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CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT - May 26, 1994
(Date of earliest event reported)
J. C. PENNEY COMPANY, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 1-777
Delaware 13-5583779
(State of incorporation) (IRS Employer
Identification No.)
6501 Legacy Drive
Plano, Texas 75024-3698
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (214) 431-1000
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Item 5. Other Events
At the Company's Annual Meeting of Stockholders held on May 20, 1994,
stockholders approved an amendment to the Company's Restated Certificate of
Incorporation, as amended ("Restated Certificate"), authorizing an increase in
the authorized number of shares of Common Stock of the Company from 500,000,000
to 1,250,000,000 and an increase in the total authorized number of shares from
525,000,000 to 1,275,000,000. A Certificate of Amendment to the Restated
Certificate reflecting this increase was filed with the Secretary of State of
the State of Delaware and became effective on May 26, 1994.
Item 7. Financial Statements and Exhibits
(c) Exhibits
(1) Restated Certificate of Incorporation of the Company,
filed July 2, 1984.
(2) Certificate of Change of Location of Registered
Office, effective July 27, 1984.
(3) Certificate of Amendment filed May 24, 1985, of
Restated Certificate of Incorporation of Company, as
amended.
(4) Certificate of Amendment filed June 1, 1987, of
Restated Certificate of Incorporation of Company, as
amended.
(5) Certificate of Designations of Series B ESOP
Convertible Preferred Stock of Company.
(6) Amended Certificate of Designations of Series A
Junior Participating Preferred Stock of Company.
(7) Certificate of Amendment filed May 26, 1994, of
Restated Certificate of Incorporation of Company, as
amended.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
J. C. PENNEY COMPANY, INC.
By /S/ C. R. Lotter
C. R. Lotter
Executive Vice President,
Secretary and General Counsel
May 31, 1994
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INDEX TO EXHIBITS
Exhibit
Number Description
------- -----------
7(c)(1) Restated Certificate of Incorporation of the Company,
filed July 2, 1984.
7(c)(2) Certificate of Change of Location of Registered
Office, effective July 27, 1984.
7(c)(3) Certificate of Amendment filed May 24, 1985, of
Restated Certificate of Incorporation of Company, as
amended.
7(c)(4) Certificate of Amendment filed June 1, 1987, of
Restated Certificate of Incorporation of Company, as
amended.
7(c)(5) Certificate of Designations of Series B ESOP
Convertible Preferred Stock of Company.
7(c)(6) Amended Certificate of Designations of Series A
Junior Participating Preferred Stock of Company.
7(c)(7) Certificate of Amendment filed May 26, 1994, of
Restated Certificate of Incorporation of Company, as
amended.
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Exhibit 7(c)(1)
RESTATED CERTIFICATE OF INCORPORATION
of
J. C. PENNEY COMPANY, INC.
J. C. Penney Company, Inc., a corporation incorporated under the name
of J. C. Penney Company by the filing of its original Certificate of
Incorporation with the Secretary of State of the State of Delaware on December
15, 1924, desiring to integrate into a single instrument all the provisions of
its Certificate of Incorporation now in effect and operative, does hereby
certify as follows:
1. Said Certificate of Incorporation, as heretofore amended and
supplemented, is hereby restated and integrated so as to read as follows:
First: The name of the corporation (which is herein referred to as
the Company) shall be J. C. Penney Company, Inc.
Second: The address of the Company's registered office in the State of
Delaware is 100 West Tenth Street, City of Wilmington, County of New Castle.
The name of the Company's registered agent at such address is The Corporation
Trust Company.
Third: The purpose of the Company is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
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Fourth: The total number of shares of all classes of stock which the
Company shall have authority to issue is 525,000,000 shares, of which
25,000,000 shares shall be shares of Preferred Stock without par value
(hereinafter called Preferred Stock) and 500,000,000 shares shall be shares of
Common Stock of 50c. par value (hereinafter called Common Stock).
Authority is hereby expressly granted to the Board of Directors from
time to time to issue the Preferred Stock as Preferred Stock of one or more
series and in connection with creation of any such series to fix by the
resolution or resolutions providing for the issue of shares thereof the
designation, powers, preferences, and relative, participating, optional, or
other special rights of such series, and the qualifications, limitations, or
restrictions thereof. Such authority of the Board of Directors with respect to
each such series shall include, but not be limited to, the determination of the
following:
(a) the distinctive designation of, and the number of
shares comprising, such series, which number may be increased (except
where otherwise provided by the Board of Directors in creating such
series) or decreased (but not below the number of shares thereof then
outstanding) from time to time by like action of the Board of
Directors;
(b) the dividend rate or amount for such series, the
conditions and dates upon which such dividends shall
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be payable, the relation which such dividends shall bear to the
dividends payable on any other class or classes or any other series of
any class or classes of stock, and whether such dividends shall be
cumulative, and if so, from which date or dates for such series;
(c) whether or not the shares of such series shall be
subject to redemption by the Company and the times, prices, and other
terms and conditions of such redemption;
(d) whether or not the shares of such series shall be
subject to the operation of a sinking fund or purchase fund to be
applied to the purchase or redemption of such shares and if such a
fund be established, the amount thereof and the terms and provisions
relative to the application thereof;
(e) whether or not the shares of such series shall be
convertible into or exchangeable for shares of any other class or
classes, or of any other series of any class or classes, of stock of
the Company and if provision be made for conversion or exchange, the
times, prices, rates, adjustments, and other terms and conditions of
such conversion or exchange;
(f) whether or not the shares of such series shall have
voting rights, in addition to the voting rights provided by law, and
if they are to have such additional voting rights, the extent thereof;
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(g) the rights of the shares of such series in the event
of any liquidation, dissolution, or winding up of the Company or upon
any distribution of its assets; and
(h) any other powers, preferences, and relative,
participating, optional, or other special rights of the shares of such
series, and qualifications, limitations, or restrictions thereof, to
the full extent now or hereafter permitted by law and not inconsistent
with the provisions hereof.
All shares of any one series of Preferred Stock shall be identical in
all respects except as to the dates from which dividends thereon shall be
cumulative. All series of the Preferred Stock shall rank equally and be
identical in all respects except as otherwise provided in the resolution or
resolutions providing for the issue of any series of Preferred Stock.
Whenever dividends upon the Preferred Stock at the time outstanding,
to the extent of the preference to which such stock is entitled, shall have
been paid in full or declared and set apart for payment for all past dividend
periods, and after the provisions for any sinking or purchase fund or funds for
any series of Preferred Stock shall have been complied with, the Board of
Directors may declare and pay dividends on the Common Stock, payable in cash,
stock, or otherwise, and the holders of shares of Preferred Stock shall not be
entitled to share therein, subject to
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the provisions of the resolution or resolutions creating any series of
Preferred Stock.
In the event of any liquidation, dissolution, or winding up of the
Company or upon the distribution of the assets of the Company, all assets and
funds of the Company remaining, after the payment to the holders of the
Preferred Stock of the full preferential amounts to which they shall be
entitled as provided in the resolution or resolutions creating any series
thereof, shall be divided and distributed among the holders of the Common Stock
ratably, except as may otherwise be provided in any such resolution or
resolutions. Neither the merger or consolidation of the Company with another
corporation nor the sale or lease of all or substantially all the assets of the
Company shall be deemed to be a liquidation, dissolution, or winding up of the
Company or a distribution of its assets.
Except as otherwise required by law or provided by a resolution or
resolutions of the Board of Directors creating any series of Preferred Stock,
the holders of Common Stock shall have the exclusive power to vote and shall
have one vote in respect of each share of such stock held and the holders of
Preferred Stock shall have no voting power whatsoever. Except as otherwise
provided in such a resolution or resolutions, the authorized shares of any
class or classes may be increased or decreased by the affirmative vote of the
holders of a majority of the outstanding
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shares of stock of the Company entitled to vote.
Fifth: In furtherance and not in limitation of the powers conferred
by the laws of the State of Delaware, the Board of Directors is expressly
authorized and empowered:
(a) to make, alter, and repeal the By-laws of the
Company, subject to the power of the stockholders of the Company to
alter or repeal any By-law made by the Board of Directors;
(b) subject to the laws of the State of Delaware, from
time to time to sell, lease, or otherwise dispose of any part or parts
of the properties of the Company and to cease to conduct the business
connected therewith or again to resume the same, as it may deem best;
and
(c) in addition to the powers and authorities
hereinbefore and by the laws of the State of Delaware conferred upon
the Board of Directors, to exercise all such powers and to do all such
acts and things as may be exercised or done by the Company; subject,
nevertheless, to the provisions of said laws, of the Certificate of
Incorporation as from time to time amended of the Company, and of its
By-laws.
Sixth: Any director or any officer of the Company elected or
appointed by the stockholders of the Company or by its Board of
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Directors may be removed at any time in such manner as shall be provided in the
By-laws of the Company.
Seventh: The Company reserves the right at any time and from
time to time to amend, alter, change, or repeal any provision contained herein,
and other provisions authorized by the laws of the State of Delaware at the
time in force may be added or inserted, in the manner now or hereafter
prescribed by law; and all rights, preferences, and privileges of whatsoever
nature conferred upon stockholders, directors, or any other persons whomsoever
by and pursuant to this Certificate of Incorporation in its present form or as
hereafter amended are granted subject to the right reserved in this Article.
2. This Restated Certificate of Incorporation and the restatement
effected hereby have been duly adopted by the Board of Directors of the Company
in accordance with the provisions of Section 345 of the General Corporation Law
of the State of Delaware, have been duly adopted in accordance with the
provisions of the Certificate of Incorporation of the Company as heretofore
amended and restated, only restates and integrates and does not further amend
the provisions of the Certificate of Incorporation as heretofore amended or
supplemented, and there is no discrepancy between those provisions and the
provisions of this Restated Certificate of Incorporation.
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3. This Restated Certificate of Incorporation shall become
effective at the close of business, New York City Time, on the day on which it
shall be filed in the office of the Secretary of State of the State of
Delaware.
IN WITNESS WHEREOF, the Company has caused its corporate seal to be
affixed hereto and this instrument to be signed in its name by its Chairman of
the Board and attested by its Secretary.
J. C. PENNEY COMPANY, INC.
/S/ W. R. Howell
----------------------------
Chairman of the Board
Attest:
/S/ A. W. Driver, Jr.
- - --------------------------
Secretary
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK)
BE IT REMEMBERED that on the 27th day of June, 1984, personally
appeared before me, THOMAS M. COMERFORD, a Notary Public in and for the County
and State aforesaid, W. R. HOWELL, the Chairman of the Board of J. C. PENNEY
COMPANY, INC., a Delaware corporation, the corporation described in and on
behalf of which was made the foregoing Certificate, known to me personally to
be such Chairman of the Board, and acknowledged that he signed said Certificate
and that said Certificate was the act and deed of said Corporation and that the
facts stated therein are true.
Given under my hand and seal of office, the day and year aforesaid.
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Exhibit 7(c)(2)
CERTIFICATE OF CHANGE OF ADDRESS OF
REGISTERED OFFICE AND OF REGISTERED AGENT
PURSUANT TO SECTION 134 OF TITLE 8 OF THE DELAWARE CODE
To: DEPARTMENT OF STATE
Division of Corporations
Townsend Building
Federal Street
Dover, Delaware 19903
Pursuant to the provisions of Section 134 of Title 8 of the Delaware
Code, the undersigned Agent for service of process, in order to change the
address of the registered office of the corporations for which it is registered
agent, hereby certifies that:
1. The name of the agent is: The Corporation Trust Company
2. The address of the old registered office was:
100 West Tenth Street
Wilmington, Delaware 19801
3. The address to which the registered office is to be changed is:
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
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The new address will be effective on July 30, 1984.
4. The names of the corporations represented by said agent are
set forth on the list annexed to this certiicate and made a
part hereof by reference.
IN WITNESS WHEREOF, said agent has caused this certificate to
be signed on its behalf by its Vice-President and Assistant Secretary this 25th
day of July , 1984.
THE CORPORATION TRUST COMPANY
(Name of Registered Agent)
By: /S/ Virginia Colvell
---------------------------
(Vice-President)
ATTEST:
/S/ Mary Murray
- - -------------------------
(Assistant Secretary)
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Exhibit 7(c)(3)
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
J. C. PENNEY COMPANY, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (herein
referred to as the Company), does hereby certify:
First: That at a meeting of the Board of Directors of the Company
held on March 26, 1985 resolutions were duly adopted setting forth proposed
amendments to the Restated Certificate of Incorporation of the Company,
declaring said amendments to be advisable, and directing that said amendments
be submitted for consideration by the stockholders at the Annual Meeting of
Stockholders of the Company to be held on May 24, 1985. The resolutions
setting forth the proposed amendments are as follows:
"RESOLVED that the Board of Directors hereby declares it advisable
that Article Sixth of the Restated Certificate of Incorporation of the Company
be amended to read as follows:
'Sixth: (a) Except as otherwise provided for or fixed by or pursuant
to the provisions of Article Fourth of this Certificate of
Incorporation relating to the rights of the holders of any class or
series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect additional directors under
specified circumstances, the number of directors of the Company shall
be fixed from time to time by or pursuant to the By-laws of the
Company. The directors, other than those who may be elected pursuant
to the aforesaid provisions of said Article Fourth, shall be
classified, with respect to the time for which they severally hold
office, into three classes, as nearly equal in number as possible, as
shall be provided in the manner specified in the By-laws of the
Company, the first such class to be originally elected for a term
expiring at the annual meeting of stockholders to be held in 1986, the
second such class to be originally elected for a term expiring at the
annual meeting of stockholders to be held in 1987, and the third such
class to be originally elected for a term expiring at the annual
meeting of stockholders to be held in 1988, with each director in each
class to hold office until his or her successor is elected and
qualified. At each annual meeting of stockholders beginning with the
annual meeting of stockholders to be held in 1986, the successors of
the class of directors whose term expires at that meeting shall be
elected to hold office for a term expiring at the annual meeting of
stockholders to be held in the third year following the year of their
election, with each director in each such class to hold office until
his or her successor is elected and qualified.
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(b) Advance notice of stockholder nominations for the election
of directors shall be given in the manner provided by the By-laws of
the Company at the time in effect.
(c) Except as otherwise provided for or fixed by or pursuant
to the provisions of Article Fourth of this Certificate of
Incorporation relating to the rights of the holders of any class or
series of stock having a preference over the Common Stock as to the
dividends or upon liquidation to elect additional directors under
specified circumstances, newly-created directorships resulting from
any increase in the number of directors and any vacancies on the Board
of Directors resulting from death, resignation, disqualification,
removal, or other cause shall be filled only by the affirmative vote
of a majority of the remaining directors then in office, even though
less than a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for the
remainder of the full term of the class of directors in which the new
directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified. No
decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
(d) Except as otherwise provided for or fixed by or pursuant
to the provisions of Article Fourth of this Certificate of
Incorporation relating to the rights of the holders of any class or
series of Stock having a preference over the Common Stock as to
dividends or upon liquidation to elect additional directors under
specified circumstances, any director may be removed from office, with
or without cause, but only by the affirmative vote of at least 80% of
the combined voting power of the then-outstanding shares of all
classes and series of stock of the Company entitled to vote generally
in the election of directors ("Voting Stock"), voting together as a
single class (it being understood that for the purposes of this
Article Sixth, each share of the Voting Stock shall have the number of
votes granted to it in accordance with Article Fourth of this
Certificate of Incorporation).
(e) Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of at least 80% of
the combined voting power of the voting Stock, voting together as a
single class, shall be required to alter, amend, or repeal, or adopt
any provision inconsistent with, this Article Sixth.'"
"RESOLVED that the Board of Directors hereby declares it advisable
that a new Article Seventh of the Restated Certificate of Incorporation of the
Company be adopted to read as follows:
'Seventh: Section 1. The vote of stockholders of the
Company required to approve any Business Combination shall be as set
forth in this Article Seventh. The term "Business Combination", as
well as other capitalized terms used in this
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Article Seventh, shall have the respective meanings ascribed to them
in Section 3 of this Article Seventh.
Irrespective of any affirmative vote required by law or by
this Certificate of Incorporation, and except as otherwise expressly
provided in Section 2 of this Article Seventh,
(i) any merger or consolidation of the Company or any
Subsidiary with (a) any Interested Stockholder or (b) any
other Person (whether or not itself an Interested Stockholder
or an Affiliate of an Interested Stockholder) which is, or
after each merger or consolidation would be, an Interested
Stockholder or an Affiliate of an Interested Stockholder,
(ii) any sale, lease, exchange, mortgage, pledge,
transfer, or other disposition (in one transaction or a series
of transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Company or any Subsidiary having an aggregate Fair Market
Value of $100 million or more,
(iii) any sale, lease, exchange, mortgage, pledge,
transfer, or other disposition (in one transaction or a series
of transactions) to the Company of any Subsidiary of any
assets of any Interested Stockholder or any Affiliate of any
Interested Stockholder, having an aggregate Fair Market Value
of $100 million or more,
(iv) any issuance or transfer by the Company or any
Subsidiary (in one transaction or a series of transactions) of
any securities of the Company or any Subsidiary to any
Interested Stockholder or any Affiliate of any Interested
Stockholder in exchange for cash, securities, or other
property in exchange for cash, securities, or other property
(or a combination thereof) having an aggregate Fair Market
Value of $100 million or more,
(v) the adoption of any plan or proposal for the
liquidation or dissolution of the Company proposed by or on
behalf of any Interested Stockholder or any Affiliate of any
Interested Stockholder, or
(vi) any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or
any merger or consolidation of the Company with any of its
Subsidiaries or any other transaction (whether or not with or
into or otherwise involving an Interested Stockholder), which
has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of
equity, or securities convertible into any equity, securities
of the Company or any Subsidiary, as the case may be,
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which is, directly or indirectly, owned by any Interested
Stockholder or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of at least 80% of the combined
voting power of the then-outstanding shares of all classes and series
of stock of the Company entitled to vote generally in the election of
directors ("Voting Stock"), voting together as a single class (it
being understood that for the purposes of this Article Seventh, each
share of Voting Stock shall have the number of votes granted to it in
accordance with Article Fourth of this Certificate of Incorporation).
Such affirmative vote shall be required notwithstanding the fact that
no vote may be required, or that a lesser percentage may otherwise be
applicable, by law or in any agreement with any national securities
exchange or otherwise.
Section 2. Any Business Combination which meets all the
conditions specified in either paragraph A or paragraph B below shall not be
subject to the provisions of Section 1. of this Article Seventh and shall
require only such affirmative vote as is required by law and any other
provision of this Certificate of Incorporation:
A. the Business Combination shall have been approved by a
majority of the Disinterested Directors;
-or-
B. all the following conditions with respect to such Business
Combination shall have been met:
(i) the aggregate amount of cash and the Fair Market
Value as of the date of the consummation of the Business
Combination of consideration other than cash to be received
per share by holders of Common Stock in such Business
Combination, shall be at least equal in value to the higher of
the following:
(a) If applicable, the highest per share price
(including any brokerage commissions, transfer taxes,
soliciting dealers' fees, and option costs) paid by the
Interested Stockholder (before or after becoming an
interested Stockholder), or any Affiliate or Associate
thereof, in acquiring Beneficial Ownership of any shares
of Common Stock (1) within the two-year period immediately
prior to the first public announcement of the proposal of
the Business Combination ("Announcement Date") or (2) in
the transaction in which it became an Interested
Stockholder, whichever is higher; or
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(b) the Fair Market Value per share of Common
Stock of the Company (1) on the Announcement Date, or (2)
on the date on which the Interested Stockholder became an
Interested Stockholder ("Determination Date"), whichever
is higher);
(ii) the aggregate amount of cash and the Fair Market
Value as of the date of the consummation of the Business
Combination of consideration other than cash to be received
per share by holders of shares of any class or series of
outstanding Voting Stock other than Common Stock shall be at
least equal to the highest of the following (it being intended
that the requirements of this paragraph B(ii) of this Section
2 of Article Seventh shall be required to be set with respect
to every class or series, as the case may be, of outstanding
Voting Stock, whether or not the Interested Stockholder has
previously acquired any shares of such class or series of
Voting Stock):
(a) if applicable, the highest per share price
(including any brokerage commissions, transfer taxes,
soliciting dealers' fees, and option costs) paid by the
Interested Stockholder (Before or after becoming an
Interested Stockholder) for any shares of such class or
series of Voting Stock acquired by it (1) within the
two-year period immediately prior to the Announcement Date
or (2) in the transaction in which it became an Interested
Stockholder, whichever is higher;
(b) if applicable, the highest preferential
amount per share to which the holders of shares of such
class or series, as the case may be, of Voting Stock are
entitled in the event of any voluntary or involuntary
liquidation, dissolution, or winding up of the Company, or
(c) the Fair Market Value per share of such class
or series, as the case may be, of Voting Stock on the
Announcement Date or on the Determination Date, whichever
is higher;
(iii) the price determined in accordance with paragraphs
B(i)and B(ii) of this Section 2 of Article Seventh shall be
subject to appropriate adjustment in the event of any stock
dividend, stock split, combination of shares, or similar
event;
(iv) the consideration to be received by the holders of
specified class or series of outstanding Voting Stock
(including Common Stock) shall be in cash or in the same form
as that which the Interested Stockholder has previously paid
for shares of such class or series of Voting Stock; if the
Interested Stockholder had paid for shares of any class or
series of Voting Stock with varying forms of consideration,
the form of consideration for such class or series of Voting
Stock shall, at the option of the Interested
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Stockholder, be either cash or the form used to acquire the
largest number of shares of such class or series of Voting
Stock previously acquired by it;
(v) after such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
Business Combination (a) except as approved by a majority of
the Disinterested Directors, there shall have been no failure
to declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on the
outstanding Preferred Stock, (b) there shall have been (i) no
reduction in the annual rate of dividends payable or last
paid, as the case may be, on the Common Stock (except as
necessary to reflect any subdivision of such Common Stock)
except as approved by a majority of the Disinterested
Directors and (ii) an increase in the annual rate of dividends
last paid on the Common Stock, as necessary to reflect any
reclassification (including any reverse Stocksplit),
recapitalization, reorganization, or any similar transaction
which has the effect of reducing the number of outstanding
shares of such Common Stock, unless the failure so to increase
such annual rate shall have been approved by a majority of the
Disinterested Directors; and (c) such Interested Stockholder
shall not have acquired Beneficial Ownership of any additional
shares of Voting Stock, except as part of the transaction
which resulted in such Interested Stockholder becoming an
Interested Stockholder;
(vi) after such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not
have received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges, or other financial assistance or any tax
credits or other tax advantages provided by, or as a result of
its equity position in, the Company, whether in anticipation
of or in connection with such Business Combination or
otherwise; and
(vii) a proxy statement or information statement
describing the proposed Business Combination (and including
the views of the Disinterested Directors, if requested by the
Disinterested Directors, and of an independent investment
banker, if any, selected by such Disinterested Directors with
respect to the proposed Business Combination) and complying
with the disclosure and other requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder
(or any subsequent provisions replacing such requirements of
such Act, rules, or regulations) shall be mailed at least 30
days prior to the consummation of such Business Combination
(whether or not such proxy statement or information statement
is required to be mailed pursuant to such Act or subsequent
provisions) to stockholders of the Company.
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Section 3. For purposes of this Article Seventh:
A. An "Affiliate" of, or a Person "Affiliated" with, a
specified Person shall mean a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Person specified.
B. "Announcement Date" shall have the meaning set forth in
paragraph B(i)(a) of Section 2 of this Article Seventh.
C. The term "Associate" used to indicate a relationship
with any Person shall mean (1) any corporation or organization (other
than the Company or any Subsidiary), of which such Person is an
officer or partner or is, directly or indirectly, the Beneficial Owner
of 10% or more of any class of equity securities, (2) any trust or
other estate in which such Person has a substantial beneficial
interest or as to which such Person serves as a trustee or in a
similar fiduciary capacity, and (3) any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such
Person or who is a director or officer of the Company or any
Subsidiary.
D. A Person shall be a "Beneficial Owner" of any Voting
Stock:
(i) which such Person or any of its Affiliates or
Associates owns, directly or indirectly;
(ii) which such Person or any of its Affiliates or
Associates has (a) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement, or understanding or
upon the exercise of conversion rights, exchange rights,
warrants, or options, or otherwise, or (b) the right to vote
(whether or not irrevocable) pursuant to any agreement,
arrangement, or understanding; or
(iii) which is Beneficially Owned, directly or
indirectly, by another Person with which such Person or any of
its Affiliates or Associates has any agreement, arrangement,
or understanding for the purpose of acquiring, holding,
voting, or disposing of any shares of Voting Stock, and any
Voting Stock of which a person shall be the Beneficial Owner
shall be "Beneficially Owned" by, or be under the "Beneficial
Ownership" of, such Person.
E. "Business Combination" shall mean any transaction which
is referred to in any one or more of clauses (i) through (vi) of
Section 1 of this Article Seventh.
F. In the event of any Business Combination in which the
Company survives, the phrase "consideration other than cash to be
received" as used in
7
<PAGE> 8
paragraphs B(i) and (ii) of Section 2 of this Article Seventh shall
include shares of Common Stock and shares of any other class of series
of outstanding Voting Stock retained by the holders of such shares, or
both.
G. "Determination Date" shall have the meaning set forth in
paragraph B(i)(b) of Section 2 of this Article Seventh.
H. "Disinterested Director" shall mean any member of the
Board of Directors who is not an Affiliate, an Associate, or a nominee
of the Interested Stockholder and who was a member of the Board of
Directors prior to the time that the Interested Stockholder became an
Interested Stockholder, and any successor of a Disinterested Director
who is not an Affiliate or Associate of the Disinterested Director by
a majority of Disinterested Directors then on the Board of Directors.
I. "Fair Market Value" shall mean: (i) in the case of stock,
the highest closing sale price of a share of such stock during the 30
calendar day period immediately preceding the date in question on the
Composite Tape for New York Stock Exchange-Listed Stocks, or, if such
stock is not quoted on such Composite Tape, on the New York Stock
Exchange, or, if such stock is not listed on such Exchange, on the
principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such stock is listed, or, if
such stock is not listed on any such exchange, the highest closing bid
quotation with respect to a share of such stock during the 30 calendar
day period immediately preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotations System or
any system then in use, or of if no such quotations are available, the
fair market value on the date in question of a share of such stock as
determined by a majority of the Disinterested Directors; and (ii) in
the case of property other than cash or stock, the fair market value
of such property on the date in question as determined by a majority
of the Disinterested Directors.
J. "Interested Stockholder" shall mean any Person (other than
the Company, any Subsidiary, or any employee benefit plan of the
Company or any Subsidiary) who or which:
(i) is the Beneficial Owner, directly or indirectly, of
at least 10% of the Voting Stock;
(ii) is an Affiliate of the Company and at any time
within the two-year period immediately prior to the date in
question was the Beneficial Owner, directly or indirectly, of
at least 10% of the Voting Stock; or
(iii) is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time within the
two-year period immediately prior to the date in question
Beneficially Owned by any Interested
8
<PAGE> 9
Stockholder, if such assignment or succession shall have
occurred in the course of a transaction or series of
transactions not involving a public offering within the
meaning of the Securities Act of 1933, as amended.
For purposes of determining whether a person is an Interested
Stockholder, the number of shares of Voting Stock deemed to be
outstanding shall include shares deemed owned through application of
paragraph D of this Section 3, but shall not include any other shares
of Voting Stock which may be issuable pursuant to any agreement,
arrangement, or understanding or upon exercise of conversion rights,
warrants, or options, or otherwise.
K. "Person" shall mean any individual, firm, trust,
partnership, association, corporation, or other entity.
L. "Subsidiary" shall mean any corporation of which a
majority of any class of equity security is owned, directly or
indirectly, by the Company.
M. "Voting Stock" shall have the meaning set forth in Section
1 of this Article Seventh.
Section 4. A majority of the Disinterested Directors
shall have the power and duty to determine for the purposes of this
Article Seventh, on the basis of information known to them after
reasonable inquiry, (A) whether a person is an Interested Stockholder,
(B) the number of shares of Voting Stock beneficially owned by any
person, (C) whether a Person is an Affiliate or Associate of another,
and (D) whether the assets which are the subject of any Business
Combination have, or the consideration to be received for the issuance
or transfer of securities by the Company or any Subsidiary in any
Business Combination has, an aggregate Fair Market Value of $100
million or more. A majority of the Disinterested Directors shall have
the further power to interpret all the terms and provisions of this
Article Seventh.
Section 5. Nothing contained in this Article Seventh
shall be construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Section 6. Notwithstanding any other provisions of this
Certificate of Incorporation or the By-laws (and notwithstanding the
fact that a lesser percentage may otherwise be specified by law, this
Certificate of Incorporation, or the By-laws), the affirmative vote of
at least 80% of the Voting Stock, voting together as single class (it
being understood that for the purposes of this Article Seventh, each
share of the Voting Stock shall have the number of votes granted to it
in accordance with Article Fourth of this Certificate of
Incorporation), shall be required to alter, amend, or repeal, or adopt
any provisions inconsistent with, this Article Seventh.'"
9
<PAGE> 10
"RESOLVED that the Board of Directors hereby declares it advisable
that a new Article Eighth of the Restated Certificate of Incorporation of the
Company be adopted to read as follows:
'Eighth: Any action required or permitted to be taken by the
holders of the Voting Stock must be effected at a duly called annual
or special meeting of such holders and may not be effected by any
consent in writing by such holders. Notwithstanding anything
contained in this Certificate of Incorporation to the contrary, the
affirmative vote of at least 80% of the combined voting power of the
then-outstanding shares of all classes and series of stock of the
Company entitled to vote generally in the election of directors
("Voting Stock"), voting together as a single class (it being
understood that for the purposes of this Article Eighth, each share of
the Voting Stock shall have the number of votes granted to it in
accordance with Article Fourth of this Certificate of Incorporation),
shall be required to alter, amend, or repeal, or adopt any provisions
inconsistent with, this Article Eighth.'"
"RESOLVED that the Board of Directors hereby declares it advisable
that Article Seventh of the Restated Certificate of Incorporation of the
Company be renumbered as Article Ninth, and be amended to read as follows:
'Ninth: The Board of Directors shall have the power to make, alter,
amend, or repeal, or adopt any provisions inconsistent with, the
By-laws (except insofar as the By-laws adopted by the stockholders
shall otherwise provide). Any By-laws made by the directors under the
powers conferred hereby may be altered, amended, or repealed, and any
provisions inconsistent therewith may be adopted, by the directors or
by the stockholders. Notwithstanding the foregoing and
anything contained in this Certificate of Incorporation to the
contrary, Section 2 of Article II, and Sections 3, 12, 13, and 15 of
Article III of the By-laws, all as in effect simultaneously with the
effectiveness of this Article, shall not be altered, amended, or
repealed, and no provision inconsistent therewith shall be adopted,
without the affirmative vote of at least 80% of the combined voting
power of the then-outstanding shares of all classes and series of
stock of the Company entitled to vote generally in the election of
directors ("Voting Stock"), voting together as a single class (it
being understood that for the purposes of this Article Ninth, each
share of the Voting Stock shall have the number of votes granted to it
in accordance with Article Fourth of this Certificate of
Incorporation). Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, the affirmative vote of
at least 80% of the Voting Stock, voting together as a single class,
shall be required to alter, amend, or repeal, or adopt any provision
inconsistent with, this Article Ninth.'"
Second: That thereafter, pursuant to resolution of its Board of
Directors, at the Annual Meeting of Stockholders of the Company duly called and
held on May 24, 1985,
10
<PAGE> 11
upon notice in accordance with Section 222 of the General Corporation Law of
the State of Delaware, the necessary number of shares as required by statute
were voted in favor of the amendments.
Third: That said amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
Fourth: That the capital of the Company will not be reduced under or
by reason of said amendments.
IN WITNESS WHEREOF, the Company has caused its corporate seal to be
hereunto affixed and this Certificate to be signed in its name by its Chairman
of the Board and attested by its Secretary, this 24th day of May, 1985.
J. C. PENNEY COMPANY, INC.
/S/ W. R. Howell
---------------------------
Chairman of the Board
Attest:
/S/ A. W. Driver, Jr.
- - ----------------------
Secretary
11
<PAGE> 1
Exhibit 7(c)(4)
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
J. C. PENNEY COMPANY, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (herein
referred to as the Company), does hereby certify:
First: That at a meeting of the Board of Directors of the Company
held on March 31, 1987 a resolution was duly adopted setting forth a proposed
amendment to the Restated Certificate of Incorporation of the Company,
declaring said amendment to be advisable, and directing that said amendment be
submitted for consideration by the stockholders at the Annual Meeting of
Stockholders of the Company to be held on May 29, 1987. The resolution setting
forth the proposed amendment is as follows:
"RESOLVED that the Board of Directors hereby declares it advisable
that a new Article Tenth of the Restated Certificate of Incorporation of the
Company be adopted to read as follows:
'Tenth: A director of the Company shall not be personally liable to
the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal
benefit. If the Delaware General Corporation Law is hereafter amended
to permit further limitation on or elimination of the personal
liability of the Company's directors for breach of fiduciary duty,
then a director of the Company shall be exempt from such liability for
any such breach to the full extent permitted by the Delaware General
Corporation Law as so amended from time to time. Any repeal or
modification of the foregoing provisions of this Article Tenth, or the
adoption of any provision inconsistent herewith, shall not adversely
affect any right or protection of a director of the Company hereunder
in respect of any act or omission of such director occurring prior to
such repeal, modification, or adoption of an inconsistent provision.'"
<PAGE> 2
Second: That thereafter, pursuant to resolution of its Board of
Directors, at the Annual Meeting of Stockholders of the Company duly called and
held on May 29, 1987, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware, the necessary number of shares as
required by statute were voted in favor of the amendment.
Third: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
Fourth: That the capital of the Company will not be reduced under or
by reason of said amendment.
IN WITNESS WHEREOF, the Company has caused its corporate seal to be
hereunto affixed and this Certificate to be signed in its name by its Chairman
of the Board and attested by its Secretary, this 29th day of May, 1987.
J. C. PENNEY COMPANY, INC.
/S/ W. R. Howell
--------------------------
Chairman of the Board
Attest:
/S/ A. W. Driver, Jr.
- - ------------------------
Secretary
<PAGE> 1
Exhibit 7(c)(5)
CERTIFICATE OF DESIGNATIONS
OF
SERIES B ESOP CONVERTIBLE PREFERRED STOCK
OF
J.C. PENNEY COMPANY, INC.
PURSUANT TO SECTION 151 OF THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE
I, William R. Howell, Chairman of the Board of J.C. Penney
Company, Inc. ("Company"), a corporation organized and existing under the
General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 151 thereof, DO HEREBY CERTIFY that, pursuant to the
authority conferred upon the Board of Directors by the Restated Certificate of
Incorporation of the Company, the Board of Directors authorized the series of
Preferred Stock hereinafter provided for and established the voting powers
thereof and authorized a committee of the Board of Directors to adopt, and said
committee has adopted, the following resolution creating a series of 1,400,000
shares of Preferred Stock, without par value, designated as Series B ESOP
Convertible Preferred Stock:
RESOLVED that, pursuant to the authority vested in the Board
of Directors of the Company in accordance with the provisions of its Restated
Certificate of Incorporation, a series of Preferred Stock of the Company be,
and it hereby is, created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional or other
special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
<PAGE> 2
Section 1. Designation and Amount; Special Purpose
Restricted Transfer Issue.
(A) The shares of this series of Preferred Stock shall be
designated as Series B ESOP Convertible Preferred Stock ("Series B Preferred
Stock") and the number of shares constituting such series shall be 1,400,000.
(B) Shares of Series B Preferred Stock shall be issued
only to a trustee acting on behalf of an employee stock ownership plan or other
employee benefit plan of the Company. In the event of any transfer of shares
of Series B Preferred Stock to any person other than any such plan trustee, the
shares of Series B Preferred Stock so transferred, upon such transfer and
without any further action by the Company or the holder, shall be automatically
converted into shares of Common Stock on the terms otherwise provided for the
conversion of shares of Series B Preferred Stock into shares of Common Stock
pursuant to Section 5 hereof and no such transferee shall have any of the
voting powers, preferences and relative, participating, optional or special
rights ascribed to shares of Series B Preferred Stock hereunder but, rather,
only the powers and rights pertaining to the Common Stock into which such
shares of Series B Preferred Stock shall be so converted. Certificates
representing shares of Series B Preferred Stock shall be legended to reflect
such restrictions on transfer. Notwithstanding the foregoing provisions of
this paragraph (B) of Section 1, shares of Series B Preferred Stock (i) may be
converted into shares of Common Stock as provided by Section 5 hereof and the
shares of Common Stock issued upon such conversion may be
2
<PAGE> 3
transferred by the holder thereof as permitted by law and (ii) shall be
redeemable by the Company upon the terms and conditions provided by Sections 6,
7 and 8 hereof.
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter
set forth, the holders of shares of Series B Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds
legally available therefor, cash dividends ("Preferred Dividends") in an amount
per share equal to $47.40 per share per annum, and no more, payable
semi-annually, one-half on the first day of January and one-half on the first
day of July of each year (each a "Dividend Payment Date") commencing on January
1, 1989, to holders of record at the start of business on such Dividend Payment
Date. Preferred Dividends shall begin to accrue on outstanding shares of
Series B Preferred Stock from the date of issuance of such shares of Series B
Preferred Stock. Preferred Dividends shall accrue on a daily basis whether or
not the Company shall have earnings or surplus at the time, but Preferred
Dividends accrued after January 1, 1989 on the shares of Series B Preferred
Stock for any period less than a full semi-annual period between Dividend
Payment Dates shall be computed on the basis of a 360-day year of 30-day
months. A full semi-annual dividend payment of $23.70 per share shall accrue
for the period from the date of issuance until January 1, 1989. Accumulated
but unpaid Preferred Dividends shall cumulate as of the Dividend Payment Date
on which
3
<PAGE> 4
they first become payable, but no interest shall accrue on accumulated but
unpaid Preferred Dividends.
(B) So long as any Series B Preferred Stock shall be
outstanding, no dividend shall be declared or paid or set apart for payment on
any other series of stock ranking on a parity with the Series B Preferred Stock
as to dividends, unless there shall also be or have been declared and paid or
set apart for payment on the Series B Preferred Stock, like dividends for all
dividend payment periods of the Series B Preferred Stock ending on or before
the dividend payment date of such parity stock, ratably in proportion to the
respective amounts of dividends accumulated and unpaid through such dividend
payment period on the Series B Preferred Stock and accumulated and unpaid or
payable on such parity stock through the dividend payment period on such parity
stock next preceding such dividend payment date. In the event that full
cumulative dividends on the Series B Preferred Stock have not been declared and
paid or set apart for payment when due, the Company shall not declare or pay or
set apart for payment any dividends or make any other distributions on, or make
any payment on account of the purchase, redemption or other retirement of any
other class of stock or series thereof of the Company ranking, as to dividends
or as to distributions in the event of a liquidation, dissolution or winding-up
of the Company, junior to the Series B Preferred Stock until full cumulative
dividends on the Series B Preferred Stock shall have been paid or declared and
provided for; provided, however, that the foregoing shall not apply to (i) any
dividend
4
<PAGE> 5
payable solely in any shares of any stock ranking, as to dividends or as to
distributions in the event of a liquidation, dissolution or winding-up of the
Company, junior to the Series B Preferred Stock, or (ii) the acquisition of
shares of any stock ranking, as to dividends or as to distributions in the
event of a liquidation, dissolution or winding-up of the company, junior to the
Series B Preferred Stock either (A) pursuant to any employee or director
incentive or benefit plan or arrangement (including any employment, severance
or consulting agreement) of the Company or any subsidiary of the Company
heretofore or hereafter adopted or (B) in exchange solely for shares of any
other stock ranking junior to the Series B Preferred Stock.
Section 3. Voting Rights. The holders of shares of
Series B Preferred Stock shall have the following voting rights:
(A) The holders of Series B Preferred Stock shall be
entitled to vote on all matters submitted to a vote of the holders of Common
Stock of the Company, voting together with the holders of Common Stock as one
class. Each share of the Series B Preferred Stock shall be entitled to the
number of votes equal to the number of shares of Common Stock into which such
share of Series B Preferred Stock could be converted on the record date for
determining the stockholders entitled to vote, rounded to the nearest one-tenth
of a vote; it being understood that whenever the "Conversion Price" (as defined
in Section 5 hereof) is adjusted as provided in Section 9 hereof, the voting
rights of the Series B Preferred Stock shall also be similarly adjusted.
5
<PAGE> 6
(B) Except as otherwise required by law or set forth
herein, holders of Series B Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for the taking of any
corporate action; provided, however, that the vote of at least 66-2/3% for the
outstanding shares of Series B Preferred Stock, voting separately as a series,
shall be necessary to adopt any alteration, amendment or repeal of any
provision of the Restated Certificate of Incorporation of the Company, as
amended, or this Resolution (including any such alteration, amendment or repeal
effected by any merger or consolidation in which the Company is the surviving
or resulting corporation) if such amendment, alteration or repeal would alter
or change the powers, preferences or special rights of the shares of Series B
Preferred Stock so as to affect them adversely.
Section 4. Liquidation, Dissolution or Winding Up.
(A) Upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holders of Series B Preferred
Stock shall be entitled to receive out of assets of the Company which remain
after satisfaction in full of all valid claims of creditors of the Company and
which are available for payment to stockholders and subject to the rights of
the holders of any stock of the Company ranking senior to or on a parity with
the Series B Preferred Stock in respect of distributions upon liquidation,
dissolution or winding up of the Company, before any amount shall
6
<PAGE> 7
be paid or distributed among the holders of Common Stock or any other shares
ranking junior to the Series B Preferred Stock in respect of distributions upon
liquidation, dissolution or winding up of the Company, liquidating
distributions in the amount of $600.00 per share, plus an amount equal to all
accumulated and unpaid dividends thereon to the date fixed for distribution,
and no more. If upon any liquidation, dissolution or winding up of the
Company, the amounts payable with respect to the Series B Preferred Stock and
any other stock ranking as to any such distribution on a parity with the Series
B Preferred Stock are not paid in full, the holders of the Series B Preferred
Stock and such other stock shall share ratably in any distribution of assets in
proportion to the full respective preferential amounts to which they are
entitled. After payment of the full amount to which they are entitled as
provided by the foregoing provisions of this paragraph 4(A), the holders of
shares of Series B Preferred Stock shall not be entitled to any further right
or claim to any of the remaining assets of the Company.
(B) Neither the merger or consolidation of the Company
with or into any other corporation, nor the merger or consolidation of any
other corporation with or into the Company, nor the sale, transfer or lease of
all or any portion of the assets of the Company, shall be deemed to be a
dissolution, liquidation or winding up of the affairs of the Company for
purposes of this Section 4, but the holders of Series B Preferred Stock shall
7
<PAGE> 8
nevertheless be entitled in the event of any such merger or consolidation to
the rights provided by Section 8 hereof.
(C) Written notice of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, stating the payment date
or dates when, and the place or places where, the amounts distributable to
holders of Series B Preferred Stock in such circumstances shall be payable,
shall be given by first-class mail, postage prepaid, mailed not less than
twenty (20) days prior to any payment date stated therein, to the holders of
Series B Preferred Stock, at the address shown on the books of the Company or
any transfer agent for the Series B Preferred Stock.
Section 5. Conversion into Common Stock.
(A) A holder of shares of Series B Preferred Stock shall
be entitled, at any time prior to the close of business on the date fixed for
redemption of such shares pursuant to Section 6, 7 or 8 hereof, to cause any or
all of such shares to be converted into shares of Common Stock, initially at a
conversion rate equal to the ratio of $600.00 to the amount which initially
shall be $60.00 and which shall be adjusted as hereinafter provided (and, as so
adjusted, is hereinafter sometimes referred to as the "Conversion Price") (that
is, a conversion rate initially equivalent to ten shares of Common Stock for
each share of Series B Preferred Stock so converted but that is subject to
adjustment as the Conversion Price is adjusted as hereinafter provided).
(B) Any holder of shares of Series B Preferred Stock
desiring to convert such shares into shares of Common Stock shall
8
<PAGE> 9
surrender the certificate or certificates representing the shares of Series B
Preferred Stock being converted, duly assigned or endorsed for transfer to the
Company (or accompanied by duly executed stock powers relating thereto), at the
principal executive office of the Company or the offices of the transfer agent
for the Series B Preferred Stock or such office or offices in the continental
United States of an agent for conversion as may from time to time be designated
by notice to the holders of the Series B Preferred Stock by the Company or the
transfer agent for the Series B Preferred Stock, accompanied by written notice
of conversion. Such notice of conversion shall specify (i) the number of
shares of Series B Preferred Stock to be converted and the name or names in
which such holder wishes the certificate or certificates for Common Stock and
for any shares of Series B Preferred Stock not to be so converted to be issued,
and (ii) the address to which such holder wishes delivery to be made of such
new certificates to be issued upon such conversion.
(C) Upon surrender of a certificate representing a share
or shares of Series B Preferred Stock for conversion, the Company shall issue
and send by hand delivery (with receipt to be acknowledged) or by first class
mail, postage prepaid, to the holder thereof or to such holder's designee, at
the address designated by such holder, a certificate or certificates for the
number of shares of Common Stock to which such holder shall be entitled upon
conversion. In the event that there shall have been surrendered a certificate
or certificates representing shares of
9
<PAGE> 10
Series B Preferred Stock, only part of which are to be converted, the Company
shall issue and deliver to such holder or such holder's designee a new
certificate or certificates representing the number of shares of Series B
Preferred Stock which shall not have been converted.
(D) The issuance by the Company of shares of Common Stock
upon a conversion of shares of Series B Preferred Stock into shares of Common
Stock made at the option of the holder thereof shall be effective as of the
earlier of (i) the delivery to such holder or such holder's designee of the
certificates representing the shares of Common Stock issued upon conversion
thereof or (ii) the commencement of business on the second business day after
the surrender of the certificate or certificates for the shares of Series B
Preferred Stock to be converted, duly assigned or endorsed for transfer to the
Company (or accompanied by duly executed stock powers relating thereto) as
provided by this Resolution. On and after the effective day of conversion, the
person or persons entitled to receive the Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock, but no allowance or adjustment shall be made in
respect of dividends payable to holders of Common Stock in respect of any
period prior to such effective date. The Company shall not be obligated to pay
any dividends which shall have been declared and shall be payable to holders of
shares of Series B Preferred Stock on a Dividend Payment Date if such Dividend
Payment Date for such dividend shall coincide with or be
10
<PAGE> 11
on or subsequent to the effective date of conversion of such shares.
(E) The Company shall not be obligated to deliver to
holders of Series B Preferred Stock any fractional share or shares of Common
Stock issuable upon any conversion of such shares of Series B Preferred Stock,
but in lieu thereof may make a cash payment in respect thereof in any manner
permitted by law.
(F) Whenever the Company shall issue shares of Common
Stock upon conversion of shares of Series B Preferred Stock as contemplated by
this Section 5, the Company shall issue together with each such share of Common
Stock one right to purchase Series A Preferred Stock of the Company (or other
securities in lieu thereof) pursuant to the Rights Agreement dated as of
January 28, 1986 between the Company and Morgan Guaranty Trust Company as
Rights Agent, as such agreement may from time to time be amended, or any rights
issued to holders of Common Stock of the Company in addition thereto or in
replacement therefor, whether or not such rights shall be exercisable at such
time, but only if such rights are issued and outstanding and held by other
holders of Common Stock of the Company at such time and have not expired.
(G) The Company shall at all times reserve and keep
available out of its authorized and unissued Common Stock, solely for issuance
upon the conversion of shares of Series B Preferred Stock as herein provided,
free from any preemptive rights, such number of shares of Common Stock as shall
from time to time be issuable upon the conversion of all the shares of Series B
11
<PAGE> 12
Preferred Stock then outstanding. The Company shall prepare and shall use its
best efforts to obtain and keep in force such governmental or regulatory
permits or other authorizations as may be required by law, and shall comply
with all requirements as to registration or qualification of the Common Stock,
in order to enable the Company lawfully to issue and deliver to each holder of
record of Series B Preferred Stock such number of shares of its Common Stock as
shall from time to time be sufficient to effect the conversion of all shares of
Series B Preferred Stock then outstanding and convertible into shares of Common
Stock.
Section 6. Redemption At the Option of the Company.
(A) The Series B Preferred Stock shall be redeemable, in
whole or in part, at the option of the Company at any time after July 1, 1991,
or on or before July 1, 1991 if permitted by paragraph (C) or (D) of this
Section 6, at the following redemption prices per share:
<TABLE>
<CAPTION>
During the Twelve-
Month Period Price Per
Beginning July 2, Share
------------------ ----------
<S> <C>
1988 . . . . . . . . . . . . . . . . . . . . . . $647.40
1989 . . . . . . . . . . . . . . . . . . . . . . 642.66
1990 . . . . . . . . . . . . . . . . . . . . . . 637.92
1991 . . . . . . . . . . . . . . . . . . . . . . 633.18
1992 . . . . . . . . . . . . . . . . . . . . . . 628.44
1993 . . . . . . . . . . . . . . . . . . . . . . 623.70
1994 . . . . . . . . . . . . . . . . . . . . . . 618.96
1995 . . . . . . . . . . . . . . . . . . . . . . 614.22
1996 . . . . . . . . . . . . . . . . . . . . . . 609.48
1997 . . . . . . . . . . . . . . . . . . . . . . 604.74
</TABLE>
12
<PAGE> 13
and thereafter at $600.00 per share, plus, in each case, an amount equal to all
accumulated and unpaid dividends thereon to the date fixed for redemption.
Payment of the redemption price shall be made by the Company in cash or shares
of Common stock, or a combination thereof, as permitted by paragraph (E) of
this Section 6. From and after the date fixed for redemption, dividends on
shares of Series B Preferred Stock called for redemption will cease to accrue,
such shares will no longer be deemed to be outstanding and all rights in
respect of such shares of the Company shall cease, except the right to receive
the redemption price. If less than all of the outstanding shares of Series B
Preferred Stock are to be redeemed, the Company shall either redeem a portion
of the shares of each holder determined pro rata based on the number of shares
held by each holder or shall select the shares to be redeemed by lot, as may be
determined by the Board of Directors of the Company.
(B) Unless otherwise required by law, notice of
redemption will be sent to the holders of Series B Preferred Stock at the
address shown on the books of the Company or any transfer agent for the Series
B Preferred Stock at the address shown on the books of the Company or any
transfer agent for the Series B Preferred Stock by first class mail, postage
prepaid, mailed not less than twenty (20) days nor more than sixty (60) days
prior to the redemption date. Each such notice shall state: (i) the
redemption date; (ii) the total number of shares of the Series B Preferred
Stock to be redeemed and, if fewer than all the shares
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<PAGE> 14
held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the redemption price; (iv) the place or places
where certificates for such shares are to be surrendered for payment of the
redemption price; (v) that dividends on the shares to be redeemed will cease to
accrue on such redemption date; and (vi) the conversion rights of the shares to
be redeemed, the period within which conversion rights may be exercised, and
the Conversion Price and number of shares of Common Stock issuable upon
conversion of a share of Series B Preferred Stock at the time. Upon surrender
of the certificates for any shares so called for redemption and not previously
converted (properly endorsed or assigned for transfer, if the Board of
Directors of the Company shall so require and the notice shall so state), such
shares shall be redeemed by the Company at the date fixed for redemption and at
the redemption price set forth in this Section 6.
(C) In the event of a change in the federal tax law of
the United States of America which has the effect of precluding the Company
from claiming any of the tax deductions for dividends paid on the Series B
Preferred Stock when such dividends are used as provided under Section
404(k)(2) of the Internal Revenue Code of 1986, as amended and in effect on the
date shares of Series B Preferred Stock are initially issued, the Company may,
in its sole discretion and notwithstanding anything to the contrary in
paragraph (A) of this Section 6, elect to redeem such shares for
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<PAGE> 15
the amount payable in respect of the shares upon liquidation of the Company
pursuant to Section 4 hereof.
(D) Notwithstanding anything to the contrary in paragraph
(A) of this Section 6, the Company may elect to redeem any or all of the shares
of Series B Preferred Stock at any time on or prior to July 1, 1991 on the
terms and conditions set forth in paragraphs (A) and (B) of this Section 6, if
the last reported sales price, regular way, of a share of Common Stock, as
reported on the New York Stock Exchange Composite Tape or, if the Common Stock
is not listed or admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which such stock is listed or
admitted to trading or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, on the National Market System of
the National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or, if the Common Stock is not quoted on such National Market
System, the average of the closing bid and asked prices in over-the-counter
market as reported by NASDAQ, for at least twenty (20) trading days within a
period of thirty (30) consecutive trading days ending within five (5) days of
the notice of redemption, equals or exceeds one hundred fifty percent (150%) of
the Conversion Price (giving effect equitably in making such calculation to any
adjustments required by Section 9 hereof).
(E) The Company, at its option, may make payment of the
redemption price required upon redemption of shares of Series B Preferred Stock
in cash or in shares of Common Stock, or in a
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<PAGE> 16
combination of such shares and cash, any such shares to be valued for such
purpose at their Fair Market Value (as defined in paragraph (G) of Section 9
hereof, provided, however, that in calculating their Fair Market Value the
Adjustment Period shall be deemed to be the five (5) consecutive trading days
preceding, and including, the date of redemption).
Section 7. Other Redemption Rights.
Shares of Series B Preferred Stock shall be redeemed by the
Company for cash or, if the Company so elects, in shares of Common Stock, or a
combination of such shares and cash, any such shares of Common Stock to be
valued for such purpose as provided by paragraph (e) of Section 6, at a
redemption price of $600.00 per share plus accumulated and unpaid dividends
thereon to the date fixed for redemption, at the option of the holder, at any
time and from time to time upon notice to the Company given not less than five
(5) business days prior to the date fixed by the holder in such notice for such
redemption, when and to the extent necessary (i) for such holder to provide for
distributions required to be made under, or to satisfy an investment election
provided to participants in accordance with, the J. C. Penney Company, Inc.
Savings, Profit-Sharing and Stock Ownership Plan, dated and effective as of
August 22, 1988, as the same may be amended, or any successor plan (the "Plan")
to participants in the Plan or (ii) for such holder to make payment of
principal, interest or premium due and payable (whether as scheduled or upon
acceleration) on the 8.17% ESOP Notes Due July 1, 1998 of the trust under the
Plan or
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<PAGE> 17
any indebtedness incurred by the holder for the benefit of the Plan.
Section 8. Consolidation, Merger, etc.
(A) In the event that the Company shall consummate any
consolidation or merger or similar transaction, however named, pursuant to
which the outstanding shares of Common Stock are by operation of law exchanged
solely for or changed, reclassified or converted solely into stock of any
successor or resulting company (including the Company) that constitutes
"qualifying employer securities" with respect to a holder of Series B Preferred
Stock within the meaning of Section 409(e) of the Internal Revenue Code of
1986, as amended, and Section 407(c)(5) of the Employee Retirement Income
Security Act of 1974, as amended, or any successor provisions of law, and, if
applicable, for a cash payment in lieu of fractional shares, if any, the shares
of Series B Preferred Stock of such holder shall be assumed by and shall become
preferred stock of such successor or resulting company, having in respect of
such company insofar as possible the same powers, preferences and relative,
participating, optional or other special rights (including the redemption
rights provided by Sections 6, 7 and 8 hereof), and the qualifications,
limitations or restrictions thereon, that the Series B Preferred Stock had
immediately prior to such transaction, except that after such transaction each
share of the Series B Preferred Stock shall be convertible, otherwise on the
terms and conditions provided by Section 5 hereof, into the qualifying employer
securities so receivable by a holder of the
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<PAGE> 18
number of shares of Common Stock into which such shares of Series B Preferred
Stock could have been converted immediately prior to such transaction if such
holder of Common Stock failed to exercise any rights of election to receive any
kind or amount of stock, securities, cash or other property (other than such
qualifying employer securities and a cash payment, if applicable, in lieu of
fractional shares) receivable upon such transaction (provided that, if the kind
or amount of qualifying employer securities receivable upon such transaction is
not the same for each non-electing share, then the kind and amount of
qualifying employer securities receivable upon such transaction for each
non-electing share shall be the kind and amount so receivable per share by a
plurality of the non-electing shares). The rights of the Series B Preferred
Stock as preferred stock of such successor or resulting company shall
successively be subject to adjustments pursuant to Section 9 hereof after any
such transaction as nearly equivalent to the adjustments provided for by such
section prior to such transaction. The Company shall not consummate any such
merger, consolidation or similar transaction unless all then outstanding shares
of the Series B Preferred Stock shall be assumed and authorized by the
successor or resulting company as aforesaid.
(B) In the event that the Company shall consummate any
consolidation or merger or similar transaction, however named, pursuant to
which the outstanding shares of Common Stock are by operation of law exchanged
for or changed, reclassified or converted into other stock or securities or
cash or any other
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<PAGE> 19
property, or any combination thereof, other than any such consideration which
is constituted solely of qualifying employer securities (as referred to in
paragraph (A) of this Section 8) and cash payments, if applicable, in lieu of
fractional shares, outstanding shares of Series B Preferred Stock shall,
without any action on the part of the Company or any holder thereof (but
subject to paragraph (C) of this Section 8), be deemed converted by virtue of
such merger, consolidation or similar transaction immediately prior to such
consummation into the number of shares of Common Stock into which such shares
of Series B Preferred Stock could have been converted at such time and each
share of Series B Preferred Stock shall, by virtue of such transaction and on
the same terms as apply to the holders of Common Stock, be converted into or
exchanged for the aggregate amount of stock, securities, cash or other property
(payable in like kind) receivable by a holder of the number of shares of Common
Stock into which such shares of Series B Preferred Stock could have been
converted immediately prior to such transaction if such holder of Common Stock
failed to exercise any rights of election as to the kind or amount of stock,
securities, cash or other property receivable upon such transaction (provided
that, if the kind or amount of stock, securities, cash or other property
receivable upon such transaction is not the same for each non-electing share,
then the kind and amount of stock, securities, cash or other property
receivable upon such transaction for each non-electing share shall be the kind
and
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amount so receivable per share by a plurality of the non-electing shares).
(C) In the event the Company shall enter into any
agreement providing for any consolidation or merger or similar transaction
described in paragraph (B) of this Section 8, then the Company shall as soon as
practicable thereafter (and in any event at least ten (10) business days before
consummation of such transaction) give notice of such agreement and the
material terms thereof to each holder of Series B Preferred Stock and each such
holder shall have the right to elect, by written notice to the Company, to
receive, upon consummation of such transaction (if and when such transaction is
consummated), from the Company or the successor of the Company, in redemption
and retirement of such Series B Preferred Stock, a cash payment equal to the
amount payable in respect of shares of Series B Preferred Stock upon
liquidation of the Company pursuant to Section 4 hereof. No such notice of
redemption shall be effective unless given to the Company prior to the close of
business on the fifth business day prior to consummation of such transaction,
unless the Company or the successor of the Company shall waive such prior
notice, but any notice of redemption so given prior to such time may be
withdrawn by notice of withdrawal given to the Company prior to the close of
business on the fifth business day prior to consummation of such transaction.
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Section 9. Anti-dilution Adjustments.
(A) In the event the Company shall, at any time or from
time to time while any of the shares of the Series B Preferred Stock are
outstanding, (i) pay a dividend or make a distribution in respect of the Common
Stock in shares of Common Stock, (ii) subdivide the outstanding shares of
Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, in each case whether by reclassification of shares,
recapitalization of the Company (including a recapitalization effected by a
merger or consolidation to which Section 8 hereof does not apply) or otherwise,
the Conversion Price in effect immediately prior to such action shall be
adjusted by multiplying such Conversion Price by the fraction the numerator of
which is the number of shares of Common Stock outstanding immediately before
such event and the denominator of which is the number of shares of Common Stock
outstanding immediately after such event. An adjustment made pursuant to this
paragraph 9(A) shall be given effect, upon payment of such a dividend or
distribution, as of the record date for the determination of shareholders
entitled to receive such dividend or distribution (on a retroactive basis) and
in the case of a subdivision or combination shall become effective immediately
as of the effective date thereof.
(B) In the event that the Company shall, at any time or
from time to time while any of the shares of Series B Preferred Stock are
outstanding, issue to holders of shares of Common Stock as a dividend or
distribution, including by way of a
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<PAGE> 22
reclassification of shares or a recapitalization of the Company, any right or
warrant to purchase shares of Common Stock (but not including as such a right
or warrant any security convertible into or exchangeable for shares of Common
Stock) at a purchase price per share less than the Fair Market Value (as
hereinafter defined) of a share of Common Stock on the date of issuance of such
right or warrant, then, subject to the provisions of paragraphs (E) and (F) of
this Section 9, the Conversion Price shall be adjusted by multiplying such
Conversion Price by the fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights
or warrants plus the number of shares of Common Stock which could be purchased
at the Fair Market Value of a share of Common Stock at the time of such
issuance for the maximum aggregate consideration payable upon exercise in full
of all such rights or warrants and the denominator of which shall be the number
of shares of Common Stock outstanding immediately before such issuance of
rights or warrants plus the maximum number of shares of Common Stock that could
be acquired upon exercise in full of all such rights and warrants.
(C) In the event the Company shall, at any time or from
time to time while any of the shares of Series B Preferred Stock are
outstanding, issue, sell or exchange shares of Common Stock (other than
pursuant to any right or warrant to purchase or acquire shares of Common Stock
(including as such a right or warrant any security convertible into or
exchangeable for shares of Common Stock) and other than pursuant to any
employee or director
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<PAGE> 23
incentive or benefit plan or arrangement, including any employment, severance
or consulting agreement, of the Company or any subsidiary of the Company
heretofore or hereafter adopted) for a consideration having a Fair Market Value
on the date of such issuance, sale or exchange less than the Fair Market Value
of such shares on the date of such issuance, sale or exchange, then, subject to
the provisions of paragraphs (E) and (F) of this Section 9, the Conversion
Price shall be adjusted by multiplying such Conversion Price by the fraction
the numerator of which shall be the sum of (i) the Fair Market Value of all the
shares of Common Stock outstanding on the day immediately preceding the first
public announcement of such issuance, sale or exchange plus (ii) the Fair
Market Value of the consideration received by the Company in respect of such
issuance, sale or exchange of shares of Common Stock, and the denominator of
which shall be the product of (i) the Fair Market Value of a share of Common
Stock on the day immediately preceding the first public announcement of such
issuance, sale or exchange multiplied by (ii) the sum of the number of shares
of Common Stock outstanding on such day plus the number of shares of Common
Stock so issued, sold or exchanged by the Company. In the event the Company
shall, at any time or from time to time while any shares of Series B Preferred
Stock are outstanding, issue, sell or exchange any right or warrant to purchase
or acquire shares of Common Stock (including as such a right or warrant any
security convertible into or exchangeable for shares of Common Stock), other
than any such issuance to holders of shares of Common Stock as a dividend or
distribution (including by
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<PAGE> 24
way of a reclassification of shares or a recapitalization of the Company) and
other than pursuant to any employee or director incentive or benefit plan or
arrangement (including any employment, severance or consulting agreement) of
the Company or any subsidiary of the Company heretofore or hereafter adopted,
for a consideration having a Fair Market Value on the date of such issuance,
sale or exchange less than the Non-Dilutive Amount (as hereinafter defined),
then, subject to the provisions of paragraphs (E) and (F) of this Section 9,
the Conversion Price shall be adjusted by multiplying such Conversion Price by
a fraction the numerator of which shall be the sum of (i) the Fair Market Value
of all the shares of Common Stock outstanding on the day immediately preceding
the first public announcement of such issuance, sale or exchange plus (ii) the
Fair Market Value of the consideration received by the Company in respect of
such issuance, sale or exchange of such right or warrant plus (iii) the Fair
Market Value at the time of such issuance of the consideration which the
Company would receive upon exercise in full of all such rights or warrants, and
the denominator of which shall be the product of (i) the Fair Market Value of a
share of Common Stock on the day immediately preceding the first public
announcement of such issuance, sale or exchange multiplied by (ii) the sum of
the number of shares of Common Stock outstanding on such day plus the maximum
number of shares of Common Stock which could be acquired pursuant to such right
or warrant at the time of the issuance, sale or exchange of such right or
warrant
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(assuming shares of Common Stock could be acquired pursuant to such right or
warrant at such time).
(D) In the event the Company shall, at any time or from
time to time while any of the shares of Series B Preferred Stock are
outstanding, make an Extraordinary Distribution (as hereinafter defined) in
respect of the Common Stock, whether by dividend, distribution,
reclassification of shares or recapitalization of the Company (including a
recapitalization or reclassification effected by a merger or consolidation to
which Section 8 hereof does not apply) or effect a Pro Rata Repurchase (as
hereinafter defined) of Common Stock, the Conversion Price in effect
immediately prior to such Extraordinary Distribution or Pro Rata Repurchase
shall, subject to paragraphs (E) and (F) of this Section 9 be adjusted by
multiplying such Conversion Price by the fraction the numerator of which is (i)
the product of (x) the number of shares of Common Stock outstanding immediately
before such Extraordinary Distribution or Pro Rata Repurchase multiplied by (y)
the Fair Market Value (as herein defined) of a share of Common Stock on the
record date with respect to an Extraordinary Distribution, or on the applicable
expiration date (including all extensions thereof) of any tender offer which is
a Pro Rata Repurchase, or on the date of purchase with respect to any Pro Rata
Repurchase which is not a tender offer, as the case may be, minus (ii) the Fair
Market Value of the Extraordinary Distribution or the aggregate purchase price
of the Pro Rata Repurchase, as the case may be, and the denominator of which
shall be the product of (A) the number of shares of Common
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Stock outstanding immediately before such Extraordinary Dividend or Pro Rata
Repurchase minus, in the case of a Pro Rata Repurchase, the number of shares of
Common Stock repurchased by the Company multiplied by (B) the Fair Market Value
of a share of Common Stock on the record date with respect to an Extraordinary
Distribution or on the applicable expiration date including all extensions
thereof) of any tender offer which is a Pro Rata Repurchase or on the date of
purchase with respect to any Pro Rata Repurchase which is not a tender offer,
as the case may be. The Company shall send each holder of Series B Preferred
Stock (i) notice of its intent to make any dividend or distribution and (ii)
notice of any offer by the Company to make a Pro Rata Repurchase, in each case
at the same time as, or as soon as practicable after, such offer is first
communicated (including by announcement of a record date in accordance with the
rules of any stock exchange on which the Common Stock is listed or admitted to
trading) to holders of Common Stock. Such notice shall indicate the intended
record date and the amount and nature of such dividend or distribution, or the
number of shares subject to such offer for a Pro Rata Repurchase and the
purchase price payable by the Company pursuant to such offer, as well as the
Conversion Price and the number of shares of Common Stock into which a share of
Series B Preferred Stock may be converted at such time.
(E) Notwithstanding any other provisions of this Section
9, the Company shall not be required to make any adjustment of the Conversion
Price unless such adjustment would require an increase
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or decrease of at least one percent (1%) in the Conversion Price. Any lesser
adjustment shall be carried forward and shall be made no later than 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 one percent (1%) in the Conversion Price.
(F) If the Company shall make any dividend or
distribution on the Common Stock or issue any Common Stock, other capital stock
or other security of the Company or any rights or warrants to purchase or
acquire any such security, which transaction does not result in an adjustment
to the Conversion Price pursuant to the foregoing provisions of this Section 9,
the Board of Directors of the Company shall consider whether such action is of
such a nature that an adjustment to the Conversion Price should equitably be
made in respect of such transaction. If in such case the Board of Directors of
the Company determines that an adjustment to the Conversion Price should be
made, an adjustment shall be made effective as of such date, as determined by
the Board of Directors of the Company. The determination of the Board of
Directors of the Company as to whether an adjustment to the Conversion Price
should be made pursuant to the foregoing provisions of this paragraph 9(F),
and, if so, as to what adjustment should be made and when, shall be final and
binding on the Company and all stockholders of the Company. The Company shall
be entitled to make such additional adjustments in the Conversion Price, in
addition to those required by the foregoing provisions of
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this Section 9, as shall be necessary in order that any dividend or
distribution in shares of capital stock of the Company, subdivision,
reclassification or combination of shares of stock of the Company or any
recapitalization of the Company shall not be taxable to holders of the Common
Stock.
(G) For purposes of this Resolution, the following
definitions shall apply:
"Extraordinary Distribution" shall mean any dividend or other
distribution (effected while any of the shares of Series B Preferred Stock are
outstanding) (i) of cash, where the aggregate amount of such cash dividend or
distribution together with the amount of all cash dividends and distributions
made during the preceding period of 12 months, when combined with the aggregate
amount of all Pro Rata Repurchases (for this purpose, including only that
portion of the aggregate purchase price of such Pro Rata Repurchase which is in
excess of the Fair Market Value of the Common Stock repurchased as determined
on the applicable expiration date (including all extensions thereof) of any
tender offer or exchange offer which is a Pro Rata Repurchase, or the date of
purchase with respect to any other Pro Rata Repurchase which is not a tender
offer or exchange offer made during such period), exceeds twelve and one-half
per cent (12-1/2%) of the aggregate Fair Market Value of all shares of Common
Stock outstanding on the record date for determining the shareholders entitled
to receive such Extraordinary Distribution and (ii) any shares of capital stock
of the Company (other than shares of Common Stock), other securities
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of the Company (other than securities of the type referred to in paragraph (B)
of this Section 9), evidence of indebtedness of the Company or any other person
or any other property (including shares of any other person or any other
property (including shares of any subsidiary of the Company), or any
combination thereof. The Fair Market Value of an Extraordinary Distribution
for purposes of paragraph (D) of this Section 9 shall be the sum of the Fair
Market Value of such Extraordinary Distribution plus the amount of any cash
dividends which are not Extraordinary Distributions made during such twelve
month period and not previously included in the calculation of an adjustment
pursuant to paragraph (D) of this Section 9.
"Fair Market Value" shall mean, as to shares of Common Stock
or any other class of capital stock or securities of the Company or any other
issuer which are publicly traded, the average of the Current Market Prices (as
hereinafter defined) of such shares or securities for each day of the
Adjustment Period (as hereinafter defined). "Current Market Price" of publicly
traded shares of Common Stock or any other class of capital stock or other
security of the Company or any other issuer for a day shall mean the last
reported sales price, regular way, or, in case no sale takes place on such day,
the average of the reported closing bid and asked prices, regular way, in
either case as reported on the New York Stock Exchange Composite Tape or, if
such security is not listed or admitted to trading on the New York Stock
Exchange, on the principal national securities exchange on which such security
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is listed or admitted to trading or, if not listed or admitted to trading on
any national securities exchange, on the NASDAQ National Market System or, if
such security is not quoted on such National Market System, the average of the
closing bid and asked prices on each such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for such security on each such
day shall not have been reported through NASDAQ, the average of the bid and
asked prices for such day as furnished by any New York Stock Exchange member
firm regularly making a market in such security selected for such purpose by
the Board of Directors of the Company or a committee thereof on each trading
day during the Adjustment Period. "Adjustment Period" shall mean the period of
five (5) consecutive trading days, selected by the Board of Directors of the
Company or a committee thereof, during the 20 trading days preceding, and
including, the date as of which the Fair Market Value of a security is to be
determined. The "Fair Market Value" of any security which is not publicly
traded or of any other property shall mean the fair value thereof as determined
by an independent investment banking or appraisal firm experienced in the
valuation of such securities or property selected in good faith by the Board of
Directors of the Company or a committee thereof, or, if no such investment
banking or appraisal firm is in the good faith judgment of the Board of
Directors or such committee available to make such determination, as determined
in good faith by the Board of Directors of the Company or such committee.
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"Non-Dilutive Amount" in respect of an issuance, sale or
exchange by the Company of any right or warrant to purchase or acquire shares
of Common Stock (including any security convertible into or exchangeable for
shares of Common Stock) shall mean the remainder of (i) the product of the Fair
Market Value of a share of Common Stock on the day preceding the first public
announcement of such issuance, sale or exchange multiplied by the maximum
number of shares of Common Stock which could be acquired on such date upon the
exercise in full of such rights and warrants (including upon the conversion or
exchange of all such convertible or exchangeable securities), whether or not
exercisable (or convertible or exchangeable) at such date, minus (ii) the
aggregate amount payable pursuant to such right or warrant to purchase or
acquire such maximum number of shares of Common Stock; provided, however, that
in no event shall the Non-Dilutive Amount be less than zero. For purposes of
the foregoing sentence, in the case of a security convertible into or
exchangeable for shares of Common Stock, the amount payable pursuant to a right
or warrant to purchase or acquire shares of Common Stock shall be the Fair
Market Value of such security on the date of the issuance, sale or exchange of
such security by the Company.
"Pro Rata Repurchase" shall mean any purchase of shares of
Common Stock by the Company or any subsidiary thereof, whether for cash, shares
of capital stock of the Company, other securities of the Company, evidence of
indebtedness of the Company or any other person or any other property
(including shares of a
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subsidiary of the Company), or any combination thereof, effected while any of
the shares of Series B Preferred Stock are outstanding, pursuant to any tender
offer or exchange offer subject to Section 13(e) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or any successor provision of law, or
pursuant to any other offer available to substantially all holders of Common
Stock; provided, however, that no purchase of shares by the Company or any
subsidiary thereof made in open market transactions shall be deemed a Pro Rata
Repurchase. For purposes of this paragraph 9(G), shares shall be deemed to
have been purchased by the Company or any subsidiary thereof "in open market
transactions" if they have been purchased substantially in accordance with the
requirements of Rule 10b-18 as in effect under the Exchange Act, on the date
shares of Series B Preferred Stock are initially issued by the Company or on
such other terms and conditions as the Board of Directors of the Company or a
committee thereof shall have determined are reasonably designed to prevent such
purchases from having a material effect on the trading market for the Common
Stock.
(H) Whenever an adjustment to the Conversion Price and
the related voting rights of the Series B Preferred Stock is required pursuant
to this Resolution, the Company shall forthwith place on file with the transfer
agent for the Common Stock and the Series B Preferred Stock if there be one,
and with the Secretary of the Company, a statement signed by two officers of
the Company stating the adjusted Conversion Price determined as provided herein
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and the resulting conversion ratio, and the voting rights (as appropriately
adjusted), of the Series B Preferred Stock. Such statement shall set forth in
reasonable detail such facts as shall be necessary to show the reason and the
manner of computing such adjustment, including any determination of Fair Market
Value involved in such computation. Promptly after each adjustment to the
Conversion Price and the related voting rights of the Series B Preferred Stock,
the Company shall mail a notice thereof and the then prevailing conversion
ratio to each holder of shares of the Series B Preferred Stock.
Section 10. Ranking; Attributable Capital and Adequacy of
Surplus; Retirement of Shares.
(A) The Series B Preferred Stock shall rank senior to the
Series A Preferred Stock and the Common Stock as to the payment of dividends
and the distribution of assets on liquidation, dissolution and winding up of
the Company, and, unless otherwise provided in the Restated Certificate of
Incorporation of the Company, as amended, or a Certificate of Designations
relating to a subsequent series of Preferred Stock, without par value, of the
Company, the Series B Preferred Stock shall rank junior to all other series of
the Company's Preferred Stock, without par value, as to the payment of
dividends and the distribution of assets on liquidation, dissolution or winding
up.
(B) The capital of the Company allocable to the Series B
Preferred Stock for purposes of the Delaware General Corporation Law (the
"Corporation Law") shall be $600.00 per share. In addition to any vote of
stockholders required by law, the vote of
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the holders of a majority of the outstanding shares of Series B Preferred Stock
shall be required to increase the par value of the Common Stock or otherwise
increase the capital of the Company allocable to the Common Stock for the
purpose of the Corporation Law if, as a result thereof, the surplus of the
Company for purposes of the Corporation Law would be less than the amount of
Preferred Dividends that would accrue on the then outstanding shares of Series
B Preferred Stock during the following three years.
(C) Any shares of Series B Preferred Stock acquired by
the Company by reason of the conversion or redemption of such shares as
provided by this Resolution, or otherwise so acquired, shall be retired as
shares of Series B Preferred Stock and restored to the status of authorized but
unissued shares of preferred stock, without par value, of the Company,
undesignated as to series, and may thereafter be reissued as part of a new
series of such preferred stock as permitted by law.
Section 11. Miscellaneous.
(A) all notices referred to herein shall be in writing,
and all notices hereunder shall be deemed to have been given upon the earlier
of receipt thereof or three (3) business days after the mailing thereof if sent
by registered mail (unless first-class mail shall be specifically permitted for
such notice under the terms of this Resolution) with postage prepaid,
addressed: (i) if to the Company, to its office at 14841 North Dallas Parkway,
Dallas, Texas 75240 (Attention: Secretary) or to the transfer agent for the
34
<PAGE> 35
Series B Preferred Stock, or other agent of the Company designated as permitted
by this Resolution or (ii) if to any holder of the Series B Preferred Stock or
Common Stock, as the case may be, to such holder at the address of such holder
as listed in the stock record books of the company (which may include the
records of any transfer agent for the Series B Preferred Stock or Common Stock,
as the case may be) or (iii) to such other address as the Company or any such
holder, as the case may be, shall have designated by notice similarly given.
(B) The term "Common Stock" as used in this Resolution
means the Company's Common Stock of 50c par value, as the same exists at the
date of filing of a Certificate of Designations relating to Series B Preferred
Stock or any other class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
In the event that, at any time as a result of an adjustment made pursuant to
Section 9 of this Resolution, the holder of any share of the Series B Preferred
Stock upon thereafter surrendering such shares for conversion shall become
entitled to receive any shares or other securities of the Company other than
shares of Common Stock, the Conversion Price in respect of such other shares or
securities so receivable upon conversion of shares of Series B Preferred Stock
shall thereafter be adjusted, and shall be subject to further adjustment from
time to time, in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to Common
35
<PAGE> 36
Stock contained in Section 9 hereof, and the provisions of Sections 1 through 8
and 10 and 11 of this Resolution with respect to the Common Stock shall apply
on like or similar terms to any such other shares or securities.
(C) The Company shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance or
delivery of shares of Series B Preferred Stock or shares of Common Stock or
other securities issued on account of Series B Preferred Stock pursuant hereto
or certificates representing such shares or securities. The Company shall not,
however, be required to pay any such tax which may be payable in respect of any
transfer involved in the issuance or delivery of shares of Series B Preferred
Stock or Common Stock or other securities in a name other than that in which
the shares of Series B Preferred Stock with respect to which such shares or
other securities are issued or delivered were registered, or in respect of any
payment to any person with respect to any such shares or securities other than
a payment to the registered holder thereof, and shall not be required to make
any such issuance, delivery or payment unless and until the person otherwise
entitled to such issuance, delivery or payment has paid to the Company the
amount of any such tax or has established, to the satisfaction of the Company,
that such tax has been paid or is not payable.
(D) In the event that a holder of shares of Series B
Preferred Stock shall not by written notice designate the name in which shares
of Common Stock to be issued upon conversion of such
36
<PAGE> 37
shares should be registered or to whom payment upon redemption of shares of
Series B Preferred Stock should be made or the address to which the certificate
or certificates representing such shares, or such payment, should be sent, the
Company shall be entitled to register such shares, and make such payment, in
the name of the holder of such Series B Preferred Stock as shown on the records
of the Company and to send the certificate or certificates representing such
shares, or such payment, to the address of such holder shown on the records of
the Company.
(E) Unless otherwise provided in the Restated Certificate
of Incorporation, as amended, of the Company, all payments in the form of
dividends, distributions on voluntary or involuntary dissolution, liquidation
or winding-up or otherwise made upon the shares of Series B Preferred Stock and
any other stock ranking on a parity with the Series B Preferred Stock with
respect to such dividend or distribution shall be made pro rata, so that
amounts paid per share on the Series B Preferred Stock and such other stock
shall in all cases bear to each other the same ratio that the required
dividends, distributions or payments, as the case may be, then payable per
share on the shares of the Series B Preferred Stock and such other stock bear
to each other.
(F) The Company may appoint, and from time to time
discharge and change, a transfer agent for the Series B Preferred Stock. Upon
any such appointment or discharge of a transfer agent, the Company shall send
notice thereof by first-class mail, postage prepaid, to each holder of record
of Series B Preferred Stock.
37
<PAGE> 38
IN WITNESS WHEREOF, I have executed and subscribed this
Certificate of Designations and do affirm the foregoing as true under the
penalties of perjury this 29th day of August, 1988.
/S/ William R. Howell
----------------------
William R. Howell
Chairman of the Board
ATTEST:
/S/ Charles R. Lotter
- - ----------------------
Charles R. Lotter
Secretary
38
<PAGE> 1
Exhibit 7(c)(6)
AMENDED
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
(Without Par Value)
OF
J. C. PENNEY COMPANY, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
J. C. Penney Company, Inc., a corporation organized and
existing under the laws of the State of Delaware (the "Company"), DOES HEREBY
CERTIFY:
1. That by resolution of the Board of Directors of the
Company dated January 28, 1986, and by a Certificate of Designations filed in
the office of the Secretary of State of State of Delaware on January 29, 1986,
the Company authorized the issuance of a series of 1,600,000 shares of Series A
Junior Participating Preferred Stock of the Company (the "Series A Preferred
Stock") and established the voting powers, designations, preferences and
relative, participating and other rights, and the qualifications, limitations
or restrictions thereof.
2. That as of the date hereof no shares of such Series A
Preferred Stock are outstanding and no shares of such Series A Preferred Stock
have been issued.
3. That pursuant to authority conferred on the Board Of
Directors of the Company by its Restated Certificate of Incorporation, as
amended ("Restated Certificate of Incorporation")
<PAGE> 2
and the provisions of Section 151(g) of the General Corporation Law of the
State of Delaware, the Board of Directors on January 30, 1990 adopted the
following resolution amending in their entireties the voting powers,
preferences, and relative, participating, optional or other special rights of
the shares of the Series A Preferred Stock, and the qualifications, limitations
or restrictions thereof effective upon the redemption of the rights (the "1986
Rights") issued pursuant to the Rights Agreement between the Company and Morgan
Guaranty Trust Company, as Agent, dated January 28, 1986.
RESOLVED, that effective upon the redemption of the 1986
Rights in accordance with these resolutions and pursuant to the authority
conferred upon the Board of Directors of the Company by its Restated
Certificate of Incorporation and by the provisions of Section 151(g) of the
General Corporation Law of the State of Delaware, the voting powers,
preferences and relative participating, optional or other special rights of the
Series A Junior Preferred Stock of the Company, and the qualifications,
limitations or restrictions thereof, be, and the same hereby are, amended in
their entireties to be as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated "Series A Junior Participating Preferred Stock" ("Series A
Preferred Stock") and the number of shares constituting such series shall be
1,600,000.
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter
set forth, the holders of shares of Series A Preferred Stock shall
<PAGE> 3
be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, (i) cash dividends in an amount per
share (rounded to the nearest cent) equal to 200 times the aggregate per share
amount of all cash dividends declared or paid on the Common Stock, 50 cents par
value per share, of the Company ("Common Stock") and (ii) a preferential cash
dividend (a "Preferential Dividend"), if any, on the first day of February,
May, August and November of each year (each a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock, in an
amount equal to $50.00 per share of Series A Preferred Stock less the per share
amount of all cash dividends declared on the Series A Preferred Stock pursuant
to clause (i) of this sentence since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Company shall, at any time after the
issuance of any share or fraction of a share of Series A Preferred Stock, make
any distribution on the shares of Common Stock, whether by way of a dividend or
a reclassification of stock, a recapitalization, reorganization or partial
liquidation of the Company or otherwise, which is payable in cash or any debt
security, debt instrument, real or personal property or any other property
(other than cash dividends subject to clause (i) of the immediately preceding
sentence and other than a distribution of shares of Common Stock or other
capital stock of the Company and other than a distribution of
<PAGE> 4
rights or warrants to acquire any such share, including any debt security
convertible into or exchangeable for any such share), at a price less than the
Current Market Price of such share, then and in each such event the Company
shall simultaneously pay on each then outstanding share of Series A Preferred
Stock of the Company a distribution, in like kind, of 200 times (subject to the
provisions for adjustment hereinafter set forth) such distribution paid on a
share of Common Stock. The dividends and distributions on the Series A
Preferred Stock to which holders thereof are entitled pursuant to clause (i) of
the first sentence of this paragraph and the second sentence of this paragraph
are hereinafter referred to as "Participating Dividends," and the multiple of
cash and noncash dividends on the Common Stock applicable to the determination
of the Participating Dividends, which shall be 200 initially but shall be
adjusted from time to time as hereinafter provided, is hereinafter referred to
as the "Dividend Multiple." In the event the Company shall at any time after
February 14, 1990 declare or pay any dividend or make any distribution on
Common Stock payable in shares of Common Stock, or effect a subdivision or
split or a combination, consolidation or reverse split of the outstanding
shares of Common Stock into a greater or lesser number of shares of Common
Stock, then in each such event the Dividend Multiple thereafter applicable to
the determination of the amount of Participating Dividends which holders of
shares of Series A Preferred Stock shall be entitled to receive shall be the
Dividend Multiple applicable immediately prior to such event multiplied by a
fraction the numerator of which is the number of shares of Common
<PAGE> 5
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided for or fixed by or
pursuant to the provisions of Article Fourth of the Restated Certificate of
Incorporation of the Company relating to the rights of holders of any class or
series of stock having a preference over the Common Stock as to dividends, the
Company shall declare each Participating Dividend at the same time it declares
any cash or noncash dividend or distribution on the Common Stock in respect of
which a Participating Dividend is required to be paid. No cash or noncash
dividend or distribution on the Common Stock in respect of which a
Participating Dividend is required shall be paid or set aside for payment on
the Common Stock unless a Participating Dividend in respect of such dividend or
distribution on the Common Stock shall be simultaneously paid or set aside for
payment on the Series A Preferred Stock.
(C) Preferential Dividends shall begin to accumulate on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of any shares of Series A
Preferred Stock. Accumulated but unpaid Preferential Dividends shall cumulate
but shall not bear interest. Preferential Dividends paid on the shares of
Series A Preferred Stock in an amount less than the total amount of such
dividends at the time accumulated and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding.
<PAGE> 6
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 200 votes on all matters submitted to a vote of the stockholders of
the Company. The number of votes which a holder of Series A Preferred Stock is
entitled to cast, as the same may be adjusted from time to time as hereinafter
provided, is hereinafter referred to as the "Vote Multiple." In the event the
Company shall at any time after February 14, 1990 declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a subdivision or
split or a combination, consolidation or reverse split of the outstanding
shares of Common Stock into a greater or lesser number of shares of Common
Stock, then in each such case the Vote Multiple thereafter applicable to the
determination of the number of votes per share to which holders of shares of
Series A Preferred Stock shall be entitled after such event shall be the Vote
Multiple immediately prior to such event multiplied by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Restated
Certificate of Incorporation, in any resolution or resolutions of the Board of
Directors of the Company providing for the issue of any other series of
Preferred Stock or by law, the holders of shares of Series A Preferred Stock,
the holders of shares of Common
<PAGE> 7
Preferential Dividends upon the outstanding shares of Series A Preferred Stock
shall have been paid (or set aside for payment) in full. The holders of shares
of Series A Preferred Stock shall continue to have the right to elect directors
as provided by the immediately preceding sentence until all accrued and unpaid
Stock and the holders of shares of any other class or series of capital stock
of the Company entitled to vote generally for the election of directors shall
vote together as one class on all matters submitted to a vote of stockholders
of the Company.
(C) In the event that the Preferential Dividends accrued
on the Series A Preferred Stock for four or more consecutive quarterly dividend
periods shall not have been declared and paid or set apart for payment, the
holders of record of the Series A Preferred Stock, voting together with the
holders of record of any other series of Preferred Stock of the Company which
shall then have the right, expressly granted by the Restated Certificate of
Incorporation of the Company or in any resolution or resolutions of the Board
of Directors of the Company providing for the issue of such shares of Preferred
Stock, to elect directors upon such a default in the payment of dividends by
the Company, shall have the right, at the next meeting of stockholders called
for the election of directors, voting together as a class, to elect two members
to the Board of Directors, which directors shall be in addition to the number
provided for pursuant to the Company's By-laws prior to such event, to serve
until the next Annual Meeting and until their successors are elected and
qualified or their earlier resignation, removal or incapacity or until such
earlier time as all accrued and unpaid
<PAGE> 8
Preferential Dividends upon the outstanding shares of Series A Preferred Stock
shall have been paid (or set aside for payment) in full. The holders of
shares of Series A Preferred Stock shall continue to have the right to elect
directors as provided by the immediately preceding sentence until all accrued
and unpaid Preferential Dividends upon the outstanding shares of Series A
Preferred Stock shall have been paid (or set aside for payment) in full. Such
directors may be removed and replaced by such stockholders, and vacancies in
such directorships may be filled only by such stockholders (or by the remaining
director elected by such stockholders, if there be one) in the manner permitted
by law. Subject to the foregoing, any directors elected pursuant to this
paragraph 3(C) shall be elected annually and shall not constitute members of
any Class of directors as contemplated by Article Sixth of the Company's
Restated Certificate of Incorporation.
(D) Except as otherwise required by law or set forth
herein, holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are entitled
to vote as set forth herein) for the taking of any corporate action.
Section 4. Certain Restrictions.
(A) Whenever Preferential Dividends or Participating
Dividends are in arrears or the Company shall be in default in payment thereof,
thereafter and until all accumulated and unpaid Preferential Dividends and
Participating Dividends, whether or not declared, on shares of Series A
Preferred Stock outstanding shall have been paid or set aside for payment in
full, and in addition to any and all other rights which any holder of shares of
Series A Preferred Stock may have in such circumstances, the Company shall not
(i) declare or pay dividends on, make any other
distributions on or redeem or purchase or otherwise acquire for
<PAGE> 9
consideration any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends or make any other
distributions on any shares of stock ranking on a parity as to dividends with
the Series A Preferred Stock, unless dividends are paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) except as permitted by subparagraph (iv) of this
paragraph (A), redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, provided that the
Company may at any time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any stock of the Company ranking
junior (both as to dividends and upon liquidation, dissolution or winding up)
to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock (either as to dividends or upon liquidation,
dissolution or winding up), except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
<PAGE> 10
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company ranking junior to the Series A Preferred Stock unless the Company
could, under paragraph (A) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
(C) The Company shall not issue any shares of Series A Preferred
Stock except upon exercise of Rights issued pursuant to that certain Rights
Agreement dated as of February 14, 1990 between the Company and First Chicago
Trust Company of New York (the "Rights Agreement"), a copy of which is on file
with the Secretary of the Company at the principal executive office of the
Company and shall be made available to holders of record of Common Stock or
Series A Preferred Stock without charge upon written request therefor addressed
to the Secretary of the Company. Notwithstanding the foregoing sentence,
nothing contained in the provisions hereof shall prohibit or restrict the
Company from issuing for any purpose any series of Preferred Stock with rights
and privileges similar to, different from, or greater than those of the Series
A Preferred Stock.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall
be retired and cancelled promptly after the acquisition thereof.
<PAGE> 11
Section 6. Liquidation, Dissolution or Winding Up. Upon any
voluntary or involuntary liquidation, dissolution or winding up of the Company,
no distribution shall be made (i) to the holders of shares of stock ranking
junior to the Series A Preferred Stock (either as to dividends or upon
liquidation, dissolution or winding up) unless the holders of shares of Series
A Preferred Stock shall have received, subject to adjustment as hereinafter
provided, the greater of (A) $200.00 per share plus an amount equal to all
accumulated and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, and (B) the amount equal to 200 times
the aggregate amount to be distributed per share to holders of Common Stock, or
(ii) to the holders of stock ranking on a parity upon liquidation, dissolution
or winding up with the Series A Preferred Stock, unless simultaneously
therewith distributions are made ratably on the Series A Preferred Stock and
all other shares of such parity stock in proportion to the total amounts to
which the holders of shares of Series A Preferred Stock are entitled under
clause (i)(A) of this sentence and to which the holders of such parity shares
are entitled, in each case upon such liquidation, dissolution or winding up.
The amount to which holders of Series A Preferred Stock shall be entitled upon
liquidation, dissolution or winding up of the Company pursuant to clause (i)(B)
of the foregoing sentence is hereinafter referred to as the "Participating
Liquidation Amount," and the multiple of the amount to be distributed to
holders of shares of Common Stock upon the liquidation, dissolution or winding
up of the Company applicable pursuant to said clause to the determination of
the
<PAGE> 12
Participating Liquidation Amount, which shall be 200 initially but shall be
adjusted from time to time as hereinafter provided, is hereinafter referred to
as the "Liquidation Multiple." In the event the Company shall at any time
after February 14, 1990 declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, then in each such case the
Liquidation Multiple thereafter applicable to the determination of the
Participating Liquidation Amount to which holders of Series A Preferred Stock
shall be entitled after such event shall be the Liquidation Multiple applicable
immediately prior to such event multiplied by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. Certain Reclassification and Other Events.
(A) In the event that holders of shares of Common Stock receive
after February 14, 1990 in respect of their shares of Common Stock any share of
capital stock of the Company (other than any share of Common Stock of the
Company), whether by way of reclassification, recapitalization, reorganization,
dividend or other distribution or otherwise ("Transaction"), then in each such
event the dividend rights and rights upon the liquidation, dissolution or
winding up of the Company of the shares of Series A Preferred Stock shall be
adjusted so that after such event the
<PAGE> 13
holders of Series A Preferred Stock shall be entitled, in respect of each share
of Series A Preferred Stock held, in addition to such rights in respect thereof
to which such holder was entitled immediately prior to such adjustment, to (i)
such additional dividends as equal the Dividend Multiple in effect immediately
prior to such Transaction multiplied by the additional dividends which the
holder of a share of Common Stock shall be entitled to receive by virtue of the
receipt in the Transaction of such capital stock, (ii) such additional voting
rights as equal the Vote Multiple in effect immediately prior to such
Transaction multiplied by the additional voting rights which the holder of a
share of Common Stock shall be entitled to receive by virtue of the receipt in
the Transaction of such capital stock, and (iii) such additional distributions
upon liquidation, dissolution or winding up of the Company as equal the
Liquidation Multiple in effect immediately prior to such Transaction multiplied
by the additional amount which the holder of a share of Common Stock shall be
entitled to receive upon liquidation, dissolution or winding up of the Company
by virtue of the receipt in the Transaction of such capital stock, as the case
may be, all as provided by the terms of such capital stock.
(B) In the event that holders of shares of Common Stock
receive after February 14, 1990 in respect of their shares of Common Stock any
right or warrant to purchase Common Stock (including as such a right, for all
purposes of this paragraph, any security convertible into or exchangeable for
Common Stock) at a purchase price per share less than the Current Market Price
(as
<PAGE> 14
hereinafter defined) of a share of Common Stock on the date of issuance of such
right or warrant, then in each such event the dividend rights, voting rights
and rights upon the liquidation, dissolution or winding up of the Company of
the shares of Series A Preferred Stock shall each be adjusted so that after
such event the Dividend Multiple, the Vote Multiple and the Liquidation
Multiple shall each be the product of the Dividend Multiple, the Vote Multiple
and the Liquidation Multiple, as the case may be, in effect immediately prior
to such event multiplied by a fraction the numerator of which shall be the
number of shares of Common Stock outstanding immediately before such issuance
of rights or warrants plus the maximum number of shares of Common Stock which
could be acquired upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number of
shares of Common Stock which could be purchased, at the Current Market Price of
the Common Stock at the time of such issuance, by the maximum aggregate
consideration payable upon exercise in full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock
receive after February 14, 1990 in respect of their shares of Common Stock any
right or warrant to purchase capital stock of the Company (other than shares of
Common Stock), including as such a right, for all purposes of this paragraph,
any security convertible into or exchangeable for capital stock of the Company
(other than Common Stock), at a purchase price per share less than the Current
Market Price of such shares of capital stock on the date of
<PAGE> 15
issuance of such right or warrant, then in each such event the dividend rights,
voting rights and rights upon liquidation, dissolution or winding up of the
Company of the shares of Series A Preferred Stock shall each be adjusted so
that after such event each holder of a share of Series A Preferred Stock held,
in addition to such rights in respect thereof to which such holder was entitled
immediately prior to such event, to receive (i) such additional dividends as
equal the Dividend Multiple in effect immediately prior to such event
multiplied, first, by the additional dividends to which the holder of a share
of Common Stock shall be entitled upon exercise of such right or warrant by
virtue of the capital stock which could be acquired upon such exercise and
multiplied again by the Discount Fraction (as hereinafter defined), (ii) such
additional voting rights as equal the Vote Multiple in effect immediately prior
to the event multiplied, first, by the additional voting rights to which the
holder of a share of Common Stock shall be entitled upon exercise of such right
or warrant by virtue of the capital stock which could be acquired upon such
exercise and multiplied, again, by the Discount Fraction, and (iii) such
additional distributions upon liquidation, dissolution or winding up of the
Company as equal the Liquidation Multiple in effect immediately prior to such
event multiplied, first, by the additional amount which the holder of a share
of Common Stock shall be entitled to receive upon liquidation, dissolution or
winding up of the Company upon exercise of such right or warrant by virtue of
the capital stock which could be acquired upon such exercise and multiplied
again by the Discount Fraction. For purposes of this
<PAGE> 16
paragraph, the "Discount Fraction" shall be a fraction the numerator of which
shall be the difference between the Current Market Price (as hereinafter
defined) of a share of the capital stock subject to a right or warrant
distributed to holders of shares of Common Stock as contemplated by this
paragraph immediately after the distribution thereof and the purchase price per
share for such share of capital stock pursuant to such right or warrant and the
denominator of which shall be the Current Market Price of a share of such
capital stock immediately after the distribution of such right or warrant.
(D) For purposes of this Section 7, the "Current Market
Price" of a share of capital stock of the Company (including a share of Common
Stock) on any date shall be deemed to be the average of the daily closing
prices per share thereof over the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, provided that in the event
that such Current Market Price of any such share of capital stock is determined
during a period which includes any date that is within 30 Trading Days after
the ex-dividend date for (i) a dividend or distribution on stock payable in
shares of such stock or securities convertible into shares of such stock or
(ii) any subdivision, split, combination, consolidation, reverse stock split or
reclassification of such stock, then in each such event, the Current Market
Price shall be appropriately adjusted by the Board of Directors to reflect the
Current Market Price of such stock to take into account ex-dividend trading.
The closing price for any day shall be the last sale price, regular way, or, in
case no such
<PAGE> 17
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares are
listed or admitted to trading or, if the shares are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then
in use, or if on any such date the shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the shares selected by the Board
of Directors. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares are listed or admitted to
trading is open for the transaction of business or, if the shares are not
listed or admitted to trading on any national securities exchange, on which the
New York Stock Exchange or such other national securities exchange as may be
selected by the Board of Directors is open. If the shares are not publicly
held or not so listed or traded on any day within the period of 30 Trading Days
applicable to the determination of Current Market Price thereof as
<PAGE> 18
aforesaid, "Current Market Price" shall mean the fair market value thereof per
share as determined in good faith by the Board of Directors. In either case
referred to in the foregoing sentence, the determination of Current Market
Price shall be described in a statement filed with the Secretary of the
Company.
Section 8. Consolidation, Merger, etc. In the event
that the Company shall enter into any consolidation, merger, combination or
other transaction in which shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such event each outstanding share of Series A Preferred Stock shall at the same
time be similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and other property (payable in like kind), as the case may be,
for which or into which each share of Common Stock is changed or exchanged
multiplied by the highest of the Dividend Multiple, the Vote Multiple or the
Liquidation Multiple in effect immediately prior to such event.
Section 9. Effective Time of Adjustments.
(A) Adjustments to the Series A Preferred Stock required
by the provisions hereof shall be effective as of the time at which the event
requiring such adjustments occurs.
(B) The Company shall give prompt written notice to each
holder of a share of Series A Preferred Stock of the effect on any such shares
of any adjustment to the dividend rights, voting rights or rights upon
liquidation, dissolution or winding up of the Company required by the
provisions hereof. Notwithstanding the
<PAGE> 19
foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of or the requirement for such
adjustment.
Section 10. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable at the option of the Company or any holder
thereof. Notwithstanding the foregoing sentence of this Section, the Company
may acquire shares of Series A Preferred Stock in any other manner permitted by
law, the provisions of the Amended Certificate of Designations setting forth
the rights, powers and preferences of the Series A Preferred Stock and the
Restated Certificate of Incorporation of the Company.
Section 11. Ranking. Unless otherwise provided in the
Restated Certificate of Incorporation or a certificate of designations relating
to a subsequent series of Preferred Stock of the Company, the Series A
Preferred Stock shall rank junior to all other series of the Company's
Preferred Stock as to the payment of dividends and the distribution of assets
on liquidation, dissolution or winding up, and senior to the Common Stock.
Section 12. Amendment. After the Distribution Date (as
defined in the Rights Agreement), the provisions of the Amended Certificate of
Designations setting forth the rights, powers and preferences of the Series A
Preferred Stock and the Restated Certificate of Incorporation shall not be
amended in any manner which would materially affect the rights, privileges or
powers of the Series A Preferred Stock without, in addition to any other vote
of stockholders required by law, the affirmative vote of the holders of 66 2/3%
or more of the outstanding shares of Series A
<PAGE> 20
Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, J. C. Penney Company, Inc. has caused this
Amended Certificate of Designations to be signed and attested this
February 15, 1990.
J. C. PENNEY COMPANY, INC.
By /S/ C. R. Lotter
------------------------
Name: C. R. Lotter
Title: Senior Vice President
ATTEST:
/S/ T. M. Comerford
- - ----------------------------
Name: T. M. Comerford
Title: Assistant Secretary
<PAGE> 1
Exhibit 7(c)(7)
CONFORMED COPY
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
J. C. PENNEY COMPANY, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware
("Company"), does hereby certify:
First: That at a meeting of the Board of Directors of the Company held on
March 9, 1994, a resolution was duly adopted setting forth a proposed amendment
to the Restated Certificate of Incorporation of the Company, as amended,
declaring said amendment to be advisable, and directing that said amendment be
submitted for consideration by the stockholders at the Annual Meeting of
Stockholders of the Company to be held on May 20, 1994. The resolution setting
forth the proposed amendment is as follows:
RESOLVED that the Board of Directors hereby declares it
advisable that the first paragraph of Article Fourth of the Restated
Certificate of Incorporation of the Company, as amended, be further
amended to read as follows ("Amendment"):
"FOURTH: The total number of shares of all classes of stock
which the Company shall have authority to issue is
1,275,000,000 shares, of which 25,000,000 shares shall be
shares of Preferred Stock without par value (hereinafter
called Preferred Stock) and 1,250,000,000 shares shall be
shares of Common Stock of 50c. par value (hereinafter called
Common Stock)."
Second: That thereafter, pursuant to resolutions of its Board of Directors, at
the Annual Meeting of Stockholders of the Company duly called and held on May
20, 1994, upon notice in accordance with Section 222 of the General Corporation
Law of the State of Delaware, the necessary number of shares as required by
statute were voted in favor of the amendment.
<PAGE> 2
Third: That said amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Certificate to be
signed in its name by its Chairman of the Board and attested by an Assistant
Secretary, this 25th day of May, 1994.
J. C. PENNEY COMPANY, INC.
/S/ W. R. Howell
W. R. Howell
Chairman of the Board
Attest:
/S/ T. M Comerford
T. M. Comerford
Assistant Secretary
