RESTATED CHARTER
OF
LOWE'S COMPANIES, INC.
1. Name. The name of the Corporation is Lowe's Companies, Inc.
2. Duration. The period of duration of the Corporation is perpetual
3. Purpose. The purpose for which the Corporation is organized is
to engage in any lawful act or activity for which corporations may be
organized under the North Carolina Business Corporation Act.
4. Authorized Stock. The Corporation shall have the authority to
issue 5,000,000 shares of Preferred Stock of a par value of $5 per share and
1,400,000,000 shares of Common Stock of a par value of $.50 per share.
(a) Preferred Stock. Authority is expressly vested in the
board of Directors to divide the Preferred Stock into series and, within the
following limitations, to fix and determine the relative rights and
preferences as between series so established and to provide for the issuance
thereof. Each series shall be so designated as to distinguish the
shares thereof from the shares of all other series and classes. All shares of
Preferred Stock shall be identical except as to the following relative rights
and preferences, as to which there may be variations between different
series:
(1) The rate of dividend;
(2) The price at and the terms and conditions on which
shares may be redeemed;
(3) The amount payable upon shares in event of involuntary
liquidation;
(4) The amount payable upon shares in event of voluntary liquidation;
(5) Sinking fund provisions for the redemption or purchase of shares;
(6) The terms and conditions on which shares may be converted if the
shares of any series are issued with the privilege of conversion;
and
(7) The terms and conditions on which shares may be voted in the
election of Directors or otherwise, either as a class or together
with other voting securities.
Prior to the issuance of any shares of a series of Preferred Stock the
Board of Directors shall establish such series by adopting a resolution
setting forth the designation of the series and the preferences, limitations
and relative rights thereof to the extent that variations are permitted by the
provisions hereof.
All series of Preferred Stock shall rank on a parity as to dividends and
assets with all other series according to the respective dividend rates and
amounts distributable upon any voluntary or involuntary liquidation of the
Corporation fixed for each such series; but all shares of Preferred Stock
shall be preferred over Common Stock as to both dividends and amounts
distributable upon any voluntary or involuntary liquidation of the
Corporation. All shares of any one series shall be identical.
(b) Common Stock. The holders of Common Stock shall, to the
exclusion of the holders of any other class of stock of the Corporation, have
the sole and full power to vote for the election of Directors and for all
other purposes without limitation except only (i) as otherwise provided in the
resolutions establishing and designating a particular series of Preferred
Stock and (ii) as otherwise expressly provided by the then existing statutes
of the State of North Carolina. The holders of Common Stock shall have one
vote for each share of Common Stock held by them.
Subject to the provisions of resolutions establishing and designating
series of Preferred Stock, the holders of shares of Common Stock shall be
entitled to receive dividends if, when and as declared by the Board of
Directors out of funds legally available therefor and to the net assets
remaining after payment of all liabilities upon voluntary or involuntary
liquidation of the Corporation.
(c) Stated Capital. The stated capital of the Corporation is
$18,550,694 as of April 4, 1986, being the date that the Board of Directors
adopted a resolution setting forth a Restated and Amended Charter for
submission to the shareholders for approval.
5. Shareholders' Preemptive Right. No holder of stock of the
Corporation shall have any preemptive right to subscribe for or purchase any
additional or increased stock of the Corporation of any class, whether now or
hereafter authorized, including treasury stock, or obligations convertible
into any class of stock, or stock of any class convertible into stock of any
other class, or obligations, stock or other securities carrying warrants or
rights to subscribe to stock of the Corporation of any class, whether now or
hereafter authorized, but any and all shares of stock, bonds, debentures or
other securities or obligations, whether or not convertible into stock or
carrying warrants entitling the holders thereof to subscribe to stock, may be
issued, sold or disposed of from time to time by authority of the Board of
Directors to such persons, firms, corporations or employee stock ownership
plans and for such consideration, as far as it may be permitted by law, as the
Board of Directors shall from time to time determine.
6 Registered Office. The address of the registered office of the
Corporation in the State of North Carolina is 225 Hillsborough Street, Wake
County, Raleigh, North Carolina, 27603; and the name of its registered agent
at such address is C T Corporation System.
7. Incorporators. The names and addresses of the original
incorporators of the Corporation are as follows:
NAME ADDRESS
H. C. Buchan, Jr. North Wilkesboro, N.C.
Ruth Lowe Buchan North Wilkesboro, N.C.
Hal E. Church North Wilkesboro, N.C.
8. Board of Directors.
(a) Number, Election & Term of Directors. The number of Directors
shall be set forth in the Bylaws but shall not exceed at any time 12 members.
The number of Directors may not be increased or decreased by more than 30%
during any 12-month period except by the affirmative vote of the holders of at
least 70% of the outstanding Voting Shares, as defined in this Article 8. The
Board of Directors shall be divided into three classes, Class I, Class II and
Class III, as nearly equal in number as possible, and with each class' term
expiring at the third annual shareholders meeting after its election. At each
Annual Meeting of Shareholders, the successors to the class of Directors whose
term shall then expire shall be identified as being of the same class as the
Directors they succeed and elected to hold office for a term expiring at the
third succeeding Annual Meeting of Shareholders. When the number of Directors
is changed, any newly-created directorships or any decrease in directorships
shall be so apportioned to one of the classes as to make all classes as nearly
equal in number as possible.
(b) Newly-Created Directorships and Vacancies. Subject to the
rights of the holders of Preferred Stock then outstanding, any vacancy
occurring in the Board of Directors, including a vacancy resulting from an
increase by not more than 30% in the number of Directors in any 12-month
period, may be filled by the affirmative vote of the majority of the remaining
Directors, through less than a quorum of the Board of Directors, and the
Directors so chosen shall hold office for a term expiring at the Annual
Meeting of Shareholders at which the term of the class to which they have been
elected expires, subject to any requirement that they be elected by the
shareholders at the annual meeting next following their election by the Board
of Directors. No decrease in the number of Directors constituting the Board
of Directors shall shorten the term of any incumbent Director.
(c) Removal of Directors. Subject to the rights of the holders of
Preferred Stock then outstanding, any Director may be removed, with or without
cause, only by the affirmative vote of the holders of at least 70% of the
outstanding Voting Shares.
(d) Amendment or Repeal. The provisions of this Article shall not
be amended or repealed, nor shall any provision of this Charter be adopted
that is inconsistent with this Article, unless such action shall have been
approved by the affirmative vote of either:
(i) the holders of at least 70% of the outstanding Voting
Shares; or
(ii) a majority of those Directors who are Disinterested Directors
and the holders of the requisite number of shares specified
under applicable North Carolina law for the amendment of the
charter of a North Carolina corporation.
(e) Certain Definitions. For purposes of this Article:
(i) "Disinterested Director" means any member of the Board of
Directors who:
(A) was elected to the Board of Directors at the 1986 Annual
Meeting of Shareholders; or
(B) was recommended for election by a majority of the
Disinterested Directors then on the Board, or was elected
by the Board to fill a vacancy and received the
affirmative vote of a majority of the Disinterested
Directors then on the Board.
(ii) "Voting Shares" shall mean the outstanding shares of all
classes or series of the Corporation's stock entitled to vote generally
in the election of Directors.
(f) To the full extent that the North Carolina Business
Corporation Act, as it exists on the date that this Amendment became
effective, permits the elimination of the liability of Directors, a Director
of the Company shall not be liable for monetary damages for breach of his duty
as a Director.
9. (a) Vote Required for Certain Business Combinations.
(i) Higher Vote for Certain Business Combinations. In addition
to any affirmative vote required by law or this Charter, and except as
otherwise expressly provided in Section (b) of this Article:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (a) any Interested
Stockholder (as hereinafter defined) or (b) any other
Corporation which immediately before such merger or
consolidation is an Affiliate or Associate (as hereinafter
defined) of an Interested Stockholder; or
(B) any statutory share exchange in which any Interested
Stockholder or any Affiliate or Associate of an Interested
Stockholder acquires the issued and outstanding shares of any
class or Capital Stock of the Corporation or a Subsidiary; or
(C) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of
transactions during any 12 month period) to or with any
Interested Stockholder or any Affiliate or Associate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate Fair Market Value (as hereinafter
defined) in excess of 5% of the Corporation's consolidated
assets as of the date of the most recently available financial
statements; or any guaranty by the Corporation or any Subsidiary
(in one transaction or a series of transactions during any 12
month period) of indebtedness of any Interested Stockholder or
any Affiliate or Associate of any Interested Stockholder in
excess of 5% of the Corporation's consolidated assets as of the
date of the most recently available financial statements; or any
transaction or series of transactions involving in excess of 5%
of the Corporation's consolidated assets as of the date of the
most recently available financial statements to which the
Corporation or any Subsidiary and any Interested Stockholder or
any Affiliate or Associate of any Interested Stockholder is a
party; or
(D) the sale or other disposition by the Corporation or
any Subsidiary to any Interested Stockholder or any Affiliate or
Associate of any Interested Stockholder (in one transaction or a
series of transactions during any 12 month period) of any
securities of the Corporation or any Subsidiary having an
aggregate Fair Market Value in excess of 5% of the aggregate
Fair Market Value of all outstanding Voting Shares of the
Corporation as of the date on which the Interested Stockholder
became an Interested Stockholder (the "Determination Date")
except pursuant to a share dividend or the exercise of rights or
warrants distributed or offered on a basis affording
substantially proportionate treatment to all holders of the same
class or series; or
(E) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or
behalf of an Interested Stockholder or any Affiliate or
Associate of any Interested Stockholder; or
(F) any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation, or
any merger or consolidation of the Corporation with any of its
Subsidiaries or any other transaction (whether or not with or
into or otherwise involving an Interested Stockholder) which has
the effect, directly or indirectly (in one transaction or a
series of transactions during any 12 month period), of
increasing by more than 5% the percentage of any class of
securities of the Corporation or any Subsidiary directly or
indirectly owned by any Interested Stockholder or any Affiliate
or Associate of any Interested Stockholder;
shall require the affirmative vote of the holders of at least 70% of the
outstanding Voting Shares. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(ii) Definition of "Business Combination." The term "Business
Combination" as used in this Article shall mean any transaction which is
referred to in any one or more of clauses (A) through (F) of paragraph (i) of
this Section (a).
(b) When Higher Vote is Not Required for Certain Business
Combination. The provisions of Section (a) of this Article shall not be
applicable to any particular Business Combination, and such Business
Combination shall require only such approval as is required by law and any
other provision of these Articles of Incorporation, if consideration will be
paid to the holders of each class or series of Voting Shares and all of the
conditions specified in either of the following paragraphs (i) or (ii) are
met.
(i) Approval by Disinterested Directors. The Business Combination
shall have been approved by a majority of those persons who are Disinterested
Directors (as hereinafter defined).
(ii) Price and Procedure Requirements.
(A) The aggregate amount of the cash and the Fair Market
Value as of the Valuation Date of consideration other than cash
to be received per share by holders of each class or series of
Voting Shares in such Business Combination shall be at least
equal to the highest of the following (taking into account all
stock dividends and stock splits):
(I) (If applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested Stockholder for any
shares of such class or series acquired by it (1) within the
two year period (the "Preannouncement Period") ending at 11:59
p.m., Eastern time, on the date of the first public
announcement of the proposal of the Business Combination (the
"Announcement Date") or (2) in the transaction in which it
became an Interested Stockholder, whichever is higher;
(II) the Fair Market Value per share of such class or
series on the Determination Date or on the day after the
Announcement Date, whichever is higher;
(III) (if applicable) the price per share equal to the
Fair Market Value per share of such class or series determined
pursuant to paragraph (ii)(A)(II) above, multiplied by the
ratio of (1) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Stockholder for any shares of such
class or series acquired by it within the Preannouncement
Period, to (2) the Fair Market Value per share of such class or
series on the first day during the Preannouncement Period upon
which the Interested Stockholder acquired any shares of such
class or series; and
(IV) (if applicable), the highest preferential amount, if
any, per share to which the holders of such class or series are
entitled in the event of any voluntary or involuntary
dissolution of the Corporation.
(B) The consideration to be received by the holder of
outstanding shares in such Business Combination shall be in
cash or in the same form as the Interested Stockholder has
previously paid for shares of the same class or series. If the
Interested Stockholder has paid for shares with varying forms
of consideration, the form of consideration shall be either
cash or the form used to acquire the largest number of shares
of such class or series previously acquired by the Interested
Stockholder.
(C) During such portion of the three year period
preceding the Announcement Date that such Interested
Stockholder has been an Interested Stockholder, except as
approved by a majority of the Disinterested Directors: (a)
there shall have been no failure to declare and pay at the
regular date therefor any full periodic dividends (whether or
not cumulative) on any outstanding shares of the Corporation;
(b) there shall have been (1) no reduction in the annual rate
of dividends paid on any class or series of Voting Shares,
(except as necessary to reflect any subdivision of the class or
series) and (2) an increase in such annual rate of dividends as
necessary to reflect any reclassification (including any
reverse stock split), recapitalization, reorganization or any
similar transaction which has the effect of reducing the number
of outstanding shares of the class or series; and (c) such
Interested Stockholder shall have not become the beneficial
owner of any additional Voting Shares except as part of the
transaction which results in such Interested Stockholder
becoming an Interested Stockholder.
(D) During such portion of the three year period
preceding the Announcement Date that such Interested
Stockholder has been an Interested Stockholder, except as
approved by a majority of the Disinterested Directors, such
Interested Stockholder shall not have received the benefit,
directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantages provided by the Corporation, whether in anticipation
of or in connection with such Business Combination or
otherwise.
(E) Except as otherwise approved by a majority of the
Disinterested Directors, a proxy or information statement
describing the proposed Business Combination and complying with
the requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall be mailed to
stockholders of the Corporation at least 20 days prior to the
consummation of such Business Combination (whether or not such
proxy or information statement is required to be mailed
pursuant to such Act or subsequent provisions).
Certain Definitions.
For the purposes of this Article:
(i)A "person" shall mean any individual, firm, corporation, partnership, joint
venture, or other entity.
(ii) "Interested Stockholder" shall mean any person who or which is the
beneficial owner, directly or indirectly, of 20% or more of the outstanding
Voting Shares of the Corporation; provided, however, the term Interested
Stockholder shall not include the Corporation, any Subsidiary, or any savings,
employee stock ownership or other employee benefit plan of the Corporation or
any Subsidiary, or any fiduciary with respect to any such plan when acting in
such capacity.
For the purposes of determining whether a person is an Interested
Stockholder, the number of shares of Voting Shares deemed to be outstanding
shall include shares deemed owned through application of paragraph (iii) of
this Section (c) but shall not include any other Voting Shares that may be
issuable pursuant to any contract, arrangement or understanding, or upon
exercise of conversion rights, exchange rights, warrants or options, or
otherwise.
(iii) A person shall be a "beneficial owner" of any Voting Shares as to
which such person and any of such person's Affiliates or Associates,
individually or in the aggregate, have or share directly, or indirectly
through any contract, arrangement, understanding, relationship, or otherwise:
(A) voting power, which includes the power to vote, or to direct the
voting of the Voting Shares;
(B) investment power, which includes the power to dispose or to direct
the disposition of the Voting Shares;
(C) economic benefit, which includes the right to receive or control
the disposition of income or liquidation proceeds from the Voting Shares; or
(D) the right to acquire voting power, investment power or economic
benefit (whether such right is exercisable immediately or only after the
passage of time) pursuant to any contract, arrangement or understanding or
upon the exercise of conversion rights, exchange rights, warrants or options,
or otherwise;
provided, that in no case shall a Director of the Corporation be deemed to be
the beneficial owner of Voting Shares beneficially owned by another Director
of the Corporation solely by reason of actions undertaken by such persons in
their capacity as Directors of the Corporation.
(iv) "Affiliate" means a person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with the person specified.
(v) "Associate" means as to any specified person:
(A) any entity (other than the Corporation and its Subsidiaries) of which
such person is an Officer, Director or partner or is, directly or indirectly,
the beneficial owner of 10% or more of the Voting Shares;
(B) any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in a
similar fiduciary capacity; or
(C) any relative or spouse of such person, or any relative of such spouse,
who has the same home as such person or who is an Officer or Director of the
Corporation or any of its Affiliates.
(vi) As to any Corporation, "Subsidiary" means any other Corporation of which
it owns directly or indirectly a majority of the Voting Shares.
(vii) "Disinterested Director" means any member of the Board of Directors
who:
(A) was elected to the Board of Directors of the Corporation at the 1986
Annual Meeting of Shareholders; or
(B) was recommended for election by a majority of the Disinterested Directors
then on the Board, or was elected by the Board to fill a vacancy and received
the affirmative vote of a majority of the Disinterested Directors then on the
Board.
(viii)"Fair Market Value" means:
(A) in the case of stock the highest closing sale price during the 30 day
period ending at 11:59 p.m., Eastern time, on the date in question of a share
of such stock on the Composite Tape for New York Stock Exchange-Listed Stocks,
or, if such stock is not quoted on the Composite Tape on the New York Stock
Exchange, or, if such stock is not listed on such Exchange, on the principal
United States securities exchange registered under the Securities Exchange Act
of 1934 on which such stock is listed, or, if such stock is not listed on any
such exchange, the highest closing bid quotation with respect to a share of
such stock during the 30 day period ending at 11:59 p.m., Eastern time, on the
date in question on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use, or if no such
quotations are available, the Fair Market Value on the date in question of a
share of such stock as determined by a majority of the Disinterested
Directors; and
(B) in the case of property other than cash or stock, the Fair Market Value
of such property on the date in question as determined by a majority of the
Disinterested Directors.
(ix) "Voting Shares" shall mean the outstanding shares of all classes or
series of the Corporation's stock entitled to vote generally in the election
of Directors.
(x) "Control" shall mean the possession, directly or indirectly, through the
ownership of voting securities, by contract, arrangement, understanding,
relationship or otherwise, of the power to direct or cause the direction of
the management and policies of the person. The beneficial ownership of 20% or
more of the Corporation's Voting Shares shall be deemed to constitute control.
(d) Certain Determinations.
Directors who are Disinterested Directors of the Corporation shall have the
power and duty to determine for the purpose of this Article, on the basis of
information known to them after reasonable inquiry, (i) whether a particular
person is an Interested Stockholder, (ii) the number of Voting Shares
beneficially owned by such person, (iii) whether any person is an Affiliate or
Associate of such person, and (iv) whether the assets that are the subject of
any Business Combination involving such person have an aggregate Fair Market
Value in excess of 5% of the Corporation's consolidated assets as of the date
of the most recently available financial statement, or the securities to be
issued or transferred by the Corporation or any Subsidiary in any Business
Combination involving such person have an aggregate Fair Market Value in
excess of 5% of the aggregate Fair Market Value of all outstanding Voting
Shares of the Corporation as of the Determination Date.
(e) No Effect on Certain Obligations.
Nothing contained in this Article shall be construed to relieve any Interested
Stockholder or any Director of the Corporation from any obligation imposed by
law.
(f) Amendment or Repeal.
The provisions of this Article shall not be amended or repealed, nor shall any
provision of these Articles of Incorporation be adopted that is inconsistent
with this Article, unless such action shall have been approved by the
affirmative vote or either:
(i) the holders of at least 70% of the outstanding Voting Shares; or
(ii) a majority of those Directors who are Disinterested Directors and the
holders of the requisite number of shares specified under applicable North
Carolina law for the amendment of the charter of a North Carolina corporation.
10. Series A Preferred Stock. The Corporation has designated 750,000 shares
of the authorized but unissued shares of the Corporation's Preferred Stock,
par value $5.00 per share, as Participating Cumulative Preferred Stock, Series
A (hereinafter referred to as "Series A Preferred Stock"). The terms of the
Series A Preferred Stock, in the respect in which the shares of such series
may vary from shares of any and all other series of Preferred Stock, are as
follows:
(a) Dividends and Distributions.
(1) The holders of shares of Series A Preferred Stock in preference to the
holders of Common Stock and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available therefor, dividends payable quarterly on the last business
day of each April, July, October and January (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $120 or (b) subject
to the provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in shares of Common Stock or
a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Preferred Stock. In the event the Corporation shall at any
time after September 8, 1998 (the "Rights Declaration Date"), (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(2) The Corporation shall declare a dividend or distribution on the Series A
Preferred Stock as provided in paragraph (1) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $120 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(3) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue
and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of
Series A Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 30 days prior to the date fixed for the payment
thereof.
(b) Voting Rights.
The holders of shares of Series A Preferred Stock shall have the following
voting rights:
(1) Subject to the provision for adjustment hereinafter set forth, each share
of Series A Preferred Stock shall entitle the holder thereof to 1,000 votes on
all matters submitted to a vote of the shareholders of the Corporation. In
the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(2)Except as otherwise provided herein, in the Restated and Amended Charter,
or under applicable law, the holders of shares of Series A Preferred Stock and
the holders of shares of Common Stock shall vote together as one voting group
on all matters submitted to a vote of stockholders of the Corporation.
(3) (i) If at any time dividends on any shares of Series A Preferred Stock
shall be in arrears in an amount equal to six quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a period (a
"default period") that shall extend until such time when all accrued and
unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series A Preferred Stock
then outstanding shall have been declared and paid or set apart for payment.
During each default period, all holders of the outstanding shares of Series A
Preferred Stock together with any other series of Preferred Stock then
entitled to such a vote under the terms of the Restated and Amended Charter,
voting as a separate voting group, shall be entitled to elect two members of
the Board of Directors of the Corporation.
(ii) During any default period, such voting right of the holders of
Series A Preferred Stock may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Subsection (b)(3) or at any
annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the right of the
holders of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised unless
the holders of ten percent (10%) in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The absence of a quorum
of the holders of Common Stock shall not affect the exercise by the holders of
Preferred Stock of such voting right. At any meeting at which the holders of
Preferred Stock shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a separate voting group,
to elect Directors to fill such vacancies, if any, in the Board of Directors
as may then exist up to two (2) Directors, or if such right is exercised at an
annual meeting, to elect two (2) Directors. If the number which may be so
elected at any special meeting does not amount to the required number, the
holders of the Preferred Stock shall have the right to make such increase in
the number of Directors as shall be necessary to permit the election by them
of the required number. After the holders of the Preferred Stock shall have
exercised their right to elect Directors in any default period and during the
continuance of such period, the number of Directors shall not be increased or
decreased except by vote of the holders of Preferred Stock as herein provided
or pursuant to the rights of any equity securities ranking senior to or pari
passu with the Series A Preferred Stock.
(iii)Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect Directors, the
Board of Directors may order, or any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling
of a special meeting of the holders of Preferred Stock, which meeting shall
thereupon be called by the Chairman, President, a Vice-President or the
Secretary of the Corporation. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to vote pursuant to
this paragraph (b)(3)(iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him at his last address as
the same appears on the books of the Corporation. Such meeting shall be
called for a time not earlier than 10 days and not later than 60 days after
such order or request. In the event such meeting is not called within 60 days
after such order or request, such meeting may be called on similar notice by
any stockholder or stockholders owning in the aggregate not less than ten
percent (10%) of the total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (b)(3)(iii), no such special
meeting shall be called during the period within 60 days immediately preceding
the date fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Preferred
Stock shall have exercised their right to elect two (2) Directors voting as a
separate voting group, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except
as provided in paragraph (b)(3)(ii)) be filled by vote of a majority of the
remaining Directors theretofore elected by the voting group which elected the
Director whose office shall have become vacant. References in this paragraph
(b)(3)(iv) to Directors elected by a particular voting group shall include
Directors elected by such Directors to fill vacancies as provided in clause
(y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right
of the holders of Preferred Stock, as a separate voting group, to elect
Directors shall cease, (y) the term of any Directors elected by the holders of
Preferred Stock, as a separate voting group, shall terminate, and (z) the
number of Directors shall be such number as may be provided for in, or
pursuant to, the Restated and Amended Charter or bylaws irrespective of any
increase made pursuant to the provisions of paragraph (b)(3)(ii) (such number
being subject, however, to change thereafter in any manner provided by law or
in the Restated and Amended Charter or bylaws). Any vacancies in the Board of
Directors affected by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining Directors, even though
less than a quorum.
(4) Except as set forth herein or as otherwise provided in the Restated and
Amended Charter, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as set forth herein)
for taking any corporate action.
(c) Certain Restrictions.
(1) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Subsection (a) are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay or set apart for payment any dividends (other than
dividends payable in shares of any class or classes of stock of the
Corporation ranking junior to the Series A Preferred Stock) or make any other
distributions on, any class of stock of the Corporation ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series
A Preferred Stock and shall not redeem, purchase or otherwise acquire,
directly or indirectly, whether voluntarily, for a sinking fund, or otherwise
any shares of any class of stock of the Corporation ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock, provided that, notwithstanding the foregoing, the Corporation
may at any time redeem, purchase or otherwise acquire shares of stock of any
such junior class in exchange for, or out of the net cash proceeds from the
concurrent sale of, other shares of stock of any such junior class;
(ii) declare or pay dividends on or make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, provided that
the Corporation may at any time redeem, purchase or otherwise acquire shares
of any such parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock;
(iv) purchase or otherwise acquire for consideration any shares of Series A
Preferred Stock, or any shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors, after consideration of
the respective annual dividend rates and other relative rights and preferences
of the respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or classes.
(2) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (1) of Subsection
(c), purchase or otherwise acquire such shares at such time and in such
manner.
(d) Reacquired Shares. Any shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject
to the conditions and restrictions on issuance set forth herein.
(e) Liquidation, Dissolution or Winding Up.
(1) Upon any voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred Stock unless, prior thereto, the
holders of shares of Series A Preferred Stock shall have received $5.00 per
share, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of the full amount of the
Series A Liquidation Preference, no additional distributions shall be made to
the holders of shares of Series A Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the Series
A Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth
in subparagraph 3 below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock) (such number
in clause (ii) being hereinafter referred to as the "Adjustment Number").
Following the payment of the full amount of the Series A Liquidation
Preference and the Common Adjustment in respect of all outstanding shares of
Series A Preferred Stock and Common Stock, respectively, holders of Series A
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such Series A
Preferred Stock and Common Stock, on a per share basis, respectively.
(2) In the event, however, that there are not sufficient assets available to
permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any, then
such remaining assets shall be distributed ratably to the holders of all such
shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(3) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(f) Consolidation, Merger, Share Exchange, etc. In case the Corporation
shall enter into any consolidation, merger, share exchange, combination or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property, then
in any such case the shares of Series A Preferred Stock shall at the same time
be similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A Preferred Stock
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(g) Redemption. The outstanding shares of Series A Preferred Stock may be
redeemed at the option of the Board of Directors as a whole, but not in part,
at any time, or from time to time, at a cash price per share equal to (i) 100%
of the product of the Adjustment Number times the Average Market Value (as
such term is hereinafter defined) of the Common Stock, plus (ii) all dividends
which on the redemption date have accrued on the shares to be redeemed and
have not been paid or declared and a sum sufficient for the payment thereof
set apart, without interest. The "Average Market Value" is the average of the
closing sale prices of a share of the Common Stock during the 30-day period
immediately preceding the date before the redemption date on the Composite
Tape for New York Stock Exchange Listed Stocks, or, if such stock is not
quoted on the Composite Tape, on the New York Stock Exchange, or, if such
stock is not listed on such exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934, as
amended, on which such stock is listed, or, if such stock is not listed on any
such exchange, the average of the closing bid quotations with respect to a
share of Common Stock during such 30-day period on the National Association of
Securities Dealers, Inc. Automated Quotation System or any system then in use,
or if no such quotations are available, the fair market value of a share of
the Common Stock as determined by the Board of Directors in good faith.
(h) Ranking. The Series A Preferred Stock shall rank on a parity with any
and all other series of Preferred Stock as to the payment of dividends and the
distribution of assets.
(i) Amendment. The Restated and Amended Charter shall not be further
amended in any manner that would adversely affect the preferences, rights or
powers of the Series A Preferred Stock without the affirmative vote of the
holders of more than two-thirds of the outstanding shares of the Series A
Preferred Stock, if any, voting separately as one voting group.
(j) Fractional Shares. Series A Preferred Stock may be issued in fractions
of one one-thousandth of a share (and integral multiples thereof) which shall
entitle the holder, in proportion to such holders' fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Preferred Stock.
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Doc Name: Restated and Amended Charter of Lowe's
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