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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES
UNDER THE TRUST INDENTURE ACT OF 1939
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TIME WARNER INC.
(Name of Applicant)
75 Rockefeller Plaza
New York, NY 10019
(Address of Principal Executive Offices)
SECURITIES TO BE ISSUED UNDER THE
INDENTURE TO BE QUALIFIED
Title of Class Amount
Debt Securities, issuable up to $1,827,948,000 (representing
in series the maximum aggregate principal
amount of securities to be received
upon redemption)
Approximate Date of Proposed Public Offering:
As soon as practicable after this
application for qualification becomes effective
Peter R. Haje, Esq.
Executive Vice President,
Secretary and General Counsel
Time Warner Inc.
75 Rockefeller Plaza
New York, NY 10019
(212) 484-8000
(Name and Address of Agent for Service)
Copies to:
William P. Rogers, Jr., Esq. Faith D. Grossnickle, Esq.
Cravath, Swaine & Moore Shearman & Sterling
Worldwide Plaza 599 Lexington Avenue
825 Eighth Avenue New York, NY 10022
New York, NY 10019-7475 (212) 848-8015
(212) 474-1270
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The obligor hereby amends this application for qualification on
such date or dates as may be necessary to delay its
effectiveness until (i) the 20th day after the filing of a
further amendment which specifically states that it shall
supersede this amendment, or (ii) such date as the Commission,
acting pursuant to section 307(c) of the Act, may determine upon
the written request of the obligor.
<PAGE>
GENERAL
Item 1. General Information
Time Warner Inc. (the "Applicant") is a
corporation organized under the General Corporation Law of
the State of Delaware.
Item 2. Securities Act Exemption Applicable
The issuance by the Applicant in the transaction
described below of one or more series of securities (the
"Securities") under the indenture to be qualified, dated as
of January 15, 1993 (the "Indenture"), between the Applicant
and Chemical Bank, a New York banking corporation, would be
exempt from the registration requirements of Section 5 of
the Securities Act of 1933, as amended (the "1933 Act"),
under Section 3(a)(9) of the 1933 Act because such
Securities will be "exchanged by the issuer with its
existing security holders exclusively where no commission or
other remuneration is paid or given directly or indirectly
for soliciting such exchange."
The Securities will be issued under the Indenture
to holders of Redeemable Reset Notes Due August 15, 2005
(the "Reset Notes"), pursuant to a redemption being effected
in accordance with the terms of the Reset Notes. Holders of
the Reset Notes neither have made nor will be required to
make any cash payments to the Applicant in connection with
the redemption of the Reset Notes.
There have not been nor will there be any sales of
securities of the same class as the Securities by the
Applicant or by or through an underwriter at or about the
same time as the transaction for which the exemption
described above is claimed. The Applicant will not pay,
directly or indirectly, any commission or other remuneration
to any person in connection with the redemption of the Reset
Notes and the issuance of the Securities, except for the
following: (i) certain investment banking firms will receive
reasonable compensation and reimbursement of reasonable
expenses from and will be indemnified against certain
liabilities or expenses by the Applicant in connection with
their services as valuation agents under the terms of the
Reset Notes; and (ii) an investor relations firm that acts
as information agent will receive reasonable
<PAGE>
compensation and reimbursement of reasonable expenses in
connection with its services as information agent.
AFFILIATIONS
Item 3. Affiliates
The following is a list of direct and indirect
subsidiaries of the Applicant, indicating the percentage of
voting securities owned by the Applicant in each such
subsidiary. Indirect subsidiaries are indented and listed
under their direct parent corporations and the share of
ownership indicated thereof refers to the share ownership of
the direct parent corporation. The names of certain
subsidiaries, which if considered in the aggregate as a
single subsidiary would not constitute a significant
subsidiary, are omitted. Investments in certain partially
owned companies representing investments of 50% or less are
not included for the reason that such companies, considered
in the aggregate, would not constitute a significant
subsidiary. Also listed below are affiliates of Time Warner
Entertainment Company, L.P., a Delaware limited partnership
("TWE"), in which certain wholly owned subsidiaries of the
Applicant collectively own 63.27% of the pro rata priority
capital and residual equity interests.
Subsidiaries of Time Warner Inc.
Percentage of
Voting Securities
Affiliates Held by TWE
---------- -----------------
Asiaweek Limited ..................................... 80
Summit Communications Group, Inc. .................... 100
Sunset Publishing Corporation ........................ 100
Time International Inc. .............................. 100
Time Inc.(1).......................................... 100
American Family Publishers (partnership) ........ 50
Book-of-the-Month Club, Inc. .................... 100
Entertainment Weekly, Inc. ...................... 100
Little, Brown and Company (Inc.) ................ 100
Time Distribution Services Inc................... 100
Time Customer Service, Inc. ..................... 100
Time Publishing Ventures, Inc. .................. 100
Southern Progress Corporation(2)............ 100
Time Inc. Ventures .............................. 100
Health Publications, Inc.................... 100
*Hippocrates Partners (partnership) .. 50
TWC Ventures Inc. ............................... 100
<PAGE>
Percentage of
Voting Securities
Affiliates Held by TWE
---------- -----------------
Time Life Inc. .................................. 100
Time-Life Customer Service, Inc. ........... 100
Warner Books, Inc. .............................. 100
Warner Publisher Services Inc. .................. 100
Time TBS Holdings, Inc. .............................. 100
TWI Cable Inc......................................... 100
Paragon Communications (partnership)............. 50(13)
TW Service Holding I, L.P. (partnership).............. (3)
TW Service Holding II, L.P. (partnership) ............ (3)
TW Programming Co. (partnership) ................ (4)
TW Transmission Co. (partnership) ............... (4)
TW Cable Service Co. (partnership) .............. (4)
E/Court Holding Co. (partnership) ............... (4)
TW/BET Holding Co. (partnership) ................ (4)
TW/Three D Holding Co. (partnership) ............ (4)
TWQ II Co. (partnership) ........................ (4)
TWQ I Co., L.P. (partnership) ................... (5)
WCI Record Club Inc. ................................. 100(6)
The Columbia House Company (partnership) ........ 50
Warner Communications Inc. ........................... 100
Atari Games Corporation ......................... 79
DC Comics (partnership) ......................... 50(7)
Warner Bros. Publications Inc. .................. 100
Warner Bros. Music International Inc. ........... 100
Warner-Tamerlane Publishing Corp. ............... 100
WB Music Corp. .................................. 100
W Cinemas Holding Inc. .......................... 100
W. Cinemas Inc. ............................ 100
Alpha Theatres Inc. ........................ 100
NPP Music Corp. ................................. 100
Warner/Chappell Music, Inc. ..................... 100
New Chappell Inc.(8)........................ 100
Super Hype Publishing, Inc. ................ 100
Cotillion Music, Inc. ...................... 100
Walden Music, Inc. ......................... 100
Summy-Birchard, Inc. ....................... 100
Lorimar Motion Picture Management, Inc. ......... 100
E.C. Publications, Inc. ......................... 100
WCI/Am Law Inc. ................................. 100
American Lawyer Media, L.P. ................ 83.25
Warner Music Group Inc.. ........................ 100
Warner Bros. Records Inc. ....................... 100
Atlantic Recording Corporation ............. 100
Warner-Elektra-Atlantic Corporation ........ 100
WEA International Inc.(9) ....................... 100
Warner Music Canada Ltd. ................... 100
<PAGE>
Percentage of
Voting Securities
Affiliates Held by TWE
---------- -----------------
The Columbia House Company
(Canada)(partnership) ................. 50
Warner Special Products Inc. .................... 100
Warner Custom Music Corp. .................. 100
WEA Manufacturing Inc. .......................... 100
Allied Record Company ...................... 100
Time Warner Limited ............................. 100
Warner Music International Services Ltd. ... 100
Time Warner UK Limited ............... 100
Warner Chappell Music Group (UK) Ltd. .. 100
Warner Chappell Music Limited.... 100
Magnet Music Ltd. .......... 100
Warner Music (U.K.) Limited .......... 100
Ivy Hill Corporation ............................ 100
Warner Cable Communications Inc.(10)............. 100
TWI Ventures Ltd. ............................... 100
American Television and Communications Corporation ... 100(11)
American Communications Corporation ............. 100
American Cablevision of Monroeville, Inc. ....... 100
American Digital Communications, Inc. ........... 100
ATC Cablevision of San Merino, Inc. ............. 100
ATC Cablevision of South Pasadena, Inc. ......... 100
American Cablevision of Kansas City, Inc. ....... 100
Kansas City Cable Partners (partnership) ... 50(12)
ATC Holdings II, Inc. ........................... 100
ARP 113, Inc................................ 100
Paragon Communications (partnership)........ 50(13)
ATC/PPV, Inc. ................................... 100
Carolina Network Corporation .................... 100
Philadelphia Community Antenna Television Company .. 100
Lower Bucks Cablevision, Inc. .............. 100
Tri-County Cable Television Company ........ 100
Public Cable Company ............................ 100
Public Cable Company (partnership) ......... 77
Shows, Inc. ..................................... 100
Time Warner Operations Inc. ................................ 100(14)
HBO Film Management, Inc. ....................... 100
Kremlin Productions, Inc. ....................... 100
Simba Productions, Inc. ......................... 100
WAC Productions, Inc. ........................... 100
Running Mates, Inc. ............................. 100
<PAGE>
Subsidiaries of Time Warner Entertainment Company, L.P.
Percentage of
Voting Securities
Affiliates Held by TWE
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Century Venture Corporation................................. 50
Century Colorado Corp................................. 100
Colorado Springs Cablevision, Inc................ 100
Colorado Springs Citizens Cable, Inc........ 100
CV of Viera Joint Venture (partnership)..................... 50
Erie Telecommunications, Inc................................ 54.19
Inverness/ATC Joint Venture (partnership)................... 50
Time Warner Cable New Zealand Holdings Ltd.................. 100(15)
Queens Inner Unity Cable System............................. 50
Comedy Partners, L.P. (partnership)......................... 50
HBO Ole (partnership)....................................... 50
HBO Ole Distribution 1 A.V.V.......................... 100
HBO Ole International/Sales Company Ltd............... 100
HBO Ole Services S.A............................. 100
HBO Ole Producciones S.A.................................... 50
HBO Direct, Inc............................................. 100
HBO Turkey Holdings I Inc............................. 100
HBO Turkey Holdings II Inc............................ 100
Warner Cable of New Jersey Inc........................ 100
Warner Cable of Vermont Inc........................... 100
TW Buffer Inc......................................... 100
Warner Bros. (F.E.) Inc.......................... 100
Warner Bros. (Japan) Inc......................... 100
Warner Bros. (South) Inc......................... 100
Warner Bros. (Transatlantic) Inc................. 100
Bethel Productions Inc...................... 100
Warner Films Consolidated Inc.................... 100
Exeter Distributing Inc..................... 100
Riverside Avenue Distributing Inc........... 100
HBO Asia Holdings, L.P. (partnership)....................... 99
HBO Pacific Partners, C.V............................. 83.33
Home Box Office (Singapore) Pty. Ltd............. 100
Turner/HBO Ltd. Purpose Joint Venture (partnership)......... 50
Acapulco 37 S.A. de C.V..................................... 100
Warner Bros. Beteiligungs Gesellschaft mbH.................. 100
Time Warner-Advance/Newhouse Partnership.................... 66.67
Time Warner Entertainment Limited........................... 100
The Bountiful Company Limited......................... 50
Time Warner Entertainment (UK) Limited................ 100
Warner Bros. Consumer Products (UK) Ltd.......... 100
TWE Finance Limited.............................. 100
Warner Bros. Theatres Ltd........................ 100
Warner Bros. Distributors Ltd.................... 100
<PAGE>
Percentage of
Voting Securities
Affiliates Held by TWE
---------- -----------------
Lorimar Telepictures International Ltd...... 100
Warner Bros. International Television
Distribution Italia S.p.A............. 100
Terremodo Ltd......................... 100
Victory Film Production, Ltd.......... 100
Warner Bros. Theatres (U.K.) Limited............. 100
Warner Bros. Investments (Pilsworth) Ltd.... 100
Warner Bros. Theatres Advertising Agency Limited.. 100
Warner Bros. Productions Limited................. 100
Warner Home Video (U.K.) Limited................. 100
Metro Color Laboratories (U.K.) Ltd......................... 100
Kay Holdings Ltd...................................... 100
Metrocolor (London) Limited...................... 100
Geffen Pictures (partnership)............................... 50
Lorimar Distribution International (Canada) Corp............ 100
Lorimar Canada Inc.......................................... 100
Productions et Editions Cinematographiques Francaises SARL
(PECF)...................................................... 100
Warner Home Video France S.A.......................... 100
Time Warner Entertainment Australia Pty. Ltd................ 100
Lorimar Telepictures Pty. Limited..................... 100
Warner Bros. (Australia) Pty. Ltd..................... 100
Warner Holdings Australia Pty. Limited................ 100
Warner Bros. Properties (Australia) Pty. Ltd..... 100
Warner Bros. Theatres (Australia) Pty. Limited... 100
Warner World Australia Pty. Limited.................. 100
Movie World Enterprises Partnership (partnership).. 50
Warner Home Video Pty. Limited........................ 100
Warner Bros. Video Pty. Ltd...................... 100
Warner Sea World Aviation Pty. Ltd.................... 100
Sea World Aviation Partnership (partnership)..... 50
Warner Sea World Investments Pty. Limited............. 100
Sari Lodge Pty. Limited.......................... 50
Sea World Management Pty. Ltd............... 100
Warner Sea World Operations Pty. Ltd.................. 100
Sea World Enterprises Partnership (partnership).. 50
Warner Sea World Units Pty. Ltd....................... 100
Time Warner Entertainment GmbH.............................. 100
Warner Bros. Deutschland Pay TV GmbH.................. 100
Warner Home Video GmbH................................ 100
Warner Home Video Spol SRO....................... 100
Warner Bros. Film GmbH................................ 100
Warner Bros. Film GmbH Kinobertriebe............. 100
Warner Bros. Film GmbH Multiplex Cinemas Mulheim. 100
Time Warner Merchandising Canada Inc........................ 100
Warner Bros. Canada Inc..................................... 100
Warner Bros. Distributing (Canada) Limited.................. 100
Warner Home Video (Canada) Ltd.............................. 100
Warner Bros. (Africa) (Pty) Ltd............................. 100
<PAGE>
Percentage of
Voting Securities
Affiliates Held by TWE
---------- -----------------
Warner Bros. Belgium SA/NV.................................. 100
Warner Bros. (D) A/S........................................ 100
Warner & Metronome Films A/S.......................... 50
Warner Bros. Theatres Denmark A/S..................... 100
Scala Biografome I/S (partnership)............... 50
Dagmar Teatret I/S (partnership)................. 50
Warner Bros. Film Ve Video Sanayi Ve Ticaret A.S............ 100
Warner Bros. Finland OY..................................... 100
Warner Bros. (Holland) B.V.................................. 100
Warner Home Video (Nederland) B.V..................... 100
Warner Bros. Theatres (Holland) B.V................... 100
Warner Bros. Holdings Sweden AB............................. 100
Warner Bros. (Sweden) AB.............................. 100
Warner Home Video (Sweden) AB......................... 100
Warner Bros. Italia S.p.A................................... 100
Cinema Data Service S.r.L............................. 100
Warner Entertainment Italia S.r.L..................... 100
Warner Bros. (Korea) Inc.................................... 100
Warner Bros. (Mexico) S.A................................... 100
Warner Bros. (N.Z.) Limited................................. 100
Warner Home Video (N.Z) Limited....................... 100
Warner Bros. Norway A/S..................................... 100
Warner Bros. Singapore Pte. Ltd............................. 100
Warner Home Video (Ireland) Ltd............................. 100
Warner Home Video Portugal Lda.............................. 100
Warner-Lusomundo Sociedade Iberica de Cinemas Lda........... 50
Warner Home Video Espanola S.A.............................. 100
Warner Bros. Licensing Espanola S.A................... 100
Warner Mycal Corporation.................................... 50
Kabelkom Management Co. (partnership)(16)................... 50
Kabelkom Holding Co. (partnership)(16)...................... 50
Quincy Jones Entertainment Company L.P. (partnership)....... 50
Six Flags Entertainment Corporation......................... 100
SF Holdings Inc....................................... 100
Six Flags Theme Parks Inc........................ 100
DC Comics (partnership)..................................... 50(7)
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(1) The names of five subsidiaries of Time Inc. carrying on the magazine
publishing business are omitted.
(2) The names of nine subsidiaries of Southern Progress Corporation
carrying on the magazine or book publishing businesses are omitted.
(3) The General Partners of TWE own 77.78%, Toshiba America Entertainment,
Inc. owns 11.11% and Itochu Entertainment Inc. owns 11.11%.
<PAGE>
(4) TW Service Holding I, L.P. owns 99% and TW Service Holding II, L.P.
owns 1%.
(5) American Television and Communications Corporation, Warner Cable
Communications Inc. and Warner Communications Inc. are the General
Partners and TW Service Holding I, L.P. and TW Service Holding II,
L.P. are the Limited Partners.
(6) Time Warner Inc. owns 80% and Warner Communications Inc. owns 20%.
(7) Warner Communications Inc. owns 50% and TWE owns 50%.
(8) The names of 16 subsidiaries of New Chappell Inc. carrying on
substantially the same music publishing operations in foreign
countries are omitted.
(9) The names of 34 subsidiaries of WEA International Inc. carrying on
substantially the same record, tape and video cassette distribution
operations in foreign countries are omitted.
(10) The names of seven other subsidiaries of Warner Cable Communications
Inc. carrying on the cable television business are omitted.
(11) Time Warner Inc. owns 86.34%, Warner Communications Inc. owns 7.8% and
Time TBS Holdings, Inc. owns 5.86%.
(12) American Cablevision of Kansas City, Inc. owns 49% of Kansas City
Cable Partners and TWE owns 1%.
(13) American Television and Communications Corporation owns 50% of Paragon
Communications through two indirectly owned subsidiaries-- 31.09%
through ATC Holdings II, Inc. and 18.91% through ARP 113, Inc. The
other 50% of Paragon Communications Corporation is owned by TWI Cable
Inc.
(14) Time Warner Inc. owns 87.21% and Warner Communications Inc. owns
12.79%.
(15) TWE owns 99% and Time Warner Inc. owns 1%.
(16) The names of 13 subsidiaries of Kabelkom Management Co. and Kabelkom
Holding Co. carrying on substantially the same cable television
operations in Hungary are omitted.
<PAGE>
MANAGEMENT AND CONTROL
Item 4. Directors and Executive Officers
Unless otherwise indicated, the mailing address of
each person listed below is Time Warner Inc., 75 Rockefeller
Plaza, New York, NY 10019.
Name Address Office
- ---- ------- ------
Gerald M. Levin Chairman, Chief
Executive
Officer and
Director
Richard D. Parsons President and
Director
Peter R. Haje Executive Vice
President,
General Counsel
and Secretary
Richard J. Bressler Senior Vice
President and
Chief Financial
Officer
Tod R. Hullin Senior Vice
President
Philip R.
Lochner, Jr. Senior Vice
President
Timothy A. Boggs Senior Vice
President
Merv Adelson Director
Lawrence B.
Buttenwieser Director
Edward S.
Finkelstein Director
<PAGE>
Name Address Office
- ---- ------- ------
Beverly Sills
Greenough Director
Carla A. Hills Director
David T. Kearns Director
Henry Luce III Director
Reuben Mark Director
Michael A. Miles Director
J. Richard Munro Director
Donald S. Perkins Director
Raymond S. Troubh Director
Francis T.
Vincent, Jr. Director
Item 5. Principal Owners of Voting Securities
As of June 30, 1995, the person listed below is
believed to be the beneficial owner of 10% or more of the
voting securities of the Applicant:
Percentage
of Voting
Name and Complete Title of Amount Securities
Mailing Address Class Owned Owned Owned
The Seagram Co. Ltd. Common 56,763,349(1) 14.8%(1)
375 Park Avenue Stock, par
New York, NY 10152 value $1.00
per share
- ------------------
(1) The number of shares of Time Warner Inc. Common Stock, par value
$1.00 per share, owned by The Seagram Co. Ltd. is as reported in
Amendment No. 8 to the Schedule 13D dated as of April 9, 1995, filed by
The Seagram Co. Ltd. The percentage of such Common Stock owned by The
Seagram Co. Ltd. is based on the number of shares of such Common Stock
outstanding as of June 30, 1995.
<PAGE>
UNDERWRITERS
Item 6. Underwriters
Within three years prior to the date of filing of
this Application, no person has acted as an underwriter of
any securities of the Applicant which are outstanding on the
date of filing this Application except as listed below.
Title of Each Class of
Securities Underwritten Underwriters
12,057,561 Preferred Morgan Stanley & Co.
Exchangeable Redemption Incorporated
Cumulative Securities 1251 Avenue of the Americas
(PERCS)1 New York, NY 10020
7.75% Notes due June 15, 2005 Morgan Stanley & Co.
Incorporated
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
("Merrill Lynch")
250 Vesey Street
World Financial Center,
North Tower
New York, NY 10281
Salomon Brothers Inc
7 World Trade Center
New York, NY 10048
Liquid Yield Option Notes due Merrill Lynch
2013
9.15% Debentures due 2023 Merrill Lynch
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, NY 10167
- ------------
(1) A registration statement (File No. 33-60203 and 33-60203-01)
covering the sale of these securities has been filed but is not yet
effective.
<PAGE>
Wertheim Schroder & Co. Inc.
The Equitable Center
787 7th Avenue
New York, NY 10019
7.45% Notes due 1998 and Salomon Brothers Inc
7.95% Notes due 2000
Merrill Lynch
Lazard Freres & Co.
1 Rockefeller Plaza
New York, NY 10020
9.125% Debentures due 2013 Merrill Lynch
BT Securities Corporation
1 Bankers Trust Plaza
New York, NY 10260
J. P. Morgan Securities Inc.
60 Wall Street, 39th Floor
New York, NY 10260
Liquid Yield Option Notes due Merrill Lynch
2012
<PAGE>
CAPITAL SECURITIES
Item 7. Capitalization
As of June 30, 1995, the following classes of
securities of the Applicant were authorized and outstanding,
to the extent indicated:
EQUITY CAPITALIZATION
Amount Amount
Title of Class Authorized(Shares) Outstanding(Shares)
Preferred Stock, par value
$1.00 per share 250,000,000
Series A Participating ---- ----
Preferred Stock
Series B Preferred 1,000,000 464,638
Stock
Series C Convertible 3,350,000 3,264,508
Preferred Stock
Series D Convertible 11,000,000 (1)
Preferred Stock
Series E Convertible 3,250,000 ----
Preferred Stock
Series F Convertible 3,250,000 ----
Preferred Stock
Common Stock, par value
$1.00 per share 750,000,000 384,199,555(1)(2)
- --------
(1) On July 6, 1995, the Applicant issued 11,000,000 shares of Series D
Convertible Preferred Stock and 1,000,000 shares of Common Stock, par value
$1.00 per share.
(2) As of June 30, 1995, the Applicant also had approximately 152 million
shares of Common Stock, par value $1.00 per share, reserved for issuance
upon the exercise of outstanding stock options and warrants and the
conversion of outstanding convertible securities.
<PAGE>
DEBT CAPITALIZATION
Amount
Title of Class Authorized Amount Outstanding
7.45% Notes due 1998 $ 500,000,000 $ 500,000,000
7.95% Notes due 2000 500,000,000 500,000,000
Redeemable Reset Notes due 2002 1,828,000,000 1,828,000,000
7.75% Notes due June 15, 2005 500,000,000 500,000,000
Liquid Yield Option Notes due
2012 1,500,000,000 555,000,000(1)
Liquid Yield Option Notes due
2013 2,100,000,000 982,000,000(1)
9.125% Debentures due 2013 1,000,000,000 1,000,000,000
8.75% Convertible Subordinated
Debentures due 2015 2,226,000,000 2,226,000,000
8.75% Debentures due 2017 248,000,000 248,000,000
9.15% Debentures due 2023 1,000,000,000 1,000,000,000
(1) Represents accreted value as of March 31, 1995.
INDENTURE SECURITIES
Item 8. Analysis of Indenture Provisions
The following is a description of certain
provisions of the Indenture required under Section 305(a)(2)
of the Trust Indenture Act of 1939 and is qualified in its
entirety by reference to the terms of the Indenture, which
is incorporated herein by reference as Exhibit T3C hereto.
References in this Item 8 to section numbers are to specific
sections in the Indenture. Certain capitalized terms used in
this Item 8 are used as defined in the Indenture.
(a) Events of Default, Notice and Waiver
The Indenture provides that, if an Event of
Default specified therein with respect to any series of Debt
Securities issued thereunder shall have happened and be
continuing, either the Trustee thereunder or the holders of
25% in aggregate principal amount of the outstanding Debt
Securities of such series (or 25% in aggregate principal
amount of all outstanding Debt Securities under the
Indenture, in the case of certain Events of Default
affecting all series of Debt Securities under the Indenture)
may declare the principal of all the Debt Securities of such
series to be due and payable. (Section 502)
<PAGE>
Events of Default in respect of any series are
defined in the Indenture as being: (i) default for 30 days
in payment of any interest installment with respect to such
series; (ii) default in payment of principal of, or premium,
if any, on, or any sinking fund or analogous payment with
respect to, Debt Securities of such series when due at their
stated maturity, by declaration or acceleration, when called
for redemption or otherwise; (iii) default for 90 days after
notice to the Company by the Trustee thereunder or by
holders of 25% in aggregate principal amount of the
outstanding Debt Securities of such series in the
performance of any covenant in such Indenture with respect
to Debt Securities of such series; (iv) failure to pay when
due, upon final maturity or upon acceleration, the principal
amount of any indebtedness for money borrowed of the Company
in excess of $50 million, if such indebtedness is not
discharged, or such acceleration annulled, within 60 days
after written notice; and (v) certain events of bankruptcy,
insolvency and reorganization with respect to the Company or
any subsidiary which is organized under the laws of the
United States or any political subdivision thereof in which
the Company's loans, advances or other investments in such
subsidiary exceed 10% of the Company's consolidated net
worth. (Section 501)
Any additions, deletions or other changes to the
Events of Default which will be applicable to a series of
Debt Securities will be set forth in the form of security
for such series or in a supplemental indenture relating to
such series of Debt Securities.
The Indenture provides that the Trustee thereunder
will, within 90 days after the occurrence of a default with
respect to the Debt Securities of any series, give to the
holders of the Debt Securities of such series notice of all
uncured and unwaived defaults known to it; provided that,
except in the case of default in the payment of principal
of, premium, if any, or interest, if any, on any of the Debt
Securities of such series, the Trustee thereunder will be
protected in withholding such notice if it in good faith
determines that the withholding of such notice is in the
interests of the holders of the Debt Securities of such
series. The term "default" for the purpose of this provision
means the happening of any of the Events of Default
specified above, except that any grace period or notice
requirement is eliminated. (Section 602)
The Indenture contains provisions entitling the
Trustee, subject to the duty of the Trustee during an Event
of Default to act with the required standard of care, to be
<PAGE>
indemnified by the holders of the Debt Securities before
proceeding to exercise any right or power under the
Indenture at the request of holders of the Debt Securities.
(Section 603)
The Indenture provides that the holders of a
majority in aggregate principal amount of the outstanding
Debt Securities of any series may direct the time, method
and place of conducting proceedings for remedies available
to the Trustee or exercising any trust or power conferred on
the Trustee in respect of such series. (Section 512)
In certain cases, the holders of a majority in
principal amount of the outstanding Debt Securities of any
series may on behalf of the holders of all Debt Securities
of such series waive any past default or Event of Default
with respect to the Debt Securities of such series or
compliance with certain provisions of the Indenture, except,
among other things, a default not theretofore cured in
payment of the principal of, or premium, if any, or
interest, if any, on any of the Debt Securities of such
series. (Sections 513 and 1009)
(b) Authentication and Delivery of Securities and
Application of Proceeds
The Debt Securities shall be executed on behalf of
the Company by its Chairman of the Board, its President, one
of its Vice Presidents or its Treasurer under its corporate
seal reproduced thereon and attested by its Secretary or one
of its Assistant Secretaries. The signature of any of these
officers on the Debt Securities may be manual or facsimile.
Debt Securities bearing the manual or facsimile
signatures of individuals who were at any time the proper
!officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at
the date of such Securities. (Section 303)
At any time and from time to time after the
execution and delivery of this Indenture, the Company may
deliver Debt Securities executed by the Company to the
Trustee for authentication; and the Trustee shall, upon
Company Order, authenticate and deliver such Securities as
provided in the Indenture. (Section 303)
<PAGE>
The Debt Securities are being offered in exchange
for the Reset Notes. No cash proceeds will be received by
the Applicant in connection with the transaction.
(c) Release or Release and Substitution of
Property Subject to the Lien of the Indenture
The Indenture contains no provisions for release
or release and substitution of property subject to the lien
of the Indenture.
(d) Satisfaction and Discharge of Indenture
The Indenture provides that the Indenture shall
cease to be of further effect with respect to any series of
the Debt Securities (except as to any surviving rights of
conversion or transfer or exchange of the Debt Securities of
such series expressly provided for herein or in the form of
Security for such series), and the Trustee, on receipt of a
Company Request and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and
discharge of this Indenture as to such series, when
(1) either (A) all Debt Securities of that series
theretofore authenticated and delivered (other than
(i) Securities of such series which have been destroyed,
lost or stolen and which have been replaced or paid as
provided in Section 306, and (ii) Securities of such series
for whose payment money in the Required Currency has
theretofore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 1003)
have been delivered to the Trustee cancelled or for
cancellation; or (B) all such Debt Securities of that series
not theretofore delivered to the Trustee cancelled or for
cancellation (i) have become due and payable, or (ii) will
become due and payable at their Stated Maturity within one
year, or (iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company, and the Company, in the
case of (i), (ii) or (iii) above, has deposited with the
Trustee funds sufficient to pay and discharge the entire
indebtedness on such Debt Securities not theretofore
delivered to the Trustee cancelled or for cancellation, for
principal (and premium, if any) and interest to the date of
such deposit (in the case of Debt Securities which have
become due and payable), or to the Stated Maturity or
Redemption Date, as the case may be; (2) the Company has
paid or caused to be paid all other sums payable under the
Indenture by the Company with respect to the Securities of
<PAGE>
such series; and (3) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel
each stating that all conditions required for satisfaction
and discharge of the Indenture have been complied with.
(Section 401)
(e) Evidence of Compliance with Conditions
The Applicant will deliver to the Trustee, within
120 days after the end of each fiscal year, a written
statement signed by the principal executive officer,
principal financial officer or principal accounting officer
of the Company stating that (1) a review of the activities
of the Company during such year and of performance under the
Indenture and under the terms of the Securities has been
made under his supervision; and (2) to the best of his
knowledge, based on such review, the Company has fulfilled
all its obligations under the Indenture and has complied
with all conditions and covenants on its part contained in
the Indenture through such year, or, if there has been a
default in the fulfillment of any such obligation, covenant
or condition, specifying each such default known to him and
the nature and status thereof. (Section 1004)
Item 9. Other Obligors
The Applicant is the only obligor of the Debt
Securities.
Contents of Application for Qualification
This application for qualification comprises:
(a) Pages numbered 1 to 22, consecutively.
(b) The statement of eligibility and
qualification of the Trustee under the Indenture
on Form T-1.
<PAGE>
(c) The following exhibits, in addition to
those filed as part of the statement of
eligibility and qualification of each trustee:
Exhibit T3A-1 Restated Certificate of
Incorporation of the Applicant as
filed with the Secretary of State
of the State of Delaware on May 26,
1993 (which is incorporated herein
by reference to Exhibit 3 to the
Applicant's Quarterly Report on
Form 10-Q for the quarter ended
June 30, 1993).
Exhibit T3A-2 Certificate of Ownership and
Merger merging TWE Holdings Inc.
into Time Warner Inc. as filed with
the Secretary of State of the State
of Delaware on September 24, 1993
(which is incorporated herein by
reference to Exhibit 3.(i)(b) to
the Applicant's Annual Report on
Form 10-K for the year ended
December 31, 1993).
Exhibit T3A-3 Certificate of the Voting
Powers, Designations, Preferences
and Relative Participating,
Optional and Other Rights and
Qualifications of Series A
Participating Cumulative Preferred
Stock of the Applicant as filed
with the Secretary of State of the
State of Delaware on January 26,
1994 (which is incorporated herein
by reference to Exhibit 3.(i)(c) to
the Applicant's Annual Report on
Form 10-K for the year ended
December 31, 1993).
Exhibit T3A-4* Certificate of the Voting
Powers, Designations, Preferences
and Relative, Participating,
Optional or Other Special Rights,
and Qualifications, Limitations or
Restrictions Thereof, of Series C
Convertible Preferred Stock of the
Applicant as filed with the
Secretary of State of the State of
Delaware on May 1, 1995.
<PAGE>
Exhibit T3A-5* Certificate of the Voting
Powers, Designations, Preferences
and Relative, Participating,
Optional or Other Special Rights,
and Qualifications, Limitations or
Restrictions Thereof, of Series D
Convertible Preferred Stock of the
Applicant as filed with the
Secretary of State of the State of
Delaware on July 6, 1995.
Exhibit T3B By-laws of the Applicant, as
amended through March 18, 1993
(which is incorporated herein by
reference to Exhibit 3.3 to the
Applicant's Annual Report on
Form 10-K for the year ended
December 31, 1992).
Exhibit T3C Indenture dated as of January 15,
1993, between the Applicant and
Chemical Bank, as Trustee (which is
incorporated herein by reference to
Exhibit 4.11 to the Applicant's
Annual Report on Form 10-K for the
year ended December 31, 1992).
Exhibit T3D Not applicable.
Exhibit T3E Copies of any prospectus, notice,
circular, letter or other written
communication will be filed by
amendment.
Exhibit T3F Cross-Reference Sheet showing the
location in the Indenture of
provisions inserted therein
pursuant to Sections 310
through 318(a) inclusive, of the
Trust Indenture Act of 1939 (which
is incorporated herein by reference
to Exhibit 4.11 to the Applicant's
Annual Report on Form 10-K for the
year ended December 31, 1992).
* Filed herewith.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust
Indenture Act of 1939, the Applicant, TIME WARNER INC., a
corporation organized and existing under the laws of the
State of Delaware, has duly caused this application to be
signed on its behalf by the undersigned, thereunto duly
authorized, and its seal to be hereunto affixed and
attested, all in the City of New York, and State of New
York, on the 11th day of July, 1995.
TIME WARNER INC.
By /s/ Peter R. Haje
--------------------------
Name: Peter R. Haje
Title: Executive Vice President
[SEAL]
Attest:
By /s/ Joan Pincus
---------------------------
Name: Joan Pincus
Title: Assistant Secretary
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Document Page
T3A-1 Restated Certificate of Incorporation of the
Applicant as filed with the Secretary of State
of the State of Delaware on May 26, 1993 (which
is incorporated herein by reference to Exhibit 3
to the Applicant's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993).....................
T3A-2 Certificate of Ownership and Merger merging TWE
Holdings Inc. into Time Warner Inc. as filed with
the Secretary of State of the State of Delaware on
September 24, 1993 (which is incorporated herein by
reference to Exhibit 3.(i)(b) to the Applicant's
Annual Report on Form 10-K for the year ended
December 31, 1993).......................................
T3A-3 Certificate of the Voting Powers, Designations,
Preferences and Relative Participating, Optional
and Other Rights and Qualifications of Series A
Participating Cumulative Preferred Stock of the
Applicant as filed with the Secretary of State of
the State of Delaware on January 26, 1994 (which is
incorporated herein by reference to Exhibit 3.(i)(c)
to the Applicant's Annual Report on Form 10-K for the
year ended December 31, 1993)............................
T3A-4<F1> Certificate of the Voting Powers, Designations,
Preferences and Relative, Participating, Optional or
Other Special Rights, and Qualifications, Limitations
or Restrictions Thereof, of Series C Convertible
Preferred Stock of the Applicant as filed with the
Secretary of State of the State of Delaware on
May 1, 1995.............................................
T3A-5<F1> Certificate of the Voting Powers, Designations,
Preferences and Relative, Participating, Optional
or Other Special Rights, and Qualifications,
Limitations or Restrictions Thereof, of Series D
Convertible Preferred Stock of the Applicant as
filed with the Secretary of State of the State
of Delaware on July 6, 1995..............................
T3B By-laws of the Applicant, as amended through
March 18, 1993 (which is incorporated herein by
reference to Exhibit 3.3 to the Applicant's Annual
Report on Form 10-K for the year ended
December 31, 1992).......................................
T3C Indenture dated as of January 15, 1993, between the
Applicant and Chemical Bank, as Trustee (which is
incorporated herein by reference to Exhibit 4.11 to
the Applicant's Annual Report on Form 10-K for the
year ended December 31, 1992)............................
T3D Not applicable...........................................
T3E Copies of any prospectus, notice, circular, letter
or other written communication will be filed by
amendment................................................
T3F Cross-Reference Sheet showing the location in the
Indenture of provisions inserted therein pursuant to
Sections 310 through 318(a) inclusive, of the Trust
Indenture Act of 1939 (which is incorporated herein
by reference to Exhibit 4.11 to the Applicant's Annual
Report on Form 10-K for the year ended December 31,
1992) ...................................................
[FN]
<F1> Filed herewith.
Exhibit T3A-4
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF SERIES C CONVERTIBLE
PREFERRED STOCK
OF
TIME WARNER INC.
---------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
----------------------
TIME WARNER INC., a corporation organized and existing by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify that the following resolution was
duly adopted by action of the Board of Directors of the Corporation at
a meeting duly held on March 16, 1995.
RESOLVED that pursuant to the authority expressly granted to
and vested in the Board of Directors of the Corporation by the
provisions of Section 2 of Article IV of the Restated Certificate of
Incorporation of the Corporation, as amended from time to time (the
"Certificate of Incorporation"), and Section 151(g) of the General
Corporation Law of the State of Delaware, such Board of Directors
hereby creates, from the authorized shares of Preferred Stock, par
value $1.00 per share (the "Preferred Stock"), of the Corporation
authorized to be issued pursuant to the Certificate of Incorporation,
a series of Preferred Stock, and hereby fixes the voting powers,
designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions
thereof, of the shares of such series as follows:
The series of Preferred Stock hereby established shall
consist of 3,350,000 shares designated as Series C Convertible
Preferred Stock or such higher number of shares (not in excess of the
total number of shares of authorized Preferred Stock then available
for issuance) as shall be
<PAGE>
determined from time to time by the Board of Directors. The rights,
preferences and limitations of such series shall be as follows:
1. Definitions. As used herein, the following terms shall
have the indicated meanings:
1.1 "Board of Directors" shall mean the Board of
Directors of the Corporation or, with respect to any action to be
taken by the Board of Directors, any com- mittee of the Board of
Directors duly authorized to take such action.
1.2 "Certificate" shall mean the certificate of the
voting powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of Series C Convertible Preferred Stock filed
with respect to this resolution with the Secretary of State of the
State of Delaware pursuant to Section 151 of the General Corporation
Law of the State of Delaware.
1.3 "Closing Price" of the Common Stock shall mean the
last reported sale price of the Common Stock (regular way) as shown on
the Composite Tape of the NYSE, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices on the
NYSE, or, if the Common Stock is not listed or admitted to trading on
the NYSE, on the principal national securities exchange on which such
stock is listed or admitted to trading, or, if it is not listed or
admitted to trading on any national securi- ties exchange, the last
reported sale price of the Common Stock, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, in either case as reported by NASDAQ.
1.4 "Common Stock" shall mean the class of Common
Stock, par value $1.00 per share, of the Corporation authorized at the
date of the Certificate, or any other class of stock resulting from
(x) successive changes or reclassifications of such Common Stock
consisting solely of changes in par value, or from par value to no par
value or (y) a subdivision or combination, and in any such case
including any shares thereof authorized after the date of the
Certificate.
1.5 "Conversion Price" shall have the meaning set forth
in Section 3.1 hereof.
<PAGE>
1.6 "Conversion Rate" shall have the meaning set forth
in Section 3.1 hereof.
1.7 "Converting Holder" shall have the meaning assigned
to such term in Section 3.5 hereof.
1.8 "Current Market Price" of the Common Stock on any
date shall mean the average of the daily Closing Prices per share of
the Common Stock for the five (5) consecutive Trading Days ending on
the Trading Day immediately preceding the applicable conversion,
redemption or exchange date referred to in Section 3 or Section 4.
1.9 "Dividend Payment Date" shall have the meaning set
forth in Section 2.1 hereof.
1.10 "Effective Time" shall mean the time as of which
the merger described in the Merger Agreement shall become effective
pursuant to the Merger Agreement and the General Corporation Law of
the State of Delaware.
1.11 "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
1.12 "Junior Stock" shall mean the Common Stock, the
Series A Stock and the shares of any other class or series of stock of
the Corporation which, by the terms of the Certificate of
Incorporation or of the instrument by which the Board of Directors,
acting pursuant to authority granted in the Certificate of
Incorporation, shall fix the relative rights, preferences and
limitations thereof, shall be junior to the Series C Stock in respect
of the right to receive dividends or to participate in any
distribution of assets other than by way of dividends.
1.13 "Liquidation Value" shall have the meaning set
forth in Section 6.1 hereof.
1.14 "Merger Agreement" shall mean the Agreement and
Plan of Merger dated as of September 12, 1994, as the same may be
amended from time to time, among the Corporation, Summit
Communications Group, Inc., a Delaware corporation and the
stockholders of Summit Communications Group, Inc. named therein.
1.15 "NASDAQ" shall mean the National Association of
Securities Dealers Automated Quotation System.
<PAGE>
1.16 "NYSE" shall mean the New York Stock Exchange,
Inc.
1.17 "Parity Stock" shall mean the Series B Stock and
the shares of any other class or series of stock of the Corporation
which, by the terms of the Certificate of Incorporation or of the
instrument by which the Board of Directors, acting pursuant to
authority granted in the Certificate of Incorporation, shall fix the
relative rights, preferences and limitations thereof, shall, in the
event that the stated dividends thereon are not paid in full, be
entitled to share ratably with the Series C Stock in the payment of
dividends, including accumulations, if any, in accordance with the
sums which would be payable on such shares if all dividends were
declared and paid in full, or shall, in the event that the amounts
payable thereon on liquidation are not paid in full, be entitled to
share ratably with the Series C Stock in any distribution of assets
other than by way of dividends in accordance with the sums which would
be payable in such distribution if all sums payable were discharged
in full; provided, however, that the term "Parity Stock" shall be
deemed to refer (i) in Section 2.2 hereof, to any stock which is
Parity Stock in respect of dividend rights; (ii) in Section 6 hereof,
to any stock which is Parity Stock in respect of the distribution of
assets; and (iii) in Sections 5.2 and 5.3 hereof, to any stock which
is Parity Stock in respect of either dividend rights or the
distribution of assets and which, pursuant to the Certificate of
Incorporation or any instrument in which the Board of Directors,
acting pursuant to authority granted in the Certificate of
Incorporation, shall so designate, is entitled to vote with the
holders of Series C Stock.
1.18 "Preferred Stock" shall mean the class of
Preferred Stock, par value $1.00 per share, of the Corporation
authorized at the date of the Certificate, including any shares
thereof authorized after the date of the Certificate.
1.19 "Pro Rata Repurchase" shall mean the purchase of
shares of Common Stock by the Corporation or by any of its
subsidiaries, which purchase is subject to Section 13(e) of the
Exchange Act or is made pursuant to an offer made available to all
holders of Common Stock, but excluding any purchase made in open
market transactions that satisfies the conditions of clause (b) of
Rule 10b-18 under the Exchange Act or has been designed (as reasonably
determined by the Board of Directors or a committee thereof)
to prevent such purchase from having a material effect on
<PAGE>
the trading market of the Common Stock. The "Effective Date" of a Pro
Rata Repurchase shall mean the applicable expiration date (including
all extensions thereof) of any tender or exchange offer which is a Pro
Rata Repurchase or the date of purchase with respect to any Pro Rata
Repurchase which is not a tender or exchange offer.
1.20 "Record Date" shall have the meaning set forth in
Section 2.1 hereof.
1.21 "Redemption Price" shall have the meaning set
forth in Section 4.1 hereof.
1.22 "Redemption Rescission Event" shall mean the
occurrence of (a) any general suspension of trading in, or limitation
on prices for, securities on the principal national securities
exchange on which shares of Common Stock are registered and listed for
trading (or, if shares of Common Stock are not registered and listed
for trading on any such exchange, in the over-the-counter market) for
more than six-and-one-half (6-1/2) consecutive trading hours, (b) any
decline in either the Dow Jones Industrial Average or the Standard &
Poor's Index of 400 Industrial Companies (or any successor index
published by Dow Jones & Company, Inc. or Standard & Poor's
Corporation) by either (i) an amount in excess of 10%, measured from
the close of business on any Trading Day to the close of business on
the next succeeding Trading Day during the period commencing on the
Trading Day preceding the day notice of any redemption or exchange of
shares of this Series is given (or, if such notice is given after the
close of business on a Trading Day, commencing on such Trading Day)
and ending at the earlier of (x) the time and date fixed for
redemption or exchange in such notice and (y) the time and date at
which the Corporation shall have irrevocably deposited funds with a
designated bank or trust company pursuant to Section 3.5 or (ii) an
amount in excess of 15% (or, if the time and date fixed for redemption
or exchange is more than 15 days following the date on which notice of
redemption or exchange is given, 20%), measured from the close of
business on the Trading Day preceding the day notice of such
redemption or exchange is given (or, if such notice is given after the
close of business on a Trading Day, from such Trading Day) to the
close of business on any Trading Day on or prior to the earlier of the
dates specified in clauses (x) and (y) above, (c) a declaration of a
banking moratorium or any suspension of payments in respect of banks
by Federal or state authorities in the United States or (d) the
commencement of a war or armed hostilities or other national
<PAGE>
or international calamity directly or indirectly involving the United
States which in the reasonable judgment of the Corporation could have
a material adverse effect on the market for the Common Stock.
1.23 "Rescission Date" shall have the meaning set forth
in Section 4.5 hereof.
1.24 "Senior Stock" shall mean the shares of any class
or series of stock of the Corporation which, by the terms of the
Certificate of Incorporation or of the instrument by which the Board
of Directors, acting pursuant to authority granted in the Certificate
of Incorporation, shall fix the relative rights, preferences and
limitations thereof, shall be senior to the Series C Stock in respect
of the right to receive dividends or to participate in any dis-
tribution of assets other than by way of dividends.
1.25 "Series A Stock" shall mean the series of
Preferred Stock authorized and designated as Series A Participating
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.26 "Series B Stock" shall mean the series of
Preferred Stock authorized and designated as Series B 6.40% Preferred
Stock at the date of the Certificate, including any shares thereof
authorized and designated after the date of the Certificate.
1.27 "Series C Stock" and "this Series" shall mean the
series of Preferred Stock authorized and designated as the Series C
Convertible Preferred Stock, including any shares thereof authorized
and designated after the date of the Certificate.
1.28 "Surrendered Shares" shall have the meaning set
forth in Section 3.5 hereof.
1.29 "Trading Day" shall mean, so long as the Common
Stock is listed or admitted to trading on the NYSE, a day on which the
NYSE is open for the transaction of business, or, if the Common Stock
is not listed or admitted to trading on the NYSE, a day on which the
principal national securities exchange on which the Common Stock is
listed is open for the transaction of business, or, if the Common
Stock is not so listed or admitted for trading on any national
securities exchange, a day on which the National
<PAGE>
Market System of NASDAQ is open for the transaction of business.
2. Cash Dividends.
2.1 The holders of the outstanding Series C Stock shall
be entitled to receive quarter-annual dividends, as and when declared
by the Board of Directors out of funds legally available therefor.
Each quarter-annual dividend shall be an amount per share equal to (i)
in the case of each Dividend Payment Date (as defined below) occurring
after the Effective Time through the Dividend Payment Date coinciding
with the fifth anniversary of the Effective Time, the greater of (A)
$.9375 per $100 in Liquidation Value of Series C Stock (which is
equivalent to $3.75 per annum) and (B) an amount per $100 in
Liquidation Value of Series C Stock equal to the product of (1) the
Conversion Rate and (2) the aggregate per share amount of regularly
scheduled dividends paid in cash on the Common Stock during the period
from but excluding the immediately preceding Dividend Payment Date to
and including such Dividend Payment Date and (ii) in the case of each
Dividend Payment Date occurring thereafter, an amount per $100 in
Liquidation Value of Series C Stock equal to the product of (1) the
Conversion Rate and (2) the aggregate per share amount of regularly
scheduled dividends paid in cash on the Common Stock during the period
from but excluding the immediately preceding Dividend Payment Date to
and including such Dividend Payment Date. All dividends shall be
payable in cash on or about the first day of February, May, August and
November in each year, beginning on the first such date that is more
than 15 days after the Effective Time, as fixed by the Board of
Directors, or such other dates as are fixed by the Board of Directors
(provided that the fifth anniversary of the Effective Time shall be a
Dividend Payment Date) (each a "Dividend Payment Date"), to the
holders of record of Series C Stock at the close of business on or
about the 15th day of the month next preceding such first day of
February, May, August and November (or fifth anniversary of the
Effective Time), as the case may be, as fixed by the Board of
Directors, or such other dates as are fixed by the Board of Directors
(each a "Record Date"). In the case of dividends payable in respect of
periods prior to the fifth anniversary of the Effective Time, (i) such
dividends shall accrue on each share on a day-to-day basis, whether or
not earned or declared, from and after the day immediately suc-
ceeding the Effective Time and (ii) any such dividends that become
payable for any partial dividend period shall be computed on the basis
of the actual days elapsed in such
<PAGE>
period. From and after the fifth anniversary of the Effective Time,
dividends on the Series C Stock (determined as to amount as provided
herein) shall accrue to the extent, but only to the extent, that
regularly scheduled cash dividends are declared by the Board of
Directors on the Common Stock with a payment date after the fifth
anniversary of the Effective Time (or, in the case of Series C Stock
originally issued after the fifth anniversary of the Effective Time,
after the Dividend Payment Date next preceding such date of original
issuance). All dividends that accrue in accordance with the foregoing
provisions shall be cumulative from and after the day immediately suc-
ceeding the Effective Time. The amount payable to each holder of
record on any Dividend Payment Date shall be rounded to the nearest
cent.
2.2 Except as hereinafter provided in this Section 2.2,
unless all dividends on the outstanding shares of Series C Stock and
any Parity Stock that shall have accrued and become payable as of any
date shall have been paid, or declared and funds set apart for payment
thereof, no dividend or other distribution (payable other than in
shares of Junior Stock) shall be paid to the holders of Junior Stock
or Parity Stock, and no shares of Series C Stock, Parity Stock or
Junior Stock shall be purchased or redeemed by the Corporation or any
of its subsidiaries (except by conversion into or exchange for, or out
of the net cash proceeds from the concurrent sale of, Junior Stock),
nor shall any monies be paid or made available for a sinking fund for
the purchase or redemption of any Series C Stock, Junior Stock or
Parity Stock; provided, however, that nothing herein shall prevent the
Corporation from completing the purchase of Series C Stock, Parity
Stock or Junior Stock for which a purchase contract was entered into,
or the notice of redemption of which was originally published, prior
to the date on which any such dividends were first required to be
paid. When dividends are not paid in full upon the shares of this
Series and any Parity Stock, all dividends declared upon shares of
this Series and all Parity Stock shall be declared pro rata so that
the amount of dividends declared per share on this Series and all such
Parity Stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the shares of this Series and all such
Parity Stock bear to each other. Holders of shares of this Series
shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of the full amount of dividends that
become payable pursuant to the terms of this Section 2. No interest,
or sum of money in lieu of interest, shall be
<PAGE>
payable in respect of any dividend payment or payments on this Series
which may be in arrears.
3. Conversion Rights.
3.1 Each holder of a share of this Series shall have
the right at any time or, as to any share of this Series called for
redemption or exchange, at any time prior to the close of business on
the date fixed for redemption or exchange (unless the Corporation
defaults in the payment of the Redemption Price, fails to exchange the
shares of this Series for the applicable number of shares of Common
Stock and any applicable cash amount, or exercises its right to
rescind such redemption or exchange pursuant to Section 4.5, in which
case such right shall not terminate at the close of business on such
date), to convert such share into fully paid and nonassessable shares
of Common Stock at a rate of 2.08264 shares of Common Stock for each
share of this Series, subject to adjustment as provided in this
Section 3 (such rate, as so adjusted from time to time, is herein
called the "Conversion Rate"). The "Conversion Price" at any time
shall equal $100 divided by the Conversion Rate in effect at such time
(rounded to the nearest one hundredth of a cent).
3.2 If any shares of this Series are surren- dered for
conversion subsequent to the Record Date preceding a Dividend Payment
Date but on or prior to such Dividend Payment Date (except shares
called for redemption or exchange on a redemption date or exchange
date between such Record Date and Dividend Payment Date and with
respect to which such redemption or exchange has not been rescinded),
the registered holder of such shares at the close of business on such
Record Date shall be entitled to receive the dividend, if any, payable
on such shares on such Dividend Payment Date notwithstanding the
conversion thereof. Shares of this Series surrendered for conversion
during the period from the close of business on any Record Date next
preceding any Dividend Payment Date to the opening of business on such
Dividend Payment Date shall (except in the case of shares which have
been called for redemption or exchange on a redemption date or
exchange date within such period and with respect to which such
redemption or exchange has not been rescinded) be accompanied by
payment in New York Clearing House funds or other funds acceptable to
the Corporation of an amount equal to the dividend payable on such
Dividend Payment Date on the shares being surrendered for conversion.
Except as provided in this Section 3.2, no adjustments in respect of
payments of dividends on shares
<PAGE>
surrendered for conversion or any dividend on the Common Stock issued
upon conversion shall be made upon the conversion of any shares of
this Series.
3.3 The Corporation may, but shall not be required to,
in connection with any conversion of shares of this Series, issue a
fraction of a share of Common Stock, and if the Corporation shall
determine not to issue any such fraction, the Corporation shall,
subject to Section 3.6(f), make a cash payment (rounded to the nearest
cent) equal to such fraction multiplied by the Closing Price of the
Common Stock on the last Trading Day prior to the date of conversion.
3.4 Any holder of shares of this Series electing to
convert such shares into Common Stock shall sur- render the
certificate or certificates for such shares at the office of the
transfer agent or agents therefor (or at such other place as the
Corporation may designate by notice to the holders of shares of this
Series) during regular business hours, duly endorsed to the
Corporation or in blank, or accompanied by instruments of transfer to
the Cor- poration or in blank, or in form satisfactory to the Corpo-
ration, and shall give written notice to the Corporation at such
office that such holder elects to convert such shares of this Series.
The Corporation shall, as soon as practicable (subject to Section
3.6(f)) after such deposit of certificates for shares of this Series,
accompanied by the written notice above prescribed and the payment of
cash in the amount required by Section 3.2, if any, issue and deliver
at such office to the holder for whose account such shares were
surrendered, or to his nominee, certificates representing the number
of shares of Common Stock and the cash, if any, to which such holder
is entitled upon such conversion.
3.5 Conversion shall be deemed to have been made as of
the date that certificates for the shares of this Series to be
converted, and the written notice and payment prescribed in Sections
3.2 and 3.4 are received by the transfer agent or agents for this
Series; and the person entitled to receive the Common Stock issuable
upon such conversion shall be treated for all purposes as the record
holder of such Common Stock on such date. Notwithstanding anything to
the contrary contained herein, in the event the Corporation shall have
rescinded a redemption or exchange of shares of this Series pursuant
to Section 4.5, any holder of shares of this Series that shall have
surrendered shares of this Series for conversion following the day on
which notice
<PAGE>
of the subsequently rescinded redemption or exchange shall have been
given but prior to the later of (a) the close of business on the
Trading Day next succeeding the date on which public announcement of
the rescission of such redemption or exchange shall have been made and
(b) the date of the mailing of the notice of rescission required by
Section 4.5 (a "Converting Holder") may rescind the conversion of such
shares surrendered for conversion by (i) properly completing a form
prescribed by the Corporation and mailed to holders of shares of this
Series (including Converting Holders) with the Corporation's notice of
rescission, which form shall provide for the certification by any
Converting Holder rescinding a conversion on behalf of any beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of
shares of this Series that the beneficial ownership (within the
meaning of such Rule) of such shares shall not have changed from the
date on which such shares were surrendered for conversion to the date
of such certification and (ii) delivering such form to the Corporation
no later than the close of business on that date which is fifteen (15)
Trading Days following the date of the mailing of the Corporation's
notice of rescission. The delivery of such form by a Converting Holder
shall be accompanied by (x) any certificates representing shares of
Common Stock issued to such Converting Holder upon a conversion of
shares of this Series that shall be rescinded by the proper delivery
of such form (the "Surrendered Shares"), (y) any securities, evidences
of indebtedness or assets (other than cash) distributed by the
Corporation to such Converting Holder by reason of such Converting
Holder's being a record holder of Surrendered Shares and (z) payment
in New York Clearing House funds or other funds acceptable to the
Corporation of an amount equal to the sum of (I) any cash such
Converting Holder may have received in lieu of the issuance of
fractional shares upon conversion and (II) any cash paid or payable by
the Corporation to such Converting Holder by reason of such Converting
Holder being a record holder of Surrendered Shares. Upon receipt by
the Corporation of any such form properly completed by a Converting
Holder and any certificates, securities, evidences of indebtedness,
assets or cash payments required to be returned or made by such
Converting Holder to the Corporation as set forth above, the
Corporation shall instruct the transfer agent or agents for shares of
Common Stock and shares of this Series to cancel any certificates
representing Surrendered Shares (which Surrendered Shares shall be
deposited in the treasury of the Corporation) and reissue certificates
representing shares of this Series to such Converting Holder (which
shares of this Series shall be
<PAGE>
deemed to have been outstanding at all times during the period
following their surrender for conversion). The Corporation shall, as
promptly as practicable, and in no event more than five (5) Trading
Days, following the receipt of any such properly completed form and
any such certificates, securities, evidences of indebtedness, assets
or cash payments required to be so returned or made, pay to the
Converting Holder or as otherwise directed by such Converting Holder
any dividend or other payment made on such shares during the period
from the time such shares shall have been surrendered for conversion
to the rescission of such conversion. All questions as to the
validity, form, eligibility (including time or receipt) and acceptance
of any form submitted to the Corporation to rescind the conversion of
shares of this Series, including questions as to the proper completion
or execution of any such form or any certification contained therein,
shall be resolved by the Corporation, whose determination shall be
final and binding. The Corporation shall not be required to deliver
certificates for shares of Common Stock while the stock transfer books
for such stock or for this Series are duly closed for any purpose or
during any period commencing at a Redemption Rescission Event and
ending at either (i) the time and date at which the Corporation's
right of rescission shall expire pursuant to Section 4.5 if the
Corporation shall not have exercised such right or (ii) the close of
business on that day which is fifteen (15) Trading Days following the
date of the mailing of a notice of rescission pursuant to Section 4.4
if the Corporation shall have exercised such right of rescission, but
certificates for shares of Common Stock shall be issued and delivered
as soon as practicable after the opening of such books or the
expiration of such period.
3.6 The Conversion Rate shall be adjusted from time to
time as follows:
(a) In case the Corporation shall, at any time or from
time to time while any of the Series C Stock is outstanding, (i)
pay a dividend in shares of its Common Stock, (ii) combine its
outstanding shares of Common Stock into a smaller number of
shares, (iii) subdivide its outstanding shares of Common Stock or
(iv) issue by reclassification of its shares of Common Stock any
shares of stock of the Corporation, then the Conversion Rate in
effect immediately before such action shall be adjusted so that
the holders of the Series C Stock, upon conversion of all shares
thereof immediately following such event, shall be
<PAGE>
entitled to receive the kind and amount of shares of capital
stock of the Corporation which they would have owned or been
entitled to receive upon or by reason of such event if such
shares of Series C Stock had been converted immediately before
the record date (or, if no record date, the effective date) for
such event. An adjustment made pursuant to this Section 3.6(a)
shall become effective retroactively immediately after the record
date in the case of a dividend or distribution and shall become
effective retroactively immediately after the effective date in
the case of a subdivision, combination or reclassification. For
the purposes of this Section 3.6(a), each holder of Series C
Stock shall be deemed to have failed to exercise any right to
elect the kind or amount of securities receivable upon the
payment of any such dividend, subdivision, combination or
reclassification (provided that if the kind or amount of
securities receivable upon such dividend, subdivision,
combination or reclassification is not the same for each
nonelecting share, then the kind and amount of securities
receivable upon such dividend, subdivision, combination or
reclassification for each nonelecting share shall be deemed to be
the kind and amount so receivable per share by a plurality of the
nonelecting shares).
(b) In case the Corporation shall, at any time or from
time to time while any of the Series C Stock is outstanding,
issue rights or warrants to all holders of shares of its Common
Stock entitling them (for a period expiring within 45 days after
the record date for such issuance) to subscribe for or purchase
shares of Common Stock (or securities convertible into shares of
Common Stock) at a price per share less than the Current Market
Price of the Common Stock at such record date (treating the price
per share of the secu- rities convertible into Common Stock as
equal to (x) the sum of (i) the price for a unit of the security
convertible into Common Stock plus (ii) any additional
consideration initially payable upon the conversion of such
security into Common Stock divided by (y) the num- ber of shares
of Common Stock initially underlying such convertible security),
the Conversion Rate shall be adjusted so that it shall equal the
rate determined by multiplying the Conversion Rate in effect
immediately prior to the date of issuance of such rights or
warrants by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the
<PAGE>
number of additional shares of Common Stock offered for
subscription or purchase (or into which the convertible
securities so offered are initially convertible), and the
denominator of which shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights or
warrants plus the number of shares which the aggregate offering
price of the total number of shares so offered for subscription
or purchase (or the aggregate purchase price of the convertible
securities so offered plus the aggregate amount of any additional
consideration initially payable upon conversion into Common
Stock) would purchase at such Current Market Price of the Common
Stock. Such adjustment shall become effective retroactively
immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants.
(c) In case the Corporation shall, at any time or from
time to time while any of the Series C Stock is outstanding,
distribute to all holders of shares of its Common Stock
(including any such distribution made in connection with a
consolidation or merger in which the Corporation is the
continuing corporation and the Common Stock is not changed or
exchanged) cash, evidences of its indebtedness, securities or
assets (excluding (i) regularly scheduled cash dividends in
amounts, if any, determined from time to time by the Board of
Directors or (ii) dividends payable in shares of Common Stock for
which adjustment is made under Section 3.6(a)) or rights or
warrants to subscribe for or purchase securities of the
Corporation (excluding those referred to in Section 3.6(b)), then
in each such case the Conversion Rate shall be adjusted so that
it shall equal the rate determined by multiplying the Conversion
Rate in effect immediately prior to the date of such distribution
by a fraction, the numerator of which shall be the Current Market
Price of the Common Stock on the record date referred to below,
and the denominator of which shall be such Current Market Price
of the Common Stock less the then fair market value (as
determined by the Board of Directors of the Corporation, whose
determination shall be conclusive) of the portion of the cash or
assets or evidences of indebtedness or securities so distributed
or of such subscription rights or warrants applicable to one
share of Common Stock (provided that such denominator shall never
be less than 1.0); provided, however, that no adjustment shall be
made with respect to any distribution of rights to purchase
securities of
<PAGE>
the Corporation if the holder of shares of this Series would
otherwise be entitled to receive such rights upon conversion at
any time of shares of this Series into Common Stock unless such
rights are subsequently redeemed by the Corporation, in which
case such redemption shall be treated for purposes of this
Section as a dividend on the Common Stock. Such adjustment shall
be made whenever any such distribution is made and shall become
effective retroactively immediately after the record date for the
determination of stockholders entitled to receive such
distribution.
(d) In case the Corporation or any subsidiary thereof
shall, at any time and from time to time while any of the Series
C Stock is outstanding, make a Pro Rata Repurchase, the
Conversion Rate in effect immediately prior to such action shall
be adjusted by multiplying such Conversion Rate by a fraction,
the numerator of which shall be the product of (i) the number of
shares of Common Stock outstanding immediately before such Pro
Rata Repurchase minus the number of shares of Common Stock
repurchased in such Pro Rata Repurchase and (ii) the Current
Market Price of the Common Stock as of the day immediately
preceding the first public announcement by the Corporation of the
intent to effect such Pro Rata Repurchase, and the denominator of
which shall be (i) the product of (x) the number of shares of
Common Stock outstanding immediately before such Pro Rata
Repurchase and (y) the Current Market Price of the Common Stock
as of the day immediately preceding the first public announcement
by the Corporation of the intent to effect such Pro Rata
Repurchase minus (ii) the aggregate purchase price of the Pro
Rata Repurchase (provided that such denominator shall never be
less than 1.0). Such adjustment shall become effective
immediately after the Effective Date of such Pro Rata Repurchase.
(e) The Corporation shall be entitled to make such
additional adjustments in the Conversion Rate, in addition to
those required by subsections 3.6(a), 3.6(b), 3.6(c) and
3.6(d), as shall be necessary in order that any dividend or
distribution in Common Stock, any subdivision, reclassification
or combination of shares of Common Stock or any issuance of
rights or warrants referred to above, shall not be taxable to
the holders of Common Stock for United States Federal income tax
purposes.
<PAGE>
(f) In any case in which this Section 3.6 shall require
that any adjustment be made effective as of or retroactively
immediately following a record date, the Corporation may elect to
defer (but only for five (5) Trading Days following the filing of
the statement referred to in Section 3.6(h)) issuing to the
holder of any shares of this Series converted after such record
date (i) the shares of Common Stock and other capital stock of
the Corporation issuable upon such conversion over and above (ii)
the shares of Common Stock and other capital stock of the
Corporation issuable upon such conversion on the basis of the
Conversion Rate prior to adjustment; provided, however, that the
Corporation shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive
such additional shares upon the occurrence of the event requiring
such adjustment.
(g) All calculations under this Section 3.6 shall be
made to the nearest cent, one-hundredth of a share or, in the
case of the Conversion Rate, one ten-thousandth. Notwithstanding
any other provision of this Section 3.6, the Corporation shall
not be required to make any adjustment of the Conversion Rate
unless such adjustment would require an increase or decrease of
at least 1.0000% of such rate. Any lesser adjustment shall be
carried forward and shall be made at the time of and together
with the next subsequent adjustment which, together with any
adjustment or adjustments so carried forward, shall amount to an
increase or decrease of at least 1.0000% in such rate. Any
adjustments under this Section 3.6 shall be made successively
whenever an event requiring such an adjustment occurs.
(h) Whenever an adjustment in the Conversion Rate is
required, the Corporation shall forthwith place on file with its
transfer agent or agents for this Series a statement signed by a
duly authorized officer of the Corporation, stating the adjusted
Conversion Rate determined as provided herein. Such statements
shall set forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustment. Promptly after the adjustment of the Conversion Rate,
the Corporation shall mail a notice thereof to each holder of
shares of this Series.
<PAGE>
(i) In the event that at any time as a result of an
adjustment made pursuant to this Section 3.6, the holder of any
share of this Series thereafter surrendered for conversion shall
become entitled to receive any shares of stock of the Corpora-
tion other than shares of Common Stock, the conversion rate of
such other shares so receivable upon conversion of any such share
of this Series shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to Common Stock contained in subpara-
graphs (a) through (h) and (j) of this Section 3.6, and the
provisions of Section 3.1 through 3.5 and 3.7 through 3.10 shall
apply on like or similar terms to any such other shares and the
determination of the Board of Directors as to any such adjustment
shall be conclusive.
(j) No adjustment shall be made pursuant to this
Section 3.6 (i) if the effect thereof would be to reduce the
Conversion Price below the par value of the Common Stock or (ii)
subject to Section 3.6(f) hereof, with respect to any share of
Series C Stock that is converted, prior to the time such
adjustment otherwise would be made.
3.7 In case of either (a) any consolidation or merger
to which the Corporation is a party, other than a merger or
consolidation in which the Corporation is the surviving or
continuing corporation and which does not result in any
reclassification of, or change (other than a change in par value or
from par value to no par value or from no par value to par value, or
as a result of a subdivision or combination) in, outstanding shares of
Common Stock or (b) any sale or conveyance of all or substantially all
of the property and assets of the Corporation, then each share of this
Series then outstanding shall be converted in such merger or
consolidation or shall be convertible from and after such sale or
conveyance of property and assets into the kind and amount of shares
of stock or other securities and property receivable upon such
consolidation, merger, sale or conveyance by a holder of the number of
shares of Common Stock into which such shares of this Series could
have been converted immediately prior to such consolidation, merger,
sale or conveyance, subject to adjustment which shall be as nearly
equivalent as may be practicable to the adjustments provided for in
this Section 3 (and assuming such holder of Common Stock failed to
exercise his rights of election, if any, as to the kind or amount of
securities,
<PAGE>
cash or other property receivable upon such consolidation, merger,
sale or conveyance (provided that if the kind or amount of securities,
cash or other property receivable upon such consolidation, merger,
sale or conveyance is not the same for each nonelecting share, then
the kind and amount of securities, cash or other property receivable
upon such consolidation, merger, sale or conveyance for each
nonelecting share shall be deemed to be the kind and amount so
receivable per share by a plurality of the nonelecting shares)). The
Corporation shall not enter into any of the transactions referred to
in clauses (a) or (b) of the preceding sentence unless effective
provision shall be made so as to give effect to the provisions set
forth in this Section 3.7. The provisions of this Section 3.7 shall
apply similarly to successive consolidations, mergers, sales or
conveyances.
3.8 The Corporation 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
shares of this Series, such number of its duly authorized shares of
Common Stock (or, if applicable, any other shares of capital stock of
the Corporation) as shall from time to time be sufficient to effect
the conversion of all outstanding shares of this Series into such
Common Stock (or such other shares of capital stock) at any time
(assuming that, at the time of the computation of such number of
shares, all such Common Stock (or such other shares of capital stock)
would be held by a single holder); provided, however, that nothing
contained herein shall preclude the Corporation from satisfying its
obligations in respect of the conversion of the shares by delivery of
purchased shares of Common Stock (or such other shares of capital
stock) that are held in the treasury of the Corporation. The
Corporation shall from time to time, in accordance with the laws of
the State of Delaware, use its best efforts to cause the authorized
amount of Common Stock (or such other shares of capital stock) to be
increased if the aggregate of the authorized amount of the Common
Stock (or such other shares of capital stock) remaining unissued and
the issued shares of such Common Stock (or such other shares of
capital stock) in its treasury (other than any shares of such Common
Stock (or such other shares capital stock) reserved for issuance in
any other connection) shall not be sufficient to permit the conversion
of the shares of this Series into the Common Stock (or such other
shares of capital stock).
3.9 If any shares of Common Stock which would be
issuable upon conversion of shares of this Series
<PAGE>
hereunder require registration with or approval of any governmental
authority before such shares may be issued upon conversion, the
Corporation will in good faith and as expeditiously as possible
cause such shares to be duly registered or approved, as the case may
be. The Corporation will endeavor to list the shares of (or depositary
shares representing fractional interests in) Common Stock required
to be delivered upon conversion of shares of this Series prior to such
delivery upon the principal national securities exchange upon which
the outstanding Common Stock is listed at the time of such delivery.
3.10 The Corporation shall pay any and all issue or
other taxes that may be payable in respect of any issue or delivery of
shares of Common Stock on conversion of shares of this Series pursuant
hereto. The Corporation shall not, however, be required to pay any tax
which is payable in respect of any transfer involved in the issue or
delivery of Common Stock in a name other than that in which the shares
of this Series so converted were registered, and no such issue or
delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of such tax, or has
established, to the satisfaction of the Corporation, that such tax has
been paid.
3.11 In case (i) of a consolidation or merger to which
the Corporation is a party and in which the Common Stock is to be
exchanged for securities or other property or of the sale or
conveyance to another person or entity or group of persons or entities
acting in concert as a partnership, limited partnership, syndicate or
other group (within the meaning of Rule 13d-3 under the Exchange Act)
of all or substantially all of the property and assets of the
Corporation, (ii) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, or (iii) of any Pro Rata
Repurchase or other action triggering an adjustment to the Conversion
Rate pursuant to this Section 3; then, in each case, the Corporation
shall cause to be filed with the transfer agent or agents for the
Series C Stock, and shall cause to be mailed, first-class postage
prepaid, to the holders of record of the outstanding shares of Series
C Stock, at least fifteen (15) days prior to the applicable record
date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of any distribution or grant of
rights or warrants triggering an adjustment to the Common Stock
Conversion Rate pursuant to this Section 3, or, if a record is not to
be taken, the date as of which the holders of record of Common Stock
entitled to such distribution, rights
<PAGE>
or warrants are to be determined, or (y) the date on which any
reclassification, consolidation, merger, sale, conveyance,
dissolution, liquidation, winding up or Pro Rata Repurchase triggering
an adjustment to the Conversion Rate pursuant to this Section 3 is
expected to become effective, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange
their Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, sale, conveyance,
dissolution, liquidation, winding up or Pro Rata Repurchase. Failure
to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clause (i), (ii)
or (iii) of this Section 3.11.
4. Redemption or Exchange.
4.1 Redemption or Exchange at the Option of the
Corporation. (a) The Corporation may, at its sole option, subject to
Section 2.2 hereof, from time to time on and after the fifth
anniversary of the Effective Time, redeem, out of funds legally
available therefor, or, as provided below, exchange shares of Common
Stock for, all or any part of the outstanding shares of this Series.
The redemption or exchange price for each share of this Series called
for redemption or exchange pursuant to clause (i) of the next sentence
of this Section 4.1(a) shall be the Liquidation Value together in each
case with an amount equal to the accrued and unpaid dividends to the
date fixed for redemption or exchange (hereinafter collectively
referred to as the "Redemption Price"). On the date fixed for
redemption or exchange the Corporation shall, at its option, effect
either
(i)(A) a redemption of the shares of this Series to be
redeemed by way of payment, out of funds legally available
therefor, of cash equal to the aggregate Redemption Price for the
shares of this Series then being redeemed, (B) an exchange of the
shares of this Series being exchanged for shares of Common Stock
the aggregate Current Market Price of which shall be equal to the
aggregate Redemption Price of the shares of this Series then
being exchanged (provided that the Corporation shall be entitled
to deliver cash in lieu of any fractional share of Common Stock
(determined in a manner consistent with Section 3.3)) or (C) any
combination thereof with respect to each share of this Series
called for redemption or exchange; provided, however, that the
<PAGE>
Corporation may not redeem or exchange any shares of this Series
pursuant to this clause (i) unless the Closing Price of the
Common Stock shall have equalled or exceeded 125% of the
applicable Conversion Price (as determined in accordance with
Section 3) for at least twenty (20) Trading Days within thirty
(30) consecutive Trading Days ending within fifteen (15) Trading
Days prior to the date notice of redemption is given; or
(ii) an exchange of the shares of this Series being
exchanged for shares of Common Stock at a rate of exchange per
$100 in Liquidation Value of Series C Stock equal to the
Conversion Rate (provided that the Corporation shall be entitled
to deliver cash in lieu of any fractional share of Common Stock
(determined in a manner consistent with Section 3.3)); provided,
however, that the Corporation may not exchange any shares of this
Series pursuant to this clause (ii) unless all dividends with
respect to such shares accrued through the Dividend Payment Date
immediately prior to the date fixed for such exchange shall have
been declared and paid in accordance with Section 2 hereof.
Except as provided in the proviso in the previous sentence, upon
receipt of shares of Common Stock in exchange for shares of this
Series being exchanged pursuant to this clause (ii), the holders
of such shares of this Series shall not be entitled to any
accrued and unpaid dividends to the date fixed for exchange.
(b) Notwithstanding clauses (i)(B), (i)(C) and (ii) of
Section 4.1(a), the Corporation shall be entitled to effect an
exchange of shares of Series C Stock for Common
Stock only to the extent Common Stock shall be available for
issuance (including delivery of previously issued shares of
Common Stock held in the Corporation's treasury) on the date
for exchange and only to the extent shares of Common Stock
are issued and exchanged for shares of this Series on a
timely basis in accordance with the terms of this Section 4.
Certificates for shares of Common Stock issued in exchange
for surrendered shares pursuant to this Section 4.1 shall be
made available by the Corporation not later than the fifth
Trading Day following the date for exchange; subject,
however, to Section 4.2.
4.2 In the event that fewer than all the outstanding
shares of this Series are to be redeemed or exchanged pursuant to
Section 4.1(a), the number of shares to be redeemed or exchanged from
each holder of shares of
<PAGE>
this Series shall be determined by the Corporation by lot or pro rata
or by any other method as may be determined by the Board of Directors
in its sole discretion to be equitable, and the certificate of the
Corporation's Secretary or an Assistant Secretary filed with the
transfer agent or transfer agents for this Series in respect of such
determination by the Board of Directors shall be conclusive.
4.3 In the event the Corporation shall redeem or
exchange shares of this Series pursuant to Section 4.1(a), notice of
such redemption or exchange shall be given by first class mail,
postage prepaid, mailed not less than fifteen (15) nor more than sixty
(60) days prior to the date fixed for redemption or exchange, as
applicable, to each record holder of the shares to be redeemed or
exchanged, at such holder's address as the same appears on the books
of the Corporation. Each such notice shall state: (i) whether the
shares of this Series are to be redeemed or exchanged and, if
exchanged, whether such shares are to be exchanged at the Redemption
Price or the Conversion Rate; (ii) the time and date as of which the
redemption or exchange shall occur; (iii) the total number of shares
of this Series to be redeemed or exchanged and, if fewer than all the
shares held by such holder are to be redeemed or exchanged, the number
of such shares to be redeemed or exchanged from such holder; (iv) the
Redemption Price, if applicable; (v) that shares of this Series called
for redemption or exchange may be converted at any time prior to the
time and date fixed for redemption or exchange (unless the Corporation
shall, in the case of a redemption, default in payment of the
Redemption Price or, in the case of an exchange, fail to exchange the
shares of this Series for the applicable number of shares of Common
Stock and amount of cash, or shall exercise its right to rescind such
redemption or exchange pursuant to Section 4.5, in which case such
right of conversion shall not terminate at such time and date); (vi)
the applicable Conversion Price or Conversion Rate; (vii) the place or
places where certificates for such shares are to be surrendered (A)
for payment of the Redemption Price, in the case of redemption, or (B)
for delivery of certificates representing the shares of Common Stock
and for payment of any applicable cash amount, in the case of
exchange; and (viii) that, in the case of any redemption or exchange
pursuant to Section 4.1(a)(i), dividends on the shares to be redeemed
or exchanged will cease to accrue on such date fixed for redemption or
exchange.
<PAGE>
4.4 If notice of redemption or exchange shall have been
given by the Corporation as provided in Section 4.3, dividends on the
shares of this Series so called for redemption or exchange shall cease
to accrue, such shares shall no longer be deemed to be outstanding,
and all rights of the holders thereof as stockholders of the
Corporation with respect to shares so called for redemption or
exchange (except (i) in the case of redemption, the right to receive
from the Corporation the Redemption Price without interest and, in the
case of exchange, the right to receive from the Corporation the shares
of Common Stock and cash amount, if any, exchanged therefor and (ii)
the right to convert such shares in accordance with Section 3) shall
cease (including any right to receive dividends otherwise payable on
any Dividend Payment Date that would have occurred after the time and
date of redemption or exchange) either (i) in the case of a redemption
or exchange pursuant to Section 4.1(a), from and after the time and
date fixed in the notice of redemption or exchange as the time and
date of redemption or exchange (unless the Corporation shall (x) in
the case of a redemption, default in the payment of the Redemption
Price, (y) in the case of an exchange, fail to exchange the shares of
this Series for the applicable number of shares of Common Stock and
any applicable cash amount pursuant to Section 4.1, or (z) exercise
its right to rescind such redemption pursuant to Section 4.5, in which
case such rights shall not terminate at such time and date) or (ii) if
the Corporation shall so elect and state in the notice of redemption
or exchange, from and after the time and date (which date shall be the
date of redemption or exchange or an earlier date not less than
fifteen (15) days after the date of mailing of the redemption or
exchange notice) on which the Corporation shall irrevocably deposit
with a designated bank or trust company doing business in the Borough
of Manhattan, City and State of New York, as paying agent, money
sufficient to pay at the office of such paying agent, on the
redemption date, the Redemption Price, in the case of redemption, or
certificates representing the shares of Common Stock to be so
exchanged and any applicable cash amount, in the case of an exchange.
Any money or certificates so deposited with any such paying agent
which shall not be required for such redemption or exchange because of
the exercise of any right of conversion or otherwise shall be returned
to the Corporation forthwith. Upon surrender (in accordance with the
notice of redemption or exchange) of the certificate or certificates
for any shares of this Series to be so redeemed or exchanged (properly
endorsed or assigned for transfer, if the Corporation shall so require
and the notice of redemption or
<PAGE>
exchange shall so state), such shares shall be redeemed or exchanged
by the Corporation at the Redemption Price or the Conversion Rate, as
applicable, as set forth in Section 4.1 (unless the Corporation shall
have exercised its right to rescind such redemption or exchange
pursuant to Section 4.5). In case fewer than all the shares
represented by any such certificate are to be redeemed or exchanged, a
new certificate shall be issued representing the unredeemed shares (or
fractions thereof as provided in Section 7.3), without cost to the
holder thereof, together with the amount of cash, if any, in lieu of
fractional shares other than those issuable in accordance with Section
7.3. Subject to applicable escheat laws, any moneys so set aside by
the Corporation in the case of redemption and unclaimed at the end of
one year from the redemption date shall revert to the general funds of
the Corporation, after which reversion the holders of such shares so
called for redemption shall look only to the general funds of the
Corporation for the payment of the Redemption Price without interest.
Any interest accrued on funds so deposited shall be paid to the
Corporation from time to time.
4.5 In the event that a Redemption Rescission Event
shall occur following any day on which a notice of redemption or
exchange shall have been given pursuant to Section 4.3 but at or prior
to the earlier of (a) the time and date fixed for redemption or
exchange as set forth in such notice of redemption or exchange and
(b) the time and date at which the Corporation shall have irrevocably
deposited funds or certificates with a designated bank or trust
company pursuant to Section 4.4, the Corporation may, at its sole
option, at any time prior to the earliest of (i) the close of business
on that day which is two (2) Trading Days following such Redemption
Rescission Event, (ii) the time and date fixed for redemption or
exchange as set forth in such notice and (iii) the time and date on
which the Corporation shall have irrevocably deposited such funds with
a designated bank or trust company, rescind the redemption or exchange
to which such notice of redemption or exchange shall have related by
making a public announcement of such rescission (the date on which
such public announcement shall have been made being hereinafter
referred to as the "Rescission Date"). The Corporation shall be deemed
to have made such announcement if it shall issue a release to the Dow
Jones News Service, Reuters Information Services or any successor news
wire service. From and after the making of such announcement, the
Corporation shall have no obligation to redeem or exchange shares of
this Series called for redemption or
<PAGE>
exchange pursuant to such notice of redemption or exchange or to pay
the redemption or exchange price therefor and all rights of holders of
shares of this Series shall be restored as if such notice of
redemption or exchange had not been given. The Corporation shall give
notice of any such rescission by first-class mail, postage prepaid,
mailed as promptly as practicable, but in no event later than the
close of business on that date which is five (5) Trading Days
following the Rescission Date to each record holder of shares of this
Series at the close of business on the Rescission Date and to any
other person or entity that was a record holder of shares of this
Series and that shall have surrendered shares of this Series for
conversion following the giving of notice of the subsequently
rescinded redemption or exchange. Each notice of rescission shall (w)
state that the redemption or exchange described in the notice of
redemption or exchange has been rescinded, (x) state that any
Converting Holder shall be entitled to rescind the conversion of
shares of this Series surrendered for conversion following the day on
which notice of redemption or exchange was given but on or prior to
the date of the mailing of the Corporation's notice of rescission, (y)
be accompanied by a form prescribed by the Corporation to be used by
any Converting Holder rescinding the conversion of shares so
surrendered for conversion (and instructions for the completion and
delivery of such form, including instructions with respect to payments
that may be required to accompany such delivery shall be in accordance
with Section 3.5) and (z) state that such form must be properly
completed and received by the Corporation no later than the close of
business on a date that shall be fifteen (15) Trading Days following
the date of the mailing of such notice of rescission.
5. Voting. The shares of this Series shall have no voting
rights except as required by law or as set forth below.
5.1 Each share of this Series shall be entitled to
vote together with holders of the shares of Common Stock (and any
other class or series which may similarly be entitled to vote with the
shares of Common Stock) as a single class upon all matters upon which
holders of Common Stock are entitled to vote. In any such vote, the
holders of this Series shall be entitled to two (2) votes per $100 in
Liquidation Value of Series C Stock, subject to adjustment at the same
time and in the same manner as each adjustment of the Conversion Rate
pursuant to Section 3.6, so that the holders of this Series shall be
entitled
<PAGE>
following such adjustment to the number of votes equal to the number
of votes such holders were entitled to under this Section 5.1
immediately prior to such adjustment multiplied by a fraction (x) the
numerator of which is the Conversion Rate as adjusted pursuant to
Section 3.6 and (y) the denominator of which is the Conversion Rate
immediately prior to such adjustment.
5.2(a) So long as any shares of this Series remain
outstanding, unless a greater percentage shall then be required by
law, the Corporation shall not, without the affirmative vote at a
meeting or the written consent with or without a meeting of the
holders of shares of this Series representing at least 66-2/3% of the
aggregate voting power of shares of this Series then outstanding (i)
authorize any Senior Stock or reclassify any Junior Stock or Parity
Stock as Senior Stock or (ii) amend, alter or repeal any of the
provisions of the Certificate or the Certificate of Incorporation,
so as in any such case to materially and adversely affect the
preferences, special rights, powers or privileges of the shares of
this Series; provided, however, that no amendment which effects a
split of this Series or which effects a combination of the shares of
this Series into a fewer number of Shares shall be deemed to have any
such material adverse effect.
b) No consent of holders of shares of this Series shall
be required for (i) the creation of any indebtedness of any kind of
the Corporation, (ii) the authorization or issuance of any class of
Junior Stock or Parity Stock, (iii) the authorization, designation or
issuance of additional shares of Series C Stock or (iv) subject to
Section 5.2(a), the authorization or issuance of any other shares of
Preferred Stock.
5.3(a) If and whenever at any time or times dividends
payable on shares of this Series shall have been in arrears and unpaid
in an aggregate amount equal to or exceeding the amount of dividends
payable thereon for six quarterly dividend periods, then the number of
directors constituting the Board of Directors shall be increased by
two and the holders of shares of this Series, together with the
holders of any shares of any Parity Stock as to which in each case
dividends are in arrears and unpaid in an aggregate amount equal to or
exceeding the amount of dividends payable thereon for six quarterly
dividend periods, shall have the exclusive right, voting separately as
a class with such other series, to elect two directors of the
Corporation.
<PAGE>
(b) Such voting right may be exercised initially either
by written consent or at a special meeting of the holders of the
Preferred Stock having such voting right, called as hereinafter
provided, or at any annual meeting of stockholders held for the
purpose of electing directors, and thereafter at each such annual
meeting until such time as all dividends accumulated on the shares of
this Series shall have been paid in full and all dividends payable on
the shares of this Series on four subsequent consecutive Dividend
Payment Dates shall have been paid in full on such dates or funds
shall have been set aside for the payment thereof, at which time such
voting right and the term of the directors elected pursuant to Section
5.3(a) shall terminate.
(c) At any time when such voting right shall have
vested in holders of shares of such series of Preferred Stock
described in Section 5.3(a), and if such right shall not already have
been exercised by written consent, a proper officer of the Corporation
may call, and, upon the written request, addressed to the Secretary of
the Corporation, of the record holders of shares representing
twenty-five percent (25%) of the voting power of the shares then
outstanding of such Preferred Stock having such voting right, shall
call, a special meeting of the holders of such Preferred Stock having
such voting right. Such meeting shall be held at the earliest
practicable date upon the notice required for annual meetings of
stockholders at the place for holding annual meetings of stockholders
of the Corporation, or, if none, at a place designated by the Board of
Directors. Notwithstanding the provisions of this Section 5.3(c), no
such special meeting shall be called during a period within 60 days
immediately preceding the date fixed for the next annual meeting of
stockholders.
(d) At any meeting held for the purpose of electing
directors at which the holders of such Preferred Stock shall have the
right to elect directors as provided herein, the presence in person or
by proxy of the holders of shares representing more than fifty percent
(50%) in voting power of the then outstanding shares of such Preferred
Stock having such right shall be required and shall be sufficient to
constitute a quorum of such class for the election of directors by
such class.
(e) Any director elected by holders of Preferred Stock
pursuant to the voting right created under this Section 5.3 shall hold
office until the next annual meeting of stockholders (unless such term
has previously
<PAGE>
terminated pursuant to Section 5.3(b)) and any vacancy in respect of
any such director shall be filled only by vote of the remaining
director so elected, or if there be no such remaining director, by the
holders of such Preferred Stock entitled to elect such director or
directors by written consent or at a special meeting called in
accordance with the procedures set forth in Section 5.3(c), or, if no
special meeting is called or written consent executed, at the next
annual meeting of stockholders. Upon any termination of such voting
right, subject to applicable law, the term of office of all directors
elected by holders of such Preferred Stock voting separately as a
class pursuant to this Section 5.3 shall terminate.
(f) In exercising the voting rights set forth in this
Section 5.3, each share of this Series shall have a number of votes
equal to its Liquidation Value.
6. Liquidation Rights.
6.1 Upon the dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, the holders of
the shares of this Series shall be entitled to receive out of the
assets of the Corporation available for distribution to stockholders,
in preference to the holders of, and before any payment or
distribution shall be made on, Junior Stock, the amount of $100 per share
(which amount shall be appropriately adjusted from time to
time to reflect any split or combination of the shares of
this Series) (the "Liquidation Value"), plus an amount equal
to all accrued and unpaid dividends to the date of final
distribution.
6.2 Neither the sale, exchange or other conveyance
(for cash, shares of stock, securities or other consideration) of
all or substantially all the property and assets of the Corporation
nor the merger or consolidation of the Corporation into or with any
other corporation, or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to be a
dissolution, liquidation or winding up, voluntary or involuntary, for
the purposes of this Section 6.
6.3 After the payment to the holders of the shares of
this Series of full preferential amounts provided for in this Section
6, the holders of this Series as such shall have no right or claim to
any of the remaining assets of the Corporation.
<PAGE>
6.4 In the event the assets of the Corporation
available for distribution to the holders of shares of this Series
upon any dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, shall be insufficient to pay in full
all amounts to which such holders are entitled pursuant to Section
6.1, no such distribution shall be made on account of any shares of
any Parity Stock upon such dissolution, liquidation or winding up
unless proportionate distributive amounts shall be paid on account of
the shares of this Series, ratably, in proportion to the full
distributable amounts for which holders of all Parity Stock are
entitled upon such dissolution, liquidation or winding up.
7. Other Provisions.
7.1 All notices from the Corporation to the holders
shall be given by first class mail. With respect to any notice to a
holder of shares of this Series required to be provided hereunder,
neither failure to mail such notice, nor any defect therein or in the
mailing thereof, to any particular holder shall affect the sufficiency
of the notice or the validity of the proceedings referred to in such
notice with respect to the other holders or affect the legality or
validity of any distribution, right, warrant, reclassification,
consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up, or the vote upon any such action. Any
notice which was mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the
holder receives the notice.
7.2 Any shares of this Series which have been
converted, redeemed, exchanged or otherwise acquired by the
Corporation shall, after such conversion, redemption, exchange or
acquisition, as the case may be, be retired and the Corporation shall
take all appropriate action to cause such shares to obtain the status
of authorized but unissued shares of Preferred Stock, without
designation as to series, until such shares are once more designated
as part of a particular series by the Board of Directors. The
Corporation may cause a certificate setting forth a resolution adopted
by the Board of Directors that none of the authorized shares of this
Series are outstanding to be filed with the Secretary of State of the
State of Delaware. When such certificate becomes effective, all
references to Series C Stock shall be eliminated from the Certificate
of Incorporation and the shares of Preferred Stock designated hereby
as Series C Stock shall have the status of authorized
<PAGE>
and unissued shares of Preferred Stock and may be reissued as part of
any new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors.
7.3 The shares of this Series shall be issuable in
whole shares or, if authorized by the Board of Directors of the
Corporation (or any authorized committee thereof), in any fraction of
a whole share so authorized or any integral multiple of such fraction.
7.4 Subject to Section 7.6, the Corporation shall be
entitled to recognize the exclusive right of a person registered on
its records as the holder of shares of this Series, and such record
holder shall be deemed the holder of such shares for all purposes.
7.5 All notice periods referred to in the Certificate
shall commence on the date of the mailing of the applicable notice.
7.6 Certificates for shares of this Series shall bear
such legends as the Corporation shall from time to time deem
appropriate.
IN WITNESS WHEREOF, Time Warner Inc. has caused this
certificate to be signed and attested this 28th day of April, 1995.
TIME WARNER INC.,
by /s/ Spencer B. Hays
-----------------------------
Name: Spencer B. Hays
Title: Vice President
Attest:
by: /s/ Susan A. Waxenberg
---------------------------
Name: Susan A. Waxenberg
Title: Assistant Secretary
Exhibit T3A-5
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF SERIES D CONVERTIBLE
PREFERRED STOCK
OF
TIME WARNER INC.
-----------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
-----------------------
TIME WARNER INC., a corporation organized and existing by
virtue of the General Corporation Law of the State of Delaware (as
defined below, the "Corporation"), does hereby certify that the
following resolution was duly adopted by action of the Board of
Directors of the Corporation at a meeting duly held on the 16th day of
March, 1995.
RESOLVED that pursuant to the authority expressly granted to
and vested in the Board of Directors of the Corporation by the
provisions of Section 2 of Article IV of the Restated Certificate of
Incorporation of the Corporation, as amended from time to time (the
"Certificate of Incorporation"), and Section 151(g) of the General
Corporation Law of the State of Delaware, such Board of Directors
hereby creates, from the authorized shares of Preferred Stock, par
value $1.00 per share (the "Preferred Stock"), of the Corporation
authorized to be issued pursuant to the Certificate of Incorporation,
a series of Preferred Stock, and hereby fixes the voting powers,
designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions
thereof, of the shares of such series as follows:
The series of Preferred Stock hereby established shall
consist of 11,000,000 shares designated as Series D Convertible
Preferred Stock. The rights, preferences and limitations of such
series shall be as follows:
<PAGE>
1. Definitions. As used herein, the following terms shall
have the indicated meanings:
1.1 "Accrued Dividend Amount" shall mean the aggregate
amount of accrued and unpaid dividends on a share of Series D Stock to
and including the Conversion Date, except that if the Conversion Date
shall occur after a Record Date and prior to a related Dividend
Payment Date, the Accrued Dividend Amount shall not include any
accrued and unpaid dividends for the period from and after the most
recent Dividend Payment Date.
1.2 "Board of Directors" shall mean the Board of
Directors of the Corporation or, with respect to any action to be
taken by the Board of Directors, any committee of the Board of
Directors duly authorized to take such action.
1.3 "Capital Stock" shall mean any and all shares of
corporate stock of a Person (however designated and whether
representing rights to vote, rights to participate in dividends or
distributions upon liquidation or otherwise with respect to such
Person, or any division or subsidiary thereof, or any joint venture,
partnership, corporation or other entity).
1.4 "Certificate" shall mean the certificate of the
voting powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of Series D Convertible Preferred Stock filed
with respect to this resolution with the Secretary of State of the
State of Delaware pursuant to Section 151 of the General Corporation
Law of the State of Delaware.
1.5 "Change of Control" and "Change of Control Date"
shall have the following meanings: "Change of Control" shall mean the
occurrence of one or both of the following events: (a) individuals who
would constitute a majority of the members of the Board of Directors
elected at any meeting of stockholders or by written consent (without
regard to any members of the Board of Directors elected pursuant to
the terms of any series of Preferred Stock) shall be elected to the
Board of Directors and the election or the nomination for election by
the Corporation's stockholders of such directors was not approved by a
vote of at least a majority of the directors in office immediately
prior to such election (in which event "Change of Control
<PAGE>
Date" shall mean the date of such election) or (b) a Person or group
of Persons acting in concert as a partnership, limited partnership,
syndicate or other group within the meaning of Rule 13d-3 under the
Exchange Act (the "Acquiring Person") shall, as a result of a tender
or exchange offer, open market purchases, privately negotiated
purchases, share repurchases or redemptions or otherwise, have become
the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of 40% or more of the outstanding shares of Common Stock
(in which event "Change of Control Date" shall mean the date of the
event resulting in such 40% ownership).
1.6 "Closing Price" of the Common Stock shall mean the
last reported sale price of the Common Stock (regular way) as shown on
the Composite Tape of the NYSE, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices on the
NYSE, or, if the Common Stock is not listed or admitted to trading on
the NYSE, on the principal national securities exchange on which such
stock is listed or admitted to trading, or, if it is not listed or
admitted to trading on any national securities exchange, the last
reported sale price of the Common Stock, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, in either case as reported by NASDAQ.
1.7 "Common Dividend Deficiency" shall be applicable in
the event that a Conversion Date shall fall after a record date and
prior to the related payment date for a regularly scheduled cash
dividend on the Common Stock (the "Common Dividend Payment Date"), and
in such event shall mean the product of (i) the Conversion Rate, (ii)
the amount per share of Common Stock of the regularly scheduled cash
dividend for which the record date has been set but a payment date has
not yet occurred and (ii) a fraction (A) the numerator of which is the
number of calendar days from and excluding the Conversion Date (or in
the event the Conversion Date falls after a Record Date and on or
prior to a related Dividend Payment Date, from and excluding the
Dividend Payment Date) to and including the Common Dividend Payment
Date and (B) the denominator of which is 91 (provided that such
fraction shall not be greater than one (1)).
1.8 "Common Dividend Excess" shall be applicable in all
circumstances where a Common Dividend Deficiency is not applicable,
and in such event shall mean the product of (i) the Conversion Rate,
<PAGE>
(ii) the regular quarterly cash dividend per share, if any, paid by
the Corporation on the Common Stock (the "Historical Dividend") on the
most recent dividend payment date for the Common Stock (the "Prior
Dividend Payment Date") occurring during the four months immediately
preceding the Conversion Date and (iii) a fraction (A) the numerator
of which is the number of calendar days from and excluding (1) the
Prior Dividend Payment Date to and including (2) the Conversion Date
(or in the event the Conversion Date falls after a Record Date and on
or prior to a related Dividend Payment Date, to and including the
Dividend Payment Date) and (B) the denominator of which is 91 days
(provided that in no event shall the fraction be greater than one
(1)).
1.9 "Common Stock" shall mean the class of Common
Stock, par value $1.00 per share, of the Corporation authorized at the
date of the Certificate, or any other class of stock resulting from
(x) successive changes or reclassifications of such Common Stock
consisting of changes in par value, or from par value to no par value,
(y) a subdivision or combination or (z) any other changes for which an
adjustment is made under Section 3.6(a), and in any such case
including any shares thereof authorized after the date of the
Certificate, together with any associated rights to purchase other
securities of the Corporation which are at the time represented by the
certificates representing such shares of Common Stock.
1.10 "Conversion Date" shall have the meaning set forth
in Section 3.5 hereof.
1.11 "Conversion Price" at any time shall mean the
Liquidation Value per share divided by the Conversion Rate in effect
at such time (rounded to the nearest one hundredth of a cent).
1.12 "Conversion Rate" shall have the meaning set forth
in Section 3.1 hereof.
1.13 "Converting Holder" shall have the meaning set
forth in Section 3.5 hereof.
1.14 "Corporation" shall mean Time Warner Inc., a
Delaware corporation, and any of its successors by operation of law,
including by merger, consolidation or sale or conveyance of all or
substantially all of its property and assets.
<PAGE>
1.15 "Current Market Price" of the Common Stock on any
date shall mean the average of the daily Closing Prices per share of
the Common Stock for the five (5) consecutive Trading Days ending on
the Trading Day immediately preceding the applicable record date,
conversion date, redemption date or exchange date referred to in
Section 3 or Section 4.
1.16 "Dividend Payment Date" shall have the meaning set
forth in Section 2.1 hereof.
1.17 "Effective Time" shall mean the time of filing (or
if later the time of effectiveness specified therein) of a certificate
of merger with the Secretary of State of the State of Delaware
pursuant to Section 1.03 of the Agreement and Plan of Merger dated as
of January 26, 1995, among KBLCOM Incorporated, Houston Industries
Incorporated, the Corporation and TWI Cable Inc. (formerly known as TW
KBLCOM Acquisition Corp.), as the same may be amended from time to
time.
1.18 "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
1.19 "Exchange Price" shall have the meaning set forth
in Section 4.1 hereof.
1.20 "Junior Stock" shall mean the Common Stock, the
Series A Stock and the shares of any other class or series of Capital
Stock of the Corporation which, by the terms of the Certificate of
Incorporation or of the instrument by which the Board of Directors,
acting pursuant to authority granted in the Certificate of
Incorporation, shall fix the relative rights, preferences and
limitations thereof, shall be junior to the Series D Stock in respect
of the right to receive dividends or to participate in any
distribution of assets other than by way of dividends.
1.21 "Liquidation Value" shall have the meaning set
forth in Section 7.1 hereof.
1.22 "NASDAQ" shall mean the National Association of
Securities Dealers Automated Quotation System.
1.23 "Net Dividend Amount" shall have the meaning set
forth in Section 3.1 hereof.
<PAGE>
1.24 "NYSE" shall mean the New York Stock Exchange,
Inc.
1.25 "Parity Stock" shall mean the Series B Stock and
the shares of any other class or series of Capital Stock of the
Corporation which, by the terms of the Certificate of Incorporation or
of the instrument by which the Board of Directors, acting pursuant to
authority granted in the Certificate of Incorporation, shall fix the
relative rights, preferences and limitations thereof, shall, in the
event that the stated dividends thereon are not paid in full, be
entitled to share ratably with the Series D Stock in the payment of
dividends, including accumulations, if any, in accordance with the
sums which would be payable on such shares if all dividends were
declared and paid in full, or shall, in the event that the amounts
payable thereon on liquidation are not paid in full, be entitled to
share ratably with the Series D Stock in any distribution of assets
other than by way of dividends in accordance with the sums which would
be payable in such distribution if all sums payable were discharged in
full; provided, however, that the term "Parity Stock" shall be deemed
to refer (i) in Section 2.2 hereof, to any stock which is Parity Stock
in respect of dividend rights; (ii) in Section 7 hereof, to any stock
which is Parity Stock in respect of the distribution of assets; and
(iii) in Sections 6.2 and 6.3 hereof, to any stock which is Parity
Stock in respect of either dividend rights or the distribution of
assets and which, pursuant to the Certificate of Incorporation or any
instrument in which the Board of Directors, acting pursuant to
authority granted in the Certificate of Incorporation, shall so
designate, is entitled to vote with the holders of Series D Stock.
1.26 "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
1.27 "Preferred Stock" shall mean the class of
Preferred Stock, par value $1.00 per share, of the Corporation
authorized at the date of the Certificate, including any shares
thereof authorized after the date of the Certificate.
1.28 "Pro Rata Portion" shall have the meaning set
forth in Section 5.6 hereof.
1.29 "Pro Rata Repurchase" shall mean the purchase of
shares of Common Stock by the Corporation or by any of its
<PAGE>
subsidiaries, whether for cash or other property or securities of the
Corporation, which purchase is subject to Section 13(e) of the
Exchange Act or is made pursuant to an offer made available to all
holders of Common Stock, but excluding any purchase made in open
market transactions that satisfies the conditions of clause (b) of
Rule 10b-18 under the Exchange Act or has been designed (as reasonably
determined by the Board of Directors or a committee thereof) to
prevent such purchase from having a material effect on the trading
market of the Common Stock. The "Effective Date" of a Pro Rata
Repurchase shall mean the applicable expiration date (including all
extensions thereof) of any tender or exchange offer which is a Pro
Rata Repurchase or the date of purchase with respect to any Pro Rata
Repurchase which is not a tender or exchange offer.
1.30 "Record Date" shall have the meaning set forth in
Section 2.1 hereof.
1.31 "Redemption Price" shall have the meaning set
forth in Section 4.1 hereof.
1.32 "Redemption Rescission Event" shall mean the
occurrence of (a) any general suspension of trading in, or limitation
on prices for, securities on the principal national securities
exchange on which shares of Common Stock are registered and listed for
trading (or, if shares of Common Stock are not registered and listed
for trading on any such exchange, in the over-the-counter market) for
more than six-and-one-half (6-1/2) consecutive trading hours, (b) any
decline in either the Dow Jones Industrial Average or the Standard &
Poor's Index of 400 Industrial Companies (or any successor index
published by Dow Jones & Company, Inc. or Standard & Poor's
Corporation) by either (i) an amount in excess of 10%, measured from
the close of business on any Trading Day to the close of business on
the next succeeding Trading Day during the period commencing on the
Trading Day preceding the day notice of any redemption of shares of
this Series is given (or, if such notice is given after the close of
business on a Trading Day, commencing on such Trading Day) and ending
at the earlier of (x) the time and date fixed for redemption in such
notice and (y) the time and date at which the Corporation shall have
irrevocably deposited funds with a designated bank or trust company
pursuant to Section 4.4 or (ii) an amount in excess of 15% (or, if the
time and date fixed for redemption is more than 15 days following the
date on which notice of redemption is given, 20%), measured from the
<PAGE>
close of business on the Trading Day preceding the day notice of such
redemption is given (or, if such notice is given after the close of
business on a Trading Day, from such Trading Day) to the close of
business on any Trading Day on or prior to the earlier of the dates
specified in clauses (x) and (y) above, (c) a declaration of a banking
moratorium or any suspension of payments in respect of banks by
Federal or state authorities in the United States or (d) the
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United
States which in the reasonable judgment of the Corporation could have
a material adverse effect on the market for the Common Stock.
1.33 "Rescission Date" shall have the meaning set forth
in Section 4.5 hereof.
1.34 "Senior Stock" shall mean the shares of any class
or series of Capital Stock of the Corporation which, by the terms of
the Certificate of Incorporation or of the instrument by which the
Board of Directors, acting pursuant to authority granted in the
Certificate of Incorporation, shall fix the relative rights,
preferences and limitations thereof, shall be senior to the Series D
Stock in respect of the right to receive dividends or to participate
in any distribution of assets other than by way of dividends.
1.35 "Series A Stock" shall mean the series of
Preferred Stock authorized and designated as Series A Participating
Preferred Stock at the date of the Certificate, including any shares
thereof authorized and designated after the date of the Certificate.
1.36 "Series B Stock" shall mean the series of
Preferred Stock authorized and designated as Series B 6.40% Preferred
Stock at the date of the Certificate, including any shares thereof
authorized and designated after the date of the Certificate.
1.37 "Series D Stock" and "this Series" shall mean the
series of Preferred Stock authorized and designated as the Series D
Convertible Preferred Stock, including any shares thereof authorized
and designated after the date of the Certificate.
1.38 "Surrendered Shares" shall have the meaning set
forth in Section 3.5 hereof.
<PAGE>
1.39 "Trading Day" shall mean, so long as the Common
Stock is listed or admitted to trading on the NYSE, a day on which the
NYSE is open for the transaction of business, or, if the Common Stock
is not listed or admitted to trading on the NYSE, a day on which the
principal national securities exchange on which the Common Stock is
listed is open for the transaction of business, or, if the Common
Stock is not so listed or admitted for trading on any national
securities exchange, a day on which the National Market System of
NASDAQ is open for the transaction of business.
2. Cash Dividends.
2.1 The holders of the outstanding Series D Stock shall
be entitled to receive quarter-annual dividends, as and when declared
by the Board of Directors out of funds legally available therefor.
Each quarter-annual dividend shall be an amount per share equal to (i)
in the case of each Dividend Payment Date (as defined below) occurring
after the Effective Time through the Dividend Payment Date coinciding
with the fourth anniversary of the Effective Time, the greater of (A)
$.9375 per $100 of Liquidation Value of Series D Stock (which is
equivalent to $3.75 per annum), and (B) an amount per $100 of
Liquidation Value of Series D Stock equal to the product of (1) the
Conversion Rate and (2) the aggregate per share amount of regularly
scheduled dividends paid in cash on the Common Stock during the period
from but excluding the immediately preceding Dividend Payment Date to
and including such Dividend Payment Date and (ii) in the case of each
Dividend Payment Date occurring thereafter, an amount per $100 of
Liquidation Value of Series D Stock equal to the product of (1) the
Conversion Rate and (2) the aggregate per share amount of regularly
scheduled dividends paid in cash on the Common Stock during the period
from but excluding the immediately preceding Dividend Payment Date to
and including such Dividend Payment Date. All dividends shall be
payable in cash on or about the first day of January, April, July and
October in each year, beginning on the first such date that is more
than 15 days after the Effective Time, as fixed by the Board of
Directors, or such other dates as are fixed by the Board of Directors
<PAGE>
(provided that the fourth anniversary of the Effective Time shall be a
Dividend Payment Date) (each a "Dividend Payment Date"), to the
holders of record of Series D Stock at the close of business on or
about the Trading Day next preceding such first day of January, April,
July or October (or fourth anniversary of the Effective Time) as the
case may be, as fixed by the Board of Directors, or such other dates
as are fixed by the Board of Directors (each a "Record Date"). In the
case of dividends payable in respect of periods prior to the fourth
anniversary of the Effective Time, (i) such dividends shall accrue on
each share on a daily basis, whether or not there are unrestricted
funds legally available for the payment of such dividends and whether
or not earned or declared, from and after the day immediately
succeeding the Effective Time and (ii) any such dividends that become
payable for any partial dividend period shall be computed on the
basis of the actual days elapsed in such period. From and after the
fourth anniversary of the Effective Time, dividends on the Series D
Stock (determined as to amount as provided herein) shall accrue to the
extent, but only to the extent, that regularly scheduled cash
dividends are declared by the Board of Directors on the Common Stock
with a payment date after the fourth anniversary of the Effective Time
(or, in the case of Series D Stock originally issued after the fourth
anniversary of the Effective Time, after the Dividend Payment Date
next preceding such date of original issuance). All dividends that
accrue in accordance with the foregoing provisions shall be cumulative
from and after the day immediately succeeding the Effective Time (or
such date of issuance). The amount payable to each holder of record on
any Dividend Payment Date shall be rounded to the nearest cent.
2.2 Except as hereinafter provided in this Section 2.2,
unless all dividends on the outstanding shares of Series D Stock and
any Parity Stock that shall have accrued and become payable as of any
date shall have been paid, or declared and funds set apart for payment
thereof, no dividend or other distribution (payable other than in
shares of Junior Stock) shall be paid to the holders of Junior Stock
or Parity Stock, and no shares of Series D Stock, Parity Stock or
Junior Stock shall be purchased, redeemed or otherwise acquired by the
Corporation or any of its subsidiaries (except by conversion into or
exchange for Junior Stock), nor shall any monies be paid or made
available for a purchase, redemption or sinking fund for the purchase
or redemption of any Series D Stock, Junior Stock or Parity Stock.
When dividends are not paid in full upon the shares of this Series and
<PAGE>
any Parity Stock, all dividends declared upon shares of this Series
and all Parity Stock shall be declared pro rata so that the amount of
dividends declared per share on this Series and all such Parity Stock
shall in all cases bear to each other the same ratio that accrued
dividends per share on the shares of this Series and all such Parity
Stock bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or
payments on this Series which may be in arrears.
2.3 In case the Corporation shall at any time
distribute (other than a distribution in liquidation of the
Corporation) to the holders of its shares of Common Stock any assets
or property, including debt or equity securities of the Corporation
(other than Common Stock subject to a distribution or reclassification
covered by Section 3.6(a)) or of any other Person (including common
stock of such Person) or cash (but excluding regularly scheduled cash
dividends payable on shares of Common Stock), or in case the
Corporation shall at any time distribute (other than a distribution in
liquidation of the Corporation) to such holders rights, options or
warrants to subscribe for or purchase shares of Common Stock
(including shares held in the treasury of the Corporation), or rights,
options or warrants to subscribe for or purchase any other security or
rights, options or warrants to subscribe for or purchase any assets or
property (in each case, whether of the Corporation or otherwise, but
other than any distribution of rights to purchase securities of the
Corporation if the holder of shares of this Series would otherwise be
entitled to receive such rights upon conversion of shares of this
Series for Common Stock; provided, however, that if such rights are
subsequently redeemed by the Corporation, such redemption shall be
treated for purposes of this Section 2.3 as a cash dividend (but not a
regularly scheduled cash dividend) on the Common Stock), the
Corporation shall simultaneously distribute such assets, property,
securities, rights, options or warrants pro rata to the holders of
Series D Stock on the record date fixed for determining holders of
Common Stock entitled to participate in such distribution (or, if no
such record date shall be established, the effective time thereof) in
an amount equal to the amount that such holders of Series D Stock
would have been entitled to receive had their shares of Series D Stock
been converted into Common Stock immediately prior to such record date
(or effective time). In the event of a distribution to holders of
<PAGE>
Series D Stock pursuant to this Section 2.3, such holders shall be
entitled to receive fractional shares or interests only to the extent
that holders of Common Stock are entitled to receive the same. The
holders of Series D Stock on the applicable record date (or effective
time) shall be entitled to receive in lieu of such fractional shares
or interests the same consideration as is payable to holders of Common
Stock with respect thereto. If there are no fractional shares or
interests payable to holders of Common Stock, the holders of Series D
Stock on the applicable record date (or effective time) shall receive
in lieu of such fractional shares or interests the fair value thereof
as determined by the Board of Directors.
2.4 If a distribution is made in accordance with the
provisions of Section 2.3, anything in Section 3 to the contrary
notwithstanding, no adjustment pursuant to Section 3 shall be effected
by reason of the distribution of such assets, property, securities,
rights, options or warrants or the subsequent modification, exercise,
expiration or termination of such securities, rights, options or
warrants.
2.5 In the event that the holders of Common Stock are
entitled to make any election with respect to the kind or amount of
securities or other property receivable by them in any distribution
that is subject to Section 2.3, the kind and amount of securities or
other property that shall be distributable to the holders of the
Series D Stock shall be based on (i) the election, if any, made by the
record holder (as of the date used for determining the holders of
Common Stock entitled to make such election) of the largest number of
shares of Series D Stock in writing to the Corporation on or prior to
the last date on which a holder of Common Stock may make such an
election or (ii) if no such election is timely made, an assumption
that such holder failed to exercise any such rights (provided that if
the kind or amount of securities or other property is not the same for
each nonelecting holder, then the kind and amount of securities or
other property receivable by holders of the Series D Stock shall be
based on the kind or amount of securities or other property receivable
by a plurality of shares held by the nonelecting holders of Common
Stock). Concurrently with the mailing to holders of Common Stock of
any document pursuant to which such holders may make an election of
the type referred to in this Section, the Corporation shall mail a
copy thereof to the record holders of the Series D Stock as of the
<PAGE>
date used for determining the holders of record of Common Stock
entitled to such mailing.
3. Conversion Rights.
3.1 Each holder of a share of this Series shall have
the right at any time or as to any share of this Series called for
redemption or exchange, at any time prior to the close of business on
the date fixed for redemption or exchange (unless the Corporation
defaults in the payment of the Redemption Price or fails to exchange
the shares of this Series for the applicable number of shares of
Common Stock and any cash portion of the Exchange Price or exercises
its right to rescind such redemption pursuant to Section 4.5, in which
case such right shall not terminate at the close of business on such
date), to convert such share into (i) a number of shares of Common
Stock equal to 2.08264 shares of Common Stock for each share of this
Series, subject to adjustment as provided in this Section 3 (such
rate, as so adjusted from time to time, is herein called the
"Conversion Rate") plus (ii) a number of shares of Common Stock equal
to
(A)(1) the Accrued Dividend Amount minus (2) the Common
Dividend Excess, if applicable, or plus (3) the Common Dividend
Deficiency, if applicable (the "Net Dividend Amount"), divided by
(B) the Closing Price of the Common Stock on the last
Trading Day prior to the Conversion Date;
provided, however, that in the event that the Net Dividend Amount is a
negative number, the number of shares deliverable upon conversion of a
share of Series D Stock shall be equal to
(I) the number of shares determined pursuant to clause (i)
minus
(II) a number of shares equal to (x) the absolute value of
the Net Dividend Amount divided by (y) the Closing Price of the
Common Stock on the last Trading Day prior to the Conversion
Date;
and provided further that, in the event that the Net Dividend Amount
is a positive number, the Corporation shall have the right to deliver
cash equal to the Net Dividend Amount or any portion thereof, in which
case its obligation to deliver shares of Common Stock pursuant to
<PAGE>
clause (ii) shall be reduced by a number of shares equal to (x) the
aggregate amount of cash so delivered divided by (y) the Closing Price
of the Common Stock on the last Trading Day prior to the Conversion
Date, unless the Corporation shall deliver cash equal to the entire
Net Dividend Amount, in which case its entire obligation under clause
(ii) shall be discharged. The obligations of the Corporation to issue
the Common Stock or make the cash payments provided by this Section
3.1 shall be absolute whether or not any accrued dividend by which
such issuance or payment is measured has been declared by the Board of
Directors and whether or not the Corporation would have adequate
surplus or net profits to pay such dividend if declared or is
otherwise restricted from making such dividend.
3.2 Except as provided in this Section 3, no
adjustments in respect of payments of dividends on shares surrendered
for conversion or any dividend on the Common Stock issued upon
conversion shall be made upon the conver- sion of any shares of this
Series (it being understood that if the Conversion Date for shares of
Series D Stock occurs after a Record Date and on or prior to a
Dividend Payment Date, the holder of record on such Record Date shall
be entitled to receive the dividend payable with respect to such
shares on the related Dividend Payment Date pursuant to Section 2.1
hereof).
3.3 The Corporation may, but shall not be required to,
in connection with any conversion of shares of this Series, issue a
fraction of a share of Common Stock, and if the Corporation shall
determine not to issue any such fraction, the Corporation shall,
subject to Section 3.6(c), make a cash payment (rounded to the nearest
cent) equal to such fraction multiplied by the Closing Price of the
Common Stock on the last Trading Day prior to the Conversion Date.
3.4 Any holder of shares of this Series electing to
convert such shares into Common Stock shall surrender the certificate
or certificates for such shares at the office of the transfer agent or
agents therefor (or at such other place as the Corporation may
designate by notice to the holders of shares of this Series) during
regular business hours, duly endorsed to the Corporation or in blank,
or accompanied by instruments of transfer to the Corporation or in
blank, or in form satisfactory to the Corpo- ration, and shall give
written notice to the Corporation at such office that such holder
elects to convert such shares of this Series. The Corporation shall,
<PAGE>
as soon as practicable (subject to Section 3.6(d)) after such deposit
of certificates for shares of this Series, accompanied by the written
notice above prescribed, issue and deliver at such office to the
holder for whose account such shares were surrendered, or to his
nominee, certificates representing the number of shares of Common
Stock and the cash, if any, to which such holder is entitled upon such
conversion.
3.5 Conversion shall be deemed to have been made as of
the date (the "Conversion Date") that certificates for the shares of
this Series to be converted, and the written notice prescribed in
Section 3.4 are received by the transfer agent or agents for this
Series; and the Person entitled to receive the Common Stock issuable
upon such conversion shall be treated for all purposes as the record
holder of such Common Stock on such date. Notwithstanding anything to
the contrary contained herein, in the event the Corporation shall have
rescinded a redemption of shares of this Series pursuant to Section
4.5, any holder of shares of this Series that shall have surrendered
shares of this Series for conversion following the day on which notice
of the subsequently rescinded redemption shall have been given but
prior to the close of business on the later of (a) the Trading Day
next succeeding the date on which public announcement of the
rescission of such redemption shall have been made and (b) the Trading
Day on which the notice of rescission required by Section 4.5 is
deemed given pursuant to Section 8.2 (a "Converting Holder"), may
rescind the conversion of such shares surrendered for conversion by
(i) properly completing a form prescribed by the Corporation and
mailed to holders of shares of this Series (including Converting
Holders) with the Corporation's notice of rescission, which form shall
provide for the certification by any Converting Holder rescinding a
conversion on behalf of any beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) of shares of this Series that the
beneficial ownership (within the meaning of such Rule) of such shares
shall not have changed from the date on which such shares were
surrendered for conversion to the date of such certification and (ii)
delivering such form to the Corporation no later than the close of
business on that date which is ten (10) Trading Days following the
date on which the Corporation's notice of rescission is deemed given
pursuant to Section 8.2. The delivery of such form by a Converting
Holder shall be accompanied by (x) any certificates representing
shares of Common Stock issued to such Converting Holder upon a
conversion of shares of this Series that shall be rescinded
<PAGE>
by the proper delivery of such form (the "Surrendered Shares"), (y)
any securities, evidences of indebtedness or assets (other than cash)
distributed by the Corporation to such Converting Holder by reason of
such Converting Holder's being a record holder of Surrendered Shares
and (z) payment in New York Clearing House funds or other funds
acceptable to the Corporation of an amount equal to the sum of (I) any
cash such Converting Holder may have received in lieu of the issuance
of fractional shares upon conversion and (II) any cash paid or payable
by the Corporation to such Converting Holder by reason of such
Converting Holder being a record holder of Surrendered Shares. Upon
receipt by the Corporation of any such form properly completed by a
Converting Holder and any certificates, securities, evidences of
indebtedness, assets or cash payments required to be returned or made
by such Converting Holder to the Corporation as set forth above, the
Corporation shall instruct the transfer agent or agents for shares of
Common Stock and shares of this Series to cancel any certificates
representing Surrendered Shares (which Surrendered Shares shall be
deposited in the treasury of the Corporation) and reissue certificates
representing shares of this Series to such Converting Holder (which
shares of this Series shall be deemed to have been outstanding at all
times during the period following their surrender for conversion). The
Corporation shall, as promptly as practicable, and in no event more
than five (5) Trading Days, following the receipt of any such properly
completed form and any such certificates, securities, evidences of
indebtedness, assets or cash payments required to be so returned or
made, pay to the Converting Holder or as otherwise directed by such
Converting Holder any dividend or other payment made on such shares
during the period from the time such shares shall have been
surrendered for conversion to the rescission of such conversion. All
questions as to the validity, form, eligibility (including time or
receipt) and acceptance of any form submitted to the Corporation to
rescind the conversion of shares of this Series, including questions
as to the proper completion or execution of any such form or any
certification contained therein, shall be resolved by the Corporation,
whose determination shall be final and binding. The Corporation shall
not be required to deliver certificates for shares of Common Stock
while the stock transfer books for such stock or for this Series are
duly closed for any purpose or during any period commencing at a
Redemption Rescission Event and ending at either (i) the time and date
at which the Corporation's right of rescission shall expire pursuant
<PAGE>
to Section 4.5 if the Corporation shall not have exercised such right
or (ii) the close of business on that day which is ten (10) Trading
Days following the date on which notice of rescission pursuant to
Section 4.4 is deemed given pursuant to Section 8.2 if the Corporation
shall have exercised such right of rescission, but certificates for
shares of Common Stock shall be delivered as soon as practicable after
the opening of such books or the expiration of such period.
3.6 The Conversion Rate shall be adjusted from time to
time as follows for events occurring after January 26, 1995:
(a) In case the Corporation shall, at any time or from
time to time while any of the Series D Stock is outstanding, (i)
pay a dividend in shares of its Common Stock, (ii) combine its
outstanding shares of Common Stock into a smaller number of
shares, (iii) subdivide its outstanding shares of Common Stock or
(iv) reclassify (other than by way of a merger that is subject to
Section 3.7) its shares of Common Stock, then the Conversion Rate
in effect immediately before such action shall be adjusted so
that immediately following such event the holders of the Series D
Stock shall be entitled to receive upon conversion or exchange
thereof the kind and amount of shares of Capital Stock of the
Corporation which they would have owned or been entitled to
receive upon or by reason of such event if such shares of Series
D Stock had been converted or exchanged immediately before the
record date (or, if no record date, the effective date) for such
event (it being understood that any distribution of cash or of
Capital Stock (other than Common Stock), including any
distribution of Capital Stock that shall accompany a
reclassification of the Common Stock, shall be subject to Section
2.3 rather than this Section 3.6(a)). An adjustment made pursuant
to this Section 3.6(a) shall become effective retroactively
immediately after the record date in the case of a dividend or
distribution and shall become effective retroactively immediately
after the effective date in the case of a subdivision,
combination or reclassification. For the purposes of this Section
3.6(a), in the event that the holders of Common Stock are
entitled to make any election with respect to the kind or amount
of securities receivable by them in any transaction that is
subject to this Section 3.6(a) (including any election that would
<PAGE>
result in all or a portion of the transaction becoming subject to
Section 2.3), the kind and amount of securities that shall be
distributable to the holders of the Series D Stock shall be based
on (i) the election, if any, made by the record holder (as of the
date used for determining the holders of Common Stock entitled to
make such election) of the largest number of shares of Series D
Stock in writing to the Corporation on or prior to the last date
on which a holder of Common Stock may make such an election or
(ii) if no such election is timely made, an assumption that such
holder failed to exercise any such rights (provided that if the
kind or amount of securities is not the same for each nonelecting
holder, then the kind and amount of securities receivable shall
be based on the kind or amount of securities receivable by a
plurality of nonelecting holders of Common Stock). Concurrently
with the mailing to holders of Common Stock of any document
pursuant to which such holders may make an election of the type
referred to in this Section, the Corporation shall mail a copy
thereof to the record holders of the Series D Stock as of the
date used for determining the holders of record of Common Stock
entitled to such mailing.
(b) In case a Change of Control shall occur, the
Conversion Rate in effect immediately prior to the Change of
Control Date shall be increased (but not decreased) by
multiplying such rate by a fraction as follows: (i) in the case
of a Change of Control specified in Section 1.5(a), a fraction in
which the numerator is the Conversion Price prior to adjustment
pursuant hereto and the denominator is the Current Market Price
of the Common Stock at the Change of Control Date, (ii) in the
case of a Change of Control specified in Section 1.5(b), the
greater of the follow- ing fractions: (x) a fraction the
numerator of which is the highest price per share of Common Stock
paid by the Acquiring Person in connection with the transaction
giving rise to the Change of Control or in any transaction within
six months prior to or after the Change of Control Date (the
"Highest Price"), and the denominator of which is the Current
Market Price of the Common Stock as of the date (but not earlier
than six months prior to the Change of Control Date) on which the
first public announcement is made by the Acquiring Person that it
intends to acquire or that it has acquired 40% or more of the
<PAGE>
outstanding shares of Common Stock (the "Announcement Date") or
(y) a fraction the numerator of which is the Conversion Price
prior to adjustment pursuant hereto and the denominator of which
is the Current Market Price of the Common Stock on the
Announcement Date and (iii) in the case where there co-exists a
Change of Control specified in both Section 1.5(a) and Section
1.5(b), the greatest of the fractions determined pursuant to
clauses (i) and (ii). Such adjustment shall become effective
immediately after the Change of Control Date and shall be made,
in the case of clauses (ii) and (iii) above, successively for six
months thereafter in the event and at the time of any increase in
the Highest Price after the Change of Control Date; provided,
however, that no such successive adjustment shall be made with
respect to the Conversion Rate of the shares of this Series in
respect of any event occurring after the Conversion Date.
(c) The Corporation shall be entitled to make such
additional adjustments in the Conversion Rate, in addition to
those required by subsec- tions 3.6(a) and 3.6(b), as shall be
necessary in order that any dividend or distribution in Common
Stock or any subdivision, reclassification or combination of
shares of Common Stock referred to above, shall not be taxable to
the holders of Common Stock for United States Federal income tax
purposes so long as such additional adjustments pursuant to this
Section 3.6(c) do not decrease the Conversion Rate.
(d) In any case in which this Section 3.6 shall require
that any adjustment be made effective as of or retroactively
immediately following a record date, the Corporation may elect to
defer (but only for five (5) Trading Days following the
occurrence of the event which necessitates the filing of the
statement referred to in Section 3.6(f)) issuing to the holder of
any shares of this Series converted after such record date (i)
the shares of Common Stock and other Capital Stock of the
Corporation issuable upon such conversion over and above (ii) the
shares of Common Stock and other Capital Stock of the Corporation
issuable upon such conversion on the basis of the Conversion Rate
prior to adjustment; provided, however, that the Corporation
shall deliver to such holder a due bill or other appropriate
<PAGE>
instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
(e) All calculations under this Section 3 shall be made
to the nearest cent, one-hundredth of a share or, in the case of
the Conversion Rate, one hundred-thousandth. Notwithstanding any
other provision of this Section 3, the Corporation shall not be
required to make any adjustment of the Conversion Rate unless
such adjustment would require an increase or decrease of at least
1.00000% of such Conversion Rate. Any lesser adjustment shall be
carried forward and shall be made at the time of and together
with the next subsequent adjustment which, together with any
adjustment or adjustments so carried forward, shall amount to an
increase or decrease of at least 1.00000% in such rate. Any
adjustments under this Section 3 shall be made successively
whenever an event requiring such an adjustment occurs.
(f) Whenever an adjustment in the Conversion Rate is
required, the Corporation shall forthwith place on file with its
transfer agent or agents for this Series a statement signed by a
duly authorized officer of the Corporation, stating the adjusted
Conversion Rate determined as provided herein. Such statements
shall set forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustment. Promptly after the adjustment of the Conversion Rate,
the Corporation shall mail a notice thereof to each holder of
shares of this Series.
(g) In the event that at any time as a result of an
adjustment made pursuant to this Section 3, the holder of any
share of this Series thereafter surrendered for conversion shall
become entitled to receive any shares of Capital Stock of the
Corporation other than shares of Common Stock, the conversion
rate of such other shares so receivable upon conversion of any
such share of this Series shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock
contained in subparagraphs (a) through (f) and (h) of this
Section 3.6, and the provisions of Section 3.1 through 3.5 and
3.7 through 3.10 shall apply on like or similar terms to any such
<PAGE>
other shares and the determination of the Board of Directors as
to any such adjustment shall be conclusive.
(h) No adjustment shall be made pursuant to this
Section 3.6 (i) if the effect thereof would be to reduce the
Conversion Price below the par value of the Common Stock or (ii)
subject to Section 3.6(c) hereof, with respect to any share of
Series D Stock that is converted, prior to the time such
adjustment otherwise would be made.
3.7 In case after January 26, 1995 (a) any
consolidation or merger to which the Corporation is a party, other
than a merger or consolidation in which the Corporation is the
surviving or continuing corporation and which does not result in any
reclassification of, or change (other than a change in par value or
from par value to no par value or from no par value to par value, or
as a result of a subdivision or combination) in, outstanding shares of
Common Stock or (b) any sale or conveyance of all or substantially all
of the property and assets of the Corporation, then lawful provision
shall be made as part of the terms of such transaction whereby the
holder of each share of Series D Stock shall have the right
thereafter, during the period such share shall be convertible or
exchangeable, to convert such share into or have such share exchanged
for the kind and amount of shares of stock or other securities and
property receivable upon such consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock into
which such shares of this Series could have been converted or
exchanged immediately prior to such consolidation, merger, sale or
conveyance, subject to adjustment which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section
3 (based on (i) the election, if any, made in writing to the
Corporation by the record holder (as of the date used for determining
holders of Common Stock entitled to make such election) of the largest
number of shares of Series D Stock on or prior to the last date on
which a holder of Common Stock may make an election regarding the kind
or amount of securities or other property receivable by such holder in
such transaction or (ii) if no such election is timely made, an
assumption that such holder failed to exercise any such rights
(provided that if the kind or amount of securities or other property
is not the same for each nonelecting holder, then the kind and amount
of securities or other property receivable shall be based upon the
<PAGE>
kind and amount of securities or other property receivable by a
plurality of the nonelecting holders of Common Stock)). In the event
that any of the transactions referred to in clauses (a) or (b)
involves the distribution of cash (or property other than equity
securities) to a holder of Common Stock, lawful provision shall be
made as part of the terms of the transaction whereby the holder of
each share of Series D Stock on the record date fixed for determining
holders of Common Stock entitled to receive such cash or property (or
if no such record date is established, the effective date of such
transaction) shall be entitled to receive the amount of cash or
property that such holder would have been entitled to receive had such
holder converted his shares of Series D Stock into Common Stock
immediately prior to such record date (or effective date) (based on
the election or nonelection made by the record holder of the largest
number of shares of Series D Stock, as provided above). Concurrently
with the mailing to holders of Common Stock of any document pursuant
to which such holders may make an election regarding the kind or
amount of securities or other property that will be receivable by such
holder in any transaction described in clause (a) or (b) of the first
sentence of this Section 3.7, the Corporation shall mail a copy
thereof to the holders of the Series D Stock as of the date used for
determining the holders of record of Common Stock entitled to such
mailing. The Corporation shall not enter into any of the transactions
referred to in clauses (a) or (b) of the preceding sentence unless
effective provision shall be made in the certificate or articles of
incorporation or other constituent documents of the Corporation or the
entity surviving the consolidation or merger, if other than the
Corporation, or the entity acquiring the Corporation's assets, as the
case may be, so as to give effect to the provisions set forth in this
Section 3.7. The provisions of this Section 3.7 shall apply similarly
to successive consolidations, mergers, sales or conveyances. For
purposes of this Section 3.7 the term "Corporation" shall refer to the
Corporation (as defined in Section 1.14) as constituted immediately
prior to the merger, consolidation or other transaction referred to in
this Section.
3.8 The Corporation 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
shares of this Series, such number of its duly authorized shares of
Common Stock (or, if applicable, any other shares of Capital Stock of
the Corporation) as shall from time to time be sufficient to
<PAGE>
effect the conversion of all outstanding shares of this Series into
such Common Stock (or such other shares of Capital Stock) at any time
(assuming that, at the time of the computation of such number of
shares, all such Common Stock (or such other shares of Capital Stock)
would be held by a single holder); provided, however, that nothing
contained herein shall preclude the Corporation from satisfying its
obligations in respect of the conversion of the shares by delivery of
purchased shares of Common Stock (or such other shares of Capital
Stock) that are held in the treasury of the Corporation. All shares of
Common Stock (or such other shares of Capital Stock of the
Corporation) which shall be deliverable upon conversion of the shares
of this Series shall be duly and validly issued, fully paid and
nonassessable. For purposes of this Section 3, any shares of Common
Stock at any time outstanding shall not include shares held in the
treasury of the Corporation.
3.9 If any shares of Common Stock or other shares of
Capital Stock of the Corporation which would be issuable upon
conversion of shares of this Series hereunder require registration
with or approval of any governmental authority before such shares may
be issued upon conversion, the Corporation will in good faith and as
expeditiously as possible cause such shares to be duly registered or
approved, as the case may be. The Corporation will use commercially
reasonable efforts to list the shares of (or depositary shares
representing fractional interests in) Common Stock or other shares of
Capital Stock of the Corporation required to be delivered upon
conversion of shares of this Series prior to such delivery upon the
principal national securities exchange upon which the outstanding
Common Stock or such other shares of Capital Stock is listed at the
time of such delivery.
3.10 The Corporation shall pay any and all issue or
other taxes that may be payable in respect of any issue or delivery of
shares of Common Stock or other shares of Capital Stock of the
Corporation on conversion of shares of this Series pursuant hereto.
The Corporation shall not, however, be required to pay any tax which
is payable in respect of any transfer involved in the issue or
delivery of Common Stock or such other shares of Capital Stock in a
name other than that in which the shares of this Series so converted
were registered, and no such issue or delivery shall be made unless
and until the Person requesting such issue has paid to the Corporation
<PAGE>
the amount of such tax, or has established, to the satisfaction of the
Corporation, that such tax has been paid.
3.11 In case of (i) the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, (ii) any
Pro Rata Repurchase or (iii) any action triggering an adjustment to
the Conversion Rate pursuant to this Section 3, then, in each case,
the Corporation shall cause to be filed with the transfer agent or
agents for the Series D Stock, and shall cause to be mailed,
first-class postage prepaid, to the holders of record of the
outstanding shares of Series D Stock, at least fifteen (15) days prior
to the applicable record date for any such transaction (or if no
record date will be established, the effective date thereof), a notice
stating (x) the date, if any, on which a record is to be taken for the
purpose of any such transaction (or, if no record date will be
established, the date as of which holders of record of Common Stock
entitled to participate in such transaction are determined), and (y)
the expected effective date thereof. Failure to give such notice or
any defect therein shall not affect the legality or validity of the
proceedings described in this Section 3.11.
4. Redemption or Exchange.
4.1 (a) The Corporation may, at its sole option,
subject to Section 2.2 hereof, from time to time on and after the
fifth anniversary of the Effective Time in the case of clause (i) or
(iii) of Section 4.1(b), and on and after the fourth anniversary, in
the case of clause (ii) of Section 4.1(b), redeem, out of funds
legally available therefor, or, as provided below, exchange shares of
Common Stock for, all (or in the case of Section 4.1(b)(i), any part)
of the outstanding shares of this Series. The redemption price for
each share of this Series called for redemption pursuant to clause (i)
of Section 4.1(b) shall be the Liquidation Value together with an
amount equal to the accrued and unpaid dividends to the date fixed for
redemption (hereinafter collectively referred to as the "Redemption
Price"). The exchange price for each share of this Series called for
exchange pursuant to clause (ii) of Section 4.1(b) shall be a number
of shares of Common Stock equal to the Conversion Rate, together with,
at the option of the Corporation, either (x) cash or (y) a number of
shares of Common Stock, valued at the Closing Price on the Trading Day
immediately preceding the date fixed for exchange, equal, in either
<PAGE>
case, to the aggregate amount of accrued and unpaid dividends on the
Series D Stock to the date fixed for exchange (provided that any
dividends which are in arrears must be paid in cash) (hereinafter
collectively referred to as the "Exchange Price").
(b) On the date fixed for redemption or exchange the
Corporation shall, at its option, effect either
(i) a redemption of the shares of this Series to be
redeemed by way of payment, out of funds legally available
therefor, of cash equal to the aggregate Redemption Price for the
shares of this Series then being redeemed;
(ii) an exchange of the shares of this Series for the
Exchange Price in shares of Common Stock (provided that the
Corporation (A) shall be entitled to deliver cash (1) in lieu of
any fractional share of Common Stock (determined in a manner
consistent with Section 3.3) and (2) equal to accrued and unpaid
dividends to the date fixed for exchange in lieu of shares of
Common Stock and (B) shall be required to deliver cash in respect
of any dividends that are in arrears); or
(iii) any combination thereof with respect to each
share of this Series called for redemption or exchange.
(c) Notwithstanding clauses (ii) and (iii) of Section
4.1(b), the Corporation shall be entitled to effect an exchange of
shares of Series D Stock for Common Stock or other shares of Capital
Stock of the Corporation only to the extent that duly and validly
issued, fully paid and nonassessable shares of Common Stock (or such
other shares of Capital Stock) shall be available for issuance
(including delivery of previously issued shares of Common Stock held
in the Corporation's treasury on the date fixed for exchange). The
Corporation shall comply with Section 3.9 and 3.10 with respect to
shares of Common Stock or other shares of Capital Stock of the
Corporation which would be issuable upon exchange of shares of this
Series. Certificates for shares of Common Stock issued in exchange for
surrendered shares of this Series pursuant to this Section 4.1 shall
be made available by the Corporation not later than the fifth Trading
Day following the date for exchange.
<PAGE>
4.2 In the event that fewer than all the outstanding
shares of this Series are to be redeemed pursuant to Section
4.1(b)(i), the number of shares to be redeemed from each holder of
shares of this Series shall be determined by the Corporation by lot or
pro rata or by any other method as may be determined by the Board of
Directors in its sole discretion to be equitable, and the certificate
of the Corporation's Secretary or an Assistant Secretary filed with
the transfer agent or transfer agents for this Series in respect of
such determination by the Board of Directors shall be conclusive.
4.3 In the event the Corporation shall redeem or
exchange shares of this Series pursuant to Section 4.1, notice of such
redemption or exchange shall be given by first class mail, postage
prepaid, mailed not less than fifteen (15) nor more than sixty (60)
days prior to the date fixed for redemption or exchange, as the case
may be, to each record holder of the shares to be redeemed or
exchanged, at such holder's address as the same appears on the books
of the Corporation. Each such notice shall state: (i) whether the
shares of this Series are to be redeemed or exchanged; (ii) the time
and date as of which the redemption or exchange shall occur; (iii) the
total number of shares of this Series to be redeemed or exchanged and,
if fewer than all the shares held by such holder are to be redeemed,
the number of such shares to be redeemed from such holder; (iv) the
Redemption Price or the Exchange Price, as the case may be; (v) that
shares of this Series called for redemption or exchange may be
converted at any time prior to the time and date fixed for redemption
or exchange (unless the Corporation shall, in the case of a
redemption, default in payment of the Redemption Price or, in the case
of an exchange, fail to exchange the shares of this Series for the
applicable number of shares of Common Stock and any cash portion of
the Exchange Price or shall exercise its right to rescind such
redemption pursuant to Section 4.5, in which case such right of
conversion shall not terminate at such time and date); (vi) the
applicable Conversion Price and Conversion Rate; (vii) the place or
places where certificates for such shares are to be surrendered for
payment of the Redemption Price, in the case of redemption, or for
delivery of certificates representing the shares of Common Stock and
the payment of any cash portion of the Exchange Price, in the case of
exchange; and (viii) that dividends on the shares of this Series to be
redeemed or exchanged will cease to accrue on such redemption or
exchange date.
<PAGE>
4.4 If notice of redemption or exchange shall have been
given by the Corporation as provided in Section 4.3, dividends on the
shares of this Series so called for redemption or exchange shall cease
to accrue, such shares shall no longer be deemed to be outstanding,
and all rights of the holders thereof as stockholders of the
Corporation with respect to shares so called for redemption or
exchange (except (i) in the case of redemption, the right to receive
from the Corporation the Redemption Price without interest and in the
case of exchange, the right to receive from the Corporation the
Exchange Price without interest and (ii) the right to convert such
shares in accordance with Section 3) shall cease (including any right
to receive dividends otherwise payable on any Dividend Payment Date
that would have occurred after the time and date of redemption or
exchange) either (i) in the case of a redemption or exchange pursuant
to Section 4.1, from and after the time and date fixed in the notice
of redemption or exchange as the time and date of redemption or
exchange (unless the Corporation shall (x) in the case of a
redemption, default in the payment of the Redemption Price, (y) in the
case of an exchange, fail to exchange the applicable number of shares
of Common Stock and any cash portion of the Exchange Price or (z)
exercise its right to rescind such redemption pursuant to Section 4.5,
in which case such rights shall not terminate at such time and date)
or (ii) if the Corporation shall so elect and state in the notice of
redemption or exchange, from and after the time and date (which date
shall be the date fixed for redemption or exchange or an earlier date
not less than fifteen (15) days after the date of mailing of the
redemption or exchange notice) on which the Corporation shall
irrevocably deposit with a designated bank or trust company doing
business in the Borough of Manhattan, City and State of New York, as
paying agent, money sufficient to pay at the office of such paying
agent, on the redemption date, the Redemption Price, in the case of
redemption, or certificates representing the shares of Common Stock to
be so exchanged and any cash portion of the Exchange Price, in the
case of an exchange. Any money or certificates so deposited with any
such paying agent which shall not be required for such redemption or
exchange because of the exercise of any right of conversion or
otherwise shall be returned to the Corporation forthwith. Upon
surrender (in accordance with the notice of redemption or exchange) of
the certificate or certificates for any shares of this Series to be so
redeemed or exchanged (properly endorsed or assigned for transfer, if
the Corporation shall so require and the notice of redemption or
<PAGE>
exchange shall so state), such shares shall be redeemed or exchanged
by the Corporation at the Redemption Price or the Exchange Price, as
applicable, as set forth in Section 4.1 (unless the Corporation shall
have exercised its right to rescind such redemption pursuant to
Section 4.5). In case fewer than all the shares represented by any
such certificate are to be redeemed, a new certificate shall be
issued representing the unredeemed shares (or fractions thereof as
provided in Section 8.4), without cost to the holder thereof, together
with the amount of cash, if any, in lieu of fractional shares other
than those issuable in accordance with Section 8.4. Subject to
applicable escheat laws, any moneys so set aside by the Corporation in
the case of redemption and unclaimed at the end of one year from the
redemption date shall revert to the general funds of the Corporation,
after which reversion the holders of such shares so called for
redemption or exchange shall look only to the general funds of the
Corporation for the payment of the Redemption Price or the Exchange
Price, as applicable, without interest. Any interest accrued on funds
so deposited shall be paid to the Corporation from time to time.
4.5 In the event that a Redemption Rescission Event
shall occur following any day on which a notice of redemption shall
have been given pursuant to Section 4.3 but at or prior to the earlier
of (a) the time and date fixed for redemption as set forth in such
notice of redemption and (b) the time and date at which the
Corporation shall have irrevocably deposited funds or certificates
with a designated bank or trust company pursuant to Section 4.4, the
Corporation may, at its sole option, at any time prior to the earliest
of (i) the close of business on that day which is two (2) Trading Days
following such Redemption Rescission Event, (ii) the time and date
fixed for redemption as set forth in such notice and (iii) the time
and date on which the Corporation shall have irrevocably deposited
such funds with a designated bank or trust company, rescind the
redemption under Section 4.1(b)(i) to which such notice of redemption
shall have related by making a public announcement of such rescission
(the date on which such public announcement shall have been made being
hereinafter referred to as the "Rescission Date"). The Corporation
shall be deemed to have made such announcement if it shall issue a
release to the Dow Jones News Service, Reuters Information Services or
any successor news wire service. From and after the making of such
announcement, the Corporation shall have no obligation
<PAGE>
to redeem shares of this Series called for redemption pursuant to such
notice of redemption or to pay the redemption price therefor and all
rights of holders of shares of this Series shall be restored as if
such notice of redemption had not been given. The Corporation shall
give notice of any such rescission by one of the means specified in
Section 8.2 as promptly as practicable, but in no event later than the
close of business on that date which is five (5) Trading Days
following the Rescission Date to each record holder of shares of this
Series at the close of business on the Rescission Date and to any
other Person or entity that was a record holder of shares of this
Series and that shall have surrendered shares of this Series for
conversion following the giving of notice of the subsequently
rescinded redemption. Each notice of rescission shall (w) state that
the redemption described in the notice of redemption has been
rescinded, (x) state that any Converting Holder shall be entitled to
rescind the conversion of shares of this Series surrendered for
conversion following the day on which notice of redemption was given
but prior to the close of business on the later of (1) the Trading Day
next succeeding the date on which public announcement of the
rescission of such redemption shall have been made and (2) the Trading
Day on which the Corporation's notice of rescission is deemed given
pursuant to Section 8.2, (y) be accompanied by a form prescribed by
the Corporation to be used by any Converting Holder rescinding the
conversion of shares so surrendered for conversion (and instructions
for the completion and delivery of such form, including instructions
with respect to payments that may be required to accompany such
delivery shall be in accordance with Section 3.5) and (z) state that
such form must be properly completed and received by the Corporation
no later than the close of business on a date that shall be ten (10)
Trading Days following the date of the mailing of such notice of
rescission is deemed given pursuant to Section 8.2.
4.6 The shares of this Series shall not be subject to
the provisions of Section 5 of Article IV of the Certificate of
Incorporation.
5. Pro Rata Repurchase.
5.1 Upon a Pro Rata Repurchase, each holder of shares
of this Series shall have the right to require that the Corporation
repurchase, out of funds legally available therefor, a Pro Rata
Portion (as defined below) of the shares of such holder, or any
<PAGE>
lesser number requested by the holder, at a price per share equal to
the highest price per share of Common Stock paid in the Pro Rata
Repurchase multiplied by the Conversion Rate then in effect plus an
amount equal to the accrued but unpaid dividends on such shares to the
date of repurchase.
5.2 At any time prior to or within thirty (30) days
following any Pro Rata Repurchase, the Corporation shall mail a notice
to each holder of shares of this Series stating:
(a) that a Pro Rata Repurchase will occur or has occurred
and that such holder will have (upon such Pro Rata Repurchase) or
has the right to require the Corporation to repurchase such
holder's shares in an amount not in excess of the Pro Rata
Portion at a repurchase price in cash determined as set forth
above plus an amount equal to accrued and unpaid dividends, if
any, to the date of repurchase;
(b) the repurchase date for the Series D Stock (which shall
be no earlier than fifteen (15) days nor later than sixty (60)
days from the date such notice is mailed); and
(c) the instructions determined by the Corporation,
consistent with this Section, that a holder must follow in order
to have its shares repurchased.
5.3 Holders electing to have any shares repurchased
will be required to surrender such shares, with an appropriate form
duly completed, to the Corporation at the address specified in the
notice at least five (5) days prior to the repurchase date. Holders
will be entitled to withdraw their election if the Corporation
receives, not later than three (3) days prior to the repurchase date,
a telegram, telex, facsimile transmission or letter setting forth the
name of the holder, the certificate numbers of the shares delivered
for purchase by the holder and a statement that such holder is
withdrawing his election to have such shares repurchased. Holders will
have such additional withdrawal and other rights as may be required
pursuant to applicable law.
5.4 On the repurchase date, the Corporation shall (i)
pay the repurchase price plus an amount equal to accrued and unpaid
<PAGE>
dividends as provided in Section 5.1, if any, to the holders entitled
thereto and (ii) issue to such holders any equity securities of the
Corporation (other than Common Stock) that would at the time be
issuable upon conversion of the shares of Series D Stock which are
then being repurchased pursuant hereto.
5.5 The Board of Directors will not approve any tender
or exchange offer by the Corporation or a third party for shares of
Common Stock or recommend that the holders of Common Stock accept any
offer or tender their shares into any offer unless a Pro Rata Portion
of the shares of this Series of all holders are entitled to be
tendered into such offer at a price not less than the price per share
for shares of Common Stock pursuant to such offer multiplied by the
Conversion Rate then in effect plus an amount equal to accrued but
unpaid dividends on such shares to the date of payment for such shares
in such tender or exchange offer.
5.6 For purposes hereof, "Pro Rata Portion" with
respect to the shares of this Series held by any holder shall mean all
the shares of this Series then owned by such holder times a fraction,
the numerator of which is the number of outstanding shares of Common
Stock (a) purchased in the applicable Pro Rata Repurchase or (b) for
which a tender or exchange offer referred to in Section 5.5 is made,
as the case may be, and the denominator of which is the number of
outstanding shares of Common Stock immediately prior to such Pro Rata
Repurchase or the commencement of such tender or exchange offer, as
the case may be.
6. Voting. The shares of this Series shall have no voting
rights except as required by law or as set forth below.
6.1 Each share of this Series shall be enti- tled to
vote together with holders of the shares of Common Stock (and any
other class or series which may similarly be entitled to vote with the
shares of Common Stock) as a single class upon all matters upon which
holders of Common Stock are entitled to vote. In any such vote, the
holders of this Series shall be entitled to two (2) votes per $100 of
Liquidation Value of Series D Stock, subject to adjustment at the same
time and in the same manner as each adjustment of the Conversion Rate
pursuant to Section 3, so that the holders of this Series shall be
entitled following such adjustment to the number of votes equal to the
<PAGE>
number of votes such holders were entitled to under this Section 6.1
immediately prior to such adjustment multiplied by a fraction (x) the
numerator of which is the Conversion Rate as adjusted pursuant to
Section 3 and (y) the denominator of which is the Conversion Rate
immediately prior to such adjustment.
6.2(a) So long as any shares of this Series remain
outstanding, unless a greater percentage shall then be required by
law, the Corporation shall not, without the affirmative vote at a
meeting or the written consent with or without a meeting of the
holders of shares of this Series representing at least 66-2/3% of the
aggregate voting power of shares of this Series then outstanding (i)
authorize any Senior Stock or reclassify (by merger, consolidation or
otherwise) any Junior Stock or Parity Stock as Senior Stock, (ii)
merge into or consolidate with any Person where the surviving or
continuing corporation will have any authorized Senior Stock (other
than capital stock corresponding to shares of Senior Stock of the
Corporation existing immediately before such merger or consolidation)
or (iii) amend, alter or repeal (by operation of law or otherwise) any
of the provisions of the Certificate or the Certificate of
Incorporation, so as in any such case to adversely affect the voting
powers, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions of the shares of this Series.
(b) No consent of holders of shares of this Series
shall be required for (i) the creation of any indebt- edness of any
kind of the Corporation, (ii) the authoriza- tion or issuance of any
class of Junior Stock or Parity Stock, (iii) the authorization,
designation or issuance of additional shares of Series D Stock or (iv)
subject to Section 6.2(a), the authorization or issuance of any other
shares of Preferred Stock.
6.3(a) If and whenever at any time or times dividends
payable on shares of this Series shall have been in arrears and unpaid
in an aggregate amount equal to or exceeding the amount of dividends
payable thereon for six quarterly dividend periods, then the number of
directors constituting the Board of Directors shall be increased by
two and the holders of shares of this Series, together with the
holders of any shares of any Parity Stock as to which in each case
dividends are in arrears and unpaid in an aggregate amount equal to or
<PAGE>
exceeding the amount of dividends payable thereon for six quarterly
dividend periods, shall have the exclusive right, voting separately as
a class with such other series, to elect two directors of the
Corporation.
(b) Such voting right may be exercised initially either
by written consent or at a special meeting of the holders of the
Preferred Stock having such voting right, called as hereinafter
provided, or at any annual meeting of stockholders held for the
purpose of electing directors, and thereafter at each such annual
meeting until such time as all dividends in arrears on the shares of
this Series shall have been paid in full and all dividends payable on
the shares of this Series on four subsequent consecutive Dividend
Payment Dates shall have been paid in full on such dates or funds
shall have been set aside for the payment thereof, at which time such
voting right and the term of the directors elected pursuant to Section
6.3(a) shall terminate.
(c) At any time when such voting right shall have
vested in holders of shares of such series of Preferred Stock
described in Section 6.3(a), and if such right shall not already have
been exercised by written consent, a proper officer of the Corporation
may call, and, upon the written request, addressed to the Secretary of
the Corporation, of the record holders of shares representing ten
percent (10%) of the voting power of the shares then outstanding of
such Preferred Stock having such voting right, shall call, a special
meeting of the holders of such Preferred Stock having such voting
right. Such meeting shall be held at the earliest practicable date
upon the notice required for annual meetings of stockholders at the
place for holding annual meetings of stockholders of the Corporation,
or, if none, at a place designated by the Board of Directors.
Notwithstanding the provisions of this Section 6.3(c), no such special
meeting shall be called during a period within 60 days immediately
preceding the date fixed for the next annual meeting of stockholders.
(d) At any meeting held for the purpose of electing
directors at which the holders of such Preferred Stock shall have the
right to elect directors as provided herein, the presence in Person or
by proxy of the holders of shares representing more than fifty percent
(50%) in voting power of the then outstanding shares of such Preferred
Stock having such right shall be required and shall be sufficient
<PAGE>
to constitute a quorum of such class for the election of directors by
such class.
(e) Any director elected by holders of Preferred Stock
pursuant to the voting right created under this Section 6.3 shall hold
office until the next annual meeting of stockholders (unless such term
has previously terminated pursuant to Section 6.3(b)) and any vacancy
in respect of any such director shall be filled only by vote of the
remaining director so elected, or if there be no such remaining
director, by the holders of such Preferred Stock entitled to elect
such director or directors by written consent or at a special meeting
called in accordance with the procedures set forth in Section 6.3(c),
or, if no special meeting is called or written consent executed, at
the next annual meeting of stockholders. Upon any termination of such
voting right, subject to applicable law, the term of office of all
directors elected by holders of such Preferred Stock voting separately
as a class pursuant to this Section 6.3 shall terminate.
(f) In exercising the voting rights set forth in this
Section 6.3, each share of this Series shall have a number of votes
equal to its Liquidation Value.
7. Liquidation Rights.
7.1 Upon the dissolution, liquidation or winding up of
the Corporation, whether voluntary or involun- tary, the holders of
the shares of this Series shall be entitled to receive out of the
assets of the Corporation available for distribution to stockholders,
in preference to the holders of, and before any payment or
distribution shall be made on, Junior Stock, the amount of $100 per
share (the "Liquidation Value"), plus an amount equal to all accrued
and unpaid dividends to the date of final distribution.
7.2 Neither the sale, exchange or other con- veyance
(for cash, shares of stock, securities or other con- sideration) of
all or substantially all the property and assets of the Corporation
nor the merger or consolidation of the Corporation into or with any
other corporation, or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to be a
dissolution, liquidation or winding up, voluntary or involuntary, for
the purposes of this Section 7.
<PAGE>
7.3 After the payment to the holders of the shares of
this Series of full preferential amounts provided for in this Section
7, the holders of this Series as such shall have no right or claim to
any of the remaining assets of the Corporation.
7.4 In the event the assets of the Corpora- tion
available for distribution to the holders of shares of this Series
upon any dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, shall be insufficient to pay in full
all amounts to which such holders are entitled pursuant to Section
7.1, no such distribution shall be made on account of any shares of
any Parity Stock upon such dissolution, liquidation or winding up
unless proportionate distributive amounts shall be paid on account of
the shares of this Series, ratably, in propor- tion to the full
distributable amounts for which holders of all Parity Stock are
entitled upon such dissolution, liquidation or winding up.
8. Other Provisions.
8.1 All notices from the Corporation to the holders
shall be given by one of the methods specified in Section 8.2. With
respect to any notice to a holder of shares of this Series required to
be provided hereunder, neither failure to give such notice, nor any
defect therein or in the transmission thereof, to any particular
holder shall affect the sufficiency of the notice or the validity of
the proceedings referred to in such notice with respect to the other
holders or affect the legality or validity of any distribution, right,
warrant, reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any
such action. Any notice which was mailed in the manner herein provided
shall be conclusively presumed to have been duly given whether or not
the holder receives the notice.
8.2 All notices and other communications hereunder
shall be deemed given (i) on the first Trading Day following the date
received, if delivered personally, (ii) on the Trading Day following
timely deposit with an overnight courier service, if sent by overnight
courier specifying next day delivery and (iii) on the first Trading
Day that is at least five days following deposit in the mails, if sent
by first class mail to (x) a holder at its last address as it appears
on the transfer records or registry for the Series D Stock and (y) the
<PAGE>
Corporation at the following address (or at such other address as the
Corporation shall specify in a notice pursuant to this Section): Time
Warner Inc., 75 Rockefeller Plaza, New York, New York 10019,
Attention: General Counsel.
8.3 Any shares of this Series which have been
converted, redeemed, exchanged or otherwise acquired by the
Corporation shall, after such conversion, redemption, exchange or
acquisition, as the case may be, be retired and promptly cancelled and
the Corporation shall take all appropriate action to cause such shares
to obtain the status of authorized but unissued shares of Preferred
Stock, without designation as to series, until such shares are once
more designated as part of a particular series by the Board of
Directors. The Corporation may cause a certificate setting forth a
resolution adopted by the Board of Directors that none of the
authorized shares of this Series are out- standing to be filed with
the Secretary of State of the State of Delaware. When such certificate
becomes effective, all references to Series D Stock shall be
eliminated from the Certificate of Incorporation and the shares of
Preferred Stock designated hereby as Series D Stock shall have the
status of authorized and unissued shares of Preferred Stock and may be
reissued as part of any new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors.
8.4 The shares of this Series shall be issu- able in
whole shares or, if authorized by the Board of Directors (or any
authorized committee thereof), in any fraction of a whole share so
authorized or any integral multiple of such fraction.
8.5 The Corporation shall be entitled to recognize the
exclusive right of a Person registered on its records as the holder of
shares of this Series, and such record holder shall be deemed the
holder of such shares for all purposes.
8.6 All notice periods referred to in the Certificate
shall commence on the date of the mailing of the applicable notice.
<PAGE>
8.7 Certificates for shares of this Series shall bear
such legends as the Corporation shall from time to time deem
appropriate.
IN WITNESS WHEREOF, Time Warner Inc. has caused this
certificate to be signed and attested this 6th day of July, 1995.
TIME WARNER INC.,
by /s/ Spencer B. Hays
---------------------------
Name: Spencer B. Hays
Title: Vice President
Attest: /s/ Eli T. Bruno
----------------------------
Name: Eli T. Bruno
Title: Assistant Secretary
- ---------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) --------
----------------------------------------
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
TIME WARNER INC.
(Exact name of obligor as specified in its charter)
Delaware 13-1388520
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
75 Rockefeller Plaza
New York, New York 10019
(Address of principal executive offices) (Zip Code)
-------------------------------------------
Debt Securities
(Title of the indenture securities)
-----------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
New York State Banking Department, State House,
Albany, New York 12110.
Board of Governors of the Federal Reserve System,
Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2,
33 Liberty Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington,
D.C., 20429.
(b) Whether it is authorized to exercise corporate
trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None.
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee
as now in effect, including the Organization Certificate and the
Certificates of Amendment dated February 17, 1969, August 31,
1977, December 31, 1980, September 9, 1982, February 28, 1985 and
December 2, 1991 (see Exhibit 1 to Form T-1 filed in connection
with Registration Statement No. 33-50010, which is incorporated
by reference).
2. A copy of the Certificate of Authority of the
Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is
incorporated by reference).
3. None, authorization to exercise corporate trust
powers being contained in the documents identified above as
Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see
Exhibit 4 to Form T-1 filed in connection with Registration
Statement No. 33-84460, which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section
321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection
with Registration Statement No. 33-50010, which is incorporated
by reference).
7. A copy of the latest report of condition of the
Trustee, published pursuant to law or the requirements of its
supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act
of 1939 the Trustee, Chemical Bank, a corporation organized and
existing under the laws of the State of New York, has duly caused
this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of New
York and State of New York, on the 10th day of July, 1995.
CHEMICAL BANK
By /s/ R. Lorenzen
---------------------
R. Lorenzen
Senior Trust Officer
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1995, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................ $ 5,797
Interest-bearing balances ........................ 5,523
Securities: ..........................................
Held to maturity securities............................ 6,195
Available for sale securities.......................... 17,785
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ................................ 2,493
Securities purchased under agreements to resell ... 50
Loans and lease financing receivables:
Loans and leases, net of unearned income $68,937
Less: Allowance for loan and lease losses 1,898
Less: Allocated transfer risk reserve ... 113
Loans and leases, net of unearned income, ------
allowance, and reserve ............................ 66,926
Trading Assets ......................................... 37,294
Premises and fixed assets (including capitalized
leases)............................................ 1,402
Other real estate owned ............................... 99
Investments in unconsolidated subsidiaries and
associated companies............................... 148
Customer's liability to this bank on acceptances
outstanding ....................................... 1,051
Intangible assets ..................................... 512
Other assets .......................................... 6,759
-----
TOTAL ASSETS .......................................... $149,034
=========
<PAGE>
LIABILITIES
Deposits
In domestic offices ................................ $44,882
Noninterest-bearing .........................$14,690
Interest-bearing ............................ 30,192
In foreign offices, Edge and Agreement subsidiaries,
and IBF's .......................................... 32,537
Noninterest-bearing .........................$ 146
Interest-bearing ............................ 32,391
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ............................ 10,587
Securities sold under agreements to repurchase ..... 3,083
Demand notes issued to the U.S. Treasury .............. 464
Trading liabilities ................................... 31,358
Other Borrowed money:
With original maturity of one year or less ......... 7,527
With original maturity of more than one year ....... 914
Mortgage indebtedness and obligations under capitalized
leases ............................................. 20
Bank's liability on acceptances executed and outstanding 1,054
Subordinated notes and debentures ..................... 3,410
Other liabilities ..................................... 5,986
TOTAL LIABILITIES ..................................... 141,822
-------
EQUITY CAPITAL
Common stock .......................................... 620
Surplus ............................................... 4,501
Undivided profits and capital reserves ................ 2,558
Net unrealized holding gains (Losses)
on available-for-sale securities ...................... (476)
Cumulative foreign currency translation adjustments ... 9
TOTAL EQUITY CAPITAL .................................. 7,212
------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL .......................... $149,034
========
I, Joseph L. Sclafani, S.V.P. & Controller of the
above-named bank, do hereby declare that this Report of
Condition has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM B. HARRISON )
