders entitled to receive the distribution.
In the event that such distribution is not made, the
Conversion Price then in effect shall be readjusted,
effective as of the date when the Directors
determine not to make such distribution, to the
Conversion Price which would then be in effect if
such record date had not been fixed. Such adjustment
shall be made successively whenever such a record
date is fixed. This subsection does not apply to
cash dividends or cash distributions paid out of
consolidated aggregate net income from and after
January 1, 1987 as shown on the books of
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<PAGE> 46
the corporation. Also, this subsection does not
apply to distributions referred to in subsection
9(h) (ii) or to rights or warrants referred to in
subsection 9(h)(iii). Notwithstanding the foregoing,
in the event that the corporation shall distribute
rights or warrants (other than those referred to in
subsection 9(h)(iii) above) ("Rights") pro rata to
holders of Common Shares, the corporation may, in
lieu of making any adjustment pursuant to this
subsection 9(h)(iv), make proper provision so that
each holder of shares of Series I Preference Stock
who converts such shares (or any portion thereof)
after the record date for such distribution and
prior to the expiration or redemption of the Rights
shall be entitled to receive upon such conversion,
in addition to the Common Shares issuable upon such
conversion, a number of Rights to be determined as
follows: (i) if such conversion occurs on or prior
to the date for the distribution to the holders of
Rights of separate certificates evidencing such
Rights (the "Distribution Date"), the same number of
Rights to which a holder of a number of Common
Shares equal to the number of Common Shares issuable
upon such conversion is entitled at the time of such
conversion in accordance with the terms and
provisions of and applicable to the Rights; and (ii)
if such conversion occurs after the Distribution
Date, the same number of Rights to which a holder of
the number of Common Shares into which the shares of
Series I Preference Stock so converted was
convertible immediately prior to the Distribution
Date would have been entitled on the Distribution
Date in accordance with the terms and provisions of
and applicable to the Rights.
(v) If the corporation issues Common Shares for a
consideration per share less than the current market
price per share on the date the corporation fixes
the offering price of such additional shares, the
Conversion Price shall be adjusted in accordance
with the formula:
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<PAGE> 47
P
-
O + M
-----
C' = C x A
where:
C'= the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of Common Shares outstanding immediately prior to the issuance of
such additional Common Shares.
P = the aggregate consideration received for the issuance of such additional
Common Shares.
M = the current market price per Common Share on the date the corporation fixes
the offering price of such additional Common Shares.
A = the number of Common Shares outstanding immediately after the issuance of
such additional Common Shares.
The adjustment shall be made successively whenever
any such issuance is made, and shall become
effective immediately after such issuance. This
subsection does not apply to (a) any of the
transactions described in subsections 9(h) (iii) and
9(h)(iv), (b) the conversion of Series I Preference
Stock, or the conversion or exchange of other
securities convertible or exchangeable for Common
Shares or (c) Common Shares issued upon the exercise
of rights or warrants issued to the holders of
Common Shares.
(vi) If the corporation issues any securities convertible
into or exchangeable for Common Shares (other than
securities issued in transactions described in
subsections 9(h) (iii) and 9(h) (iv) or the Series I
Preference Stock) for a consideration per Common
Share initially deliverable upon conversion or
exchange of such securities less than the current
market price per share on the date the corporation
fixes the offering price of such securities, the
Conversion Price shall be adjusted in accordance
with the formula:
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<PAGE> 48
P
-
O + M
-----
C' = C x O + D
where:
C'= the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of Common Shares outstanding immediately prior to the
issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the current market price per Common Share on the date of issuance of
such securities.
D = the maximum number of Common Shares deliverable upon conversion or in
exchange for such securities at the initial conversion or exchange rate.
The adjustment shall be made successively whenever
any such issuance is made, and shall become
effective immediately after such issuance. If all of
the Common Shares deliverable upon conversion or
exchange of such securities have not been issued
when such securities are no longer outstanding, then
the Conversion Price shall promptly be readjusted to
the Conversion Price which would then be in effect
had the adjustment upon the issuance of such
securities been made on the basis of the actual
number of Common Shares issued upon conversion or
exchange of such securities.
(i) In subsections 9(h) (iii), 9(h) (iv), 9(h) (v) and 9(h) (vi)
the current market price per Common Share on any date is the average of
the Quoted Prices (as hereinafter defined) of the Common Shares for the
five consecutive trading days ending prior to such date. "Quoted Price"
of the Common Shares means (i) if the Common Shares are listed on a
securities exchange, the last reported closing sales price of the Common
Shares on such exchange which shall be for consolidated trading if
applicable to such exchange, (ii) if the Common Shares are quoted on the
NASDAQ National Market System, the last reported closing sales price of
the Common Shares on such System or (iii) if the Common Shares are not
listed on a securities exchange or quoted on the NASDAQ National Market
System, the last reported closing bid price of the Common Shares.
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<PAGE> 49
(j) For purposes of any computation respecting consideration
received pursuant to subsections 9(h) (v) and 9(h)(vi), the following
shall apply:
(1) in the case of the issuance of shares of Common Shares
for cash, the consideration shall be the amount of such cash,
provided that in no case shall any deduction be made for any
commissions, discounts or other expenses incurred by the
corporation for any underwriting of the issue or otherwise in
connection therewith;
(2) in the case of the issuance of Common Shares for a
consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair
market value thereof as determined in good faith by the
Directors (irrespective of the accounting treatment thereof),
whose determination shall be conclusive and described in a
resolution of the Directors which shall be filed with the
conversion agent; and
(3) in the case of the issuance of securities convertible
into or exchangeable for shares, the aggregate consideration
received therefor shall be deemed to be the consideration
received by the corporation for the issuance of such securities
plus the additional minimum consideration, if any, to be
received by the corporation upon the conversion or exchange
thereof (the consideration in each case to be determined in the
same manner as provided in clauses (1) and (2) of this
subsection).
(k) No adjustment in the conversion price need be made unless
the adjustment would require an increase or decrease of at least 1% in
the Conversion Price; PROVIDED, HOWEVER, that any adjustments that are
not made shall be carried forward and taken into account in any
subsequent adjustment.
All calculations under this Section 9 shall be made to the
nearest cent or to the nearest one one-hundredth of a share, as the case may be.
In any case in which this Section 9 shall require that an
adjustment shall become effective immediately after a record date for an event,
the corporation may defer until the occurrence of such event (1) issuing to the
holder of any Series I Preference Stock converted after such record date and
before the occurrence of such event the additional Common Shares issuable upon
such conversion by reason of the adjustment required by such event over and
above the Common Shares issuable upon such conversion before giving effect to
such adjustment and (2) paying to such holder any amount in cash in lieu of a
fractional Common Share pursuant to
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<PAGE> 50
subsection 9(d); PROVIDED, HOWEVER, that the corporation shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's
rights to receive such additional Common Shares, and such cash, upon the
occurrence of the event requiring such adjustment.
(1) No adjustment need be made for a change in the par value or
no par value of the Common Shares. To the extent the Series I Preference
Stock becomes convertible into cash, no adjustment need be made
thereafter as to the cash. Dividends will not accrue on the cash.
No adjustment need be made (1) for issuances of Common Shares or
securities convertible into Common Shares in connection with the corporation's
plans adopted by the Directors and approved by the holders of Common Shares for
the benefit of the employees of the corporation or its subsidiaries; and (2) for
issuances pursuant to rights, warrants or convertible securities outstanding on
or prior to the date of issuance of the Series I Preference Stock.
(m) Whenever the Conversion Price is adjusted, the corporation
shall promptly mail to holders of Series I Preference Stock a notice of
adjustment. The corporation shall file with the conversion agent an
Officers' Certificate (in the case of an adjustment under subsection
9(h) (ii), clauses (1), (2), or (3) or a certificate from the
corporation's independent public accountants (in the case of all other
adjustments) briefly stating the facts requiring the adjustment and the
manner of computing it.
(n) Whenever the Conversion Price is reduced, the corporation
shall mail to holders of Series I Preference Stock a notice of the
reduction. The corporation shall mail the notice at least 15 days before
the date the reduced Conversion Price takes effect. The notice shall
state the reduced Conversion Price and the period it will be in effect.
(o) If:
(1) the corporation takes any action that would require an
adjustment in the Conversion Price pursuant to subsections 9(h)
(ii), 9(h) (iii), 9(h) (iv), 9(h) (v) or 9(h) (vi);
(2) the corporation is a party to a transaction of the
nature contemplated by the first paragraph of subsection (p)
hereof or upon the occurrence of any of the events contemplated
by the second paragraph of subsection (p) hereof; or
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<PAGE> 51
(3) there is a liquidation or dissolution of the
corporation;
the corporation shall mail to each holder of Series I Preference Stock a notice
stating the proposed record date for a dividend or distribution or the proposed
effective date of a sale of Common Shares or of a subdivision, combination,
reclassification, consolidation, merger, transfer, lease, liquidation or
dissolution. The corporation shall mail the notice at least 15 days before such
date. Failure to mail the notice or any defect in it shall not affect the
validity of the transaction.
(p) If the corporation is a party to a transaction subject to
Section 6.01 of the Debenture Indenture, upon consummation of such
transaction the Series I Preference Stock shall automatically become
convertible into the kind and amount of securities, cash or other assets
which the holder of shares of Series I Preference Stock would have owned
immediately after such transaction if such holder had converted such
shares of Series I Preference Stock immediately before the effective
date of the transaction. Thereafter, the holders of Series I Preference
Stock shall be entitled to appropriate adjustment with respect to their
conversion rights to the end that the provisions set forth in subsection
9(h) shall correspondingly be made applicable, as nearly as may be
reasonably possible, in relation to any shares of stock or other
securities or property thereafter deliverable upon conversion of the
Series I Preference Stock.
In case of any reclassification or change of the Common Shares
issuable upon conversion of the Series I Preference Stock (other than a change
in par value, or from par value to no par value, or as a result of a subdivision
or combination, but including any change in the Common Shares into two or more
classes or series of shares), or in case of any consolidation or merger of
another corporation into the corporation in which the corporation is the
continuing corporation and in which there is a reclassification or change
(including a change to the right to receive cash or other property) of the
Common Shares (other than a change in par value, or from par value to no par
value, or as a result of a subdivision or combination, but including any change
in the Common Shares into two or more classes or series of shares), the
corporation shall take such steps as shall be necessary to provide that the
holder of each share of Series I Preference Stock then outstanding shall have
the right thereafter to convert such shares solely into the kind and amount of
shares of stock, other securities, property or cash or any combination thereof
receivable
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<PAGE> 52
upon such reclassification, change, consolidation or merger by a holder of the
number of Common Shares into which such holder's shares of Series I Preference
Stock might have been converted immediately prior to such reclassification,
change, consolidation or merger.
The successor to the corporation or the corporation, as the case
may be, shall mail to holders of Series I Preference Stock a notice briefly
stating the Conversion Price per Common Share or per share price of the security
of the successor to the corporation.
If this Section applies, subsections 9(h) (ii), 9(h)(iii),
9(h)(iv), 9(h)(v) and 9(h)(vi) do not apply. The foregoing, however, shall not
in any way affect the rights a holder of shares of Series I Preference Stock may
otherwise have, pursuant to the last sentence of subsection 9(h) (iv), to
receive Rights upon conversion of such shares.
(q) The conversion agent, if other than the corporation, has no
duty to determine when an adjustment under this Section 9 should be
made, how it should be made or what it should be. The conversion agent,
if other than the corporation, makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Series I Preference Stock. The conversion agent, if other than the
corporation, shall not be responsible for the corporation's failure to
comply with this Section. Each conversion agent other than the Company,
shall have the same protection under this subsection 9(q) and shall be
protected in relying upon any notice of adjustment described in
subsection 9(m).
(r) Before taking any action which would cause an adjustment
reducing the Conversion Price below the then stated or par value of the
Common Shares issuable upon conversion of the Series I Preference Stock,
the corporation will take any corporate action which may, in the opinion
of its counsel, be necessary in order that the corporation may validly
and legally issue fully paid and nonassessable shares of such Common
Shares at such adjusted conversion price.
(s) Notwithstanding any other provision of this Section 9 to the
contrary, no adjustment to the Conversion Price shall be made as a
result of (1) the conversion of the corporation's Series A Preferred
Stock or the exercise of any warrants, options or other rights to
acquire Common Shares outstanding, in either case, as of the date of
issuance of the Series I Preference Stock (including the Common Share
warrants issued to Drexel Burnham Lambert Incorporated in connection
with the offering and sale of the Series I Preference Stock), regardless
of whether the conversion price or exercise price of any such securities
is such that upon conversion or
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<PAGE> 53
exercise thereof an adjustment to the Conversion Price would otherwise
be required by the terms of this Section 9 or (2) an adjustment in the
conversion price or exercise price applicable to any such securities
pursuant to the respective terms thereof.
(t) The corporation hereby reserves and shall at all times
reserve and keep available, free from preemptive rights, out of its
authorized but unissued stock, for the purpose of effecting the
conversion of the Series I Preference Stock, such number of its duly
authorized Common Shares as shall from time to time be sufficient to
effect the conversion of all outstanding Series I Preference Stock.
(u) Upon conversion of Series I Preference Stock the stated
capital of the Common Shares issued upon such conversion shall be the
aggregate stated value thereof, and the stated capital of the
corporation shall be correspondingly increased or reduced to reflect the
difference between the par value of the Series I Preference Stock so
converted and the stated value of the Common Shares issued upon
conversion.
Section 10. Limitation and Rights Upon Insolvency. Notwithstanding any
other Provision of this Subdivision B-1, the corporation shall not be required
to pay any dividend on, or to pay any amount in respect of any redemption of,
the Series I Preference Stock at a time when immediately after making such
payment the corporation is or would be rendered insolvent (as defined by
applicable law), provided that the obligation of the corporation to make any
such payment shall not be extinguished in the event the foregoing limitation
applies.
SUBDIVISION B-2
EXPRESS TERMS OF THE CUMULATIVE REDEEMABLE
SERIAL PREFERENCE STOCK, SERIES II
Section 1. Designation of Series. There is established hereby a series
of Serial Preference Stock that shall be designated "Cumulative Redeemable
Serial Preference Stock, Series II" (hereinafter sometimes called this "Series"
or the "Series II Preference Shares") and that shall have the terms set forth in
this Subdivision B-2.
Section 2. Number of Shares. The number of shares of this Series shall
be 200,000.
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<PAGE> 54
Section 3. Dividend Rate and Payment.
(a) The holders of record of Series II Preference Shares shall
be entitled to receive, when and as declared by the Board of Directors
in accordance with the terms hereof, subject to the prior preference
with respect to dividends upon the corporation's Serial Preferred Stock
set forth in Section 2 of Subdivision A, out of funds legally available
for the purpose, cumulative quarterly dividends payable in cash on the
first day of January, April, July and October in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a Series II Preference Share or fraction of a Series II
Preference Share in an amount per share (rounded to the nearest cent)
equal to, subject to the provision for adjustment hereinafter set forth,
one hundred times the aggregate per share amount of all cash dividends,
and one hundred times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions, other than a dividend
payable in Common Shares, or a subdivision of the outstanding Common
Shares (by reclassification or otherwise), declared on the Common Shares
since the immediately preceding Quarterly Dividend Payment Date, or,
with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any Series II Preference Share or fraction of a Series
II Preference Share. In the event the corporation shall at any time
declare or pay any dividend on the Common Shares payable in Common
Shares, or effect a subdivision or combination or consolidation of the
outstanding Common Shares (by reclassification or otherwise than by
payment of a dividend in Common Shares) into a greater or lesser number
of Common Shares, then in each such case the amount of the quarterly
dividend which holders of Series II Preference Shares were entitled
immediately prior to such event pursuant to the preceding sentence shall
be adjusted by multiplying such amount by a fraction the numerator of
which is the number of Common Shares outstanding immediately after such
event and the denominator of which is the number of Common Shares that
were outstanding immediately prior to such event.
(b) Dividends shall begin to accrue and be cumulative on
outstanding Series II Preference Shares from the Quarterly Dividend
Payment Date next preceding the date of issue of such Series II
Preference Shares, unless the date of issue of such shares (i) is on or
prior to the record date for the first Quarterly Dividend Payment Date,
in which case dividends on such shares shall begin to accrue from the
date of issue of such shares, or (ii) is a Quarterly Dividend Payment
Date or a date after the record date for the determination of holders of
Series II Preference Shares entitled to receive a quarterly
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<PAGE> 55
dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. No dividends shall be paid upon or declared and set
apart for any Series II Preference Shares for any dividend period unless
at the same time a dividend for the same dividend period, ratably in
proportion to the respective annual dividend rates fixed therefor, shall
be paid upon or declared and set apart for all Serial Preference Stock
of all series then outstanding and entitled to receive such dividend.
The Board of Directors may fix a record date for the determination of
holders of Series II Preference Shares entitled to receive payment of a
dividend or distribution declared thereon, which record date shall not
be more than 40 days prior to the date fixed for the payment thereof.
Section 4. Optional Redemption.
(a) Subject to the express terms of each series of
Serial Preference Stock and to the provisions of Section 5(c)
(3) of Subdivision B and in accordance with Section 3 of
Subdivision B, the Series II Preference Shares shall be
redeemable from time to time at the option of the Board of
Directors of the corporation, as a whole or in part, at any
time at a redemption price per share equal to one hundred
times the then applicable Purchase Price as defined in that
certain Rights Agreement, dated as of August 22, 1988 between
the corporation and National City Bank (the "Rights
Agreement"), as the same may be from time to time amended
in accordance with its terms, which Purchase Price is $47.00
as of August 22, 1988, subject to adjustment from time to time
as provided in the Rights Agreement. Copies of the Rights
Agreement are available from the corporation upon request. In
the event that fewer than all of the outstanding Series II
Preference Shares are to be redeemed, the number of shares to
be redeemed shall be as determined by the Board of Directors
and the shares to be redeemed shall be selected pro rata or by
lot in such manner as shall be determined by the Board of
Directors.
(b) Any Series II Preference Shares purchased or
otherwise acquired by the corporation in any manner
whatsoever, including, without limitation, by a redemption
pursuant to Section 4.(a) hereof, shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Serial Preference Stock and may be reissued
as part of a new series of Serial Preference Stock
subject to
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<PAGE> 56
the conditions and restrictions set forth herein, in the Amended
Articles of Incorporation, or in any other Certificate of Adoption of
Amendment creating a series of Serial Preferred or Preference Stock or
as required by law.
Section 5. Liquidation.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the corporation (hereinafter
referred to as a "Liquidation"), and subject to the prior preference
with respect to distributions to holders of Serial Preferred Stock, no
distribution shall be made to the holders of shares of stock ranking
junior (either as to dividends or upon Liquidation) to the Series II
Preference Shares, unless, prior thereto, the holders of Series II
Preference Shares shall have received at least an amount per share
(rounded to the nearest cent) equal to, subject to the provision for
adjustment hereinafter set forth, one hundred times the aggregate amount
to be distributed per share to holders of Common Shares (the "Series II
Liquidation Preference"), plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or declared,
to the date of such payment.
(b) In the event, however, that the net assets of the
corporation are not sufficient to pay in full the amount of the Series
II Liquidation Preference and the liquidation preferences of all other
series of Serial Preference Stock, if any, which rank on a parity with
the Series II Preference Shares as to distribution of assets in
Liquidation, all shares of this Series and of such other series of
Serial Preference Stock shall share ratably in the distribution of
assets (or proceeds thereof) in Liquidation in proportion to the full
amounts to which they are respectively entitled.
(c) In the event the corporation shall at any time declare or
pay any dividend on the Common Shares payable in Common Shares, or
effect a subdivision or combination or consolidation of the outstanding
Common Shares (by reclassification or otherwise than by payment of a
dividend in Common Shares) into a greater or lesser number of Common
Shares, then in each such case the amounts to which holders of Series II
Preference Shares were entitled to receive upon a liquidation
immediately prior to such event pursuant to paragraph (a) above, shall
be adjusted by multiplying such amount by a fraction the numerator of
which is the number of Common Shares outstanding immediately after such
event and the denominator of which is the number of Common Shares that
were outstanding immediately prior to such event.
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(d) The merger or consolidation of the corporation into or with
any other corporation, or the merger of any other corporation into it,
or the sale, lease or conveyance of all or substantially all the
property or business of the corporation, shall not be deemed to be a
Liquidation for the purposes of this Section 5.
Section 6. Voting. The holders of Series II Preference Shares will have
no voting rights except as otherwise provided in Section 5 of Subdivision B and
as required by law.
Section 7. Conversion Rights. The Series II Preference Shares shall not
be convertible into Common Shares.
Section 8. Fractional Shares. The corporation may issue fractions and
certificates representing fractions of a Series II Preference Share in integral
multiples of one one-hundredth of a Series II Preference Share, or in lieu
thereof, at the election of the Board of Directors of the corporation, evidence
such fractions by depositary receipts, pursuant to an appropriate agreement
between the corporation and a depositary selected by it, provided that such
agreement shall provide that the holders of such depositary receipts shall have
all the rights, privileges and preferences of the holders of Series II
Preference Shares. In the event that fractional Series II Preference Shares are
issued, the holders thereof shall have all the rights provided herein for
holders of full shares of Series II Preference Shares in the proportion which
such fractional share bears to a full share.
SUBDIVISION C
COMMON SHARES WITHOUT PAR VALUE
The Common Shares shall be subject to the express terms of the Serial
Preferred Stock and any series thereof and to the express terms of the Serial
Preference Stock and any series thereof. Each Common Share shall be equal to
every other Common Share and the holders thereof shall have such rights as are
provided by law and shall be entitled to one vote for each share held by them
upon all questions presented to shareholders.
Each of the Common Shares having a par value of $5.00 per share
heretofore authorized and outstanding or held in the corporation's treasury
immediately prior to the filing of this Certificate of Amendment is hereby
changed into one Common Share without par value.
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ARTICLE V. Subject to the terms of Section 2(b) of Subdivision A and
Section 2(b) of Subdivision B of Article IV, the corporation may purchase or
otherwise acquire, hold, redeem, cancel, retire, reissue and in any other manner
deal in and with, and dispose of, from time to time and to the extent permitted
by the laws of the State of Ohio, shares of any class issued by it. Such
purchases may be made either in the open market or at private or public sale,
and in such manner and amounts, from such holder or holders of outstanding
shares of the corporation and at such prices as the Board of Directors of the
corporation shall from time to time determine, and the Board of Directors is
hereby empowered to authorize such purchases from time to time without any vote
or other action of the holders of any class of shares now or hereafter
authorized and outstanding at the time of any such purchase.
ARTICLE VI. (A) Notwithstanding any provision of law now or hereafter in
force requiring for any action the vote of a designated proportion of the voting
power of a corporation, except as provided in paragraph (B) below and in the
Code of Regulations, such action may be taken by the vote of the holders of
shares entitling them to exercise two-thirds of the voting power of the
corporation.
(B) If a shareholder vote is required by law, the affirmative vote of
the holders of shares entitling them to exercise eighty percent (80%) of the
voting power of the corporation, given in person or by proxy at a meeting called
for the purpose, shall be necessary:
(a) to approve (i) the lease, sale, exchange, transfer or other
disposition by the corporation of all, or substantially all, of its
assets or business to a related company or an affiliate of a related
company, or (ii) the consolidation of the corporation with or its merger
into a related company or an affiliate of a related company, or (iii)
the merger into the corporation of a related company or an affiliate of
a related company, or (iv) a combination or majority share acquisition
in which the corporation is the acquiring corporation and its voting
shares are issued or transferred to a related company or an affiliate of
a related company or to shareholders of a related company or an
affiliate of a related company or an associated person; or
(b) to approve any agreement, contract or other arrangement with
a related company or an affiliate of a related company or an associated
person providing for any of the transactions described in subparagraph
(a) above; or
(c) to adopt any amendment to these Amended Articles of
Incorporation of the corporation which conflicts with any provision of
the corporation's Code of Regulations; or
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(d) to effect any amendment of the Amended Articles of
Incorporation of the corporation which changes any or all the provisions
of this Article VI.
For the purpose of this paragraph (B), (i) a "related company"
in respect of a given transaction shall be any person, partnership,
corporation or firm which, together with its affiliates and associated
persons, owns of record or beneficially, directly or indirectly, in
excess of five percent (5%) of the shares of any outstanding class of
shares of the corporation entitled to vote upon such transaction, as of
the record date used to determine the shareholders of the corporation
entitled to vote upon such transactions; (ii) an "affiliate" of a
related company shall be any individual, joint venture, estate, trust,
partnership or corporation which, directly or indirectly, through one or
more intermediaries, controls, or is controlled by, or is under common
control with, the related company; (iii) an "associated person" of a
related company shall be any officer or director or any beneficial
owner, directly or indirectly, of ten percent (10%) or more of any class
of equity security of such related company or any of its affiliates; and
(iv) the terms "combination", "majority share acquisition" and
"acquiring corporation" shall have the same meaning as that contained in
Section 1701.01 of the Ohio General Corporation Law or any similar
provision hereafter enacted.
The determination of the Board of Directors of the corporation,
based on information known to the Board of Directors and made in good
faith, shall be conclusive as to whether any person, partnership,
corporation, entity or firm is a related company or affiliate or
associated person as defined in this paragraph (B).
ARTICLE VII. These Amended Articles of Incorporation supersede and take
the place of the heretofore Amended Articles of Incorporation and all amendments
thereto.
ARTICLE VIII. No holder of shares of the corporation of any class shall
be entitled as such, as a matter of right, to subscribe for or purchase shares
of any class, now or hereafter authorized, or to purchase or subscribe for,
securities convertible into or exchangeable for shares of the corporation or to
which shall be attached or appertain any warrants or rights entitling the holder
thereof to subscribe for or purchase shares, except such rights of subscription
or purchase, if any, at such price or prices and upon such terms and conditions
as the Board of Directors in its discretion from time to time may determine.
ARTICLE IX. The provisions of Section 1701.831 of the Ohio Revised Code
relating to control share acquisitions shall not apply to the corporation.
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CERTIFICATE
The undersigned, the duly elected and acting Secretary of The Lamson &
Sessions Co., an Ohio corporation having its principal office at 25701 Science
Park Drive, Beachwood, Cuyahoga County, Ohio 44122, does hereby certify that the
foregoing is a true and correct copy of the Amended Articles of Incorporation of
said corporation which were last amended by the Board of Directors of the
corporation at a meeting duly called and held on August 22, 1988, and that the
foregoing Amended Articles of Incorporation are in full force and effect on the
date of this certificate.
Date: September 20, 1988
/s/ Alan L. Miller
-------------------------------
Secretary of The Lamson
& Sessions Co.
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Exhibit 4(c)
THE LAMSON & SESSIONS CO.
1988 INCENTIVE EQUITY PERFORMANCE PLAN
(AS AMENDED AS OF APRIL 26, 1996)
SECTION 1. PURPOSE.
The 1988 Incentive Equity Performance Plan (the "Plan"), is intended to
encourage key executives and managerial employees of The Lamson & Sessions Co.
(the "Company") and its Subsidiaries or Affiliates to become owners of Stock
of the Company in order to increase their interest in the Company's long-term
success. to provide incentive equity opportunities which are competitive with
other similarly situated corporations and to stimulate the efforts of such
employees by giving suitable recognition for services which contribute
materially to the Company's success.
SECTION 2. DEFINITIONS.
For purposes of the Plan, the following terms shall be defined as
set forth below:
(a) "Affiliate" means any entity other than the Company and its
Subsidiaries which the Board designates as an "Affiliate" for purposes of
this Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Cause" means a felony conviction of a participant or the
failure of a participant to contest prosecution for a felony, or a
participant's willful misconduct or dishonesty, any of which is directly
and materially harmful to the business or reputation of the Company or
any Subsidiary or Affiliate.
(d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
(e) "Committee" means the Committee referred to in Section 3 of the
Plan. If at any time a Committee shall not be in existence, then the
functions of the Committee specified in the Plan shall be exercised by
the Board.
(f) "Deferral Period" means the initial period of time during which
shares of Deferred Stock awarded pursuant to Section 8 are subject to
deferral limitations under Section 8(c).
(g) "Deferred Stock" means an award made pursuant to Section 8 of
the right to receive Stock at the end of a specified deferral period.
(h) "Disability" means permanent and total disability as determined
under the Company's long term disability program.
(i) "Disinterested Person" shall have the meaning set forth in Rule
16b-3(d)(3) as promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, or any successor definition
adopted by the Commission.
(j) "Early Retirement" means retirement, with the consent for
purposes of this Plan of the Committee (or any officer designated by the
Committee) at or prior to the time of retirement, from active employment
with the Company or any Subsidiary or Affiliate pursuant to the early
retirement provisions of the applicable pension plan of such employer.
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<PAGE> 2
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(1) "Company" means The Lamson & Sessions Co., a corporation
organized under the laws of the State of Ohio, or any successor
corporation to it.
(m) "Elective Deferral Period" means the deferral period described
in Section 8(c)(v).
(n) "Fair Market Value" means, as of any given date, the mean
between the highest and lowest quoted selling price, regular way, of the
Stock on the New York Stock Exchange or, if no such sale of Stock occurs
on the New York Stock Exchange on such date, the fair market value of the
Stock as determined by the Committee in good faith.
(o) "Incentive Stock Option" means any Stock Option intended to be
and designated as an "incentive stock option" within the meaning of
Section 422A of the Code.
(p) "Non-Qualified Stock Option" means any Stock Option that is not
an Incentive Stock Option.
(q) "Normal Retirement" means retirement from active employment with
the Company or any Subsidiary or Affiliate on or after the normal
retirement date specified in the applicable pension plan of such
employer.
(r) "Plan" means The Lamson & Sessions Co. 1988 Incentive Equity
Performance Plan, as hereinafter amended from time to time.
(s) "Restriction Period" means the period of time during which
shares of Stock awarded to a participant pursuant to Sections 8(a) and
(b) remain subject to the restrictions referred to in Section 8(b).
(t) "Restricted Stock" means an award of shares of stock that is
subject to restrictions under Section 8.
(u) "Retirement" means Normal or Early Retirement.
(v) "Rule 16b-3" as promulgated and amended from time to time by the
Securities and Exchange Commission pursuant to Section 16(b) of the
Exchange Act.
(w) "Stock" means the Common Shares, without par value, of the
Company.
(x) "Stock Appreciation Right" means the right granted under Section
7 to surrender to the Company all or a portion of a Stock Option in
exchange for a payment in cash or Stock.
(y) "Stock Option" or "Option" means any option to purchase shares
of Stock granted pursuant to Section 6.
(z) "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if each of
the corporations (other than the last corporation in the unbroken chain)
owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.
In addition, the terms "Approval Date," "Change in Control," "Potential
Change in Control." "Change in Control Price" and "Voting Stock" shall have
meanings set forth in Section 9.
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<PAGE> 3
SECTION 3. ADMINISTRATION.
The Plan shall be administered by the Compensation and Organization
Committee of the Board of Directors, which shall consist of not less than
three Disinterested Persons who are appointed by, and serve at the pleasure
of, the Board.
The Committee shall have the power and authority to grant to eligible
employees Stock Options, Stock Appreciation Rights, Restricted Stock and
Deferred Stock.
In particular, the Committee shall have the authority:
(i) to select the key employees of the Company, its Subsidiaries and
Affiliates to whom Stock Options and other awards may from time to time
be granted;
(ii) to determine whether and to what extent Stock Options, Stock
Appreciation Rights, Restricted Stock and Deferred Stock are granted;
(iii) to determine the number of shares to be covered by each such
award granted;
(iv) to determine the terms and conditions, not inconsistent with
the terms hereof, of any award granted (including, but not limited to,
the share price and any restriction or limitation on, or any vesting.
acceleration or forfeiture waiver regarding, any award, based on such
factors and criteria as the Committee shall determine, in its sole
discretion);
(v) to determine and adjust the performance goals and measurements
applicable to performance-based Deferred Stock and Restricted Stock
awards to include or exclude the impact of extraordinary or unusual
items, events or circumstances and/or to reflect change in applicable tax
or accounting rules and other developments;
(vi) to determine whether and under what circumstances a Stock
Option may be settled in cash, Deferred Stock and/or Restricted Stock
under Section 6(j); and
(vii) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to an award
shall be deferred.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it
shall, from time to time, deem advisable; to interpret the terms and
provisions of the Plan and any Stock Option or other award granted and any
agreements relating thereto; and to otherwise supervise the administration of
the Plan.
All decisions made by the Committee pursuant to the provisions hereof
shall be made in the Committee's sole discretion and shall be final and
binding on all persons.
SECTION 4. ELIGIBILITY.
Officers and other key employees of the Company, its Subsidiaries and its
Affiliates (but excluding members of the Committee and any person who serves
only as a director) who are responsible for or contribute to the management,
growth and/or profitability of the business of the Company, its Subsidiaries
or its Affiliates are eligible to be granted Stock Options, Stock Appreciation
Rights, Restricted Stock or Deferred Stock awards.
The participants under the Plan shall be selected from time to time by
the Committee, in its sole discretion, from among those eligible.
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<PAGE> 4
SECTION 5. STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for
distribution pursuant to Stock Options or other awards hereunder shall be
1,800,000 shares. Such shares may consist, in whole or in part, of authorized
and unissued shares or treasury shares.
Subject to Section 7(b)(iv), if any shares of Stock that have been
optioned cease to be subject to a Stock Option, or if any such shares of Stock
that are subject to any Restricted Stock or Deferred Stock award granted
hereunder are forfeited or any such Option or other award otherwise terminates
without a payment being made to the participant in the form of Stock, such
shares shall again be available for distribution in connection with future
awards under the Plan. For purposes of this Section 5, Restricted Stock shall
be deemed to have been issued or transferred at the earlier of the time when
such Restricted Stock is no longer subject to a substantial risk of forfeiture
or when any dividends are paid thereon.
In the event of any merger, reorganization, consolidation,
recapitalization, Stock dividend, or other change in corporate structure
affecting the Stock, a substitution or adjustment shall be made in the
aggregate number of shares reserved for issuance under the Plan, in the number
and option price of shares subject to outstanding Options granted under the
Plan, and in the number of shares subject to other outstanding awards granted
under the Plan as may be determined to be appropriate by the Board, provided
that the number of shares subject to any award shall always be a whole number.
Such adjusted option price shall also be used to determine the amount payable
by the Company upon the exercise of any Stock Appreciation Right associated
with any Stock Option.
SECTION 6. STOCK OPTIONS.
Stock Options may be granted alone or in addition to other awards granted
under the Plan. Any Stock Option granted under the Plan shall be in such form
as the Committee may from time to time approve and the provisions of Stock
Option awards need not be the same with respect to each optionee.
Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options; and (ii) Non-Qualified Stock Options (provided that Incentive
Stock Options may not be granted to employees of Affiliates). The Committee
may grant to any optionee Incentive Stock Options, Non-Qualified Stock
Options, or both types of Stock Options (in each case with or without Stock
Appreciation Rights). To the extent that any Stock Option does not qualify as
an Incentive Stock Option, it shall constitute a separate Non-Qualified Stock
Option.
Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify the Plan under Section 422A of the Code, or,
without the consent of the optionee(s) affected, to disqualify any Incentive
Stock Option under such Section 422A.
Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions not
inconsistent with the terms of the Plan, as the Committee deems appropriate:
(a) Exercise Price. The exercise price per share of Stock
purchasable under a Stock Option shall be no less than the Fair Market
Value on the day the Option is granted.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years after the date such Option is granted and no Non-Qualified Stock
Option shall be exercisable more than ten years and one day after the date
such Option is granted.
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<PAGE> 5
(c) Exercise of Options. Options shall become exercisable at such time or
times and subject to such terms and conditions (including, without limitation,
installment exercise provisions) as shall be determined by the Committee,
provided, however, that, except as provided in Section 6(f) or (g) (in the
case of Disability) and Section 9, unless otherwise determined by the
Committee at or after grant, no Stock Option shall be exercisable prior to the
first anniversary date of the granting of the option. If the Committee
provides that any Stock Option is exercisable only in installments, the
Committee may waive such installment exercise provisions at any time in whole
or in part based on performance and/or such other factors as the Committee may
determine.
(d) Method of Exercise. Options may be exercised in whole or in part by
giving written notice of exercise to the Company specifying the number of
shares to be purchased. Such notice shall be accompanied by payment in full of
the purchase price, either by certified or bank check, or such other
instrument as may be permitted in accordance with rules or procedures adopted
by the Committee.
As determined by the Committee, at or after grant, payment in full or in
part may also be made in the form of unrestricted Stock already owned by the
optionee or, in the case of the exercise of a Non-Qualified Stock Option,
Restricted Stock or Deferred Stock subject to an award hereunder (based in
each case, on the Fair Market Value on the date the option is exercised, as
determined by the Committee), provided, however, that, in the case of an
Incentive Stock Option, the right to make a payment in the form of already
owned shares may be authorized only at the time the Option is granted.
If payment of the option exercise price of a Non-Qualified Stock Option
is made in whole or in part in the form of Restricted Stock or Deferred Stock,
the shares received upon the exercise of such Stock Option shall be restricted
or deferred, (as the case may be, in accordance with the original terms of the
Restricted Stock award or Deferred Stock award in question) equal in number to
the number of shares of Restricted Stock or Deferred Stock surrendered upon
the exercise of such Option.
No shares of Stock shall be transferred until full payment therefor has
been made. An optionee shall generally have the rights of a shareholder with
respect to shares subject to the Option only when the optionee has given
written notice of exercise, has paid in full for such shares and, if
requested, given the representation described in Section 12(a).
(e) Non-Transferability of Options. No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee.
At the request of an optionee, Stock purchased upon exercise of an Option
may be issued or transferred into the name of the optionee and another person
jointly with rights of survivorship.
(f) Termination by Death. Subject to Section 6(i), if an optionee's
employment by the Company or any Subsidiary or Affiliate terminates by reason
of death, any Stock Option held by such optionee may thereafter be exercised,
to the extent it was exercisable at the time of death or on such accelerated
basis as the Committee may determine at or after grant, by the legal
representative of the estate or by the legatee of the optionee under the will
of the optionee. for a period of one year (or such other period up to three
years as the Committee may specify) from the date of death or until the
expiration of the stated term of such Stock Option, whichever period is
shorter.
(g) Termination by Reason of Disability or Retirement. Subject to Section
6(i), if an optionee's employment by the Company or any Subsidiary or
Affiliate terminates by reason of Disability or Retirement, any Stock Option
held by such optionee may thereafter be exercised by the optionee, to
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<PAGE> 6
the extent it was exercisable at the time of such termination or on such
accelerated basis as the Committee may determine at or after grant, for a
period of three years (or such shorter period as the Committee may specify at
grant) from the date of such termination of employment or until the expiration
of the stated term of such Stock Option, whichever period is the shorter,
provided, however, that, if the optionee dies within such three-year period
(or such shorter period), any unexercised Stock Option held by such optionee
shall thereafter be exercisable, to the extent to which it was exercisable at
the time of death, for a period of one year from the date of such death or
until the expiration of the stated term of such Stock Option, whichever period
is the shorter. In the event of termination of employment by reason of
Disability or Retirement, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422A of
the Code, such Stock Option shall thereafter be treated as a Non-Qualified
Stock Option.
(h) Other Termination of Employment. Unless otherwise determined by the
Committee at or after grant, if an optionee's employment by the Company or any
Subsidiary or Affiliate terminates for any reason other than death, Disability
or Retirement, the optionee will have three months from the date of
termination to exercise any and all Stock Options that are then exercisable,
except that, if the termination was for Cause, any and all Options shall be
immediately cancelled.
(i) Incentive Stock Option Limitations. To the extent required for
"incentive stock option" status under Section 422A of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the Stock with
respect to which Incentive Stock Options granted after 1986 are exercisable
for the first time by the optionee during any calendar year under the Plan and
any other stock option plan of the Company or any Subsidiary or parent
corporation (within the meaning of Section 425 of the Code) or any predecessor
of any such corporation. in each case after 1986 shall not exceed $100,000.
The Committee may provide at grant, to the extent permitted under Section
422A of the Code, that, if (i) a participant's employment with the Company or
its Subsidiaries is terminated by reason of death, Disability or Retirement
and (ii) the portion of any Incentive Stock Option that is otherwise
exercisable during the post-termination period specified under Sections 6(f),
(g) or (h), applied without regard to this Section 6(i), is greater than the
portion of such Option that is exercisable as an "incentive stock option"
during such post-termination period under Section 422A, such post-termination
period shall automatically be extended (but not beyond the original option
term) to the extent necessary to permit the optionee to exercise such
Incentive Stock Option either as an Incentive Stock Option or, if exercised
after the expiration of the applicable exercise periods under Section 422A (a),
as a Non-Qualified Stock Option. The Committee is also authorized to provide at
grant for a similar extension of the post-termination exercise period in the
event of a Change in Control or a Potential Change in Control.
(j) Cashout of Option: Settlement of Spread Value in Deferred or
Restricted Stock. On receipt of written notice to exercise, the Committee may,
in its sole discretion, elect to cashout all or part of the portion of the
Stock Option(s) to be exercised by paying the optionee an amount, in cash or
Stock, equal to the excess of the Fair Market Value of the Stock over the
option price (the "Spread Value") on the effective date of such cashout.
Cashouts relating to options held by optionees who are actually or potentially
subject to Section 16(b) of the Exchange Act shall comply with the "window
period" provisions of Rule 16b-3 referred to in Section 7(b)(ii), to the
extent applicable.
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<PAGE> 7
In addition, if the option agreement so provides at grant or is
amended after grant and prior to exercise to so provide (with the
optionee's consent), the Committee may require that all or part of the
shares to be issued with respect to (i) the Spread Value payable in the
event of a cashout of an unexercised Stock Option pursuant to Section 9 or
(ii) the Spread Value portion of an exercised Stock Option take the form
of Deferred or Restricted Stock, which shall be valued on the date of the
cashout or exercise on the basis of the Fair Market Value of such Deferred
or Restricted Stock determined without regard to the deferral limitations
and/or forfeiture restrictions involved.
SECTION 7. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan.
In the case of a Non-Qualified Stock Option, such rights may be granted
either at or after the time of the grant of such Stock Option. In the
case of an Incentive Stock Option, such rights may be granted only at the
time of the grant of such Stock Option.
A Stock Appreciation Right or applicable portion thereof granted
with respect to a given Stock Option shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock Option,
except that, unless otherwise determined by the Committee at the time of
grant, a Stock Appreciation Right granted with respect to less than the
full number of shares covered by a related Stock Option shall not be
reduced until the number of shares covered by an exercise or termination
of the related Stock Option exceeds the number of shares not covered by
the Stock Appreciation Right.
A Stock Appreciation Right may be exercised by an optionee, in
accordance with Section 7(b), by surrendering the applicable portion of
the related Stock Option in accordance with procedures established by the
Committee for such purposes. Upon such exercise and surrender, the
optionee shall be entitled to receive an amount determined in the manner
prescribed in Section 7(b). Stock Options which have been so surrendered
shall no longer be exercisable to the extent the related Stock
Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject
to such terms and conditions, not inconsistent with the provisions of the
Plan, as shall be determined from time to time by the Committee,
including the following:
(i) Stock Appreciation Rights shall be exercisable only at such time
or times and to the extent that the Stock Options to which they relate
are exercisable, in accordance with the provisions of Section 6 and this
Section 7 of the Plan, provided that a Stock Appreciation Right shall not
be exercisable during the first six months of its term by any optionee
except in the event of death or Disability of the optionee prior to the
expiration of the six-month period.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee
shall be entitled to receive an amount in cash and/or shares of Stock in
the aggregate equal in value to the excess of the Fair Market Value of
one share of Stock over the option price per share specified in the
related Stock Option multiplied by the number of shares in respect of
which the Stock Appreciation Right shall have been exercised, with the
Committee having the right to determine the form of payment.
(iii) Stock Appreciation Rights shall be transferable only when and
to the extent that the underlying Stock Option would be transferable
under Section 6(e) of the Plan.
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<PAGE> 8
(iv) Upon the exercise of a Stock Appreciation Right, the Stock
Option or part thereof to which such Stock Appreciation Right is related
shall be deemed to have been exercised for the purpose of the limitation
set forth in Section 3 of the Plan on the number of shares of Stock to be
issued under the Plan.
(v) The Committee may provide, at the time of grant, that such Stock
Appreciation Right can be exercised only in the event of a Change in
Control and/or a Potential Change in Control, subject to such terms and
conditions as the Committee may specify at grant.
(vi) The Committee may also provide that, in the event of a Change
in Control and/or a Potential Change in Control, the amount to be paid
upon the exercise of a Stock Appreciation Right shall be based on the
Change in Control Price, subject to such terms and conditions as the
Committee may specify at grant.
SECTION 8. AWARDS OF RESTRICTED STOCK AND DEFERRED STOCK.
(a) Administration. Shares of Restricted Stock and/or Deferred Stock may
be issued either alone or in addition to other awards granted under the Plan.
The Committee shall determine the officers and key employees of the Company
and its Subsidiaries or Affiliates to whom, and the time or times at which,
such grants will be made, the number of shares to be awarded, the price (if
any) to be paid under Section 8(b)(i) by the recipient of a Restricted Stock
award, the time or times within which such awards may be subject to
forfeiture, and all other conditions of the awards.
The Committee may condition grants of Restricted Stock and/or Deferred
Stock upon the attainment of specified performance goals or such other factors
or criteria as the Committee may determine.
The provisions of Restricted Stock and Deferred Stock awards need not be
the same with respect to each recipient.
(b) Restrictions and Conditions Applicable to Restricted Stock
Awards. Restricted Stock Awards shall be subject to the following restrictions
and conditions:
(i) The purchase price for shares of Restricted Stock shall be equal
to or less than their par value and may be zero.
(ii) Awards of Restricted Stock must be accepted within a period of
60 days (or such shorter periods as the Committee may specify at grant)
after the award date, by executing a Restricted Stock Award Agreement and
paying whatever price (if any) is required under Section 8(b)(i).
The prospective recipient of a Restricted Stock award shall not have
any rights with respect to such award, unless and until such recipient
has executed an agreement evidencing the award and has delivered a fully
executed copy thereof of the Company, and has otherwise complied with the
applicable terms and conditions of such award.
(iii) Each participant receiving a Restricted Stock award shall be
issued a stock certificate in respect of such shares of Restricted Stock.
Such certificate shall be registered in the name of such participant, and
shall bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such award, substantially in the following
form:
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<PAGE> 9
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of The Lamson & Sessions Co. 1988 Incentive Equity
Performance Plan and an Agreement entered into between the registered
owner and The Lamson & Sessions Co. Copies of such Plan and Agreement are
on file in the offices of The Lamson & Sessions Co., Beachwood, Ohio and
will be mailed to the registered owner, without charge, within five days
after receipt of written request therefor."
The Committee may require that the stock certificates evidencing
such shares be held in custody by the Company until the restrictions
thereon shall have lapsed, and that, as a condition of any Restricted
Stock award, the participant shall have delivered a stock power, endorsed
in blank, relating to the Stock covered by such award.
(iv) Subject to the provisions of this Plan and the applicable award
agreement, during a period set by the Committee commencing with the date
of such award (the "Restriction Period"), the participant shall not be
permitted to sell, transfer, pledge, assign or otherwise encumber shares
of Restricted Stock awarded under the Plan.
Based on service, performance and/or such other factors or criteria as
the Committee may determine, the Committee may, however, at or after grant
provide for the lapse of such restrictions in installments and/or may
accelerate or waive such restrictions in whole or in part.
(v) Except as provided in this Section 8(b), the recipient shall
have, with respect to the shares of Restricted Stock covered by any
award, all of the rights of a shareholder of the Company, including the
right to vote the shares, and the right to receive any dividends,
provided, however, that unless otherwise determined by the Committee, any
dividends on such shares shall be automatically deferred and reinvested
in additional Restricted Stock subject to the same restrictions as the
underlying award, to the extent shares are available under Section 3.
(vi) Except as otherwise provided in this Section 8(b) and in the
applicable award agreement, upon termination of a participant's
employment with the Company or any Subsidiary or Affiliate for any reason
during the Restriction Period for a given award, all shares still subject
to restriction shall be forfeited by the participant, provided, however,
the Committee may provide for waiver of the restrictions in the event of
termination of employment due to death, Disability or Retirement.
(vii) In the event of hardship or other special circumstances of a
participant whose employment with the Company or any Subsidiary or
Affiliate is involuntarily terminated (other than for Cause), the
Committee may waive in whole or in part any or all remaining restrictions
with respect to any or all of the participant's Restricted Stock, based
on such factors and criteria as the Committee may deem appropriate.
(viii) If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock subject to such Restriction Period,
unrestricted certificates for such shares shall be delivered to the
participant.
(c) Terms and Conditions Applicable to Deferred Stock Awards. Deferred
Stock Awards shall be subject to the following terms and conditions:
(i) Subject to the provisions of this Plan and the applicable award
agreement. Deferred Stock awards may not be sold, transferred, pledged,
assigned or otherwise encumbered during the period specified by the
Committee for purposes of such award (the "Deferral Period"). At the
expiration of the Deferral Period (or the Elective Deferral Period
defined in Section 8(c)(v), where applicable),
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<PAGE> 10
share certificates shall be delivered to the participant, or his legal
representative, in a number equal to the number of shares covered by the
Deferred Stock award.
Based on service, performance and/or such other factors or criteria
as the Committee may determine, the Committee may, however, at or after
grant, accelerate the vesting of all or any part of any Deferred Stock
award and/or waive the deferral limitations for all or any part of such
award.
(ii) Unless otherwise determined by the Committee, amounts equal to
any dividends that would have been payable during the Deferral Period
with respect to the number of shares covered by a Deferred Stock award if
such shares had been outstanding shall be automatically deferred and
deemed to be reinvested in additional Deferred Stock, subject to the same
deferral limitations as the underlying award.
(iii) Except to the extent otherwise provided in this Section 8(c)
and in the applicable award agreement, upon termination of a
participant's employment with the Company or any Subsidiary or Affiliate
for any reason during the Deferral Period for a given award, the Deferred
Stock covered by such award shall be forfeited by the participant,
provided, however, the Committee may provide for accelerated vesting in
the event of termination of employment due to death, Disability or
Retirement.
(iv) In the event of hardship or other special circumstances of a
participant whose employment with the Company or any Subsidiary or
Affiliate is involuntarily terminated (other than for Cause), the
Committee may waive in whole or in part any or all of the remaining
deferral limitations imposed hereunder with respect to any or all of the
participant's Deferred Stock, based on such factors and criteria as the
Committee deems appropriate.
(v) A participant may elect to further defer receipt of Deferred
Stock for a specified period or until a specified event (the "Elective
Deferral Period"), subject in each case to the Committee's approval and
to such terms as are determined by the Committee. Subject to any
exceptions adopted by the Committee, such election must generally be made
at least twelve months prior to completion of the Deferral Period for the
Deferred Stock award in question (or for the applicable installment of
such an award).
(vi) Each award shall be confirmed by, and subject to the terms of,
a Deferred Stock agreement executed by the Company and the participant.
SECTION 9. CHANGE IN CONTROL PROVISIONS.
(a) Impact of Event. In the event of:
(x) a "Change in Control" as defined in Section 9 (b), or
(y) a "Potential Change in Control" as defined in Section 9(c),
the Committee or the Board may provide that one or more of the following
acceleration and valuation provisions shall apply:
(i) Any or all Stock Appreciation Rights outstanding for at least
six months on the date that such Change in Control or Potential Change in
Control is determined to have occurred and any or all Stock Options
awarded under this Plan not previously exercisable and vested shall
become fully exercisable and vested.
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<PAGE> 11
(ii) The restrictions and deferral limitations applicable to any or
all Restricted Stock and Deferred Stock awards shall lapse and such
shares and awards shall be fully vested.
(iii) The value of any or all outstanding Stock Options. Restricted
Stock and Deferred Stock awards shall be cashed out on the basis of the
"Change in Control Price" as defined in Section 9(d) as of the date such
Change in Control or such Potential Change in Control is determined to
have occurred or such other date as the Committee may determine prior to
the Change in Control.
(b) Definition of "Change in Control". For purposes of Section 9(a), a
"Change in Control" means the happening of any of the following:
(i) The Company is merged or consolidated or reorganized into or
with another corporation or other legal person, and as a result of such
merger, consolidation or reorganization less than a majority of the
combined voting power of the then-outstanding securities of such
corporation or person immediately after such transaction are held in the
aggregate by the holders of Voting Stock (as that term is hereafter
defined) of the Company immediately prior to such transaction;
(ii) The Company sells or otherwise transfers all or substantially
all of its assets to any other corporation or other legal person, and
less than a majority of the combined voting power of the then-outstanding
securities of such corporation or person immediately after such sale or
transfer is held in the aggregate by the holders of Voting Stock of the
Company immediately prior to such sale or transfer;
(iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated pursuant to
the Exchange Act, disclosing that any person (as the term "person" is
used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has
become the beneficial owner (as the term "beneficial owner" is defined
under Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of securities representing 15% or more of the combined
voting power of the then-outstanding securities entitled to vote
generally in the election of directors of the Company ("Voting Stock");
(iv) The Company files any report, proxy statement or other document
with the Securities and Exchange Commission pursuant to the Exchange Act
or any rules or regulations presently in effect or hereafter promulgated
under such Act disclosing that a Change in Control of the Company has or
may have occurred or will or may occur in the future pursuant to any
then-existing contract or transaction; or
(v) If during any period of two consecutive years, individuals who
at the beginning of any such period constitute the Board cease for any
reason to constitute at least a majority thereof, unless the election, or
the nomination for election by the Company's shareholders, of each member
of the Board first elected during such period was approved by a vote of
at least two-thirds of the Board then still in office who were members of
the Board at the beginning of any such period.
Notwithstanding the foregoing provisions of Section 9(b)(iii) or 9(b)(iv)
hereof, a Change in Control shall not be deemed to have occurred for purposes
of Section 9(a) solely because (i) the Company, (ii) an entity in which the
Company directly or indirectly beneficially owns 80% or more of the voting
securities, or (iii) any Company-sponsored employee stock ownership plan or any
other employee benefit plan of the Company, either files or becomes obligated
to file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule,
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<PAGE> 12
form or report or item therein) under the Exchange Act, disclosing beneficial
ownership by it of shares of Voting Stock, whether in excess of 15% or
otherwise, or because the Company reports that a Change in Control of the
Company has or may have occurred or will or may occur in the future by reason
of such beneficial ownership.
(c) Definition of "Potential Change in Control". For purposes of Section
9(a), a "Potential Change in Control" means the happening of any one of the
following:
(i) The entering into an agreement by the Company, the consummation
of which would result in a Change in Control of the Company as defined in
Section 9(b); or
(ii) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than the Company or a
Subsidiary or any Company employee benefit plan) (including any trustee
of such plan acting as such trustee) of securities of the Company
representing 5% or more of the combined voting power of the Company's
outstanding securities, and the adoption by the Board of a resolution to
the effect that a "Potential Change in Control" of the Company has
occurred for the purposes of this Plan.
(d) Change in Control Price. For the purposes of this Section 9, "Change
in Control Price" means the highest price per share paid in any transaction
reported on the New York Stock Exchange Composite Index, or paid or offered in
any bona fide transaction related to an actual or Potential Change in Control
of the Company, at the time during the preceding sixty-day period as
determined by the Committee, except that, in the case of Incentive Stock
Options and Stock Appreciation Rights relating to Incentive Stock Options,
such price shall be based only on transactions reported for the date as of
which the Committee decides to cashout such options.
SECTION 10. AMENDMENTS AND TERMINATION.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights
of an optionee or participant under a Stock Option, Stock Appreciation Right
or Deferred Stock award theretofore granted, without the optionee's or
participant's consent, or which, without the approval of the Company's
stockholders, would:
(a) except as expressly provided in the Plan, increase the total number
of shares reserved for purposes of the Plan;
(b) change the class of employees eligible to participate in the Plan;
(c) extend the maximum option period under Section 6(b) of the Plan; or
(d) increase materially the benefits under the Plan.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but no such amendment
shall impair the rights of any holder without the holder's consent. The
Committee may also substitute new Stock Options for previously granted Stock
Options, including previously granted Stock Options having higher option
prices.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in applicable tax and securities laws
and accounting rules, as well as other developments.
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SECTION 11. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give
any such participant or optionee any rights that are greater than those of a
general creditor of the Company. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Stock or payments hereunder consistent with the foregoing.
SECTION 12. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing shares pursuant to a
Stock Option or Restricted Stock award under the Plan to represent to and
agree with the Company in writing that the optionee or participant is
acquiring the shares without a view to distribution thereof. The certificates
for such shares may include any legend which the Committee deems appropriate
to reflect any restrictions on transfer.
All certificates for shares of Stock or other securities delivered under
the Plan shall be subject to such stock-transfer orders and other restrictions
as the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Stock is then listed and any applicable Federal or state
securities law, and the Committee may cause a legend or legends to be put on
any such certificates to make appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Company, a
subsidiary or an Affiliate from adopting other or additional compensation
arrangements for its employees.
(c) The adoption of the Plan shall not confer upon any employee of the
Company or any Subsidiary or Affiliate any right to continued employment with
the Company or a Subsidiary or Affiliate, as the case may be, nor shall it
interfere in any way with the right of the Company or any Subsidiary or
Affiliate to terminate the employment of any of its employees at any time.
(d) No later than the date as of which an amount first becomes includible
in the gross income of the optionee for Federal income tax purposes with
respect to any Stock Option or other award under the Plan, the participant
shall pay to the Company, or make any arrangements satisfactory to the
Committee regarding the payment of any Federal, state or local taxes of any
kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Company, withholding obligations may be settled
with Stock, including Stock that is part of the award that gives rise to the
withholding requirement.
The obligations of the Company under the Plan shall be conditional on
such payment or arrangements, and the Company and its Subsidiaries or
Affiliates shall, to the extent permitted by law, have the right to deduct any
such taxes from the payment(s) otherwise due to the participant.
(e) The Committee shall establish such procedures as it deems appropriate
for a participant to designate a beneficiary to whom any amounts payable in
the event of the participant's death are to be paid.
(f) The Plan and all awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Ohio.
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SECTION 13. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the date it is approved by the
stockholders of the Company. Grants made prior to such stockholder approval
shall be contingent on such approval.
SECTION 14. TERM OF PLAN.
No Stock Option, Stock Appreciation Right, Restricted Stock or Deferred
Stock shall be granted pursuant to the Plan on or after the tenth anniversary
of the effective date of the Plan, but awards granted prior to such tenth
anniversary may extend beyond that date.
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Exhibit 5
August 5, 1997
The Lamson & Sessions Co.
25701 Science Park Drive
Cleveland, Ohio 44122-7313
Re: 1988 Incentive Equity Performance Plan (as Amended as of
April 26, 1996)
--------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel for The Lamson & Sessions Co., an Ohio
corporation (the "Registrant"), in connection with The Lamson & Sessions Co.
1988 Incentive Equity Performance Plan (as Amended as of April 26, 1996) (the
"Plan"). We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion, and based thereon, we are of the
opinion that the Registrant's Common Shares without par value (the "Common
Shares") that may be issued or transferred and sold pursuant to the Plan and the
authorized forms of agreements thereunder (the "Agreements") will be, when
issued or transferred and sold in accordance with the Plan and such Agreements,
duly authorized, validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement on Form S-8 filed by the Registrant to effect
registration of the Common Shares to be issued and sold pursuant to the Plan
under the Securities Act of 1933. William H. Coquillette, a partner in this law
firm, is a Director of the Company.
Very truly yours,
Jones, Day, Reavis & Pogue
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
(Form S-8) pertaining to the 1988 Incentive Equity Performance Plan (as Amended
as of April 26, 1996) of The Lamson & Sessions Co. of our report dated
January 23, 1997, with respect to the consolidated financial statements and
schedule of The Lamson & Sessions Co. included in the Annual Report on Form 10-K
for the year ended December 28, 1996, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Cleveland, Ohio
August 4, 1997
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
of The Lamson & Sessions Co., an Ohio corporation (the "Company"),
hereby constitutes and appoints John B. Schulze and James J. Abel, and each of
them, his true and lawful attorney or attorneys-in-fact, with full power of
substitution and revocation, for him and in his name, place, and stead, to sign
on his behalf as a director of the Company a Registration Statement pursuant to
the Securities Act of 1933 on Form S-8 concerning certain Common Shares of the
Company to be offered in connection with the Company's 1988 Incentive Equity
Performance Plan (as amended), and to sign any and all amendments or
post-effective amendments to such Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission or any state regulatory authority,
granting unto said attorney or attorneys-in-fact, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as they might or could do in person, hereby ratifying and confirming
all that said attorney or attorneys-in-fact or any of them or the substitutes
may lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the 25th day of April, 1997 and the 2nd day of May, 1997.
/s/ John C. Dannemiller
- --------------------------------- ---------------------------
James T. Bartlett John C. Dannemiller
Director Director
/s/ Francis H. Beam, Jr. /s/ George R. Hill
- --------------------------------- ---------------------------
Francis H. Beam, Jr. George R. Hill
Director Director
/s/ William H. Coquillette /s/ A. Malachi Mixon, III
- --------------------------------- ---------------------------
William H. Coquillette A. Malachi Mixon, III
Director Director
/s/ Martin J. Cleary /s/ John C. Morley
- --------------------------------- ---------------------------
Martin J. Cleary John C. Morley
Director Director
/s/ D. Van Skilling
---------------------------
D. Van Skilling
Director
