As filed with the Securities and Exchange Commission on December 16, 1996
Registration No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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MORGAN STANLEY GROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-2838811
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1585 Broadway
New York, New York 10036
(212) 761-4000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
--------------------------------------------
Ralph L. Pellecchio
Assistant Secretary
Morgan Stanley Group Inc.
1585 Broadway
New York, New York 10036
(212) 761-4000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies To:
Jerry V. Elliott John M. Brandow
Shearman & Sterling Davis Polk & Wardwell
599 Lexington Avenue 450 Lexington Avenue
New York, New York 10022 New York, New York 10017
____________________________________
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this registration statement becomes effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act"), check the following
box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.|_|
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================================================
Title of each class of securities Amount to Proposed maximum Proposed maximum
to be registered be registered offering price per security (1) aggregate offering price (1)
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<S> <C> <C> <C>
Debt Securities.......................
Warrants (2)..........................
Preferred Stock (3)................... $6,000,000,000 (7) (8) 100% $6,000,000,000
Depositary Shares (4).................
Purchase Contracts (5)................
Units(6) .............................
==================================================================================================================================
</TABLE>
<TABLE>
===================================================================
Title of each class of securities Amount of
to be registered registration fee
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<S> <C>
Debt Securities.......................
Warrants (2)..........................
Preferred Stock (3)................... $1,818,182
Depositary Shares (4).................
Purchase Contracts (5)................
Units(6) .............................
===========================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee.
(2) There are being registered hereby such indeterminate number of Warrants as
may be issued by the Registrant at indeterminate prices. Such Warrants may
be issued together with any Debt Securities or Purchase Contracts or both.
Warrants may be exercised to purchase Debt Securities registered hereby or
to purchase or sell (i) securities of an entity unaffiliated with the
Registrant, a basket of such securities, an index or indices of such
securities or any combination of the above, (ii) currencies or composite
currencies or (iii) commodities.
(3) There are being registered hereby such indeterminate number of shares of
Preferred Stock as may from time to time be issued at indeterminate prices.
(4) There are being registered hereby such indeterminate number of Depositary
Shares as may be issued in the event that the Registrant elects to offer
fractional interests in shares of the Preferred Stock registered hereby.
(5) There are being registered hereby such indeterminate number of Purchase
Contracts as may be issued by the Registrant at indeterminate prices. Such
Purchase Contracts may be issued together with any Debt Securities or
Warrants or both. Purchase Contracts may require the holders thereof to
purchase or sell (i) securities of an entity unaffiliated with the
Registrant, a basket of such securities, an index or indices of such
securities or any combination of the above, (ii) currencies or composite
currencies or (iii) commodities.
(6) There are being registered hereby such indeterminate number of Units as may
be issued at indeterminate prices. Units may consist of one or more
Purchase Contracts, Warrants and Debt Securities or any combination of the
above.
(7) This registration statement also relates to offers and sales of Debt
Securities, Warrants, Preferred Stock, Depositary Shares, Purchase
Contracts and Units (collectively, "Securities") in connection with
market-making transactions by and through affiliates of the Registrant
(subject, with respect to Preferred Stock and Depositary Shares, to
approval of the New York Stock Exchange in connection with market-making
transactions by and through Morgan Stanley & Co. Incorporated).
(8) Or, if any Debt Securities are issued at an original issue discount, such
greater amount as shall result in aggregate net proceeds not in excess of
$6,000,000,000 to the Registrant or if any Securities are issued with an
offering price payable in a foreign currency or composite currency, such
amount as shall result in an aggregate initial offering price equivalent to
$6,000,000,000 at the time of initial offering.
The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until the registration statement shall become effective on
such date as the Securities and Exchange Commission (the "Commission"), acting
pursuant to Section 8(a), may determine.
Pursuant to Rule 429 of the General Rules and Regulations under the
Securities Act, the Prospectus which is a part of this registration statement is
a combined Prospectus relating also to $540,824,239 of securities registered and
remaining unissued under registration statement no. 333-01655 previously filed
by the Registrant and declared effective by the Commission.
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<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS (Subject to Completion, Issued December 16, 1996)
$6,540,824,239
Morgan Stanley Group Inc.
DEBT SECURITIES
WARRANTS
PREFERRED STOCK
PURCHASE CONTRACTS
UNITS
---------------------------
Morgan Stanley Group Inc. (the "Company") may offer and issue from time
to time its debt securities ("Debt Securities") in one or more series. Debt
Securities may be issuable in registered form without coupons or in bearer form
with or without coupons attached. The Company also may issue and sell warrants
to purchase Debt Securities ("Debt Warrants") or to purchase or sell (i)
securities of an entity unaffiliated with the Company, a basket of such
securities, an index or indices of such securities or any combination of the
above, (ii) currencies or composite currencies or (iii) commodities ("Universal
Warrants," and together with Debt Warrants, the "Warrants"), as set forth in the
applicable Prospectus Supplement on terms to be determined at the time of sale.
The Company also may offer and issue from time to time purchase contracts
("Purchase Contracts") requiring the holders thereof to purchase or sell (i)
securities of an entity unaffiliated with the Company, a basket of such
securities, an index or indices of such securities or any combination of the
above, (ii) currencies or composite currencies or (iii) commodities, as set
forth in the applicable Prospectus Supplement on terms to be determined at the
time of sale. The Company may satisfy its obligations, if any, with respect to
any Universal Warrants or Purchase Contracts by delivering the underlying
securities, currencies or commodities or, in the case of underlying securities
or commodities, the cash value thereof, as set forth in the applicable
Prospectus Supplement. Debt Securities, Purchase Contracts and Warrants or any
combination thereof may be offered in the form of Units ("Units").
Units may be issued as Definitive Units or Book-Entry Units.
The Company will offer Debt Securities, Warrants, Purchase Contracts
and Units to the public on terms determined by market conditions. Debt
Securities, Warrants, Purchase Contracts and Units may be sold for U.S. dollars,
foreign denominated currency or currency units; principal of and any interest on
Debt Securities and cash amounts payable with respect to Warrants or Purchase
Contracts may likewise be payable in U.S. dollars, foreign denominated currency
or currency units -- in each case, as the Company specifically designates.
The Company may also offer and issue from time to time in one or more
series its Preferred Stock, no par value, on terms to be determined at the time
of sale. The Debt Securities, Warrants, Purchase Contracts, Units and Preferred
Stock are hereinafter collectively referred to as the "Securities."
The accompanying Prospectus Supplement will set forth the specific
terms of the Securities, including (i) in the case of Debt Securities, the
ranking as senior or subordinated Debt Securities, the specific designation,
aggregate principal amount, purchase price, maturity, redemption terms, interest
rate (or manner of calculation thereof), time of payment of interest (if any),
terms for any conversion or exchange (including the terms relating to the
adjustment thereof), listing (if any) on a securities exchange and any other
specific terms of the Debt Securities, (ii) in the case of Warrants, whether
such Warrants are Debt Warrants or Universal Warrants, and in the case of
Universal Warrants, the (a) security, basket of securities, index or indices of
securities, (b) currencies or composite currencies or (c) commodities,
underlying such Universal Warrants and, in any case, the exercise price and
other specific terms of the Warrants, (iii) in the case of Purchase Contracts,
the (a) security, basket of securities, index or indices of securities, (b)
currencies or composite currencies or (c) commodities, underlying such Purchase
Contracts and other specific terms of such Purchase Contracts, (iv) in the case
of Units, the particular combination of Purchase Contracts, Warrants and Debt
Securities comprising such Units and any other specific terms of such Units and
(v) in the case of a particular series of Preferred Stock, the specific
designation, the aggregate number of shares offered, the dividend rate (or
manner of calculation thereof), the dividend periods (or manner of calculation
thereof), the stated value of the shares of such series, the voting rights of
the shares of such series, whether and on what terms the shares of such series
may be redeemed at the option of the Company, whether depositary shares
representing shares of such series of Preferred Stock will be offered and if so,
the fraction of a share of Preferred Stock represented by each depositary share,
listing (if any) on a securities exchange and any other specific terms of such
series of Preferred Stock being offered. The accompanying Prospectus Supplement
will also set forth the name of and compensation to each dealer, underwriter or
agent (if any) involved in the sale of the Securities being offered and the
managing underwriters with respect to any Securities sold to or through
underwriters. Any such underwriters (and any representative thereof), dealers or
agents in the United States will include Morgan Stanley & Co. Incorporated ("MS
& Co.") and any such underwriters (and any representative thereof), dealers or
agents outside the United States will include Morgan Stanley & Co. International
Limited ("MSIL") or other affiliates of the Company.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------------
Securities may be offered through dealers, underwriters or agents designated
from time to time, as set forth in the accompanying Prospectus Supplement. Net
proceeds to the Company will be the purchase price in the case of sales to a
dealer, the public offering price less discount in the case of sales to an
underwriter or the purchase price less commission in the case of sales through
an agent -- in each case, less other expenses attributable to issuance and
distribution. See "Plan of Distribution" for possible indemnification
arrangements for dealers, underwriters and agents.
Following the initial distribution of a series of Securities, MS & Co., MSIL and
other affiliates of the Company, may offer and sell previously issued Securities
in the course of their businesses as broker-dealers (subject, in the case of
Preferred Stock and Depositary Shares, to obtaining any necessary approval of
The New York Stock Exchange for any such offers and sales by MS & Co.). MS &
Co., MSIL and such other affiliates may act as a principal or agent in such
transactions. This Prospectus and the accompanying Prospectus Supplement may be
used by MS & Co., MSIL and such other affiliates in connection with such
transactions. Such sales, if any, will be made at varying prices related to
prevailing market prices at the time of sale.
---------------------------
Morgan Stanley & Co.
Incorporated
, 1996
<PAGE>
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any underwriter, dealer or agent. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy Securities by
anyone in any jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do
so or to any person to whom it is unlawful to make such offer or solicitation.
---------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company with the Commission can be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549 or at its Regional Offices
located at Suite 1400, Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661 and at Seven World Trade Center, 13th Floor, New York, New York
10048, and copies of such material can be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, the Commission maintains a Website that contains
reports, proxy and other information regarding registrants that file
electronically, such as the Company. The address of the Commission's Website is
http:/www.sec.gov. The Company's Common Stock, par value $1.00 per share (the
"Common Stock"), is listed on the New York Stock Exchange, Inc. (the "NYSE"),
the Boston Stock Exchange, the Chicago Stock Exchange and the Pacific Stock
Exchange, Inc. Reports, proxy statements and other information concerning the
Company can be inspected at the offices of the NYSE, 20 Broad Street, New York,
New York 10005; the Boston Stock Exchange, One Boston Place, Boston,
Massachusetts 02108; the Chicago Stock Exchange, 440 South LaSalle Street,
Chicago, Illinois 60605; and the Pacific Stock Exchange, Inc., 301 Pine Street,
San Francisco, California 94104 or 618 South Spring Street, Los Angeles,
California 90014.
This Prospectus constitutes a part of a Registration Statement filed by
the Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus omits certain of the information
contained in the Registration Statement in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to the
Company and the Securities. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
---------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K of the Company for the fiscal period
ended November 30, 1995, as amended, Quarterly Reports on Form 10-Q for the
quarters ended February 29, 1996, May 31, 1996 and August 31, 1996, and Current
Reports on Form 8-K of the Company dated January 4, 1996, January 5, 1996,
January 23, 1996, February 7, 1996, February 20, 1996 (two Current Reports),
February 23, 1996, February 28, 1996, March 7, 1996, March 15, 1996, March 27,
1996, April 8, 1996, May 6, 1996, May 9, 1996, May 23, 1996, May 30, 1996, June
14, 1996, June 24, 1996, June 26, 1996, July 2, 1996, July 17, 1996, July 24,
1996, August 12, 1996, August 23, 1996 and October 2, 1996 have been filed with
the Commission and are incorporated herein by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the later of (i) the termination of the offering of the Securities and (ii)
the date on which MS & Co., MSIL and other affiliates of the Company cease
offering and selling previously issued Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any document incorporated or deemed to be
incorporated by reference herein has not been nor shall be submitted for review
under the clearance procedures of the Commission des Operations de Bourse of the
Paris Bourse, except as required in connection with the listing of any
Securities on the Paris Bourse.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document that also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Copies of the above documents (excluding exhibits) may be obtained upon
request without charge from the Company, 1585 Broadway, New York, New York
10036, Attention: Mailroom Manager (telephone number (212) 761-4000).
___________________________
IN CONNECTION WITH THE OFFERING OF CERTAIN SECURITIES, THE UNDERWRITERS
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICES OF SUCH SECURITIES, OTHER SECURITIES OF THE COMPANY OR ANY SECURITIES THE
PRICES OF WHICH MAY BE USED TO DETERMINE PAYMENTS ON SUCH SECURITIES AT LEVELS
ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS
MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
THE COMPANY
Morgan Stanley Group Inc. is a holding company that, through its
subsidiaries, provides a wide range of financial services on a global basis. Its
businesses include securities underwriting, distribution and trading; merger,
acquisition, restructuring, real estate, project finance and other corporate
finance advisory activities; merchant banking and other principal investment
activities; brokerage and research services; asset management; the trading of
foreign exchange and commodities as well as derivatives on a broad range of
asset categories, rates and indices; and global custody, securities clearance
services and securities lending. These services are provided to a large and
diversified group of clients and customers, including corporations, governments,
financial institutions and individual investors. The Company, which was formed
in 1935, conducts business from its head office in New York City, international
offices in Beijing, Bombay, Frankfurt, Geneva, Hong Kong, Johannesburg, London,
Luxembourg, Madrid, Melbourne, Milan, Montreal, Moscow, Osaka, Paris, Sao Paulo,
Seoul, Shanghai, Singapore, Sydney, Taipei, Tokyo, Toronto and Zurich, and
United States regional offices in Chicago, Houston, Philadelphia, Los Angeles
and San Francisco.
Morgan Stanley & Company, Incorporated was incorporated under the laws
of the State of New York in 1935 and was liquidated and reconstituted as Morgan
Stanley & Co., a partnership, in 1941. MS & Co. was incorporated under the laws
of the State of Delaware in 1969 and over a number of years assumed all of the
business of the partnership. Morgan Stanley Holdings Incorporated was
incorporated under the laws of the State of Delaware in 1975 to own all of the
stock of MS & Co. and other related entities, and changed its name to Morgan
Stanley Inc. in 1978 and to Morgan Stanley Group Inc. in 1985. The Company's
principal executive offices are at 1585 Broadway, New York, New York 10036, and
its telephone number is (212) 761-4000. Unless the context otherwise requires,
the term "Company" means Morgan Stanley Group Inc. and its consolidated
subsidiaries.
USE OF PROCEEDS
The net proceeds from the sale of the Securities offered hereby will be
used for general corporate purposes of the Company, which may include additions
to working capital, the redemption of outstanding preferred stock and the
repayment of indebtedness or for such other purposes set forth in the applicable
Prospectus Supplement. The Company anticipates that it will raise additional
funds from time to time through equity or debt financings, including borrowings
under revolving credit agreements, to finance its businesses worldwide.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the unaudited consolidated ratios of
earnings to fixed charges and earnings to fixed charges and preferred stock
dividends for the Company for the periods indicated.
<TABLE>
<CAPTION>
Fiscal Fiscal
(Unaudited) Period Ended Year Ended Year Ended
Nine Months Ended November 30, January 31, December 31,
------------------------------- ------------ ------------------------- ------------
August 31, August 31,
1996 1995 1995 1995 1994 1993 1991
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges...... 1.2 1.1 1.2 1.1 1.2 1.2 1.2
Ratio of earnings
to fixed charges
and preferred stock
dividends............. 1.2 1.1 1.1 1.1 1.2 1.2 1.2
</TABLE>
3
<PAGE>
For the purpose of calculating the ratio of earnings to fixed charges
and the ratio of earnings to fixed charges and preferred stock dividends,
earnings consist of income before income taxes and fixed charges (exclusive of
preferred stock dividends). For the purposes of calculating both ratios, fixed
charges include interest expense, capitalized interest and that portion of
rentals representative of an interest factor. Additionally, for the purposes of
calculating the ratio of earnings to fixed charges and preferred stock
dividends, preferred stock dividends (on a pre-tax basis) are included in the
denominator of the ratio.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute either senior or subordinated debt
of the Company and will be issued, in the case of Debt Securities that will be
senior debt, under a Senior Indenture dated as of April 15, 1989, as
supplemented by a First Supplemental Senior Indenture dated as of May 15, 1991
and a Second Supplemental Senior Indenture dated as of April 15, 1996 (as so
supplemented, the "Senior Debt Indenture"), between the Company and The Chase
Manhattan Bank (formerly known as Chemical Bank), as Trustee, and, in the case
of Debt Securities that will be subordinated debt, under a Subordinated
Indenture dated as of April 15, 1989, as supplemented by a First Supplemental
Subordinated Indenture dated as of May 15, 1991 and a Second Supplemental
Subordinated Indenture dated as of April 15, 1996 (as so supplemented, the
"Subordinated Debt Indenture"), between the Company and The First National Bank
of Chicago, as Trustee. The Senior Debt Indenture and Subordinated Debt
Indenture are sometimes hereinafter referred to individually as an "Indenture"
and collectively as the "Indentures." The Chase Manhattan Bank and The First
National Bank of Chicago are hereinafter referred to individually as a "Trustee"
and collectively as the "Trustees."
The following summaries of certain provisions of the Indentures and the
Debt Securities do not purport to be complete and such summaries are subject to
the detailed provisions of the applicable Indenture to which reference is hereby
made for a full description of such provisions, including the definition of
certain terms used herein, and for other information regarding the Debt
Securities. Numerical references in parentheses below are to sections in the
applicable Indenture. Wherever particular sections or defined terms of the
applicable Indenture are referred to, such sections or defined terms are
incorporated herein by reference as part of the statement made, and the
statement is qualified in its entirety by such reference. The Indentures are
substantially identical, except for the provisions relating to subordination and
the Company's negative pledge. See "Subordinated Debt" and "Certain Covenants."
The Debt Securities offered by this Prospectus and the accompanying Prospectus
Supplement are referred to herein as the "Offered Debt Securities." As used
under this caption and the captions "Description of Warrants," "Description of
Capital Stock," "Description of Purchase Contracts" and "Description of Units,"
the term "Company" means Morgan Stanley Group Inc.
General
Neither of the Indentures limits the amount of additional indebtedness
that the Company or any of its subsidiaries may incur. The Debt Securities will
be unsecured senior or subordinated obligations of the Company. Most of the
assets of the Company are owned by its subsidiaries. Therefore, the Company's
rights and the rights of its creditors, including holders of Debt Securities, to
participate in the assets of any subsidiary upon such subsidiary's liquidation
or recapitalization will be subject to the prior claims of such subsidiary's
creditors, except to the extent that the Company may itself be a creditor with
recognized claims against the subsidiary. In addition, dividends, loans and
advances from certain of the Company's subsidiaries, including MS & Co., to the
Company are restricted by net capital requirements under the Exchange Act and
under rules of certain exchanges and various domestic and foreign regulatory
bodies.
The Indentures provide that Debt Securities may be issued from time to
time in one or more series and may be denominated and payable in foreign
currencies or units based on or relating to foreign currencies, including
European Currency Units ("ECUs"). Special United States federal income tax
considerations applicable to any Debt Securities so denominated are described in
the relevant Prospectus Supplement.
Reference is made to the Prospectus Supplement for the following terms
of and information relating to the Offered Debt Securities (to the extent such
terms are applicable to such Debt Securities): (i) classification as senior
4
<PAGE>
or subordinated Debt Securities, the specific designation, aggregate principal
amount, purchase price and denomination; (ii) currency or units based on or
relating to currencies in which such Debt Securities are denominated and/or in
which principal (and premium, if any) and/or interest will or may be payable;
(iii) any date of maturity; (iv) interest rate or rates (or the method by which
such rate or rates will be determined), if any; (v) the dates on which any such
interest will be payable; (vi) the place or places where the principal of,
premium, if any, and interest, if any, on the Offered Debt Securities will be
payable; (vii) any repayment, redemption, prepayment or sinking fund provisions;
(viii) whether the Offered Debt Securities will be issuable in registered form
or bearer form ("Bearer Securities") or both and, if Bearer Securities are
issuable, any restrictions applicable to the exchange of one form for another
and to the offer, sale and delivery of Bearer Securities; (ix) the terms, if
any, on which such Debt Securities may be converted into or exchanged for stock
or other securities of the Company or other entities, any specific terms
relating to the adjustment thereof and the period during which such Debt
Securities may be so converted or exchanged; (x) any applicable United States
federal income tax consequences, including whether and under what circumstances
the Company will pay additional amounts on Offered Debt Securities held by a
person who is not a U.S. person (as defined in the Prospectus Supplement) in
respect of any tax, assessment or governmental charge withheld or deducted and,
if so, whether the Company will have the option to redeem such Debt Securities
rather than pay such additional amounts; and (xi) any other specific terms of
the Offered Debt Securities, including any additional events of default or
covenants provided for with respect to such Debt Securities, and any terms which
may be required by or advisable under applicable laws or regulations.
Debt Securities may be presented for exchange and registered Debt
Securities may be presented for transfer in the manner, at the places and
subject to the restrictions set forth in the Debt Securities and the Prospectus
Supplement. Such services will be provided without charge, other than any tax or
other governmental charge payable in connection therewith, but subject to the
limitations provided in the applicable Indenture. Debt Securities in bearer form
and the coupons, if any, appertaining thereto will be transferable by delivery.
Debt Securities will bear interest at a fixed rate (a "Fixed Rate
Security") or a floating rate (a "Floating Rate Security"). Debt Securities
bearing no interest or interest at a rate that at the time of issuance is below
the prevailing market rate will be sold at a discount below their stated
principal amount. Special United States federal income tax considerations
applicable to any such discounted Debt Securities or to certain Debt Securities
issued at par which are treated as having been issued at a discount for United
States federal income tax purposes will be described in the relevant Prospectus
Supplement.
Debt Securities may be issued, from time to time, with the principal
amount payable on any principal payment date, or the amount of interest payable
on any interest payment date, to be determined by reference to one or more
currency exchange rates, securities or baskets of securities, commodity prices
or indices. Holders of such Debt Securities may receive a payment of principal
on any principal payment date, or a payment of interest on any interest payment
date, that is greater than or less than the amount of principal or interest
otherwise payable on such dates, depending upon the value on such dates of the
applicable currency, security or basket of securities, commodity or index.
Information as to the methods for determining the amount of principal or
interest payable on any date, the currencies, securities or baskets of
securities, commodities or indices to which the amount payable on such date is
linked and certain additional tax considerations will be set forth in the
applicable Prospectus Supplement.
Senior Debt
The Debt Securities and, in the case of Bearer Securities, any coupons
appertaining thereto (the "Coupons"), that will constitute part of the senior
debt of the Company will be issued under the Senior Debt Indenture and will rank
pari passu with all other unsecured and unsubordinated debt of the Company.
Subordinated Debt
The Debt Securities and Coupons that will constitute part of the
subordinated debt of the Company will be issued under the Subordinated Debt
Indenture and will be subordinate and junior in right of payment, to the extent
and in the manner set forth in the Subordinated Debt Indenture, to all "Senior
Indebtedness" of the Company. The
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Subordinated Debt Indenture defines "Senior Indebtedness" as obligations (other
than nonrecourse obligations, the subordinated Debt Securities or any other
obligations specifically designated as being subordinate in right of payment to
Senior Indebtedness) of, or guaranteed or assumed by, the Company for borrowed
money or evidenced by bonds, debentures, notes or other similar instruments, and
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligations. (Subordinated Debt Indenture, Section 1.1)
In the event (a) of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or a substantial part of its property, or (b) that (i) a
default shall have occurred with respect to the payment of principal of (and
premium, if any) or any interest on or other monetary amounts due and payable on
any Senior Indebtedness or (ii) there shall have occurred an event of default
(other than a default in the payment of principal, premium, if any, or interest,
or other monetary amounts due and payable) with respect to any Senior
Indebtedness, as defined therein or in the instrument under which the same is
outstanding, permitting the holder or holders thereof to accelerate the maturity
thereof (with notice or lapse of time, or both), and such event of default shall
have continued beyond the period of grace, if any, in respect thereof, and such
default or event of default shall not have been cured or waived or shall not
have ceased to exist, or (c) that the principal of and accrued interest on the
subordinated Debt Securities shall have been declared due and payable upon an
Event of Default pursuant to Section 5.1 of the Subordinated Debt Indenture and
such declaration shall not have been rescinded and annulled as provided therein,
then the holders of all Senior Indebtedness shall first be entitled to receive
payment of the full amount unpaid thereon, or provision shall be made for such
payment in money or money's worth, before the holders of any of the subordinated
Debt Securities or Coupons are entitled to receive a payment on account of the
principal of (and premium, if any) or any interest on the indebtedness evidenced
by such subordinated Debt Securities or such Coupons. (Subordinated Debt
Indenture, Section 13.1) If this Prospectus is being delivered in connection
with a series of subordinated Debt Securities, the accompanying Prospectus
Supplement or the information incorporated herein by reference will set forth
the approximate amount of Senior Indebtedness outstanding as of the end of the
most recent fiscal quarter.
Certain Covenants
Negative Pledge. The Senior Debt Indenture provides that the Company
and any successor corporation will not, and will not permit any Subsidiary (as
defined in such Indenture) to, create, assume, incur or guarantee any
indebtedness for borrowed money secured by a pledge, lien or other encumbrance
(except for certain liens specifically permitted by such Indenture) on the
Voting Securities (as defined in such Indenture) of either MS & Co. or MSIL
without making effective provision whereby the Debt Securities issued under such
Indenture will be secured equally and ratably with such secured indebtedness.
(Senior Debt Indenture, Section 3.6)
Merger, Consolidation, Sale, Lease or Conveyance. Each Indenture
provides that the Company will not merge or consolidate with any other
corporation and will not sell, lease or convey all or substantially all its
assets to any person, unless the Company shall be the continuing corporation, or
the successor corporation or person that acquires all or substantially all the
assets of the Company shall be a corporation organized under the laws of the
United States or a state thereof or the District of Columbia and shall expressly
assume all obligations of the Company under such Indenture and the Debt
Securities issued thereunder, and immediately after such merger, consolidation,
sale, lease or conveyance, the Company, such person or such successor
corporation shall not be in default in the performance of the covenants and
conditions of such Indenture to be performed or observed by the Company.
(Indentures, Section 9.1) This covenant would not apply to a recapitalization
transaction, a change of control of the Company or a highly leveraged
transaction unless such transactions or change of control were structured to
include a merger or consolidation or sale, lease or conveyance of all or
substantially all of the assets of the Company.
Except as may be described in a Prospectus Supplement applicable to a
particular series of Debt Securities, there are no covenants or other provisions
in the Indentures providing for a put or increased interest or otherwise that
would afford holders of Debt Securities additional protection in the event of a
recapitalization transaction, a change of control of the Company or a highly
leveraged transaction.
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Events of Default
An Event of Default is defined under each Indenture with respect to
Debt Securities of any series issued under such Indenture as being: (a) default
in payment of any principal of the Debt Securities of such series, either at
maturity (or upon any redemption), by declaration or otherwise; (b) default for
30 days in payment of any interest on any Debt Securities of such series; (c)
default for 60 days after written notice in the observance or performance of any
other covenant or agreement in the Debt Securities of such series or such
Indenture other than a covenant included in such Indenture solely for the
benefit of a series of Debt Securities other than such series; (d) certain
events of bankruptcy, insolvency or reorganization; (e) failure by the Company
to make any payment at maturity, including any applicable grace period, in
respect of indebtedness, which term as used in each of the Indentures means
obligations (other than nonrecourse obligations or the Debt Securities of such
series issued under such Indenture) of, or guaranteed or assumed by, the Company
for borrowed money or evidenced by bonds, debentures, notes or other similar
instruments ("Indebtedness") in an amount in excess of $10,000,000 and
continuance of such failure for a period of 30 days after written notice thereof
to the Company by the Trustee, or to the Company and the Trustee by the holders
of not less than 25% in principal amount of such outstanding Debt Securities
(treated as one class) issued under such Indenture; or (f) default with respect
to any Indebtedness, which default results in the acceleration of Indebtedness
in an amount in excess of $10,000,000 without such Indebtedness having been
discharged or such acceleration having been cured, waived, rescinded or annulled
for a period of 30 days after written notice thereof to the Company by the
Trustee, or to the Company and the Trustee by the holders of not less than 25%
in principal amount of such outstanding Debt Securities (treated as one class)
issued under such Indenture; provided, however, that if any such failure,
default or acceleration referred to in clause (e) or clause (f) above shall
cease or be cured, waived, rescinded or annulled, then the Event of Default by
reason thereof shall be deemed likewise to have been thereupon cured.
(Indentures, Section 5.1)
Each Indenture provides that (a) if an Event of Default due to the
default in payment of principal of, premium, if any, or interest on, any series
of Debt Securities issued under such Indenture or due to the default in the
performance or breach of any other covenant or warranty of the Company
applicable to the Debt Securities of such series but not applicable to all
outstanding Debt Securities issued under such Indenture shall have occurred and
be continuing, either the Trustee or the holders of not less than 25% in
principal amount of such Debt Securities of each such affected series (treated
as one class) issued under such Indenture and then outstanding may then declare
the principal of all Debt Securities of each such affected series and interest
accrued thereon to be due and payable immediately; and (b) if an Event of
Default due to a default in the performance of any other of the covenants or
agreements in such Indenture applicable to all outstanding Debt Securities
issued under such Indenture and then outstanding or due to certain events of
bankruptcy, insolvency or reorganization of the Company shall have occurred and
be continuing, either the Trustee or the holders of not less than 25% in
principal amount of all Debt Securities issued under such Indenture and then
outstanding (treated as one class) may declare the principal of all such Debt
Securities and interest accrued thereon to be due and payable immediately, but
upon certain conditions such declarations may be annulled and past defaults may
be waived (except a continuing default in payment of principal of (or premium,
if any) or interest on such Debt Securities) by the holders of a majority in
principal amount of the Debt Securities of all such affected series then
outstanding. (Indentures, Sections 5.1 and 5.10)
Each Indenture contains a provision entitling the Trustee, subject to
the duty of the Trustee during a default to act with the required standard of
care, to be indemnified by the holders of Debt Securities (treated as one class)
issued under such Indenture before proceeding to exercise any right or power
under such Indenture at the request of such holders. (Indentures, Section 6.2)
Subject to such provisions in each Indenture for the indemnification of the
Trustee and certain other limitations, the holders of a majority in principal
amount of the outstanding Debt Securities (treated as one class) issued under
such Indenture may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee.
(Indentures, Section 5.9)
Each Indenture provides that no holder of Debt Securities issued under
such Indenture may institute any action against the Company under such Indenture
(except actions for payment of overdue principal or interest) unless such holder
previously shall have given to the Trustee written notice of default and
continuance thereof and unless the holders of not less than 25% in principal
amount of the Debt Securities of each affected series (treated as one class)
issued under such Indenture and then outstanding shall have requested the
Trustee to institute such action and shall have offered the Trustee reasonable
indemnity, the Trustee shall not have instituted such action within 60 days
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of such request and the Trustee shall not have received direction inconsistent
with such written request by the holders of a majority in principal amount of
the Debt Securities of each affected series (treated as one class) issued under
such Indenture and then outstanding. (Indentures, Sections 5.6 and 5.9)
Each Indenture contains a covenant that the Company will file annually
with the Trustee a certificate of no default or a certificate specifying any
default that exists. (Indentures, Section 3.5)
Discharge, Defeasance and Covenant Defeasance
The Company can discharge or defease its obligations under an Indenture
as set forth below. (Indentures, Section 10.1)
Under terms satisfactory to the Trustee, the Company may discharge
certain obligations to holders of any series of Debt Securities issued under
such Indenture which have not already been delivered to the Trustee for
cancellation and which have either become due and payable or are by their terms
due and payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the Trustee cash or, in the case of Debt Securities
payable only in U.S. dollars, U.S. Government Obligations (as defined in such
Indenture), as trust funds in an amount certified to be sufficient to pay at
maturity (or upon redemption) the principal of and interest on such Debt
Securities.
The Company may also discharge any and all of the obligations to
holders of any series of Debt Securities issued under an Indenture at any time
("defeasance"), but may not thereby avoid any duty to register the transfer or
exchange of such series of Debt Securities, to replace any mutilated, destroyed,
lost, or stolen Debt Securities of such series or to maintain an office or
agency in respect of such series of Debt Securities. Under terms satisfactory to
the relevant Trustee, the Company may instead be released with respect to any
outstanding series of Debt Securities issued under the relevant Indenture from
the obligations imposed by Sections 3.6 (in the case of the Senior Debt
Indenture) and 9.1 (which Sections contain the covenants described above
limiting liens and consolidations, mergers, asset sales and leases), and elect
not to comply with such Sections without creating an Event of Default ("covenant
defeasance"). Defeasance or covenant defeasance may be effected only if, among
other things: (i) the Company irrevocably deposits with the relevant Trustee
cash or, in the case of Debt Securities payable only in U.S. dollars, U.S.
Government Obligations, as trust funds in an amount certified to be sufficient
to pay at maturity (or upon redemption) the principal of and interest on all
outstanding Debt Securities of such series issued under such Indenture; (ii) the
Company delivers to the relevant Trustee an opinion of counsel to the effect
that the holders of such series of Debt Securities will not recognize income,
gain or loss for United States federal income tax purposes as a result of such
defeasance or covenant defeasance and that defeasance or covenant defeasance
will not otherwise alter such holders' United States federal income tax
treatment of principal and interest payments on such series of Debt Securities
(in the case of a defeasance, such opinion must be based on a ruling of the
Internal Revenue Service or a change in United States federal income tax law
occurring after the date of such Indenture, since such a result would not occur
under current tax law); and (iii) in the case of the Subordinated Debt Indenture
(a) no event or condition shall exist that, pursuant to certain provisions
described under "Subordinated Debt" above, would prevent the Company from making
payments of principal of (and premium, if any) and interest on the subordinated
Debt Securities at the date of the irrevocable deposit referred to above or at
any time during the period ending on the 91st day after such deposit date and
(b) the Company delivers to the Trustee for the Subordinated Debt Indenture an
opinion of counsel to the effect that (1) the trust funds will not be subject to
any rights of holders of Senior Indebtedness and (2) after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, except that if a court were to rule under any such
law in any case or proceeding that the trust funds remained property of the
Company, then the relevant Trustee and the holders of the subordinated Debt
Securities would be entitled to certain rights as secured creditors in such
trust funds.
Modification of the Indentures
Each Indenture provides that the Company and the Trustee may enter into
supplemental indentures without the consent of the holders of Debt Securities
to: (a) secure any Debt Securities, (b) evidence the assumption by a successor
corporation of the obligations of the Company, (c) add covenants for the
protection of the holders of Debt
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Securities, (d) cure any ambiguity or correct any inconsistency in such
Indenture, (e) establish the forms or terms of Debt Securities of any series and
(f) evidence the acceptance of appointment by a successor trustee. (Indentures,
Section 8.1)
Each Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
principal amount of Debt Securities of all series issued under such Indenture
then outstanding and affected (voting as one class), to add any provisions to,
or change in any manner or eliminate any of the provisions of, such Indenture or
modify in any manner the rights of the holders of the Debt Securities of each
series so affected; provided that the Company and the Trustee may not, without
the consent of the holder of each outstanding Debt Security affected thereby,
(a) extend the stated maturity of the principal of any Debt Security, or reduce
the principal amount thereof or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable on redemption thereof or change
the currency in which the principal thereof (including any amount in respect of
original issue discount), premium, if any, or interest thereon is payable or
reduce the amount of any original issue discount security payable upon
acceleration or provable in bankruptcy or alter certain provisions of such
Indenture relating to the Debt Securities issued thereunder not denominated in
U.S. dollars or impair the right to institute suit for the enforcement of any
payment on any Debt Security when due or (b) reduce the aforesaid percentage in
principal amount of Debt Securities of any series issued under such Indenture,
the consent of the holders of which is required for any such modification.
(Indentures, Section 8.2)
The Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding subordinated Debt Securities without the
consent of each holder of Senior Indebtedness then outstanding that would be
adversely affected thereby. (Subordinated Debt Indenture, Section 8.6)
Concerning the Trustees
The Chase Manhattan Bank and The First National Bank of Chicago are two
of a number of banks with which the Company and its subsidiaries maintain
ordinary banking relationships and with which the Company and its subsidiaries
maintain credit facilities.
DESCRIPTION OF WARRANTS
The Company may issue, together with Debt Securities or separately,
Debt Warrants for the purchase of Debt Securities on terms to be determined at
the time of sale. The Company may also issue Universal Warrants to purchase or
sell (i) securities of an entity unaffiliated with the Company, a basket of such
securities, an index or indices of such securities or any combination of the
above, (ii) currencies or composite currencies or (iii) commodities, on terms to
be determined at the time of sale. The Company may satisfy its obligations, if
any, with respect to any Universal Warrants by delivering the underlying
securities, currencies or commodities or, in the case of underlying securities
or commodities, the cash value thereof, as set forth in the applicable
Prospectus Supplement. Warrants may be offered separately or together with one
or more additional Warrants, Purchase Contracts or Debt Securities or any
combination thereof in the form of Units, as set forth in the applicable
Prospectus Supplement. If Warrants are issued as part of a Unit, the
accompanying Prospectus Supplement will specify whether such Warrants may be
separated from the other Securities in such Unit prior to the Warrants'
expiration date. The Warrants offered by this Prospectus and the accompanying
Prospectus Supplement are referred to herein as the "Offered Warrants."
The Offered Warrants are to be issued under one or more Warrant
Agreements (each, a "Warrant Agreement") to be entered into between the Company
and a bank or trust company, as Warrant Agent (the "Warrant Agent"), and may be
issued in one or more series, all as shall be set forth in the Prospectus
Supplement relating thereto. Reference is made to the Prospectus Supplement for
any further description of the terms of any Warrant Agreement governing the
Offered Warrants. The forms of Warrant Agreement for the Warrants are filed as
exhibits to the Registration Statement of which this Prospectus is a part. The
following summaries of certain provisions of the applicable Warrant Agreement
and the Warrants do not purport to be complete and such summaries are subject to
the detailed provisions of such Warrant Agreement to which reference is hereby
made for a full description of such provisions, including the definition of
certain terms used herein, and for other information regarding the
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Warrants. Wherever particular provisions of the Warrant Agreement are referred
to, such provisions are incorporated by reference as a part of the statements
made, and the statements are qualified in their entirety by such reference.
General
Reference is made to the Prospectus Supplement for the following terms
of and information relating to the Offered Warrants: (i) the price at which the
Offered Warrants will be issued; (ii) the currency or composite currency for
which the Offered Warrants may be purchased; (iii) the date on which the right
to exercise the Offered Warrants shall commence and the date (the "Warrant
Expiration Date") on which such right shall expire or, if the Offered Warrants
are not continuously exercisable throughout such period, the specific date or
dates on which they will be exercisable (each, a "Warrant Exercise Date," which
term shall also mean, with respect to Offered Warrants continuously exercisable
for a period of time, every date during such period); (iv) whether the Warrant
certificates representing the Offered Warrants (the "Warrant Certificates") will
be in registered form ("Registered Warrants") or bearer form ("Bearer Warrants")
or both; (v) whether any Registered Warrants will be issued in global or
definitive form or both; (vi) any applicable United States federal income tax
consequences; (vii) the identity of the Warrant Agent in respect of the Offered
Warrants; (viii) the proposed listing, if any, of the Offered Warrants or the
securities purchasable upon exercise thereof on any securities exchange; (ix)
whether the Offered Warrants are to be sold separately or are, with other
Offered Securities, to comprise Units; and (x) any other terms of the Offered
Warrants.
Reference is made to the Prospectus Supplement for the following terms
of and information relating to any Offered Debt Warrants: (i) the designation,
aggregate principal amount, currency or composite currency and terms of the Debt
Securities that may be purchased upon exercise of the Offered Debt Warrants,
(ii) if applicable, the designation and terms of the Debt Securities with which
the Offered Debt Warrants are issued and the number of the Offered Debt Warrants
issued with each of such Debt Securities, (iii) if applicable, the date on and
after which the Offered Securities and the related Debt Securities will be
separately transferable and (iv) the principal amount of Debt Securities
purchasable upon exercise of each Offered Debt Warrant and the price at which
and the currency or composite currency in which such principal amount of Debt
Securities may be purchased upon such exercise.
Reference is made to the Prospectus Supplement for the following terms
of and information relating to any Offered Universal Warrants: (i) whether such
Offered Universal Warrants are put Warrants or call Warrants (ii)(a) the
specific security, basket of securities, index or indices of securities or
combination of the above, (b) currencies or composite currencies or (c)
commodities (and, in each case, the amount thereof) purchasable or saleable upon
exercise of each Offered Universal Warrant; (iii) the price at which and the
currency or composite currency with which such underlying securities, currencies
or commodities may be purchased upon such exercise; (iv) whether such exercise
price may be paid in cash, by the exchange of any other Security offered with
such Offered Universal Warrants or both and (v) whether the exercise of such
Offered Universal Warrants is to be settled in cash or by delivery of the
underlying securities or commodities.
Registered Warrants of each series will be evidenced by Warrant
Certificates in registered form, which may be global Registered Warrants or
definitive Registered Warrants, as specified in the applicable Prospectus
Supplement. Bearer Warrants of each series will be evidenced by one or more
global Warrant Certificates in bearer form and, if specified in the applicable
Prospectus Supplement, in definitive form. Bearer Debt Warrants will not be
issued in definitive form. See "Global Securities" herein.
At the option of the holder upon request confirmed in writing, and
subject to the terms of the applicable Warrant Agreement, Registered Warrants in
definitive form may be presented for exchange and for registration of transfer
(with the form of transfer endorsed thereon duly executed) at the corporate
trust office of the Warrant Agent for such series of Warrants (or any other
office indicated in the Prospectus Supplement relating to such series of
Warrants) without service charge and upon payment of any taxes and other
governmental charges as described in such Warrant Agreement. Such transfer or
exchange will be effected only if the Warrant Agent for such series of Warrants
is satisfied with the documents of title and identity of the person making the
request.
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Modifications
Each Warrant Agreement and the terms of the Warrants and the Warrant
Certificates may be amended by the Company and the Warrant Agent, without the
consent of the holders, for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective or inconsistent provision therein or
in any other manner which the Company may deem necessary or desirable and which
will not adversely affect the interests of the holders in any material respect.
Merger, Consolidation, Sale or Other Disposition
If at any time there shall be a merger or consolidation of the Company
or a transfer of substantially all of its assets, as permitted under the
applicable Indentures, the successor corporation thereunder shall succeed to and
assume all obligations of the Company under each Warrant Agreement and the
Warrant Certificates. See "Description of Debt Securities -- Certain Covenants."
Enforceability of Rights of Warrantholders; Governing Law
The Warrant Agents will act solely as agents of the Company in
connection with the Warrant Certificates and will not assume any obligation or
relationship of agency or trust for or with any holders of Warrant Certificates
or beneficial owners of Warrants. Any holder of Warrant Certificates and any
beneficial owner of Warrants may, without the consent of the Warrant Agent, any
other holder or beneficial owner, the relevant Trustee, the holder of any Debt
Securities or other securities issuable upon exercise of Warrants or, if
applicable, the common depositary for the Euroclear System currently operated by
Morgan Guaranty Trust Company of New York, Brussels Office, or its successor as
operator of the Euroclear System ("Euroclear") and Cedel Bank, societe anonyme
or its successor ("Cedel Bank"), enforce by appropriate legal action, on its own
behalf, its right to exercise the Warrants evidenced by such Warrant
Certificates, in the manner provided therein and in the applicable Warrant
Agreement. No holder of any Warrant Certificate or beneficial owner of any
Warrants shall be entitled to any of the rights of a holder of the Debt
Securities or other securities purchasable upon exercise of such Warrants,
including, without limitation, the right to receive the payment of dividends,
principal of or premium, if any, or interest, if any, on such Debt Securities or
other securities or to enforce any of the covenants or rights in the relevant
Indenture or any other similar agreement. The Warrants and each Warrant
Agreement will be governed by, and construed in accordance with, the laws of the
State of New York.
DESCRIPTION OF PURCHASE CONTRACTS
The Company may issue Purchase Contracts for the purchase or sale of
(i) securities of an entity unaffiliated with the Company, a basket of such
securities, an index or indices of such securities or any combination of the
above as specified in the applicable Prospectus Supplement, (ii) currencies or
composite currencies or (iii) commodities. Each Purchase Contract will entitle
the holder thereof to purchase or sell, and obligate the Company to sell or
purchase, on specified dates, such securities, currencies or commodities at a
specified purchase price, all as set forth in the applicable Prospectus
Supplement. The applicable Prospectus Supplement will also specify the methods
by which the holders may purchase or sell such securities, currencies or
commodities and any acceleration, cancellation or termination provisions or
other provisions relating to the settlement of a Purchase Contract.
Purchase Contracts may require holders to satisfy their obligations
thereunder when such Purchase Contracts are issued ("Pre-paid Purchase
Contracts"). The Company's obligation to settle such Pre-paid Purchase Contracts
on the relevant settlement date will constitute Senior Indebtedness or
subordinated indebtedness of the Company. Accordingly, such Pre-paid Purchase
Contracts will be issued under the Senior Debt Indenture or the Subordinated
Debt Indenture, as specified in the applicable Prospectus Supplement.
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DESCRIPTION OF UNITS
As specified in the applicable Prospectus Supplement, Units will
consist of one or more Purchase Contracts, Warrants and Debt Securities or any
combination thereof. Unless otherwise specified in the applicable Prospectus
Supplement, such Purchase Contracts, Warrants and Debt Securities may be
purchased and transferred only as part of a Unit. Reference is made to the
applicable Prospectus Supplement for (i) all terms of Units and of the Purchase
Contracts, Warrants and Debt Securities, or any combination thereof, comprising
such Units, including whether and under what circumstances the Securities
comprising such Units may be traded separately, (ii) a description of the terms
of any Unit Agreement governing the Units and (iii) a description of the
provisions for the payment, settlement, transfer or exchange of the Units.
LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES AND BEARER WARRANTS
In compliance with United States federal income tax laws and
regulations, Bearer Securities (including Bearer Securities in global form) and
Warrants that are Bearer Warrants will not be offered, sold, resold or
delivered, directly or indirectly, in the United States or its possessions or to
United States persons (as defined below), except as otherwise permitted by
United States Treasury Regulations Section 1.163-5(c)(2)(i)(D). Any
underwriters, agents or dealers participating in the offerings of Bearer
Securities or Bearer Warrants, directly or indirectly, must agree that (i) they
will not, in connection with the original issuance of any Bearer Securities or
during the restricted period (as defined in United States Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)) (the "restricted period"), offer, sell, resell
or deliver, directly or indirectly, any Bearer Securities in the United States
or its possessions or to United States persons (other than as permitted by the
applicable Treasury Regulations described above) and (ii) they will not, at any
time, offer, sell, resell or deliver, directly or indirectly, any Bearer
Warrants in the United States or its possessions or to United States persons
(other than as permitted by the applicable Treasury Regulations described
above). In addition, any such underwriters, agents or dealers must have
procedures reasonably designed to ensure that its employees or agents who are
directly engaged in selling Bearer Securities or Bearer Warrants are aware of
the above restrictions on the offering, sale, resale or delivery of Bearer
Securities or Bearer Warrants. Moreover, Bearer Securities (other than temporary
global Debt Securities and Bearer Securities that satisfy the requirements of
United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(3)(iii)) and any
Coupons appertaining thereto will not be delivered in definitive form, and no
interest will be paid thereon, unless the Company has received a signed
certificate in writing (or an electronic certificate described in United States
Treasury Regulations Section 1.163-5(c)(2)(i)(D)(3)(ii)) stating that on such
date such Bearer Security (i) is owned by a person that is not a United States
person, (ii) is owned by a United States person that (a) is a foreign branch of
a United States financial institution (as defined in United States Treasury
Regulations Section 1.165-12(c)(1)(v)) (a "financial institution") purchasing
for its own account or for resale, or (b) is acquiring such Bearer Security
through a foreign branch of a United States financial institution and who holds
the Bearer Security through such financial institution through such date (and in
either case (a) or (b) above, each such United States financial institution
agrees, on its own behalf or through its agent, that the Company may be advised
that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder)
or (iii) is owned by a United States or foreign financial institution for the
purposes of resale during the restricted period and, in addition, if the owner
of such Bearer Security is a United States or foreign financial institution
described in clause (iii) above (whether or not also described in clause (i) or
clause (ii) above), such financial institution certifies that it has not
acquired the Bearer Security for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its possessions.
Bearer Debt Warrants will not be issued in definitive form. Interest on Bearer
Securities will be paid only outside the United States and its possessions
except as permitted by the above regulations.
Bearer Securities (other than temporary global Securities) and any
Coupons appertaining thereto will bear the following legend: "Any United States
person who holds this obligation will be subject to limitations under the United
States federal income tax laws, including the limitations provided in Sections
165(j) and 1287(a) of the United States Internal Revenue Code." The sections
referred to in such legend provide that, with certain exceptions, a United
States person will not be permitted to deduct any loss, and will not be eligible
for capital gain treatment with respect to any gain, realized on the sale,
exchange or redemption of such Bearer Security or Coupon.
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As used herein, "United States person" means, for United States federal
income tax purposes, a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate or trust the
income of which is subject to United States federal income taxation regardless
of its source.
DESCRIPTION OF CAPITAL STOCK
As of the date of this Prospectus, the Company's authorized capital
stock consists of 600,000,000 shares of Common Stock, par value $1.00 per share,
and 30,000,000 shares of Preferred Stock, no par value per share ("Preferred
Stock"). The Board of Directors of the Company has the power, without further
action by the stockholders unless action is required by applicable laws or
regulations or by the terms of outstanding Preferred Stock, to issue Preferred
Stock in one or more series and to fix the voting rights, designations,
preferences and relative, participating, optional and other special rights, and
the qualifications, limitations and restrictions applicable thereto.
The rights of holders of the Preferred Stock offered hereby (the
"Offered Preferred Stock") will be subject to, and may be adversely affected by,
the rights of holders of any Preferred Stock that may be issued in the future.
The Board of Directors may cause shares of Preferred Stock to be issued to
obtain additional financing, in connection with acquisitions, to officers,
directors or employees of the Company and its subsidiaries pursuant to benefit
plans or otherwise and for other proper corporate purposes. Shares of Preferred
Stock issued by the Company may have the effect, under certain circumstances,
alone or in combination with certain other provisions of the Company's Restated
Certificate of Incorporation described below, of rendering more difficult or
discouraging an acquisition of the Company deemed undesirable by the Board of
Directors.
As of August 31, 1996, there were 152,419,789 shares of Common Stock
outstanding. On August 31, 1996, the Company also had outstanding the following
series of Preferred Stock: 3,711,165 shares of ESOP Convertible Preferred Stock,
with a liquidation value of $35.88 per share (the "ESOP Preferred Stock"),
issued in connection with the Company's Employee Stock Ownership Plan (the
"ESOP"), 975,000 shares of 8.88% Cumulative Preferred Stock, with a stated value
of $200.00 per share (the "8.88% Preferred Stock"), 750,000 shares of 8 3/4%
Cumulative Preferred Stock, with a stated value of $200.00 per share (the "8
3/4% Preferred Stock"), 1,000,000 shares of 7 3/8% Cumulative Preferred Stock,
with a stated value of $200.00 per share (the "7 3/8% Preferred Stock") and
1,000,000 shares of 7 3/4% Cumulative Preferred Stock, with a stated value of
$200.00 per share (the "7 3/4% Preferred Stock"). All 975,000 shares of the
8.88% Preferred Stock were called for redemption on December 3, 1996 and will be
redeemed on January 3, 1997. Subsequent to August 31, 1996 the Company issued
1,725,000 shares of Series A Fixed/Adjustable Rate Cumulative Preferred Stock,
with a stated value of $200.00 per share (the "Series A Fixed/Adjustable Rate
Preferred Stock"). The 8.88% Preferred Stock, until its redemption, the 8 3/4%
Preferred Stock, the 7 3/8% Preferred Stock, the 7 3/4% Preferred Stock and the
Series A Fixed/Adjustable Rate Preferred Stock are collectively referred to
herein as the "Existing Cumulative Preferred Stock". In addition, the Company
and its wholly owned subsidiary Morgan Stanley Finance plc currently have
outstanding Capital Units that may result in up to 611,237 shares of the
Company's 7.82% Cumulative Preferred Stock, with a stated value of $200.00 per
share (the "7.82% Preferred Stock"), being issued at any time, up to 1,150,000
shares of the Company's 7.80% Cumulative Preferred Stock, with a stated value of
$200.00 per share (the "7.80% Preferred Stock"), being issued at any time, up to
720,900 shares of the Company's 9.00% Cumulative Preferred Stock, with a stated
value of $200.00 per share (the "9.00% Preferred Stock"), being issued at any
time, up to 996,775 shares of the Company's 8.40% Cumulative Preferred Stock,
with a stated value of $200.00 per share (the "8.40% Preferred Stock"), being
issued at any time and up to 847,500 shares of the Company's 8.20% Cumulative
Preferred Stock, with a stated value of $200.00 per share (the "8.20% Preferred
Stock"), being issued at any time. The following summary does not purport to be
complete and is qualified by the Company's Restated Certificate of
Incorporation, by a Certificate of Designation of Preferences and Rights of the
ESOP Preferred Stock, by a Certificate of Designation of Preferences and Rights
for each of the 7.82% Preferred Stock, the 7.80% Preferred Stock, the 9.00%
Preferred Stock, the 8.40% Preferred Stock and the 8.20% Preferred Stock and by
a Certificate of Designation of Preferences and Rights of each series of
Existing Cumulative Preferred Stock.
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Offered Preferred Stock
The Board of Directors of the Company has authorized the issuance in
series of additional shares of Preferred Stock and has authorized a committee of
the Board of Directors (the "Committee") to establish and designate series and
to fix the number of shares and the relative rights, preferences and limitations
of the respective series of the Offered Preferred Stock (except for the voting
rights of the Offered Preferred Stock, which will be established by the Board of
Directors). The shares of Offered Preferred Stock, when issued and sold, will be
fully paid and nonassessable.
The following description of the terms of the Offered Preferred Stock
sets forth certain general terms and provisions of the Offered Preferred Stock
to which a Prospectus Supplement relates. The number of shares and all of the
terms and conditions of the relative rights, preferences and limitations of the
respective series of Offered Preferred Stock as established by the Board of
Directors or the Committee will be set forth in the Prospectus Supplement
accompanying this Prospectus relating to the particular series of Offered
Preferred Stock being offered thereby. The terms of particular series of Offered
Preferred Stock may differ, among other things, in (i) the number of shares that
constitute such series, (ii) the dividend rate (or the method of calculation
thereof) on the shares of such series, (iii) the dividend periods (or the method
of calculation thereof), (iv) the stated value of the shares of such series, (v)
the voting rights of the shares of such series, (vi) the preferences and rights
of the shares of such series upon any liquidation or winding-up of the Company,
(vii) whether or not and on what terms the shares of such series will be subject
to redemption at the option of the Company, (viii) whether depositary shares
representing shares of such series of Offered Preferred Stock will be offered
and, if so, the fraction or multiple of a share of such series of Offered
Preferred Stock represented by each depositary share and (ix) the other rights
and privileges and any qualifications, limitations or restrictions of such
rights or privileges of such series.
As described under "Depositary Shares" below, the Company may, at its
option, elect to offer depositary shares (the "Depositary Shares") evidenced by
depositary receipts, each representing a fraction or a multiple (to be specified
in the Prospectus Supplement relating to the particular series of Offered
Preferred Stock) of a share of the particular series of Offered Preferred Stock
issued and deposited with a depositary, in lieu of offering individual shares of
such series of Offered Preferred Stock.
The following statements are brief summaries of certain provisions that
will be contained in the Certificate of Designation authorizing the issuance of
a series of Offered Preferred Stock, do not purport to be complete and are
qualified in their entirety by reference to such Certificate of Designation, the
form of which has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part, and by the Company's Restated Certificate of
Incorporation. The resolutions to be set forth in the Certificate of Designation
will be adopted by the Board of Directors or the Committee prior to the issuance
of a series of Offered Preferred Stock (except for the voting rights of the
Offered Preferred Stock, which will be established by the Board of Directors),
and such Certificate of Designation will be filed with the Secretary of State of
the State of Delaware as soon thereafter as reasonably practicable. In the event
the Company elects to issue Depositary Shares, each representing a fraction or a
multiple of a share of a particular series of Offered Preferred Stock, subject
to the terms of the Deposit Agreement (as defined below), each such Depositary
Share will be entitled, in proportion to the applicable fraction or multiple of
a share of Offered Preferred Stock represented by such Depositary Share, to all
the rights and preferences of the Offered Preferred Stock represented thereby
(including dividend, voting, redemption and liquidation rights). See "Depositary
Shares" below. The following statements concerning Depositary Shares, Depositary
Receipts (as defined below) and the Deposit Agreement do not purport to be
complete and are qualified in their entirety by reference to the forms of such
documents, which have been filed as exhibits to the Registration Statement of
which this Prospectus is a part.
Rank. Each series of Offered Preferred Stock will rank, with respect to
voting powers, preferences or relative, participating, optional and other
special rights and the qualifications, limitations and restrictions thereof,
including with respect to the payment of dividends and the distribution of
assets, whether upon liquidation or otherwise, junior to any series of capital
stock of the Company expressly stated to be senior to such series of the Offered
Preferred Stock, senior to any class of capital stock expressly stated to be
junior to such series of the Offered Preferred Stock, and on a parity with each
other series of Offered Preferred Stock and all other classes of capital stock
of the Company. The Offered Preferred Stock will rank, as to payment of
dividends and amounts payable on liquidation, prior to the Common Stock (see
"Common Stock" below) and on a parity with the ESOP
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Preferred Stock, each series of the Existing Cumulative Preferred Stock and, if
issued, the 7.82% Preferred Stock, the 7.80% Preferred Stock, the 9.00%
Preferred Stock, the 8.40% Preferred Stock and the 8.20% Preferred Stock.
Dividends. Holders of shares of the Offered Preferred Stock will be
entitled to receive, when and as declared by the Board of Directors or the
Committee out of funds legally available for payment, cumulative cash dividends
at an annual rate set forth in, or determined or calculated in accordance with
the method or formula set forth in, and on the dates, for the periods and
otherwise in the manner set forth in, the Prospectus Supplement. Dividends on
the Offered Preferred Stock will be payable to holders of record as they appear
on the stock books of the Company on such record dates, not more than 60 days
nor less than 10 days preceding the payment dates thereof, as shall be fixed by
the Board of Directors or the Committee. Dividends will be cumulative from the
date of original issue of such series. The Offered Preferred Stock will be
junior as to dividends to any Preferred Stock that may be issued in the future
that is expressly senior as to dividends to the Offered Preferred Stock. If at
any time the Company has failed to pay accrued dividends on any such senior
shares at the time such dividends are payable, the Company may not pay any
dividend on any series of Offered Preferred Stock or redeem or otherwise
repurchase any shares of any series of Offered Preferred Stock until such
accumulated but unpaid dividends on such senior shares have been paid (or set
aside for payment) in full by the Company.
No dividends may be declared or paid or set apart for payment on any
Preferred Stock ranking on a parity as to dividends with the Offered Preferred
Stock unless there shall also be or have been declared and paid or set apart for
payment on the outstanding shares of Offered Preferred Stock dividends for all
dividend payment periods of each series of the Offered Preferred Stock ending on
or before the dividend payment date of such parity stock, ratably in proportion
to the respective amounts of dividends (i) accumulated and unpaid or payable on
such parity stock, on the one hand, and (ii) accumulated and unpaid or payable
through the dividend payment period or periods of each series of the Offered
Preferred Stock next preceding such dividend payment date, on the other hand.
Except as set forth above, unless full cumulative dividends on the
outstanding shares of Offered Preferred Stock have been paid, dividends (other
than in Common Stock) may not be paid or declared and set aside for payment and
other distributions may not be made upon the Common Stock or on any other
Preferred Stock of the Company ranking junior to or on a parity with the Offered
Preferred Stock as to dividends (which parity Preferred Stock currently includes
the ESOP Preferred Stock and the Existing Cumulative Preferred Stock and, if
issued, would include the 7.82% Preferred Stock, the 7.80% Preferred Stock, the
9.00% Preferred Stock, the 8.40% Preferred Stock and the 8.20% Preferred Stock),
nor may any Common Stock or such other Preferred Stock of the Company be
redeemed, purchased or otherwise acquired by the Company for any consideration
or any payment be made to or available for a sinking fund for the redemption of
any shares of such stock; provided, however, that any monies theretofore
deposited in any sinking fund with respect to any Preferred Stock in compliance
with the provisions of such sinking fund may thereafter be applied to the
purchase or redemption of such Preferred Stock in accordance with the terms of
such sinking fund, regardless of whether at the time of such application full
cumulative dividends upon shares of the Offered Preferred Stock outstanding on
the last dividend payment date for any series of Offered Preferred Stock shall
have been paid or declared and set apart for payment; and provided further that
any such junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Company ranking junior to the Offered Preferred
Stock as to dividends.
The amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period shall be computed on the basis of a
360-day year of twelve 30-day months. Accrued but unpaid dividends will not bear
interest.
The ability of the Company, as a holding company, to pay dividends on
the Offered Preferred Stock will be dependent upon, among other factors, the
Company's earnings, financial condition and cash requirements at the time such
payment is considered, and the payment to it of dividends or principal and
interest by, or the availability of other funds from, its subsidiaries.
Dividends, loans and advances from certain subsidiaries, including MS & Co., to
the Company are restricted by net capital requirements under the Exchange Act
and under rules of certain exchanges and various domestic and foreign regulatory
bodies. Such restrictions could limit the ability of the Company to pay
dividends to its stockholders.
Liquidation Rights. In the event of any liquidation, dissolution or
winding up of the Company, the holders of shares of Offered Preferred Stock will
be entitled to receive out of the assets of the Company available for
distribution to stockholders, before any distribution is made to holders of (i)
any other shares of Preferred Stock
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ranking junior to the Offered Preferred Stock as to rights upon liquidation,
dissolution or winding up that may be issued in the future or (ii) Common Stock,
liquidating distributions in an amount equal to the stated value per share of
each series of Offered Preferred Stock, as set forth in the applicable
Prospectus Supplement, plus accrued and accumulated but unpaid dividends to the
date of final distribution; but the holders of the shares of Offered Preferred
Stock will not be entitled to receive the liquidation price of such shares until
the liquidation preference of any other shares of the Company's capital stock
ranking senior to the Offered Preferred Stock as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set aside therefor
sufficient to provide for payment) in full. If upon any liquidation, dissolution
or winding up of the Company, the amounts payable with respect to the Offered
Preferred Stock and any other Preferred Stock ranking as to rights upon
liquidation, dissolution or winding up on a parity with the Offered Preferred
Stock are not paid in full, the holders of the Offered Preferred Stock and of
such other Preferred Stock will share ratably in any such distribution in
proportion to the full respective preferential amounts to which they are
entitled. After payment of the full amount of the liquidating distribution to
which they are entitled, the holders of the Offered Preferred Stock will not be
entitled to any further participation in any distribution of assets by the
Company. Neither a consolidation or merger of the Company with or into another
corporation nor a merger of another corporation with or into the Company nor a
sale or transfer of all or part of the Company's assets for cash or securities
shall be considered a liquidation, dissolution or winding up of the Company.
Because the Company is a holding company, its rights and the rights of
its creditors and its stockholders, including the holders of the shares of
Offered Preferred Stock, to participate in the assets of any subsidiary upon the
latter's liquidation or recapitalization may be subject to the prior claims of
the subsidiary's creditors, except to the extent that the Company may itself be
a creditor with recognized claims against the subsidiary.
Optional Redemption. The Prospectus Supplement will indicate whether,
and if so on what terms, shares of a series of the Offered Preferred Stock will
be subject to any mandatory redemption or sinking fund provision. The Prospectus
Supplement will also indicate whether, and if so on what terms (including the
date on or after which redemption may occur), shares of a series of the Offered
Preferred Stock will be redeemable. Any such redemption would be effected upon
not less than 30 days' notice at a redemption price of not less than the stated
value per share of the applicable series of Offered Preferred Stock plus accrued
and accumulated but unpaid dividends to but excluding the date fixed for
redemption. If full cumulative dividends on all outstanding shares of Offered
Preferred Stock have not been paid, no shares of Offered Preferred Stock may be
redeemed in part and the Company may not purchase or acquire any shares of
Offered Preferred Stock otherwise than pursuant to a purchase or exchange offer
made on the same terms to all holders of the Offered Preferred Stock. If fewer
than all the outstanding shares of a series of Offered Preferred Stock are to be
redeemed, the Company will select those to be redeemed by lot or a substantially
equivalent method.
Voting Rights. Unless otherwise determined by the Board of Directors of
the Company and indicated in the Prospectus Supplement, holders of the Offered
Preferred Stock will not have any voting rights except as set forth below or as
otherwise from time to time required by law. Whenever dividends on any shares of
Offered Preferred Stock or any other class or series of stock ranking on a
parity with the Offered Preferred Stock with respect to the payment of dividends
shall be in arrears for dividend periods, whether or not consecutive, containing
in the aggregate a number of days equivalent to six calendar quarters, the
holders of shares of each series of Offered Preferred Stock (voting separately
as a class with all other series of Preferred Stock (including the Existing
Cumulative Preferred Stock) upon which like voting rights have been conferred
and are exercisable) will be entitled to vote for the election of two of the
authorized number of directors of the Company at the next annual meeting of
stockholders and at each subsequent meeting until all dividends accumulated on
such series of Offered Preferred Stock have been fully paid or set apart for
payment. The term of office of all directors elected by the holders of Preferred
Stock shall terminate immediately upon the termination of the right of the
holders of Preferred Stock to vote for directors. Each holder of shares of the
Offered Preferred Stock will have one vote for each share of Offered Preferred
Stock held.
So long as any shares of the Offered Preferred Stock remain
outstanding, the Company shall not, without the consent of the holders of at
least two-thirds of the shares of Offered Preferred Stock outstanding at the
time, voting separately as a class with all other series of Preferred Stock
(including the Existing Cumulative Preferred Stock and, if issued, the 7.82%
Preferred Stock, the 7.80% Preferred Stock, the 9.00% Preferred Stock, the 8.40%
Preferred Stock and the 8.20% Preferred Stock) upon which like voting rights
have been conferred and are
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exercisable, (i) issue or increase the authorized amount of any class or series
of stock ranking prior to the outstanding Offered Preferred Stock as to
dividends or upon liquidation or (ii) amend, alter or repeal the provisions of
the Company's Restated Certificate of Incorporation or of the resolutions
contained in the Certificate of Designation, whether by merger, consolidation or
otherwise, so as to materially and adversely affect any power, preference or
special right of the outstanding Offered Preferred Stock or the holders thereof;
provided, however, that any increase in the amount of the authorized Common
Stock or authorized Preferred Stock or the creation and issuance of other series
of Common Stock or Preferred Stock ranking on a parity with or junior to the
Offered Preferred Stock as to dividends and upon liquidation shall not be deemed
to materially and adversely affect such powers, preferences or special rights.
The transfer agent, dividend disbursing agent and registrar for each
series of Offered Preferred Stock will be The Bank of New York.
Depositary Shares
General. The Company may, at its option, elect to offer fractional
shares or some multiple of shares of Offered Preferred Stock, rather than
individual shares of Offered Preferred Stock. In the event such option is
exercised, the Company will issue receipts for Depositary Shares, each of which
will represent a fraction or a multiple (to be set forth in the Prospectus
Supplement relating to a particular series of Offered Preferred Stock) of a
share of a particular series of Offered Preferred Stock as described below.
The shares of any series of Offered Preferred Stock represented by
Depositary Shares will be deposited under a Deposit Agreement (the "Deposit
Agreement") among the Company, The Bank of New York, as depositary (the
"Preferred Stock Depositary"), and the holders from time to time of depositary
receipts issued thereunder. Subject to the terms of the Deposit Agreement, each
holder of a Depositary Share will be entitled, in proportion to the applicable
fraction or multiple of a share of Offered Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Offered Preferred
Stock represented thereby (including dividend, voting and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional or multiple
shares of the related series of Offered Preferred Stock. Copies of the forms of
Deposit Agreement and Depositary Receipt are filed as exhibits to the
Registration Statement of which this Prospectus is a part, and the following
summary is qualified in its entirety by reference to such exhibits. Immediately
following the issuance of shares of a series of Offered Preferred Stock by the
Company, the Company will deposit such shares with the Preferred Stock
Depositary, which will then issue and deliver the Depositary Receipts to the
purchasers thereof. Depositary Receipts will only be issued evidencing whole
Depositary Shares. A Depositary Receipt may evidence any number of whole
Depositary Shares.
Pending the preparation of definitive engraved Depositary Receipts, the
Preferred Stock Depositary may, upon the written order of the Company, issue
temporary Depositary Receipts substantially identical to (and entitling the
holders thereof to all the rights pertaining to) the definitive Depositary
Receipts but not in definitive form. Definitive Depositary Receipts will be
prepared thereafter without unreasonable delay, and such temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at the
Company's expense.
Dividends and Other Distributions. The Preferred Stock Depositary will
distribute all cash dividends or other cash distributions received in respect of
the related series of Offered Preferred Stock to the record holders of
Depositary Shares relating to such series of Offered Preferred Stock in
proportion to the number of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto in proportion to the number of Depositary
Shares owned by such holders, unless the Preferred Stock Depositary determines
that such distribution cannot be made proportionately among such holders or that
it is not feasible to make such distribution, in which case the Preferred Stock
Depositary may, with the approval of the Company, sell such property and
distribute the net proceeds from such sale to such holders in proportion to the
number of Depositary Shares owned by such holders.
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The amount distributed in any of the foregoing cases will be reduced by
any amounts required to be withheld by the Company or the Preferred Stock
Depositary on account of taxes or other governmental charges.
Withdrawal of Stock. Upon surrender of the Depositary Receipts at the
corporate trust office of the Preferred Stock Depositary and upon payment of the
taxes, charges and fees provided for in the Deposit Agreement and subject to the
terms thereof, the holder of the Depositary Shares evidenced thereby is entitled
to delivery at such office, to or upon his or her order, of the number of whole
shares of the related series of Offered Preferred Stock and any money or other
property, if any, represented by such Depositary Shares. Holders of Depositary
Shares will be entitled to receive whole shares of the related series of Offered
Preferred Stock, but holders of such whole shares of Offered Preferred Stock
will not thereafter be entitled to deposit such shares of Offered Preferred
Stock with the Preferred Stock Depositary or to receive Depositary Shares
therefor. If the Depositary Receipts delivered by the holder evidence a number
of Depositary Shares in excess of the number of Depositary Shares representing
the number of whole shares of the related series of Offered Preferred Stock to
be withdrawn, the Preferred Stock Depositary will deliver to such holder, or
upon his or her order, at the same time a new Depositary Receipt evidencing such
excess number of Depositary Shares.
Voting the Offered Preferred Stock. Upon receipt of notice of any
meeting at which the holders of any series of the Offered Preferred Stock are
entitled to vote, the Preferred Stock Depositary will mail the information
contained in such notice of meeting to the record holders of the Depositary
Shares relating to such series of Offered Preferred Stock. Each record holder of
such Depositary Shares on the record date (which will be the same date as the
record date for the related series of Offered Preferred Stock) will be entitled
to instruct the Preferred Stock Depositary as to the exercise of the voting
rights pertaining to the number of shares of the series of Offered Preferred
Stock represented by such holder's Depositary Shares. The Preferred Stock
Depositary will endeavor, insofar as practicable, to vote or cause to be voted
the number of shares of the Offered Preferred Stock represented by such
Depositary Shares in accordance with such instructions, provided the Preferred
Stock Depositary receives such instructions sufficiently in advance of such
meeting to enable it to so vote or cause to be voted the shares of Offered
Preferred Stock, and the Company will agree to take all reasonable action that
may be deemed necessary by the Preferred Stock Depositary in order to enable the
Preferred Stock Depositary to do so. The Preferred Stock Depositary will abstain
from voting shares of the Offered Preferred Stock to the extent it does not
receive specific instructions from the holders of Depositary Shares representing
such Offered Preferred Stock.
Redemption of Depositary Shares. If a series of the Offered Preferred
Stock underlying the Depositary Shares is subject to redemption, the Depositary
Shares will be redeemed from the proceeds received by the Preferred Stock
Depositary resulting from any redemption, in whole or in part, of such series of
the Offered Preferred Stock held by the Preferred Stock Depositary. The
redemption price per Depositary Share will be equal to the applicable fraction
or multiple of the redemption price per share payable with respect to such
series of the Offered Preferred Stock. If the Company redeems shares of a series
of Offered Preferred Stock held by the Preferred Stock Depositary, the Preferred
Stock Depositary will redeem as of the same redemption date the number of
Depositary Shares representing the shares of Offered Preferred Stock so
redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or substantially
equivalent method determined by the Preferred Stock Depositary.
After the date fixed for redemption, the Depositary Shares so called
for redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption, upon
surrender to the Preferred Stock Depositary of the Depositary Receipts
evidencing such Depositary Shares. Any funds deposited by the Company with the
Preferred Stock Depositary for any Depositary Shares that the holders thereof
fail to redeem will be returned to the Company after a period of two years from
the date such funds are so deposited.
Amendment and Termination of the Deposit Agreement. The form of
Depositary Receipt evidencing the Depositary Shares and any provision of the
Deposit Agreement may at any time and from time to time be amended by agreement
between the Company and the Preferred Stock Depositary. However, any amendment
that materially and adversely alters the rights of the holders of Depositary
Shares will not be effective unless such amendment has been approved by the
holders of at least a majority of the Depositary Shares then outstanding.
Notwithstanding the foregoing, in no event may any amendment impair the right of
any holder of any Depositary Shares, upon surrender of the Depositary Receipts
evidencing such Depositary Shares and subject to any conditions specified in the
Deposit
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Agreement, to receive shares of the related series of Offered Preferred Stock
and any money or other property represented thereby, except in order to comply
with mandatory provisions of applicable law. The Deposit Agreement may be
terminated by the Company at any time upon not less than 60 days' prior written
notice to the Depositary, in which case, on a date that is not later than 30
days after the date of such notice, the Preferred Stock Depositary shall deliver
or make available for delivery to holders of Depositary Shares, upon surrender
of the Depositary Receipts evidencing such Depositary Shares, such number of
whole or fractional shares of the related series of Offered Preferred Stock as
are represented by such Depositary Shares. The Deposit Agreement shall
automatically terminate after there has been a final distribution in respect of
the related series of Offered Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution has
been distributed to the holders of Depositary Shares.
Charges of Preferred Stock Depositary. The Company will pay all
transfer and other taxes and governmental charges arising solely from the
existence of the depositary arrangements. The Company will pay charges of the
Preferred Stock Depositary, including charges in connection with the initial
deposit of the related series of Offered Preferred Stock and the initial
issuance of the Depositary Shares and all withdrawals of shares of the related
series of Offered Preferred Stock, except that holders of Depositary Shares will
pay other transfer and other taxes and governmental charges and such other
charges as are expressly provided in the Deposit Agreement to be for their
accounts.
Miscellaneous. The Preferred Stock Depositary will forward to the
holders of Depositary Shares all reports and communications from the Company
that are delivered to the Preferred Stock Depositary and which the Company is
required to furnish to the holders of the Offered Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable
if it is prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Preferred Stock Depositary under the Deposit Agreement will be
limited to performance with best judgment and in good faith of their duties
thereunder, except that they are liable for negligence and willful misconduct in
the performance of their duties thereunder, and they will not be obligated to
appear in, prosecute or defend any legal proceeding in respect of any Depositary
Receipts, Depositary Shares or series of Offered Preferred Stock unless
satisfactory indemnity is furnished. The Preferred Stock Depositary and the
Company may rely on advice of legal counsel or accountants of their choice, or
information provided by persons presenting Offered Preferred Stock for deposit,
holders of Depositary Shares or other persons believed in good faith to be
competent and on documents believed to be genuine.
The Preferred Stock Depositary's corporate trust office is currently
located at 101 Barclay Street, New York, New York 10286. The Preferred Stock
Depositary will act as transfer agent and registrar for Depositary Receipts and
if shares of a series of Offered Preferred Stock are redeemable, the Preferred
Stock Depositary will act as redemption agent for the corresponding Depositary
Receipts.
Resignation and Removal of Preferred Stock Depositary. The Preferred
Stock Depositary may resign at any time by delivering to the Company written
notice of its election to do so, and the Company may at any time remove the
Preferred Stock Depositary, any such resignation or removal to take effect upon
the appointment of a successor Preferred Stock Depositary, which successor
Preferred Stock Depositary must be appointed within 60 days after delivery of
the notice of resignation or removal and must be a bank or trust company having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000.
Common Stock
Each holder of Common Stock is entitled to one vote per share for the
election of directors and for all other matters to be voted on by the Company's
stockholders. Except as otherwise provided by law, the holders of shares of
Common Stock vote as one class, together with the ESOP Preferred Stock and any
other class or series of stock conferred with general class voting rights by the
Company's Restated Certificate of Incorporation. Holders of Common Stock may not
cumulate their votes in the election of directors, which means that the holders
of Common Stock, together with the holders of ESOP Preferred Stock, who are
entitled to exercise more than 50% of the voting rights generally are able to
elect all of the directors to be elected at each annual meeting and to cast a
sufficient number of votes to control the affairs of the Company subject to a
vote of stockholders. As of February 7, 1996,
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certain current and former Managing Directors and Principals of MS & Co. owned,
in the aggregate, 47,650,342 shares of Common Stock subject to voting
restrictions contained in certain agreements (the "Voting Agreements"). As of
such date, such shares constituted approximately 29% of the votes that are
entitled to be cast by the Common Stock and ESOP Preferred Stock at any meeting
of the Company's stockholders.
The holders of the Common Stock are entitled to share equally in such
dividends as may be declared by the Board of Directors out of funds legally
available therefor, but only after payment of dividends required to be paid on
outstanding shares of Offered Preferred Stock, ESOP Preferred Stock, Existing
Cumulative Preferred Stock and any other class or series of stock having
preference over the Common Stock as to dividends, including, if issued, the
7.82% Preferred Stock, the 7.80% Preferred Stock, the 9.00% Preferred Stock, the
8.40% Preferred Stock and the 8.20% Preferred Stock. The ability of the Company,
as a holding company, to pay dividends on its Common Stock will be dependent
upon, among other factors, the Company's earnings, financial condition and cash
requirements at the time such payment is considered, and payment to it of
dividends or principal and interest by, or the availability of other funds from,
its subsidiaries. Dividends, loans and advances from certain subsidiaries,
including MS & Co., to the Company are restricted by net capital requirements
under the Exchange Act and under rules of certain exchanges and various domestic
and foreign regulatory bodies. Such restrictions could limit the ability of the
Company to pay dividends to its stockholders.
Upon voluntary or involuntary liquidation, dissolution or winding up of
the Company, the holders of the Common Stock share pro rata in the assets
remaining after payments to creditors and provision for the preference of any
Offered Preferred Stock, ESOP Preferred Stock, Existing Cumulative Preferred
Stock and any other class or series of stock having preference over the Common
Stock upon liquidation, dissolution or winding up that may be then outstanding,
including, if issued, the 7.82% Preferred Stock, the 7.80% Preferred Stock, the
9.00% Preferred Stock, the 8.40% Preferred Stock and the 8.20% Preferred Stock.
There are no preemptive or other subscription rights, conversion rights or
redemption or sinking fund provisions with respect to shares of Common Stock.
All of the outstanding shares of Common Stock are fully paid and
nonassessable.
The transfer agent and registrar for the Common Stock is First Chicago
Trust Company of New York.
ESOP Convertible Preferred Stock
The ESOP Preferred Stock is senior to the Company's Common Stock and
ranks on a parity with the Offered Preferred Stock and the Existing Cumulative
Preferred Stock (and, if issued, the 7.82% Preferred Stock, the 7.80% Preferred
Stock, the 9.00% Preferred Stock, the 8.40% Preferred Stock and the 8.20%
Preferred Stock) as to the payment of dividends and upon liquidation. The
holders of shares of the ESOP Preferred Stock are entitled to receive, when
declared out of funds legally available therefor, cash dividends in the amount
of $2.78 per share per annum, subject to adjustment, payable either annually or
semiannually, at the election of the Board of Directors of the Company. Holders
of ESOP Preferred Stock are entitled to receive $35.88 per share, subject to
adjustment (the "ESOP Preferred Stock Liquidation Price"), upon dissolution or
liquidation of the Company.
So long as any shares of ESOP 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 ESOP Preferred Stock as to dividends
(which parity Preferred Stock currently includes the Offered Preferred Stock and
the Existing Cumulative Preferred Stock and, if issued, would include the 7.82%
Preferred Stock, the 7.80% Preferred Stock, the 9.00% Preferred Stock, the 8.40%
Preferred Stock and the 8.20% Preferred Stock), unless there shall also be or
have been declared and paid or set apart for payment on the ESOP Preferred Stock
like dividends for all dividend payment periods of the ESOP Preferred Stock
ending on or before the dividend payment date of such parity stock, ratably in
proportion to the respective amounts of dividends (i) accumulated and unpaid or
payable on such parity stock, on the one hand, and (ii) accumulated and unpaid
through the dividend payment period or periods of the ESOP Preferred Stock next
preceding such dividend payment date, on the other hand.
Holders of ESOP Preferred Stock are entitled to vote on all matters
submitted to a vote of the holders of shares of Common Stock, voting together
with the holders of shares of Common Stock as one class. Each share of ESOP
Preferred Stock is entitled to the number of votes equal to 1.35 times the
number of shares of Common
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Stock into which such share of ESOP Preferred Stock could be converted on the
record date for such vote. Shares of ESOP Preferred Stock are allocated to each
participant in the ESOP on December 31 in each year.
Each share of ESOP Preferred Stock is convertible into shares of Common
Stock by the trustee of the ESOP at any time prior to the date fixed for
redemption of the ESOP Preferred Stock at a conversion rate of one share of ESOP
Preferred Stock to two shares of Common Stock, which rate is subject to
adjustment. The conversion price per share at which shares of Common Stock will
be issued upon conversion of any shares of ESOP Preferred Stock is $35.88,
subject to adjustment.
The ESOP Preferred Stock is redeemable at the Company's option at the
ESOP Preferred Stock Liquidation Price plus accrued dividends at any time after
September 19, 2000 and prior thereto under certain circumstances at specified
prices. The Company may pay the redemption price of the ESOP Preferred Stock in
cash, in shares of Common Stock or a combination thereof. Neither ESOP Preferred
Stock nor shares of Common Stock issued to participants in the ESOP are subject
to the restrictions on voting and disposition contained in the Voting
Agreements.
Existing Cumulative Preferred Stock
Other than as described below, the terms of the 8.88% Preferred Stock,
the 8 3/4% Preferred Stock, the 7 3/8% Preferred Stock, the 7 3/4% Preferred
Stock and the Series A Fixed/Adjustable Rate Preferred Stock are identical.
Unless otherwise indicated, the terms and provisions described below relate to
each of the 8.88% Preferred Stock, the 8 3/4% Preferred Stock, the 7 3/8%
Preferred Stock, the 7 3/4% Preferred Stock and the Series A Fixed/Adjustable
Rate Preferred Stock, which are collectively referred to as the "Existing
Cumulative Preferred Stock." Unless otherwise indicated below, the terms and
provisions described below for the Existing Cumulative Preferred Stock also
relate to each of the 7.82% Preferred Stock, the 7.80% Preferred Stock, the
9.00% Preferred Stock, the 8.40% Preferred Stock and the 8.20% Preferred Stock,
if issued.
Each series of the Existing Cumulative Preferred Stock and, if issued,
the 7.82% Preferred Stock, the 7.80% Preferred Stock, the 9.00% Preferred Stock,
the 8.40% Preferred Stock and the 8.20% Preferred Stock ranks on a parity with
each other and with the Offered Preferred Stock and the ESOP Preferred Stock and
prior to the Common Stock as to payment of dividends and amounts payable on
liquidation. The shares of Existing Cumulative Preferred Stock are fully paid
and nonassessable, are not convertible into Common Stock of the Company and have
no preemptive rights.
Dividends. Holders of the shares of Existing Cumulative Preferred Stock
(except for the Series A Fixed/Adjustable Rate Preferred Stock) are entitled to
receive, when and as declared by the Board of Directors of the Company out of
funds legally available therefor, cumulative cash dividends payable quarterly at
the rate of 8.88% per annum, 8 3/4% per annum, 7 3/8% per annum, 7 3/4% per
annum, 7.82% per annum (if the 7.82% Preferred Stock is issued), 7.80% per annum
(if the 7.80% Preferred Stock is issued), 9.00% per annum (if the 9.00%
Preferred Stock is issued), 8.40% per annum (if the 8.40% Preferred Stock is
issued) and 8.20% per annum (if the 8.20% Preferred Stock is issued), as the
case may be. Holders of the shares of Series A Fixed/Adjustable Rate Preferred
Stock are entitled to receive, when and as declared by the Board of Directors of
the Company out of funds legally available therefor, cumulative cash dividends
payable quarterly at a rate of 5.91% per annum through November 30, 2001 and
thereafter at a rate of .37% plus the highest of the Treasury Bill Rate, the
Ten-Year Constant Maturity Rate and the Thirty-Year Constant Maturity Rate (each
as defined in the applicable Certificate of Designation). The amount of
dividends payable in respect of the 7 3/4% Preferred Stock and the Series A
Fixed/Adjustable Rate Preferred Stock will be adjusted in the event of certain
amendments to the Code in respect of the dividends received deduction. The
Existing Cumulative Preferred Stock will be junior as to dividends to any
preferred stock that may be issued in the future that is expressly senior as to
dividends to the Existing Cumulative Preferred Stock. If at any time the Company
has failed to pay accrued dividends on any such senior shares at the time such
dividends are payable, the Company may not pay any dividend on the Existing
Cumulative Preferred Stock or redeem or otherwise repurchase any shares of
Existing Cumulative Preferred Stock until such accumulated but unpaid dividends
on such senior shares have been paid (or set aside for payment) in full by the
Company.
No dividends may be declared or paid or set apart for payment on any
preferred stock ranking on a parity as to dividends with the Existing Cumulative
Preferred Stock unless there shall also be or have been declared and
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paid or set apart for payment on each series of the Existing Cumulative
Preferred Stock dividends for all dividend payment periods of the Existing
Cumulative Preferred Stock ending on or before the dividend payment date of such
parity stock, ratably in proportion to the respective amounts of dividends (i)
accumulated and unpaid or payable on such parity stock, on the one hand, and
(ii) accumulated and unpaid or payable through the dividend payment period or
periods of the Existing Cumulative Preferred Stock next preceding such dividend
payment date, on the other hand.
Except as set forth above, unless full cumulative dividends on the
Existing Cumulative Preferred Stock have been paid, dividends (other than in
Common Stock) may not be paid or declared and set aside for payment and other
distributions may not be made upon the Common Stock or on any other preferred
stock of the Company ranking junior to or on a parity with the Existing
Cumulative Preferred Stock as to dividends (which parity preferred stock
currently includes the Offered Preferred Stock and the ESOP Preferred Stock),
nor may any Common Stock or such other preferred stock of the Company be
redeemed, purchased or otherwise acquired by the Company for any consideration
or any payment be made to or available for a sinking fund for the redemption of
any shares of such stock; provided, however, that any monies theretofore
deposited in any sinking fund with respect to any preferred stock in compliance
with the provisions of such sinking fund may thereafter be applied to the
purchase or redemption of such preferred stock in accordance with the terms of
such sinking fund regardless of whether at the time of such application full
cumulative dividends upon shares of each series of the Existing Cumulative
Preferred Stock outstanding on the last dividend payment date shall have been
paid or declared and set apart for payment; and provided further that any such
junior or parity preferred stock or Common Stock may be converted into or
exchanged for stock of the Company ranking junior to the Existing Cumulative
Preferred Stock as to dividends.
Optional Redemption. The Existing Cumulative Preferred Stock is not
subject to any mandatory redemption or sinking fund provision. The 8.88%
Preferred Stock will be redeemed on January 3, 1997. The 8 3/4% Preferred Stock
is not redeemable prior to May 30, 1997, the 7 3/8% Preferred Stock is not
redeemable prior to August 30, 1998, the 7 3/4% Preferred Stock is not
redeemable prior to August 30, 2001, the Series A Fixed/Adjustable Rate
Preferred Stock is not redeemable prior to November 30, 2001, if issued, the
7.82% Preferred Stock will not be redeemable prior to November 30, 1998, if
issued, the 7.80% Preferred Stock will not be redeemable prior to February 28,
1999, if issued, the 9.00% Preferred Stock will not be redeemable prior to
February 28, 2000, if issued, the 8.40% Preferred Stock will not be redeemable
prior to August 30, 2000 and, if issued, the 8.20% Preferred Stock will not be
redeemable prior to November 30, 2000. On or after such dates, the applicable
series of Existing Cumulative Preferred Stock will be redeemable at the option
of the Company, in whole or in part, upon not less than 30 days' notice at a
redemption price equal to $200.00 per share in the case of each of the series of
Existing Cumulative Preferred Stock and, if issued, the 7.82% Preferred Stock,
the 7.80% Preferred Stock, the 9.00% Preferred Stock, the 8.40% Preferred Stock
and the 8.20% Preferred Stock, in each case plus accrued and accumulated but
unpaid dividends to but excluding the date fixed for redemption.
Liquidation Rights. In the event of any liquidation, dissolution or
winding up of the Company, the holders of shares of Existing Cumulative
Preferred Stock will be entitled to receive out of the assets of the Company
available for distribution to stockholders, before any distribution is made to
holders of (i) any other shares of preferred stock ranking junior to the
Existing Cumulative Preferred Stock as to rights upon liquidation, dissolution
or winding up which may be issued in the future and (ii) Common Stock,
liquidating distributions in the amount of $200.00 per share in the case of each
of the series of Existing Cumulative Preferred Stock and, if issued, the 7.82%
Preferred Stock, the 7.80% Preferred Stock, the 9.00% Preferred Stock, the 8.40%
Preferred Stock and the 8.20% Preferred Stock, in each case plus accrued and
accumulated but unpaid dividends to the date of final distribution, but the
holders of the shares of Existing Cumulative Preferred Stock will not be
entitled to receive the liquidation price of such shares until the liquidation
preference of any other shares of the Company's capital stock ranking senior to
the Existing Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set aside therefor
sufficient to provide for payment) in full. If upon any liquidation, dissolution
or winding up of the Company, the amounts payable with respect to the Existing
Cumulative Preferred Stock and any other preferred stock ranking as to rights
upon liquidation, dissolution or winding up on a parity with the Existing
Cumulative Preferred Stock (including the Offered Preferred Stock) are not paid
in full, the holders of the Existing Cumulative Preferred Stock and of such
other preferred stock will share ratably in any such distribution in proportion
to the full respective preferential amounts to which they are entitled. After
payment of the full amount of the liquidating distribution to which they are
entitled, the holders of Existing Cumulative Preferred Stock will not be
entitled to any further participation in any distribution of assets by the
Company.
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Voting Rights. Holders of Existing Cumulative Preferred Stock do not
have any voting rights except as set forth below or as otherwise from time to
time required by law. Whenever dividends on any series of Existing Cumulative
Preferred Stock or any other class or series of stock ranking on a parity with
such series of Existing Cumulative Preferred Stock with respect to the payment
of dividends shall be in arrears for dividend periods, whether or not
consecutive, containing in the aggregate a number of days equivalent to six
calendar quarters, the holders of shares of such series of Existing Cumulative
Preferred Stock (voting separately as a class with all other series of preferred
stock upon which like voting rights have been conferred and are exercisable)
will be entitled to vote for the election of two of the authorized number of
directors of the Company at the next annual meeting of stockholders and at each
subsequent meeting until all dividends accumulated on such series of Existing
Cumulative Preferred Stock have been fully paid or set aside for payment. The
term of office of all directors elected by the holders of Preferred Stock shall
terminate immediately upon the termination of the right of the holders of
Preferred Stock to vote for directors. Each holder of shares of Existing
Cumulative Preferred Stock will have one vote for each share of Existing
Cumulative Preferred Stock held.
So long as any shares of Existing Cumulative Preferred Stock remain
outstanding, the Company shall not, without the consent of the holders of at
least two-thirds of the shares of each series of Existing Cumulative Preferred
Stock outstanding at the time, voting separately as a class with all other
series of preferred stock upon which like voting rights have been conferred and
are exercisable, (i) issue or increase the authorized amount of any class or
series of stock ranking prior to the Existing Cumulative Preferred Stock as to
dividends or upon liquidation or (ii) amend, alter or repeal the provisions of
the Company's Restated Certificate of Incorporation or of the resolutions
contained in the Certificate of Designation relating to such series of Existing
Cumulative Preferred Stock, whether by merger, consolidation or otherwise, so as
to materially and adversely affect any power, preference or special right of
such series of Existing Cumulative Preferred Stock or the holders thereof;
provided, however, that any increase in the amount of the authorized Common
Stock or authorized preferred stock or the creation and issuance of other series
of Common Stock or preferred stock ranking on a parity with or junior to the
Existing Cumulative Preferred Stock as to dividends and upon liquidation shall
not be deemed to materially and adversely affect such powers, preferences or
special rights.
The transfer agent and registrar for each series of Existing Cumulative
Preferred Stock is The Bank of New York.
Additional Provisions of the Company's Restated Certificate of Incorporation
Size of the Board of Directors, Removal of Directors and Filling
Vacancies on the Board of Directors. The Company's Restated Certificate of
Incorporation provides that the number of directors shall be not fewer than four
nor greater than fifteen persons, as shall be established from time to time by a
majority of the Board of Directors. The Company currently has ten directors. The
Company's Restated Certificate of Incorporation also provides that directors may
be removed, with or without cause, only with the approval of the holders of at
least 80% of the voting power of the outstanding shares of capital stock of the
Company entitled to be voted generally in the election of directors (the "Voting
Stock"), voting together as a single class. Furthermore, any vacancy on the
Board of Directors or newly created directorship shall be filled by a majority
of the remaining directors then in office, though less than a quorum, and such
newly elected director shall serve the balance of the term of the replaced
director or, if there is no replaced director, until the next annual election of
directors.
Calling Special Meetings of Stockholders. The Company's Restated
Certificate of Incorporation provides that special meetings of stockholders may
be called at any time and for any purpose by the Chairman of the Board, by the
President or by order of the Board of Directors, and shall be called by the
Secretary of the Company upon the written request of the holders of at least 80%
of the voting power of the Voting Stock, setting forth the purpose of such
meeting.
Amendment of Restated Certificate of Incorporation and By-laws. The
Company's Restated Certificate of Incorporation provides that the affirmative
vote of the holders of at least 80% of the voting power of the Voting Stock,
voting together as a single class, is required to amend, repeal or adopt any
By-laws, to adopt any amendment to the Restated Certificate of Incorporation
inconsistent with the By-laws of the Company or to amend or repeal, or to adopt
any provision inconsistent with, any provisions of the Restated Certificate of
Incorporation described above.
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Limitation of Directors' Liability. Section 102 of the Delaware General
Corporation Law allows a corporation to eliminate the personal liability of
directors of a corporation to the corporation or to any of its stockholders for
monetary damages for a breach of fiduciary duty as a director, except in the
case where the director breached his duty of loyalty, failed to act in good
faith, engaged in intentional misconduct or knowingly violated a law, authorized
the payment of a dividend or approved a stock repurchase in violation of the
Delaware General Corporation Law or obtained an improper personal benefit. Under
the Company's Restated Certificate of Incorporation, a director of the Company
shall not be liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director, except to the extent such exemption from
liability or limitation thereof is not permitted under the General Corporation
Law of Delaware as in effect or as the same may be amended.
GLOBAL SECURITIES
The registered Debt Securities, Warrants, Purchase Contracts and Units
of any series may be issued in the form of one or more fully registered global
Securities (a "Registered Global Security") that will be deposited with a
depositary (a "Depositary") or with a nominee for a Depositary identified in the
Prospectus Supplement relating to such series and registered in the name of such
Depositary or nominee thereof. In such case, one or more Registered Global
Securities will be issued in a denomination or aggregate denominations equal to
the portion of the aggregate principal or face amount of outstanding registered
Securities of the series to be represented by such Registered Global Securities.
Unless and until it is exchanged in whole for Securities in definitive
registered form, a Registered Global Security may not be transferred except as a
whole by the Depositary for such Registered Global Security to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any
portion of a series of Securities to be represented by a Registered Global
Security will be described in the Prospectus Supplement relating to such series.
The Company anticipates that the following provisions will apply to all
depositary arrangements.
Ownership of beneficial interests in a Registered Global Security will
be limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the Depositary
for such Registered Global Security will credit, on its book-entry registration
and transfer system, the participants' accounts with the respective principal or
face amounts of the Securities represented by such Registered Global Security
beneficially owned by such participants. The accounts to be credited shall be
designated by any dealers, underwriters or agents participating in the
distribution of such Securities. Ownership of beneficial interests in such
Registered Global Security will be shown on, and the transfer of such ownership
interests will be effected only through, records maintained by the Depositary
for such Registered Global Security (with respect to interests of participants)
and on the records of participants (with respect to interests of persons holding
through participants). The laws of some states may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to own, transfer or
pledge beneficial interests in Registered Global Securities.
So long as the Depositary for a Registered Global Security, or its
nominee, is the registered owner of such Registered Global Security, such
Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Securities represented by such Registered Global Security
for all purposes under the applicable Indenture, Warrant Agreement, Purchase
Contract or Unit Agreement. Except as set forth below, owners of beneficial
interests in a Registered Global Security will not be entitled to have the
Securities represented by such Registered Global Security registered in their
names, will not receive or be entitled to receive physical delivery of such
Securities in definitive form and will not be considered the owners or holders
thereof under the applicable Indenture, Warrant Agreement, Purchase Contract or
Unit Agreement. Accordingly, each person owning a beneficial interest in a
Registered Global Security must rely on the procedures of the Depositary for
such Registered Global Security and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a holder under the applicable Indenture, Warrant
Agreement, Purchase Contract or Unit Agreement. The Company understands that
under existing industry practices, if it
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requests any action of holders or if an owner of a beneficial interest in a
Registered Global Security desires to give or take any action which a holder is
entitled to give or take under the applicable Indenture, Warrant Agreement,
Purchase Contract or Unit Agreement, the Depositary for such Registered Global
Security would authorize the participants holding the relevant beneficial
interests to give or take such action, and such participants would authorize
beneficial owners owning through such participants to give or take such action
or would otherwise act upon the instructions of beneficial owners holding
through them.
Principal, premium, if any, and interest payments on Debt Securities,
and any payments to holders with respect to Warrants, Purchase Contracts or
Units, represented by a Registered Global Security registered in the name of a
Depositary or its nominee will be made to such Depositary or its nominee, as the
case may be, as the registered owner of such Registered Global Security. None of
the Company, the Trustees, the Warrant Agents or any other agent of the Company,
agent of the Trustees or agent of the Warrant Agents will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in such Registered
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Company expects that the Depositary for any Securities represented
by a Registered Global Security, upon receipt of any payment of principal,
premium, interest or other distribution of underlying securities or commodities
to holders in respect of such Registered Global Security, will immediately
credit participants' accounts in amounts proportionate to their respective
beneficial interests in such Registered Global Security as shown on the records
of such Depositary. The Company also expects that payments by participants to
owners of beneficial interests in such Registered Global Security held through
such participants will be governed by standing customer instructions and
customary practices, as is now the case with the securities held for the
accounts of customers in bearer form or registered in "street name", and will be
the responsibility of such participants.
If the Depositary for any Securities represented by a Registered Global
Security is at any time unwilling or unable to continue as Depositary or ceases
to be a clearing agency registered under the Exchange Act, and a successor
Depositary registered as a clearing agency under the Exchange Act is not
appointed by the Company within 90 days, the Company will issue such Securities
in definitive form in exchange for such Registered Global Security. In addition,
the Company may at any time and in its sole discretion determine not to have any
of the Securities of a series represented by one or more Registered Global
Securities and, in such event, will issue Securities of such series in
definitive form in exchange for all of the Registered Global Security or
Securities representing such Securities. Any Securities issued in definitive
form in exchange for a Registered Global Security will be registered in such
name or names as the Depositary shall instruct the relevant Trustee, Warrant
Agent or other relevant agent of the Company, the Trustees or the Warrant
Agents. It is expected that such instructions will be based upon directions
received by the Depositary from participants with respect to ownership of
beneficial interests in such Registered Global Security.
The Securities of a series may also be issued in the form of one or
more bearer global Securities (a "Bearer Global Security") that will be
deposited with a common depositary for Euroclear and Cedel Bank, or with a
nominee for such depositary identified in the Prospectus Supplement relating to
such series. The specific terms and procedures, including the specific terms of
the depositary arrangement, with respect to any portion of a series of
Securities to be represented by a Bearer Global Security will be described in
the Prospectus Supplement relating to such series.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby in three ways:
(i) through agents, (ii) through underwriters and (iii) through dealers. Any
such underwriters, dealers or agents in the United States will include MS & Co.,
and any such underwriters, dealers or agents outside the United States will
include MSIL or other affiliates of the Company.
Offers to purchase Securities may be solicited by agents designated by
the Company from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act, involved in the offer
or sale of the Securities in respect of which this Prospectus is delivered will
be named, and any commissions payable by the Company to such agent set forth, in
the Prospectus Supplement. Any such agent will
25
<PAGE>
be acting on a reasonable efforts basis for the period of its appointment or, if
indicated in the applicable Prospectus Supplement, on a firm commitment basis.
Agents may be entitled under agreements which may be entered into with the
Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act, and may be customers of, engage
in transactions with or perform services for the Company in the ordinary course
of business.
If any underwriters are utilized in the sale of the Securities in
respect of which this Prospectus is delivered, the Company will enter into an
underwriting agreement with such underwriters at the time of sale to them and
the names of the underwriters and the terms of the transaction will be set forth
in the Prospectus Supplement, which will be used by the underwriters to make
resales of the Securities in respect of which this Prospectus is delivered to
the public. The underwriters may be entitled, under the relevant underwriting
agreement, to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, and may be customers of, engage
in transactions with or perform services for the Company in the ordinary course
of business.
If a dealer is utilized in the sale of the Securities in respect of
which the Prospectus is delivered, the Company will sell such Securities to the
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale. Dealers
may be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, and may be customers of, engage
in transactions with or perform services for the Company in the ordinary course
of business.
Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase, in
accordance with their terms, by one or more firms, including MS & Co. and MSIL
("remarketing firms"), acting as principals for their own accounts or as agents
for the Company. Any remarketing firm will be identified and the terms of its
agreement, if any, with the Company and its compensation will be described in
the Prospectus Supplement. Remarketing firms may be entitled under agreements
which may be entered into with the Company to indemnification by the Company
against certain civil liabilities, including liabilities under the Securities
Act, and may be customers of, engage in transactions with or perform services
for the Company in the ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers by certain
purchasers to purchase Offered Debt Securities or Offered Warrants, Purchase
Contracts or Units, as the case may be, from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
Such contracts will be subject to only those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such offers.
Any underwriters, agents or dealers utilized in the sale of Securities
will not confirm sales to accounts over which they exercise discretionary
authority.
MS & Co. and MSIL are wholly owned subsidiaries of the Company. Each
offering of Securities and any market-making activities by MS & Co. with respect
to Securities will be conducted in compliance with the requirements of Rule 2720
of the National Association of Securities Dealers, Inc. (the "NASD") regarding a
NASD member firm's distributing the securities of an affiliate. Following the
initial distribution of any Securities, MS & Co., MSIL and other affiliates of
the Company may offer and sell such Securities in the course of their business
as broker-dealers (subject, in the case of Preferred Stock and Depositary
Shares, to obtaining any necessary approval of the NYSE for any such offers and
sales by MS & Co.). MS & Co., MSIL and such other affiliates may act as
principals or agents in such transactions. This Prospectus may be used by MS &
Co., MSIL and such other affiliates in connection with such transactions. Such
sales, if any, will be made at varying prices related to prevailing market
prices at the time of sale or otherwise. Neither MS & Co., MSIL nor such other
affiliates are obligated to make a market in any Securities and may discontinue
any market-making activities at any time without notice.
26
<PAGE>
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by
Jonathan M. Clark, General Counsel and Secretary of the Company and a Managing
Director of MS & Co., or other counsel who is satisfactory to MS & Co. or MSIL,
as the case may be, and an officer of the Company. Mr. Clark and such other
counsel beneficially own, or have rights to acquire under an employee benefit
plan of the Company, an aggregate of less than 1% of the common stock of the
Company. Certain legal matters relating to the Securities will be passed upon
for the Underwriters by Davis Polk & Wardwell. Davis Polk & Wardwell has in the
past represented and continues to represent the Company on a regular basis and
in a variety of matters, including in connection with its merchant banking and
leveraged capital activities.
EXPERTS
The consolidated financial statements and financial statement schedule
of the Company incorporated by reference and included in the Company's Annual
Report on Form 10-K for the fiscal period ended November 30, 1995 have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such consolidated
financial statements and financial statement schedule are, and audited
consolidated financial statements and financial statement schedules to be
included in subsequently filed documents will be, incorporated herein in
reliance upon the reports of Ernst & Young LLP pertaining to such financial
statements and financial statement schedules (to the extent covered by consents
filed with the Commission) given upon the authority of such firm as experts in
accounting and auditing.
ERISA MATTERS FOR PENSION PLANS AND INSURANCE COMPANIES
The Company and certain affiliates of the Company, including MS & Co.
and MSIL, may each be considered a "party in interest" within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or a
"disqualified person" within the meaning of the Code with respect to many
employee benefit plans. Prohibited transactions within the meaning of ERISA or
the Code may arise, for example, if the Debt Securities, Warrants or Purchase
Contracts (or any Units including Debt Securities, Warrants or Purchase
Contracts) are acquired by or with the assets of a pension or other employee
benefit plan with respect to which MS & Co. or any of its affiliates is a
service provider, unless such Debt Securities, Warrants or Purchase Contracts
(or any Units including Debt Securities, Warrants or Purchase Contracts) are
acquired pursuant to an exemption for transactions effected on behalf of such
plan by a "qualified professional asset manager" or pursuant to any other
available exemption. The assets of a pension or other employee benefit plan may
include assets held in the general account of an insurance company that are
deemed to be "plan assets" under ERISA. Any insurance company or pension or
employee benefit plan proposing to invest in the Debt Securities, Warrants or
Purchase Contracts (or any Units including Debt Securities, Warrants, or
Purchase Contracts) should consult with its legal counsel.
27
<PAGE>
MORGAN STANLEY GROUP INC.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following are the expenses of the issuance and distribution of the
securities being registered, all of which will be paid by the registrant. Other
than the registration fee and the NASD filing fee, all of such expenses are
estimated.
Registration fee............................................ $ 1,818,182
NASD filing fee............................................. 30,500
Blue Sky fees and expenses.................................. *
Rating agency fees.......................................... *
Printing and engraving expenses............................. *
Legal fees and expenses..................................... *
Accounting fees and expenses................................ *
Trustees' and Preferred Stock Depositary's
fees and expenses (including counsel fees)............ *
Miscellaneous............................................... *
-----------
Total................................................. $ *
===========
Item 15. Indemnification of Officers and Directors
Article VI of the Restated Certificate of Incorporation of the Company
and Article VI of the By-Laws of the Company, each as amended to date, provide
for the indemnification of directors and officers. Under these articles, any
person who is a director or officer of the Company or a corporation all of the
capital stock (other than directors' qualifying shares) of which is owned
directly or indirectly by the Company (a "Subsidiary") and any person who is or
was serving at the request of the Company or a Subsidiary as a director,
officer, partner, member, employee or agent of another corporation, partnership
or other enterprise shall be indemnified, to the fullest extent permitted by
applicable law, by the Company if such person was or is a party or is threatened
to be made a party to, or is involved in any manner in, any threatened, pending
or completed action, suit or proceeding (whether civil, criminal, administrative
or investigative) by reason of the fact that such person was acting in such a
capacity. The Restated Certificate of Incorporation and the By-Laws also permit,
to the extent deemed advisable by the Board of Directors of the Company,
indemnification, to the fullest extent permitted by applicable law, of any
person who was or is an employee or agent (other than a director or officer) of
the Company or a Subsidiary and who is involved in any of the aforementioned
actions.
The right to indemnification under the Restated Certificate of
Incorporation and the By-Laws includes, to the fullest extent permitted by
applicable law, the right to be paid the expenses (including attorneys' fees)
incurred in connection with any proceeding in advance of its final disposition.
The payment of any amounts to any indemnified person pursuant to the Restated
Certificate of Incorporation and the By-Laws shall subrogate the Company to any
right such person may have against any other person or entity.
Under both the Restated Certificate of Incorporation and the By-Laws,
the Company has the power to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Company or a
Subsidiary, or is or was serving at the request of the Company or a Subsidiary
as a director, officer, partner, member, employee or agent of another
corporation, partnership, joint venture, trust, committee or other enterprise,
against any expense, liability or loss asserted against such person and incurred
by him in any such capacity, or arising out of his status as such, whether or
not the Company or a Subsidiary would have the power to indemnify him against
such expense, liability or loss under the provisions of applicable law.
- ---------------
* To be filed by amendment.
II-1
<PAGE>
Item 16. Exhibits
Exhibit
Number Description
-------- ----------
1-a* Form of Underwriting Agreement for Debt Securities, Warrants,
Purchase Contracts and Units.
1-b Form of Underwriting Agreement for Preferred Stock (previously
filed as an exhibit to the Company's Current Report on Form 8-K
dated August 23, 1996 and incorporated herein by this
reference).
1-c* Form of U.S. Distribution Agreement.
1-d* Form of Euro Distribution Agreement.
4-a Restated Certificate of Incorporation of the Company, as
amended.
4-b Form of Certificate of Designation of Offered Preferred Stock
(previously filed as an exhibit to the Company's Registration
Statement on Form S-3 (File No. 33-65838) and incorporated
herein by this reference).
4-c Form of Certificate of Offered Preferred Stock (previously filed
as an exhibit to the Company's Registration Statement on Form
S-3 (File No. 33-65838) and incorporated herein by this
reference).
4-d Form of Deposit Agreement (including Form of Depositary Receipt)
(previously filed as an exhibit to the Company's Registration
Statement on Form S-3 (File No. 33-43542) and incorporated
herein by this reference).
4-e Senior Indenture dated as of April 15, 1989 between the Company
and The Chase Manhattan Bank (formerly known as Chemical Bank),
Trustee (previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31, 1993
and incorporated herein by this reference).
4-f First Supplemental Senior Indenture, dated as of May 15, 1991,
to the Senior Indenture dated as of April 15, 1989, between the
Company and The Chase Manhattan Bank (formerly known as Chemical
Bank), Trustee (previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended January 31,
1993 and incorporated herein by this reference).
4-g Second Supplemental Senior Indenture, dated as of April 15,
1996, to the Senior Indenture dated as of April 15, 1989 between
the Company and The Chase Manhattan Bank (formerly known as
Chemical Bank), Trustee (previously filed as an exhibit to the
Company's Current Report on Form 8-K dated May 6, 1996 and
incorporated herein by this reference).
4-h Subordinated Indenture dated as of April 15, 1989 between the
Company and The First National Bank of Chicago, Trustee
(previously filed as an exhibit to the Company's Annual Report
on Form 10-K for the fiscal year ended January 31, 1993 and
incorporated herein by this reference).
4-i First Supplemental Subordinated Indenture, dated as of May 15,
1991, to the Subordinated Indenture dated as of April 15, 1989
between the Company and The First National Bank of Chicago,
Trustee (previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31, 1993
and incorporated herein by this reference).
4-j Second Supplemental Subordinated Indenture, dated as of April
15, 1996, to the Subordinated Indenture dated as of April 15,
1989 between the Company and The First National Bank of Chicago,
Trustee (previously filed as an exhibit to the Company's Current
Report on Form 8-K dated May 6, 1996 and incorporated herein by
this reference).
4-k Form of Floating Rate Senior Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated May 6,
1996 and incorporated herein by this reference).
II-2
<PAGE>
Exhibit
Number Description
------- ----------
4-l Form of Fixed Rate Senior Note (previously filed as an exhibit
to the Company's Current Report on Form 8-K dated May 6, 1996
and incorporated herein by this reference).
4-m Form of Senior Variable Rate Renewable Note (previously filed as
an exhibit to the Company's Current Report on Form 8-K dated May
6, 1996 and incorporated herein by this reference).
4-n Form of Floating Rate Subordinated Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated May 6,
1996 and incorporated herein by this reference).
4-o Form of Fixed Rate Subordinated Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated May 6,
1996 and incorporated herein by this reference).
4-p Form of Subordinated Variable Rate Renewable Note (previously
filed as an exhibit to the Company's Current Report on Form 8-K
dated May 6, 1996 and incorporated herein by this reference).
4-q Form of Temporary Global Floating Rate Senior Bearer Note
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-r Form of Temporary Global Fixed Rate Senior Bearer Note
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-s Form of Permanent Global Floating Rate Senior Bearer Note
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-t Form of Permanent Global Fixed Rate Senior Bearer Note
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-u Form of Euro Fixed Rate Senior Bearer Note (previously filed as
an exhibit to the Company's Current Report on Form 8-K dated May
6, 1996 and incorporated herein by this reference).
4-v Form of Euro Fixed Rate Senior Registered Note (previously filed
as an exhibit to the Company's Current Report on Form 8-K dated
May 6, 1996 and incorporated herein by this reference).
4-w Form of Floating/Fixed Rate Senior Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated May 6,
1996 and incorporated herein by this reference).
4-x Form of Senior Dollarized Bull Note (previously filed as an
exhibit to the Company's Current Report on Form 8-K dated May 6,
1996 and incorporated herein by this reference).
4-y Form of S&P Indexed (Bull) Note (previously filed as an exhibit
to the Company's Current Report on Form 8-K dated May 6, 1996
and incorporated herein by this reference).
4-z Form of S&P Indexed (Bear) Note (previously filed as an exhibit
to the Company's Current Report on Form 8-K dated May 6, 1996
and incorporated herein by this reference).
4-aa Form of Euro Fixed Rate Subordinated Registered Note (previously
filed as an exhibit to the Company's Current Report on Form 8-K
dated May 6, 1996 and incorporated herein by this reference).
4-bb Form of Principal Exchange Rate Linked Security (PERLS) Note
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-cc Form of Reverse PERLS Note (previously filed as an exhibit to
the Company's Current Report on Form 8-K dated May 6, 1996 and
incorporated herein by this reference).
4-dd Form of Multicurrency PERLS Note (previously filed as an exhibit
to the Company's Current Report on Form 8-K dated May 6, 1996
and incorporated herein by this reference).
II-3
<PAGE>
Exhibit
Number Description
------- ----------
4-ee Form of Fixed Rate Amortizing Senior Note (previously filed as
an exhibit to the Company's Current Report on Form 8-K dated May
6, 1996 and incorporated herein by this reference).
4-ff Form of Senior Dollarized Yield Curve Note (Bond Basis)
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-gg Form of Senior Dollarized Yield Curve Note (Money Market Basis)
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-hh Form of Permanent Global Senior Bull Note (previously filed as
an exhibit to the Company's Current Report on Form 8-K dated May
6, 1996 and incorporated herein by this reference).
4-ii Form of Definitive Floating Rate Senior Bearer Note (previously
filed as an exhibit to the Company's Current Report on Form 8-K
dated May 6, 1996 and incorporated herein by this reference).
4-jj Form of Temporary Global Senior ECU Puttable Floating Rate Note
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-kk Form of Permanent Global Senior ECU Puttable Floating Rate Note
(previously filed as an exhibit to the Company's Current Report
on Form 8-K dated May 6, 1996 and incorporated herein by this
reference).
4-ll Form of Debt Warrant Agreement for Warrants Sold Attached to
Debt Securities (previously filed as an exhibit to the Company's
Registration Statement on Form S-3 (File No. 33-35300) and
incorporated herein by this reference).
4-mm Form of Debt Warrant Agreement for Warrants Sold Alone
(previously filed as an exhibit to the Company's Registration
Statement on Form S-3 (File No. 33-35300) and incorporated
herein by this reference).
4-nn* Form of Warrant Agreement for Universal Warrants.
4-oo* Form of Purchase Contract.
4-pp* Form of Unit Agreement.
5* Opinion of Ralph L. Pellecchio, Assistant Secretary and Counsel
of the Company.
12-a Computation of Consolidated Ratio of Earnings to Fixed Charges
(previously filed as an exhibit to the Company's Quarterly
Report on Form 10-Q for the quarter ended August 31, 1996 and
incorporated herein by this reference).
12-b Computation of Consolidated Ratio of Earnings to Fixed Charges
and Preferred Stock Dividends (previously filed as an exhibit to
the Company's Quarterly Report on Form 10-Q for the quarter
ended August 31, 1996 and incorporated herein by this
reference).
23-a Consent of Ernst & Young LLP.
23-b* Consent of Ralph L. Pellecchio, Assistant Secretary and Counsel
of the Company (included in Exhibit 5).
24 Powers of Attorney (included on the signature pages).
25-a Statement of Eligibility of The Chase Manhattan Bank, Trustee
under the Senior Debt Indenture.
II-4
<PAGE>
Exhibit
Number Description
------- ----------
25-b Statement of Eligibility of The First National Bank of Chicago,
Trustee under the Subordinated Debt Indenture.
- ---------------
* To be filed by amendment.
Item 17. Undertakings
(1) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(2) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by a registrant
of expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(3) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
registration statement or any material change to such information
in this registration statement;
provided, however, that paragraphs (3)(a)(i) and (3)(a)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
this registration statement.
II-5
<PAGE>
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York and State of New York, on the 16th day of
December, 1996.
MORGAN STANLEY GROUP INC.
(Registrant)
By /s/ Richard B. Fisher
----------------------------------------
Richard B. Fisher
Chairman of the Board of Directors
POWER OF ATTORNEY
Each of the undersigned officers and directors of Morgan Stanley Group
Inc. constitutes and appoints Jonathan M. Clark, Philip N. Duff, Eileen K.
Murray and Ralph L. Pellecchio, and each or any of them, his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign
this registration statement and all amendments (including post-effective
amendments) to this registration statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each or any of them, full power and authority to do and perform each
and every act and thing requisite and necessary to enable the Registrant to
comply with the Securities Act of 1933 and all requirements of the Securities
and Exchange Commission, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each or any of them, or their or his
substitutes or substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated and on the 16th day of December 1996.
Signature Title
--------- -----
/s/ Richard B. Fisher Chairman, Managing Director and
------------------------------ Director
Richard B. Fisher
/s/ John J. Mack President, Managing Director and
------------------------------ Director
John J. Mack
/s/ Barton M. Biggs Managing Director and Director
------------------------------
Barton M. Biggs
II-7
<PAGE>
/s/ Peter F. Karches Managing Director and Director
------------------------------
Peter F. Karches
/s/ Sir David A. Walker Managing Director and Director
------------------------------
Sir David A. Walker
/s/ Philip N. Duff Chief Financial Officer
------------------------------ and Managing Director
Philip N. Duff
/s/ Eileen K. Murray Treasurer and Chief Accounting Officer
------------------------------
Eileen K. Murray
Director
------------------------------
Daniel B. Burke
Director
------------------------------
Robert P. Bauman
/s/ S. Parker Gilbert Director
------------------------------
S. Parker Gilbert
/s/ Allen E. Murray Director
------------------------------
Allen E. Murray
/s/ Paul J. Rizzo Director
------------------------------
Paul J. Rizzo
II-8
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Documents
------- -----------------------
1-a* Form of Underwriting Agreement for Debt Securities, Warrants,
Purchase Contracts and Units.
1-c* Form of U.S. Distribution Agreement.
1-d* Form of Euro Distribution Agreement.
4-a Restated Certificate of Incorporation of the Company, as
amended.
4-nn* Form of Warrant Agreement for Universal Warrants.
4-oo* Form of Purchase Contract.
4-pp* Form of Unit Agreement.
5* Opinion of Ralph L. Pellecchio, Assistant Secretary and Counsel
of the Company.
23-a Consent of Ernst & Young LLP.
25-a Statement of Eligibility of The Chase Manhattan Bank, Trustee
under the Senior Debt Indenture.
25-b Statement of Eligibility of The First National Bank of Chicago,
Trustee under the Subordinated Debt Indenture.
- ---------------
* To be filed by amendment.
EXHIBIT 4.a
RESTATED CERTIFICATE OF INCORPORATION
OF
MORGAN STANLEY GROUP INC.
Pursuant to Section 245 of the
General Corporation Law of the State of Delaware
Morgan Stanley Group Inc., a corporation duly organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation") and originally incorporated in the State of Delaware on
July 10, 1975 under the name Morgan Stanley Holdings Incorporated, does
hereby certify as follows:
FIRST: That the Certificate of Incorporation of the
Corporation was filed in the office of the Secretary of State of the State of
Delaware, and a certified copy thereof was recorded in the office of the
Recorder of Kent County, Delaware, on the 10th day of July, 1975.
SECOND: That the Restated Certificate of Incorporation was
filed in the office of the Secretary of State of the State of Delaware, and a
certified copy thereof was recorded in the office of the Recorder of Kent
County, Delaware, on the 30th day of October, 1989.
THIRD: That Certificates of Amendment to the Restated
Certificate of Incorporation were filed in the office of the Secretary of State
of the State of Delaware, and certified copies thereof were recorded in the
office of the Recorder of Kent County, Delaware, on the 8th day of May, 1991,
and the 21st day of May, 1992.
FOURTH: That Certificates of Stock Designation were filed in
the office of the Secretary of State of the State of Delaware, and certified
copies thereof were recorded in the office of the Recorder of Kent County,
Delaware, on the 19th day of September, 1990, the 24th day of May, 1991, the
29th day of August, 1991, the 15th day of November, 1991, the 20th day of
March, 1992, and the 6th day of May, 1992.
FIFTH: That a Certificate of Retirement of Stock was filed in
the office of the Secretary of State of the State of Delaware and a certified
copy thereof was recorded in the office of the Recorder of Kent County,
Delaware, on the 20th day of June, 1992.
<PAGE>
2
SIXTH: That this Restated Certificate of Incorporation
restates and integrates and does not further amend the provisions of the
Corporation's Restated Certificate of Incorporation as heretofore amended or
supplemented, and that there is no discrepancy between those provisions and the
provisions of this Restated Certificate of Incorporation, and that the Restated
Certificate of Incorporation is hereby restated to read in its entirety as
follows:
ARTICLE I
NAME
The name of the Corporation is:
MORGAN STANLEY GROUP INC.
ARTICLE II
REGISTERED OFFICE AND REGISTERED AGENT
The registered office of the Corporation in the State of
Delaware is located at 32 Loockerman Sq., Ste. L-100, City of Dover, County of
Kent. The name of the registered agent of the Corporation at such address is
United States Corporation Company.
ARTICLE III
CORPORATE PURPOSE
The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may now or hereafter be organized under the
General Corporation Law of Delaware.
ARTICLE IV
CAPITAL STOCK
SECTION 1. Shares and Classes Authorized. The total number
of shares of all classes of capital stock which the Corporation shall have
authority to issue is 330,000,000 shares, which shall include:
(a) 30,000,000 shares of preferred stock of no par value
each (hereinafter referred to as "Preferred Stock"); and
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(b) 300,000,000 shares of common stock of the par value
of $1.00 each (hereinafter referred to as "Common Stock");
such classes of Preferred Stock and Common Stock being sometimes hereinafter
collectively referred to as "capital stock".
SECTION 2. Preferences, Rights, Limitations and Restrictions
of Capital Stock. The designations and the powers, preferences and rights, and
the qualifications, limitations or restrictions thereof, in respect of the
classes of the capital stock, and the authority with respect thereto expressly
vested in the Board of Directors of the Corporation, are as follows:
PART I -- PREFERRED STOCK (a) The Preferred Stock may be
issued either as a class without series or, if so determined by the Board of
Directors of the Corporation, from time to time in one or more series and with
such designation for such class or each such series as shall be stated and
expressed in the resolution or resolutions providing for the issue of such
class or each such series adopted by the Board of Directors. The Board of
Directors in any such resolution or resolutions is expressly authorized to
state and express for such class or each such series:
(i) Voting rights, if any, including, without limitation, the
authority to confer multiple votes per share, voting rights as to
specified matters or issues or, subject to the provisions of this
Restated Certificate of Incorporation, voting rights to be exercised
either together with holders of Common Stock as a single class, or
independently as a separate class;
(ii) The rate per annum and the times at and conditions upon
which the holders of shares of such class or series shall be entitled
to receive dividends, the conditions and dates upon which such
dividends shall be payable and whether such dividends shall be
cumulative or noncumulative, and, if cumulative, the terms upon which
such dividends shall be cumulative;
(iii) Redemption, repurchase, retirement and sinking fund
rights, preferences and limitations, if any, the amount payable on
shares of such class or series in the event of such redemption,
repurchase or retirement, the terms and conditions of any sinking
fund, the manner of creating such fund or funds and whether any of the
foregoing shall be cumulative or noncumulative;
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(iv) The rights to which the holders of the shares of such
class or series shall be entitled upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation;
(v) The terms, if any, upon which the shares of such class or
series shall be convertible into, or exchangeable for, shares of stock
of any other class or classes or of any other series of the same or
any other class or classes, including the price or prices or the rate
or rates of conversion or exchange and the terms of adjustment, if
any; and
(vi) Any other designations, preferences and relative,
participating, optional or other special rights and qualifications,
limitations or restrictions thereof so far as they are not
inconsistent with the provisions of this Restated Certificate of
Incorporation and to the full extent now or hereafter permitted by the
laws of the State of Delaware.
(b) All shares of the Preferred Stock, if issued as a
class without series, or all shares of the Preferred Stock of any one series,
if issued in series, shall be identical to each other in all respects and shall
entitle the holders thereof to the same rights and privileges, except that
shares of any one series issued at different times may differ as to the dates
from which dividends thereon, if cumulative, shall be cumulative.
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5
Subpart A: ESOP Convertible Preferred Stock*
1. Designation and Issuance.
(A) The shares of such series shall be designated ESOP
CONVERTIBLE PREFERRED STOCK (hereinafter referred to as the "ESOP Preferred
Stock") and such series shall consist of 3,902,438 shares. Such number of
shares may be increased or decreased from time to time by resolution of the
Pricing Committee of this Board of Directors (the "Pricing Committee"), but no
such increase shall result in such series consisting of more than 4,000,000
shares, and no decrease shall reduce the number of shares of ESOP Preferred
Stock to a number less than that of shares of ESOP Preferred Stock then
outstanding plus the number of shares issuable upon exercise of any rights,
options or warrants or upon conversion of outstanding securities issued by the
Corporation relating to such shares. Any shares of ESOP Preferred Stock
redeemed or purchased by the Corporation shall remain issued and outstanding
for all purposes (except that as long as such shares are held by the
Corporation or its nominee, no dividends shall be paid on such shares and they
shall neither be entitled to vote nor counted for quorum purposes) and may
thereafter be transferred by the Corporation from time to time to a trustee or
trustees referred to in paragraph (B) of this Section 1 (whereupon the voting
and dividend rights of such shares shall be restored); provided that the
Corporation may provide at the time of or at any time after such redemption or
purchase that any such shares then held by the Corporation or its nominee shall
be retired, and such shares shall then be restored to the status of authorized
but unissued shares of preferred stock of the Corporation.
(B) Shares of ESOP Preferred Stock shall be issued only to a
trustee or trustees acting on behalf of an employee stock ownership trust or
plan or other employee benefit plan (a "Plan") of the Corporation. In the
event of any sale, transfer or other disposition (hereinafter a "transfer") of
shares of ESOP Preferred Stock to any person (including, without limitation,
any participant in the Plan) other than (x) any trustee or trustees of the Plan
or (y) any pledgee of such shares acquiring such shares as security for any
loan or
- --------------------
* Terms defined in this Subpart A are so defined for purposes of this
Subpart alone.
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loans made to the Plan or to any trustee or trustees acting on behalf of the
Plan, the shares of ESOP Preferred Stock so transferred, upon such transfer and
without any further action by the Corporation or the holder, shall be
automatically converted into shares of Common Stock at the Conversion Price (as
hereinafter defined) and on the terms otherwise provided for the conversion of
shares of ESOP 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 ESOP Preferred Stock hereunder, but, rather, only the powers and
rights pertaining to the Common Stock into which such shares of ESOP Preferred
Stock shall be so converted; provided, however, that in the event of a
foreclosure or other realization upon shares of ESOP Preferred Stock pledged as
security for any loan or loans made to the Plan or to the trustee or the
trustees acting on behalf of the Plan, the pledged shares so foreclosed or
otherwise realized upon shall be converted automatically into shares of Common
Stock at the Conversion Price and on the terms otherwise provided for
conversions of shares of ESOP Preferred Stock into shares of Common Stock
pursuant to Section 5 hereof. In the event of such a conversion, such
transferee shall be treated for all purposes as the record holder of the shares
of Common Stock into which the ESOP Preferred Stock shall have been converted
as of the date of such conversion. Certificates representing shares of ESOP
Preferred Stock shall be legended to reflect such restrictions on transfer.
Notwithstanding the foregoing provisions of this Section 1, shares of ESOP
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 transferred by the holder thereof as permitted by law and (ii) shall be
redeemable by the Corporation upon the terms and conditions provided by
Sections 6, 7 and 8 hereof.
2. Dividends and Distributions.
(A) (1) Subject to the provisions for adjustment
hereinafter set forth, the holders of shares of ESOP Preferred Stock (other
than the Corporation or its nominee) shall be entitled to receive, when and as
declared by the Board of Directors out of funds legally available therefor,
cash dividends ("Preferred Dividends") payable in accordance with either of the
following elections, as the Board of Directors shall elect from time to time in
its absolute discretion:
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(i) in an amount per share initially equal to $2.78 per
share per annum, and no more (such amount, as adjusted from time to
time pursuant to the terms hereof, including during any period in
which a Semiannual Payment Election (as defined below) shall be in
effect, the "Annual Dividend Rate"), payable annually in arrears on
December 31 (or such later date not more than four business days
thereafter as the Board of Directors may from time to time elect in
its absolute discretion; such date, the "Annual Payment Date") of each
year (such election, the "Annual Payment Election") beginning on the
Annual Payment Date occurring immediately after the effective date of
such Annual Payment Election; or
(ii) in an amount per share initially equal to $2.78 per share
per annum, and no more (such amount, as adjusted from time to time
pursuant to the terms hereof, including during any period in which an
Annual Payment Election is in effect, the "Semiannual Dividend Rate";
and the Semiannual Dividend Rate and the Annual Dividend Rate, as in
effect at any time, are each hereinafter referred to as the "Preferred
Dividend Rate"), semiannually in arrears, one-half on each June 30 and
December 31 (or, in either case, such later date not more than four
business days after either of such dates as the Board of Directors may
from time to time elect in its absolute discretion; such dates, the
"Semiannual Payment Dates") of each year (such election, the
"Semiannual Payment Election"), beginning on the Semiannual Payment
Date occurring immediately after the effective date of such Semiannual
Payment Election;
provided that any Semiannual Payment Election shall be made effective only
during the period beginning on January 5 and ending on June 29 in each year.
The Board of Directors shall give prompt notice to the holders of the ESOP
Preferred Stock of any Semiannual Payment Election or Annual Payment Election
and any election to alter any Dividend Payment Date pursuant to this Section
2(A)(1). Each Annual Payment Date or Semiannual Payment Date, as applicable,
is hereinafter referred to as a "Dividend Payment Date", and each payment of a
Preferred Dividend shall be made to holders of record at the opening of
business on such Dividend Payment Date.
(2) Preferred Dividends shall begin to accrue on
outstanding shares of ESOP Preferred Stock from the date of issuance of such
shares, except that with respect to any shares of ESOP Preferred Stock redeemed
or purchased by the Corporation and then reissued, Preferred Dividends shall
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8
accrue on such shares from their date of reissuance. Preferred Dividends shall
accrue on a daily basis, whether or not the Corporation shall then have
earnings or surplus (computed on the basis of a 360-day year of twelve 30-day
months in case of any period less than one year) based on the Preferred
Dividend Rate in effect on such date; provided that if a Semiannual Payment
Election or an Annual Payment Election becomes effective on or after such date
and before the immediately succeeding Dividend Payment Date, payments in
respect of dividends on the ESOP Preferred Stock made on or after the effective
date of such Semiannual Payment Election or Annual Payment Election and on or
before such Dividend Payment Date shall be computed using the Preferred
Dividend Rate in effect on the date of such payment. Accrued but unpaid
Preferred Dividends shall cumulate as of the Dividend Payment Date on which
they first become payable, but no interest shall accrue on accumulated but
unpaid Preferred Dividends.
(B) So long as any shares of ESOP 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 ESOP Preferred Stock as
to dividends, unless there shall also be or have been declared and paid or set
apart for payment on the ESOP Preferred Stock, like dividends for all dividend
payment periods of the ESOP Preferred Stock ending on or before the dividend
payment date of such parity stock, ratably in proportion to the respective
amounts of dividends (1) accumulated and unpaid or payable on such parity
stock, on the one hand, and (2) accumulated and unpaid through the dividend
payment period or periods of the ESOP Preferred Stock next preceding such
dividend payment date, on the other hand. If full cumulative dividends on the
ESOP Preferred Stock have not been declared and paid or set apart for payment
when due, the Corporation 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 Corporation ranking, as to dividends or upon dissolution,
junior to the ESOP Preferred Stock until full cumulative dividends on the ESOP
Preferred Stock shall have been paid or declared and set apart; provided,
however, that the foregoing shall not apply to (i) any dividend or distribution
payable solely in any shares of, or options, warrants or rights to subscribe
for or purchase shares of, any stock ranking, as to dividends and upon
dissolution, junior to the ESOP Preferred Stock or (ii) the acquisition of
shares of any stock ranking, as to dividends and upon dissolution, junior to
the ESOP Preferred Stock in
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9
exchange solely for or by conversion solely into shares of any other stock
ranking junior to the ESOP Preferred Stock as to dividends and upon
dissolution.
(C) Any dividend payment made on shares of ESOP Preferred
Stock shall first be credited against the earliest accumulated but unpaid
dividend due with respect to such shares.
3. Liquidation Preference.
(A) In the event of any dissolution or liquidation of the
Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus)
shall be made to or set apart for the holders of any series or class or classes
of stock of the Corporation ranking junior to ESOP Preferred Stock upon
dissolution or liquidation, the holders of ESOP Preferred Stock (other than the
Corporation or its nominee) shall be entitled to receive the Liquidation Price
(as hereinafter defined) per share in effect at the time of dissolution or
liquidation plus an amount equal to all dividends accrued (whether or not
accumulated) and unpaid on the ESOP Preferred Stock to the date of final
distribution to such holders; but such holders shall not be entitled to and
shall not otherwise receive any further payments. The Liquidation Price per
share that holders of ESOP Preferred Stock shall receive upon dissolution or
liquidation shall be $35.875, subject to adjustment as hereinafter provided.
If, upon any dissolution or liquidation of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of ESOP
Preferred Stock shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other shares ranking, as to
dissolution or liquidation, on a parity with ESOP Preferred Stock, then such
assets, or the proceeds thereof, shall be distributed among the holders of ESOP
Preferred Stock and any such other shares ratably in accordance with the
respective amounts that would be payable on such shares of ESOP Preferred Stock
and any such other shares if all amounts payable thereon were paid in full.
For the purposes of this Section 3, neither a consolidation or merger of the
Corporation with or into one or more corporations, nor the sale, transfer,
lease or exchange (for cash, shares of equity stock, securities or other
consideration) of all or substantially all of the assets of the Corporation,
nor the distribution to the stockholders of the Corporation of all or
substantially all of the consideration for such sale, unless such consideration
(apart from assumption of liabilities) or the net proceeds
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thereof consists substantially entirely of cash, shall be deemed to be a
dissolution or liquidation, voluntary or involuntary.
(B) Subject to the rights of the holders of shares of any
series or class or classes of stock ranking on a parity with or senior to ESOP
Preferred Stock upon dissolution or liquidation, upon any dissolution or
liquidation of the Corporation, after payment shall have been made in full to
the holders of ESOP Preferred Stock as provided in this Section 3, but not
prior thereto, any other series or class or classes of stock ranking junior to
ESOP Preferred Stock upon dissolution or liquidation shall, subject to the
respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets of the Corporation remaining to be paid or
distributed, and the holders of ESOP Preferred Stock shall not be entitled to
share therein.
4. Ranking and Voting of Shares.
(A) The Corporation's 9.36% Cumulative Preferred Stock, with
a liquidation value of $25.00 per share, the Corporation's 8.88% Cumulative
Preferred Stock, with a liquidation value of $200.00 per share, and the
Corporation's 8-3/4% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share, shall rank on a parity with ESOP Preferred Stock as to
dividends and as to distribution of assets upon dissolution or liquidation.
Unless otherwise provided in the Restated Certificate of
Incorporation of the Corporation, as the same may be amended, or in a
Certificate of Designation of Rights and Preferences relating to any subsequent
series of preferred stock, the ESOP Preferred Stock shall rank on a parity with
all series of the Corporation's preferred stock as to dividends and as to the
distribution of assets upon dissolution or liquidation.
(B) The holders of shares of ESOP Preferred Stock (other
than the Corporation or its nominee) shall have the following voting rights:
(1) The holders of ESOP Preferred Stock shall be entitled
to vote on all matters submitted to a vote of the stockholders of the
Corporation, voting together with the holders of Common Stock as one class.
The holder of each share of ESOP Preferred Stock shall be entitled to a number
of votes equal to 1.35 times the number of shares of Common
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Stock into which such share of ESOP Preferred Stock could be converted on the
record date for determining the stockholders entitled to vote; it being
understood that whenever the "Conversion Price" (as defined in Section 5
hereof) is adjusted as provided in Section 9 hereof, the number of votes of the
ESOP Preferred Stock shall also be correspondingly adjusted. Notwithstanding
the immediately preceding sentence, if the governing body of the New York Stock
Exchange or any other securities listing service or exchange (each, an
"Exchange") or any relevant governmental or regulatory entity (each such
entity, and each governing body of an Exchange, a "Regulating Entity") shall
have disapproved of such voting power or taken or threatened any action against
the Corporation or in respect of any of its securities in accordance with Rule
19c-4 promulgated under the Securities Exchange Act of 1934 (the "Exchange
Act"), or any other rule or listing standard of any Regulating Entity regarding
the voting power of securities, or if the Board of Directors determines in its
sole judgment that any Regulating Entity may so disapprove or take or threaten
any such action, the holder of each share of ESOP Preferred Stock shall be
entitled to a maximum number of votes permissible (consistent with continued
listing of the Corporation's securities on any such Exchange) in accordance
with the interpretations of any such rule or listing standard by such
Regulating Entity, as determined by the Board of Directors.
(2) Except as otherwise required by law or set forth herein,
holders of ESOP 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, including the issuance of any preferred stock now or
hereafter authorized; provided, however, that the vote of at least 66-2/3% of
the outstanding shares of ESOP Preferred Stock, voting separately as a series,
shall be necessary to approve any alteration, amendment or repeal of any
provision of the Restated Certificate of Incorporation or any alteration,
amendment or repeal of any provision of the resolutions relating to the
designation, preferences and rights of ESOP Preferred Stock (including any such
alteration, amendment or repeal effected by any merger or consolidation in
which the Corporation is the surviving or resulting corporation, but not
including any alteration or amendment of rights expressly provided for in
Section (B)(1) above or in Section 2(A)(1)), if such amendment, alteration or
repeal would alter or change the powers, preferences, or special rights of the
ESOP Preferred Stock so as to affect them adversely.
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5. Conversion into Common Stock.
(A) A holder of shares of ESOP 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. The number of
shares of Common Stock into which each share of the ESOP Preferred Stock may be
converted shall be determined by dividing the Liquidation Price in effect at
the time of conversion by the Conversion Price (as hereinafter defined) in
effect at the time of conversion. The initial Conversion Price per share at
which shares of Common Stock shall be issuable upon conversion of any shares of
ESOP Preferred Stock shall be $35.875, subject to adjustment as hereinafter
provided; that is, a conversion rate initially equivalent to one share of
Common Stock for each share of ESOP Preferred Stock, which is subject to
adjustment as hereinafter provided.
(B) Any holder of shares of ESOP Preferred Stock desiring to
convert such shares into shares of Common Stock shall surrender, if
certificated, the certificate or certificates representing the shares of ESOP
Preferred Stock being converted, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating thereto), or
if uncertificated, a duly executed stock power relating thereto, at the
principal executive office of the Corporation or the offices of the transfer
agent for the ESOP 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 ESOP Preferred Stock by the Corporation or the
transfer agent for the ESOP Preferred Stock, accompanied by written notice of
conversion. Such notice of conversion shall specify (i) the number of shares
of ESOP Preferred Stock to be converted and the name or names in which such
holder wishes the Common Stock and any shares of ESOP Preferred Stock not to be
so converted to be issued, and (ii) the address to which such holder wishes
delivery to be made of a confirmation of such conversion, if uncertificated, or
any new certificates which may be issued upon such conversion, if certificated.
(C) Upon surrender, if certificated, of a certificate
representing a share or shares of ESOP Preferred Stock for conversion, or if
uncertificated, of a duly executed stock power relating thereto, the
Corporation shall issue and send by hand delivery (with receipt to be
acknowledged) or by first class mail, postage prepaid, to the
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holder thereof or to such holder's designee, at the address designated by such
holder, if certificated, a certificate or certificates for, or if
uncertificated, confirmation of, the number of shares of Common Stock to which
such holder shall be entitled upon conversion. If there shall have been
surrendered shares of ESOP Preferred Stock only part of which are to be
converted, the Corporation shall issue and deliver to such holder or such
holder's designee, if certificated, a new certificate or certificates
representing the number of shares of ESOP Preferred Stock that shall not have
been converted, or if uncertificated, confirmation of the number of shares of
ESOP Preferred Stock that shall not have been converted.
(D) The issuance by the Corporation of shares of Common
Stock upon a conversion of shares of ESOP 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, if certificated, or confirmation, if uncertificated, and (ii) the
commencement of business on the second business day after the surrender of the
certificate or certificates, if certificated, or a duly executed stock power,
if uncertificated, for the shares of ESOP Preferred Stock to be converted. On
and after the effective date of conversion, the person or persons entitled to
receive Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock, and no
allowance or adjustment shall be made in respect of dividends payable to
holders of Common Stock of record on any date prior to such effective date.
The Corporation shall not be obligated to pay any dividend that may have
accrued or have been declared but that is not payable to holders of shares of
ESOP Preferred Stock if the Dividend Payment Date for such dividend is on or
subsequent to the effective date of conversion of such shares.
(E) The Corporation shall not be obligated to deliver to
holders of ESOP Preferred Stock any fractional share or shares of Common Stock
issuable upon any conversion of such shares of ESOP Preferred Stock, but in
lieu thereof may make a cash payment in respect thereof in any manner permitted
by law.
(F) The Corporation shall at all times reserve and keep
available out of its authorized and unissued Common Stock or treasury Common
Stock, solely for issuance upon the conversion of shares of ESOP Preferred
Stock as herein
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provided, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the shares of ESOP Preferred Stock then
outstanding.
6. Redemption at the Option of the Corporation.
(A) The ESOP Preferred Stock shall be redeemable, in whole or in
part, at the option of the Corporation at any time after September 19, 2000,
out of funds legally available therefor, at a redemption price per share equal
to 100% of the Liquidation Price plus an amount equal to all accrued (whether
or not accumulated) and unpaid dividends thereon to the date fixed for
redemption. Payment of the redemption price shall be made by the Corporation
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 ESOP Preferred Stock called for redemption will cease to
accrue and all rights of the holder in respect of such shares shall cease,
except the right to receive the redemption price. Upon payment of the
redemption price, such shares shall be deemed to have been transferred to the
Corporation, to be held as treasury shares or to be retired, in either case as
provided in Section 1(A). If less than all of the outstanding shares of ESOP
Preferred Stock are to be redeemed, the Corporation 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 Corporation.
(B) Notice of redemption will be sent to the holders of ESOP
Preferred Stock at the address shown on the books of the Corporation or any
transfer agent for ESOP 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 or in any other manner provided by law. Each notice shall
state: (i) the redemption date; (ii) the total number of shares of ESOP
Preferred Stock to be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (iii) the redemption price; (iv) the place or places where
certificates, if certificated, 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; (vi) whether such
redemption price should be paid in cash or in shares of Common Stock; and (vii)
the conversion rights of the shares to be redeemed, the period within which
conversion
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rights may be exercised and the Conversion Price and number of shares of Common
Stock issuable upon conversion of a share of ESOP Preferred Stock at the time.
Upon surrender of the certificates, if certificated, for any shares so called
for redemption, or upon the date fixed for redemption, if uncertificated, such
shares, if not previously converted, shall be redeemed by the Corporation as of
the close of business on the date fixed for redemption and at the redemption
price set forth in this Section 6.
(C) The Corporation may, in its sole discretion and
notwithstanding anything to the contrary in paragraph (A) of this Section 6, at
any time within one year after either of the following events:
(i) there shall be a change in the federal tax law or
regulations of the United States of America or of an interpretation or
application of such law or regulations or of a determination by a
court of competent jurisdiction that in any case has the effect of
precluding the Corporation from claiming (other than for purposes of
calculating any alternative minimum tax) any of the tax deductions for
dividends paid on the ESOP Preferred Stock when such dividends are
used as provided under Section 404(k)(2) of the Internal Revenue Code
of 1986, as amended (the "Code"), as in effect on the date shares of
ESOP Preferred Stock are initially issued, or
(ii) the Corporation shall certify to the holders of the ESOP
Preferred Stock that the Corporation has determined in good faith that
the Plan either is not qualified as a "stock bonus plan" within the
meaning of Section 401(a) of the Code or is not an "employee stock
ownership plan" within the meaning of Section 4975(e)(7) of the Code,
elect either to (a) redeem, out of funds legally available therefor, any or all
of such ESOP Preferred Stock for cash or, if the Corporation so elects, in
shares of Common Stock, or a combination of such shares of Common Stock and
cash, as permitted by paragraph (E) of this Section 6, at a redemption price
equal to (x) if the relevant event is as provided in clause (i) above, the
Liquidation Price per share on the date fixed for redemption, plus an amount
equal to accrued (whether or not accumulated) and unpaid dividends thereon to
the date fixed for redemption or (y) if the relevant event is as provided in
clause (ii) above, an amount calculated on the basis of the redemption prices
provided in paragraph (D) of this Section 6 on the date fixed for redemption or
(b)
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exchange any or all of such shares of ESOP Preferred Stock for securities of at
least equal value (as determined by an independent appraiser) that constitute
"qualifying employer securities" with respect to a holder of ESOP Preferred
Stock within the meaning of Section 409(1) of the Code and Section 407(d)(5) of
the Employment Retirement Income Security Act of 1974, as amended ("ERISA"), or
any successor provisions of law. If the Corporation elects to redeem any or
all of the ESOP Preferred Stock pursuant to clause (a) of the preceding
sentence, notice of such redemption shall be given as required in paragraph (B)
of this Section 6, and if the Corporation elects to exchange any or all of the
ESOP Preferred Stock for securities of at least equal value pursuant to clause
(b) of the preceding sentence, it will cause notice of such election to be sent
to the holders of ESOP Preferred Stock at the address shown on the books of the
Corporation or any transfer agent for ESOP Preferred Stock by first class mail,
postage prepaid, mailed not less than twenty (20) days nor more than sixty (60)
days prior to the date of exchange or in any other manner required by law.
Each notice shall state: (i) the exchange date; (ii) the total number of
shares of ESOP Preferred Stock to be exchanged and, if fewer than all the
shares held by such holder are to be exchanged, the number of shares held by
such holder to be exchanged; (iii) the exchange rate; (iv) the place or places
where certificates, if certificated, for such shares are to be surrendered for
exchange; and (v) that dividends on the shares to be exchanged will cease to
accrue on such exchange date.
(D) Notwithstanding anything to the contrary in paragraph (A)
of this Section 6, in the event that the Plan is, or contributions thereto are,
terminated, the Corporation may, in its sole discretion, call for redemption
any or all of the then outstanding ESOP Preferred Stock, upon notice as
required in paragraph (B) of this Section 6, out of funds legally available
therefor, at a redemption price per share equal to the following percentages of
the Liquidation Price in effect on the date fixed for redemption:
<PAGE>
17
<TABLE>
<CAPTION>
During the Twelve-
Month Period Percentage of
Beginning September 19, Liquidation Price
----------------------- -----------------
<S> <C>
1991 106.98
1992 106.20
1993 105.43
1994 104.65
1995 103.88
1996 103.10
1997 102.33
1998 101.55
1999 100.78
2000 100.00
</TABLE>
and thereafter at 100%, plus, in each case, an amount equal to all accrued
(whether or not accumulated) and unpaid dividends thereon to the date fixed for
redemption. Payment of the redemption price shall be made by the Corporation
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 ESOP Preferred Stock called for redemption will cease to
accrue and all rights of the holder in respect of such shares shall cease,
except the right to receive the redemption price. Upon payment of the
redemption price, such shares shall be deemed to have been transferred to the
Corporation, to be held as treasury shares or to be retired, in either case as
provided in Section 1(A).
(E) The Corporation, at its option, may make payment of the
redemption price required upon redemption of shares of ESOP Preferred Stock
in cash or in shares of Common Stock, or in a combination of such shares and
cash, any such shares of Common Stock to be valued for such purpose at their
Fair Market Value (as defined in paragraph 9(H)(2)); provided, however, that in
calculating their Fair Market Value the Adjustment Period (as defined in
paragraph 9(H)(2)) shall be deemed to be the five (5) consecutive trading days
preceding the date of redemption.
7. Redemption at the Option of the Holder.
(A) Unless otherwise provided by law, shares of ESOP
Preferred Stock shall be redeemed by the Corporation at the option of the
holder, at any time and from time to time upon notice to the Corporation given
not less than five business days prior to the date fixed by the holder in such
notice, when and to the extent necessary for such holder to
<PAGE>
18
provide for distributions required to be made under, or to satisfy an
investment election provided to participants in accordance with, the Plan or
any successor plan or when the holder elects to redeem shares of ESOP Preferred
Stock in connection with any Preferred Dividend (a "Dividend Redemption"), in
shares of Common Stock legally available therefor, at a redemption price equal
to the higher of (x) the Liquidation Price per share on the date fixed for
redemption and (y) the Fair Market Value (as defined in paragraph 9(H)(2)) of
the number of shares of Common Stock into which each share of ESOP Preferred
Stock is convertible at the time the notice of such redemption is given, plus
in either case an amount equal to accrued (whether or not accumulated) and
unpaid dividends thereon to the date fixed for redemption (such higher price on
any date, together with such accrued and unpaid dividends, the "Special
Redemption Price"). At the election of the Corporation, such redemption may
instead be made out of funds legally available therefor in cash or a
combination of Common Stock and cash. Any shares of Common Stock shall be
valued for the purposes of redemption pursuant to this paragraph (A) as
provided by paragraph (E) of Section 6. In the case of any Dividend
Redemption, such holder shall give the notice specified above on the fifth
business day after the related Dividend Payment Date and such redemption shall
be effective as to such number of shares of ESOP Preferred Stock as shall equal
(x) the aggregate amount of such Preferred Dividends paid with respect to
shares of ESOP Preferred Stock allocated or credited to the accounts of
participants in the Plan or any successor plan that are used to repay any loan
associated with such allocated or credited shares divided by (y) the Special
Redemption Price specified above in this paragraph (A).
(B) Unless otherwise provided by law, shares of ESOP
Preferred Stock shall be redeemed by the Corporation at the option of the
holder, at any time and from time to time upon notice to the Corporation given
not less than five business days prior to the date fixed by the holder in such
notice, upon certification by such holder to the Corporation of the following
events: (i) when and to the extent necessary for such holder to make any
payments of principal, interest or premium due and payable (whether voluntary,
scheduled, upon acceleration or otherwise) upon any obligations of the trust
established under the Plan in connection with the acquisition of ESOP Preferred
Stock or any indebtedness, expenses or costs incurred by the holder for the
benefit of the Plan; or (ii) when and if it shall be established to the
satisfaction of the holder that the Plan
<PAGE>
19
has not initially been determined by the Internal Revenue Service to be
qualified as a "stock bonus plan" and an "employee stock ownership plan" within
the meaning of Section 401(a) or 4975(e)(7) of the Code, respectively, in
shares of Common Stock legally available therefor, at a redemption price equal
to the Liquidation Price plus an amount equal to accrued and unpaid dividends
thereon to the date fixed for redemption. At the election of the Corporation,
such redemption may instead be made out of funds legally available therefor in
cash or a combination of Common Stock and cash. Any shares of Common Stock
shall be valued for the purposes of redemption pursuant to this paragraph (B)
as provided by paragraph (E) of Section 6.
8. Consolidation, Merger, etc.
(A) If the Corporation 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 securities of any successor or resulting
company (including the Corporation) that constitute "qualifying employer
securities" with respect to a holder of ESOP Preferred Stock within the
meanings of Section 409(l) of the Code and Section 407(d)(5) of ERISA, or any
successor provision of law, and, if applicable, for a cash payment in lieu of
fractional shares, if any, then, in such event, the terms of such consolidation
or merger or similar transaction shall provide that the shares of ESOP
Preferred Stock of such holder shall be converted into or exchanged for and
shall become preferred securities of such successor or resulting company,
having in respect of such company insofar as possible (taking into account,
without limitation, any requirements relating to the listing of such preferred
securities on any national securities exchange or the qualification of such
preferred securities for trading in any over-the-counter market) 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
ESOP Preferred Stock had immediately prior to such transaction; provided,
however, that after such transaction each security into which the ESOP
Preferred Stock is so converted or for which it is exchanged shall be
convertible, pursuant to the terms and conditions provided by Section 5 hereof,
into the number and kind of qualifying employer securities receivable by a
holder equivalent to the number of shares of Common Stock into which such
shares of ESOP
<PAGE>
20
Preferred Stock could have been converted pursuant to Section 5 hereof
immediately prior to such transaction and provided further that if by virtue of
the structure of such transaction, a holder of Common Stock is required to make
an election with respect to the nature and kind of consideration to be received
in such transaction, which election cannot practicably be made by the holders
of the ESOP Preferred Stock, then such election shall be deemed to be solely
for "qualifying employer securities" (together, if applicable, with a cash
payment in lieu of fractional shares) with the effect provided above on the
basis of the number and kind of qualifying employer securities receivable by a
holder of the number of shares of Common Stock into which the shares of ESOP
Preferred Stock could have been converted pursuant to Section 5 hereof
immediately prior to such transaction (it being understood that if the kind or
amount of qualifying employer securities receivable in respect of each share of
Common Stock upon such transaction is not the same for each such share, then
the kind and amount of qualifying employer securities deemed to be receivable
in respect of each share of Common Stock for purposes of this proviso shall be
the kind and amount so receivable per share of Common Stock by a plurality of
such shares). The rights of the ESOP Preferred Stock as preferred equity of
such successor or resulting company shall successively be subject to
adjustments pursuant to Section 9 hereof after any such transaction as nearly
equivalent as practicable to the adjustments provided for by such Section prior
to such transaction. The Corporation shall not consummate any such merger,
consolidation or similar transaction unless all the terms of this paragraph (A)
are complied with.
(B) If the Corporation 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 shares or securities or cash or any other
property, or any combination thereof, other than any such consideration which
is constituted solely of qualifying employer securities that are common stock
or common equity (as referred to in paragraph (A) of this Section 8) and cash
payments, if applicable, in lieu of fractional shares or other interests,
outstanding shares of ESOP Preferred Stock shall, without any action on the
part of the Corporation or any holder thereof (but subject to paragraph (C) of
this Section 8), be automatically converted immediately prior to the
consummation of such merger, consolidation or similar transaction into shares
of Common Stock at the Conversion Price then in effect.
<PAGE>
21
(C) If the Corporation shall enter into any agreement providing
for any consolidation or merger or similar transaction described in paragraph
(B) of this Section 8, then the Corporation 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 ESOP Preferred Stock and each such
holder shall have the right to elect, by written notice to the Corporation, to
receive, upon consummation of such transaction (if and when such transaction
is consummated), out of funds legally available therefor, from the Corporation
or the successor of the Corporation, in redemption of such ESOP Preferred
Stock, in lieu of any cash or other securities which such holder would
otherwise be entitled to receive under paragraph (B) of this Section 8, a cash
payment equal to the Liquidation Price per share on the date fixed for such
transaction, plus an amount equal to accrued (whether or not accumulated) and
unpaid dividends thereon to the date fixed for such transaction. No such
notice of redemption shall be effective unless given to the Corporation prior
to the close of business of the fifth business day prior to consummation of
such transaction, unless the Corporation or the successor of the Corporation
shall waive such prior notice, but any notice or redemption so given prior to
such time may be withdrawn by notice of withdrawal given to the Corporation
prior to the close of business on the fifth business day prior to consummation
of such transaction.
9. Anti-dilution Adjustments.
(A) (1) Subject to the provisions of paragraphs (E) and (F)
of this Section 9, in the event the Corporation shall, at any time or from time
to time while any of the shares of the ESOP Preferred Stock are outstanding,
(i) pay a dividend or make a distribution in respect of the Common Stock in
shares of Common Stock or (ii) subdivide the outstanding shares of Common Stock
into a greater number of shares, in each case whether by reclassification of
shares, recapitalization of the Corporation (excluding a recapitalization or
reclassification effected by a merger or consolidation to which Section 8
applies) or otherwise, then, in such event, the Board of Directors shall, to
the extent legally permissible, declare a dividend in respect of the ESOP
Preferred Stock in shares of ESOP Preferred Stock (a "Special Dividend") in
such a manner that a holder of ESOP Preferred Stock will become a holder of
that number of shares of ESOP Preferred Stock equal to the product of the
number of such shares held prior to such event times a fraction (the
<PAGE>
22
"Section 9(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 outstanding immediately before
such event. A Special Dividend declared pursuant to this Section 9(A)(1) shall
be effective, upon payment of such dividend or distribution in respect of the
Common Stock, as of the record date for the determination of stockholders
entitled to receive such dividend or distribution (on a retroactive basis), and
in the case of a subdivision shall become effective immediately as of the
effective date thereof. Concurrently with the declaration of the Special
Dividend pursuant to this paragraph 9(A)(1), the Conversion Price, the
Liquidation Price and the Preferred Dividend Rate of all shares of ESOP
Preferred Stock shall be adjusted by dividing the Conversion Price, the
Liquidation Price and the Preferred Dividend Rate, respectively, in effect
immediately before such event by the Section 9(A) Fraction.
(2) Subject to the provisions of paragraphs (E) and (F) of this
Section 9, in the event the Corporation shall, at any time or from time to time
while any of the shares of the ESOP Preferred Stock are outstanding, combine
the outstanding shares of Common Stock into a lesser number of shares, whether
by reclassification of shares, recapitalization of the Corporation (excluding a
recapitalization or reclassification effected by a merger, consolidation or
other transaction to which Section 8 applies) or otherwise, then, in such
event, the Conversion Price shall automatically be adjusted by dividing the
Conversion Price in effect immediately before such event by the Section 9(A)
Fraction and the Liquidation Price and the Preferred Dividend Rate will not be
adjusted. An adjustment to the Conversion Price made pursuant to this
paragraph 9(A)(2) shall be given effect immediately as of the effective date of
such combination.
(B) Subject to the provisions of paragraphs (E) and (F) of this
Section 9, in the event the Corporation shall, at any time or from time to time
while any of the shares of ESOP Preferred Stock are outstanding, issue to
holders of shares of Common Stock as a dividend or distribution, including by
way of a reclassification of shares or a recapitalization of the Corporation,
any right or warrant to purchase shares of Common Stock (but not including as a
right or warrant for this purpose any security convertible into or exchangeable
for shares of Common Stock) for a consideration having a Fair Market Value (as
hereinafter defined) per share less than the Fair Market Value of a share of
Common Stock on the date of issuance of such right or warrant (other than
pursuant to any
<PAGE>
23
employee or director incentive, compensation or benefit plan or arrangement of
the Corporation or any subsidiary of the Corporation heretofore or hereafter
adopted), then, in such event, the Board of Directors shall, to the extent
legally permissible, declare a Special Dividend in such a manner that a holder
of ESOP Preferred Stock will become a holder of that number of shares of ESOP
Preferred Stock equal to the product of the number of such shares held prior to
such event times a fraction (the "Section 9(B) Fraction"), the numerator of
which is 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 and the denominator of which is the number of shares of Common Stock
outstanding immediately before such issuance of warrants or rights plus the
number of shares of Common Stock that 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 and
warrants. A Special Dividend declared pursuant to this Section 9(B) shall be
effective upon such issuance of rights or warrants. Concurrently with the
declaration of the Special Dividend pursuant to this Section 9(B), the
Conversion Price, the Liquidation Price and the Preferred Dividend Rate of all
shares of ESOP Preferred Stock shall be adjusted by dividing the Conversion
Price, the Liquidation Price and the Preferred Dividend Rate, respectively, in
effect immediately before such event by the Section 9(B) Fraction.
(C) (1) Subject to the provisions of paragraphs (E) and (F) of
this Section 9, in the event the Corporation shall, at any time or from time to
time while any of the shares of ESOP Preferred Stock are outstanding, issue,
sell or exchange shares of Common Stock (other than pursuant to (x) 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) or (y) any employee or director incentive, compensation or
benefit plan or arrangement of the Corporation or any subsidiary of the
Corporation heretofore or hereafter adopted) at a purchase price per share less
than the Fair Market Value of a share of Common Stock on the date of such
issuance, sale or exchange, then, in such event, the Board of Directors shall,
to the extent legally permissible, declare a Special Dividend in such a manner
that a holder of ESOP Preferred Stock will become the holder of that number of
shares of ESOP Preferred Stock equal to the product of the number of such
shares held prior to such event times a
<PAGE>
24
fraction (the "Section 9(C)(1) Fraction"), the numerator of which is the number
of shares of Common Stock outstanding immediately before such issuance, sale or
exchange plus the number of shares of Common Stock so issued, sold or exchanged
and the denominator of which is the number of shares of Common Stock
outstanding immediately before such issuance, sale or exchange plus the number
of shares of Common Stock that could be purchased at the Fair Market Value of a
share of Common Stock at the time of such issuance, sale or exchange for the
maximum aggregate consideration paid therefor.
(2) Subject to the provisions of paragraphs (E) and (F) of this
Section 9, in the event that the Corporation shall, at any time or from time to
time while any ESOP Preferred Stock is 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 pursuant to (x) any employee or director
incentive, compensation or benefit plan or arrangement of the Corporation or
any subsidiary of the Corporation heretofore or hereafter adopted and (y) any
dividend or distribution on shares of Common Stock contemplated in Section
9(A)(1)) 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, in such event, the Board of Directors shall, to the extent
legally permissible, declare a Special Dividend in such a manner that a holder
of ESOP Preferred Stock will become the holder of that number of shares of ESOP
Preferred Stock equal to the product of the number of such shares held prior to
such event times a fraction (the "Section 9(C)(2) Fraction"), the numerator of
which is 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 and the denominator of which is the number of shares of Common Stock
outstanding immediately before such issuance of rights or warrants plus the
number of shares of Common Stock that could be purchased at the Fair Market
Value of a share of Common Stock at the time of such issuance for the total of
(x) the maximum aggregate consideration payable at the time of the issuance,
sale or exchange of such right or warrant and (y) the maximum aggregate
consideration payable upon exercise in full of all such rights or warrants.
(3) A Special Dividend declared pursuant to this Section 9(C)
shall be effective upon the effective date of
<PAGE>
25
such issuance, sale or exchange. Concurrently with the declaration of the
Special Dividend pursuant to this Section 9(C), the Conversion Price, the
Liquidation Price and the Preferred Dividend Rate of all shares of ESOP
Preferred Stock shall be adjusted by dividing the Conversion Price, the
Liquidation Price and the Preferred Dividend Rate, respectively, in effect
immediately before such event by the Section 9(C)(1) Fraction or Section
9(C)(2) Fraction, as the case may be.
(D) Subject to the provisions of paragraphs (E) and (F) of this
Section 9, in the event the Corporation shall, at any time or from time to time
while any of the shares of ESOP 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 Corporation (including capitalization or
reclassification effected by a merger or consolidation to which Section 8 does
not apply) or effect a Pro Rata Repurchase (as hereinafter defined) of Common
Stock, then, in such event, the Board of Directors shall, to the extent legally
permissible, declare a Special Dividend in such a manner that a holder of ESOP
Preferred Stock will become a holder of that number of shares of ESOP Preferred
Stock equal to the product of the number of such shares held prior to such
event times a fraction (the "Section 9(D) Fraction"), the numerator of which is
the product of (a) the number of shares of Common Stock outstanding immediately
before such Extraordinary Distribution or Pro Rata Repurchase minus, in the
case of Pro Rata Repurchase, the number of shares of Common Stock repurchased
by the Corporation multiplied by (b) the Fair Market Value of a share of Common
Stock on the day before the ex-dividend date with respect to an Extraordinary
Distribution that is paid in cash and on the distribution date with respect to
an Extraordinary Distribution that is paid other than in cash, or on the
applicable expiration date (including all extensions thereof) of any tender
offer that is a Pro Rata Repurchase or on the date of purchase with respect to
any Pro Rata Repurchase that is not a tender offer, as the case may be, and the
denominator 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 of a share of Common
Stock on the day before the ex-dividend date with respect to an Extraordinary
Distribution that is paid in cash and on the distribution date with respect to
an Extraordinary Distribution that is paid other than in cash, or on the
applicable expiration date
<PAGE>
26
(including all extensions thereof) of any tender offer that is a Pro Rata
Repurchase, or on the date of purchase with respect to any Pro Rata Repurchase
that 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. The Corporation shall send each
holder of ESOP Preferred Stock (i) notice of its intent to make any
Extraordinary Distribution and (ii) notice of any offer by the Corporation 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 to holders of Common Stock
or, in the case of an Extraordinary Distribution, the 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. 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 Corporation pursuant to such
offer, as well as the Conversion Price and the number of shares of Common Stock
into which a share of ESOP Preferred Stock may be converted at such time.
Concurrently with the Special Dividend paid pursuant to this Section 9(D), the
Conversion Price, the Liquidation Price and the Preferred Dividend Rate of all
shares of ESOP Preferred Stock shall be adjusted by dividing the Conversion
Price, the Liquidation Price and the Preferred Dividend Rate, respectively, in
effect immediately before such Extraordinary Distribution or Pro Rata
Repurchase by the Section 9(D) Fraction.
(E) Notwithstanding any other provision of this Section 9, the
Corporation shall not be required to make (i) any Special Dividend or any
adjustment of the Conversion Price, the Liquidation Price or the Preferred
Dividend Rate unless such Special Dividend or adjustment would require an
increase or decrease of at least one percent (1%) in the number of shares of
ESOP Preferred Stock outstanding, or, (ii) if no additional shares of ESOP
Preferred Stock are issued, any adjustment of the Conversion Price unless such
adjustment would require an increase or decrease of at least one percent (1%)
in the Conversion Price. Any lesser Special Dividend or adjustment shall be
carried forward and shall be made no later than the time of, and together with,
the next subsequent Special Dividend or adjustment which, together with any
Special Dividend or Dividends, adjustment or adjustments so carried forward,
shall amount to an increase or decrease of at least one percent (1%) of the
number of shares of ESOP Preferred Stock outstanding or, if no additional
shares of ESOP Preferred Stock are being issued,
<PAGE>
27
an increase or decrease of at least one percent (1%) of the Conversion Price,
whichever the case may be.
(F) The Corporation and the Board of Directors shall each use its
best efforts to take all necessary steps or to take all actions as are
reasonably necessary or appropriate for declaration of any Special Dividend
provided in any of paragraphs (A), (B), (C) and (D) of this Section 9, but
shall not be required to call a special meeting of stockholders in order to
implement the provisions thereof. If for any reason the Board of Directors is
precluded from giving full effect to the Special Dividend provided in any of
such paragraphs, then no such Special Dividend shall be declared, but instead
the Conversion Price shall automatically be adjusted by dividing the Conversion
Price in effect immediately before the relevant event by the Section 9(A),
Section 9(B), Section 9(C) or Section 9(D) Fraction, as applicable, and the
Liquidation Price and the Preferred Dividend Rate will not be adjusted. An
adjustment to the Conversion Price made pursuant to this paragraph (F) shall be
given effect, (i) in the case of a payment of a dividend or distribution under
Section 9(A), upon payment thereof as of the record date for the determination
of holders entitled to receive such dividend or distribution (on a retroactive
basis), and, in the case of a subdivision under Section 9(A), immediately as of
the effective date thereof, (ii) in the case of Section 9(B), upon such
issuance of rights or warrants, (iii) in the case of Section 9(C), upon the
effective date of such issuance, sale or exchange and (iv) in the case of an
Extraordinary Dividend under Section 9(D), as of the record date for the
determination of holders entitled to receive such Extraordinary Dividend (on a
retroactive basis), and, in the case of a Pro Rata Repurchase under Section
9(D), upon the expiration date thereof (if such Pro Rata Repurchase is a tender
offer) or the effective date thereof (if such Pro Rata Repurchase is not a
tender offer). If subsequently the Board of Directors is able to give full
effect to the Special Dividend as provided in paragraph (A), (B), (C) or (D) of
this Section 9, then such Special Dividend will be declared and other
adjustments will be made in accordance with the provisions of such paragraph
and the adjustment in the Conversion Price as provided in this paragraph (F)
will automatically be reversed and nullified prospectively.
(G) If the Corporation shall make any dividend or distribution
on the Common Stock or issue any Common Stock, other capital stock or other
security of the Corporation or any rights or warrants to purchase or acquire
any such
<PAGE>
28
security, which transaction does not result in an adjustment to the number of
shares of ESOP Preferred Stock outstanding or the Conversion Price pursuant to
the foregoing provisions of this Section 9, the Board of Directors of the
Corporation may, in its sole discretion, consider whether such action is of
such a nature that some type of equitable adjustment should be made in respect
of such transaction. If in such case the Board of Directors of the Corporation
determines that some type of adjustment should be made, an adjustment shall be
made effective as of such date as determined by the Board of Directors of the
Corporation. The determination of the Board of Directors of the Corporation as
to whether some type of adjustment should be made pursuant to the foregoing
provisions of this Section 9(G), and, if so, as to what adjustment should be
made and when, shall be final and binding on the Corporation and all
stockholders of the Corporation. The Corporation shall be entitled, but not
required, to make such additional adjustments, in addition to those required by
the foregoing provisions of this Section 9, as shall be necessary in order that
any dividend or distribution in shares of capital stock of the Corporation,
subdivision, reclassification or combination of shares of the Corporation or
any reclassification of the Corporation shall not be taxable to holders of the
Common Stock.
(H) For purposes hereof, the following definitions shall apply:
(1) "Extraordinary Distribution" shall mean any dividend or other
distribution to holders of Common Stock (effected while any of the shares of
ESOP Preferred Stock are outstanding) of (i) cash or (ii) any shares of capital
stock of the Corporation (other than shares of Common Stock), other securities
of the Corporation (other than securities of the type referred to in paragraph
(B) of this Section 9), evidences of indebtedness of the Corporation or any
other person or any other property (including shares of any subsidiary of the
Corporation), or any combination of the foregoing, where the aggregate amount
of such cash dividend or other distribution together with the amount of all
cash dividends and other distributions made during the preceding period of
twelve 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 that 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 that is a Pro Rata Repurchase, or the date of purchase with
respect to any
<PAGE>
29
other Pro Rata Repurchase that is not a tender offer or exchange offer) made
during such period, exceeds twelve and one-half percent (12-1/2%) of the
aggregate Fair Market Value of all shares of Common Stock outstanding on the
day before the ex-dividend date with respect to such Extraordinary Distribution
that is paid in cash and on the distribution date with respect to an
Extraordinary Distribution that is paid other than in cash. 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 aggregate amount of any cash dividends or other
distributions that 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, but shall exclude the
aggregate amount of regular quarterly dividends declared by the Board of
Directors and paid by the Corporation in such twelve-month period.
(2) "Fair Market Value" shall mean, as to shares of Common Stock
or any other class of capital stock or securities of the Corporation or any
other issuer that 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 Corporation 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
is listed or admitted to trading or, if not listed or admitted to trading on
any national securities exchange, on the National Association of Securities
Dealers Automated Quotation System ("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 such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for such security on 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 Corporation. "Adjustment Period" shall mean the
period of five consecutive trading days, selected by the Board of Directors of
the
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30
Corporation, during the twenty (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 that 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
Corporation, or, if no such investment banking or appraisal firm is in the good
faith judgment of the Board of Directors available to make such determination,
as determined in good faith by the Board of Directors of the Corporation.
(3) "Non-Dilutive Amount" in respect of an issuance, sale or
exchange by the Corporation 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 difference between (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 that could be acquired on such date
upon the exercise in full of such rights or 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, and
(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 Corporation.
(4) "Pro Rata Repurchase" shall mean any purchase of shares or
Common Stock by the Corporation or any subsidiary thereof, whether for cash,
shares of capital stock of the Corporation, other securities of the Corporation,
evidences of indebtedness of the Corporation or any other person or any other
property (including shares of a subsidiary of the Corporation), or any
combination thereof, effected while any of the shares of ESOP Preferred Stock
are outstanding, pursuant to any tender offer or exchange offer subject to
Section 13(e) of the Exchange Act, or any successor provision of law, or
pursuant to any other offer available to substantially all holders of Common
Stock;
<PAGE>
31
provided, however, that no purchase of shares by the Corporation or any
subsidiary thereof made in open market transactions shall be deemed a Pro Rata
Repurchase. For purposes of this Section 9(H), shares shall be deemed to have
been purchased by the Corporation 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 ESOP Preferred Stock are initially issued by the Corporation or on
such other terms and conditions as the Board of Directors of the Corporation
shall have determined are reasonably designed to prevent such purchases from
having a material effect on the trading market for the Common Stock.
(I) Whenever an adjustment increasing the number of shares of
ESOP Preferred Stock outstanding is required pursuant hereto, the Board of
Directors shall take action as is necessary so that a sufficient number of
shares of ESOP Preferred Stock are designated with respect to such increase
resulting from such adjustment. Whenever an adjustment to the Conversion
Price, the Liquidation Price or the Preferred Dividend Rate of the ESOP
Preferred Stock is required pursuant hereto, the Corporation shall forthwith
place on file with the transfer agent for the Common Stock and the ESOP
Preferred Stock, if there be one, and with the Treasurer of the Corporation, a
statement signed by the Treasurer or any Assistant Treasurer of the Corporation
stating the adjusted Conversion Price, Liquidation Price and Preferred Dividend
Rate determined as provided herein. Such statement shall set forth in
reasonable detail such facts as shall be necessary to show the reason and the
manner of computing such adjustments, including any determination of Fair
Market Value involved in such computation. Promptly after each adjustment to
the number of shares of ESOP Preferred Stock outstanding, the Conversion Price,
the Liquidation Price or the Preferred Dividend Rate, the Corporation shall
mail a notice thereof and of the then prevailing number of shares of ESOP
Preferred Stock outstanding, the Conversion Price, the Liquidation Price and
the Preferred Dividend Rate to each holder of shares of ESOP Preferred Stock.
10. 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 hereof) with postage prepaid,
<PAGE>
32
addressed: (i) if to the Corporation, to its office at 1251 Avenue of the
Americas, New York, New York 10020 (Attention: Secretary) or to the transfer
agent for the ESOP Preferred Stock, or other agent of the Corporation
designated as permitted hereof or (ii) if to any holder of the ESOP 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 Corporation (which may
include the records of any transfer agent for Common Stock) or (iii) to such
other address as the Corporation or any such holder, as the case may be, shall
have designated by notice similarly given.
(B) The term "Common Stock" as used herein means the Corporation's
Common Stock, par value $1.00 per share, as the same exists at the date of
filing of this Certificate of Designation pursuant to Section 151 of the
General Corporation Law of the State of Delaware, 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 without par
value, or from without par value to par value. In the event that, at any time
as a result of an adjustment made pursuant to Section 9 hereof, the holder of
any shares of the ESOP Preferred Stock upon thereafter surrendering such shares
for conversion shall become entitled to receive any shares or other securities
of the Corporation other than shares of Common Stock, the anti-dilution
provisions contained in Section 9 hereof shall apply in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to Common
Stock, and the provisions of Sections 1 through 8 and 10 hereof with respect to
the Common Stock shall apply on like or similar terms to any such other shares
or securities.
(C) The Corporation 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 ESOP Preferred Stock or shares of Common Stock or other
securities issued on account of ESOP Preferred Stock pursuant thereto or
certificates representing such shares or securities. The Corporation 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 ESOP
Preferred Stock or Common Stock or other securities in a name other than that
in which the shares of ESOP 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 shares or securities other than a
payment
<PAGE>
33
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 Corporation the amount of
any such tax or has established, to the satisfaction of the Corporation, that
such tax has been paid or is not payable.
(D) In the event that a holder of shares of ESOP Preferred Stock
shall not by written notice designate the name in which shares of Common Stock
to be issued upon conversion or exchange of such shares should be registered or
to whom payment upon redemption of shares of ESOP Preferred Stock should be
made or the address to which the certificate or certificates representing such
shares, or such payment, should be sent, the Corporation shall be entitled to
register such shares, and make such payment, in the name of the holder of such
ESOP Preferred Stock as shown on the records of the Corporation and to send the
certificate or certificates or other documentation representing such shares, or
such payment, to the address of such holder shown on the records of the
Corporation.
(E) The Corporation may appoint, and from time to time discharge
and change, a transfer agent for the ESOP Preferred Stock. Upon any such
appointment or discharge of a transfer agent, the Corporation shall send notice
thereof by first-class mail, postage prepaid, to each holder of record of ESOP
Preferred Stock.
<PAGE>
34
Subpart B: 9.36% Cumulative Preferred Stock*
1. Designation and Amount; Fractional Shares. The designation
for such series of the Preferred Stock authorized by this resolution shall be
the 9.36% Cumulative Preferred Stock, without par value but with a stated value
of $25.00 per share (the "Cumulative Preferred Stock"). The maximum number of
shares of Cumulative Preferred Stock shall be 5,500,000. The Cumulative
Preferred Stock is issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative Preferred Stock
will be entitled to receive, when and as declared by the Board out of assets of
the Corporation legally available for payment, cash dividends payable quarterly
at the rate of 9.36% per annum. Dividends on the Cumulative Preferred Stock,
calculated as a percentage of the stated value, will be payable quarterly on
February 28, May 30, August 30 and November 30, commencing August 30, 1991
(each a "dividend payment date"). Dividends on shares of the Cumulative
Preferred Stock will be cumulative from the date of initial issuance of such
shares of Cumulative Preferred Stock. Dividends will be payable, in arrears,
to holders of record as they appear on the stock books of the Corporation on
such record dates, not more than 60 days nor less than 10 days preceding the
payment dates thereof, as shall be fixed by the Board. The amount of dividends
payable for the initial dividend period or any period shorter than a full
dividend period shall be calculated on the basis of a 360-day year of twelve
30-day months. No dividends may be declared or paid or set apart for payment
on any Parity Preferred Stock (as defined in paragraph 9(b) below) with regard
to the payment of dividends unless there shall also be or have been declared
and paid or set apart for payment on the Cumulative Preferred Stock, like
dividends for all dividend payment periods of the Cumulative Preferred Stock
ending on or before the dividend payment date of such Parity Preferred Stock,
ratably in proportion to the respective amounts of dividends (x) accumulated
and unpaid or payable on such Parity Preferred Stock, on the one hand, and (y)
accumulated and unpaid through the dividend payment period or periods of the
Cumulative Preferred Stock next preceding such dividend payment date, on the
other hand.
- --------------------
* Terms defined in this Subpart B are so defined for purposes of this
Subpart alone.
<PAGE>
35
Except as set forth in the preceding sentence, unless full
cumulative dividends on the Cumulative Preferred Stock have been paid, no
dividends (other than in Common Stock of the Corporation) may be paid or
declared and set aside for payment or other distribution made upon the Common
Stock or on any other stock of the Corporation ranking junior to or on a parity
with the Cumulative Preferred Stock as to dividends, nor may any Common Stock
or any other stock of the Corporation ranking junior to or on a parity with the
Cumulative Preferred Stock as to dividends be redeemed, purchased or otherwise
acquired for any consideration (or any payment be made to or available for a
sinking fund for the redemption of any shares of such stock; provided, however,
that any moneys theretofore deposited in any sinking fund with respect to any
preferred stock of the Corporation in compliance with the provisions of such
sinking fund may thereafter be applied to the purchase or redemption of such
preferred stock in accordance with the terms of such sinking fund regardless of
whether at the time of such application full cumulative dividends upon shares
of the Cumulative Preferred Stock outstanding to the last dividend payment date
shall have been paid or declared and set apart for payment) by the Corporation
(except by conversion into or exchange for stock of the Corporation ranking
junior to the Cumulative Preferred Stock as to dividends).
3. Liquidation Preference. The shares of Cumulative Preferred
Stock shall rank, as to liquidation, dissolution or winding up of the
Corporation, prior to the shares of Common Stock and any other class of stock
of the Corporation ranking junior to the Cumulative Preferred Stock as to
rights upon liquidation, dissolution or winding up of the Corporation, so that
in the event of any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of the Cumulative Preferred Stock
shall be entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of Common Stock or any
other such junior stock, an amount equal to $25.00 per share (the "Liquidation
Preference" of a share of Cumulative Preferred Stock) plus an amount equal to
all dividends (whether or not earned or declared) accrued and accumulated and
unpaid on the shares of Cumulative Preferred Stock to the date of final
distribution. The holders of the Cumulative Preferred Stock will not be
entitled to receive the Liquidation Preference until the liquidation preference
of any other class of stock of the Corporation ranking senior to the Cumulative
Preferred Stock as to rights upon
<PAGE>
36
liquidation, dissolution or winding up shall have been paid (or a sum set aside
therefor sufficient to provide for payment) in full. After payment of the full
amount of the Liquidation Preference and such dividends, the holders of shares
of Cumulative Preferred Stock will not be entitled to any further participation
in any distribution of assets by the Corporation. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of shares of Parity Preferred
Stock shall be insufficient to pay in full the preferential amount aforesaid,
then such assets, or the proceeds thereof, shall be distributable among such
holders ratably in accordance with the respective amounts which would be
payable on such shares if all amounts payable thereon were paid in full. For
the purposes hereof, neither a consolidation or merger of the Corporation with
or into any other corporation, nor a merger of any other corporation with or
into the Corporation, nor a sale or transfer of all or any part of the
Corporation's assets for cash or securities shall be considered a liquidation,
dissolution or winding up of the Corporation.
4. Conversion. The Cumulative Preferred Stock is not
convertible into shares of any other class or series of stock of the
Corporation.
5. Voting Rights. The holders of shares of Cumulative
Preferred Stock shall have no voting rights whatsoever, except for any voting
rights to which they may be entitled under the laws of the State of Delaware,
and except as follows:
(a) Whenever, at any time or times, dividends payable on the
shares of Cumulative Preferred Stock or on any Parity Preferred Stock
with respect to payment of dividends shall be in arrears for an
aggregate number of days equal to six calendar quarters or more,
whether or not consecutive, the holders of the outstanding shares of
Cumulative Preferred Stock shall have the right, with holders of
shares of any one or more other class or series of stock upon which
like voting rights have been conferred and are exercisable (voting
together as a class), to elect two of the authorized number of members
of the Board of Directors of the Corporation at the Corporation's next
annual meeting of stockholders and at each subsequent annual meeting
of stockholders until such arrearages have been paid or set apart for
payment, at which time such right shall terminate, except as herein or
by law expressly provided, subject to revesting in the
<PAGE>
37
event of each and every subsequent default of the character above
mentioned. Upon any termination of the right of the holders of shares
of Cumulative Preferred Stock as a class to vote for directors as
herein provided, the term of office of all directors then in office
elected by the holders of shares of Cumulative Preferred Stock shall
terminate immediately. Any director who shall have been so elected
pursuant to this paragraph may be removed at any time, either with or
without cause. Any vacancy thereby created may be filled, only by the
affirmative vote of the holders of shares of Cumulative Preferred
Stock voting separately as a class (together with the holders of
shares of any other class or series of stock upon which like voting
rights have been conferred and are exercisable). If the office of any
director elected by the holders of shares of Cumulative Preferred
Stock voting as a class becomes vacant for any reason other than
removal from office as aforesaid, the remaining director elected
pursuant to this paragraph may choose a successor who shall hold
office for the unexpired term in respect of which such vacancy
occurred. At elections for such directors, each holder of shares of
Cumulative Preferred Stock shall be entitled to one vote for each
share held (the holders of shares of any other class or series of
preferred stock having like voting rights being entitled to such
number of votes, if any, for each share of such stock held as may be
granted to them).
(b) So long as any shares of Cumulative Preferred Stock
remain outstanding, the consent of the holders of at least two-thirds
of the shares of Cumulative Preferred Stock outstanding at the time
and all other class or series of stock upon which like voting rights
have been conferred and are exercisable (voting together as a class)
given in person or by proxy, either in writing or at any meeting
called for the purpose, shall be necessary to permit, effect or
validate any one or more of the following:
(i) the issuance or increase of the authorized amount of
any class or series of shares ranking prior (as that term is
defined in paragraph 9(a) hereof) to the shares of the
Cumulative Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Certificate of
<PAGE>
38
Incorporation (including this resolution or any provision
hereof) that would materially and adversely affect any power,
preference, or special right of the shares of Cumulative
Preferred Stock or of the holders thereof;
provided, however, that any increase in the amount of authorized
Common Stock or authorized Preferred Stock or any increase or decrease
in the number of shares of any series of Preferred Stock or the
creation and issuance of other series of Common Stock or Preferred
Stock, in each case ranking on a parity with or junior to the shares
of Cumulative Preferred Stock with respect to the payment of dividends
and the distribution of assets upon liquidation, dissolution or
winding up, shall not be deemed to materially and adversely affect
such powers, preferences or special rights.
(c) The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such vote would
otherwise be required shall be effected, all outstanding shares of
Cumulative Preferred Stock shall have been redeemed or called for
redemption and sufficient funds shall have been deposited in trust to
effect such redemption.
6. Redemption. The shares of the Cumulative Preferred Stock
may be redeemed at the option of the Corporation, as a whole, or from time to
time in part, at any time, upon not less than 30 days' prior notice mailed to
the holders of the shares to be redeemed at their addresses as shown on the
stock books of the Corporation; provided, however, that shares of the
Cumulative Preferred Stock shall not be redeemable prior to May 30, 1996.
Subject to the foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $25.00 per share together with an amount
equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative Preferred Stock
have not been paid, the Cumulative Preferred Stock may not be redeemed in part
and the Corporation may not purchase or acquire any shares of the Cumulative
Preferred Stock otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of the Cumulative Preferred Stock. If fewer than
all the outstanding shares of Cumulative Preferred Stock are to be redeemed,
the Corporation will select those to be redeemed by lot or a substantially
equivalent method.
<PAGE>
39
If a notice of redemption has been given pursuant to this
paragraph 6 and if, on or before the date fixed for redemption, the funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds, in trust for the pro rata benefit of
the holders of the shares of Cumulative Preferred Stock so called for
redemption, then, notwithstanding that any certificates for such shares have
not been surrendered for cancellation, on the redemption date dividends shall
cease to accrue on the shares to be redeemed, and at the close of business on
the redemption date the holders of such shares shall cease to be stockholders
with respect to such shares and shall have no interest in or claims against the
Corporation by virtue thereof and shall have no voting or other rights with
respect to such shares, except the right to receive the moneys payable upon
surrender (and endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no longer be outstanding.
Subject to applicable escheat laws, any moneys so set aside by the Corporation
and unclaimed at the end of two years from the redemption date shall revert to
the general funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such redemption. Any
interest accrued on funds so deposited shall be paid to the Corporation from
time to time.
7. Authorization and Issuance of Other Securities. No
consent of the holders of the Cumulative Preferred Stock shall be required for
(a) the creation of any indebtedness of any kind of the Corporation, (b) the
creation, or increase or decrease in the amount, of any class or series of
stock of the Corporation not ranking prior as to dividends or upon liquidation,
dissolution or winding up to the Cumulative Preferred Stock or (c) any increase
or decrease in the amount of authorized Common Stock or any increase, decrease
or change in the par value thereof or in any other terms thereof.
8. Amendment of Resolution. Subject to the provisions of
paragraph 5, the Board reserves the right by subsequent amendment of this
resolution from time to time to increase or decrease the number of shares which
constitute the Cumulative Preferred Stock (but not below the number of shares
thereof then outstanding) and in other respects to amend this resolution within
the limitations provided by law, this resolution and the Certificate of
Incorporation.
9. Rank. For the purposes of this resolution, any stock of
any class or classes of the Corporation shall be deemed to rank:
<PAGE>
40
(a) prior to shares of the Cumulative Preferred Stock, either
as to dividends or upon liquidation, dissolution or winding up, or
both, if the holders of stock of such class or classes shall be
entitled by the terms thereof to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as
the case may be, in preference or priority to the holders of shares of
the Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative Preferred
Stock, either as to dividends or upon liquidation, dissolution or
winding up, or both, whether or not the dividend rates, dividend
payment dates, or redemption or liquidation prices per share thereof
be different from those of the Cumulative Preferred Stock, if the
holders of stock of such class or classes shall be entitled by the
terms thereof to the receipt of dividends or of amounts distributed
upon liquidation, dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or liquidation prices,
without preference or priority of one over the other as between the
holders of such stock and the holders of shares of Cumulative
Preferred Stock (the term "Parity Preferred Stock" being used to refer
to any stock on a parity with the shares of Cumulative Preferred
Stock, either as to dividends or upon liquidation, dissolution or
winding up, or both, as the context may require); and
(c) junior to shares of the Cumulative Preferred Stock,
either as to dividends or upon liquidation, dissolution or winding up,
or both, if such class shall be Common Stock or if the holders of the
Cumulative Preferred Stock shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the
holders of stock of such class or classes.
The Cumulative Preferred Stock shall rank prior, as to
dividends and upon liquidation, dissolution or winding up, to the Common Stock
and on a parity with the Corporation's ESOP Convertible Preferred Stock, with a
liquidation value of $35.875 per share, the Corporation's 8.88% Cumulative
Preferred Stock, with a liquidation value of $200.00 per share, and the
Corporation's 8-3/4% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share.
<PAGE>
41
Subpart C: 8.88% Cumulative Preferred Stock*
1. Designation and Amount; Fractional Shares. The
designation for such series of the Preferred Stock authorized by this
resolution shall be the 8.88% Cumulative Preferred Stock, without par value,
with a stated value of $200.00 per share (the "Cumulative Preferred Stock").
The stated value per share of Cumulative Preferred Stock shall not for any
purpose be considered to be a determination by the Board or the Committee with
respect to the capital and surplus of the Corporation. The maximum number of
shares of Cumulative Preferred Stock shall be 975,000. The Cumulative
Preferred Stock is issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative Preferred
Stock will be entitled to receive, when and as declared by the Board or the
Committee out of assets of the Corporation legally available for payment, cash
dividends payable quarterly at the rate of 8.88% per annum. Dividends on the
Cumulative Preferred Stock, calculated as a percentage of the stated value,
will be payable quarterly on February 28, May 30, August 30 and November 30,
commencing February 28, 1992 (each a "dividend payment date"). Dividends on
shares of the Cumulative Preferred Stock will be cumulative from the date of
initial issuance of such shares of Cumulative Preferred Stock. Dividends will
be payable, in arrears, to holders of record as they appear on the stock books
of the Corporation on such record dates, not more than 60 days nor less than 10
days preceding the payment dates thereof, as shall be fixed by the Board or the
Committee. The amount of dividends payable for the initial dividend period or
any period shorter than a full dividend period shall be calculated on the basis
of a 360-day year of twelve 30-day months. No dividends may be declared or
paid or set apart for payment on any Parity Preferred Stock (as defined in
paragraph 9(b) below) with regard to the payment of dividends unless there
shall also be or have been declared and paid or set apart for payment on the
Cumulative Preferred Stock, like dividends for all dividend payment periods of
the Cumulative Preferred Stock ending on or before the dividend payment date of
such Parity Preferred Stock, ratably in proportion to the respective amounts of
dividends (x) accumulated and unpaid or payable on such Parity Preferred Stock,
on the one hand, and (y) accumulated and unpaid
- ---------------------
* Terms defined in this Subpart C are so defined for purposes of this
Subpart alone.
<PAGE>
42
through the dividend payment period or periods of the Cumulative Preferred
Stock next preceding such dividend payment date, on the other hand.
Except as set forth in the preceding sentence, unless full
cumulative dividends on the Cumulative Preferred Stock have been paid, no
dividends (other than in Common Stock of the Corporation) may be paid or
declared and set aside for payment or other distribution made upon the Common
Stock or on any other stock of the Corporation ranking junior to or on a parity
with the Cumulative Preferred Stock as to dividends, nor may any Common Stock
or any other stock of the Corporation ranking junior to or on a parity with the
Cumulative Preferred Stock as to dividends be redeemed, purchased or otherwise
acquired by the Corporation for any consideration or any payment by the
Corporation be made to or available for a sinking fund for the redemption of
any shares of such stock; provided, however, that any moneys theretofore
deposited in any sinking fund with respect to any preferred stock of the
Corporation in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such preferred stock in
accordance with the terms of such sinking fund regardless of whether at the
time of such application full cumulative dividends upon shares of the
Cumulative Preferred Stock outstanding to the last dividend payment date shall
have been paid or declared and set apart for payment; and provided further that
any such junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Corporation ranking junior to the Cumulative
Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Cumulative
Preferred Stock shall rank, as to liquidation, dissolution or winding up of the
Corporation, prior to the shares of Common Stock and any other class of stock
of the Corporation ranking junior to the Cumulative Preferred Stock as to
rights upon liquidation, dissolution or winding up of the Corporation, so that
in the event of any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of the Cumulative Preferred Stock
shall be entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of Common Stock or any
other such junior stock, an amount equal to $200.00 per share (the "Liquidation
Preference" of a share of Cumulative Preferred Stock) plus an amount equal to
all dividends (whether or not earned or declared) accrued and
<PAGE>
43
accumulated and unpaid on the shares of Cumulative Preferred Stock to the date
of final distribution. The holders of the Cumulative Preferred Stock will not
be entitled to receive the Liquidation Preference until the liquidation
preference of any other class of stock of the Corporation ranking senior to the
Cumulative Preferred Stock as to rights upon liquidation, dissolution or
winding up shall have been paid (or a sum set aside therefor sufficient to
provide for payment) in full. After payment of the full amount of the
Liquidation Preference and an amount equal to such dividends, the holders of
shares of Cumulative Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Corporation. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of shares of
Parity Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid, then such assets, or the proceeds thereof, shall be
distributable among such holders ratably in accordance with the respective
amounts which would be payable on such shares if all amounts payable thereon
were paid in full. For the purposes hereof, neither a consolidation or merger
of the Corporation with or into any other corporation, nor a merger of any
other corporation with or into the Corporation, nor a sale or transfer of all
or any part of the Corporation's assets for cash or securities shall be
considered a liquidation, dissolution or winding up of the Corporation.
4. Conversion. The Cumulative Preferred Stock is not
convertible into shares of any other class or series of stock of the
Corporation.
5. Voting Rights. The holders of shares of Cumulative
Preferred Stock shall have no voting rights whatsoever, except for any voting
rights to which they may be entitled under the laws of the State of Delaware,
and except as follows:
(a) Whenever, at any time or times, dividends payable on the
shares of Cumulative Preferred Stock or on any Parity Preferred Stock
with respect to payment of dividends shall be in arrears for an
aggregate number of days equal to six calendar quarters or more,
whether or not consecutive, the holders of the outstanding shares of
Cumulative Preferred Stock shall have the right, with holders of
shares of any one or more other class or series of stock upon which
like voting rights have been conferred and are exercisable (voting
together as a class), to elect two of the authorized number of members
<PAGE>
44
of the Board at the Corporation's next annual meeting of stockholders
and at each subsequent annual meeting of stockholders until such
arrearages have been paid or set apart for payment, at which time such
right shall terminate, except as herein or by law expressly provided,
subject to revesting in the event of each and every subsequent default
of the character above mentioned. Upon any termination of the right
of the holders of shares of Cumulative Preferred Stock as a class to
vote for directors as herein provided, the term of office of all
directors then in office elected by the holders of shares of
Cumulative Preferred Stock shall terminate immediately. Any director
who shall have been so elected pursuant to this paragraph may be
removed at any time, either with or without cause. Any vacancy
thereby created may be filled only by the affirmative vote of the
holders of shares of Cumulative Preferred Stock voting separately as a
class (together with the holders of shares of any other class or
series of stock upon which like voting rights have been conferred and
are exercisable). If the office of any director elected by the
holders of shares of Cumulative Preferred Stock voting as a class
becomes vacant for any reason other than removal from office as
aforesaid, the remaining director elected pursuant to this paragraph
may choose a successor who shall hold office for the unexpired term in
respect of which such vacancy occurred. At elections for such
directors, each holder of shares of Cumulative Preferred Stock shall
be entitled to one vote for each share held (the holders of shares of
any other class or series of preferred stock having like voting rights
being entitled to such number of votes, if any, for each share of such
stock held as may be granted to them).
(b) So long as any shares of Cumulative Preferred Stock
remain outstanding, the consent of the holders of at least two-thirds
of the shares of Cumulative Preferred Stock outstanding at the time
and all other classes or series of stock upon which like voting rights
have been conferred and are exercisable (voting together as a class)
given in person or by proxy, either in writing or at any meeting
called for the purpose, shall be necessary to permit, effect or
validate any one or more of the following:
(i) the issuance or increase of the authorized amount of
any class or series of shares ranking prior (as that term is
defined in paragraph 9(a) hereof) to the shares of the
Cumulative Preferred Stock; or
<PAGE>
45
(ii) the amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Certificate of Incorporation (including this resolution
or any provision hereof) that would materially and adversely
affect any power, preference, or special right of the shares
of Cumulative Preferred Stock or of the holders thereof;
provided, however, that any increase in the amount of
authorized Common Stock or authorized Preferred Stock or any
increase or decrease in the number of shares of any series of
Preferred Stock or the creation and issuance of other series
of Common Stock or Preferred Stock, in each case ranking on a
parity with or junior to the shares of Cumulative Preferred
Stock with respect to the payment of dividends and the
distribution of assets upon liquidation, dissolution or
winding up, shall not be deemed to materially and adversely
affect such powers, preferences or special rights.
(c) The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such vote would
otherwise be required shall be effected, all outstanding shares of
Cumulative Preferred Stock shall have been redeemed or called for
redemption and sufficient funds shall have been deposited in trust to
effect such redemption.
6. Redemption. The shares of the Cumulative Preferred Stock
may be redeemed at the option of the Corporation, as a whole, or from time to
time in part, at any time, upon not less than 30 days' prior notice mailed to
the holders of the shares to be redeemed at their addresses as shown on the
stock books of the Corporation; provided, however, that shares of the
Cumulative Preferred Stock shall not be redeemable prior to November 30, 1996.
Subject to the foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $200.00 per share together with an amount
equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative Preferred Stock
have not been paid, the Cumulative Preferred Stock may not be redeemed in part
and the Corporation may not purchase or acquire any shares of the Cumulative
Preferred Stock otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of the Cumulative Preferred Stock.
<PAGE>
46
If fewer than all the outstanding shares of Cumulative
Preferred Stock are to be redeemed, the Corporation will select those to be
redeemed by lot or a substantially equivalent method.
If a notice of redemption has been given pursuant to this
paragraph 6 and if, on or before the date fixed for redemption, the funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds, in trust for the pro rata benefit of
the holders of the shares of Cumulative Preferred Stock so called for
redemption, then, notwithstanding that any certificates for such shares have
not been surrendered for cancellation, on the redemption date dividends shall
cease to accrue on the shares to be redeemed, and at the close of business on
the redemption date the holders of such shares shall cease to be stockholders
with respect to such shares and shall have no interest in or claims against the
Corporation by virtue thereof and shall have no voting or other rights with
respect to such shares, except the right to receive the moneys payable upon
surrender (and endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no longer be outstanding.
Subject to applicable escheat laws, any moneys so set aside by the Corporation
and unclaimed at the end of two years from the redemption date shall revert to
the general funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such redemption. Any
interest accrued on funds so deposited shall be paid to the Corporation from
time to time.
All shares of Cumulative Preferred Stock redeemed, purchased
or otherwise acquired by the Corporation shall be retired and cancelled and
shall be restored to the status of authorized but unissued shares of Preferred
Stock, without designation as to series, and may thereafter be issued.
7. Authorization and Issuance of Other Securities. No
consent of the holders of the Cumulative Preferred Stock shall be required for
(a) the creation of any indebtedness of any kind of the Corporation, (b) the
creation, or increase or decrease in the amount, of any class or series of
stock of the Corporation not ranking prior as to dividends or upon liquidation,
dissolution or winding up to the Cumulative Preferred Stock or (c) any increase
or decrease in the amount of authorized Common Stock or any increase, decrease
or change in the par value thereof or in any other terms thereof.
<PAGE>
47
8. Amendment of Resolution. The Board and the Committee each
reserves the right by subsequent amendment of this resolution from time to time
to increase or decrease the number of shares that constitute the Cumulative
Preferred Stock (but not below the number of shares thereof then outstanding)
and in other respects to amend this resolution within the limitations provided
by law, this resolution and the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock of
any class or classes of the Corporation shall be deemed to rank:
(a) prior to shares of the Cumulative Preferred Stock, either
as to dividends or upon liquidation, dissolution or winding up, or
both, if the holders of stock of such class or classes shall be
entitled by the terms thereof to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as
the case may be, in preference or priority to the holders of shares of
the Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative Preferred
Stock, either as to dividends or upon liquidation, dissolution or
winding up, or both, whether or not the dividend rates, dividend
payment dates, or redemption or liquidation prices per share thereof
be different from those of the Cumulative Preferred Stock, if the
holders of stock of such class or classes shall be entitled by the
terms thereof to the receipt of dividends or of amounts distributed
upon liquidation, dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or liquidation prices,
without preference or priority of one over the other as between the
holders of such stock and the holders of shares of Cumulative
Preferred Stock (the term "Parity Preferred Stock" being used to refer
to any stock on a parity with the shares of Cumulative Preferred
Stock, either as to dividends or upon liquidation, dissolution or
winding up, or both, as the context may require); and
(c) junior to shares of the Cumulative Preferred Stock,
either as to dividends or upon liquidation, dissolution or winding up,
or both, if such class shall be Common Stock or if the holders of the
Cumulative Preferred Stock shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the
holders of stock of such class or classes.
<PAGE>
48
The Cumulative Preferred Stock shall rank prior, as to
dividends and upon liquidation, dissolution or winding up, to the Common Stock
and on a parity with the Corporation's ESOP Convertible Preferred Stock, with a
liquidation value of $35.875 per share, the Corporation's 9.36% Cumulative
Preferred Stock, with a liquidation value of $25.00 per share, and the
Corporation's 8-3/4% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share.
<PAGE>
49
Subpart D: 8-3/4% Cumulative Preferred Stock*
1. Designation and Amount; Fractional Shares. The
designation for such series of the Preferred Stock authorized by this
resolution shall be the 8-3/4% Cumulative Preferred Stock, without par value,
with a stated value of $200.00 per share (the "Cumulative Preferred Stock").
The stated value per share of Cumulative Preferred Stock shall not for any
purpose be considered to be a determination by the Board or the Committee with
respect to the capital and surplus of the Corporation. The number of shares of
Cumulative Preferred Stock shall be 750,000. The Cumulative Preferred Stock is
issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative Preferred
Stock will be entitled to receive, when and as declared by the Board or the
Committee out of assets of the Corporation legally available for payment, cash
dividends payable quarterly at the rate of 8-3/4% per annum. Dividends on the
Cumulative Preferred Stock, calculated as a percentage of the stated value,
will be payable quarterly on February 28, May 30, August 30 and November 30,
commencing May 30, 1992 (each a "dividend payment date"). Dividends on shares
of the Cumulative Preferred Stock will be cumulative from the date of initial
issuance of such shares of Cumulative Preferred Stock. Dividends will be
payable, in arrears, to holders of record as they appear on the stock books of
the Corporation on such record dates, not more than 60 days nor less than 10
days preceding the payment dates thereof, as shall be fixed by the Board or the
Committee. The amount of dividends payable for the initial dividend period or
any period shorter than a full dividend period shall be calculated on the basis
of a 360-day year of twelve 30-day months. No dividends may be declared or
paid or set apart for payment on any Parity Preferred Stock (as defined in
paragraph 9(b) below) with regard to the payment of dividends unless there
shall also be or have been declared and paid or set apart for payment on the
Cumulative Preferred Stock, like dividends for all dividend payment periods of
the Cumulative Preferred Stock ending on or before the dividend payment date of
such Parity Preferred Stock, ratably in proportion to the respective amounts of
dividends (x) accumulated and unpaid or payable on such Parity Preferred Stock,
on the one hand, and (y) accumulated and unpaid through the dividend payment
period or periods of the
- --------------------
* Terms defined in this Subpart D are so defined for purposes of this
Subpart alone.
<PAGE>
50
Cumulative Preferred Stock next preceding such dividend payment date, on the
other hand.
Except as set forth in the preceding sentence, unless full
cumulative dividends on the Cumulative Preferred Stock have been paid, no
dividends (other than in Common Stock of the Corporation) may be paid or
declared and set aside for payment or other distribution made upon the Common
Stock or on any other stock of the Corporation ranking junior to or on a parity
with the Cumulative Preferred Stock as to dividends, nor may any Common Stock
or any other stock of the Corporation ranking junior to or on a parity with the
Cumulative Preferred Stock as to dividends be redeemed, purchased or otherwise
acquired by the Corporation for any consideration or any payment by the
Corporation be made to or available for a sinking fund for the redemption of
any shares of such stock; provided, however, that any moneys theretofore
deposited in any sinking fund with respect to any preferred stock of the
Corporation in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such preferred stock in
accordance with the terms of such sinking fund regardless of whether at the
time of such application full cumulative dividends upon shares of the
Cumulative Preferred Stock outstanding to the last dividend payment date shall
have been paid or declared and set apart for payment; and provided further that
any such junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Corporation ranking junior to the Cumulative
Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Cumulative
Preferred Stock shall rank, as to liquidation, dissolution or winding up of the
Corporation, prior to the shares of Common Stock and any other class of stock
of the Corporation ranking junior to the Cumulative Preferred Stock as to
rights upon liquidation, dissolution or winding up of the Corporation, so that
in the event of any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of the Cumulative Preferred Stock
shall be entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of Common Stock or any
other such junior stock, an amount equal to $200.00 per share (the "Liquidation
Preference" of a share of Cumulative Preferred Stock) plus an amount equal to
all dividends (whether or not earned or declared) accrued and accumulated and
unpaid on the shares of Cumulative Preferred
<PAGE>
51
Stock to the date of final distribution. The holders of the Cumulative
Preferred Stock will not be entitled to receive the Liquidation Preference
until the liquidation preference of any other class of stock of the Corporation
ranking senior to the Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set aside therefor
sufficient to provide for payment) in full. After payment of the full amount
of the Liquidation Preference and an amount equal to such dividends, the
holders of shares of Cumulative Preferred Stock will not be entitled to any
further participation in any distribution of assets by the Corporation. If,
upon any liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation, or proceeds thereof, distributable among the holders of
shares of Parity Preferred Stock shall be insufficient to pay in full the
preferential amount aforesaid, then such assets, or the proceeds thereof, shall
be distributable among such holders ratably in accordance with the respective
amounts which would be payable on such shares if all amounts payable thereon
were paid in full. For the purposes hereof, neither a consolidation or merger
of the Corporation with or into any other corporation, nor a merger of any
other corporation with or into the Corporation, nor a sale or transfer of all
or any part of the Corporation's assets for cash or securities shall be
considered a liquidation, dissolution or winding up of the Corporation.
4. Conversion. The Cumulative Preferred Stock is not
convertible into shares of any other class or series of stock of the
Corporation.
5. Voting Rights. The holders of shares of Cumulative
Preferred Stock shall have no voting rights whatsoever, except for any voting
rights to which they may be entitled under the laws of the State of Delaware,
and except as follows:
(a) Whenever, at any time or times, dividends payable on the
shares of Cumulative Preferred Stock or on any Parity Preferred Stock
with respect to payment of dividends shall be in arrears for an
aggregate number of days equal to six calendar quarters or more,
whether or not consecutive, the holders of the outstanding shares of
Cumulative Preferred Stock shall have the right, with holders of
shares of any one or more other class or series of stock upon which
like voting rights have been conferred and are exercisable (voting
together as a class), to elect two of the authorized number of members
of the Board at the Corporation's next annual meeting of
<PAGE>
52
stockholders and at each subsequent annual meeting of stockholders
until such arrearages have been paid or set apart for payment, at
which time such right shall terminate, except as herein or by law
expressly provided, subject to revesting in the event of each and
every subsequent default of the character above mentioned. Upon any
termination of the right of the holders of shares of Cumulative
Preferred Stock as a class to vote for directors as herein provided,
the term of office of all directors then in office elected by the
holders of shares of Cumulative Preferred Stock shall terminate
immediately. Any director who shall have been so elected pursuant to
this paragraph may be removed at any time, either with or without
cause. Any vacancy thereby created may be filled only by the
affirmative vote of the holders of shares of Cumulative Preferred
Stock voting separately as a class (together with the holders of
shares of any other class or series of stock upon which like voting
rights have been conferred and are exercisable). If the office of any
director elected by the holders of shares of Cumulative Preferred
Stock voting as a class becomes vacant for any reason other than
removal from office as aforesaid, the remaining director elected
pursuant to this paragraph may choose a successor who shall hold
office for the unexpired term in respect of which such vacancy
occurred. At elections for such directors, each holder of shares of
Cumulative Preferred Stock shall be entitled to one vote for each
share held (the holders of shares of any other class or series of
preferred stock having like voting rights being entitled to such
number of votes, if any, for each share of such stock held as may be
granted to them).
(b) So long as any shares of Cumulative Preferred Stock
remain outstanding, the consent of the holders of at least two-thirds
of the shares of Cumulative Preferred Stock outstanding at the time
and all other classes or series of stock upon which like voting rights
have been conferred and are exercisable (voting together as a class)
given in person or by proxy, either in writing or at any meeting
called for the purpose, shall be necessary to permit, effect or
validate any one or more of the following:
(i) the issuance or increase of the authorized amount of
any class or series of shares ranking prior (as that term is
defined in paragraph 9(a) hereof) to the shares of the
Cumulative Preferred Stock; or
<PAGE>
53
(ii) the amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Certificate of Incorporation (including this resolution
or any provision hereof) that would materially and adversely
affect any power, preference, or special right of the shares
of Cumulative Preferred Stock or of the holders thereof;
provided, however, that any increase in the amount of
authorized Common Stock or authorized Preferred Stock or any
increase or decrease in the number of shares of any series of
Preferred Stock or the creation and issuance of other series
of Common Stock or Preferred Stock, in each case ranking on a
parity with or junior to the shares of Cumulative Preferred
Stock with respect to the payment of dividends and the
distribution of assets upon liquidation, dissolution or
winding up, shall not be deemed to materially and adversely
affect such powers, preferences or special rights.
(c) The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such vote would
otherwise be required shall be effected, all outstanding shares of
Cumulative Preferred Stock shall have been redeemed or called for
redemption and sufficient funds shall have been deposited in trust to
effect such redemption.
6. Redemption. The shares of the Cumulative Preferred Stock
may be redeemed at the option of the Corporation, as a whole, or from time to
time in part, at any time, upon not less than 30 days' prior notice mailed to
the holders of the shares to be redeemed at their addresses as shown on the
stock books of the Corporation; provided, however, that shares of the
Cumulative Preferred Stock shall not be redeemable prior to May 30, 1997.
Subject to the foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $200.00 per share together with an amount
equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative Preferred Stock
have not been paid, the Cumulative Preferred Stock may not be redeemed in part
and the Corporation may not purchase or acquire any shares of the Cumulative
Preferred Stock otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of the Cumulative Preferred Stock.
<PAGE>
54
If fewer than all the outstanding shares of Cumulative
Preferred Stock are to be redeemed, the Corporation will select those to be
redeemed by lot or a substantially equivalent method.
If a notice of redemption has been given pursuant to this
paragraph 6 and if, on or before the date fixed for redemption, the funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds, in trust for the pro rata benefit of
the holders of the shares of Cumulative Preferred Stock so called for
redemption, then, notwithstanding that any certificates for such shares have
not been surrendered for cancellation, on the redemption date dividends shall
cease to accrue on the shares to be redeemed, and at the close of business on
the redemption date the holders of such shares shall cease to be stockholders
with respect to such shares and shall have no interest in or claims against the
Corporation by virtue thereof and shall have no voting or other rights with
respect to such shares, except the right to receive the moneys payable upon
surrender (and endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no longer be outstanding.
Subject to applicable escheat laws, any moneys so set aside by the Corporation
and unclaimed at the end of two years from the redemption date shall revert to
the general funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such redemption. Any
interest accrued on funds so deposited shall be paid to the Corporation from
time to time.
All shares of Cumulative Preferred Stock redeemed, purchased
or otherwise acquired by the Corporation shall be retired and cancelled and
shall be restored to the status of authorized but unissued shares of Preferred
Stock, without designation as to series, and may thereafter be issued.
7. Authorization and Issuance of Other Securities. No
consent of the holders of the Cumulative Preferred Stock shall be required for
(a) the creation of any indebtedness of any kind of the Corporation, (b) the
creation, or increase or decrease in the amount, of any class or series of
stock of the Corporation not ranking prior as to dividends or upon liquidation,
dissolution or winding up to the Cumulative Preferred Stock or (c) any increase
or decrease in the amount of authorized Common Stock or any increase, decrease
or change in the par value thereof or in any other terms thereof.
<PAGE>
55
8. Amendment of Resolution. The Board and the Committee each
reserves the right by subsequent amendment of this resolution from time to time
to increase or decrease the number of shares that constitute the Cumulative
Preferred Stock (but not below the number of shares thereof then outstanding)
and in other respects to amend this resolution within the limitations provided
by law, this resolution and the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock of
any class or classes of the Corporation shall be deemed to rank:
(a) prior to shares of the Cumulative Preferred Stock, either
as to dividends or upon liquidation, dissolution or winding up, or
both, if the holders of stock of such class or classes shall be
entitled by the terms thereof to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as
the case may be, in preference or priority to the holders of shares of
the Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative Preferred
Stock, either as to dividends or upon liquidation, dissolution or
winding up, or both, whether or not the dividend rates, dividend
payment dates, or redemption or liquidation prices per share thereof
be different from those of the Cumulative Preferred Stock, if the
holders of stock of such class or classes shall be entitled by the
terms thereof to the receipt of dividends or of amounts distributed
upon liquidation, dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or liquidation prices,
without preference or priority of one over the other as between the
holders of such stock and the holders of shares of Cumulative
Preferred Stock (the term "Parity Preferred Stock" being used to refer
to any stock on a parity with the shares of Cumulative Preferred
Stock, either as to dividends or upon liquidation, dissolution or
winding up, or both, as the context may require); and
(c) junior to shares of the Cumulative Preferred Stock,
either as to dividends or upon liquidation, dissolution or winding up,
or both, if such class shall be Common Stock or if the holders of the
Cumulative Preferred Stock shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the
holders of stock of such class or classes.
<PAGE>
56
The Cumulative Preferred Stock shall rank prior, as to
dividends and upon liquidation, dissolution or winding up, to the Common Stock
and on a parity with the Corporation's ESOP Convertible Preferred Stock, with a
liquidation value of $35.875 per share, the Corporation's 9.36% Cumulative
Preferred Stock, with a liquidation value of $25.00 per share, and the
Corporation's 8.88% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share.
<PAGE>
57
PART II -- COMMON STOCK (a) Dividends. Subject to the
preferential dividend rights applicable to shares of any class or series of
stock having preference over the Common Stock as to dividends, the holders of
shares of Common Stock shall be entitled to receive such dividends when and as
declared by the Board of Directors and shall share equally, share for share
alike, in such dividends.
(b) Liquidation, Dissolution or Winding Up. In the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, after distribution in full of the preferential amounts to be
distributed to the holders of shares of any class or series of stock having
preference over the Common Stock upon voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Common
Stock shall be entitled to receive all of the remaining assets of the
Corporation available for distribution, ratably in proportion to the number of
shares of the Common Stock held.
(c) Voting. Each share of Common Stock shall entitle the
holder thereof to one vote on all matters submitted to a vote of the
stockholders of the Corporation. The holders of the shares of Common Stock
shall at all times, except as otherwise provided in this Restated Certificate
of Incorporation or required by law, vote as one class, together with the
holders of any other class or series of stock of the Corporation accorded such
general class voting right.
SECTION 3. Definitions. For the purposes of this Restated
Certificate of Incorporation:
(a) the term "outstanding", when used in reference to shares
of stock, shall mean issued shares, excluding shares held by the
Corporation or a Subsidiary; and
(b) the term "Subsidiary" or "Subsidiaries" shall mean a
corporation(s) of which the Corporation, directly or indirectly, has
the power, whether through the ownership of voting securities,
contract or otherwise, to elect at least a majority of the members of
such corporation's board of directors; provided, however, that for
purposes of Article VI of the Restated Certificate of Incorporation,
the term "Subsidiary" or "Subsidiaries" shall mean a corporation(s),
all of the capital stock of which is owned by the Corporation, other
than directors' qualifying shares.
<PAGE>
58
ARTICLE V
BOARD OF DIRECTORS
SECTION 1. Number, Election and Terms of Directors.
The business and affairs of the Corporation shall be managed by or under the
direction of a Board of Directors consisting of not fewer than four nor more
than fifteen persons; provided, however, that, pursuant to the provisions of
Section 141(a) of the General Corporation Law of the State of Delaware, the
powers and authority of the Board of Directors with respect to any stock
option, performance unit or other compensation or employee benefit plan of the
Corporation, to the extent not otherwise assigned or reserved to the Board of
Directors by the provisions of any such plan, are hereby conferred upon and
shall be exercised by a committee or committees designated by resolution passed
by the Board of Directors to consist of one or more persons who may or may not
be directors of the Corporation, unless the Board of Directors, by resolution
passed by the Board of Directors, shall determine that any or all such powers
and authority shall instead be conferred upon and exercised by the Board of
Directors. The exact number of directors within the minimum and maximum
limitations specified in the preceding sentence may be established from time to
time by the Board of Directors pursuant to a resolution adopted by a majority
of the entire Board of Directors. Subject to the rights of the holders of any
class or series of stock having preference over the Common Stock as to
dividends or upon liquidation, dissolution or winding up of the Corporation to
elect directors under specified circumstances, if any, directors shall be
elected each year at the annual meeting of stockholders and shall hold office
until their successors shall have been duly elected and qualified, or until
their earlier resignation or removal.
SECTION 2. Calling Special Meetings of Stockholders.
A special meeting of the stockholders may be called at any time and for any
purpose or purposes by the President or the Chairman of the Board or by order
of the Board of Directors, and shall be called by the Secretary upon the
written request of the holders of record of at least 80% of the voting power of
the then outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (the "Voting Stock").
SECTION 3. Newly Created Directorships and Vacancies on the
Board of Directors. Subject to the rights of any class or series of stock
having preference over the
<PAGE>
59
Common Stock as to dividends or upon liquidation, dissolution or winding up of
the Corporation to elect directors under specified circumstances, if any,
newly-created directorships resulting from any increase in the authorized
number of directors or any vacancies on the Board of Directors resulting from
death, resignation, retirement, disqualification, removal from office or other
cause shall be filled by a majority vote of the directors then in office,
although less than a quorum; and any director so chosen shall hold office for
the remaining term of his predecessor or, if there shall have been no
predecessor, until the next annual election of directors or until his successor
shall have been duly elected and qualified. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director.
SECTION 4. Removal of Directors. Subject to the rights of
the holders of any class or series of stock having preference over the Common
Stock as to dividends or upon liquidation, dissolution or winding up of the
Corporation to elect directors under specified circumstances, if any, any
director, or the entire Board of Directors, may be removed from office at any
time, with or without cause, only by the affirmative vote of the holders of at
least 80% of the voting power of the Voting Stock, voting together as a single
class.
SECTION 5. Amendment of By-Laws. In furtherance of and not
in limitation of the powers conferred by statute, the Board of Directors of the
Corporation from time to time, may amend, repeal or adopt By-Laws of the
Corporation; provided, that any By-Laws made, amended or repealed by the Board
of Directors or the stockholders may be amended or repealed, and that any
By-Laws may be made, by the stockholders of the Corporation. Notwithstanding
any other provisions of this Restated Certificate of Incorporation or the
By-Laws of the Corporation (and notwithstanding the fact that a lesser
percentage may be specified by law, this Restated Certificate of Incorporation
or the By-Laws of the Corporation), the affirmative vote of the holders of at
least 80% of the voting power of the Voting Stock, voting together as a single
class, shall be required for the stockholders of the Corporation to amend,
repeal or adopt any By-Laws of the Corporation or to adopt any amendment to
this Restated Certificate of Incorporation inconsistent with the By-Laws of the
Corporation.
SECTION 6. Amendment of Certificate of Incorporation.
Notwithstanding any other provisions of this Restated Certificate of
Incorporation or the By-Laws of the
<PAGE>
60
Corporation (and notwithstanding the fact that a lesser percentage may be
specified by law, this Restated Certificate of Incorporation or the By-Laws of
the Corporation), the affirmative vote of the holders of at least 80% of the
voting power of the Voting Stock, voting together as a single class, shall be
required to amend or repeal, or to adopt any provision inconsistent with, this
Article V hereof.
SECTION 7. Other Powers. The By-Laws of the Corporation may
confer upon the Board of Directors powers in addition to the foregoing and in
addition to the powers and authorities expressly conferred upon them by law,
but only to the extent permitted by law and not prohibited by the provisions of
this Restated Certificate of Incorporation.
ARTICLE VI
INDEMNIFICATION
The Corporation shall indemnify, to the fullest extent
permitted by applicable law, any person who was or is a party or is threatened
to be made a party to, or is involved in any manner in, any threatened, pending
or completed action, suit or proceeding (whether civil, criminal,
administrative or investigative) by reason of the fact that such person (1) is
or was a director or officer of the Corporation or a Subsidiary or (2) is or
was serving at the request of the Corporation or a Subsidiary as a director,
officer, partner, member, employee or agent of another corporation,
partnership, joint venture, trust, committee or other enterprise.
To the extent deemed advisable by the Board of Directors, the
Corporation may indemnify, to the fullest extent permitted by applicable law,
any person who was or is a party or is threatened to be made a party to, or is
involved in any manner in, any threatened, pending or completed action, suit or
proceeding (whether civil, criminal, administrative or investigative) by reason
of the fact that the person is or was an employee or agent (other than a
director or officer) of the Corporation or a Subsidiary.
The Corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation or a Subsidiary, or is or was serving at the
request of the Corporation or a Subsidiary as a director, officer, partner,
<PAGE>
61
member, employee or agent of another corporation, partnership, joint venture,
trust, committee or other enterprise, against any expense, liability or loss
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the Corporation or a Subsidiary would
have the power to indemnify him against such expense, liability or loss under
the provisions of applicable law.
No repeal, modification or amendment of, or adoption of any
provision inconsistent with, this Article VI nor, to the fullest extent
permitted by applicable law, any modification of law shall adversely affect any
right or protection of any person granted pursuant hereto existing at, or with
respect to events that occurred prior to, the time of such repeal, amendment,
adoption or modification.
For purposes of this Article VI, the term "Subsidiary" or
"Subsidiaries" shall mean a corporation(s), all of the capital stock of which
is owned directly or indirectly by the Corporation, other than directors'
qualifying shares.
The right to indemnification conferred in this Article VI also
includes, to the fullest extent permitted by applicable law, the right to be
paid the expenses (including attorneys' fees) incurred in connection with any
such proceeding in advance of its final disposition. The payment of any
amounts to any director, officer, partner, member, employee or agent pursuant
to this Article VI shall subrogate the Corporation to any right such director,
officer, partner, member, employee or agent may have against any other person
or entity. The rights conferred in this Article VI shall be contract rights.
ARTICLE VII
LIABILITY OF DIRECTORS
A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for any breach of
fiduciary duty as a director, except for liability (i) for any breach by the
director of his duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware or (iv) for any transaction from which
the director derived an improper personal benefit.
<PAGE>
62
No repeal, modification or amendment of, or adoption of any
provision inconsistent with, this Article VII nor, to the fullest extent
permitted by law, any modification of law shall adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal, amendment, adoption or modification or affect the liability of any
director of the Corporation for any action taken or any omission that occurred
prior to the time of such repeal, amendment, adoption or modification.
If the General Corporation Law of the State of Delaware shall
be amended, after this Restated Certificate of Incorporation is amended to
include this Article VII, to authorize corporate action further eliminating or
limiting the liability of directors, then a director of the Corporation, in
addition to the circumstances in which he is not liable immediately prior to
such amendment, shall be free of liability to the fullest extent permitted by
the General Corporation Law of the State of Delaware, as so amended.
SEVENTH: That this restatement has been duly adopted by
resolution of the Board of Directors of the Corporation in accordance with
Section 245 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused this
Certificate to be executed by its President and attested by its Assistant
Secretary and its corporate seal to be affixed hereto this 14th day of
September, 1992.
/s/ Robert F. Greenhill
(Seal) ----------------------------
Robert F. Greenhill
President
Attest:
/s/ Patricia A. Kurtz
- -------------------------
Patricia A. Kurtz
Assistant Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
MORGAN STANLEY GROUP INC.
(Pursuant to Section 242 of the
Delaware General Corporation Law)
MORGAN STANLEY GROUP INC., a Delaware corporation, HEREBY
CERTIFIES AS FOLLOWS;
1. The name of the Corporation is Morgan Stanley Group Inc.
The date of filing of its original Certificate of Incorporation with the
Secretary of State of the State of Delaware was July 10, 1975. The date of
filing of the most recent Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware was September 15, 1992.
2. This Certificate of Amendment sets forth amendments to the
Restated Certificate of Incorporation of the Corporation that were duly adopted
in accordance with the provisions of Section 242 of the General Corporation Law
of the State of Delaware.
3. Article IV, Section 2, Part I, Subpart A, Section 1(A) of
the Restated Certificate of Incorporation is hereby amended in full to be and
read as follows:
(A) The shares of such series shall be designated ESOP
CONVERTIBLE PREFERRED STOCK (hereinafter referred to as the "ESOP
Preferred Stock") and such series shall consist of 3,902,438 shares.
Such number of shares may be increased or decreased from time to time
by resolution of the Pricing Committee of this Board of Directors (the
"Pricing Committee"), but no such increase shall result in such series
consisting of more than 4,000,000 shares, and no decrease shall reduce
the number of shares of ESOP Preferred Stock to a number less than
that of shares of ESOP Preferred Stock then outstanding plus the
number of shares issuable upon exercise of any rights, options or
warrants or upon conversion of outstanding securities issued by the
Corporation relating to such shares. Notwithstanding the preceding
sentence, the Board of Directors may increase the number of shares of
ESOP
<PAGE>
2
Preferred Stock to a number greater than 4,000,000 shares, or may
decrease the number of such shares, subject only to any limitations
imposed by applicable law or this Restated Certificate of
Incorporation. Any shares of ESOP Preferred Stock redeemed or
purchased by the Corporation shall remain issued and outstanding for
all purposes (except that as long as such shares are held by the
Corporation or its nominee, no dividends shall be paid on such shares
and they shall neither be entitled to vote nor counted for quorum
purposes) and may thereafter be transferred by the Corporation from
time to time to a trustee or trustees referred to in paragraph (B) of
this Section 1 (whereupon the voting and dividend rights of such
shares shall be restored); provided that the Corporation may provide
at the time of or at any time after such redemption or purchase that
any such shares then held by the Corporation or its nominee shall be
retired, and such shares shall then be restored to the status of
authorized but unissued shares of preferred stock of the Corporation.
4. Article IV, Section 2, Part I, Subpart A, Section 9,
Paragraphs (A), (B), (C), (D), (E), (F), (G) and (I) of the Restated
Certificate of Incorporation are hereby amended in full to be and read as
follows:
(A)(1) In the event the Corporation shall, at any time or
from time to time while any of the shares of the ESOP Preferred Stock
are outstanding, (i) pay a dividend or make a distribution in respect
of the Common Stock in shares of Common Stock or (ii) subdivide the
outstanding shares of Common Stock into a greater number of shares, in
each case whether by reclassification of shares, recapitalization of
the Corporation (excluding a recapitalization or reclassification
effected by a merger or consolidation to which Section 8 applies) or
otherwise, then, in such event, the Conversion Price shall, subject to
the provisions of paragraphs (E) and (F) of this Section 9,
automatically be adjusted by dividing such Conversion Price by a
fraction (the "Section 9(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 outstanding immediately before such event. Such adjustment to
the Conversion Price shall be effective, upon payment of such dividend
or distribution in respect of the Common Stock, as of the record date
for the determination of stockholders entitled to receive such
dividend or distribution (on a
<PAGE>
3
retroactive basis), and in the case of a subdivision shall become
effective immediately as of the effective date thereof. An adjustment
to the Conversion Price pursuant to this Section 9(A)(1) shall have no
effect on the Liquidation Price or the Preferred Dividend Rate of the
ESOP Preferred Stock.
(2) In the event the Corporation shall, at any time or from
time to time while any of the shares of the ESOP Preferred Stock are
outstanding, combine the outstanding shares of Common Stock into a
lesser number of shares, whether by reclassification of shares,
recapitalization of the Corporation (excluding a recapitalization or
reclassification effected by a merger, consolidation or other
transaction to which Section 8 applies) or otherwise, then, in such
event, the Conversion Price shall, subject to the provisions of
paragraph (F) of this Section 9, automatically be adjusted by dividing
the Conversion Price in effect immediately before such event by the
Section 9(A) Fraction. An adjustment to the Conversion Price made
pursuant to this paragraph 9(A)(2) shall be given effect immediately
as of the effective date of such combination and shall have no effect
on the Liquidation Price or the Preferred Dividend Rate of the ESOP
Preferred Stock.
(B) In the event the Corporation shall, at any time or from
time to time while any of the shares of ESOP Preferred Stock are
outstanding, issue to holders of shares of Common Stock as a dividend
or distribution, including by way of a reclassification of shares or a
recapitalization of the Corporation, any right or warrant to purchase
shares of Common Stock (but not including as a right or warrant for
this purpose any security convertible into or exchangeable for shares
of Common Stock) for a consideration having a Fair Market Value (as
hereinafter defined) per share less than the Fair Market Value of a
share of Common Stock on the date of issuance of such right or warrant
(other than pursuant to any employee or director incentive,
compensation or benefit plan or arrangement of the Corporation or any
subsidiary of the Corporation heretofore or hereafter adopted), then,
in such event, the Conversion Price shall, subject to the provisions
of paragraphs (E) and (F) of this Section 9, automatically be adjusted
by dividing such Conversion Price by a fraction (the "Section 9(B)
Fraction"), the numerator of which is the number of shares of Common
Stock outstanding immediately before such issuance of rights or
warrants plus the maximum
<PAGE>
4
number of shares of Common Stock that could be acquired upon exercise
in full of all such rights and warrants and the denominator of which
is the number of shares of Common Stock outstanding immediately before
such issuance of warrants or rights plus the number of shares of
Common Stock that 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 and warrants. Such adjustment to the Conversion Price shall be
effective upon such issuance of rights or warrants. An adjustment to
the Conversion Price pursuant to this Section 9(B) shall have no
effect on the Liquidation Price or the Preferred Dividend Rate of the
ESOP Preferred Stock.
(C)(1) In the event the Corporation shall, at any time or
from time to time while any of the shares of ESOP Preferred Stock are
outstanding, issue, sell or exchange shares of Common Stock (other
than pursuant to (x) any right or warrant to purchase or acquire
shares of Common Stock (including as such a right or warrant for this
purpose any security convertible into or exchangeable for shares of
Common Stock) or (y) any employee or director incentive, compensation
or benefit plan or arrangement of the Corporation or any subsidiary of
the Corporation heretofore or hereafter adopted) at a purchase price
per share less than the Fair Market Value of a share of Common Stock
on the date of such issuance, sale or exchange, then, in such event,
the Conversion Price shall, subject to the provisions of paragraphs
(E) and (F) of this Section 9, automatically be adjusted by dividing
such Conversion Price by a fraction (the "Section 9(C)(1) Fraction"),
the numerator of which is the number of shares of Common Stock
outstanding immediately before such issuance, sale or exchange plus
the number of shares of Common Stock so issued, sold or exchanged and
the denominator of which is the number of shares of Common Stock
outstanding immediately before such issuance, sale or exchange plus
the number of shares of Common Stock that could be purchased at the
Fair Market Value of a share of Common Stock at the time of such
issuance, sale or exchange for the maximum aggregate consideration
paid therefor.
(2) In the event that the Corporation shall, at any time or
from time to time while any ESOP Preferred Stock is outstanding, issue,
sell or exchange any right or warrant to purchase or acquire
shares of Common Stock (including as such a right or warrant for this
purpose
<PAGE>
5
any security convertible into or exchangeable for shares of Common
Stock other than pursuant to any employee or director incentive,
compensation or benefit plan or arrangement of the Corporation or any
subsidiary of the Corporation 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, in such event, the Conversion Price shall,
subject to the provisions of paragraphs (E) and (F) of this Section 9,
automatically be adjusted by dividing such Conversion Price by a
fraction (the "Section 9(C)(2) Fraction"), the numerator of which is
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 and the denominator of which is the number of
shares of Common Stock outstanding immediately before such issuance of
rights or warrants plus the number of shares of Common Stock that
could be purchased at the Fair Market Value of a share of Common Stock
at the time of such issuance for the total of (x) the maximum
aggregate consideration payable at the time of the issuance, sale or
exchange of such right or warrant and (y) the maximum aggregate
consideration payable upon exercise in full of all such rights or
warrants.
(3) An adjustment to the Conversion Price pursuant to this
Section 9(C) shall be effective upon the effective date of any
issuance, sale or exchange described in paragraph (1) or (2) above.
Any such adjustment shall have no effect on the Liquidation Price or
the Preferred Dividend Rate of the ESOP Preferred Stock.
(D) In the event the Corporation shall, at any time or from
time to time while any of the shares of ESOP 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
Corporation (including capitalization or reclassification effected by
a merger or consolidation to which Section 8 does not apply) or effect
a Pro Rata Repurchase (as hereinafter defined) of Common Stock, then,
in such event, the Conversion Price shall, subject to the provisions
of paragraphs (E) and (F) of this Section 9, automatically be adjusted
by dividing such Conversion
<PAGE>
6
Price by a fraction (the "Section 9(D) Fraction"), the numerator of
which is the product of (a) the number of shares of Common Stock
outstanding immediately before such Extraordinary Distribution or Pro
Rata Repurchase minus, in the case of a Pro Rata Repurchase, the
number of shares of Common Stock repurchased by the Corporation
multiplied by (b) the Fair Market Value of a share of Common Stock on
the day before the ex-dividend date with respect to an Extraordinary
Distribution that is paid in cash and on the distribution date with
respect to an Extraordinary Distribution that is paid other than in
cash, or on the applicable expiration date (including all extensions
thereof) of any tender offer that is a Pro Rata Repurchase or on the
date of purchase with respect to any Pro Rata Repurchase that is not a
tender offer, as the case may be, and the denominator 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 of a share of
Common Stock on the day before the ex-dividend date with respect to an
Extraordinary Distribution that is paid in cash and on the
distribution date with respect to an Extraordinary Distribution that
is paid other than in cash, or on the applicable expiration date
(including all extensions thereof) of any tender offer that is a Pro
Rata Repurchase, or on the date of purchase with respect to any Pro
Rata Repurchase that 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. The Corporation shall send each holder of ESOP Preferred Stock
(i) notice of its intent to make any Extraordinary Distribution and
(ii) notice of any offer by the Corporation 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 to holders of
Common Stock or, in the case of an Extraordinary Distribution, the
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. 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 Corporation pursuant to such offer, as
well as the Conversion Price and the number of shares of Common Stock
into which a share of ESOP Preferred Stock may be converted at such
time. An adjustment to the Conversion Price pursuant to
<PAGE>
7
this Section 9(D) shall be effective (i) in the case of an
Extraordinary Dividend as of the record date for the determination of
holders entitled to receive such Extraordinary Dividend (on a
retroactive basis) and (ii) in the case of a Pro Rata Repurchase upon
the expiration date thereof (if such Pro Rata Repurchase is a tender
offer) or the effective date thereof (if such Pro Rata Repurchase is
not a tender offer). Any such adjustment shall have no effect on the
Liquidation Price or the Preferred Dividend Rate of the ESOP Preferred
Stock.
(E) The Board of Directors shall have the authority to
determine that any adjustment to the Conversion Price provided for in
paragraph (A)(1), (B), (C) or (D) of this Section 9 shall not be made
(or if already made, to determine that such adjustment shall be
cancelled prospectively), and in lieu thereof to declare a dividend in
respect of the ESOP Preferred Stock in shares of ESOP Preferred Stock
(a "Special Dividend") in such a manner that a holder of ESOP
Preferred Stock will become a holder of that number of shares of ESOP
Preferred Stock equal to the product of the number of such shares held
prior to such event times the Section 9(A), Section 9(B), Section
9(C)(1), Section 9(C)(2) or Section 9(D) Fraction, as applicable. The
declaration of such a Special Dividend shall be authorized, if at all,
by the Board of Directors no later than 30 calendar days following the
authorization by the Board of Directors (or by a committee duly
authorized by the Board of Directors) of the transaction or other
event described in any of the foregoing paragraphs (A)(1), (B), (C) or
(D) that would otherwise result in an adjustment to the Conversion
Price being made pursuant to any such paragraphs, and if the Board of
Directors does not authorize the declaration of a Special Dividend by
the end of such 30-day period, then no such Special Dividend shall be
declared and the adjustment to the Conversion Price provided for in
paragraph (A)(1), (B), (C) or (D) of this Section 9 shall become final
and binding on the Corporation and all stockholders of the
Corporation. Concurrently with the declaration of any Special
Dividend pursuant to this paragraph (E), the Conversion Price, the
Liquidation Price and the Preferred Dividend Rate of all shares of
ESOP Preferred Stock shall be adjusted by dividing the Conversion
Price, the Liquidation Price and the Preferred Dividend Rate,
respectively, in effect immediately before such event by the Section
9(A), Section 9(B), Section 9(C)(1), Section 9(C)(2) or Section 9(D)
Fraction, as applicable.
<PAGE>
8
(F) Unless the Board of Directors determines otherwise, and
notwithstanding any other provision of this Section 9, any adjustment
to the Conversion Price provided for in any of paragraphs (A), (B), (C)
or (D) of this Section 9 shall not be made unless such adjustment
would require an increase or decrease of at least one percent (1%) in
the Conversion Price and, similarly, the Board of Directors shall not
declare any Special Dividend pursuant to paragraph (E) of this Section
9 unless such Special Dividend or adjustment would require an
increase or decrease of at least one percent (1%) in the number of
shares of ESOP Preferred Stock outstanding. Any lesser adjustment to
the Conversion Price or Special Dividend shall be carried forward and
shall be made no later than the time of, and together with, the next
subsequent adjustment to the Conversion Price or Special Dividend
which, together with any adjustment or adjustments or Special Dividend
or Dividends so carried forward, shall amount to an increase or
decrease of at least one percent (1%) of the Conversion Price or an
increase or decrease of at least one percent (1%) in the number of
shares of ESOP Preferred Stock outstanding, whichever the case may be.
(G) If the Corporation shall make any dividend or
distribution on the Common Stock or issue any Common Stock, other
capital stock or other security of the Corporation or any rights or
warrants to purchase or acquire any such security, which transaction
does not result in an adjustment to the Conversion Price or to the
number of shares of ESOP Preferred Stock outstanding pursuant to the
foregoing provisions of this Section 9, the Board of Directors of the
Corporation may, in its sole discretion, consider whether such action
is of such a nature that some type of equitable adjustment should be
made in respect of such transaction. If in such case the Board of
Directors of the Corporation determines that some type of adjustment
should be made, an adjustment shall be made effective as of such date
as determined by the Board of Directors of the Corporation. The
determination of the Board of Directors of the Corporation as to
whether some type of adjustment should be made pursuant to the
foregoing provisions of this Section 9(G), and, if so, as to what
adjustment should be made and when, shall be final and binding on the
Corporation and all stockholders of the Corporation. The Corporation
shall be entitled, but not required, to make such additional
adjustments, in addition to those required by the foregoing provisions
of this Section 9, as shall be necessary in order that any dividend or
<PAGE>
9
distribution in shares of capital stock of the Corporation,
subdivision, reclassification or combination of shares of the
Corporation or any reclassification of the Corporation shall not be
taxable to holders of the Common Stock.
* * *
(I) Whenever an adjustment to the Conversion Price of the
ESOP Preferred Stock is required pursuant to this Section 9, the
Corporation shall forthwith place on file with the transfer agent for
the Common Stock and the ESOP Preferred Stock, if there be one, and
with the Treasurer of the Corporation, a statement signed by the
Treasurer or any Assistant Treasurer of the Corporation stating the
adjusted Conversion Price determined as provided herein. In addition,
whenever a Special Dividend is declared pursuant to paragraph (E) of
this Section 9, (i) the maximum number of shares of ESOP Preferred
Stock shall be adjusted by multiplying 4,000,000 (or such other number
as shall be the maximum number of shares of ESOP Preferred Stock in
effect prior to the authorization of such Special Dividend) by the
Section 9(A), Section 9(B), Section 9(C)(1), Section 9(C)(2) or
Section 9(D) Fraction, as the case may be, (ii) the Board of Directors
shall take action as is necessary so that a sufficient number of
shares of ESOP Preferred Stock are designated with respect to any
increase in the number of shares of ESOP Preferred Stock to be
outstanding as a result of such Special Dividend and (iii) the
Corporation shall forthwith place on file with the transfer agent for
the Common Stock and the ESOP Preferred Stock, if there be one, and
with the Treasurer of the Corporation, a statement signed by the
Treasurer or any Assistant Treasurer of the Corporation stating the
adjusted maximum number of shares of ESOP Preferred Stock, Conversion
Price, Liquidation Price and Preferred Dividend Rate determined as
provided herein. The statement required by either of the two
preceding sentences shall set forth in reasonable detail such facts as
shall be necessary to show the reason and the manner of computing such
adjustments, including any determination of Fair Market Value involved
in such computation. Promptly after each adjustment to the maximum
number of shares of ESOP Preferred Stock, Conversion Price, the
Liquidation Price, the Preferred Dividend Rate, or the number of
shares of ESOP Preferred Stock outstanding, the Corporation shall mail
a notice thereof and of the then prevailing maximum number of shares
of ESOP Preferred Stock, Conversion Price, Liquidation Price,
Preferred Dividend Rate and
<PAGE>
10
number of shares of ESOP Preferred Stock outstanding to each holder of
shares of ESOP Preferred Stock.
IN WITNESS WHEREOF, MORGAN STANLEY GROUP INC. has caused this
Certificate to be signed by John J. Mack, its President, and attested by
Jonathan M. Clark, its General Counsel and Secretary, this 30th day of June,
1993.
MORGAN STANLEY GROUP INC.
By: /s/ John J. Mack
--------------------
Name: John J. Mack
Title: President
ATTEST:
/s/ Jonathan M. Clark
- --------------------------
Name: Jonathan M. Clark
Title: General Counsel and
Secretary
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
7-3/8% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
MORGAN STANLEY GROUP INC.
______________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
______________________________
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors (the "Board") of Morgan
Stanley Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), by unanimous written consent in lieu of a meeting dated as of
July 27, 1993, with certain of the designations, preferences and rights having
been fixed by the Pricing Committee of the Board (the "Committee") at a meeting
on August 18, 1993, pursuant to authority delegated to it by the Board pursuant
to the provisions of Section 141(c) of the General Corporation Law of the State
of Delaware:
RESOLVED that, pursuant to authority expressly granted to and
vested in the Committee by the Board and in the Board by provisions of
the Restated Certificate of Incorporation of the Corporation, as
amended (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, without par value (the "Preferred Stock"), which
shall consist of 1,000,000 of the 30,000,000 shares of Preferred Stock
which the Corporation now has authority to issue, is authorized, and
the Board and, pursuant to the authority expressly granted to the
Committee by the Board pursuant to the provisions of Section 141(c) of
the General Corporation Law of the State of Delaware and the
Certificate of Incorporation, the Committee, fix the powers,
<PAGE>
2
designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or
restrictions thereof, of the shares of such series (in addition to the
powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations
or restrictions thereof, set forth in the Certificate of Incorporation
which may be applicable to the Preferred Stock) as follows:
1. Designation and Amount; Fractional Shares. The
designation for such series of the Preferred Stock authorized
by this resolution shall be the 7-3/8% Cumulative Preferred
Stock, without par value, with a stated value of $200.00 per
share (the "Cumulative Preferred Stock"). The stated value
per share of Cumulative Preferred Stock shall not for any
purpose be considered to be a determination by the Board or
the Committee with respect to the capital and surplus of the
Corporation. The number of shares of Cumulative Preferred
Stock shall be 1,000,000. The Cumulative Preferred Stock is
issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative
Preferred Stock will be entitled to receive, when, as and if
declared by the Board or the Committee out of assets of the
Corporation legally available for payment, cash dividends
payable quarterly at the rate of 7-3/8% per annum. Dividends
on the Cumulative Preferred Stock, calculated as a percentage
of the stated value, will be payable quarterly on February 28,
May 30, August 30 and November 30 commencing November 30, 1993
(each a "dividend payment date"). Dividends on shares of the
Cumulative Preferred Stock will be cumulative from the date of
initial issuance of such shares of Cumulative Preferred Stock.
Dividends will be payable, in arrears, to holders of record as
they appear on the stock books of the Corporation on such
record dates, not more than 60 days nor less than 10 days
preceding the payment dates thereof, as shall be fixed by the
Board or the Committee. The amount of dividends payable for
the initial dividend period or any period shorter than a full
dividend period shall be calculated on the basis of a 360-day
year of twelve 30-day months. No dividends may be declared or
paid or set apart for payment on any Parity Preferred Stock
(as defined in paragraph 9(b) below) with regard to the
payment of dividends
<PAGE>
3
unless there shall also be or have been declared and paid or
set apart for payment on the Cumulative Preferred Stock, like
dividends for all dividend payment periods of the Cumulative
Preferred Stock ending on or before the dividend payment date
of such Parity Preferred Stock, ratably in proportion to the
respective amounts of dividends (x) accumulated and unpaid or
payable on such Parity Preferred Stock, on the one hand, and
(y) accumulated and unpaid through the dividend payment
period or periods of the Cumulative Preferred Stock next
preceding such dividend payment date, on the other hand.
Except as set forth in the preceding sentence, unless
full cumulative dividends on the Cumulative Preferred Stock
have been paid, no dividends (other than in Common Stock of
the Corporation) may be paid or declared and set aside for
payment or other distribution made upon the Common Stock or on
any other stock of the Corporation ranking junior to or on a
parity with the Cumulative Preferred Stock as to dividends,
nor may any Common Stock or any other stock of the Corporation
ranking junior to or on a parity with the Cumulative Preferred
Stock as to dividends be redeemed, purchased or otherwise
acquired for any consideration (or any payment be made to or
available for a sinking fund for the redemption of any shares
of such stock; provided, however, that any moneys theretofore
deposited in any sinking fund with respect to any preferred
stock of the Corporation in compliance with the provisions of
such sinking fund may thereafter be applied to the purchase or
redemption of such preferred stock in accordance with the
terms of such sinking fund, regardless of whether at the time
of such application full cumulative dividends upon shares of
the Cumulative Preferred Stock outstanding to the last
dividend payment date shall have been paid or declared and set
apart for payment) by the Corporation; provided that any such
junior or parity Preferred Stock or Common Stock may be
converted into or exchanged for stock of the Corporation
ranking junior to the Cumulative Preferred Stock as to
dividends.
3. Liquidation Preference. The shares of Cumulative
Preferred Stock shall rank, as to liquidation, dissolution or
winding up of the Corporation, prior to the shares of Common
Stock and any other class of stock of the Corporation ranking
<PAGE>
4
junior to the Cumulative Preferred Stock as to rights upon
liquidation, dissolution or winding up of the Corporation, so
that in the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the
holders of the Cumulative Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital,
surplus or earnings, before any distribution is made to
holders of shares of Common Stock or any other such junior
stock, an amount equal to $200.00 per share (the "Liquidation
Preference" of a share of Cumulative Preferred Stock) plus an
amount equal to all dividends (whether or not earned or
declared) accrued and accumulated and unpaid on the shares of
Cumulative Preferred Stock to the date of final distribution.
The holders of the Cumulative Preferred Stock will not be
entitled to receive the Liquidation Preference until the
liquidation preference of any other class of stock of the
Corporation ranking senior to the Cumulative Preferred Stock
as to rights upon liquidation, dissolution or winding up shall
have been paid (or a sum set aside therefor sufficient to
provide for payment) in full. After payment of the full
amount of the Liquidation Preference and such dividends, the
holders of shares of Cumulative Preferred Stock will not be
entitled to any further participation in any distribution of
assets by the Corporation. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of
the Corporation, or proceeds thereof, distributable among the
holders of shares of Parity Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid,
then such assets, or the proceeds thereof, shall be
distributable among such holders ratably in accordance with
the respective amounts which would be payable on such shares
if all amounts payable thereon were paid in full. For the
purposes hereof, neither a consolidation or merger of the
Corporation with or into any other corporation, nor a merger
of any other corporation with or into the Corporation, nor a
sale or transfer of all or any part of the Corporation's
assets for cash or securities shall be considered a
liquidation, dissolution or winding up of the Corporation.
4. Conversion. The Cumulative Preferred Stock is
not convertible into shares of any other class or series of
stock of the Corporation.
<PAGE>
5
5. Voting Rights. The holders of shares of
Cumulative Preferred Stock shall have no voting rights
whatsoever, except for any voting rights to which they may be
entitled under the laws of the State of Delaware, and except
as follows:
(a) Whenever, at any time or times,
dividends payable on the shares of Cumulative
Preferred Stock or on any Parity Preferred Stock with
respect to payment of dividends, shall be in arrears
for an aggregate number of days equal to six calendar
quarters or more, whether or not consecutive, the
holders of the outstanding shares of Cumulative
Preferred Stock shall have the right, with holders of
shares of any one or more other class or series of
stock upon which like voting rights have been
conferred and are exercisable (voting together as a
class), to elect two of the authorized number of
members of the Board at the Corporation's next annual
meeting of stockholders and at each subsequent annual
meeting of stockholders until such arrearages have
been paid or set apart for payment, at which time
such right shall terminate, except as herein or by
law expressly provided, subject to revesting in the
event of each and every subsequent default of the
character above mentioned. Upon any termination of
the right of the holders of shares of Cumulative
Preferred Stock as a class to vote for directors as
herein provided, the term of office of all directors
then in office elected by the holders of shares of
Cumulative Preferred Stock shall terminate
immediately.
Any director who shall have been so elected pursuant
to this paragraph may be removed at any time, either
with or without cause. Any vacancy thereby created
may be filled only by the affirmative vote of the
holders of shares of Cumulative Preferred Stock
voting separately as a class (together with the
holders of shares of any other class or series of
stock upon which like voting rights have been
conferred and are exercisable). If the office of any
director elected by the holders of shares of
Cumulative Preferred Stock voting as a class becomes
vacant for any reason other than removal from office
as aforesaid, the remaining
<PAGE>
6
director elected pursuant to this paragraph may
choose a successor who shall hold office for the
unexpired term in respect of which such vacancy
occurred. At elections for such directors, each
holder of shares of Cumulative Preferred Stock shall
be entitled to one vote for each share held (the
holders of shares of any other class or series of
preferred stock having like voting rights being
entitled to such number of votes, if any, for each
share of such stock held as may be granted to them).
(b) So long as any shares of Cumulative
Preferred Stock remain outstanding, the consent of
the holders of at least two-thirds of the shares of
Cumulative Preferred Stock outstanding at the time
and all other classes or series of stock upon which
like voting rights have been conferred and are
exercisable (voting together as a class) given in
person or by proxy, either in writing or at any
meeting called for the purpose, shall be necessary to
permit, effect or validate any one or more of the
following:
(i) the issuance or increase of the
authorized amount of any class or series of
shares ranking prior (as that term is defined
in paragraph 9(a) hereof) to the shares of
the Cumulative Preferred Stock; or
(ii) the amendment, alteration or
repeal, whether by merger, consolidation or
otherwise, of any of the provisions of the
Certificate of Incorporation, (including this
resolution or any provision hereof) that
would materially and adversely affect any
power, preference, or special right of the
shares of Cumulative Preferred Stock or of
the holders thereof;
provided, however, that any increase in the amount of
authorized Common Stock or authorized Preferred Stock
or any increase or decrease in the number of shares
of any series of Preferred Stock or the creation and
issuance of other series of Common Stock or Preferred
Stock, in each case ranking on a parity with or
junior to the shares of Cumulative Preferred Stock
with
<PAGE>
7
respect to the payment of dividends and the
distribution of assets upon liquidation, dissolution
or winding up, shall not be deemed to materially and
adversely affect such powers, preferences or special
rights.
(c) The foregoing voting provisions shall
not apply if, at or prior to the time when the act
with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of
Cumulative Preferred Stock shall have been redeemed
or called for redemption and sufficient funds shall
have been deposited in trust to effect such
redemption.
6. Redemption. The shares of the Cumulative
Preferred Stock may be redeemed at the option of the
Corporation, as a whole, or from time to time in part, at any
time, upon not less than 30 days' prior notice mailed to the
holders of the shares to be redeemed at their addresses as
shown on the stock books of the Corporation; provided,
however, that shares of the Cumulative Preferred Stock shall
not be redeemable prior to August 30, 1998. Subject to the
foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $200.00 per share together
with an amount equal to all dividends (whether or not earned
or declared) accrued and accumulated and unpaid to, but
excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative
Preferred Stock have not been paid, the Cumulative Preferred
Stock may not be redeemed in part and the Corporation may not
purchase or acquire any shares of the Cumulative Preferred
Stock otherwise than pursuant to a purchase or exchange offer
made on the same terms to all holders of the Cumulative
Preferred Stock. If fewer than all the outstanding shares of
Cumulative Preferred Stock are to be redeemed, the Corporation
will select those to be redeemed by lot or a substantially
equivalent method.
If a notice of redemption has been given pursuant to
this paragraph 6 and if, on or before the date fixed for
redemption, the funds necessary for such redemption shall have
been set aside by the Corporation, separate and apart from its
other funds, in trust for the pro rata benefit of the holders
of the shares of Cumulative Preferred Stock
<PAGE>
8
so called for redemption, then, notwithstanding that any
certificates for such shares have not been surrendered for
cancellation, on the redemption date dividends shall cease to
accrue on the shares to be redeemed, and at the close of
business on the redemption date the holders of such shares
shall cease to be stockholders with respect to such shares and
shall have no interest in or claims against the Corporation by
virtue thereof and shall have no voting or other rights with
respect to such shares, except the right to receive the moneys
payable upon surrender (and endorsement, if required by the
Corporation) of their certificates, and the shares evidenced
thereby shall no longer be outstanding. Subject to applicable
escheat laws, any moneys so set aside by the Corporation and
unclaimed at the end of two years from the redemption date
shall revert to the general funds of the Corporation, after
which reversion the holders of such shares so called for
redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such
redemption. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
7. Authorization and Issuance of Other Securities.
No consent of the holders of the Cumulative Preferred Stock
shall be required for (a) the creation of any indebtedness of
any kind of the Corporation, (b) the creation, or increase or
decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon
liquidation, dissolution or winding up to the Cumulative
Preferred Stock or (c) any increase or decrease in the amount
of authorized Common Stock or any increase, decrease or change
in the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the
Committee each reserves the right by subsequent amendment of
this resolution from time to time to increase or decrease the
number of shares that constitute the Cumulative Preferred
Stock (but not below the number of shares thereof then
outstanding) and in other respects to amend this resolution
within the limitations provided by law, this resolution and
the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any
stock of any class or classes of the Corporation shall be
deemed to rank:
<PAGE>
9
(a) prior to shares of the Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, if
the holders of stock of such class or classes shall
be entitled by the terms thereof to the receipt of
dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of
shares of the Cumulative Preferred Stock;
(b) on a parity with shares of the
Cumulative Preferred Stock, either as to dividends or
upon liquidation, dissolution or winding up, or both,
whether or not the dividend rates, dividend payment
dates, or redemption or liquidation prices per share
thereof be different from those of the Cumulative
Preferred Stock, if the holders of stock of such
class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts
distributed upon liquidation, dissolution or winding
up, as the case may be, in proportion to their
respective dividend rates or liquidation prices,
without preference or priority of one over the other
as between the holders of such stock and the holders
of shares of Cumulative Preferred Stock (the term
"Parity Preferred Stock" being used to refer to any
stock on a parity with the shares of Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, as
the context may require); and
(c) junior to shares of the Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, if
such class shall be Common Stock or if the holders of
the Cumulative Preferred Stock shall be entitled to
the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders
of stock of such class or classes.
The Cumulative Preferred Stock shall rank prior, as
to dividends and upon liquidation, dissolution or winding up,
to the Common Stock and on a parity with the Corporation's
ESOP Convertible
<PAGE>
10
Preferred Stock, with a liquidation value of $35.88 per share,
the Corporation's 9.36% Cumulative Preferred Stock, with a
liquidation value of $25.00 per share, the Corporation's 8.88%
Cumulative Preferred Stock, with a liquidation value of
$200.00 per share and the Corporation's 8-3/4% Cumulative
Preferred Stock, with a liquidation value of $200.00 per
share.
IN WITNESS WHEREOF, Morgan Stanley Group Inc. has
caused this Certificate to be made under the seal of the Corporation
and signed by Barton M. Biggs, its Managing Director, and attested by
Ralph L. Pellecchio, its Assistant Secretary, this 24th day of August,
1993.
MORGAN STANLEY GROUP INC.
By: /s/ Barton M. Biggs
---------------------
Name: Barton M. Biggs
Title: Managing Director,
who is duly authorized to
exercise the duties of a
Vice President.
[SEAL]
Attest:
/s/ Ralph L. Pellecchio
-----------------------
Assistant Secretary
<PAGE>
CERTIFICATE OF CORRECTION FILED
TO CORRECT A CERTAIN ERROR IN THE
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE 7-3/8% CUMULATIVE PREFERRED STOCK
($200.00 STATED VALUE)
OF
MORGAN STANLEY GROUP INC,
FILED IN THE OFFICE OF THE SECRETARY OF STATE OF
THE STATE OF DELAWARE ON AUGUST 24, 1993, AND
FORWARDED TO THE OFFICE OF THE RECORDER OF DEEDS
IN AND FOR KENT COUNTY, DELAWARE ON AUGUST 25, 1993
Pursuant to Section 103(f) of the
General Corporation Law of the State of Delaware
Morgan Stanley Group Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
1. The name of the corporation is Morgan Stanley Group
Inc. (the "Corporation").
2. A Certificate of Designation of Preferences and Rights
of the 7-3/8% Cumulative Preferred Stock ($200.00 Stated Value) of the
Corporation was filed on August 24, 1993 and forwarded to the Office of the
Recorder of Deeds in and for Kent County, Delaware on August 25, 1993 (the
"Certificate").
3. The Certificate requires correction as permitted by
subsection (f) of the Section 103 of the General Corporation Law of the State
of Delaware.
<PAGE>
4. The inaccuracy or defect of the Certificate to be
corrected is that the concluding clause is corrected to read as follows:
"IN WITNESS WHEREOF, Morgan Stanley Group Inc. has
caused this Certificate to be made under the seal of the
Corporation and signed by Barton M. Biggs, its Managing
Director, and attested by Ralph Pallecchio, its Assistant
Secretary, this 24th day of August, 1993."
IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused this
Certificate of Correction to be made under the seal of the Corporation and
signed by Anson M. Beard, Jr., its Managing Director, and attested by Patricia
A. Kurtz, its Assistant Secretary, this 27th day of August, 1993.
MORGAN STANLEY GROUP INC.
By: /s/ Anson M. Beard, Jr.
--------------------------------
Name: Anson M. Beard, Jr.
Title: Managing Director,
who is duly authorized
to exercise the duties
of a Vice President
[SEAL]
Attest:
/s/ Patricia A. Kurtz
-------------------------
Assistant Secretary
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
7.82% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
MORGAN STANLEY GROUP INC.
______________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
______________________________
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors (the "Board") of Morgan
Stanley Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), by unanimous written consent in lieu of a meeting dated as of
October 29, 1993, with certain of the designations, preferences and rights
having been fixed by the Pricing Committee of the Board (the "Committee") at a
meeting on November 19, 1993, pursuant to authority delegated to it by the
Board pursuant to the provisions of Section 141(c) of the General Corporation
Law of the State of Delaware:
RESOLVED that, pursuant to authority expressly granted to and
vested in the Committee by the Board and in the Board by provisions of
the Restated Certificate of Incorporation of the Corporation, as
amended (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, without par value (the "Preferred Stock"), which
shall consist of 682,813 of the 30,000,000 shares of Preferred Stock
which the Corporation now has authority to issue, is authorized, and
the Board and, pursuant to the authority expressly granted to the
Committee by the Board pursuant to the provisions of Section 141(c) of
the General Corporation Law of the State of Delaware and the
Certificate of Incorporation, the Committee, fix the powers,
designations, preferences
<PAGE>
2
and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, of the
shares of such series (in addition to the powers, designations,
preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof,
set forth in the Certificate of Incorporation which may be applicable
to the Preferred Stock) as follows:
1. Designation and Amount; Fractional Shares. The
designation for such series of the Preferred Stock authorized by
this resolution shall be the 7.82% Cumulative Preferred Stock,
without par value, with a stated value of $200.00 per share (the
"Cumulative Preferred Stock"). The stated value per share of
Cumulative Preferred Stock shall not for any purpose be
considered to be a determination by the Board or the Committee
with respect to the capital and surplus of the Corporation. The
maximum number of shares of Cumulative Preferred Stock shall be
682,813. The Cumulative Preferred Stock is issuable in whole
shares only.
2. Dividends. Holders of shares of Cumulative Preferred
Stock will be entitled to receive, when, as and if declared by
the Board or the Committee out of assets of the Corporation
legally available for payment, cash dividends payable quarterly
at the rate of 7.82% per annum. Dividends on the Cumulative
Preferred Stock will be payable quarterly on February 28, May 30,
August 30 and November 30 (each a "dividend payment date").
Dividends on shares of the Cumulative Preferred Stock will be
cumulative from the date of initial issuance of such shares of
Cumulative Preferred Stock. Dividends will be payable, in
arrears, to holders of record as they appear on the stock books
of the Corporation on such record dates, not more than 60 days
nor less than 10 days preceding the payment dates thereof, as
shall be fixed by the Board or the Committee. The amount of
dividends payable for the initial dividend period or any period
shorter than a full dividend period shall be calculated on the
basis of a 360-day year of twelve 30-day months. No dividends
may be declared or paid or set apart for payment on any Parity
Preferred Stock (as defined in paragraph 9(b) below) with regard
to the payment of dividends unless there shall also be or have
been declared and paid or set apart for payment on the Cumulative
<PAGE>
3
Preferred Stock, like dividends for all dividend payment periods
of the Cumulative Preferred Stock ending on or before the
dividend payment date of such Parity Preferred Stock, ratably in
proportion to the respective amounts of dividends (x) accumulated
and unpaid or payable on such Parity Preferred Stock, on the one
hand, and (y) accumulated and unpaid through the dividend payment
period or periods of the Cumulative Preferred Stock next
preceding such dividend payment date, on the other hand.
Except as set forth in the preceding sentence, unless full
cumulative dividends on the Cumulative Preferred Stock have been
paid, no dividends (other than in Common Stock of the
Corporation) may be paid or declared and set aside for payment
or other distribution made upon the Common Stock or on any other
stock of the Corporation ranking junior to or on a parity with
the Cumulative Preferred Stock as to dividends, nor may any
Common Stock or any other stock of the Corporation ranking junior
to or on a parity with the Cumulative Preferred Stock as to
dividends be redeemed, purchased or otherwise acquired for any
consideration (or any payment be made to or available for a
sinking fund for the redemption of any shares of such stock;
provided, however, that any moneys theretofore deposited in any
sinking fund with respect to any preferred stock of the
Corporation in compliance with the provisions of such sinking
fund may thereafter be applied to the purchase or redemption of
such preferred stock in accordance with the terms of such sinking
fund, regardless of whether at the time of such application full
cumulative dividends upon shares of the Cumulative Preferred
Stock outstanding to the last dividend payment date shall have
been paid or declared and set apart for payment) by the
Corporation; provided that any such junior or parity Preferred
Stock or Common Stock may be converted into or exchanged for
stock of the Corporation ranking junior to the Cumulative
Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Cumulative
Preferred Stock shall rank, as to liquidation, dissolution or
winding up of the Corporation, prior to the shares of Common
Stock and any other class of stock of the Corporation ranking
junior to the Cumulative Preferred Stock as to
<PAGE>
4
rights upon liquidation, dissolution or winding up of the
Corporation, so that in the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or
involuntary, the holders of the Cumulative Preferred Stock shall
be entitled to receive out of the assets of the Corporation
available for distribution to its stockholders, whether from
capital, surplus or earnings, before any distribution is made to
holders of shares of Common Stock or any other such junior stock,
an amount equal to $200.00 per share (the "Liquidation
Preference" of a share of Cumulative Preferred Stock) plus an
amount equal to all dividends (whether or not earned or declared)
accrued and accumulated and unpaid on the shares of Cumulative
Preferred Stock to the date of final distribution. The holders
of the Cumulative Preferred Stock will not be entitled to receive
the Liquidation Preference until the liquidation preference of
any other class of stock of the Corporation ranking senior to the
Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set
aside therefor sufficient to provide for payment) in full. After
payment of the full amount of the Liquidation Preference and such
dividends, the holders of shares of Cumulative Preferred Stock
will not be entitled to any further participation in any
distribution of assets by the Corporation. If, upon any
liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation, or proceeds thereof, distributable
among the holders of shares of Parity Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid,
then such assets, or the proceeds thereof, shall be distributable
among such holders ratably in accordance with the respective
amounts which would be payable on such shares if all amounts
payable thereon were paid in full. For the purposes hereof,
neither a consolidation or merger of the Corporation with or into
any other corporation, nor a merger of any other corporation with
or into the Corporation, nor a sale or transfer of all or any
part of the Corporation's assets for cash or securities shall be
considered a liquidation, dissolution or winding up of the
Corporation.
4. Conversion. The Cumulative Preferred Stock is not
convertible into shares of any other class or series of stock of
the Corporation.
<PAGE>
5
5. Voting Rights. The holders of shares of Cumulative
Preferred Stock shall have no voting rights whatsoever, except
for any voting rights to which they may be entitled under the
laws of the State of Delaware, and except as follows:
(a) Whenever, at any time or times, dividends payable
on the shares of Cumulative Preferred Stock or on any Parity
Preferred Stock with respect to payment of dividends, shall
be in arrears for an aggregate number of days equal to six
calendar quarters or more, whether or not consecutive, the
holders of the outstanding shares of Cumulative Preferred
Stock shall have the right, with holders of shares of any
one or more other class or series of stock upon which like
voting rights have been conferred and are exercisable
(voting together as a class), to elect two of the authorized
number of members of the Board at the Corporation's next
annual meeting of stockholders and at each subsequent annual
meeting of stockholders until such arrearages have been paid
or set apart for payment, at which time such right shall
terminate, except as herein or by law expressly provided,
subject to revesting in the event of each and every
subsequent default of the character above mentioned. Upon
any termination of the right of the holders of shares of
Cumulative Preferred Stock as a class to vote for directors
as herein provided, the term of office of all directors then
in office elected by the holders of shares of Cumulative
Preferred Stock shall terminate immediately.
Any director who shall have been so elected pursuant to this
paragraph may be removed at any time, either with or without
cause. Any vacancy thereby created may be filled only by
the affirmative vote of the holders of shares of Cumulative
Preferred Stock voting separately as a class (together with
the holders of shares of any other class or series of stock
upon which like voting rights have been conferred and are
exercisable). If the office of any director elected by the
holders of shares of Cumulative Preferred Stock voting as a
class becomes vacant for any reason other than removal from
office as aforesaid, the remaining
<PAGE>
6
director elected pursuant to this paragraph may choose
a successor who shall hold office for the unexpired term in
respect of which such vacancy occurred. At elections for
such directors, each holder of shares of Cumulative
Preferred Stock shall be entitled to one vote for each share
held (the holders of shares of any other class or series of
preferred stock having like voting rights being entitled to
such number of votes, if any, for each share of such stock
held as may be granted to them).
(b) So long as any shares of Cumulative Preferred
Stock remain outstanding, the consent of the holders of at
least two-thirds of the shares of Cumulative Preferred Stock
outstanding at the time and all other classes or series of
stock upon which like voting rights have been conferred and
are exercisable (voting together as a class) given in person
or by proxy, either in writing or at any meeting called for
the purpose, shall be necessary to permit, effect or
validate any one or more of the following:
(i) the issuance or increase of the authorized
amount of any class or series of shares ranking prior
(as that term is defined in paragraph 9(a) hereof) to
the shares of the Cumulative Preferred Stock; or
(ii) the amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Certificate of
Incorporation, (including this resolution or any
provision hereof) that would materially and adversely
affect any power, preference, or special right of the
shares of Cumulative Preferred Stock or of the
holders thereof;
provided, however, that any increase in the amount of
authorized Common Stock or authorized Preferred Stock
or any increase or decrease in the number of shares
of any series of Preferred Stock or the creation and
issuance of other series of Common Stock or Preferred
Stock, in each case ranking on a parity with or
junior to the shares of Cumulative Preferred Stock
with
<PAGE>
7
respect to the payment of dividends and the
distribution of assets upon liquidation, dissolution
or winding up, shall not be deemed to materially and
adversely affect such powers, preferences or special
rights.
(c) The foregoing voting provisions shall not apply
if, at or prior to the time when the act with respect to
which such vote would otherwise be required shall be
effected, all outstanding shares of Cumulative Preferred
Stock shall have been redeemed or called for redemption and
sufficient funds shall have been deposited in trust to
effect such redemption.
6. Redemption Shares. The shares of the Cumulative
Preferred Stock may be redeemed at the option of the Corporation,
as a whole, or from time to time in part, at any time, upon not
less than 30 days' prior notice mailed to the holders of the
shares to be redeemed at their addresses as shown on the stock
books of the Corporation; provided, however, that shares of the
Cumulative Preferred Stock shall not be redeemable prior to
November 30, 1998. Subject to the foregoing, on or after such
date, shares of the Cumulative Preferred Stock are redeemable at
$200.00 per share together with an amount equal to all dividends
(whether or not earned or declared) accrued and accumulated and
unpaid to, but excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative Preferred
Stock have not been paid, the Cumulative Preferred Stock may not
be redeemed in part and the Corporation may not purchase or
acquire any shares of the Cumulative Preferred Stock otherwise
than pursuant to a purchase or exchange offer made on the same
terms to all holders of the Cumulative Preferred Stock. If fewer
than all the outstanding shares of Cumulative Preferred Stock are
to be redeemed, the Corporation will select those to be redeemed
by lot or a substantially equivalent method.
If a notice of redemption has been given pursuant to this
paragraph 6 and if, on or before the date fixed for redemption,
the funds necessary for such redemption shall have been set aside
by the Corporation, separate and apart from its other funds, in
trust for the pro rata benefit of the holders of the shares of
Cumulative Preferred Stock
<PAGE>
8
so called for redemption, then, notwithstanding that any
certificates for such shares have not been surrendered for
cancellation, on the redemption date dividends shall cease to
accrue on the shares to be redeemed, and at the close of business
on the redemption date the holders of such shares shall cease to
be stockholders with respect to such shares and shall have no
interest in or claims against the Corporation by virtue thereof
and shall have no voting or other rights with respect to such
shares, except the right to receive the moneys payable upon
surrender (and endorsement, if required by the Corporation) of
their certificates, and the shares evidenced thereby shall no
longer be outstanding. Subject to applicable escheat laws, any
moneys so set aside by the Corporation and unclaimed at the end
of two years from the redemption date shall revert to the general
funds of the Corporation, after which reversion the holders of
such shares so called for redemption shall look only to the
general funds of the Corporation for the payment of the amounts
payable upon such redemption. Any interest accrued on funds so
deposited shall be paid to the Corporation from time to time.
7. Authorization and Issuance of Other Securities. No
consent of the holders of the Cumulative Preferred Stock shall be
required for (a) the creation of any indebtedness of any kind of
the Corporation, (b) the creation, or increase or decrease in the
amount, of any class or series of stock of the Corporation not
ranking prior as to dividends or upon liquidation, dissolution or
winding up to the Cumulative Preferred Stock or (c) any increase
or decrease in the amount of authorized Common Stock or any
increase, decrease or change in the par value thereof or in any
other terms thereof.
8. Amendment of Resolution. The Board and the Committee
each reserves the right by subsequent amendment of this
resolution from time to time to increase or decrease the number
of shares that constitute the Cumulative Preferred Stock (but not
below the number of shares thereof then outstanding) and in other
respects to amend this resolution within the limitations provided
by law, this resolution and the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock
of any class or classes of the Corporation shall be deemed to
rank:
<PAGE>
9
(a) prior to shares of the Cumulative Preferred
Stock, either as to dividends or upon liquidation,
dissolution or winding up, or both, if the holders of stock
of such class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up,
as the case may be, in preference or priority to the holders
of shares of the Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative
Preferred Stock, either as to dividends or upon liquidation,
dissolution or winding up, or both, whether or not the
dividend rates, dividend payment dates, or redemption or
liquidation prices per share thereof be different from those
of the Cumulative Preferred Stock, if the holders of stock
of such class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts
distributed upon liquidation, dissolution or winding up, as
the case may be, in proportion to their respective dividend
rates or liquidation prices, without preference or priority
of one over the other as between the holders of such stock
and the holders of shares of Cumulative Preferred Stock (the
term "Parity Preferred Stock" being used to refer to any
stock on a parity with the shares of Cumulative Preferred
Stock, either as to dividends or upon liquidation,
dissolution or winding up, or both, as the context may
require); and
(c) junior to shares of the Cumulative Preferred
Stock, either as to dividends or upon liquidation,
dissolution or winding up, or both, if such class shall be
Common Stock or if the holders of the Cumulative Preferred
Stock shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to
the holders of stock of such class or classes.
The Cumulative Preferred Stock shall rank prior, as to
dividends and upon liquidation, dissolution or winding up, to the
Common Stock and on a parity with the Corporation's ESOP
Convertible
<PAGE>
10
Preferred Stock, with a liquidation value of $35.88 per share,
the Corporation's 9.36% Cumulative Preferred Stock, with a
liquidation value of $25.00 per share, the Corporation's 8.88%
Cumulative Preferred Stock, with a liquidation value of $200.00
per share, the Corporation's 8-3/4% Cumulative Preferred Stock,
with a liquidation value of $200.00 per share and the
Corporation's 7-3/8% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share.
IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused
this Certificate to be made under the seal of the Corporation and signed by
Richard B. Fisher, its Chairman, and attested by Patricia A. Kurtz, its
Assistant Secretary, this 23rd day of November, 1993.
MORGAN STANLEY GROUP INC.
/s/ Richard B. Fisher
By: ------------------------
Name: Richard B. Fisher
Title: Chairman
[SEAL]
Attest:
/s/ Patricia A. Kurtz
- -----------------------------
Assistant Secretary
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
7.80% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
MORGAN STANLEY GROUP INC.
-------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
-------------------------------
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors (the "Board") of Morgan
Stanley Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), by unanimous written consent in lieu of a meeting dated as of
October 29, 1993, with certain of the designations, preferences and rights
having been fixed by the Pricing Committee of the Board (the "Committee") at a
meeting on February 1, 1994, pursuant to authority delegated to it by the Board
pursuant to the provisions of Section 141(c) of the General Corporation Law of
the State of Delaware:
RESOLVED that, pursuant to authority expressly granted to and
vested in the Committee by the Board and in the Board by provisions of
the Restated Certificate of Incorporation of the Corporation, as
amended (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, without par value (the "Preferred Stock"), which
shall consist of 1,150,000 of the 30,000,000 shares of Preferred
Stock which the Corporation now has authority to issue, is authorized,
and the Board and, pursuant to the authority expressly granted to the
Committee by the Board pursuant to the provisions of Section 141(c) of
the General Corporation Law of the State of Delaware and the
Certificate of Incorporation, the Committee, fix the powers,
<PAGE>
2
designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or
restrictions thereof, of the shares of such series (in addition to the
powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations
or restrictions thereof, set forth in the Certificate of Incorporation
which may be applicable to the Preferred Stock) as follows:
1. Designation and Amount; Fractional Shares.
The designation for such series of the Preferred Stock
authorized by this resolution shall be the 7.80% Cumulative
Preferred Stock, without par value, with a stated value of
$200.00 per share (the "Cumulative Preferred Stock"). The
stated value per share of Cumulative Preferred Stock shall not
for any purpose be considered to be a determination by the
Board or the Committee with respect to the capital and surplus
of the Corporation. The maximum number of shares of
Cumulative Preferred Stock shall be 1,150,000. The Cumulative
Preferred Stock is issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative
Preferred Stock will be entitled to receive, when, as and if
declared by the Board or the Committee out of assets of the
Corporation legally available for payment, cash dividends
payable quarterly at the rate of 7.80% per annum. Dividends
on the Cumulative Preferred Stock will be payable quarterly on
February 28, May 30, August 30 and November 30 (each a
"dividend payment date"). Dividends on shares of the
Cumulative Preferred Stock will be cumulative from the date of
initial issuance of such shares of Cumulative Preferred Stock.
Dividends will be payable, in arrears, to holders of record as
they appear on the stock books of the Corporation on such
record dates, not more than 60 days nor less than 10 days
preceding the payment dates thereof, as shall be fixed by the
Board or the Committee. The amount of dividends payable for
the initial dividend period or any period shorter than a full
dividend period shall be calculated on the basis of a 360-day
year of twelve 30-day months. No dividends may be declared or
paid or set apart for payment on any Parity Preferred Stock
(as defined in paragraph 9(b) below) with regard to the
payment of dividends unless there shall also be or have been
declared and paid or set apart for payment on the Cumulative
<PAGE>
3
Preferred Stock, like dividends for all dividend payment
periods of the Cumulative Preferred Stock ending on or before
the dividend payment date of such Parity Preferred Stock,
ratably in proportion to the respective amounts of dividends
(x) accumulated and unpaid or payable on such Parity Preferred
Stock, on the one hand, and (y) accumulated and unpaid through
the dividend payment period or periods of the Cumulative
Preferred Stock next preceding such dividend payment date, on
the other hand.
Except as set forth in the preceding sentence, unless
full cumulative dividends on the Cumulative Preferred Stock
have been paid, no dividends (other than in Common Stock of
the Corporation) may be paid or declared and set aside for
payment or other distribution made upon the Common Stock or on
any other stock of the Corporation ranking junior to or on a
parity with the Cumulative Preferred Stock as to dividends,
nor may any Common Stock or any other stock of the Corporation
ranking junior to or on a parity with the Cumulative Preferred
Stock as to dividends be redeemed, purchased or otherwise
acquired for any consideration (or any payment be made to or
available for a sinking fund for the redemption of any shares
of such stock; provided, however, that any moneys theretofore
deposited in any sinking fund with respect to any preferred
stock of the Corporation in compliance with the provisions of
such sinking fund may thereafter be applied to the purchase or
redemption of such preferred stock in accordance with the
terms of such sinking fund, regardless of whether at the time
of such application full cumulative dividends upon shares of
the Cumulative Preferred Stock outstanding to the last
dividend payment date shall have been paid or declared and set
apart for payment) by the Corporation; provided that any such
junior or parity Preferred Stock or Common Stock may be
converted into or exchanged for stock of the Corporation
ranking junior to the Cumulative Preferred Stock as to
dividends.
3. Liquidation Preference. The shares of
Cumulative Preferred Stock shall rank, as to liquidation,
dissolution or winding up of the Corporation, prior to the
shares of Common Stock and any other class of stock of the
Corporation ranking junior to the Cumulative Preferred Stock
as to
<PAGE>
4
rights upon liquidation, dissolution or winding up of the
Corporation, so that in the event of any liquidation,
dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the Cumulative
Preferred Stock shall be entitled to receive out of the assets
of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of Common
Stock or any other such junior stock, an amount equal to
$200.00 per share (the "Liquidation Preference" of a share of
Cumulative Preferred Stock) plus an amount equal to all
dividends (whether or not earned or declared) accrued and
accumulated and unpaid on the shares of Cumulative Preferred
Stock to the date of final distribution. The holders of the
Cumulative Preferred Stock will not be entitled to receive the
Liquidation Preference until the liquidation preference of any
other class of stock of the Corporation ranking senior to the
Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set
aside therefor sufficient to provide for payment) in full.
After payment of the full amount of the Liquidation Preference
and such dividends, the holders of shares of Cumulative
Preferred Stock will not be entitled to any further
participation in any distribution of assets by the
Corporation. If, upon any liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of shares of
Parity Preferred Stock shall be insufficient to pay in full
the preferential amount aforesaid, then such assets, or the
proceeds thereof, shall be distributable among such holders
ratably in accordance with the respective amounts which would
be payable on such shares if all amounts payable thereon were
paid in full. For the purposes hereof, neither a
consolidation or merger of the Corporation with or into any
other corporation, nor a merger of any other corporation with
or into the Corporation, nor a sale or transfer of all or any
part of the Corporation's assets for cash or securities shall
be considered a liquidation, dissolution or winding up of the
Corporation.
4. Conversion. The Cumulative Preferred Stock
is not convertible into shares of any other class or series of
stock of the Corporation.
<PAGE>
5
5. Voting Rights. The holders of shares of
Cumulative Preferred Stock shall have no voting rights
whatsoever, except for any voting rights to which they may be
entitled under the laws of the State of Delaware, and except
as follows:
(a) Whenever, at any time or times,
dividends payable on the shares of Cumulative
Preferred Stock or on any Parity Preferred Stock with
respect to payment of dividends, shall be in arrears
for an aggregate number of days equal to six calendar
quarters or more, whether or not consecutive, the
holders of the outstanding shares of Cumulative
Preferred Stock shall have the right, with holders of
shares of any one or more other class or series of
stock upon which like voting rights have been
conferred and are exercisable (voting together as a
class), to elect two of the authorized number of
members of the Board at the Corporation's next annual
meeting of stockholders and at each subsequent annual
meeting of stockholders until such arrearages have
been paid or set apart for payment, at which time
such right shall terminate, except as herein or by
law expressly provided, subject to revesting in the
event of each and every subsequent default of the
character above mentioned. Upon any termination of
the right of the holders of shares of Cumulative
Preferred Stock as a class to vote for directors as
herein provided, the term of office of all directors
then in office elected by the holders of shares of
Cumulative Preferred Stock shall terminate
immediately.
Any director who shall have been so elected pursuant
to this paragraph may be removed at any time, either
with or without cause. Any vacancy thereby created
may be filled only by the affirmative vote of the
holders of shares of Cumulative Preferred Stock
voting separately as a class (together with the
holders of shares of any other class or series of
stock upon which like voting rights have been
conferred and are exercisable). If the office of any
director elected by the holders of shares of
Cumulative Preferred Stock voting as a class becomes
vacant for any reason other than removal from office
as aforesaid, the remaining
<PAGE>
6
director elected pursuant to this paragraph may choose a successor who
shall hold office for the unexpired term in respect of which such
vacancy occurred. At elections for such directors, each holder of
shares of Cumulative Preferred Stock shall be entitled to one vote for
each share held (the holders of shares of any other class or series of
preferred stock having like voting rights being entitled to such number
of votes, if any, for each share of such stock held as may be granted to
them).
(b) So long as any shares of Cumulative Preferred Stock
remain outstanding, the consent of the holders of at least two-thirds of
the shares of the Cumulative Preferred Stock outstanding at the time and
all other classes or series of stock upon which like voting rights have
been conferred and are exercisable (voting together as a class) given in
person or by proxy, either in writing or at any meeting called for the
purpose, shall be necessary to permit, effect or validate any one or
more of the following:
(i) the issuance or increase of the authorized amount of
any class or series of shares ranking prior (as that term is
defined in paragraph 9(a) hereof) to the shares of the
Cumulative Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions of
the Certificate of Incorporation, (including this resolution or
any provision hereof) that would materially and adversely
affect any power, preference, or special right of the shares of
Cumulative Preferred Stock or of the holders thereof;
provided, however, that any increase in the amount of authorized
Common Stock or authorized Preferred Stock or any increase or
decrease in the number of shares of any series of Preferred
Stock or the creation and issuance of other series of Common
Stock or Preferred Stock, in each case ranking on a parity with
or junior to the shares of Cumulative Preferred Stock with
<PAGE>
7
respect to the payment of dividends and the distribution
of assets upon liquidation, dissolution or winding up, shall
not be deemed to materially and adversely affect such
powers, preferences or special rights.
(c) The foregoing voting provisions shall not
apply if, at or prior to the time when the act with respect to
which such vote would otherwise be required shall be effected,
all outstanding shares of Cumulative Preferred Stock shall have
been redeemed or called for redemption and sufficient funds
shall have been deposited in trust to effect such redemption.
6. Redemption Shares. The shares of the Cumulative
Preferred Stock may be redeemed at the option of the Corporation, as a
whole, or from time to time in part, at any time, upon not less than 30
days' prior notice mailed to the holders of the shares to be redeemed at
their addresses as shown on the stocks books of the Corporation;
provided, however, that shares of the Cumulative Preferred Stock shall
not be redeemable prior to February 28, 1999. Subject to the foregoing,
on or after such date, shares of the Cumulative Preferred Stock are
redeemable at $200.00 per share together with an amount equal to all
dividends (whether or not earned or declared) accrued and accumulated
and unpaid to, but excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative Preferred Stock
have not been paid, the Cumulative Preferred Stock may not be redeemed
in part and the Corporation may not purchase or acquire any shares of
the Cumulative Preferred Stock otherwise than pursuant to a purchase or
exchange offer made on the same terms to all holders of the Cumulative
Preferred Stock. If fewer than all the outstanding shares of Cumulative
Preferred Stock are to be redeemed, the Corporation will select those to
be redeemed by lot or a substantially equivalent method.
If a notice of redemption has been given pursuant to this
paragraph 6 and if, on or before the date fixed for redemption, the
funds necessary for such redemption shall have been set aside by the
Corporation, separate and apart from its other funds, in trust for the
pro rata benefit of the holders of the shares of Cumulative Preferred
Stock
<PAGE>
8
so called for redemption, then, notwithstanding that any certificates
for such shares have not been surrendered for cancellation, on the
redemption date dividends shall cease to accrue on the shares to
be redeemed, and at the close of business on the redemption date the
holders of such shares shall cease to be stockholders with respect to
such shares and shall have no interest in or claims against the
Corporation by virtue thereof and shall have no voting or other rights
with respect to such shares, except the right to receive the moneys
payable upon surrender (and endorsement, if required by the Corporation)
of their certificates, and the shares evidenced thereby shall no longer
be outstanding. Subject to applicable escheat laws, any moneys so set
aside by the Corporation and unclaimed at the end of two years from the
redemption date shall revert to the general funds of the Corporation,
after which reversion the holders of such shares so called for
redemption shall look only to the general funds of the Corporation for
the payment of the amounts payable upon such redemption. Any interest
accrued on funds so deposited shall be paid to the Corporation from time
to time.
7. Authorization and Issuance of Other Securities. No
consent of the holders of the Cumulative Preferred Stock shall be
required for (a) the creation of any indebtedness of any kind of the
Corporation, (b) the creation, or increase or decrease in the amount, of
any class or series of stock of the Corporation not ranking prior as to
dividends or upon liquidation, dissolution or winding up to the
Cumulative Preferred Stock or (c) any increase or decrease in the amount
of authorized Common Stock or any increase, decrease or change in the
par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the Committee
each reserves the right by subsequent amendment of this resolution from
time to time to increase or decrease the number of shares that
constitute the Cumulative Preferred Stock (but not below the number of
shares thereof then outstanding) and in other respects to amend this
resolution within the limitations provided by law, this resolution and
the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock
of any class or classes of the Corporation shall be deemed to rank:
<PAGE>
9
(a) prior to shares of the Cumulative Preferred
Stock, either as to dividends or upon liquidation, dissolution
or winding up, or both, if the holders of stock of such class
or classes shall be entitled by the terms thereof to the
receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of shares of the
Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative
Preferred Stock, either as to dividends or upon liquidation,
dissolution or winding up, or both, whether or not the dividend
rates, dividend payment dates, or redemption or liquidation
prices per share thereof be different from those of the
Cumulative Preferred Stock, if the holders of stock of such
class or classes shall be entitled by the terms thereof to the
receipt of dividends or of amounts distributed upon
liquidation, dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or liquidation
prices, without preference or priority of one over the other as
between the holders of such stock and the holders of shares of
Cumulative Preferred Stock (the term "Parity Preferred Stock"
being used to refer to any stock on a parity with the shares of
Cumulative Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, as the context
may require); and
(c) junior to shares of the Cumulative Preferred
Stock, either as to dividends or upon liquidation, dissolution
or winding up, or both, if such class shall be Common Stock or
if the holders of the Cumulative Preferred Stock shall be
entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as
the case may be, in preference or priority to the holders of
stock in such class or classes.
The Cumulative Preferred Stock shall rank prior, as to
dividends and upon liquidation, dissolution or winding up, to the Common
Stock and on a parity with the Corporation's ESOP Convertible
<PAGE>
10
Preferred Stock, with a liquidation value of $35.88
per share, the Corporation's 9.36% Cumulative
Preferred Stock, with a liquidation value of $25.00
per share, the Corporation's 8.88% Cumulative
Preferred Stock, with a liquidation value of $200.00
per share, the Corporation's 8-3/4% Cumulative
Preferred Stock, with a liquidation value of $200.00
per share, the Corporation's 7-3/8% Cumulative
Preferred Stock, with a liquidation value of $200.00
per share and, if issued, the Corporation's 7.82%
Cumulative Preferred Stock with a liquidation value
of $200.00 per share.
IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused
this Certificate to be made under the seal of the Corporation and signed
by Richard B. Fisher, its Chairman, and attested by Patricia A. Kurtz,
its Assistant Secretary, this 4 day of February, 1994.
MORGAN STANLEY GROUP INC.
By: /s/ Richard B. Fisher
---------------------------
Name: Richard B. Fisher
Title: Chairman of the Board
[SEAL]
Attest:
/s/ Patricia A. Kurtz
- -------------------------
Patricia A. Kurtz
Assistant Secretary
<PAGE>
CERTIFICATE OF DECREASE
OF
AUTHORIZED NUMBER OF SHARES
OF
7.82% CUMULATIVE PREFERRED STOCK
Morgan Stanley Group Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
That the Restated Certificate of Incorporation of the Corporation was
filed in the Office of the Secretary of State of Delaware on September 15, 1992
and forwarded for recording in the Office of the Recorder of Deeds for Kent
County, Delaware on September 15, 1992 and a Certificate of Designation of
Preferences and Rights ("Certificate of Designation") of the 7.82% Cumulative
Preferred Stock, was filed in said Office of the Secretary of State on November
24, 1993 and forwarded for recording in the office of the Recorder of Deeds on
even date therewith.
That pursuant to authority expressly granted to and vested in the
Pricing Committee of the Board of Directors of the Corporation (the "Pricing
Committee"), by resolutions duly adopted by said Board of Directors on October
29, 1993 (the "Resolutions"), the Pricing Committee fixed certain designations,
preferences and rights of the aforesaid 7.82% Cumulative Preferred Stock as set
forth in the Certificate of Designation.
That pursuant to authority expressly granted to and vested in the
Pricing Committee by the Resolutions, the Pricing Committee by a written
unanimous consent in lieu of a meeting dated as of April 12, 1994 duly adopted
a resolution authorizing and directing a decrease in the authorized number of
shares of the 7.82% Cumulative Preferred Stock of the Corporation, from 682,813
shares to 611,238 shares and providing that the 71,575 shares of the 7.82%
Cumulative Preferred Stock designated by the Pricing Committee but not issued
and outstanding resume the status of authorized and unissued Preferred Stock,
all in accordance with the provisions of Section 151 of The General Corporation
Law of the State of Delaware and the aforesaid Restated Certificate of
Incorporation of the Corporation.
<PAGE>
IN WITNESS WHEREOF, said Morgan Stanley Group Inc., has caused this
certificate to be signed by Richard B. Fisher, its Chairman, and attested by
Patricia A. Kurtz, its Assistant Secretary, this 12 day of April, 1994.
By /s/ Richard B. Fisher
------------------------------
Name: Richard B. Fisher
Title: Chairman
ATTEST:
By /s/ Patricia A. Kurtz
------------------------------
Name: Patricia A. Kurtz
Title: Assistant Secretary
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
9.00% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
MORGAN STANLEY GROUP INC.
------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------
The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted by the Board of Directors (the "Board") of Morgan Stanley Group
-----
Inc., a Delaware corporation (hereinafter called the "Corporation"), by
-----------
unanimous written consent in lieu of a meeting dated as of October 29, 1993 with
certain of the designations, preferences and rights having been fixed by the
Pricing Committee of the Board (the "Committee") at a meeting on February 10,
---------
1995, pursuant to authority delegated to it by the Board pursuant to the
provisions of Section 141(c) of the General Corporation Law of the State of
Delaware:
RESOLVED that, pursuant to authority expressly granted to and vested
in the Committee by the Board and in the Board by provisions of the
Restated Certificate of Incorporation of the Corporation, as amended (the
"Certificate of Incorporation"), the issuance of a series of Preferred
-----------------------------
Stock, without par value (the "Preferred Stock"), which shall consist of
---------------
738,763 of the 30,000,000 shares of Preferred Stock which the Corporation
now has authority to issue, is authorized, and the Board and, pursuant to
the authority expressly granted to the Committee by the Board pursuant to
the provisions of Section 141(c) of the General Corporation Law of the
State of Delaware and the Certificate of Incorporation, the Committee fix
the powers, designations, preferences and relative, participating, optional
or other special rights, and the qualifications, limitations or
restrictions thereof, of the shares of such series (in addition to the
powers, designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or restrictions
thereof, set
<PAGE>
2
forth in the Certificate of Incorporation which may be applicable to the
Preferred Stock) as follows:
1. Designation and Amount; Fractional Shares. The designation
-----------------------------------------
for such series of the Preferred Stock authorized by this resolution
shall be the 9.00% Cumulative Preferred Stock, without par value, with
a stated value of $200.00 per share (the "Cumulative Preferred
--------------------
Stock"). The stated value per share of Cumulative Preferred Stock
------
shall not for any purpose be considered to be a determination by the
Board or the Committee with respect to the capital and surplus of the
Corporation. The maximum number of shares of Cumulative Preferred
Stock shall be 738,763. The Cumulative Preferred Stock is issuable in
whole shares only.
2. Dividends. Holders of shares of Cumulative Preferred Stock
---------
will be entitled to receive, when, as and if declared by the Board or
the Committee out of assets of the Corporation legally available for
payment, cash dividends payable quarterly at the rate of 9.00% per
annum. Dividends on the Cumulative Preferred Stock will be payable
quarterly on February 28, May 30, August 30 and November 30 (each a
"dividend payment date"). Dividends on shares of the Cumulative
----------------------
Preferred Stock will be cumulative from the date of initial issuance
of such shares of Cumulative Preferred Stock. Dividends will be
payable, in arrears, to holders of record as they appear on the stock
books of the Corporation on such record dates, not more than 60 days
nor less than 10 days preceding the payment dates thereof, as shall be
fixed by the Board or the Committee. The amount of dividends payable
for the initial dividend period or any period shorter than a full
dividend period shall be calculated on the basis of a 360-day year of
twelve 30-day months. No dividends may be declared or paid or set
apart for payment on any Parity Preferred Stock (as defined in
paragraph 9(b) below) with regard to the payment of dividends unless
there shall also be or have been declared and paid or set apart for
payment on the Cumulative Preferred Stock, like dividends for all
dividend payment periods of the Cumulative Preferred Stock ending on
or before the dividend payment date of such Parity Preferred Stock,
ratably in proportion to the respective amounts of dividends (x)
accumulated and unpaid or payable on such Parity Preferred Stock, on
the one hand, and (y) accumulated and unpaid through the dividend
payment period or periods of the Cumulative Preferred Stock next
preceding such dividend payment date, on the other hand.
Except as set forth in the preceding sentence, unless full
cumulative dividends on the Cumulative Preferred Stock have been paid,
no dividends (other than in Common Stock of the Corporation) may be
paid or declared and set aside for payment or other distribution made
upon the Common Stock or on any other stock of the Corporation ranking
junior to or on a parity with the
<PAGE>
3
Cumulative Preferred Stock as to dividends, nor may any Common Stock
or any other stock of the Corporation ranking junior to or on a parity
with the Cumulative Preferred Stock as to dividends be redeemed,
purchased or otherwise acquired for any consideration (or any payment
be made to or available for a sinking fund for the redemption of any
shares of such stock; provided, however, that any moneys theretofore
deposited in any sinking fund with respect to any preferred stock of
the Corporation in compliance with the provisions of such sinking fund
may thereafter be applied to the purchase or redemption of such
preferred stock in accordance with the terms of such sinking fund,
regardless of whether at the time of such application full cumulative
dividends upon shares of the Cumulative Preferred Stock outstanding to
the last dividend payment date shall have been paid or declared and
set apart for payment) by the Corporation; provided that any such
junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Corporation ranking junior to the
Cumulative Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Cumulative Preferred
----------------------
Stock shall rank, as to liquidation, dissolution or winding up of the
Corporation, prior to the shares of Common Stock and any other class
of stock of the Corporation ranking junior to the Cumulative Preferred
Stock as to rights upon liquidation, dissolution or winding up of the
Corporation, so that in the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the
holders of the Cumulative Preferred Stock shall be entitled to receive
out of the assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings, before any
distribution is made to holders of shares of Common Stock or any other
such junior stock, an amount equal to $200.00 per share (the
"Liquidation Preference" of a share of Cumulative Preferred Stock)
-----------------------
plus an amount equal to all dividends (whether or not earned or
declared) accrued and accumulated and unpaid on the shares of
Cumulative Preferred Stock to the date of final distribution. The
holders of the Cumulative Preferred Stock will not be entitled to
receive the Liquidation Preference until the liquidation preference of
any other class of stock of the Corporation ranking senior to the
Cumulative Preferred Stock as to rights upon liquidation, dissolution
or winding up shall have been paid (or a sum set aside therefor
sufficient to provide for payment) in full. After payment of the full
amount of the Liquidation Preference and such dividends, the holders
of shares of Cumulative Preferred Stock will not be entitled to any
further participation in any distribution of assets by the
Corporation. If, upon any liquidation, dissolution or winding up of
the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of shares of Parity Preferred Stock
shall be insufficient to pay in full the preferential amount
aforesaid, then such assets, or the proceeds thereof, shall be
distributable among such holders
<PAGE>
4
ratably in accordance with the respective amounts which would be
payable on such shares if all amounts payable thereon were paid in
full. For the purposes hereof, neither a consolidation or merger of
the Corporation with or into any other corporation, nor a merger of
any other corporation with or into the Corporation, nor a sale or
transfer of all or any part of the Corporation's assets for cash or
securities shall be considered a liquidation, dissolution or winding
up of the Corporation.
4. Conversion. The Cumulative Preferred Stock is not
----------
convertible into shares of any other class or series of stock of the
Corporation.
5. Voting Rights. The holders of shares of Cumulative Preferred
-------------
Stock shall have no voting rights whatsoever, except for any voting
rights to which they may be entitled under the laws of the State of
Delaware, and except as follows:
(a) Whenever, at any time or times, dividends payable on the
shares of Cumulative Preferred Stock or on any Parity Preferred
Stock with respect to payment of dividends, shall be in arrears
for an aggregate number of days equal to six calendar quarters or
more, whether or not consecutive, the holders of the outstanding
shares of Cumulative Preferred Stock shall have the right, with
holders of shares of any one or more other class or series of
stock upon which like voting rights have been conferred and are
exercisable (voting together as a class), to elect two of the
authorized number of members of the Board at the Corporation's
next annual meeting of stockholders and at each subsequent annual
meeting of stockholders until such arrearages have been paid or
set apart for payment, at which time such right shall terminate,
except as herein or by law expressly provided, subject to
revesting in the event of each and every subsequent default of
the character above mentioned. Upon any termination of the right
of the holders of shares of Cumulative Preferred Stock as a class
to vote for directors as herein provided, the term of office of
all directors then in office elected by the holders of shares of
Cumulative Preferred Stock shall terminate immediately.
Any director who shall have been so elected pursuant to this
paragraph may be removed at any time, either with or without
cause. Any vacancy thereby created may be filled only by the
affirmative vote of the holders of shares of Cumulative Preferred
Stock voting separately as a class (together with the holders of
shares of any other class or series of stock upon which like
voting rights have been conferred and are exercisable). If the
office of any director elected by the holders of shares of
Cumulative Preferred Stock voting as a class becomes vacant
<PAGE>
5
for any reason other than removal from office as aforesaid, the
remaining director elected pursuant to this paragraph may choose
a successor who shall hold office for the unexpired term in
respect of which such vacancy occurred. At elections for such
directors, each holder of shares of Cumulative Preferred Stock
shall be entitled to one vote for each share held (the holders of
shares of any other class or series of preferred stock having
like voting rights being entitled to such number of votes, if
any, for each share of such stock held as may be granted to
them).
(b) So long as any shares of Cumulative Preferred Stock
remain outstanding, the consent of the holders of at least two-
thirds of the shares of Cumulative Preferred Stock outstanding at
the time and all other classes or series of stock upon which like
voting rights have been conferred and are exercisable (voting
together as a class) given in person or by proxy, either in
writing or at any meeting called for the purpose, shall be
necessary to permit, effect or validate any one or more of the
following:
(i) the issuance or increase of the authorized amount
of any class or series of shares ranking prior (as that term
is defined in paragraph 9(a) hereof) to the shares of the
Cumulative Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Certificate of Incorporation, (including this
resolution or any provision hereof) that would materially
and adversely affect any power, preference, or special right
of the shares of Cumulative Preferred Stock or of the
holders thereof;
provided, however, that any increase in the amount of
authorized Common Stock or authorized Preferred Stock or any
increase or decrease in the number of shares of any series
of Preferred Stock or the creation and issuance of other
series of Common Stock or Preferred Stock, in each case
ranking on a parity with or junior to the shares of
Cumulative Preferred Stock with respect to the payment of
dividends and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially
and adversely affect such powers, preferences or special
rights.
(c) The foregoing voting provisions shall not apply if, at
or prior to the time when the act with respect to which such vote
would
<PAGE>
6
otherwise be required shall be effected, all outstanding shares
of Cumulative Preferred Stock shall have been redeemed or called
for redemption and sufficient funds shall have been deposited in
trust to effect such redemption.
6. Redemption Shares. The shares of the Cumulative Preferred
-----------------
Stock may be redeemed at the option of the Corporation, as a whole, or
from time to time in part, at any time, upon not less than 30 days'
prior notice mailed to the holders of the shares to be redeemed at
their addresses as shown on the stock books of the Corporation;
provided, however, that shares of the Cumulative Preferred Stock shall
not be redeemable prior to February 28, 2000. Subject to the
foregoing, on or after such date, shares of the Cumulative Preferred
Stock are redeemable at $200.00 per share together with an amount
equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for
redemption.
If full cumulative dividends on the Cumulative Preferred Stock
have not been paid, the Cumulative Preferred Stock may not be redeemed
in part and the Corporation may not purchase or acquire any shares of
the Cumulative Preferred Stock otherwise than pursuant to a purchase
or exchange offer made on the same terms to all holders of the
Cumulative Preferred Stock. If fewer than all the outstanding shares
of Cumulative Preferred Stock are to be redeemed, the Corporation will
select those to be redeemed by lot or a substantially equivalent
method.
If a notice of redemption has been given pursuant to this
paragraph 6 and if, on or before the date fixed for redemption, the
funds necessary for such redemption shall have been set aside by the
Corporation, separate and apart from its other funds, in trust for the
pro rata benefit of the holders of the shares of Cumulative Preferred
Stock so called for redemption, then, notwithstanding that any
certificates for such shares have not been surrendered for
cancellation, on the redemption date dividends shall cease to accrue
on the shares to be redeemed, and at the close of business on the
redemption date the holders of such shares shall cease to be
stockholders with respect to such shares and shall have no interest in
or claims against the Corporation by virtue thereof and shall have no
voting or other rights with respect to such shares, except the right
to receive the moneys payable upon surrender (and endorsement, if
required by the Corporation) of their certificates, and the shares
evidenced thereby shall no longer be outstanding. Subject to
applicable escheat laws, any moneys so set aside by the Corporation
and unclaimed at the end of two years from the redemption date shall
revert to the general funds of the Corporation, after which reversion
the holders of such shares so called for redemption shall look only to
the general funds of the Corporation for the
<PAGE>
7
payment of the amounts payable upon such redemption. Any interest
accrued on funds so deposited shall be paid to the Corporation from
time to time.
7. Authorization and Issuance of Other Securities. No consent
----------------------------------------------
of the holders of the Cumulative Preferred Stock shall be required for
(a) the creation of any indebtedness of any kind of the Corporation,
(b) the creation, or increase or decrease in the amount, of any class
or series of stock of the Corporation not ranking prior as to
dividends or upon liquidation, dissolution or winding up to the
Cumulative Preferred Stock or (c) any increase or decrease in the
amount of authorized Common Stock or any increase, decrease or change
in the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the Committee each
-----------------------
reserves the right by subsequent amendment of this resolution from
time to time to increase or decrease the number of shares that
constitute the Cumulative Preferred Stock (but not below the number of
shares thereof then outstanding) and in other respects to amend this
resolution within the limitations provided by law, this resolution and
the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock of
----
any class or classes of the Corporation shall be deemed to rank:
(a) prior to shares of the Cumulative Preferred Stock,
either as to dividends or upon liquidation, dissolution or
winding up, or both, if the holders of stock of such class or
classes shall be entitled by the terms thereof to the receipt of
dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or
priority to the holders of shares of the Cumulative Preferred
Stock;
(b) on a parity with shares of the Cumulative Preferred
Stock, either as to dividends or upon liquidation, dissolution or
winding up, or both, whether or not the dividend rates, dividend
payment dates, or redemption or liquidation prices per share
thereof be different from those of the Cumulative Preferred
Stock, if the holders of stock of such class or classes shall be
entitled by the terms thereof to the receipt of dividends or of
amounts distributed upon liquidation, dissolution or winding up,
as the case may be, in proportion to their respective dividend
rates or liquidation prices, without preference or priority of
one over the other as between the holders of such stock and the
holders of shares of Cumulative Preferred Stock (the term "Parity
------
Preferred Stock" being used to refer to any stock on a parity
---------------
with the shares of
<PAGE>
8
Cumulative Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, as the context
may require); and
(c) junior to shares of the Cumulative Preferred Stock,
either as to dividends or upon liquidation, dissolution or
winding up, or both, if such class shall be Common Stock or if
the holders of the Cumulative Preferred Stock shall be entitled
to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of stock of such class or
classes.
The Cumulative Preferred Stock shall rank prior, as to dividends
and upon liquidation, dissolution or winding up, to the Common Stock and on
a parity with (i) the Corporation's ESOP Convertible Preferred Stock, with
a liquidation value of $35.88 per share, (ii) the Corporation's 9.36%
Cumulative Preferred Stock, with a liquidation value of $25.00 per share,
(iii) the Corporation's 8.88% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (iv) the Corporation's 8-3/4%
Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(v) the Corporation's 7-3/8% Cumulative Preferred Stock, with a liquidation
value of $200.00 per share, (vi) if issued, the Corporation's 7.82%
Cumulative Preferred Stock, with a liquidation value of $200.00 per share
and (vii) if issued, the Corporation's 7.80% Cumulative Preferred Stock,
with a liquidation value of $200.00 per share.
<PAGE>
9
IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused this
Certificate to be made under the seal of the Corporation and signed by
Richard B. Fisher, its Chairman, and attested by Patricia A. Kurtz, its
Assistant Secretary, this 14th day of February, 1995.
MORGAN STANLEY GROUP INC.
By: /s/ Richard B. Fisher
-----------------------------------------
Name: Richard B. Fisher
Title: Chairman of the Board
[SEAL]
ATTEST:
/s/ Patricia A. Kurtz
- ----------------------------------
Name: Patricia A. Kurtz
Title: Assistant Secretary
<PAGE>
CERTIFICATE OF DECREASE
OF
AUTHORIZED NUMBER OF SHARES
OF
9.00% CUMULATIVE PREFERRED STOCK
Morgan Stanley Group Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
That the Restated Certificate of Incorporation of the
Corporation was filed in the Office of the Secretary of State of Delaware on
September 15, 1992 and forwarded for recording in the Office of the Recorder of
Deeds for Kent County, Delaware on September 15, 1992 and a Certificate of
Designation of Preferences and Rights ("Certificate of Designation") of the
9.00% Cumulative Preferred Stock, was filed in said Office of the Secretary of
State on February 17, 1995 and forwarded for recording in the office of the
Recorder of Deeds on even date therewith.
That pursuant to authority expressly granted to and vested in
the Pricing Committee of the Board of Directors of the Corporation (the "Pricing
Committee"), by resolutions duly adopted by said Board of Directors on October
29, 1993 (the "Resolutions"), the Pricing Committee fixed certain designations,
preferences and rights of the aforesaid 9.00% Cumulative Preferred Stock as set
forth in the Certificate of Designation.
That pursuant to authority expressly granted to and vested in
the Pricing Committee by the Resolutions, the Pricing Committee by a written
unanimous consent in lieu of a meeting dated as of March 9, 1995 duly adopted a
resolution authorizing and directing a decrease in the authorized number of
shares of the 9.00% Cumulative Preferred Stock of the Corporation, from 738,763
shares to 720,900 shares and providing that the 17,863 shares of the 9.00%
Cumulative Preferred Stock designated by the Pricing Committee but not issued
and outstanding resume the status of authorized and unissued Preferred Stock,
all in accordance with the provisions of Section 151 of The General Corporation
Law of the State of Delaware and the aforesaid Restated Certificate of
Incorporation of the Corporation.
IN WITNESS WHEREOF, said Morgan Stanley Group Inc., has caused
this certificate to be signed by Richard B. Fisher, its Chairman, and attested
by Patricia A. Kurtz, its Assistant Secretary, this 13th day of March, 1995.
By /s/ Richard B. Fisher
--------------------------------
Name: Richard B. Fisher
Title: Chairman
ATTEST:
By /s/ Patricia A. Kurtz
-------------------------------
Name: Patricia A. Kurtz
Title: Assistant Secretary
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
8.40% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
MORGAN STANLEY GROUP INC.
----------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
----------
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors (the "Board") of Morgan
Stanley Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), by unanimous written consent in lieu of a meeting dated as of
April 12, 1995 with certain of the designations, preferences and rights having
been fixed by the Pricing Committee of the Board (the "Committee") at a meeting
on July 27, 1995, pursuant to authority delegated to it by the Board pursuant to
the provisions of Section 141(c) of the General Corporation Law of the State of
Delaware:
RESOLVED that, pursuant to authority expressly granted to and
vested in the Committee by the Board and in the Board by provisions of
the Restated Certificate of Incorporation of the Corporation, as
amended (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, without par value (the "Preferred Stock"), which
shall consist of 1,006,250 of the 30,000,000 shares of Preferred Stock
which the Corporation now has authority to issue, is authorized, and
the Board and, pursuant to the authority expressly granted to the
Committee by the Board pursuant to the provisions of Section 141(c) of
the General Corporation Law of the State of Delaware and the
Certificate of Incorporation, the Committee fix the powers,
designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or
restrictions thereof, of the shares of such series (in addition to the
powers, designations, preferences and relative, participating, optional
or other special rights, and the qualifications, limitations or
restrictions thereof, set
<PAGE>
2
forth in the Certificate of Incorporation which may be applicable
to the Preferred Stock) as follows:
1. Designation and Amount; Fractional Shares. The
designation for such series of the Preferred Stock authorized
by this resolution shall be the 8.40% Cumulative Preferred
Stock, without par value, with a stated value of $200.00 per
share (the "Cumulative Preferred Stock"). The stated value per
share of Cumulative Preferred Stock shall not for any purpose
be considered to be a determination by the Board or the
Committee with respect to the capital and surplus of the
Corporation. The total number of shares of Cumulative
Preferred Stock shall be 1,006,250. The Cumulative Preferred
Stock is issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative
Preferred Stock will be entitled to receive, when, as and if
declared by the Board or the Committee out of assets of the
Corporation legally available for payment, cash dividends
payable quarterly at the rate of 8.40% per annum. Dividends on
the Cumulative Preferred Stock will be payable quarterly on
February 28, May 30, August 30 and November 30 (each a
"dividend payment date"). Dividends on shares of the
Cumulative Preferred Stock will be cumulative from the date of
initial issuance of such shares of Cumulative Preferred Stock.
Dividends will be payable, in arrears, to holders of record as
they appear on the stock books of the Corporation on such
record dates, not more than 60 days nor less than 10 days
preceding the payment dates thereof, as shall be fixed by the
Board or the Committee. The amount of dividends payable for
the initial dividend period or any period shorter than a full
dividend period shall be calculated on the basis of a 360-day
year of twelve 30-day months. No dividends may be declared or
paid or set apart for payment on any Parity Preferred Stock
(as defined in paragraph 9(b) below) with regard to the
payment of dividends unless there shall also be or have been
declared and paid or set apart for payment on the Cumulative
Preferred Stock, like dividends for all dividend payment
periods of the Cumulative Preferred Stock ending on or before
the dividend payment date of such Parity Preferred Stock,
ratably in proportion to the respective amounts of dividends
(x) accumulated and unpaid or payable on such Parity Preferred
Stock, on the one hand, and (y) accumulated and unpaid through
the dividend payment period or periods of the Cumulative
Preferred Stock next preceding such dividend payment date, on
the other hand.
Except as set forth in the preceding sentence, unless
full cumulative dividends on the Cumulative Preferred Stock
have been paid, no dividends (other than in Common Stock of
the Corporation) may be paid or declared and set aside for
payment or other distribution made upon the Common Stock or on
any other stock of the Corporation ranking junior to or on a
parity with the
<PAGE>
3
Cumulative Preferred Stock as to dividends, nor may any Common
Stock or any other stock of the Corporation ranking junior to
or on a parity with the Cumulative Preferred Stock as to
dividends be redeemed, purchased or otherwise acquired for any
consideration (or any payment be made to or available for a
sinking fund for the redemption of any shares of such stock;
provided, however, that any moneys theretofore deposited in
any sinking fund with respect to any preferred stock of the
Corporation in compliance with the provisions of such sinking
fund may thereafter be applied to the purchase or redemption
of such preferred stock in accordance with the terms of such
sinking fund, regardless of whether at the time of such
application full cumulative dividends upon shares of the
Cumulative Preferred Stock outstanding to the last dividend
payment date shall have been paid or declared and set apart
for payment) by the Corporation; provided that any such junior
or parity Preferred Stock or Common Stock may be converted
into or exchanged for stock of the Corporation ranking junior
to the Cumulative Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Cumulative
Preferred Stock shall rank, as to liquidation, dissolution or
winding up of the Corporation, prior to the shares of Common
Stock and any other class of stock of the Corporation ranking
junior to the Cumulative Preferred Stock as to rights upon
liquidation, dissolution or winding up of the Corporation, so
that in the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the
holders of the Cumulative Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital,
surplus or earnings, before any distribution is made to
holders of shares of Common Stock or any other such junior
stock, an amount equal to $200.00 per share (the "Liquidation
Preference" of a share of Cumulative Preferred Stock) plus an
amount equal to all dividends (whether or not earned or
declared) accrued and accumulated and unpaid on the shares of
Cumulative Preferred Stock to the date of final distribution.
The holders of the Cumulative Preferred Stock will not be
entitled to receive the Liquidation Preference until the
liquidation preference of any other class of stock of the
Corporation ranking senior to the Cumulative Preferred Stock
as to rights upon liquidation, dissolution or winding up shall
have been paid (or a sum set aside therefor sufficient to
provide for payment) in full. After payment of the full amount
of the Liquidation Preference and such dividends, the holders
of shares of Cumulative Preferred Stock will not be entitled
to any further participation in any distribution of assets by
the Corporation. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation,
or proceeds thereof, distributable among the holders of shares
of Parity Preferred Stock shall be insufficient to pay in full
the preferential amount aforesaid, then such assets, or the
proceeds thereof, shall be distributable among such holders
<PAGE>
4
ratably in accordance with the respective amounts which would
be payable on such shares if all amounts payable thereon were
paid in full. For the purposes hereof, neither a consolidation
or merger of the Corporation with or into any other
corporation, nor a merger of any other corporation with or
into the Corporation, nor a sale or transfer of all or any
part of the Corporation's assets for cash or securities shall
be considered a liquidation, dissolution or winding up of the
Corporation.
4. Conversion. The Cumulative Preferred Stock is
not convertible into shares of any other class or series of
stock of the Corporation.
5. Voting Rights. The holders of shares of
Cumulative Preferred Stock shall have no voting rights
whatsoever, except for any voting rights to which they may be
entitled under the laws of the State of Delaware, and
except as follows:
(a) Whenever, at any time or times,
dividends payable on the shares of Cumulative
Preferred Stock or on any Parity Preferred Stock with
respect to payment of dividends, shall be in arrears
for an aggregate number of days equal to six calendar
quarters or more, whether or not consecutive, the
holders of the outstanding shares of Cumulative
Preferred Stock shall have the right, with holders of
shares of any one or more other class or series of
stock upon which like voting rights have been
conferred and are exercisable (voting together as a
class), to elect two of the authorized number of
members of the Board at the Corporation's next annual
meeting of stockholders and at each subsequent annual
meeting of stockholders until such arrearages have
been paid or set apart for payment, at which time
such right shall terminate, except as herein or by
law expressly provided, subject to revesting in the
event of each and every subsequent default of the
character above mentioned. Upon any termination of
the right of the holders of shares of Cumulative
Preferred Stock as a class to vote for directors as
herein provided, the term of office of all directors
then in office elected by the holders of shares of
Cumulative Preferred Stock shall terminate
immediately.
Any director who shall have been so elected pursuant
to this paragraph may be removed at any time, either
with or without cause. Any vacancy thereby created
may be filled only by the affirmative vote of the
holders of shares of Cumulative Preferred Stock
voting separately as a class (together with the
holders of shares of any other class or series of
stock upon which like voting rights have been
conferred and are exercisable). If the office of any
director elected by the holders of shares of
Cumulative Preferred Stock voting as a class becomes
vacant
<PAGE>
5
for any reason other than removal from office as
aforesaid, the remaining director elected pursuant to
this paragraph may choose a successor who shall hold
office for the unexpired term in respect of which
such vacancy occurred. At elections for such
directors, each holder of shares of Cumulative
Preferred Stock shall be entitled to one vote for
each share held (the holders of shares of any other
class or series of preferred stock having like voting
rights being entitled to such number of votes, if
any, for each share of such stock held as may be
granted to them).
(b) So long as any shares of Cumulative
Preferred Stock remain outstanding, the consent of
the holders of at least two-thirds of the shares of
Cumulative Preferred Stock outstanding at the time
and all other classes or series of stock upon which
like voting rights have been conferred and are
exercisable (voting together as a class) given in
person or by proxy, either in writing or at any
meeting called for the purpose, shall be necessary to
permit, effect or validate any one or more of the
following:
(i) the issuance or increase of the
authorized amount of any class or series of
shares ranking prior (as that term is
defined in paragraph 9(a) hereof) to the
shares of the Cumulative Preferred Stock; or
(ii) the amendment, alteration or
repeal, whether by merger, consolidation or
otherwise, of any of the provisions of the
Certificate of Incorporation, (including
this resolution or any provision hereof)
that would materially and adversely affect
any power, preference, or special right of
the shares of Cumulative Preferred Stock or
of the holders thereof; provided, however,
that any increase in the amount of
authorized Common Stock or authorized
Preferred Stock or any increase or decrease
in the number of shares of any series of
Preferred Stock or the creation and issuance
of other series of Common Stock or Preferred
Stock, in each case ranking on a parity with
or junior to the shares of Cumulative
Preferred Stock with respect to the payment
of dividends and the distribution of assets
upon liquidation, dissolution or winding up,
shall not be deemed to materially and
adversely affect such powers, preferences or
special rights.
(c) The foregoing voting provisions shall
not apply if, at or prior to the time when the act
with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of
<PAGE>
6
Cumulative Preferred Stock shall have been redeemed
or called for redemption and sufficient funds shall
have been deposited in trust to effect such
redemption.
6. Redemption Shares. The shares of the Cumulative
Preferred Stock may be redeemed at the option of the
Corporation, as a whole, or from time to time in part, at any
time, upon not less than 30 days' prior notice mailed to the
holders of the shares to be redeemed at their addresses as
shown on the stock books of the Corporation; provided,
however, that shares of the Cumulative Preferred Stock shall
not be redeemable prior to August 30, 2000. Subject to the
foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $200.00 per share together
with an amount equal to all dividends (whether or not earned
or declared) accrued and accumulated and unpaid to, but
excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative
Preferred Stock have not been paid, the Cumulative Preferred
Stock may not be redeemed in part and the Corporation may not
purchase or acquire any shares of the Cumulative Preferred
Stock otherwise than pursuant to a purchase or exchange offer
made on the same terms to all holders of the Cumulative
Preferred Stock. If fewer than all the outstanding shares of
Cumulative Preferred Stock are to be redeemed, the Corporation
will select those to be redeemed by lot or a substantially
equivalent method.
If a notice of redemption has been given pursuant to
this paragraph 6 and if, on or before the date fixed for
redemption, the funds necessary for such redemption shall have
been set aside by the Corporation, separate and apart from its
other funds, in trust for the pro rata benefit of the holders
of the shares of Cumulative Preferred Stock so called for
redemption, then, notwithstanding that any certificates for
such shares have not been surrendered for cancellation, on the
redemption date dividends shall cease to accrue on the shares
to be redeemed, and at the close of business on the redemption
date the holders of such shares shall cease to be stockholders
with respect to such shares and shall have no interest in or
claims against the Corporation by virtue thereof and shall
have no voting or other rights with respect to such shares,
except the right to receive the moneys payable upon surrender
(and endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no longer
be outstanding. Subject to applicable escheat laws, any moneys
so set aside by the Corporation and unclaimed at the end of
two years from the redemption date shall revert to the general
funds of the Corporation, after which reversion the holders of
such shares so called for redemption shall look only to the
general funds of the Corporation for the payment of the
amounts payable upon such redemption. Any interest accrued on
funds so deposited shall be paid to the Corporation from time
to time.
<PAGE>
7
7. Authorization and Issuance of Other Securities. No
consent of the holders of the Cumulative Preferred Stock shall
be required for (a) the creation of any indebtedness of any
kind of the Corporation, (b) the creation, or increase or
decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon
liquidation, dissolution or winding up to the Cumulative
Preferred Stock or (c) any increase or decrease in the amount
of authorized Common Stock or any increase, decrease or change
in the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the
Committee each reserves the right by subsequent amendment of
this resolution from time to time to increase or decrease the
number of shares that constitute the Cumulative Preferred
Stock (but not below the number of shares thereof then
outstanding) and in other respects to amend this resolution
within the limitations provided by law, this resolution and
the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any
stock of any class or classes of the Corporation shall be
deemed to rank:
(a) prior to shares of the Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, if
the holders of stock of such class or classes shall
be entitled by the terms thereof to the receipt of
dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of
shares of the Cumulative Preferred Stock;
(b) on a parity with shares of the
Cumulative Preferred Stock, either as to dividends or
upon liquidation, dissolution or winding up, or both,
whether or not the dividend rates, dividend payment
dates, or redemption or liquidation prices per share
thereof be different from those of the Cumulative
Preferred Stock, if the holders of stock of such
class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts
distributed upon liquidation, dissolution or winding
up, as the case may be, in proportion to their
respective dividend rates or liquidation prices,
without preference or priority of one over the other
as between the holders of such stock and the holders
of shares of Cumulative Preferred Stock (the term
"Parity Preferred Stock" being used to refer to any
stock on a parity with the shares of Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, as
the context may require); and
<PAGE>
8
(c) junior to shares of the Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, if
such class shall be Common Stock or if the holders of
the Cumulative Preferred Stock shall be entitled to
the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders
of stock of such class or classes.
The Cumulative Preferred Stock shall rank prior, as
to dividends and upon liquidation, dissolution or winding up,
to the Common Stock and on a parity with (i) the Corporation's
ESOP Convertible Preferred Stock, with a liquidation value of
$35.88 per share, (ii) the Corporation's 9.36% Cumulative
Preferred Stock, with a liquidation value of $25.00 per share,
(iii) the Corporation's 8.88% Cumulative Preferred Stock, with
a liquidation value of $200.00 per share, (iv) the
Corporation's 8-3/4% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (v) the Corporation's
7-3/8% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share, (vi) if issued, the Corporation's 7.82%
Cumulative Preferred Stock, with a liquidation value of
$200.00 per share, (vii) if issued, the Corporation's 7.80%
Cumulative Preferred Stock, with a liquidation value of
$200.00 per share and (viii) if issued, the Corporation's
9.00% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share.
<PAGE>
9
IN WITNESS WHEREOF, Morgan Stanley Group Inc. has
caused this Certificate to be made under the seal of the Corporation
and signed by Richard B. Fisher, its Chairman, and attested by Patricia
A. Kurtz, its Assistant Secretary, this 27th day of July, 1995.
MORGAN STANLEY GROUP INC.
By: /s/ Richard B. Fisher
-----------------------------------
Name: Richard B. Fisher
Title: Chairman of the Board
[SEAL]
Attest:
/s/ Patricia A. Kurtz
- ----------------------------
Patricia A. Kurtz
Assistant Secretary
<PAGE>
CERTIFICATE OF DECREASE
OF
AUTHORIZED NUMBER OF SHARES
OF
8.40% CUMULATIVE PREFERRED STOCK
Morgan Stanley Group Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
That the Restated Certificate of Incorporation of the
Corporation was filed in the Office of the Secretary of State of Delaware on
September 15, 1992 and forwarded for recording in the Office of the Recorder of
Deeds for Kent County, Delaware on September 15, 1992 and a Certificate of
Designation of Preferences and Rights ("Certificate of Designation") of the
8.40% Cumulative Preferred Stock, was filed in said Office of the Secretary of
State on July 31, 1995 and forwarded for recording in the office of the Recorder
of Deeds on even date therewith.
That pursuant to authority expressly granted to and vested in
the Pricing Committee of the Board of Directors of the Corporation (the "Pricing
Committee"), by resolutions duly adopted by said Board of Directors on April 12,
1995 (the "Resolutions"), the Pricing Committee fixed certain designations,
preferences and rights of the aforesaid 8.40% Cumulative Preferred Stock as set
forth in the Certificate of Designation.
That pursuant to authority expressly granted to and vested in the
Pricing Committee by the Resolutions, the Pricing Committee by a written
unanimous consent in lieu of a meeting dated as of September 6, 1995 duly
adopted a resolution authorizing and directing a decrease in the authorized
number of shares of the 8.40% Cumulative Preferred Stock of the Corporation,
from 1,006,250 shares to 996,776 shares and providing that the 9,474 shares of
the 8.40% Cumulative Preferred Stock designated by the Pricing Committee but not
issued and outstanding resume the status of authorized and unissued Preferred
Stock, all in accordance with the provisions of Section 151 of The General
Corporation Law of the State of Delaware and the aforesaid Restated Certificate
of Incorporation of the Corporation.
IN WITNESS WHEREOF, said Morgan Stanley Group Inc., has caused
this certificate to be signed by Richard B. Fisher, its Chairman, and attested
by Patricia A. Kurtz, its Assistant Secretary, this 6th day of September, 1995.
By /s/ Richard B. Fisher
---------------------------------
Name: Richard B. Fisher
Title: Chairman
ATTEST:
By /s/ Patricia A. Kurtz
----------------------------------
Name: Patricia A. Kurtz
Title: Assistant Secretary
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
8.20% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
MORGAN STANLEY GROUP INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors (the "Board") of Morgan
Stanley Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), by unanimous written consent in lieu of a meeting dated as of
April 12, 1995 with certain of the designations, preferences and rights having
been fixed by the Pricing Committee of the Board (the "Committee") at a meeting
on October 13, 1995, pursuant to authority delegated to it by the Board pursuant
to the provisions of Section 141(c) of the General Corporation Law of the State
of Delaware:
RESOLVED that, pursuant to authority expressly granted to and
vested in the Committee by the Board and in the Board by provisions of
the Restated Certificate of Incorporation of the Corporation, as
amended (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, without par value (the "Preferred Stock"), which
shall consist of 862,500 of the 30,000,000 shares of Preferred Stock
which the Corporation now has authority to issue, is authorized, and
the Board and, pursuant to the authority expressly granted to the
Committee by the Board pursuant to the provisions of Section 141(c) of
the General Corporation Law of the State of Delaware and the
Certificate of Incorporation, the Committee fix the powers,
designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or
restrictions thereof, of the shares of such series (in addition to the
powers, designations, preferences and relative, participating, optional
or other special rights, and the qualifications, limitations or
restrictions thereof, set
<PAGE>
2
forth in the Certificate of Incorporation which may be applicable to
the Preferred Stock) as follows:
1. Designation and Amount; Fractional Shares. The
designation for such series of the Preferred Stock authorized
by this resolution shall be the 8.20% Cumulative Preferred
Stock, without par value, with a stated value of $200.00 per
share (the "Cumulative Preferred Stock"). The stated value per
share of Cumulative Preferred Stock shall not for any purpose
be considered to be a determination by the Board or the
Committee with respect to the capital and surplus of the
Corporation. The total number of shares of Cumulative
Preferred Stock shall be 862,500. The Cumulative Preferred
Stock is issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative
Preferred Stock will be entitled to receive, when, as and if
declared by the Board or the Committee out of assets of the
Corporation legally available for payment, cash dividends
payable quarterly at the rate of 8.20% per annum. Dividends
on the Cumulative Preferred Stock will be payable quarterly on
February 28, May 30, August 30 and November 30 (each a
"dividend payment date"). Dividends on shares of the
Cumulative Preferred Stock will be cumulative from the date of
initial issuance of such shares of Cumulative Preferred Stock.
Dividends will be payable, in arrears, to holders of record as
they appear on the stock books of the Corporation on such
record dates, not more than 60 days nor less than 10 days
preceding the payment dates thereof, as shall be fixed by the
Board or the Committee. The amount of dividends payable for
the initial dividend period or any period shorter than a full
dividend period shall be calculated on the basis of a 360-day
year of twelve 30-day months. No dividends may be declared or
paid or set apart for payment on any Parity Preferred Stock
(as defined in paragraph 9(b) below) with regard to the
payment of dividends unless there shall also be or have been
declared and paid or set apart for payment on the Cumulative
Preferred Stock, like dividends for all dividend payment
periods of the Cumulative Preferred Stock ending on or before
the dividend payment date of such Parity Preferred Stock,
ratably in proportion to the respective amounts of dividends
(x) accumulated and unpaid or payable on such Parity Preferred
Stock, on the one hand, and (y) accumulated and unpaid through
the dividend payment period or periods of the Cumulative
Preferred Stock next preceding such dividend payment date, on
the other hand.
Except as set forth in the preceding sentence, unless
full cumulative dividends on the Cumulative Preferred Stock
have been paid, no dividends (other than in Common Stock of
the Corporation) may be paid or declared and set aside for
payment or other distribution made upon the Common Stock or on
any other stock of the Corporation ranking junior to or on a
parity with the
<PAGE>
3
Cumulative Preferred Stock as to dividends, nor may any Common
Stock or any other stock of the Corporation ranking junior to
or on a parity with the Cumulative Preferred Stock as to
dividends be redeemed, purchased or otherwise acquired for any
consideration (or any payment be made to or available for a
sinking fund for the redemption of any shares of such stock;
provided, however, that any moneys theretofore deposited in
any sinking fund with respect to any preferred stock of the
Corporation in compliance with the provisions of such sinking
fund may thereafter be applied to the purchase or redemption
of such preferred stock in accordance with the terms of such
sinking fund, regardless of whether at the time of such
application full cumulative dividends upon shares of the
Cumulative Preferred Stock outstanding to the last dividend
payment date shall have been paid or declared and set apart
for payment) by the Corporation; provided that any such junior
or parity Preferred Stock or Common Stock may be converted
into or exchanged for stock of the Corporation ranking junior
to the Cumulative Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Cumulative
Preferred Stock shall rank, as to liquidation, dissolution or
winding up of the Corporation, prior to the shares of Common
Stock and any other class of stock of the Corporation ranking
junior to the Cumulative Preferred Stock as to rights upon
liquidation, dissolution or winding up of the Corporation, so
that in the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the
holders of the Cumulative Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital,
surplus or earnings, before any distribution is made to
holders of shares of Common Stock or any other such junior
stock, an amount equal to $200.00 per share (the "Liquidation
Preference" of a share of Cumulative Preferred Stock) plus an
amount equal to all dividends (whether or not earned or
declared) accrued and accumulated and unpaid on the shares of
Cumulative Preferred Stock to the date of final distribution.
The holders of the Cumulative Preferred Stock will not be
entitled to receive the Liquidation Preference until the
liquidation preference of any other class of stock of the
Corporation ranking senior to the Cumulative Preferred Stock
as to rights upon liquidation, dissolution or winding up shall
have been paid (or a sum set aside therefor sufficient to
provide for payment) in full. After payment of the full amount
of the Liquidation Preference and such dividends, the holders
of shares of Cumulative Preferred Stock will not be entitled
to any further participation in any distribution of assets by
the Corporation. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation,
or proceeds thereof, distributable among the holders of shares
of Parity Preferred Stock shall be insufficient to pay in full
the preferential amount aforesaid, then such assets, or the
proceeds thereof, shall be distributable among such holders
<PAGE>
4
ratably in accordance with the respective amounts which would
be payable on such shares if all amounts payable thereon were
paid in full. For the purposes hereof, neither a consolidation
or merger of the Corporation with or into any other
corporation, nor a merger of any other corporation with or
into the Corporation, nor a sale or transfer of all or any
part of the Corporation's assets for cash or securities shall
be considered a liquidation, dissolution or winding up of the
Corporation.
4. Conversion. The Cumulative Preferred Stock
is not convertible into shares of any other class or series of
stock of the Corporation.
5. Voting Rights. The holders of shares of
Cumulative Preferred Stock shall have no voting rights
whatsoever, except for any voting rights to which they may be
entitled under the laws of the State of Delaware, and except
as follows:
(a) Whenever, at any time or times,
dividends payable on the shares of Cumulative
Preferred Stock or on any Parity Preferred Stock with
respect to payment of dividends, shall be in arrears
for an aggregate number of days equal to six calendar
quarters or more, whether or not consecutive, the
holders of the outstanding shares of Cumulative
Preferred Stock shall have the right, with holders of
shares of any one or more other class or series of
stock upon which like voting rights have been
conferred and are exercisable (voting together as a
class), to elect two of the authorized number of
members of the Board at the Corporation's next annual
meeting of stockholders and at each subsequent annual
meeting of stockholders until such arrearages have
been paid or set apart for payment, at which time
such right shall terminate, except as herein or by
law expressly provided, subject to revesting in the
event of each and every subsequent default of the
character above mentioned. Upon any termination of
the right of the holders of shares of Cumulative
Preferred Stock as a class to vote for directors as
herein provided, the term of office of all directors
then in office elected by the holders of shares of
Cumulative Preferred Stock shall terminate
immediately.
Any director who shall have been so elected pursuant
to this paragraph may be removed at any time, either
with or without cause. Any vacancy thereby created
may be filled only by the affirmative vote of the
holders of shares of Cumulative Preferred Stock
voting separately as a class (together with the
holders of shares of any other class or series of
stock upon which like voting rights have been
conferred and are exercisable). If the office of any
director elected by the holders of shares of
Cumulative Preferred Stock voting as a class becomes
vacant
<PAGE>
5
for any reason other than removal from office as
aforesaid, the remaining director elected pursuant to
this paragraph may choose a successor who shall hold
office for the unexpired term in respect of which
such vacancy occurred. At elections for such
directors, each holder of shares of Cumulative
Preferred Stock shall be entitled to one vote for
each share held (the holders of shares of any other
class or series of preferred stock having like voting
rights being entitled to such number of votes, if
any, for each share of such stock held as may be
granted to them).
(b) So long as any shares of Cumulative
Preferred Stock remain outstanding, the consent of
the holders of at least two-thirds of the shares of
Cumulative Preferred Stock outstanding at the time
and all other classes or series of stock upon which
like voting rights have been conferred and are
exercisable (voting together as a class) given in
person or by proxy, either in writing or at any
meeting called for the purpose, shall be necessary to
permit, effect or validate any one or more of the
following:
(i) the issuance or increase of the
authorized amount of any class or series of
shares ranking prior (as that term is
defined in paragraph 9(a) hereof) to the
shares of the Cumulative Preferred Stock; or
(ii) the amendment, alteration or
repeal, whether by merger, consolidation or
otherwise, of any of the provisions of the
Certificate of Incorporation, (including
this resolution or any provision hereof)
that would materially and adversely affect
any power, preference, or special right of
the shares of Cumulative Preferred Stock or
of the holders thereof; provided, however,
that any increase in the amount of
authorized Common Stock or authorized
Preferred Stock or any increase or decrease
in the number of shares of any series of
Preferred Stock or the creation and issuance
of other series of Common Stock or Preferred
Stock, in each case ranking on a parity with
or junior to the shares of Cumulative
Preferred Stock with respect to the payment
of dividends and the distribution of assets
upon liquidation, dissolution or winding up,
shall not be deemed to materially and
adversely affect such powers, preferences or
special rights.
(c) The foregoing voting provisions shall
not apply if, at or prior to the time when the act
with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of
<PAGE>
6
Cumulative Preferred Stock shall have been redeemed
or called for redemption and sufficient funds shall
have been deposited in trust to effect such
redemption.
6. Redemption Shares. The shares of the Cumulative
Preferred Stock may be redeemed at the option of the
Corporation, as a whole, or from time to time in part, at any
time, upon not less than 30 days' prior notice mailed to the
holders of the shares to be redeemed at their addresses as
shown on the stock books of the Corporation; provided,
however, that shares of the Cumulative Preferred Stock shall
not be redeemable prior to November 30, 2000. Subject to the
foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $200.00 per share together
with an amount equal to all dividends (whether or not earned
or declared) accrued and accumulated and unpaid to, but
excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative
Preferred Stock have not been paid, the Cumulative Preferred
Stock may not be redeemed in part and the Corporation may not
purchase or acquire any shares of the Cumulative Preferred
Stock otherwise than pursuant to a purchase or exchange offer
made on the same terms to all holders of the Cumulative
Preferred Stock. If fewer than all the outstanding shares of
Cumulative Preferred Stock are to be redeemed, the Corporation
will select those to be redeemed by lot or a substantially
equivalent method.
If a notice of redemption has been given pursuant to
this paragraph 6 and if, on or before the date fixed for
redemption, the funds necessary for such redemption shall have
been set aside by the Corporation, separate and apart from its
other funds, in trust for the pro rata benefit of the holders
of the shares of Cumulative Preferred Stock so called for
redemption, then, notwithstanding that any certificates for
such shares have not been surrendered for cancellation, on the
redemption date dividends shall cease to accrue on the shares
to be redeemed, and at the close of business on the redemption
date the holders of such shares shall cease to be stockholders
with respect to such shares and shall have no interest in or
claims against the Corporation by virtue thereof and shall
have no voting or other rights with respect to such shares,
except the right to receive the moneys payable upon surrender
(and endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no longer
be outstanding. Subject to applicable escheat laws, any moneys
so set aside by the Corporation and unclaimed at the end of
two years from the redemption date shall revert to the general
funds of the Corporation, after which reversion the holders of
such shares so called for redemption shall look only to the
general funds of the Corporation for the payment of the
amounts payable upon such redemption. Any interest accrued on
funds so deposited shall be paid to the Corporation from time
to time.
<PAGE>
7
7. Authorization and Issuance of Other Securities. No
consent of the holders of the Cumulative Preferred Stock shall
be required for (a) the creation of any indebtedness of any
kind of the Corporation, (b) the creation, or increase or
decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon
liquidation, dissolution or winding up to the Cumulative
Preferred Stock or (c) any increase or decrease in the amount
of authorized Common Stock or any increase, decrease or change
in the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the
Committee each reserves the right by subsequent amendment of
this resolution from time to time to increase or decrease the
number of shares that constitute the Cumulative Preferred
Stock (but not below the number of shares thereof then
outstanding) and in other respects to amend this resolution
within the limitations provided by law, this resolution and
the Certificate of Incorporation.
9. Rank. For the purposes of this resolution,
any stock of any class or classes of the Corporation shall be
deemed to rank:
(a) prior to shares of the Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, if
the holders of stock of such class or classes shall
be entitled by the terms thereof to the receipt of
dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of
shares of the Cumulative Preferred Stock;
(b) on a parity with shares of the
Cumulative Preferred Stock, either as to dividends or
upon liquidation, dissolution or winding up, or both,
whether or not the dividend rates, dividend payment
dates, or redemption or liquidation prices per share
thereof be different from those of the Cumulative
Preferred Stock, if the holders of stock of such
class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts
distributed upon liquidation, dissolution or winding
up, as the case may be, in proportion to their
respective dividend rates or liquidation prices,
without preference or priority of one over the other
as between the holders of such stock and the holders
of shares of Cumulative Preferred Stock (the term
"Parity Preferred Stock" being used to refer to any
stock on a parity with the shares of Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, as
the context may require); and
<PAGE>
8
(c) junior to shares of the Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, if
such class shall be Common Stock or if the holders of
the Cumulative Preferred Stock shall be entitled to
the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders
of stock of such class or classes.
The Cumulative Preferred Stock shall rank prior, as
to dividends and upon liquidation, dissolution or winding up,
to the Common Stock and on a parity with (i) the Corporation's
ESOP Convertible Preferred Stock, with a liquidation value of
$35.88 per share, (ii) the Corporation's 9.36% Cumulative
Preferred Stock, with a liquidation value of $25.00 per share,
(iii) the Corporation's 8.88% Cumulative Preferred Stock, with
a liquidation value of $200.00 per share, (iv) the
Corporation's 8-3/4% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (v) the Corporation's
7-3/8% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share, (vi) if issued, the Corporation's 7.82%
Cumulative Preferred Stock, with a liquidation value of
$200.00 per share, (vii) if issued, the Corporation's 7.80%
Cumulative Preferred Stock, with a liquidation value of
$200.00 per share (viii) if issued, the Corporation's 9.00%
Cumulative Preferred Stock, with a liquidation value of
$200.00 per share and (ix) if issued, the Corporation's 8.40%
Cumulative Preferred Stock, with a liquidation value of
$200.00 per share.
<PAGE>
9
IN WITNESS WHEREOF, Morgan Stanley Group Inc. has
caused this Certificate to be made under the seal of the Corporation
and signed by Richard B. Fisher, its Chairman, and attested by Patricia
A. Kurtz, its Assistant Secretary, this 13th day of October, 1995.
MORGAN STANLEY GROUP INC.
By /s/ Richard B. Fisher
---------------------------------
Name: Richard B. Fisher
Title: Chairman of the Board
[SEAL]
Attest:
By /s/ Patricia A. Kurtz
----------------------------------
Name: Patricia A. Kurtz
Title: Assistant Secretary
<PAGE>
CERTIFICATE OF DECREASE
OF
AUTHORIZED NUMBER OF SHARES
OF
8.20% CUMULATIVE PREFERRED STOCK
Morgan Stanley Group Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
That the Restated Certificate of Incorporation of the
Corporation was filed in the Office of the Secretary of State of Delaware on
September 15, 1992 and forwarded for recording in the Office of the Recorder of
Deeds for Kent County, Delaware on September 15, 1992 and a Certificate of
Designation of Preferences and Rights ("Certificate of Designation") of the
8.20% Cumulative Preferred Stock, was filed in said Office of the Secretary of
State on October 17, 1995 and forwarded for recording in the office of the
Recorder of Deeds on even date therewith.
That pursuant to authority expressly granted to and vested in
the Pricing Committee of the Board of Directors of the Corporation (the "Pricing
Committee"), by resolutions duly adopted by said Board of Directors on April 12,
1995 (the "Resolutions"), the Pricing Committee fixed certain designations,
preferences and rights of the aforesaid 8.20% Cumulative Preferred Stock as set
forth in the Certificate of Designation.
That pursuant to authority expressly granted to and vested in
the Pricing Committee by the Resolutions, the Pricing Committee by a written
unanimous consent in lieu of a meeting dated as of October 27, 1995 duly adopted
a resolution authorizing and directing a decrease in the authorized number of
shares of the 8.20% Cumulative Preferred Stock of the Corporation, from 862,500
shares to 847,500 shares and providing that the 15,000 shares of the 8.20%
Cumulative Preferred Stock designated by the Pricing Committee but not issued
and outstanding resume the status of authorized and unissued Preferred Stock,
all in accordance with the provisions of Section 151 of The General Corporation
Law of the State of Delaware and the aforesaid Restated Certificate of
Incorporation of the Corporation.
IN WITNESS WHEREOF, said Morgan Stanley Group Inc., has caused
this certificate to be signed by Richard B. Fisher, its Chairman, and attested
by Patricia A. Kurtz, its Assistant Secretary, this 31st day of October, 1995.
By /s/ Richard B. Fisher
____________________________
Name: Richard B. Fisher
Title: Chairman
ATTEST:
By /s/ Patricia A. Kurtz
______________________________
Name: Patricia A. Kurtz
Title: Assistant Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
MORGAN STANLEY GROUP INC.
MORGAN STANLEY GROUP INC., a Delaware corporation, HEREBY CERTIFIES AS
FOLLOWS:
1. The name of the Corporation is Morgan Stanley Group Inc. The date of
filing of its original Certificate of Incorporation with the Secretary of State
of the State of Delaware was July 10, 1975. The date of filing of its Restated
Certificate of Incorporation with the Secretary of State of the State of
Delaware was September 15, 1992.
2. This Certificate of Amendment sets forth amendments to the Restated
Certificate of Incorporation of the Corporation that were duly adopted in
accordance with the provisions of Section 242 of the General Corporation Law of
the State of Delaware.
3. Article IV, Section 1 of the Restated Certificate of Incorporation
is hereby amended in full to read as follows:
SECTION 1. Shares and Classes Authorized. The total number of
shares of all classes of capital stock which the Corporation shall have
authority to issue is 630,000,000 shares, which shall include:
(a) 30,000,000 shares of preferred stock of no par value each
(hereinafter referred to as "Preferred Stock"); and
(b) 600,000,000 shares of common stock of the par value of
$1.00 each (hereinafter referred to as "Common Stock");
such classes of Preferred Stock and Common Stock being sometimes
hereinafter collectively referred to as "capital stock".
IN WITNESS WHEREOF, MORGAN STANLEY GROUP INC. has caused this
certificate to be signed by Richard B. Fisher, its Chairman, and attested by
Jonathan M. Clark, its General Counsel and Secretary, this 16th day of April,
1996.
MORGAN STANLEY GROUP INC.
By /s/ Richard B. Fisher
---------------------------------
Name: Richard B. Fisher
Title: Chairman
ATTEST:
/s/ Jonathan M. Clark
- ---------------------------------
Name: Jonathan M. Clark
Title: General Counsel and Secretary
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
7-3/4% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
MORGAN STANLEY GROUP INC.
--------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
--------------------
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors (the "Board") of Morgan
Stanley Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), by unanimous written consent in lieu of a meeting dated as of
March 12, 1996, with certain of the designations, preferences and rights having
been fixed by the Pricing Committee of the Board (the "Committee") at a meeting
on July 17, 1996 pursuant to authority delegated to it by the Board pursuant to
the provisions of Section 141(c) of the General Corporation Law of the State of
Delaware:
RESOLVED that, pursuant to authority expressly granted to and
vested in the Committee by the Board and in the Board by provisions of
the Restated Certificate of Incorporation of the Corporation, as
amended (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, without par value (the "Preferred Stock"), which
shall consist of 1,150,000 of the 30,000,000 shares of Preferred Stock
which the Corporation now has authority to issue, is authorized, and
the Board and the Committee, pursuant to the authority expressly
granted to the Committee by the Board pursuant to the provisions of
Section 141(c) of the General Corporation Law of the State of Delaware
and the Certificate of Incorporation, fix the powers, designations,
preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of
the shares of such series (in addition to the powers, designations,
preferences and relative participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof,
set forth in the Certificate of Incorporation which may be applicable
to the Preferred Stock) as follows:
1. Designation and Amount; Fractional Shares. The
designation for such series of the Preferred Stock authorized
by this resolution shall be the 7-3/4% Cumulative Preferred
Stock, without par value, with a stated value of $200.00 per
share (the "Cumulative Preferred Stock"). The stated value per
<PAGE>
2
share of Cumulative Preferred Stock shall not for any purpose
be considered to be a determination by the Board or the
Committee with respect to the capital and surplus of the
Corporation. The number of shares of Cumulative Preferred
Stock shall be 1,150,000. The Cumulative Preferred Stock is
issuable in whole shares only.
2. Dividends. (a) Holders of shares of Cumulative
Preferred Stock will be entitled to receive, when, as and if
declared by the Board or the Committee out of assets of the
Corporation legally available for payment, cash dividends
payable quarterly at the rate of 7-3/4% per annum. Dividends
on the Cumulative Preferred Stock, calculated as a percentage
of the stated value, will be payable quarterly on February 28,
May 30, August 30 and November 30 commencing August 30, 1996
(each a "dividend payment date"). Dividends (including
Additional Dividends as such term is defined in paragraph 2(b)
below) on shares of the Cumulative Preferred Stock will be
cumulative from the date of initial issuance of such shares of
Cumulative Preferred Stock. Dividends will be payable, in
arrears, to holders of record as they appear on the stock
books of the Corporation on such record dates, not more than
60 days nor less than 10 days preceding the payment dates
thereof, as shall be fixed by the Board or the Committee. The
amount of dividends payable for the initial dividend period or
any period shorter than a full dividend period shall be
calculated on the basis of a 360-day year of twelve 30-day
months. No dividends may be declared or paid or set apart for
payment on any Parity Preferred Stock (as such term is defined
in paragraph 9(b) below) with regard to the payment of
dividends unless there shall also be or have been declared and
paid or set apart for payment on the Cumulative Preferred
Stock, like dividends for all dividend payment periods of the
Cumulative Preferred Stock ending on or before the dividend
payment date of such Parity Preferred Stock, ratably in
proportion to the respective amounts of dividends (x)
accumulated and unpaid or payable on such Parity Preferred
Stock, on the one hand, and (y) accumulated and unpaid through
the dividend payment period or periods of the Cumulative
Preferred Stock next preceding such dividend payment date, on
the other hand.
Except as set forth in the preceding sentence, unless
full cumulative dividends on the Cumulative Preferred Stock
have been paid, no dividends (other than in Common Stock of
the Corporation) may be paid or declared and set aside for
payment or other distribution made upon the Common Stock or on
any other stock of the Corporation ranking junior to or on a
parity with the Cumulative Preferred Stock as to dividends,
nor may any Common Stock or any other stock of the Corporation
ranking junior to or on a parity with the Cumulative Preferred
Stock as to dividends be redeemed, purchased or otherwise
acquired for any consideration (or any payment be made to or
available for a sinking fund for the redemption of any shares
of such stock;
<PAGE>
3
provided, however, that any moneys theretofore deposited in
any sinking fund with respect to any preferred stock of the
Corporation in compliance with the provisions of such sinking
fund may thereafter be applied to the purchase or redemption
of such preferred stock in accordance with the terms of such
sinking fund, regardless of whether at the time of such
application full cumulative dividends upon shares of the
Cumulative Preferred Stock outstanding to the last dividend
payment date shall have been paid or declared and set apart
for payment) by the Corporation; provided that any such junior
or parity Preferred Stock or Common Stock may be converted
into or exchanged for stock of the Corporation ranking junior
to the Cumulative Preferred Stock as to dividends.
(b) If one or more amendments to the Internal
Revenue Code of 1986, as amended (the "Code"), are enacted
that reduce the percentage of the dividends received deduction
as specified in Section 243(a)(1) of the Code or any successor
provision (the "Dividends Received Percentage") to below the
existing Dividends Received Percentage (currently 70%), the
amount of each dividend payable per share of the Cumulative
Preferred Stock for dividend payments made on or after the
date of enactment of such change will be adjusted by
multiplying the amount of the dividend payable determined as
described above (before adjustment) by a factor, which will be
the number determined in accordance with the following formula
(the "DRD Formula"), and rounding the result to the nearest
cent:
1 - (.35 (1 - .70))
-------------------------
1 - (.35 (1 - DRP))
For the purposes of the DRD Formula, "DRP" means the Dividends
Received Percentage applicable to the dividend in question. No
amendment to the Code, other than a change in the percentage
of the dividends received deduction set forth in Section
243(a)(1) of the Code or any successor provision, will give
rise to an adjustment. Notwithstanding the foregoing
provisions, in the event that, with respect to any such
amendment, the Corporation will receive either an unqualified
opinion of nationally recognized independent tax counsel
selected by the Corporation or a private letter ruling or
similar form of authorization from the Internal Revenue
Service to the effect that such an amendment would not apply
to dividends payable on the Cumulative Preferred Stock, then
any such amendment will not result in the adjustment provided
for pursuant to the DRD Formula. The opinion referenced in the
previous sentence will be based upon a specific exception in
the legislation amending the DRP or upon a published
pronouncement of the Internal Revenue Service addressing such
legislation. Unless the context otherwise requires, references
to dividends in this Certificate of Designation will mean
dividends as adjusted by the DRD Formula. The Corporation's
calculation of the dividends payable,
<PAGE>
4
as so adjusted and as certified accurate as to calculation and
reasonable as to method by the independent certified public
accountants then regularly engaged by the Corporation, will be
final and not subject to review absent manifest error.
If any amendment to the Code which reduces the Dividends
Received Percentage to below 70% is enacted after a dividend
payable on a dividend payment date has been declared, the
amount of dividend payable on such dividend payment date will
not be increased. Instead, an amount, equal to the excess of
(x) the product of the dividends paid by the Corporation on
such dividend payment date and the DRD Formula (where the DRP
used in the DRD Formula would be equal to the reduced
Dividends Received Percentage) over (y) the dividends paid by
the Corporation on such dividend payment date, will be payable
to holders of record on the next succeeding dividend payment
date in addition to any other amounts payable on such date.
In addition, if, prior to January 2, 1997, an amendment
to the Code is enacted that reduces the Dividends Received
Percentage to below 70% and such reduction retroactively
applies to a dividend payment date as to which the Corporation
previously paid dividends on the Cumulative Preferred Stock
(each an "Affected Dividend Payment Date"), holders of the
Cumulative Preferred Stock shall be entitled to receive when,
as and if declared by the Board out of assets of the
corporation legally available for payment, additional
dividends (the "Additional Dividends") on the next succeeding
dividend payment date (or if such amendment is enacted after
the dividend payable on such dividend payment date has been
declared, on the second succeeding dividend payment date
following the date of enactment) to holders of record on such
succeeding dividend payment date in an amount equal to the
excess of (x) the product of the dividends paid by the
Corporation on each Affected Dividend Payment Date and the DRD
Formula (where the DRP used in the DRD Formula would be equal
to the reduced Dividends Received Percentage applied to each
Affected Dividend Payment Date) over (y) the dividends paid by
the Corporation on each Affected Dividend Payment Date.
Additional Dividends will not be paid in respect of the
enactment of any amendment to the Code on or after January 2,
1997 which retroactively reduces the Dividends Received
Percentage to below 70%, or if prior to January 2, 1997, such
amendment would not result in an adjustment due to the
Corporation having received either an opinion of counsel or
tax ruling referred to in the third preceding paragraph. The
Corporation will only make one payment of Additional
Dividends.
In the event that the amount of dividends payable per
share of the Cumulative Preferred Stock will be adjusted
pursuant to the DRD Formula
<PAGE>
5
and/or Additional Dividends are to be paid, the Corporation
will cause notice of each such adjustment and, if applicable,
any Additional Dividends, to be sent to the holders of record
as they appear on the stock books of the Corporation on such
record dates, not more than 60 days nor less than 10 days
preceding the payment dates thereof as shall be fixed by the
Board or the Committee.
In the event that the Dividends Received Percentage is
reduced to 40% or less, the Corporation may, at its option,
redeem the Cumulative Preferred Stock, in whole but not in
part, as described in paragraph 6 hereof.
3. Liquidation Preference. The shares of Cumulative
Preferred Stock shall rank, as to liquidation, dissolution or
winding up of the Corporation, prior to the shares of Common
Stock and any other class of stock of the Corporation ranking
junior to the Cumulative Preferred Stock as to rights upon
liquidation, dissolution or winding up of the Corporation, so
that in the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the
holders of the Cumulative Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital,
surplus or earnings, before any distribution is made to
holders of shares of Common Stock or any other such junior
stock, an amount equal to $200.00 per share (the "Liquidation
Preference" of a share of Cumulative Preferred Stock) plus an
amount equal to all dividends (whether or not earned or
declared) accrued and accumulated and unpaid on the shares of
Cumulative Preferred Stock to the date of final distribution.
The holders of the Cumulative Preferred Stock will not be
entitled to receive the Liquidation Preference until the
liquidation preference of any other class of stock of the
Corporation ranking senior to the Cumulative Preferred Stock
as to rights upon liquidation, dissolution or winding up shall
have been paid (or a sum set aside therefor sufficient to
provide for payment) in full. After payment of the full amount
of the Liquidation Preference and such dividends, the holders
of shares of Cumulative Preferred Stock will not be entitled
to any further participation in any distribution of assets by
the Corporation. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation,
or proceeds thereof, distributable among the holders of shares
of Parity Preferred Stock shall be insufficient to pay in full
the preferential amount aforesaid, then such assets, or the
proceeds thereof, shall be distributable among such holders
ratably in accordance with the respective amounts which would
be payable on such shares if all amounts payable thereon were
paid in full. For the purposes hereof, neither a consolidation
or merger of the Corporation with or into any other
corporation, nor a merger of any other corporation with or
into the Corporation, nor a sale or transfer of all or any
part of the Corporation's
<PAGE>
6
assets for cash or securities shall be considered a
liquidation, dissolution or winding up of the Corporation.
4. Conversion. The Cumulative Preferred Stock is not
convertible into shares of any other class or series of stock
of the Corporation.
5. Voting Rights. The holders of shares of Cumulative
Preferred Stock shall have no voting rights whatsoever, except
for any voting rights to which they may be entitled under the
laws of the State of Delaware, and except as follows:
(a) Whenever, at any time or times, dividends
payable on the shares of Cumulative Preferred Stock or
on any Parity Preferred Stock with respect to payment of
dividends, shall be in arrears for an aggregate number
of days equal to six calendar quarters or more, whether
or not consecutive, the holders of the outstanding
shares of Cumulative Preferred Stock shall have the
right, with holders of shares of any one or more other
class or series of stock upon which like voting rights
have been conferred and are exercisable (voting together
as a class), to elect two of the authorized number of
members of the Board at the Corporation's next annual
meeting of stockholders and at each subsequent annual
meeting of stockholders until such arrearages have been
paid or set apart for payment, at which time such right
shall terminate, except as herein or by law expressly
provided, subject to revesting in the event of each and
every subsequent default of the character above
mentioned. Upon any termination of the right of the
holders of shares of Cumulative Preferred Stock as a
class to vote for directors as herein provided, the term
of office of all directors then in office elected by the
holders of shares of Cumulative Preferred Stock shall
terminate immediately.
Any director who shall have been so elected pursuant to
this paragraph may be removed at any time, either with
or without cause. Any vacancy thereby created may be
filled only by the affirmative vote of the holders of
shares of Cumulative Preferred Stock voting separately
as a class (together with the holders of shares of any
other class or series of stock upon which like voting
rights have been conferred and are exercisable). If the
office of any director elected by the holders of shares
of Cumulative Preferred Stock voting as a class becomes
vacant for any reason other than removal from office as
aforesaid, the remaining director elected pursuant to
this paragraph may choose a successor who shall hold
office for the unexpired term in respect of which such
vacancy occurred. At elections for such directors, each
holder of shares of Cumulative Preferred Stock shall be
entitled to one
<PAGE>
7
vote for each share held (the holders of shares of any
other class or series of preferred stock having like
voting rights being entitled to such number of votes, if
any, for each share of such stock held as may be granted
to them).
(b) So long as any shares of Cumulative Preferred
Stock remain outstanding, the consent of the holders of
at least two-thirds of the shares of Cumulative
Preferred Stock outstanding at the time and all other
classes or series of stock upon which like voting rights
have been conferred and are exercisable (voting together
as a class) given in person or by proxy, either in
writing or at any meeting called for the purpose, shall
be necessary to permit, effect or validate any one or
more of the following:
(i) the issuance or increase of the authorized
amount of any class or series of shares ranking
prior (as that term is defined in paragraph 9(a)
hereof) to the shares of the Cumulative Preferred
Stock; or
(ii) the amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of
any of the provisions of the Certificate of
Incorporation (including this resolution or any
provision hereof), that would materially and
adversely affect any power, preference, or special
right of the shares of Cumulative Preferred Stock or
of the holders thereof;
provided, however, that any increase in the amount of
authorized Common Stock or authorized Preferred Stock or
any increase or decrease in the number of shares of any
series of Preferred Stock or the creation and issuance
of other series of Common Stock or Preferred Stock, in
each case ranking on a parity with or junior to the
shares of Cumulative Preferred Stock with respect to the
payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up, shall not be
deemed to materially and adversely affect such powers,
preferences or special rights.
(c) The foregoing voting provisions shall not apply
if, at or prior to the time when the act with respect to
which such vote would otherwise be required shall be
effected, all outstanding shares of Cumulative Preferred
Stock shall have been redeemed or called for redemption
and sufficient funds shall have been deposited in trust
to effect such redemption.
<PAGE>
8
6. Redemption. The shares of the Cumulative Preferred
Stock may be redeemed at the option of the Corporation, as a
whole, or from time to time in part, at any time, upon not
less than 30 days' prior notice mailed to the holders of the
shares to be redeemed at their addresses as shown on the stock
books of the Corporation; provided, however, that shares of
the Cumulative Preferred Stock shall not be redeemable prior
to August 30, 2001, except as stated below. Subject to the
foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $200.00 per share together
with an amount equal to all dividends (whether or not earned
or declared) accrued and accumulated and unpaid to, but
excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative Preferred
Stock have not been paid, the Cumulative Preferred Stock may
not be redeemed in part and the Corporation may not purchase
or acquire any shares of the Cumulative Preferred Stock
otherwise than pursuant to a purchase or exchange offer made
on the same terms to all holders of the Cumulative Preferred
Stock. If fewer than all the outstanding shares of Cumulative
Preferred Stock are to be redeemed, the Corporation will
select those to be redeemed by lot or a substantially
equivalent method.
If a notice of redemption has been given pursuant to
this paragraph 6 and if, on or before the date fixed for
redemption, the funds necessary for such redemption shall have
been set aside by the Corporation, separate and apart from its
other funds, in trust for the pro rata benefit of the holders
of the shares of Cumulative Preferred Stock so called for
redemption, then, notwithstanding that any certificates for
such shares have not been surrendered for cancellation, on the
redemption date dividends shall cease to accrue on the shares
to be redeemed, and at the close of business on the redemption
date the holders of such shares shall cease to be stockholders
with respect to such shares and shall have no interest in or
claims against the Corporation by virtue thereof and shall
have no voting or other rights with respect to such shares,
except the right to receive the moneys payable upon surrender
(and endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no longer
be outstanding. Subject to applicable escheat laws, any moneys
so set aside by the Corporation and unclaimed at the end of
two years from the redemption date shall revert to the general
funds of the Corporation, after which reversion the holders of
such shares so called for redemption shall look only to the
general funds of the Corporation for the payment of the
amounts payable upon such redemption. Any interest accrued on
funds so deposited shall be paid to the Corporation from time
to time.
Notwithstanding the foregoing provisions, if the
Dividends Received Percentage is equal to or less than 40%
and, as a result, the amount of dividends on the Cumulative
Preferred Stock payable on any dividend payment
<PAGE>
9
date will be or is adjusted upwards as described in paragraph
2(b) hereof, the Corporation, at its option, may redeem all,
but not less than all, of the outstanding shares of the
Cumulative Preferred Stock (and the Depositary Shares) (a
"Dividends Received Deduction Redemption"), provided that
within sixty days of the date on which an amendment to the
Code is enacted which reduces the Dividends Received
Percentage to 40% or less, the Corporation sends notice to
holders of the Cumulative Preferred Stock relating to any
Dividends Received Deduction Redemption of such redemption. A
redemption of the Cumulative Preferred Stock will take place
on the date specified in the notice, which shall be not less
than thirty nor more than sixty days from the date such notice
is sent to holders of the Cumulative Preferred Stock. A
Dividends Received Deduction Redemption shall be at the
applicable redemption price set forth in the following table,
in each case plus accrued and unpaid dividends (whether or not
declared) thereon to but excluding the date fixed for
redemption, including any changes in dividends payable due to
changes in the Dividends Received Percentage and Additional
Dividends, if any:
Redemption Period Redemption Price
- ----------------- ----------------
Per Share Per Depositary Share
--------- --------------------
July 22, 1996 to August 29, 1997......... $210.00 $52.50
August 30, 1997 to August 29, 1998....... 208.00 52.00
August 30, 1998 to August 29, 1999....... 206.00 51.50
August 30, 1999 to August 29, 2000....... 204.00 51.00
August 30, 2000 to August 29, 2001....... 202.00 50.50
On or after August 30, 2001.............. 200.00 50.00
7. Authorization and Issuance of Other Securities. No
consent of the holders of the Cumulative Preferred Stock shall
be required for (a) the creation of any indebtedness of any
kind of the Corporation, (b) the creation, or increase or
decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon
liquidation, dissolution or winding up to the Cumulative
Preferred Stock or (c) any increase or decrease in the amount
of authorized Common Stock or any increase, decrease or change
in the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the Committee
each reserves the right by subsequent amendment of this
resolution from time to time to increase or decrease the
number of shares that constitute the Cumulative Preferred
Stock (but not below the number of shares thereof then
outstanding) and in other respects to amend this resolution
within the limitations provided by law, this resolution and
the Certificate of Incorporation.
<PAGE>
10
9. Rank. For the purposes of this resolution, any stock
of any class or classes of the Corporation shall be deemed to
rank:
(a) prior to shares of the Cumulative Preferred
Stock, either as to dividends or upon liquidation,
dissolution or winding up, or both, if the holders of
stock of such class or classes shall be entitled by the
terms thereof to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to the
holders of shares of the Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, whether
or not the dividend rates, dividend payment dates, or
redemption or liquidation prices per share thereof be
different from those of the Cumulative Preferred Stock,
if the holders of stock of such class or classes shall
be entitled by the terms thereof to the receipt of
dividends or of amounts distributed upon liquidation,
dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or
liquidation prices, without preference or priority of
one over the other as between the holders of such stock
and the holders of shares of Cumulative Preferred Stock
(the term "Parity Preferred Stock" being used to refer
to any stock on a parity with the shares of Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, as the
context may require); and
(c) junior to shares of the Cumulative Preferred
Stock, either as to dividends or upon liquidation,
dissolution or winding up, or both, if such class shall
be Common Stock or if the holders of the Cumulative
Preferred Stock shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in
preference or priority to the holders of stock of such
class or classes.
The Cumulative Preferred Stock shall rank prior, as to
dividends and upon liquidation, dissolution or winding up, to
the Common Stock and on a parity with (i) the Corporation's
ESOP Convertible Preferred Stock, with a liquidation value of
$35.88 per share, (ii) the Corporation's 9.36% Cumulative
Preferred Stock, with a liquidation value of $25.00 per share,
(iii) the Corporation's 8.88% Cumulative Preferred Stock, with
a liquidation value of $200.00 per share, (iv) the
Corporation's 8-3/4% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (v) the Corporation's
7-3/8% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share, (vi) if issued, the Corporation's 7.82%
Cumulative Preferred Stock, with a
<PAGE>
11
liquidation value of $200.00 per share, (vii) if issued, the
Corporation's 7.80% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (viii) if issued, the
Corporation's 9.00% Preferred Stock, with a liquidation value
of $200.00 per share, (ix) if issued, the Corporation's 8.40%
Preferred Stock, with a liquidation value of $200.00 per share
and (x) if issued, the Corporation's 8.20% Preferred Stock,
with a liquidation value of $200.00 per share.
<PAGE>
12
IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused this
Certificate to be made under the seal of the Corporation and signed by Richard
B. Fisher, its Chairman of the Board, and attested by Patricia A. Kurtz, an
Assistant Secretary of the Corporation, this 18th day of July, 1996.
MORGAN STANLEY GROUP INC.
By: /s/ Richard B. Fisher
-------------------------------
Name: Richard B. Fisher
Title: Chairman of the Board
[SEAL]
Attest:
/s/ Patricia A. Kurtz
- --------------------------
Assistant Secretary
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
SERIES A FIXED/ADJUSTABLE RATE PREFERRED STOCK
($200.00 Stated Value)
OF
MORGAN STANLEY GROUP INC.
------------------------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------------------------
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors (the "Board") of Morgan
Stanley Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), by unanimous written consent in lieu of a meeting dated as of
March 12, 1996, with certain of the designations, preferences and rights having
been fixed by the Pricing Committee of the Board (the "Committee") at a meeting
on November 8, 1996, pursuant to authority delegated to it by the Board pursuant
to the provisions of Section 141(c)(1) of the General Corporation Law of the
State of Delaware:
RESOLVED that, pursuant to authority expressly granted to and
vested in the Committee by the Board and in the Board by provisions of
the Restated Certificate of Incorporation of the Corporation, as
amended (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, without par value (the "Preferred Stock"), which
shall consist of 1,725,000 of the 30,000,000 shares of Preferred Stock
which the Corporation now has authority to issue, is authorized, and
the Board and the Committee, pursuant to the authority expressly
granted to the Committee by the Board pursuant to the provisions of
Section 141(c)(1) of the General Corporation Law of the State of
Delaware and the Certificate of Incorporation, fix the powers,
designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or
restrictions thereof, of the shares of such series (in addition to the
powers, designations, preferences and relative participating, optional
or other special rights, and the qualifications, limitations or
restrictions thereof, set
<PAGE>
2
forth in the Certificate of Incorporation which may be applicable to
the Preferred Stock) as follows:
1. Designation and Amount; Fractional Shares. The
designation for such series of the Preferred Stock authorized
by this resolution shall be the Series A Fixed/Adjustable Rate
Cumulative Preferred Stock, without par value, with a stated
value of $200.00 per share (the "Series A Fixed/Adjustable
Rate Preferred Stock"). The stated value per share of Series A
Fixed/Adjustable Rate Preferred Stock shall not for any
purpose be considered to be a determination by the Board or
the Committee with respect to the capital and surplus of the
Corporation. The number of shares of Series A Fixed/Adjustable
Rate Preferred Stock shall be 1,725,000. The Series A
Fixed/Adjustable Rate Preferred Stock is issuable in whole
shares only.
2. Dividends. (a) Holders of shares of Series A
Fixed/Adjustable Rate Preferred Stock will be entitled to
receive cash dividends, when, as and if declared by the Board
or the Committee out of assets of the Corporation legally
available for payment. Dividends on the Series A
Fixed/Adjustable Rate Preferred Stock, calculated as a
percentage of the stated value, will be payable quarterly on
February 28, May 30, August 30 and November 30 of each year
(each a "dividend payment date"), commencing February 28,
1997. From the date of issuance of the Series A
Fixed/Adjustable Rate Preferred Stock and continuing through
November 30, 2001, the rate of such dividend will be 5.91% per
annum.
After November 30, 2001, dividends on the Series A
Fixed/Adjustable Rate Preferred Stock will be payable
quarterly on each dividend payment date at the Applicable Rate
(as defined in paragraph 3) from time to time in effect. The
Applicable Rate per annum for any dividend period beginning on
or after November 30, 2001 will be equal to .37% plus the
highest of the Treasury Bill Rate, the Ten-Year Constant
Maturity Rate and the Thirty-Year Constant Maturity Rate (each
as defined in paragraph 3), as determined in advance of such
dividend period. The Applicable Rate per annum for any
dividend period beginning on or after November 30, 2001, will
not be less than 6.41% nor greater than 12.41% (without taking
into account any adjustments set forth in paragraph 2(b)).
Dividends on shares of the Series A Fixed/Adjustable
Rate Preferred Stock will be cumulative from the date of
initial issuance of such shares of Series A Fixed/Adjustable
Rate Preferred Stock. Dividends will be payable, in arrears,
to holders of record as they appear on the stock books of the
Corporation on such record dates, not more than 60 days nor
less than 10 days preceding the payment dates thereof, as
shall be fixed by the Board or the Committee. The amount of
dividends payable for the initial dividend period or
<PAGE>
3
any period shorter than a full dividend period shall be
calculated on the basis of a 360-day year of twelve 30-day
months. No dividends may be declared or paid or set apart for
payment on any Parity Preferred Stock (as defined in paragraph
10(b)) with regard to the payment of dividends unless there
shall also be or have been declared and paid or set apart for
payment on the Series A Fixed/Adjustable Rate Preferred Stock,
like dividends for all dividend payment periods of the Series
A Fixed/Adjustable Rate Preferred Stock ending on or before
the dividend payment date of such Parity Preferred Stock
ratably in proportion to the respective amounts of dividends
(x) accumulated and unpaid or payable on such Parity Preferred
Stock, on the one hand, and (y) accumulated and unpaid through
the dividend payment period or periods of the Series A
Fixed/Adjustable Rate Preferred Stock next preceding such
dividend payment date, on the other hand.
Except as set forth in the preceding sentence, unless
full cumulative dividends on the Series A Fixed/Adjustable
Rate Preferred Stock have been paid, no dividends (other than
in Common Stock of the Corporation) may be paid or declared
and set aside for payment or other distribution made upon the
Common Stock or on any other stock of the Corporation ranking
junior to or on a parity with the Series A Fixed/Adjustable
Rate Preferred Stock as to dividends, nor may any Common Stock
or any other stock of the Corporation ranking junior to or on
a parity with the Series A Fixed/Adjustable Rate Preferred
Stock as to dividends be redeemed, purchased or otherwise
acquired for any consideration (or any payment be made to or
available for a sinking fund for the redemption of any shares
of such stock; provided, however, that any moneys theretofore
deposited in any sinking fund with respect to any preferred
stock of the Corporation in compliance with the provisions of
such sinking fund may thereafter be applied to the purchase or
redemption of such preferred stock in accordance with the
terms of such sinking fund, regardless of whether at the time
of such application full cumulative dividends upon shares of
the Series A Fixed/Adjustable Rate Preferred Stock outstanding
to the last dividend payment date shall have been paid or
declared and set apart for payment) by the Corporation;
provided that any such junior or parity Preferred Stock or
Common Stock may be converted into or exchanged for stock of
the Corporation ranking junior to the Series A
Fixed/Adjustable Rate Preferred Stock as to dividends.
(b) If one or more amendments to the Internal Revenue
Code of 1986, as amended (the "Code"), are enacted that reduce
the percentage of the dividends received deduction as
specified in Section 243(a)(1) of the Code or any successor
provision (the "Dividends Received Percentage") to below the
existing Dividends Received Percentage (currently 70%), the
amount of each dividend payable per share of the Series A
Fixed/Adjustable Rate Preferred
<PAGE>
4
Stock for dividend payments made on or after the date of
enactment of such change will be adjusted by multiplying the
amount of the dividend payable determined as described above
(before adjustment) by a factor, which will be the number
determined in accordance with the following formula (the "DRD
Formula"), and rounding the result to the nearest cent:
1 - (.35 (1 - .70))
-------------------
1 - (.35 (1 - DRP))
For the purposes of the DRD Formula, "DRP" means the Dividends
Received Percentage applicable to the dividend in question. No
amendment to the Code, other than a change in the percentage
of the dividends received deduction set forth in Section
243(a)(1) of the Code or any successor provision, will give
rise to an adjustment. Notwithstanding the foregoing
provisions, in the event that, with respect to any such
amendment, the Corporation will receive either an unqualified
opinion of nationally recognized independent tax counsel
selected by the Corporation or a private letter ruling or
similar form of authorization from the Internal Revenue
Service to the effect that such an amendment would not apply
to dividends payable on the Series A Fixed/Adjustable Rate
Preferred Stock, then any such amendment will not result in
the adjustment provided for pursuant to the DRD Formula. The
opinion referenced in the previous sentence will be based upon
a specific exception in the legislation amending the DRP or
upon a published pronouncement of the Internal Revenue Service
addressing such legislation. Unless the context otherwise
requires, references to dividends in this Certificate of
Designation will mean dividends as adjusted by the DRD
Formula. The Corporation's calculation of the dividends
payable, as so adjusted and as certified accurate as to
calculation and reasonable as to method by the independent
certified public accountants then regularly engaged by the
Corporation, will be final and not subject to review absent
manifest error.
If any amendment to the Code which reduces the
Dividends Received Percentage to below 70% is enacted after a
dividend payable on a dividend payment date has been declared,
the amount of dividend payable on such dividend payment date
will not be increased. Instead, an amount, equal to the excess
of (x) the product of the dividends paid by the Corporation on
such dividend payment date and the DRD Formula (where the DRP
used in the DRD Formula would be equal to the reduced
Dividends Received Percentage) over (y) the dividends paid by
the Corporation on such dividend payment date, will be payable
on the next succeeding dividend payment date to holders of
record in addition to any other amounts payable on such date.
In addition, if prior to May 31, 1997, an amendment
to the Code is enacted that reduces the Dividends Received
Percentage to below 70% and
<PAGE>
5
such reduction retroactively applies to a dividend payment
date as to which the Corporation previously paid dividends on
the Series A Fixed/Adjustable Rate Preferred Stock (each an
"Affected Dividend Payment Date"), holders of the Series A
Fixed/Adjustable Rate Preferred Stock shall be entitled to
receive when, as and if declared by the Board out of assets of
the corporation legally available for payment, additional
dividends (the "Additional Dividends") on the next succeeding
dividend payment date (or if such amendment is enacted after
the dividend payable on such dividend payment date has been
declared and on or before such dividend is paid, on the second
succeeding dividend payment date following the date of
enactment) payable on such succeeding dividend payment date to
holders of record in an amount equal to the excess of (x) the
product of the dividends paid by the Corporation on each
Affected Dividend Payment Date and the DRD Formula (where the
DRP used in the DRD Formula would be equal to the reduced
Dividends Received Percentage applied to each Affected
Dividend Payment Date) over (y) the dividends paid by the
Corporation on each Affected Dividend Payment Date.
Additional Dividends will not be paid in respect of
the enactment of any amendment to the Code on or after May 31,
1997 which retroactively reduces the Dividends Received
Percentage to below 70%, or if prior to May 31, 1997, such
amendment would not result in an adjustment due to the
Corporation having received either an opinion of counsel or
tax ruling referred to in the third preceding paragraph. The
Corporation will only make one payment of Additional
Dividends.
In the event that the amount of dividends payable per
share of the Series A Fixed/Adjustable Rate Preferred Stock
will be adjusted pursuant to the DRD Formula and/or Additional
Dividends are to be paid, the Corporation will cause notice of
each such adjustment and, if applicable, any Additional
Dividends, to be sent to the holders of record as they appear
on the stock books of the Corporation on such record date, not
more than 60 days nor less than 10 days preceding the payment
date thereof as shall be fixed by the Board or the Committee.
In the event that the Dividends Received Percentage
is reduced to 50% or less, the Corporation may, at its option,
redeem the Series A Fixed/Adjustable Rate Preferred Stock, in
whole but not in part, as described in paragraph 7 hereof.
3. Applicable Rate. Except as provided above in
paragraph 2, the "Applicable Rate" per annum for any dividend
period beginning on or after November 30, 2001 will be equal
to .37% plus the Effective Rate (as defined herein), but not
less than 6.41% nor greater than 12.41% (without taking into
account any adjustments as described in paragraph 2(b)). The
"Effective Rate"
<PAGE>
6
for any dividend period beginning on or after November 30,
2001 will be equal to the highest of the Treasury Bill Rate,
the Ten-Year Constant Maturity Rate and the Thirty-Year
Constant Maturity Rate (each as defined herein) for such
dividend period. If the Corporation determines in good faith
that for any reason: (i) any one of the Treasury Bill Rate,
the Ten-Year Constant Maturity Rate or the Thirty-Year
Constant Maturity Rate cannot be determined for any dividend
period beginning on or after November 30, 2001, then the
Effective Rate for such dividend period will be equal to the
higher of whichever two of such rates can be so determined;
(ii) only one of the Treasury Bill Rate, the Ten-Year Constant
Maturity Rate or the Thirty-Year Constant Maturity Rate can be
determined for any dividend period beginning on or after
November 30, 2001, then the Effective Rate for such dividend
period will be equal to whichever such rate can be so
determined; or (iii) none of the Treasury Bill Rate, the
Ten-Year Constant Maturity Rate or the Thirty-Year Constant
Maturity Rate can be determined for any dividend period
beginning on or after November 30, 2001, then the Effective
Rate for the preceding dividend period will be continued for
such dividend period.
The "Treasury Bill Rate" for each dividend period
will be the arithmetic average of the two most recent weekly
per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate is published
during the relevant Calendar Period (as defined herein) for
three-month U.S. Treasury bills, as published weekly by the
Federal Reserve Board (as defined herein) during the Calendar
Period immediately preceding the tenth calendar day preceding
the dividend period for which the dividend rate on the Series
A Fixed/Adjustable Rate Preferred Stock is being determined.
The "Ten-Year Constant Maturity Rate" for each
dividend period will be the arithmetic average of the two most
recent weekly per annum Ten-Year Average Yields (as defined
herein) (or the one weekly per annum Ten-Year Average Yield,
if only one such yield is published during the relevant
Calendar Period), as published weekly by the Federal Reserve
Board during the Calendar Period immediately preceding the
tenth calendar day preceding the dividend period for which the
dividend rate on the Series A Fixed/Adjustable Rate Preferred
Stock is being determined.
The "Thirty-Year Constant Maturity Rate" for each
dividend period will be the arithmetic average of the two most
recent weekly per annum Thirty-Year Average Yields (as defined
herein) or the one weekly per annum Thirty-Year Average Yield,
if only one such yield is published during the relevant
Calendar Period), as published weekly by the Federal Reserve
Board during the Calendar Period immediately preceding the
tenth calendar day preceding the dividend period for which the
dividend rate on the Series A Fixed/Adjustable Rate Preferred
Stock is being determined.
<PAGE>
7
If the Federal Reserve Board does not publish a
weekly per annum market discount rate, Ten-Year Average Yield
or Thirty-Year Average Yield during any applicable Calendar
Period, then the Treasury Bill Rate, Ten-Year Constant
Maturity Rate or Thirty-Year Constant Maturity Rate, as the
case may be, for such dividend period will be the arithmetic
average of the two most recent weekly per annum market
discount rates for three-month U.S. Treasury bills, Ten-Year
Average Yields or Thirty-Year Average Yields, as the case may
be (or the one weekly per annum rate, if only one such rate is
published during the relevant Calendar Period), as published
weekly during such Calendar Period by any Federal Reserve Bank
or by any U.S. Government department or agency selected by the
Corporation. If any such rate is not published by the Federal
Reserve Board or by any Federal Reserve Bank or by any U.S.
Government department or agency during such Calendar Period,
then the Treasury Bill Rate, Ten-Year Constant Maturity Rate
or Thirty-Year Constant Maturity Rate for such dividend period
will be the arithmetic average of the two most recent weekly
per annum (i) in the case of the Treasury Bill Rate, market
discount rates (or the one weekly per annum market discount
rate, if only one such rate is published during the relevant
Calendar Period) for all of the U.S. Treasury bills then
having remaining maturities of not less than 80 nor more than
100 days, and (ii) in the case of the Ten-Year Constant
Maturity Rate, average yields to maturity (or the one weekly
per annum average yield to maturity, if only one such yield is
published during the relevant Calendar Period) for all of the
actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities (as defined herein)
then having remaining maturities of not less than eight nor
more than twelve years, and (iii) in the case of the
Thirty-Year Constant Maturity Rate, average yields to maturity
(or the one weekly per annum average yield to maturity, if
only one such yield is published during the relevant Calendar
Period) for all of the actively traded marketable U.S.
Treasury fixed interest rate securities (other than Special
Securities) then having remaining maturities of not less than
twenty-eight nor more than thirty years, in each case as
published during such Calendar Period by the Federal Reserve
Board or, if the Federal Reserve Board does not publish such
rates, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. If the
Corporation determines in good faith that for any reason (i)
no such U.S. Treasury bill rates are published as provided
above during such Calendar Period or (ii) the Corporation
cannot determine the Treasury Bill Rate for any dividend
period; then the Treasury Bill Rate for such dividend period
will be the arithmetic average of the per annum market
discount rates based upon the closing bids during such
Calendar Period for each of the issues of marketable
non-interest-bearing U.S. Treasury securities with a remaining
maturity of not less than 80 nor more than 100 days from the
date of each such quotation, as chosen and quoted daily for
each business day in New York City (or less frequently if
daily quotations are not generally available) to the
Corporation by at least three recognized dealers in U.S.
Government securities selected by the Corporation.
<PAGE>
8
If the Corporation determines in good faith that for any
reason the Corporation cannot determine the Ten-Year Constant
Maturity Rate or Thirty-Year Constant Maturity Rate for any
dividend period as provided above, then the applicable rate
for such dividend period will be the arithmetic average of the
per annum average yields to maturity based upon the closing
bids during such Calendar Period for each of the issues of
actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities) with a final
maturity date (i) in the case of the Ten-Year Constant
Maturity Rate, not less than eight nor more than twelve years
from the date of each such quotation, and (ii) in the case of
the Thirty-Year Constant Maturity Rate, not less than
twenty-eight nor more than thirty years from the date of each
such quotation, in each case as chosen and quoted daily for
each business day in New York City (or less frequently if
daily quotations are not generally available) to the
Corporation by at least three recognized dealers in the United
States.
The Treasury Bill Rate, the Ten-Year Constant
Maturity Rate and the Thirty-Year Constant Maturity Rate will
each be rounded to the nearest five hundredths of a percent,
with .025% being rounded upward.
The Applicable Rate with respect to each dividend
period beginning on or after November 30, 2001 will be
calculated as promptly as practicable by the Corporation
according to the appropriate method described above. The
Corporation will cause notice of each Applicable Rate to be
given to the holders of Series A Fixed/Adjustable Rate
Preferred Stock when payment is made of the dividend for the
immediately preceding dividend period.
As used in this paragraph 3, the term "Calendar
Period" means a period of fourteen calendar days; the term
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System; the term "Special Securities" means
securities which can, at the option of the holder, be
surrendered at face value in payment of any Federal estate tax
or which provide tax benefits to the holder and are priced to
reflect such tax benefits or which were originally issued at a
deep or substantial discount; the term "Ten-Year Average
Yield" means the average yield to maturity for actively traded
marketable U.S. Treasury fixed interest rate securities
(adjusted to constant maturities of ten years); and the term
"Thirty-Year Average Yield" means the average yield to
maturity for actively traded marketable U.S. Treasury fixed
interest rate securities (adjusted to constant maturities of
thirty years).
4. Liquidation Preference. The shares of Series A
Fixed/Adjustable Rate Preferred Stock shall rank, as to
liquidation, dissolution or winding up of the Corporation,
prior to the shares of Common Stock and any other class of
stock of the Corporation ranking junior to the Series A
Fixed/Adjustable Rate Preferred Stock as to rights upon
liquidation, dissolution or winding up of the
<PAGE>
9
Corporation, so that in the event of any liquidation,
dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the Series A
Fixed/Adjustable Rate Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital,
surplus or earnings, before any distribution is made to
holders of shares of Common Stock or any other such junior
stock, an amount equal to $200.00 per share (the "Liquidation
Preference" of a share of Series A Fixed/Adjustable Rate
Preferred Stock) plus an amount equal to all dividends
(whether or not earned or declared) accrued and accumulated
and unpaid on the shares of Series A Fixed/Adjustable Rate
Preferred Stock to the date of final distribution. The holders
of the Series A Fixed/Adjustable Rate Preferred Stock will not
be entitled to receive the Liquidation Preference until the
liquidation preference of any other class of stock of the
Corporation ranking senior to the Series A Fixed/Adjustable
Rate Preferred Stock as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set
aside therefor sufficient to provide for payment) in full.
After payment of the full amount of the Liquidation Preference
and such dividends, the holders of shares of Series A
Fixed/Adjustable Rate Preferred Stock will not be entitled to
any further participation in any distribution of assets by the
Corporation. If, upon any liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of shares of
Parity Preferred Stock shall be insufficient to pay in full
the preferential amount aforesaid, then such assets, or the
proceeds thereof, shall be distributable among such holders
ratably in accordance with the respective amounts which would
be payable on such shares if all amounts payable thereon were
paid in full. For the purposes hereof, neither a consolidation
or merger of the Corporation with or into any other
corporation, nor a merger of any other corporation with or
into the Corporation, nor a sale or transfer of all or any
part of the Corporation's assets for cash or securities shall
be considered a liquidation, dissolution or winding up of the
Corporation.
5. Conversion. The Series A Fixed/Adjustable Rate
Preferred Stock is not convertible into shares of any other
class or series of stock of the Corporation.
6. Voting Rights. The holders of shares of Series A
Fixed/Adjustable Rate Preferred Stock shall have no voting
rights whatsoever, except for any voting rights to which they
may be entitled under the laws of the State of Delaware, and
except as follows:
(a) Whenever, at any time or times,
dividends payable on the shares of Series A
Fixed/Adjustable Rate Preferred Stock or on any
Parity Preferred Stock with respect to payment of
dividends, shall be in arrears for an aggregate
number of days equal to six calendar quarters or
more, whether or not consecutive, the holders of the
outstanding shares of Series
<PAGE>
10
A Fixed/Adjustable Rate Preferred Stock shall have
the right, with holders of shares of any one or more
other class or series of stock upon which like voting
rights have been conferred and are exercisable
(voting together as a class), to elect two of the
authorized number of members of the Board at the
Corporation's next annual meeting of stockholders and
at each subsequent annual meeting of stockholders
until such arrearages have been paid or set apart for
payment, at which time such right shall terminate,
except as herein or by law expressly provided,
subject to revesting in the event of each and every
subsequent default of the character above mentioned.
Upon any termination of the right of the holders of
shares of Series A Fixed/Adjustable Rate Preferred
Stock as a class to vote for directors as herein
provided, the term of office of all directors then in
office elected by the holders of shares of Series A
Fixed/Adjustable Rate Preferred Stock shall terminate
immediately.
Any director who shall have been so elected pursuant
to this paragraph may be removed at any time, either
with or without cause. Any vacancy thereby created
may be filled only by the affirmative vote of the
holders of shares of Series A Fixed/Adjustable Rate
Preferred Stock voting separately as a class
(together with the holders of shares of any other
class or series of stock upon which like voting
rights have been conferred and are exercisable). If
the office of any director elected by the holders of
shares of Series A Fixed/Adjustable Rate Preferred
Stock voting as a class becomes vacant for any reason
other than removal from office as aforesaid, the
remaining director elected pursuant to this paragraph
may choose a successor who shall hold office for the
unexpired term in respect of which such vacancy
occurred. At elections for such directors, each
holder of shares of Series A Fixed/Adjustable Rate
Preferred Stock shall be entitled to one vote for
each share held (the holders of shares of any other
class or series of preferred stock having like voting
rights being entitled to such number of votes, if
any, for each share of such stock held as may be
granted to them).
(b) So long as any shares of Series A
Fixed/Adjustable Rate Preferred Stock remain
outstanding, the consent of the holders of at least
two-thirds of the shares of Series A Fixed/Adjustable
Rate Preferred Stock outstanding at the time and all
other classes or series of stock upon which like
voting rights have been conferred and are exercisable
(voting together as a class) given in person or by
proxy, either in writing or at any meeting called for
the purpose, shall be necessary to permit, effect or
validate any one or more of the following:
(i) the issuance or increase of the
authorized amount of any class or series of
shares ranking prior (as that term is
defined
<PAGE>
11
in paragraph 10(a) hereof) to the shares of
the Series A Fixed/Adjustable Rate
Preferred Stock; or
(ii) the amendment, alteration or
repeal, whether by merger, consolidation or
otherwise, of any of the provisions of the
Certificate of Incorporation (including this
resolution or any provision hereof), that
would materially and adversely affect any
power, preference, or special right of the
shares of Series A Fixed/Adjustable Rate
Preferred Stock or of the holders thereof;
provided, however, that any increase in the amount of
authorized Common Stock or authorized Preferred Stock
or any increase or decrease in the number of shares
of any series of Preferred Stock or the creation and
issuance of other series of Common Stock or Preferred
Stock, in each case ranking on a parity with or
junior to the shares of Series A Fixed/Adjustable
Rate Preferred Stock with respect to the payment of
dividends and the distribution of assets upon
liquidation, dissolution or winding up, shall not be
deemed to materially and adversely affect such
powers, preferences or special rights.
(c) The foregoing voting provisions shall
not apply if, at or prior to the time when the act
with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of
Series A Fixed/Adjustable Rate Preferred Stock shall
have been redeemed or called for redemption and
sufficient funds shall have been deposited in trust
to effect such redemption.
7. Redemption. The shares of the Series A
Fixed/Adjustable Rate Preferred Stock may be redeemed at the
option of the Corporation, as a whole, or from time to time in
part, at any time, upon not less than 30 days' prior notice
mailed to the holders of the shares to be redeemed at their
addresses as shown on the stock books of the Corporation;
provided, however, that shares of the Series A
Fixed/Adjustable Rate Preferred Stock shall not be redeemable
prior to November 30, 2001, except as stated below. Subject to
the foregoing, on or after such date, shares of the Series A
Fixed/Adjustable Rate Preferred Stock are redeemable at
$200.00 per share together with an amount equal to all
dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for
redemption.
If full cumulative dividends on the Series A
Fixed/Adjustable Rate Preferred Stock have not been paid, the
Series A Fixed/Adjustable Rate Preferred Stock may not be
redeemed in part and the Corporation may not purchase or
acquire any shares of the Series A Fixed/Adjustable Rate
Preferred Stock otherwise than pursuant to a purchase or
exchange offer made on the same terms
<PAGE>
12
to all holders of the Series A Fixed/Adjustable Rate Preferred
Stock. If fewer than all the outstanding shares of Series A
Fixed/Adjustable Rate Preferred Stock are to be redeemed, the
Corporation will select those to be redeemed by lot or a
substantially equivalent method.
If a notice of redemption has been given pursuant to
this paragraph 7 and if, on or before the date fixed for
redemption, the funds necessary for such redemption shall have
been set aside by the Corporation, separate and apart from its
other funds, in trust for the pro rata benefit of the holders
of the shares of Series A Fixed/Adjustable Rate Preferred
Stock so called for redemption, then, notwithstanding that any
certificates for such shares have not been surrendered for
cancellation, on the redemption date dividends shall cease to
accrue on the shares to be redeemed, and at the close of
business on the redemption date the holders of such shares
shall cease to be stockholders with respect to such shares and
shall have no interest in or claims against the Corporation by
virtue thereof and shall have no voting or other rights with
respect to such shares, except the right to receive the moneys
payable upon surrender (and endorsement, if required by the
Corporation) of their certificates, and the shares evidenced
thereby shall no longer be outstanding. Subject to applicable
escheat laws, any moneys so set aside by the Corporation and
unclaimed at the end of two years from the redemption date
shall revert to the general funds of the Corporation, after
which reversion the holders of such shares so called for
redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such
redemption. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
Notwithstanding the foregoing provisions, if the
Dividends Received Percentage is equal to or less than 50%
and, as a result, the amount of dividends on the Series A
Fixed/Adjustable Rate Preferred Stock payable on any dividend
payment date will be or is adjusted upwards as described in
paragraph 2(b) hereof, the Corporation, at its option, may
redeem all, but not less than all, of the outstanding shares
of the Series A Fixed/Adjustable Rate Preferred Stock (the
Depositary Shares) (a "Dividends Received Deduction
Redemption") provided that within sixty days of the date on
which an amendment to the Code is enacted which reduces the
Dividends Received Percentage to 50% or less, the Corporation
sends notice to holders of the Series A Fixed/Adjustable Rate
Preferred Stock of such redemption. A Dividends Received
Deduction Redemption, in accordance with this paragraph, will
take place on the date specified in the notice, which shall be
not less than thirty nor more than sixty days from the date
such notice is sent to holders of the Series A
Fixed/Adjustable Rate Preferred Stock. A Dividends Received
Deduction Redemption shall be at the applicable redemption
price set forth in the following table, in each case plus
accrued and unpaid dividends (whether or not declared) thereon
to but excluding
<PAGE>
13
the date fixed for redemption, including any changes in
dividends payable due to changes in the Dividends Received
Percentage and Additional Dividends, if any:
<TABLE>
<CAPTION>
Redeemable Price
----------------
Redemption Period Per Share Per Depositary Share
----------------- --------- --------------------
<S> <C> <C>
November 14, 1996 to November 29, 1997... $210.00 $ 52.50
November 30, 1997 to November 29, 1998... 208.00 52.00
November 30, 1998 to November 29, 1999... 206.00 51.50
November 30, 1999 to November 29, 2000... 204.00 51.00
November 30, 2000 to November 29, 2001... 202.00 50.50
On or after November 30, 2001............ 200.00 50.00
</TABLE>
8. Authorization and Issuance of Other Securities. No
consent of the holders of the Series A Fixed/Adjustable Rate
Preferred Stock shall be required for (a) the creation of any
indebtedness of any kind of the Corporation, (b) the creation,
or increase or decrease in the amount, of any class or series
of stock of the Corporation not ranking prior as to dividends
or upon liquidation, dissolution or winding up to the Series A
Fixed/Adjustable Rate Preferred Stock or (c) any increase or
decrease in the amount of authorized Common Stock or any
increase, decrease or change in the par value thereof or in
any other terms thereof.
9. Amendment of Resolution. The Board and the
Committee each reserves the right by subsequent amendment of
this resolution from time to time to increase or decrease the
number of shares that constitute the Series A Fixed/Adjustable
Rate Preferred Stock (but not below the number of shares
thereof then outstanding) and in other respects to amend this
resolution within the limitations provided by law, this
resolution and the Certificate of Incorporation.
10. Rank. For the purposes of this resolution, any
stock of any class or classes of the Corporation shall be
deemed to rank:
(a) prior to shares of the Series A
Fixed/Adjustable Rate Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding
up, or both, if the holders of stock of such class or
classes shall be entitled by the terms thereof to the
receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of
shares of the Series A Fixed/Adjustable Rate
Preferred Stock;
(b) on a parity with shares of the Series A
Fixed/Adjustable Rate Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding
up, or both, whether or not the dividend rates,
dividend payment dates, or redemption or liquidation
prices per share thereof be different from those of
the Series A Fixed/Adjustable Rate
<PAGE>
14
Preferred Stock, if the holders of stock of such
class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts
distributed upon liquidation, dissolution or winding
up, as the case may be, in proportion to their
respective dividend rates or liquidation prices,
without preference or priority of one over the other
as between the holders of such stock and the holders
of shares of Series A Fixed/Adjustable Rate Preferred
Stock (the term "Parity Preferred Stock" being used
to refer to any stock on a parity with the shares of
Series A Fixed/Adjustable Rate Preferred Stock,
either as to dividends or upon liquidation,
dissolution or winding up, or both, as the context
may require); and
(c) junior to shares of the Series A
Fixed/Adjustable Rate Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding
up, or both, if such class shall be Common Stock or
if the holders of the Series A Fixed/Adjustable Rate
Preferred Stock shall be entitled to the receipt of
dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of
stock of such class or classes.
The Series A Fixed/Adjustable Rate Preferred Stock
shall rank prior, as to dividends and upon liquidation,
dissolution or winding up, to the Common Stock and on a parity
with (i) the Corporation's ESOP Convertible Preferred Stock,
with a liquidation value of $35.88 per share, (ii) the
Corporation's 9.36% Cumulative Preferred Stock, with a
liquidation value of $25.00 per share, (iii) the Corporation's
8.88% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share, (iv) the Corporation's 8-3/4% Cumulative
Preferred Stock, with a liquidation value of $200.00 per
share, (v) the Corporation's 7-3/8% Cumulative Preferred
Stock, with a liquidation value of $200.00 per share, (vi) if
issued, the Corporation's 7.82% Cumulative Preferred Stock,
with a liquidation value of $200.00 per share, (vii) if
issued, the Corporation's 7.80% Cumulative Preferred Stock,
with a liquidation value of $200.00 per share, (viii) if
issued, the Corporation's 9.00% Cumulative Preferred Stock,
with a liquidation value of $200.00 per share, (ix) if issued,
the Corporation's 8.40% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (x) if issued, the
Corporation's 8.20% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share and (xi) the
Corporation's 7-3/4% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share.
<PAGE>
15
IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused this
Certificate to be made under the seal of the Corporation and signed by Richard
B. Fisher, its Chairman of the Board, and attested by Patricia Kurtz, Assistant
Secretary of the Corporation, this 8th day of November, 1996.
MORGAN STANLEY GROUP INC.
By: /s/ Richard B. Fisher
-----------------------------
Name: Richard B. Fisher
Title: Chairman of the Board
[SEAL]
Attest:
/s/ Patricia A. Kurtz
- --------------------------
Assistant Secretary
Consent of Independent Auditors
-------------------------------
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 for the registration of $6,000,000,000 of
debt securities, warrants, preferred stock depositary shares, purchase contracts
and units and in the related Prospectus of Morgan Stanley Group Inc. for
$7,393,054,097 of the same securities and to the incorporation by reference
therein of our report dated January 4, 1996, with respect to the consolidated
financial statements and financial statement schedule of Morgan Stanley Group
Inc. incorporated by reference and included in its Annual Report on Form 10-K
for the fiscal period ended November 30, 1995, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
New York, New York
December 16, 1996
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
MORGAN STANLEY GROUP INC.
(Exact name of obligor as specified in its charter)
Delaware 13-2838811
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1585 Broadway
New York, New York 10036
(Address of principal executive offices) (Zip Code)
---------------------------------------------
Debt Securities
(Title of the indenture securities)
---------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 6th day of December, 1996.
THE CHASE MANHATTAN BANK
By /s/ Thomas J. Foley
----------------------------
Thomas J. Foley
Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1996, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin............................................ $ 11,095
Interest-bearing balances.................................... 4,998
Securities:
Held to maturity securities ...................................... 3,231
Available for sale securities .................................... 38,078
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's: Federal funds sold............................. 8,018
Securities purchased under agreements to resell ............. 731
Loans and lease financing receivables:
Loans and leases, net of unearned income $130,513
Less: Allowance for loan and lease losses 2,938
Less: Allocated transfer risk reserve 27
--------
Loans and leases, net of unearned income,
allowance, and reserve....................................... 127,548
Trading Assets.................................................... 48,576
Premises and fixed assets (including capitalized
leases)...................................................... 2,850
Other real estate owned........................................... 300
Investments in unconsolidated subsidiaries and
associated companies ........................................ 92
Customer's liability to this bank on acceptances
outstanding.................................................. 2,777
Intangible assets................................................. 1,361
Other assets...................................................... 12,204
--------
TOTAL ASSETS...................................................... $261,859
========
- 4 -
<PAGE>
LIABILITIES
Deposits
In domestic offices ......................................... $80,163
Noninterest-bearing ................................. $30,596
Interest-bearing .................................... 49,567
In foreign offices, Edge and Agreement subsidiaries,
and IBF's.................................................... 65,173
Noninterest-bearing ................................. $ 3,616
Interest-bearing .................................... 61,557
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ..................................... 14,594
Securities sold under agreements to repurchase .............. 14,110
Demand notes issued to the U.S. Treasury ......................... 2,200
Trading liabilities .............................................. 30,136
Other Borrowed money:
With a remaining maturity of one year or less ............... 16,895
With a remaining maturity of more than one year ............. 449
Mortgage indebtedness and obligations under capitalized
leases ...................................................... 49
Bank's liability on acceptances executed and outstanding ......... 2,764
Subordinated notes and debentures ................................ 5,471
Other liabilities ................................................ 13,997
TOTAL LIABILITIES ................................................ 246,001
--------
Limited-Life Preferred stock and related surplus ................. 550
EQUITY CAPITAL
Common stock ..................................................... 1,209
Surplus .......................................................... 10,176
Undivided profits and capital reserves ........................... 4,385
Net unrealized holding gains (Losses)
on available-for-sale securities ................................. (481)
Cumulative foreign currency translation adjustments .............. 19
TOTAL EQUITY CAPITAL ............................................. 15,308
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL .................................... $261,859
========
I, Joseph L. Sclafani, S.V.P. & Controller of the
above-named bank, do hereby declare that this Report of
Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)______
----------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
----------
MORGAN STANLEY GROUP INC.
(Exact name of obligor as specified in its charter)
Delaware 13-2838811
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1585 Broadway
New York, New York 10036
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
1
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Chicago and State of Illinois, on the 2nd day of
December, 1996.
The First National Bank of Chicago,
Trustee
By /s/ Richard D. Manella
Richard D. Manella
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25.1 to the Registration Statement on Form S-3 of
SunAmerica Inc. filed with the Securities and Exchange Commission on October 25,
1996 (Registration No. 333-14201).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
December 2, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Morgan Stanley
Group, Inc. and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Richard D. Manella
Richard D. Manella
Vice President
4
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/96 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
C400 [-
Dollar Amounts in ---- ------
Thousands RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) ........ 0081 3,572,641 1.a.
b. Interest-bearing balances(2) ................................. 0071 6,958,367 1.b.
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A).... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) . 1773 1,448,974 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold ........................................... 0276 5,020,878 3.a.
b. Securities purchased under agreements to resell .............. 0277 918,688 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) ........................................................... RCFD 2122 19,125,160 4.a.
b. LESS: Allowance for loan and lease losses .................... RCFD 3123 379,232 4.b.
c. LESS: Allocated transfer risk reserve ........................ RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) ......................... 2125 18,745,928 4.d.
5. Assets held in trading accounts ................................. 3545 9,599,172 5.
6. Premises and fixed assets (including capitalized leases) ........ 2145 623,289 6.
7. Other real estate owned (from Schedule RC-M) .................... 2150 8,927 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) .................................. 2130 57,280 8.
9. Customers' liability to this bank on acceptances outstanding .... 2155 632,259 9.
10. Intangible assets (from Schedule RC-M) .......................... 2143 156,715 10.
11. Other assets (from Schedule RC-F) ............................... 2160 1,592,088 11.
12. Total assets (sum of items 1 through 11)......................... 2170 49,335,206 12.
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/96 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
--------- ------------
LIABILITIES
<S> <C> <C> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)............................ RCON 2200 16,878,870 13.a.
(1) Noninterest-bearing(1)............................. RCON 6631 7,855,880 13.a.(1)
(2) Interest-bearing................................... RCON 6636 9,022,990 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries,
and IBFs (from Schedule RC-E, part II)................. RCFN 2200 12,677,057 13.b.
(1) Noninterest bearing................................ RCFN 6631 766,936 13.b.(1)
(2) Interest-bearing................................... RCFN 6636 11,910,121 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank
and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased................................ RCFD 0278 1,318,968 14.a.
b. Securities sold under agreements to repurchase......... RCFD 0279 1,197,589 14.b.
15. a. Demand notes issued to the U.S. Treasury............... RCON 2840 104,546 15.a.
b. Trading Liabilities.................................... RCFD 3548 6,431,784 15.b.
16. Other borrowed money:
a. With original maturity of one year or less............. RCFD 2332 4,437,636 16.a.
b. With original maturity of more than one year.......... RCFD 2333 75,308 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases.................................................... RCFD 2910 283,041 17.
18. Bank's liability on acceptance executed and outstanding... RCFD 2920 632,259 18.
19. Subordinated notes and debentures......................... RCFD 3200 1,275,000 19.
20. Other liabilities (from Schedule RC-G).................... RCFD 2930 892,947 20.
21. Total liabilities (sum of items 13 through 20)............ RCFD 2948 46,205,005 21.
22. Limited-Life preferred stock and related surplus.......... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............. RCFD 3838 0 23.
24. Common stock.............................................. RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).. RCFD 3839 2,349,164 25.
26. a. Undivided profits and capital reserves................. RCFD 3632 584,878 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities.......................... RCFD 8434 (3,951) 26.b.
27. Cumulative foreign currency translation adjustments....... RCFD 3284 (748) 27.
28. Total equity capital (sum of items 23 through 27)......... RCFD 3210 3,130,201 28.
29. Total liabilities, limited-life preferred stock, and
equity capital (sum of items 21, 22, and 28).............. RCFD 3300 49,335,206 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external auditors Number
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as of any date during 1995 . . . . . . . . . . . . . .. . . .. . . .RCFD 6724 . .... N/A M.1.
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</TABLE>
1 = Independent audit of the bank conducted in accordance
with generally accepted auditing standards by a certified
public accounting firm which submits a report on the bank
2 = Independent audit of the bank's parent holding company
conducted in accordance with generally accepted auditing
standards by a certified public accounting firm which
submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
4.= Directors' examination of the bank performed by other
external auditors (may be required by state chartering
authority)
5 = Review of the bank's financial statements by external
auditors
6 = Compilation of the bank's financial statements by external
auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
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(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
6
