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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 29, 1997
REGISTRATION NO. 333-03224
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
THE EQUITABLE COMPANIES INCORPORATED
(Exact name of registrant as specified in its charter)
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<TABLE>
<S> <C> <C>
DELAWARE 1290 AVENUE OF THE AMERICAS 13-3623351
(State or other jurisdiction NEW YORK, NEW YORK 10104 (I.R.S. Employer
of (212) 554-1234 Identification Number)
incorporation or
organization)
</TABLE>
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
------------------------------
ROBERT E. GARBER, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
THE EQUITABLE COMPANIES INCORPORATED
1290 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10104
(212) 554-1234
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
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PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:
MICHAEL W. BLAIR, ESQ.
DEBEVOISE & PLIMPTON
875 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 909-6000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time as determined by market conditions, after the effective date of this
Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
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, other than securities offered only in connection with dividend or interest
reinvestment plans, 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, 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. / /
------------------------
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 OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
11,940,299 SHARES
THE
[LOGO]EQUITABLE
COMPANIES INCORPORATED
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
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This Prospectus relates to the resale, from time to time, by The Chase
Manhattan Bank, acting solely as trustee (the "SECT Trustee") of The Equitable
Companies Incorporated Stock Trust (the "SECT Trust" or "Selling Stockholder"),
of up to 11,940,299 shares (the "Offered Shares") of Common Stock, $.01 par
value ("Common Stock"), of The Equitable Companies Incorporated (the "Company").
The Offered Shares were or will be issued to the SECT Trust upon conversion of
certain shares of the Company's Series D Convertible Preferred Stock sold in a
private transaction by the Company to the SECT Trust in 1993. The SECT Trust was
established to provide a source of funding for a portion of the obligations
arising under certain employee compensation and benefit programs of the
Company's subsidiaries (the "Plans"). A committee (the "Committee") comprised of
officers, directors and/or employees of the Company, its subsidiaries or
companies affiliated with AXA-UAP ("AXA"), the Company's largest stockholder,
will give instructions to the SECT Trustee concerning the time and manner of
sale or disposition of the Offered Shares. See "Selling Stockholder" and "Plan
of Distribution".
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE OFFERED
SHARES.
The Common Stock of the Company is listed on the New York Stock Exchange
(the "NYSE") under the symbol "EQ".
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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.
----------------
The Offered Shares may be sold from time to time to or through underwriters,
through dealers or agents or directly to purchasers, in transactions on the NYSE
or on other exchanges on which the Common Stock may be traded, in the
over-the-counter market, through negotiated transactions or otherwise, at market
prices prevailing at the time of sale or at other prices. See "Plan of
Distribution".
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The date of this Prospectus is , 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION."
FOR NORTH CAROLINA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA,
NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR ADEQUACY OF
THIS DOCUMENT.
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, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, NW,
Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, Suite 1300, New York,
New York 10048 and Suite 1400, Northwest Atrium Center, 14th Floor, 500 West
Madison Street, Chicago, Illinois 60611. Copies of such material can also be
obtained at prescribed rates by writing to the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
In addition, such reports, proxy statements and other information can be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005. The Commission maintains a Website that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of the
Commission's Website is http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with any amendments thereto, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the securities offered hereby. This Prospectus, which constitutes a part of the
Registration Statement, omits certain information contained in the Registration
Statement as permitted by the rules and regulations of the Commission. For
further information with respect to the Company and the securities offered
hereby, reference is made to the Registration Statement and the exhibits and the
financial statements, notes and schedules filed as a part thereof or
incorporated by reference therein, which may be inspected at the public
reference facilities of the Commission, at the addresses set forth above.
Statements made in this Prospectus concerning the contents of any documents
referred to herein are not necessarily complete, and in each instance are
qualified in all respects by reference to the copy of such document filed as an
exhibit to the Registration Statement or incorporated by reference therein.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated into this Prospectus by reference:
1. the Company's Annual Report on Form 10-K for the year ended December
31, 1996 (the "1996 10-K");
2. the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997 (the "First Quarter 10-Q"); and
3. the Company's Registration Statement on Form 8-A, dated May 26, 1992,
incorporating the description of the Company's Common Stock in the
Company's Registration Statement on Form S-1 (Registration No.
33-48115).
All documents or reports subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and
prior to the termination of the offering described herein shall be deemed to be
incorporated by reference into this Prospectus and to be a part of this
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Prospectus from the date of filing of such document. Any statement contained
herein, or in a document all or a portion of which is 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 other subsequently filed document which 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 the Registration
Statement or this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference (other than
exhibits not specifically incorporated by reference into the texts of such
documents). Requests for such documents should be directed to: The Equitable
Companies Incorporated, 1290 Avenue of the Americas, New York, New York 10104
Attention: Corporate Secretary (telephone (212) 554-1234).
3
<PAGE>
THE EQUITABLE
FOR THE PURPOSE OF THIS PROSPECTUS, THE TERM "THE EQUITABLE" REFERS TO THE
EQUITABLE COMPANIES INCORPORATED (THE "COMPANY") AND ITS SUBSIDIARIES.
The Equitable is a diversified financial services organization serving a
broad spectrum of insurance, investment management and investment banking
customers. The Equitable Life Assurance Society of the United States ("Equitable
Life"), a subsidiary of the Company, was established in the State of New York in
1859. For more than 100 years it has been among the largest life insurance
companies in the United States. Equitable Life and its subsidiaries distribute a
variety of insurance, annuity and investment products through a career agency
force, which at December 31, 1996 consisted of over 7,200 professional insurance
agents.
At March 31, 1997, the Company's holdings in its investment subsidiaries
included an approximately 78% interest in Donaldson, Lufkin & Jenrette, Inc.
("DLJ"), an approximately 58% interest in Alliance Capital Management L.P.
("Alliance") and a 100% interest in Equitable Real Estate Investment Management,
Inc., Equitable Agri-Business, Inc. and EQ Services, Inc. (collectively,
"Equitable Real Estate"). The Company's investment subsidiaries provide
investment management and investment banking services to institutional and
individual clients, including the Company's insurance subsidiaries.
On April 10, 1997, Equitable Life entered into an agreement to sell
Equitable Real Estate (other than EQ Services, Inc. and its interest in Column
Financial, Inc.) to Lend Lease Corporation Limited. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Combined Results
of Operations by Segment--Investment Services--Equitable Real Estate" in the
First Quarter 10-Q.
AXA is the Company's largest stockholder, beneficially owning at December
31, 1996 60.8% of the outstanding shares of Common Stock and $392.2 million of
the Company's Series E Convertible Preferred Stock. The Company is a Delaware
corporation with its principal headquarters located at 1290 Avenue of the
Americas, New York, New York 10104 (telephone (212) 554-1234).
BUSINESS
The Equitable is engaged in two related financial services businesses: an
insurance business, which is comprised of the Insurance Operations segment and
operates through the Insurance Group (consisting principally of Equitable Life)
and an investment management and investment banking business, which comprises
the Investment Services segment and operates through the Investment Subsidiaries
(consisting of DLJ, Alliance and, until the completion of its pending sale,
Equitable Real Estate).
INSURANCE BUSINESS
Insurance Operations accounted for $3.74 billion, or approximately 45.1% of
consolidated revenues for the year ended December 31, 1996. The Insurance Group
offers a variety of products which include traditional, variable and
interest-sensitive life insurance products, annuity products and mutual fund and
other investment products, as well as disability income products and association
plans. The Insurance Group emphasizes the sale of individual variable and
interest-sensitive life insurance and annuity products. The Insurance Group
maintains a substantial market share in sales of individual variable life
insurance in the United States and also maintains a strong position in the
market for individual variable annuity products. This segment also includes the
Insurance Group's Separate Accounts for certain individual insurance and annuity
products in which customers may invest their accumulated policy funds.
The Equitable believes the experience and training of its career agency
force constitutes a key competitive advantage in the sale of the Insurance
Group's sophisticated insurance products, including
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<PAGE>
variable life insurance and annuity products which offer a broad range of
investment options. At December 31, 1996, the Insurance Group led the insurance
industry in the number of agents and employees who hold both the Chartered Life
Underwriter (CLU) and Chartered Financial Consultant (ChFC) designation.
The Insurance Group's Income Manager Series of annuity products, which was
introduced in May 1995, is also distributed through securities firms, financial
planners and banks, as well as the career agency force. In 1996, Equitable
Distributors, Inc. ("EDI"), an indirect wholly owned subsidiary of the Company,
began actively to facilitate the marketing of the Income Manager Series through
these distribution channels.
INVESTMENT BUSINESS
The Investment Services segment, which accounted for $4.54 billion, or
approximately 54.7%, of consolidated revenues for the year ended December 31,
1996, provides investment management, investment banking, securities transaction
and brokerage services to both corporate and institutional clients, including
the Insurance Group, and to high net worth individuals. Sales of mutual fund
shares to individuals and retail clients augment the traditional focus on
institutional markets.
The Investment Subsidiaries have steadily added to third party assets under
management, while continuing to provide investment management services to the
Insurance Group. Of the $240.8 billion of assets under management at March 31,
1997, $184.1 billion (76.5%) were managed by the Investment Subsidiaries for
third parties, including domestic and overseas investors, mutual funds, pension
funds, endowment funds and, through the Insurance Group's Separate Accounts,
insurance and annuity customers of the Insurance Group. During 1996,
approximately $128.8 million (14.8%) of the fees earned by the Investment
Subsidiaries from asset management consisted of fees for services provided to
the Insurance Group.
DLJ is a leading integrated investment and merchant bank that serves
institutional, corporate, governmental and individual clients both domestically
and internationally. DLJ's businesses include securities underwriting, sales and
trading; merchant banking; financial advisory services; investment research;
correspondent brokerage services; and asset management. DLJ's revenues for the
year ended December 31, 1996 were $3.49 billion. DLJ conducts its operations
through three principal operating groups each of which is an important
contributor to revenue and earnings: the Banking Group, which includes DLJ's
Investment Banking, Merchant Banking and Emerging Markets groups; the Capital
Markets Group, consisting of DLJ's Fixed Income, Institutional Equities and
Equities Derivatives Divisions, Autranet, a distributor of investment research
products, and Sprout, its venture capital affiliate; and the Financial Services
Group, comprised of the Pershing Division, the Investment Services Group and the
Asset Management Group.
Alliance is one of the largest investment advisors in the United States and
provides diversified investment management services to a variety of institutions
including The Equitable, pension funds, endowments and foreign financial
institutions as well as to individual investors through a broad line of mutual
funds. Alliance had assets under management at March 31, 1997 of $182.0 billion
(including $158.4 billion for third party clients). For a discussion of the
possible restructuring of Alliance, see "Risk Factors--Risk-Based and Statutory
Capital" herein and "Business--Investment Services--Alliance-- Other" and
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations--Liquidity and Capital Resources--Insurance Group--Risk-Based
Capital" in the 1996 10-K.
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RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, THE
FOLLOWING FACTORS SHOULD BE CAREFULLY CONSIDERED PRIOR TO DECIDING WHETHER OR
NOT TO PURCHASE THE OFFERED SHARES.
INVESTMENT ASSETS
As of March 31, 1997, commercial mortgages and equity real estate comprise
9.6% ($3.60 billion) and 11.8% ($4.45 billion), respectively, of the $37.6
billion aggregate amortized cost net of valuation allowances ("net amortized
cost") of assets held in the Insurance Group's General Account ("General Account
Investment Assets") and assets held in the General Account associated with the
Insurance Group's discontinued guaranteed investment contract ("GIC") Segment
("GIC Segment Investment Assets"). Since December 31, 1990, The Equitable has
substantially reduced its exposure to commercial mortgages. The percentage of
General Account and GIC Segment Investment Assets represented by The Equitable's
equity real estate portfolio has declined modestly since December 31, 1990, as
sales offset the acquisition of properties through foreclosure. At March 31,
1997, the equity real estate portfolio included properties acquired as
investment real estate having an aggregate amortized cost of $3.21 billion
(70.5% of the aggregate amortized cost of all equity real estate held) and
properties acquired through foreclosure (including in-substance foreclosure)
having an aggregate amortized cost of $1.34 billion (29.5% of the aggregate
amortized cost of all equity real estate held). It is management's continuing
objective to reduce the size of the equity real estate portfolio relative to
total assets over the next several years. Management anticipates that reductions
will depend on real estate market conditions, the level of mortgage foreclosures
and expenditures required to fund necessary or desired improvements to
properties. Due to real estate market conditions, proceeds from the sale of most
equity real estate properties have been less than amortized cost at the date of
sale. The Equitable intends to continue to seek to sell individual equity real
estate properties on an opportunistic basis. If a significant amount of equity
real estate not currently held for sale is sold, material investment losses
would likely be incurred.
Since 1990, General Account and GIC Segment Investment Assets have included
a large amount of problem, potential problem and restructured assets,
particularly problem commercial mortgages and restructured commercial mortgages.
While the amounts of problem, potential problem and restructured commercial
mortgages have decreased significantly since the beginning of 1992, both the
General Account and GIC Segment portfolios continue to have a significant amount
of such commercial mortgages. At March 31, 1997, these commercial mortgages
aggregated $761.4 million (2.0% of the aggregate amortized cost of General
Account and GIC Segment Investment Assets). In the last three quarters of 1997,
approximately $696.4 million of commercial mortgage principal payments are
scheduled, including $622.1 million of payments at maturity on commercial
mortgage balloon loans. An additional $906.9 million of payments at maturity on
commercial mortgage balloon loans are scheduled in 1998 and 1999. Depending on
market conditions and lending practices in future years, many maturing
commercial mortgages may have to be refinanced, restructured or foreclosed upon.
Since 1990, The Equitable has recognized significant additions to asset
valuation allowances and writedowns on commercial mortgages and equity real
estate. At March 31, 1997, such asset valuation allowance balances for
continuing and discontinued operations totaled $175.0 million. As a result of
the adoption of SFAS No. 121 on January 1, 1996, $224.3 million of asset
valuation allowances related to equity real estate were released and impairment
losses of $219.4 million were recognized on equity real estate held and used.
The determination of asset valuation allowances and writedowns requires numerous
forecasts and the exercise of a significant degree of judgment, and is an
inherently subjective process. No assurance can be given as to the amount of
future writedowns and additions to the asset valuation allowances. For more
information concerning The Equitable's General Account Investment Assets and GIC
Segment Investment Assets, including problem, potential problem and restructured
investments and asset valuation allowances, see "Management's Discussion and
Analysis of Financial
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Condition and Results of Operations--Continuing Operations Investment Portfolio"
in the First Quarter 10-Q and the 1996 10-K and Notes 4, 8 and 9 of Notes to
Consolidated Financial Statements in the First Quarter 10-Q.
At March 31, 1997, the net amortized cost of below investment grade fixed
maturities in General Account and GIC Segment Investment Assets (including
redeemable preferred stock) was $2.85 billion (representing 7.6% of the net
amortized cost of all General Account and GIC Segment Investment Assets). See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Continuing Operations Investment Portfolio" in the First Quarter
10-Q and the 1996 10-K, Note 9 of Notes to Consolidated Financial Statements in
the First Quarter 10-Q and Note 3 of Notes to Consolidated Financial Statements
in the 1996 10-K.
DISCONTINUED OPERATIONS
At March 31, 1997, $1.32 billion of liabilities in the GIC Segment, of which
$279.7 million related to GIC products and the balance to Wind-Up Annuities,
were outstanding to contractholders as compared to $14.29 billion at December
31, 1986. The GIC Segment had total assets of $2.67 billion at March 31, 1997
which are not reflected in total assets within The Equitable's consolidated
balance sheet but are netted against total GIC Segment liabilities. The
Equitable experienced pre-tax losses from operations in the GIC Segment of $17.3
million, $10.4 million, $23.7 million, $25.1 million and $21.7 million in the
three months ended March 31, 1997 and 1996 and for the years 1996, 1995 and
1994, respectively. All such pre-tax losses were charged to the GIC Segment loss
allowances.
The Equitable's quarterly process for evaluating the loss provisions applies
the current period's results of discontinued operations against the allowance,
re-estimates future losses, and adjusts the provisions, if appropriate.
Additionally, as part of The Equitable's annual planning process, investment and
benefit cash flow projections are prepared. The evaluations performed for the
fourth quarter of 1996 and the first quarter of 1997 resulted in management's
decision to strengthen the loss provisions by $129.0 million and $5.1 million,
respectively, resulting in post-tax charges of $83.8 million and $3.3 million to
discontinued operations' results for the fourth quarter of 1996 and the first
quarter of 1997, respectively.
Management believes the loss provisions for Wind-Up Annuities and GIC
contracts at March 31, 1997 (aggregating $246.9 million) are adequate to provide
for all future losses; however, the determination of loss provisions continues
to involve numerous estimates and subjective judgments regarding the expected
performance of discontinued operations investment assets. There can be no
assurance the losses provided for will not differ from the losses ultimately
realized. To the extent actual results or future projections of discontinued
operations differ from management's current best estimates and assumptions
underlying the loss provisions, the difference would be reflected in the
consolidated statements of earnings in discontinued operations. In particular,
to the extent income, sales proceeds and holding periods for equity real estate
differ from management's previous assumptions, periodic adjustments to the loss
provisions are likely to result. See Footnotes 2, 8 and 9 to the "Selected
Consolidated Financial Data" herein and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Discontinued Operations" in the
1996 10-K and Note 9 of Notes to Consolidated Financial Statements in the First
Quarter 10-Q.
VOLATILE NATURE OF SECURITIES BUSINESS
In recent periods, DLJ has contributed a significant portion of The
Equitable's earnings. In October 1995, DLJ completed an initial public offering
which reduced The Equitable's ownership position in DLJ common stock to
approximately 80% (78% at the date hereof). Assuming full vesting of certain
forfeitable restricted stock units and the exercise of stock options granted to
certain DLJ employees in connection
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with the initial public offering and all other vested DLJ employee stock
options, The Equitable's ownership position in DLJ common stock would be reduced
to approximately 63%. The securities industry generally experienced favorable
market conditions in 1996, as strong rallies in the stock and bond markets and
strong trading volumes on all major exchanges led to increased merger and
acquisition activity as well as underwriting activity. Although the strong
conditions that existed in 1996 continued through the first quarter of 1997,
certain market factors weakened from the fourth quarter of 1996. DLJ's principal
business activities, investment and merchant banking, securities sales and
trading and correspondent brokerage services are, by their nature, highly
competitive and subject to various risks, volatile trading markets and
fluctuations in the volume of market activity. Consequently, DLJ's net income
and revenue have been, and are likely to continue to be, subject to wide
fluctuations, reflecting the impact of many factors beyond DLJ's control,
including securities market conditions, the level and volatility of interest
rates, competitive conditions and the size and timing of transactions. There can
be no assurance that such fluctuations in DLJ's earnings will not affect the
level of The Equitable's future earnings. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Combined Results of
Continuing Operations by Segment--Investment Services" in the First Quarter 10-Q
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations--Combined Results of Operations--Combined Results of Continuing
Operations by Segment--Investment Services" in the 1996 10-K.
For a discussion of Alliance's acquisition of Cursitor Holdings, L.P. and
Cursitor Holdings Limited (collectively, "Cursitor") and the potential
impairment of that investment see "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Combined Results of Operations by
Segment--Investment Services--Alliance" in the First Quarter 10-Q.
PAYMENT OF DIVIDENDS AND LIQUIDITY
The Company's ability to make cash payments with respect to its securities,
including the payment of dividends on its Common Stock, depends on the
availability of adequate sources of funds. The New York Insurance Law gives the
Superintendent of Insurance of the State of New York (the "New York
Superintendent") broad discretion in determining whether the financial condition
of a New York domiciled insurer, such as Equitable Life, supports the payment of
dividends to its shareholders. Dividends from Equitable Life are not expected to
be a source of liquidity for the Company for several years. Management believes
the Company's primary sources of liquidity will be sufficient to meet its cash
requirements for several years. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources--Liquidity Requirements" and "--Liquidity Sources" in the 1996 10-K.
RATINGS
Ratings are an important factor in establishing the competitive position of
insurance companies. A significant downgrade in the financial strength or
claims-paying ratings of Equitable Life could have a material adverse effect on
the Insurance Group's business, liquidity and results of operations. For a
discussion of the Insurance Group's current ratings, see "The
Equitable--Insurance Business" herein and "Business--Competition--Insurance and
Annuities" in the 1996 10-K.
RISK-BASED AND STATUTORY CAPITAL
Since 1993, life insurers, including Equitable Life, have been subject to
certain risk-based capital ("RBC") guidelines. The RBC guidelines provide a
method to measure the adjusted capital (statutory capital and surplus plus the
asset valuation reserve and other adjustments) that a life insurance company
should have for regulatory purposes, taking into account the risk
characteristics of the company's investments and products. A life insurance
company's RBC ratio will vary over time depending upon many factors, including
its earnings, the mix of assets in its investment portfolio, the nature of the
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products it sells and its rate of sales growth. Under the RBC formula, Equitable
Life's year end RBC ratio depends in part on the closing price of units
representing assignments of beneficial ownership of limited partnership
interests in Alliance (the "Alliance Units") on the last trading day of the
year. At December 31, 1996, the valuation formula for Alliance Units increased
the statutory carrying value of Equitable Life's investment in Alliance Units to
$1.06 billion from $914.3 million at December 31, 1995, compared to a statutory
carrying value based on adjusted cost of $292.3 million. The management of
Equitable Life has begun to examine possible responses to the expiration on
December 31, 1997 of the exemption from Federal income taxes for publicly traded
limited partnerships and is discussing with regulators alternative bases on
which to value its Alliance holdings for statutory purposes in the event
Equitable Life were to cease to own publicly traded Alliance Units. Management
believes that these discussions should result in an approach which would, in
such event, continue to take into account for statutory purposes a significant
portion of the value of Equitable Life's investment in Alliance in excess of
such statutory carrying value based on adjusted cost. If Equitable Life were to
cease to own publicly traded Alliance Units, and if a significant portion of
such excess were not recognized for statutory purposes, and if other offsetting
corporate actions available to Equitable Life were not taken, Equitable Life
would have a significant decline in its statutory capital and RBC ratio, which
may adversely affect the market's perception of the Insurance Group relative to
its principal competitors and could, therefore, make it more difficult to market
certain of its insurance and annuity products and also result in higher levels
of surrenders and withdrawals. See "The Equitable--Investment Business" herein
and "Management's Discussion and Analysis of Financial Conditions and Results of
Operations--Liquidity and Capital Resources--Insurance Group--Risk-Based
Capital" in the 1996 10-K.
The RBC guidelines are intended to be a regulatory tool only, and are not
intended as a means to rank insurers generally. However, comparisons of RBC
ratios of life insurers have become generally available. Equitable Life was
above its target RBC ratio at year end 1996. Management believes that
principally because of the RBC formula's treatment of Equitable Life's large
holdings of subsidiary common stock (including its interests in Alliance, DLJ
and, until the completion of its pending sale, Equitable Real Estate), equity
real estate and mortgages, Equitable Life's year end 1996 RBC ratio was lower
than those of its competitors in the life insurance industry. See
"Business--Regulation--Risk-Based Capital" in the 1996 10-K.
The NAIC has undertaken a comprehensive codification of statutory accounting
practices for insurers. The resulting changes, once the codification project has
been completed and the new principles adopted and implemented, could have a
significant adverse effect on the Insurance Group's statutory results and
financial position. The codification is not expected to become effective until
1998 or later.
CHANGES IN INTEREST RATES
Changes in prevailing interest rates can affect both the Insurance Group's
investment results and its results of operations. For a discussion of the
effects on the Insurance Group of changes in prevailing interest rates, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Combined Results of Operations--Combined Results of Continuing
Operations by Segment--Margins on Individual Insurance and Annuity Products" in
the 1996 10-K.
PRINCIPAL STOCKHOLDER
AXA is the Company's largest stockholder, beneficially owning at December
31, 1996 (i) 60.8% of the outstanding shares of Common Stock (63.6% assuming
conversion of the Company's convertible preferred stock owned by AXA) and (ii)
$392.2 million of the Company's Series E Convertible Preferred Stock.
Accordingly, AXA currently beneficially owns, without acquiring any additional
shares of Common Stock, shares of Common Stock in an amount sufficient to permit
it to control the outcome of any stockholder vote, including any vote relating
to the election of directors to the Company's Board of
9
<PAGE>
Directors. In May 1997, Compagnie UAP merged into AXA, with AXA as the surviving
corporation, effective retroactive to January 1, 1997. For a discussion of this
transaction, see "Security Ownership of Certain Beneficial Owners and
Management--Beneficial Ownership of Common Stock by the AXA Group" in the 1996
10-K.
Under a Standstill and Registration Rights Agreement, dated as of July 18,
1991, as amended (the "Standstill Agreement"), between the Company and AXA, AXA
currently has certain demand and piggyback registration rights with respect to
the Common Stock owned by it and has certain preemptive rights entitling it to
participate in any sale by the Company of voting securities to the extent
necessary to maintain AXA's percentage of voting power. However, all other
contractual restrictions in the Standstill Agreement, including restrictions on
the ability of AXA and certain affiliates to purchase voting securities, have
expired and AXA and such affiliates are currently free to acquire additional
shares of Common Stock. Neither AXA nor any of its affiliates has any obligation
to provide additional capital or credit support to The Equitable. See
"Business--Principal Shareholder" in the 1996 10-K.
SELLING STOCKHOLDER
The SECT Trust was established in 1993 to provide a source of funding for a
portion of the obligations arising under the Plans. The SECT Trust is intended
to be a grantor trust within the meaning of Section 671 of the Internal Revenue
Code. In the event of insolvency of the Company, the SECT Trust shall be subject
to the claims of the Company's general creditors.
The Offered Shares were or will be issued to the SECT Trust upon conversion
of certain of the shares of the Company's Series D Convertible Preferred Stock
purchased by the SECT Trust in a private transaction in 1993. The Company agreed
under a 1993 agreement establishing the SECT Trust to prepare and file a
registration statement with respect to any shares of Common Stock to be sold by
the SECT Trust.
As of March 31, 1997, the SECT Trust held 60,000 shares of Series D
Convertible Preferred Stock which are convertible into 11,940,299 shares of
Common Stock, subject to certain anti-dilution adjustments, or approximately 6%
of the Company's outstanding shares of Common Stock after giving effect to such
conversion.
USE OF PROCEEDS
The SECT Trustee will contribute the net proceeds from the sale of the
Offered Shares to the Plans, in accordance with instructions from the Committee,
to fund a portion of the obligations arising thereunder. Pending such use, such
net proceeds may be invested temporarily in short-term marketable securities. In
consideration of such contributions to the Plans, the Company's subsidiaries
sponsoring such Plans will pay the Company an amount equal to any such
contributions.
10
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected historical consolidated financial
information for The Equitable. The selected historical consolidated financial
information (other than General Account Investment Assets and assets under
management) at December 31, 1996 and 1995 and for each of the years in the
three-year period ended December 31, 1996 has been derived from consolidated
financial statements audited by Price Waterhouse LLP, independent accountants,
included in the 1996 10-K incorporated by reference herein and should be read in
conjunction with and is qualified by reference to such statements and related
notes. The selected historical consolidated financial information (other than
General Account Investment Assets and assets under management) at December 31,
1994, 1993 and 1992 and for the two-year period ended December 31, 1993 have
been derived from consolidated financial statements not included or incorporated
herein. The selected historical consolidated financial information at and for
the three months ended March 31, 1997 and 1996 (other than General Account
Investment Assets and assets under management) has been derived from the
Company's unaudited financial statements included in the First Quarter 10-Q
incorporated by reference herein and should be read in conjunction with and is
qualified by reference to such statements and related notes. This unaudited
interim information reflects, in the view of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
such information. Results for the three months ended March 31, 1997 are not
necessarily indicative of results which may be expected for any other interim
period or for the year as a whole.
11
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA--CONTINUED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
---------------------- ----------------------------------------------
1997 1996 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
CONSOLIDATED STATEMENTS OF EARNINGS
DATA(1)
REVENUES
Universal life and
investment-type product policy
fee income..................... $ 230.5 $ 212.9 $ 874.0 $ 788.2 $ 715.0 $ 644.5
Premiums......................... 151.8 141.0 597.6 606.8 625.6 599.1
Net investment income(2)......... 872.0 780.5 3,308.6 3,047.4 2,838.4 2,715.0
Investment gains, net(3)(4)...... 178.0 170.3 599.2 552.3 338.6 526.4
Commissions, fees and other
income......................... 768.5 599.3 2,800.5 2,142.4 1,748.4 1,851.5
Contribution from the Closed
Block(3)(11)................... 35.8 32.1 125.0 143.2 137.0 137.9
---------- ---------- ---------- ---------- ---------- ----------
Total revenues................. 2,236.6 1,936.1 8,304.9 7,280.3 6,403.0 6,474.4
---------- ---------- ---------- ---------- ---------- ----------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders'
account balances................. 312.9 320.6 1,271.1 1,249.2 1,202.2 1,325.6
Policyholders' benefits(5)......... 254.9 254.2 1,317.7 1,008.6 914.9 1,001.7
Other operating costs and
expenses(5)(6)(7)................ 1,392.7 1,147.2 5,200.3 4,377.3 3,739.3 3,770.8
---------- ---------- ---------- ---------- ---------- ----------
Total benefits and other
deductions....................... 1,960.5 1,722.0 7,789.1 6,635.1 5,856.4 6,098.1
---------- ---------- ---------- ---------- ---------- ----------
EARNINGS FROM CONTINUING OPERATIONS
BEFORE FEDERAL INCOME TAXES AND
MINORITY INTEREST(5)............. 276.1 214.1 515.8 645.2 546.6 376.3
Federal income tax expense......... 87.4 64.7 137.4 192.3 157.0 111.7
Minority interest in net income of
consolidated subsidiaries........ 49.4 39.7 172.4 87.5 68.3 31.9
---------- ---------- ---------- ---------- ---------- ----------
Earnings (loss) from continuing
operations(5).................... 139.3 109.7 206.0 365.4 321.3 232.7
Discontinued operations, net of
Federal income
taxes(2)(5)(6)(8)(9)............. (3.3) -- (83.8) -- -- --
Extraordinary charge for
demutualization expenses......... -- -- -- -- -- --
Cumulative effect of accounting
changes, net of Federal income
taxes(10)........................ -- (23.1) (23.1) -- (27.1) --
---------- ---------- ---------- ---------- ---------- ----------
Net Earnings (Loss)................ $ 136.0 $ 86.6 $ 99.1 $ 365.4 $ 294.2 $ 232.7
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Net earnings after
demutualization.................. $ 136.0 $ 86.6 $ 99.1 $ 365.4 $ 294.2 $ 232.7
Dividends on preferred stocks...... 6.7 6.7 26.7 26.7 80.1 65.4
---------- ---------- ---------- ---------- ---------- ----------
Net Earnings (Loss) Applicable to
Common Shares.................... $ 129.3 $ 79.9 $ 72.4 $ 338.7 $ 214.1 $ 167.3
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
NET EARNINGS (LOSS) PER COMMON
SHARE:
Assuming No Dilution............. $ .68 $ .43 $ .36 $ 1.83 $ 1.49 $ 1.18
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Assuming Full Dilution........... $ .62 $ .41 $ .36 $ 1.74 $ 1.37 $ 1.08
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Cash Dividend Per Common Share..... $ .05 $ .05 $ .20 $ .20 $ .20 $ .20
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
<CAPTION>
1992
----------
<S> <C>
CONSOLIDATED STATEMENTS OF EARNINGS
DATA(1)
REVENUES
Universal life and
investment-type product policy
fee income..................... $ 571.7
Premiums......................... 1,185.3
Net investment income(2)......... 2,681.5
Investment gains, net(3)(4)...... 371.8
Commissions, fees and other
income......................... 1,412.5
Contribution from the Closed
Block(3)(11)................... 51.5
----------
Total revenues................. 6,274.3
----------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders'
account balances................. 1,440.8
Policyholders' benefits(5)......... 1,754.0
Other operating costs and
expenses(5)(6)(7)................ 3,070.3
----------
Total benefits and other
deductions....................... 6,265.1
----------
EARNINGS FROM CONTINUING OPERATIONS
BEFORE FEDERAL INCOME TAXES AND
MINORITY INTEREST(5)............. 9.2
Federal income tax expense......... 12.8
Minority interest in net income of
consolidated subsidiaries........ 35.0
----------
Earnings (loss) from continuing
operations(5).................... (38.6)
Discontinued operations, net of
Federal income
taxes(2)(5)(6)(8)(9)............. --
Extraordinary charge for
demutualization expenses......... (101.3)
Cumulative effect of accounting
changes, net of Federal income
taxes(10)........................ 4.9
----------
Net Earnings (Loss)................ $ (135.0)
----------
----------
Net earnings after
demutualization.................. $ --
Dividends on preferred stocks...... 14.5
----------
Net Earnings (Loss) Applicable to
Common Shares.................... $ (14.5)
----------
----------
NET EARNINGS (LOSS) PER COMMON
SHARE:
Assuming No Dilution............. $ (.10)
----------
----------
Assuming Full Dilution........... $ (.10)
----------
----------
Cash Dividend Per Common Share..... $ .10
----------
----------
</TABLE>
12
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA--CONTINUED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
---------------------- ----------------------------------------------
1997 1996 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------- ----------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
REVENUES BY SEGMENT:
Insurance operations(2)(3)(4)...... $ 983.1 $ 905.7 $ 3,742.9 $ 3,614.6 $ 3,507.4 $ 3,464.4
Investment services(4)............. 1,250.5 1,027.3 4,540.0 3,689.8 2,908.6 3,024.1
Corporate, other and
eliminations..................... 3.0 3.1 22.0 (24.1) (13.0) (14.1)
---------- ---------- ---------- ---------- ---------- ----------
Total Revenues..................... $ 2,236.6 $ 1,936.1 $ 8,304.9 $ 7,280.3 $ 6,403.0 $ 6,474.4
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE FEDERAL INCOME
TAXES AND MINORITY INTEREST, BY
SEGMENT:
Insurance operations............... $ 126.8 $ 84.6 $ (36.6) $ 303.1 $ 327.5 $ 128.2
Investment services................ 181.7 159.5 663.2 466.3 375.2 359.3
Corporate interest expense and
other eliminations............... (32.4) (30.0) (110.8) (124.2) (156.1) (111.2)
---------- ---------- ---------- ---------- ---------- ----------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE FEDERAL INCOME
TAXES AND MINORITY INTEREST...... $ 276.1 $ 214.1 $ 515.8 $ 645.2 $ 546.6 $ 376.3
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
GENERAL ACCOUNT INVESTMENT ASSETS
(AT PERIOD END)(12)(13).......... $ 35,160.1 $ 33,872.6 $ 34,676.0 $ 33,777.1 $ 32,338.6 $ 32,695.4
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
ASSETS UNDER MANAGEMENT (AT PERIOD
END):
The Equitable...................... $ 56,684 $ 50,819 $ 54,990 $ 50,900 $ 47,376 $ 51,003
Third Party(14).................... 184,137 161,231 184,784 144,441 125,145 121,643
---------- ---------- ---------- ---------- ---------- ----------
Total.............................. $ 240,821 $ 212,050 $ 239,774 $ 195,341 $ 172,521 $ 172,646
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
CONSOLIDATED BALANCE SHEETS DATA
(AT PERIOD END):(1)
Total assets(13)(15)............... $139,601.8 $116,394.7 $128,811.2 $113,716.2 $ 94,785.3 $100,382.3
Long-term debt..................... 4,012.3 3,994.3 3,920.7 3,852.0 2,925.9 2,662.3
Total liabilities(13)(15).......... 135,716.7 112,496.2 124,823.2 109,607.5 91,605.2 96,670.9
Redeemable preferred stock......... 264.9
Shareholders' equity............... 3,885.1 3,898.5 3,988.0 4,108.7 3,180.1 3,446.5
Book value per common share........ 18.49 18.72 19.12 19.88 14.93 16.83
<CAPTION>
1992
----------
<S> <C>
REVENUES BY SEGMENT:
Insurance operations(2)(3)(4)...... $ 4,069.1
Investment services(4)............. 2,314.4
Corporate, other and
eliminations..................... (109.2)
----------
Total Revenues..................... $ 6,274.3
----------
----------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE FEDERAL INCOME
TAXES AND MINORITY INTEREST, BY
SEGMENT:
Insurance operations............... $ (158.7)
Investment services................ 324.8
Corporate interest expense and
other eliminations............... (156.9)
----------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE FEDERAL INCOME
TAXES AND MINORITY INTEREST...... $ 9.2
----------
----------
GENERAL ACCOUNT INVESTMENT ASSETS
(AT PERIOD END)(12)(13).......... $ 31,419.7
----------
----------
ASSETS UNDER MANAGEMENT (AT PERIOD
END):
The Equitable...................... $ 45,141
Third Party(14).................... 104,784
----------
Total.............................. $ 149,925
----------
----------
CONSOLIDATED BALANCE SHEETS DATA
(AT PERIOD END):(1)
Total assets(13)(15)............... $ 80,743.7
Long-term debt..................... 1,897.9
Total liabilities(13)(15).......... 78,010.9
Redeemable preferred stock......... 262.1
Shareholders' equity............... 2,470.7
Book value per common share........ 15.60
</TABLE>
- ------------------------------
(1) In 1996, The Equitable changed its method of accounting for long-duration
participating life insurance contracts, primarily within the Closed Block,
in accordance with the provisions prescribed by Statement of Financial
Accounting Standards ("SFAS") No. 120, "Accounting and Reporting by Mutual
Life Insurance Enterprises and by Insurance Enterprises for Certain
Long-Duration Participating Contracts". The financial statements for the
three months ended March 31, 1996, and the years ended December 31, 1995,
1994, 1993 and 1992 have been restated for the change. Shareholders' equity
increased $194.9 million as of January 1, 1992 for the effect of retroactive
application of the new method. See Note 2 of Notes to Consolidated Financial
Statements in the 1996 10-K and Note 2 of Notes to Consolidated Financial
Statements in the First Quarter 10-Q.
(2) Net investment income and discontinued operations included $14.8 million,
$37.6 million, $114.3 million, $154.6 million, $219.7 million, $197.1
million and $132.8 million for the three months ended March 31, 1997 and
1996 and for the years ended December 31, 1996, 1995, 1994, 1993 and 1992,
respectively, recognized as investment income by continuing operations and
as interest expense by the GIC Segment relating to intersegment loans.
(3) Investment gains, net, included additions to asset valuation allowances and
writedowns of publicly traded securities for continuing operations
aggregating $25.1 million ($34.3 million including amounts related to the
Closed Block), $51.4 million ($65.5 million including amounts related to the
Closed Block), $178.6 million ($205.8 million including amounts related to
the Closed Block), $197.6 million ($224.9 million including amounts related
to the Closed Block), $100.5 million ($137.5 million including amounts
related to the Closed Block), $108.7 million ($147.3 million including
amounts related to the Closed Block) and $278.6 million ($300.2 million
including amounts related to the Closed Block) for the three months ended
March 31, 1997 and 1996 and for the years ended December 31, 1996, 1995,
1994, 1993 and 1992, respectively. Additionally, as a result of the adoption
of SFAS No. 121, $152.4 million of allowances on assets held for investment
were released and impairment losses of $144.0 million ($149.6 million
including amounts related to the Closed Block) were recognized on real
estate held and used as of January 1, 1996.
(4) Investment gains, net for the three months ended March 31, 1996 included a
$20.6 million gain resulting from the issuance of Alliance Units to third
parties upon completion of the Cursitor acquisition. Investment gains, net
for the year ended December 31, 1996 included a $79.4 million gain (before
variable compensation and related expenses) related to the sale of shares of
13
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA--CONTINUED
one investment in the DLJ long-term corporate development portfolio.
Investment gains, net for the year ended December 31, 1995 included a $34.7
million gain resulting from the sale of a minority interest in DLJ.
Investment gains, net for the year ended December 31, 1994 included a $52.4
million gain related to the sale by Alliance of 4.96 million of newly issued
Alliance Units. Investment gains, net for the year ended December 31, 1993
included a $49.3 million gain (before variable compensation and related
expenses) related to the sale of shares on that same investment in the DLJ
long-term corporate development portfolio. Investment gains, net for the
year ended December 31, 1992 included a gain on that same investment of
$166.2 million, which consisted of an $82.4 million net gain on shares sold
and an $83.8 million investment gain from the recognition of an increase in
fair value of the investment.
(5) During the fourth quarter of 1996, The Equitable completed experience and
loss recognition studies of participating group annuity contracts and
conversion annuities ("Pension Par") and disability income ("DI") products.
Additionally, The Equitable's management reviewed the loss provisions for
the GIC Segment lines of business. As a result of these studies, $145.0
million of unamortized DI deferred policy acquisition costs ("DAC") were
written off and reserves were strengthened by $248.0 million for these lines
of business. Consequently, earnings from continuing operations for the year
ended December 31, 1996 decreased by $255.5 million ($393.0 million pre-tax)
and net earnings decreased by $339.3 million. See Notes 2 and 7 of Notes to
Consolidated Financial Statements in the 1996 10-K.
(6) Other operating costs and expenses included corporate interest expenses of
$34.7 million, $34.6 million, $139.6 million, $100.5 million, $50.6 million,
$28.4 million and $58.4 million for the three months ended March 31, 1997
and 1996 and for the years ended December 31, 1996, 1995, 1994, 1993 and
1992, respectively, and interest credited to the discontinued GIC Segment of
$88.2 million, $97.7 million and $94.2 million for the years ended December
31, 1994, 1993 and 1992, respectively.
(7) Other operating costs and expenses included provisions associated with
employee termination and exit costs of $5.2 million, $0.7 million, $24.4
million, $39.2 million, $20.4 million, $96.4 million and $24.8 million for
the three months ended March 31, 1997 and 1996 and for the years ended
December 31, 1996, 1995, 1994, 1993 and 1992, respectively (including $5.2
million, $0.7 million, $22.3 million, $28.1 million, $20.4 million, $45.6
million and $24.8 million attributable to Insurance Operations for the three
months ended March 31, 1997 and 1996 and for the years ended December 31,
1996, 1995, 1994, 1993 and 1992, respectively; and $2.1 million, $11.1
million and $50.8 million attributable to Investment Services for the years
ended December 31, 1996, 1995 and 1993, respectively).
(8) Discontinued operations, net of Federal income taxes, included additions to
asset valuation allowances and writedowns of fixed securities and, in 1996,
equity real estate for the discontinued GIC Segment aggregating $3.1
million, $3.7 million, $36.0 million, $38.2 million, $50.8 million, $53.0
million and $105.6 million for the three months ended March 31, 1997 and
1996 and for the years ended December 31, 1996, 1995, 1994, 1993, and 1992,
respectively. Additionally, the implementation of SFAS No. 121 as of January
1, 1996 resulted in the release of existing valuation allowances of $71.9
million on equity real estate and recognition of impairment losses of $69.8
million on real estate held and used.
(9) Discontinued operations, net of Federal income taxes, included GIC Segment
after-tax losses of $3.3 million and $83.8 million for the three months
ended March 31, 1997 and for the year ended December 31, 1996, respectively.
Pre-tax losses of $17.3 million, $10.4 million, $23.7 million, $25.1
million, $21.7 million, $24.7 million and $160.9 million for the three
months ended March 31, 1997 and 1996 and for the years ended December 31,
1996, 1995, 1994, 1993 and 1992, respectively, were charged to the GIC
Segment allowance for future losses. See Notes 9 and 7 of Notes to
Consolidated Financial Statements included in the First Quarter 10-Q and the
1996 10-K, respectively.
(10) Cumulative effect of accounting changes, net of Federal income taxes,
included a charge of $23.1 million, net of a Federal income tax benefit of
$12.4 million, related to SFAS No. 121 for the three months ended March 31,
1996 and the year ended December 31, 1996, a charge of $27.1 million, net of
a Federal income tax benefit of $14.6 million related to SFAS No. 112 for
the year ended December 31, 1994 and a credit of $252.3 million related to
SFAS No. 109 and a charge of $247.4 million, net of a Federal income tax
benefit of $130.9 million, related to SFAS No. 106 for the year ended
December 31, 1992.
(11) The results of the Closed Block for the periods subsequent to July 22, 1992
are reported on one line in the consolidated statements of earnings.
Accordingly, the line-by-line statements of earnings data are not comparable
for all periods presented. Total assets and total liabilities include the
assets and liabilities of the Closed Block, respectively, and therefore
amounts are comparable for all periods presented. See Notes 8 and 6 of Notes
to Consolidated Financial Statements in the First Quarter 10-Q and the 1996
10-K, respectively.
(12) General Account Investment Assets does not include the GIC Segment
Investment Assets, which had an aggregate carrying value of $2.44 billion,
$3.47 billion, $2.49 billion, $3.26 billion, $3.90 billion, $4.82 billion
and $5.73 billion at March 31, 1997 and 1996 and at December 31, 1996, 1995,
1994, 1993, and 1992, respectively.
(13) Total assets, total liabilities and General Account Investment Assets
included the assets and liabilities of the Closed Block and, therefore, are
comparable for all periods presented. See Notes 8 and 6 of Notes to
Consolidated Financial Statements included in the First Quarter 10-Q and the
1996 10-K, respectively.
(14) Third party assets under management included Separate Accounts assets under
management of $30.22 billion, $25.98 billion, $29.87 billion, $24.72
billion, $20.67 billion, $19.74 billion and $18.07 billion at March 31, 1997
and 1996 and at December 31, 1996, 1995, 1994, 1993 and 1992, respectively.
(15) Assets and liabilities relating to the discontinued GIC Segment are not
reflected on the consolidated balance sheets of The Equitable, except that
as of March 31, 1997 and 1996 and December 31, 1996, 1995, 1994, 1993 and
1992, the net amount due to continuing operations for intersegment loans
made to the discontinued GIC Segment in excess of continuing operations'
obligations to fund the discontinued GIC Segment's accumulated deficit (the
amount required to make assets equal to liabilities) is reflected as
"Amounts due from discontinued GIC Segment." In 1995, continuing operations
transferred $1,215.4 million in cash to the GIC Segment in settlement of its
obligation. Subsequently, the GIC Segment remitted $1,155.4 million in cash
to continuing operations in partial repayment of borrowings by the GIC
Segment. See Notes 9 and 7 of Notes to Consolidated Financial Statements
included in the First Quarter 10-Q and the 1996 10-K, respectively.
14
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The following summary descriptions with respect to the capital stock of the
Company are summaries and are subject to the detailed provisions of the
Company's restated certificate of incorporation, as amended (the "Restated
Certificate") and by-laws (the "By-Laws"). These statements do not purport to be
complete, do not give effect to the provisions of statutory or common law, and
are subject to, and are qualified in their entirety by reference to, the terms
of the Restated Certificate and the By-Laws.
The Restated Certificate authorizes the Company to issue 510 million shares
of capital stock, of which 500 million shares are designated as Common Stock
having a par value of $.01 per share and 10 million shares are designated as
preferred stock having a par value of $1.00 per share. The preferred stock may
be issued by the Company's Board of Directors in one or more series and may have
such voting rights, if any, designations, preferences and relative,
participating, optional and other special rights, and such qualifications,
limitations and restrictions, as the Board of Directors (or a duly authorized
committee thereof) may fix by resolution or resolutions. Moreover, the Company's
Board of Directors may issue such preferred stock from time to time in
transactions that may not require the approval of the stockholders of the
Company and the preferences, designations, voting and other rights of any such
shares of preferred stock may materially limit or qualify the rights of the
outstanding shares of Common Stock. As of the date hereof, there are three
series of preferred stock outstanding. For a description of the Company's
preferred stock, see Note 10 to Notes to Consolidated Financial Statements in
the 1995 10-K.
DESCRIPTION OF COMMON STOCK
DIVIDENDS. Subject to the rights of any holders of preferred stock, each
holder of Common Stock is entitled to receive dividends out of funds legally
available therefor when, as and if declared by the Company's Board of Directors.
Dividends may be paid in cash, property or shares of the Company's capital
stock.
VOTING RIGHTS. The holders of Common Stock possess exclusive voting rights
in the Company, except to the extent that the Company's Board of Directors shall
have designated voting power with respect to any preferred stock issued. Each
holder of Common Stock is entitled, on each matter submitted for a vote of
holders of Common Stock, to one vote for each share of such stock registered in
such holder's name on the books of the Company. Except as otherwise required by
law and subject to the rights of any holders of preferred stock, the presence in
person or by proxy of the holders of record of a majority of the shares entitled
to vote at a meeting of stockholders constitutes a quorum for the transaction of
business at that meeting. Actions requiring approval of stockholders will
generally require approval by a majority vote at a meeting at which a quorum is
present, except that at each stockholder meeting for the election of directors,
provided a quorum is present, directors will be elected by a plurality of votes
validly cast in the election. Stockholders will not have any right to cumulate
votes in the election of directors.
The holders of preferred stock issued by the Company may be given the right
to vote for the election of directors generally or to elect a specified number
or percentage of the members of the Company's Board of Directors. The number of
directors that may be elected by the holders of any class or series of preferred
stock having the right, voting separately by class or series, to elect directors
will be in addition to the number of directors fixed by or pursuant to the
Restated Certificate.
LIQUIDATION RIGHTS. In the event of liquidation, dissolution or winding-up
of the Company, the holders of the Common Stock will be entitled to share
ratably in the distribution of all assets of the Company remaining after payment
of all of the Company's debts and liabilities and of all sums to which holders
of any preferred stock may be entitled.
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PREEMPTIVE RIGHTS. Holders of the Common Stock are not generally entitled
to preemptive rights with respect to any shares of capital stock which may be
issued by the Company. Under the Standstill Agreement, AXA has preemptive rights
with respect to voting securities and securities convertible into voting
securities of the Company.
MISCELLANEOUS. The issued and outstanding shares of Common Stock are duly
authorized, validly issued, fully paid and nonassessable and, upon issuance as
herein described, the Offered Shares will be duly authorized, validly issued,
fully paid and nonassessable.
The transfer agent for the Common Stock is First Chicago Trust Company of
New York.
RESTRICTIONS ON ACQUISITIONS OF
SECURITIES OF THE COMPANY
Section 7312 of the New York Insurance Law ("Section 7312") provides that,
for a period of five years after the effective date of Equitable Life's
demutualization (July 22, 1992), no person may directly or indirectly offer to
acquire or acquire in any manner the beneficial ownership (defined as the power
to vote or dispose of, or to direct the voting or disposition of a security) of
5% or more of any class of the Company's voting security (which term includes
the Common Stock) or any class of security convertible into a voting security of
the Company without the prior approval of the New York Superintendent. Pursuant
to Section 7312, voting securities acquired in excess of the 5% threshold
without such prior approval will be deemed non-voting.
State insurance laws also regulate changes of control (generally presumed
upon acquisitions of 10% or more of securities then having voting power for the
election of directors) of insurance holding companies, such as the Company.
State insurance laws, including the New York Insurance Law, require certain
filings concerning changes in ownership of insurance companies. Although the
specific provisions vary, insurance laws in states such as New York generally
prohibit a person from acquiring a controlling interest in an insurer
incorporated in the state or in any other person controlling such insurer unless
the insurance regulatory authority has approved the proposed acquisition in
accordance with the applicable regulations. In accordance with these
restrictions, the issuance of Common Stock and preferred stock to AXA required
the prior approval of the New York Superintendent and the prior approval of the
insurance regulatory authorities in the other states where Equitable Life's
insurance company subsidiaries were domiciled. AXA has obtained the requisite
approvals described above and in the preceding paragraph for its acquisitions of
Common Stock and the Company's preferred stock.
In addition, Section 203 of the Delaware General Corporation law prohibits
an "interested stockholder" of a Delaware corporation from engaging in certain
business combinations with the corporation, including mergers or consolidations
or acquisitions of additional shares of the corporation, for a period of three
years following the date the stockholder becomes an "interested stockholder." An
"interested stockholder" is defined to include persons owning directly or
indirectly 15% or more of the outstanding voting stock of a corporation. The
prohibitions under Section 203 are not applicable in certain circumstances,
including those in which (i) the business combination or the transaction which
results in the stockholder becoming an "interested stockholder" is approved by
the corporation's board of directors prior to the date the stockholder becomes
an "interested stockholder," (ii) the "interested stockholder" upon consummation
of such transaction owns at least 85% of the voting stock of the corporation
outstanding prior to such transaction or (iii) the corporation has elected not
to be governed by such prohibitions. The Company's Board of Directors approved
AXA's acquisition of Common Stock as part of its approval of AXA's original
investment and, accordingly, the prohibitions under Section 203 do not apply to
any business combination with AXA.
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PLAN OF DISTRIBUTION
The SECT Trust, at the discretion of the Committee, may from time to time
offer and sell all or a portion of the Offered Shares to or through one or more
underwriters, through one or more dealers or agents or directly to purchasers.
The offer and sale of the Offered Shares may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Sales may be effected from time to time in one or more transactions (which
may involve block transactions) (i) on the NYSE, or on other national securities
exchanges on which the Common Stock may be traded, in transactions that may
include special offerings, exchange distributions pursuant to and in accordance
with the rules of such exchanges or otherwise, (ii) in the over-the-counter
market, (iii) in transactions otherwise than on such exchanges or in the
over-the-counter market, (iv) in negotiated transactions through the writing of
options on shares of Common Stock (whether such options are listed on an options
exchange or otherwise) or otherwise, (v) pursuant to a distribution through one
or more underwriters on a firm commitment or best-efforts basis or (vi) in a
combination of any such transactions. The SECT Trust may effect such
transactions by selling Offered Shares to or through underwriters, agents or
dealers, and such underwriters, agents or dealers may receive compensation in
the form of discounts or commissions from the SECT Trust and may receive
commissions from the purchasers of Offered Shares for whom they may act as
agent, in each case in amounts which will not exceed those customary in the
types of transactions involved.
If required, a prospectus supplement to this Prospectus may be distributed
in connection with an offer and sale of the Offered Shares. Such prospectus
supplement may identify underwriters, dealers or agents participating in such
offer and sale and any discounts, commissions or other terms thereof, and may
set forth such additional information as may be determined to be required.
Offers to purchase Offered Shares may be solicited directly by the Company
and the sale thereof may be made by the SECT Trust directly to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any resale thereof.
In connection with the distribution of the Offered Shares, underwriters and
any other persons participating in such distribution may purchase and sell
Common Stock in the open market. These transactions may include over-allotment
and stabilizing transactions and, in the case of underwriters, purchases to
cover short positions created in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or retarding a decline in the market price of the Common Stock; and short
positions created by underwriters involve the sale by underwriters of a greater
number of Offered Shares than they are required to purchase from the Company in
an offering. Underwriters also may impose a penalty bid, whereby selling
concessions allowed to broker-dealers in respect of the Offered Shares may be
reclaimed by such underwriters if such Offered Shares are repurchased by the
underwriters in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the Common Stock,
which may be higher than the price that might otherwise prevail in the open
market; and these activities, if commenced, may be discontinued at any time.
These transactions may be effected on the NYSE, in the over-the-counter-market
or otherwise.
In making any offer on behalf of the SECT Trust, underwriters, agents and
any other broker or dealer may be deemed to be underwriters within the meaning
of the Securities Act, and the compensation of the underwriter, agent or other
broker or dealer may be deemed to be underwriting commissions or discounts.
17
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Underwriters, agents and dealers may be entitled under relevant agreements
with the Company and the SECT Trustee to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act.
The offering of the Offered Shares is being conducted in accordance with
Section 2720 of the NASD Conduct Rules. In addition, underwriters and other
persons participating in the distribution may not confirm sales to any
discretionary accounts without the prior specific written approval of the
customer.
Underwriters, agents and dealers who participate in offers and sales of the
Offered Shares may be customers of, engage in transactions with, or perform
services for, the Company and its subsidiaries from time to time in the ordinary
course of business.
LEGAL OPINIONS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022.
EXPERTS
The consolidated financial statements and consolidated financial statement
schedules of The Equitable as of December 31, 1996 and 1995 and for each of the
years in the three-year period ended December 31, 1996 incorporated by reference
in this Prospectus have been so incorporated in reliance on the reports of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
The United States firm of Price Waterhouse has registered as a Registered
Limited Liability Partnership (LLP) under the laws of the State of Delaware and
from August 10, 1994 has conducted its practice under the name of Price
Waterhouse LLP. All references to Price Waterhouse and the documents
incorporated herein by reference are to Price Waterhouse LLP.
ERISA MATTERS
The Company and certain affiliates of the Company, including Equitable Life,
Alliance and DLJ, may each be considered a "party in interest" within the
meaning of ERISA or a "disqualified person" within the meaning of ERISA or a
"disqualified person" within the meaning of the Internal Revenue Code of 1986,
as amended (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 Offered Shares are acquired by or on behalf of a pension or other employee
benefit plan with respect to which the Company or any of its affiliates is a
service provider, unless such Offered Shares 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. Any
such pension or employee benefit plan or other person proposing to invest in the
Offered Shares should consult with its legal counsel.
18
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NO 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, THE SECT TRUST, THE
SECT TRUSTEE, OR ANY AGENT, DEALER OR UNDERWRITER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES
IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE EQUITABLE
COMPANIES INCORPORATED SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE OF SUCH INFORMATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS
PAGE
-----
Available Information................ 2
<S> <C>
Incorporation of Certain Documents by
Reference.......................... 2
The Equitable........................ 4
Risk Factors......................... 6
Selling Stockholder.................. 10
Use of Proceeds...................... 10
Selected Consolidated Financial
Data............................... 11
Description of Capital Stock......... 15
Description of Common Stock.......... 15
Restrictions on Acquisitions of
Securities of the Company.......... 16
Plan of Distribution................. 17
Legal Opinions....................... 18
Experts.............................. 18
ERISA Matters........................ 18
</TABLE>
11,940,299 SHARES
THE EQUITABLE COMPANIES
INCORPORATED
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
---------------------
PROSPECTUS
---------------------
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth those expenses to be incurred by the Company
in connection with the issuance and distribution of the securities being
registered. Except for the Securities and Exchange Commission filing fee and the
NASD filing fee, all amounts shown are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee.................................... $ 101,905
NASD filing fee.................................................................. 30,500
Blue Sky fees and expenses....................................................... 15,000
Printing expenses................................................................ 8,000
Accountants' fees and expenses................................................... 25,000
Legal fees and expenses.......................................................... 85,000
Trustee fees and expenses........................................................ 13,000
Miscellaneous expenses........................................................... 5,595
---------
Total........................................................................ $ 284,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, as amended, provides in
regard to indemnification of directors and officers as follows:
145. Indemnification of Officers, Directors, Employees and Agents;
Insurance.
(a) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that the person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by the person in
connection with such action, suit or proceeding if the person acted in good
faith and in a manner the person reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe the person's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of NOLO CONTENDERE
or its equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which the person reasonably
believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, had reasonable cause
to believe that the person's conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense of
settlement of such action or suit if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be
made in respect
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of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(1) by a majority vote of the directors who were not parties to such action,
suit or proceeding, even though less than a quorum, or (2) if there are no
such directors, or if such directors so direct, by independent legal counsel
in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount
if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the board of directors deems
appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office.
(g) A corporation shall have 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 is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with respect
to the resulting or surviving corporation as he would have with respect to
such constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with
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<PAGE>
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with
respect to an employee benefit plan, its participants or beneficiaries; and
a person who acted in good faith and in a manner he reasonably believed to
be in the interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the
best interests of the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligation to advance
expenses (including attorneys' fees).
Article SIXTH of the Company's Restated Certificate of Incorporation
provides in regard to indemnification of directors and officers as follows:
ARTICLE SIXTH: (i) Each person who is or was or had agreed to become a
Director or officer of the Corporation, and each person who is or was or was
serving or who had agreed to serve at the request of the Board of Directors
or an officer of the Corporation as a director or officer of another
corporation (including, without limitation, The Equitable Life Assurance
Society of the United States and its subsidiaries), partnership, joint
venture, trust, employee benefit plan or other enterprise (including the
heirs, executor, administrators or estate of such person), shall be
indemnified by the Corporation, and (ii) each person who is or was or who
had agreed to become an employee or agent of the Corporation or who is or
was serving or who had agreed to serve at the request of the Board of
Directors or an officer of the Corporation as an employee or agent of
another corporation (including, without limitation, The Equitable Life
Assurance Society of the United States and its subsidiaries), partnership,
joint venture, trust, employee benefit plan or other enterprise (including
the heirs, executor, administrators or estate of such person) may be
indemnified by the Corporation, in each case in accordance with the By-Laws,
to the full extent permitted from time to time by the General Corporation
Law of the State of Delaware as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader amendment rights than
said law permitted the Corporation to provide prior to such amendment) or
any other applicable laws as presently or hereafter in effect. Without
limiting the generality or the effect of the foregoing, the Corporation may
enter into one or more agreements with any person which provide for
indemnification greater or different than provided in this Article SIXTH.
Any amendment or repeal of this Article SIXTH shall not adversely affect any
right or protection existing hereunder immediately prior to such amendment
or repeal.
Article VI of the Company's By-Laws provides in regard to indemnification of
directors and officers as follows:
Section 6.01. NATURE OF INDEMNITY. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or
she is or was or has agreed to become a Director or officer of the
Corporation, or is or was serving or has agreed to serve at the request of
the Corporation as a Director or officer of another corporation (including,
without limitation, The Equitable Life Assurance Society of the United
States and its subsidiaries), partnership, joint venture, trust or other
enterprise, including an employee benefit
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<PAGE>
plan, or by reason of any action alleged to have been taken or omitted in
such capacity, and may indemnify any person who was or is a party or is
threatened to be made a party to such an action, suit or proceeding by
reason of the fact that he or she is or was or has agreed to become an
employee or agent of the Corporation, or is or was serving or has agreed to
serve at the request of the Corporation as an employee or agent of another
corporation (including, without limitation, The Equitable Life Assurance
Society of the United States and its subsidiaries), partnership, joint
venture, trust or other enterprise, including an employee benefit plan,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him or her or on his
or her behalf in connection with such action, suit or proceeding and any
appeal therefrom, if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding had no
reasonable cause to believe his or her conduct was unlawful; except that in
the case of an action or suit by or in the right of the Corporation to
procure a judgment in its favor (i) such indemnification shall be limited to
expenses (including attorneys' fees) actually and reasonably incurred by
such person in the defense or settlement of such action or suit, and (ii) no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Delaware Court of Chancery or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses which the Delaware Court of Chancery or such
other court shall deem proper.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of NOLO CONTENDERE or its equivalent,
shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which he or she reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his
or her conduct was unlawful. [Section 145(a), (b)]
Section 6.02. SUCCESSFUL DEFENSE. To the extent that a Director,
officer, employee or agent of the Corporation has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to
in Section 6.01 hereof or in defense of any claim, issue or matter therein,
he or she shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith.
Section 6.03. DETERMINATION THAT INDEMNIFICATION IS PROPER. Any
indemnification of a Director or officer of the Corporation under Section
6.01 hereof (unless ordered by a court) shall be made by the Corporation
unless a determination is made that indemnification of the Director or
officer is not proper in the circumstances because he or she has not met the
applicable standard of conduct set forth in Section 6.01 hereof. Any
indemnification of an employee or agent of the Corporation under Section
6.01 hereof (unless ordered by a court) may be made by the Corporation upon
a determination that indemnification of the employee or agent is proper in
the circumstances because he or she has met the applicable standard of
conduct set forth in Section 6.01 hereof. Any such determination shall be
made (i) by the Board of Directors by a majority vote of a quorum consisting
of Directors who were not parties to such action, suit or proceeding, or
(ii) if such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested Directors so directs, by independent legal counsel in a
written opinion, or (iii) by the stockholders. [Section 145(d), (f)]
Section 6.04. ADVANCE PAYMENT OF EXPENSES. Expenses (including
attorneys' fees) incurred by a Director or officer in defending any civil,
criminal, administrative or investigative action, suit or proceeding shall
be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
the Director or officer to repay
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<PAGE>
such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by the Corporation as authorized in this Article
VI. Such expenses (including attorneys' fees) incurred by other employees
and agents may be so paid upon such terms and conditions, if any, as the
Board of Directors deems appropriate. The Board of Directors may authorize
the Corporation's counsel to represent such Director, officer, employee or
agent in any action, suit or proceeding, whether or not the Corporation is a
party to such action, suit or proceeding. [Section 145(e)]
Section 6.05. PROCEDURE FOR INDEMNIFICATION OF DIRECTORS AND
OFFICERS. Any indemnification of a Director or officer of the Corporation
under Sections 6.01 and 6.02, or advance of costs, charges and expenses to a
Director or officer under Section 6.04 of this Article VI, shall be made
promptly, and in any event within 30 days, upon the written request of the
Director or officer. If a determination by the Corporation that the Director
or officer is entitled to indemnification pursuant to this Article is
required, and the Corporation fails to respond within sixty days to a
written request for indemnity, the Corporation shall be deemed to have
approved such request. If the Corporation denies a written request for
indemnity or advancement of expenses, in whole or in part, or if payment in
full pursuant to such request is not made within 30 days, the right to
indemnification or advances as granted by this Article VI shall be
enforceable by the Director or officer in any court of competent
jurisdiction. Such person's cost and expenses incurred in connection with
successfully establishing his or her right to indemnification, in whole or
in part, in any such action shall also be indemnified by the Corporation. It
shall be a defense to any such action (other than an action brought to
enforce a claim for the advance of costs, charges and expenses under Section
6.04 of this Article VI where the required undertaking, if any, has been
received by the Corporation) that the claimant has not met the standard of
conduct set forth in Section 6.01 of this Article, but the burden of proving
such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, its independent legal
counsel, and its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper
in the circumstances because he or she has met the applicable standard of
conduct set forth in Section 6.01 of this Article VI, nor the fact that
there has been an actual determination by the Corporation (including its
Board of Directors, its independent legal counsel, and its stockholders)
that the claimant has not met such applicable standard of conduct, shall be
a defense to the action or create a presumption that the claimant has not
met the applicable standard of conduct.
Section 6.06. SURVIVAL, PRESERVATION OF OTHER RIGHTS. The foregoing
indemnification provisions shall be deemed to be a contract between the
Corporation and each Director, officer, employee and agent who serves in any
such capacity at any time while these provisions as well as the relevant
provisions of the General Corporation Law of the State of Delaware are in
effect, and any repeal or modification thereof shall not affect any right or
obligation then existing with respect to any state of facts then or
previously existing or any action, suit or proceeding previously or
thereafter brought or threatened based in whole or in part upon any such
state of facts. Such a "contract right" may not be modified retroactively
without the consent of such Director, officer, employee or agent.
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote of stockholders or disinterested Directors
or otherwise, both as to action in his or her official capacity and as to
action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a Director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of
such a person.
Section 6.07. INSURANCE. The Corporation shall purchase and maintain
insurance on behalf of any person who is or was or has agreed to become a
Director or officer of the Corporation, or is or was serving at the request
of the Corporation as a Director or officer of another corporation
(including, without limitation, The Equitable Life Assurance Society of the
United States and its
II-5
<PAGE>
subsidiaries), partnership, joint venture, trust or other enterprise,
including an employee benefit plan, against any liability asserted against
him or her and incurred by him or her or on his or her behalf in any such
capacity, or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such
liability under the provisions of this Article, provided that such insurance
is available on acceptable terms, which determination shall be made by a
vote of a majority of the entire Board of Directors.
Section 6.08. SEVERABILITY. If this Article or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each Director or officer and
may indemnify each employee or agent of the Corporation as to costs, charges
and expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article VI that shall not have been invalidated and to the
fullest extent permitted by applicable law.
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
provides in regard to the limitation of liability of directors and officers as
follows:
(b) In addition to the matters required to be set forth in the
certificate of incorporation by subsection (a) of this section, the
certificate of incorporation may also contain any or all of the following
matters:
* * * *
(7) A provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, provided that such provision shall
not eliminate or limit the liability of a director (i) for any breach of the
director's 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 this Title, or
(iv) for any transaction from which the director derived an improper
personal benefit. No such provision shall eliminate or limit the liability
of a director for any act or omission occurring prior to the date when such
provision becomes effective. All references in this paragraph to a director
shall also be deemed to refer (x) to a member of the governing body of a
corporation which is not authorized to issue capital stock, and (y) to such
other person or persons, if any, who, pursuant to a provision of the
certificate of incorporation in accordance with subsection (a) of Section
141 of this title, exercise or perform any of the powers or duties otherwise
conferred or imposed upon the board of directors by this title.
Article FIFTH (f) of the Company's Restated Certificate of Incorporation, as
amended, provides in regard to the limitation of liability of directors and
officers as follows:
(f) No Director of the Corporation shall be liable to the Corporation or
its stockholders for monetary damages for breach of his or her fiduciary
duty as a Director, PROVIDED that nothing contained in this paragraph (f) of
this Article FIFTH shall eliminate or limit the liability of a director (i)
for any breach of the Director's 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 the 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. No amendment, modification or repeal of this paragraph (f) of this
Article FIFTH shall adversely affect any right or protection of a Director
that exists at the time of such amendment, modification or repeal.
Reference is made to the Standstill Agreement and the Company's and AXA's
respective agreements made therein to indemnify each other, and to provide
contribution in circumstances where indemnification is unavailable.
II-6
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
<C> <S> <C>
1.01 Form of Sales Agreement for Common Stock.*
4.01 (a) Restated Certificate of Incorporation of the Registrant.
4.01 (b) Certificate of Designation of Convertible Preferred Stock, Series A.
4.01 (c) Certificate of Designation of Redeemable Preferred Stock, Series B.
4.01 (d) Certificate of Designation of Cumulative Convertible Preferred Stock, Series C.
4.01 (e) Certificate of Designation of Cumulative Convertible Preferred Stock, Series D.
4.01 (f) Certificate of Designation of Cumulative Convertible Preferred Stock, Series E.
4.01 (g) Amendment to Restated Certificate of Incorporation of the Registrant, dated as of
May 15, 1997.
4.02 By-Laws of the Registrant.
5.01 Opinion of Debevoise & Plimpton.*
10.01 The Equitable Companies Incorporated Stock Trust Agreement, effective as of
December 2, 1993, filed as Exhibit 10.01 to the registrant's Form S-4
Registration Statement No. 33-73102, dated December 17, 1993 and incorporated
herein by reference.
10.02 The First Amendment to The Equitable Companies Incorporated Stock Trust
Agreement, dated as of September 19, 1996.
23.01 Consent of Price Waterhouse LLP.
23.02 Consent of Debevoise & Plimpton (included in Exhibit 5.01).
24.01 Powers of Attorney of certain officers and directors of the Company (previously
filed on the signature page hereto).
</TABLE>
- ------------------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
(A) RULE 415 OFFERING.
The undersigned Registrants hereby undertake:
(1) 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 the 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
the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(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 Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) 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.
(3) 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.
(B) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
II-7
<PAGE>
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the 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.
(C) ACCELERATION OF EFFECTIVENESS.
Insofar as indemnifications for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons, if any,
of the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have 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, if any, of such
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, such 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.
(D) RULE 430A.
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus 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.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, The Equitable
Companies Incorporated certifies that it has reasonable grounds to believe that
it meets all of 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, State of New York, on this 29th day of
May, 1997.
THE EQUITABLE COMPANIES INCORPORATED
By /s/ JOSEPH J. MELONE
___________________________________
Name: Joseph J. Melone
Title: President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------- ------------------------------------ -------------
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICERS:
/s/ JOSEPH J. MELONE President, Chief Executive Officer May 29, 1997
Joseph J. Melone and Director
PRINCIPAL FINANCIAL OFFICER:
/s/ STANLEY B. TULIN Executive Vice President and Chief May 29, 1997
Stanley B. Tulin Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ ALVIN H. FENICHEL Senior Vice President and Controller May 29, 1997
Alvin H. Fenichel
* Chairman of the Board, Director
Claude Bebear
* Director
Henri de Castries
* Director
John S. Chalsty
Francoise Colloc'h Director
* Director
Joseph L. Dionne
</TABLE>
II-9
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------- ------------------------------------ -------------
<S> <C> <C>
* Director
William T. Esrey
Jean-Rene Fourtou Director
* Director
Donald J. Greene
* Director
Anthony J. Hamilton
* Director
John T. Hartley
John H.F. Haskell, Jr. Director
Mary R. (Nina) Henderson Director
* Director
W. Edwin Jarmain
* Director
Winthrop Knowlton
Arthur L. Liman Director
Didier Pineau-Valencienne Director
* Director
George J. Sella, Jr.
Dave H. Williams Director
*By /s/ HENRY Q. CONLEY
(Attorney-in-Fact)
May 29, 1997
</TABLE>
II-10
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBITS.
- -----------
<S> <C> <C>
1.01 Form of Sales Agreement for Common Stock.*
4.01(a) Restated Certificate of Incorporation of the Registrant.
4.01(b) Certificate of Designation of Convertible Preferred Stock, Series A.
4.01(c) Certificate of Designation of Redeemable Preferred Stock, Series B.
4.01(d) Certificate of Designation of Cumulative Convertible Preferred Stock,
Series C.
4.01(e) Certificate of Designation of Cumulative Convertible Preferred Stock,
Series D.
4.01(f) Certificate of Designation of Cumulative Convertible Preferred Stock,
Series E.
4.01(g) Amendment to Restated Certificate of Incorporation of the Registrant,
dated as of May 15, 1997.
4.02 By-Laws of the Registrant.
5.01 Opinion of Debevoise & Plimpton.*
10.01 The Equitable Companies Incorporated Stock Trust Agreement, effective as
of December 2, 1993, filed as Exhibit 10.01 to the registrant's Form
S-4 Registration Statement No. 33-73102, dated December 17, 1993 and
incorporated herein by reference.
10.02 The First Amendment to The Equitable Companies Incorporated Stock Trust
Agreement, dated as of September 19, 1996.
23.01 Consent of Price Waterhouse LLP.
23.02 Consent of Debevoise & Plimpton (included in Exhibit 5.01).
24.01 Powers of Attorney of certain officers and directors of the Company
(previously filed on the signature page hereto).
</TABLE>
- ------------------------
* Previously filed.
<PAGE>
Exhibit 4.01(a)
[CONFORMED COPY]
RESTATED CERTIFICATE OF INCORPORATION
OF
THE EQUITABLE COMPANIES INCORPORATED
Pursuant to Section 242 and 245
of the General Corporation Law
of the State of Delaware
THE EQUITABLE COMPANIES INCORPORATED, a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), certifies as follows:
1. The name of the Corporation is THE EQUITABLE COMPANIES
INCORPORATED.
2. The Corporation's original Certificate of Incorporation was filed
with the Secretary of State on July 15, 1991.
3. This Restated Certificate of Incorporation integrates, amends and
restates the Certificate of Incorporation by among other things:
(a) changing the authorized capital stock of the Corporation;
(b) providing for certain restrictions on the authority of the Board
of Directors of the Corporation to issue certain shares of capital stock
of the Corporation;
(c) providing for advance notice of stockholder nominations for the
election of Directors and of business to be brought by stockholders before
any meeting of stockholders of the Corporation; and
(d) changing the By-Laws that the Board of Directors shall have the
power to adopt, amend, alter or repeal without a vote of stockholders.
4. The text of the Certificate of Incorporation of the Corporation
is hereby integrated, amended and restated to read as herein set forth in full:
<PAGE>
FIRST: The name of the Corporation is THE EQUITABLE COMPANIES
INCORPORATED.
SECOND: The Corporation's registered office in the State of Delaware
is at Corporation Trust Center, 1209 Orange Street in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD: The nature of the business of the Corporation and its purpose
is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
FOURTH: 1. The amount of total authorized capital stock of the
Corporation is 510,000,000 shares, of which 500,000,000 shares shall be Common
Stock, having a par value of $.01 per share, and 10,000,000 shares shall be
Preferred Stock, having a par value of $1.00 per share.
2. The Board of Directors of the Corporation is hereby expressly
authorized, at any time and from time to time by a resolution or resolutions
adopted by the affirmative vote of a majority of the total number of Directors
which the Corporation would have if there were no vacancies (the "entire Board
of Directors"), to divide the shares of Preferred Stock into one or more series,
to issue from time to time in whole or in part the shares of Preferred Stock or
the shares of any series thereof, and subject to Section 5 of this Article
FOURTH to fix and determine in the resolution or resolutions providing for the
issue of shares of Preferred Stock of a particular series the voting rights, if
any, of the holders of shares of such series, the designations, preferences and
relative, participating, optional and other special rights of such series, and
the qualifications, limitations and restrictions thereof, to the fullest extent
now or hereafter permitted by the laws of the State of Delaware. The voting
rights, if any, of each such series and the preferences and relative,
participating, optional and other special rights of each such series, and the
qualifications, limitations and restrictions
2
<PAGE>
thereof, if any, may differ from those of any and all other series. Unless
otherwise provided in the resolution or resolutions of the Board of Directors
providing for the issuance thereof, shares of any series of Preferred Stock
which shall be issued and thereafter acquired by the Corporation through
purchase, redemption, exchange, conversion or otherwise shall return to the
status of authorized but unissued Preferred Stock.
Without limiting the generality of the foregoing authority of the
Board of Directors, but subject to Section 5 of this Article FOURTH, the Board
of Directors from time to time may (if otherwise permitted under the General
Corporation Law of the State of Delaware):
(a) designate a series of Preferred Stock, which may be
distinguished by number, letter or title from other Preferred Stock of the
Corporation;
(b) fix and thereafter increase or decrease (but not below the
number of shares thereof then outstanding) the number of shares of
Preferred Stock that shall constitute such series;
(c) provide for dividends on shares of Preferred Stock of such
series and, if provisions are made for dividends, determine the dividend
rate and the times at which holders of shares of Preferred Stock of such
series shall be entitled to receive the dividends, whether the dividends
shall be cumulative and, if so, from what date or dates, and the other
conditions, if any, including rights of priority, if any, upon which the
dividends shall be paid;
3
<PAGE>
(d) determine the rights, if any, to which holders of the shares of
Preferred Stock of such series shall be entitled in the event of any
liquidation, dissolution or winding up of the Corporation;
(e) provide for the redemption or purchase of shares of Preferred
Stock of such series and, if provisions are made for redemption, determine
the time or times and the price or prices at which the shares of Preferred
Stock of such series shall be subject to redemption in whole or in part,
and the other terms and conditions, if any, on which shares of Preferred
Stock of such series may be redeemed or purchased;
(f) provide for a sinking fund or purchase fund for the redemption
or purchase of shares of Preferred Stock of such series and, if any such
fund is so provided for the benefit of such shares of Preferred Stock, the
amount of such fund and the manner of its application;
(g) determine the extent of the voting rights, if any, of the shares
of Preferred Stock of such series, including but not limited to the right
of the holders of such shares to vote as a separate class acting alone or
with the holders of one or more other series of Preferred Stock and the
right to have more (or less) than one vote per share;
(h) provide whether or not the shares of Preferred Stock of such
series shall be convertible into, or exchangeable for, shares of any other
class or classes of capital stock, or any series thereof, of the
Corporation and, if so convertible or exchangeable, determine the
conversion or exchange price or rate, the adjustments thereof and the
other terms and conditions, if any, on which such shares of Preferred
Stock shall be so convertible or exchangeable; and
(i) provide for any other preferences, any relative, participating,
optional or other special rights, any qualifications, limitations or
restrictions
4
<PAGE>
thereof, or any other terms or provisions of shares of Preferred Stock of
such series as the Board of Directors may deem appropriate or desirable.
3. Except for and subject to those rights expressly granted to the
holders of Preferred Stock, or any series thereof, by the Board of Directors,
pursuant to the authority hereby vested in the Board of Directors or as provided
by the laws of the State of Delaware, the holders of the Corporation's Common
Stock shall have exclusively all rights of stockholders and shall possess
exclusively all voting power. Each holder of Common Stock of the Corporation
shall be entitled, on each matter submitted for a vote to holders of Common
Stock, to one vote for each share of such stock standing in such holder's name
on the books of the Corporation.
4. Shares of Common Stock or Preferred Stock may be issued by the
Corporation from time to time for such consideration, having a value of not less
than the par value, if any, thereof, as is determined from time to time by the
Board of Directors. Any and all shares issued and for which full consideration
has been paid or delivered shall be deemed fully paid stock and the holder
thereof shall not be liable for any further payment thereon.
5. Notwithstanding the foregoing provisions, until the obligations
of the Corporation under that certain Standstill and Registration Rights
Agreement dated as of July 18, 1991 among the Corporation, The Equitable Life
Assurance Society of the United States and AXA, as amended from time to time
(the "Standstill Agreement"), shall terminate in accordance with the terms of
the Standstill Agreement, the Board of Directors is not authorized to issue any
shares of capital stock of the Corporation having a vote on any matter (whether
or not such voting rights are contingent upon the occurrence of a contingency)
in violation of the restrictions contained in the Standstill Agreement. The
Corporation shall promptly provide written notice to its stockholders of the
termination of such restrictions under the Standstill Agreement. A copy of the
Standstill Agreement shall be
5
<PAGE>
available for inspection at the office of the Secretary at the corporate
headquarters of the Corporation.
FIFTH: The following provisions are inserted for the management of
the business and for the conduct of the affairs of the Corporation and for the
purpose of creating, defining, limiting and regulating the powers of the
Corporation and its Directors and stockholders:
(a) The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors.
(b) The Board of Directors shall consist of not less than thirteen
nor more than thirty-six Directors. The exact number of Directors shall be
determined from time to time by a resolution or resolutions adopted by the
affirmative vote of a majority of the entire Board of Directors. A
Director shall hold office until the annual meeting next following his or
her election and until his or her successor shall be elected and shall
qualify, subject, however, to the Director's prior death, resignation,
disqualification or removal from office. Subject to the rights of the
holders of any series of Preferred Stock, any newly created Directorship
and any other vacancy occurring on the Board of Directors may be filled by
a majority of the Directors then in office, although less than a quorum,
or by a sole remaining Director, except that the stockholders shall fill
any vacancy resulting from the removal of a Director by the stockholders.
Election of Directors need not be by written ballot unless the By-Laws so
provide.
(c) Notwithstanding the foregoing, whenever the holders of any one
or more series of Preferred Stock issued by the Corporation shall have the
right, voting separately by class or series, to elect Directors at an
annual or special meeting of stockholders, the election, term of office,
filling of vacancies and other features of such Directorships shall be
governed by the terms of this Restated Certificate of Incorporation
applicable
6
<PAGE>
thereto (including the resolutions adopted by the Board of Directors
pursuant to Article FOURTH). The number of Directors that may be elected
by the holders of any such series of Preferred Stock shall be in addition
to the number of Directors fixed by or pursuant to paragraph (b) of this
Article FIFTH.
(d) Advance notice of stockholder nominations for the election of
Directors and of business to be brought by stockholders before any meeting
of stockholders of the Corporation shall be given if required by, and in
the manner provided in, the By-Laws. At any annual meeting or special
meeting of stockholders of the Corporation, only such business shall be
conducted as shall have been brought before such meeting in the manner
provided in the By-Laws.
(e) The Board of Directors shall have the express power, without a
vote of stockholders, to adopt any By-Law not inconsistent with this
Restated Certificate of Incorporation, or with Sections 1.02, 1.05, 1.10,
2.05, 2.06 and 3.02, the final paragraph of Section 1.01, and the final
paragraph of Section 2.03 of the original By-Laws of the Corporation (the
"Governance By-Laws") or with any By-Law adopted by vote of the
stockholders of the Corporation, and to amend, alter or repeal the By-Laws
of the Corporation other than the Governance By-Laws and any By-Law
adopted by vote of the stockholders of the Corporation, except to the
extent that the By-Laws or this Restated Certificate of Incorporation
otherwise provide. The Board of Directors may exercise such power upon the
affirmative vote of a majority of the entire Board of Directors.
Stockholders may adopt any By-Law, or amend, alter or repeal the By-Laws
of the Corporation, upon the affirmative vote of the holders of shares
having at least a majority of the voting power of the then outstanding
shares of capital stock of the Corporation entitled (at all times and
without regard to the occurrence of a contingency) to vote generally on
the election of Directors and other matters submitted for stockholder
approval, voting together as a single class.
7
<PAGE>
(f) No Director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of his or
her fiduciary duty as a Director, provided that nothing contained in this
paragraph (f) of this Article FIFTH shall eliminate or limit the liability
of a director (i) for any breach of the Director's 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
the 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. No amendment, modification or repeal
of this paragraph (f) of this Article FIFTH shall adversely affect any
right or protection of a Director that exists at the time of such
amendment, modification or repeal.
SIXTH: (i) Each person who is or was or had agreed to become a
Director or officer of the Corporation, and each person who is or was serving or
who had agreed to serve at the request of the Board of Directors or an officer
of the Corporation as a director or officer of another corporation (including,
without limitation, The Equitable Life Assurance Society of the United States
and its subsidiaries), partnership, joint venture, trust, employee benefit plan
or other enterprise (including the heirs, executor, administrators or estate of
such person), shall be indemnified by the Corporation, and (ii) each person who
is or was or who had agreed to become an employee or agent of the Corporation or
who is or was serving or who had agreed to serve at the request of the Board of
Directors or an officer of the Corporation as an employee or agent of another
corporation (including, without limitation, The Equitable Life Assurance Society
of the United States and its subsidiaries), partnership, joint venture, trust,
employee benefit plan or other enterprise (including the heirs, executor,
administrators or estate of such person) may be indemnified by the Corporation,
in each case in accordance with the By-Laws, to the full extent permitted from
time to time by the General Corporation Law of the State of Delaware as the same
exists or
8
<PAGE>
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment) or any other applicable laws as presently or hereafter in
effect. Without limiting the generality or the effect of the foregoing, the
Corporation may enter into one or more agreements with any person which provide
for indemnification greater or different than that provided in this Article
SIXTH. Any amendment or repeal of this Article SIXTH shall not adversely affect
any right or protection existing hereunder immediately prior to such amendment
or repeal.
SEVENTH: The Corporation reserves the right to amend or repeal any
provision contained in this Restated Certificate of Incorporation in the manner
now or hereafter prescribed by the laws of the State of Delaware, and all rights
herein conferred upon stockholders or Directors are granted subject to this
reservation.
5. This Restated Certificate of Incorporation was duly adopted in
accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware. The Board of Directors adopted
resolutions setting forth the Restated Certificate of Incorporation, declaring
their advisability and directing the consideration of the Restated Certificate
of Incorporation by the sole stockholder of the Corporation. Pursuant to Section
228 of the General Corporation Law of the State of
9
<PAGE>
Delaware, such stockholder of the Corporation duly consented to this Restated
Certificate of Incorporation.
IN WITNESS WHEREOF, THE EQUITABLE COMPANIES INCORPORATED has caused
this certificate to be signed by Richard H. Jenrette, its Chairman and Chief
Executive Officer, and attested by Molly K. Heines, its Secretary, this 20th day
of May 1992.
THE EQUITABLE COMPANIES
INCORPORATED
By /s/ Richard H. Jenrette
--------------------------
Chairman and Chief Executive
Officer
ATTEST:
By /s/ Molly K. Heines
----------------------
Secretary
10
<PAGE>
Exhibit 4.01(b)
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL
AND OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
THE EQUITABLE COMPANIES INCORPORATED
CONVERTIBLE EXCHANGEABLE PREFERRED STOCK, SERIES A
---------------
Pursuant to Section 151
of the General Corporation Law of the State of Delaware
---------------
The following resolution has been duly adopted by the Board of
Directors (such Board, including any committee thereof duly authorized to act on
behalf of such Board, herein referred to as the "Board") of The Equitable
Companies Incorporated, a Delaware corporation (the "Corporation"), pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, which resolution remains in full force and effect as of the date
hereof:
WHEREAS the Board is authorized, within the limitations and
restrictions stated in the Restated Certificate of Incorporation of the
Corporation, to fix by resolution or resolutions the voting rights, if any, of
each series of Preferred Stock, par value $1.00 per share (the "Preferred
Stock"), of the Corporation and the designations, preferences and relative,
participating, optional and other special rights and qualifications, limitations
and restrictions thereof; and
WHEREAS it is the desire of the Board, pursuant to its authority as
aforesaid, to authorize and fix the terms
<PAGE>
2
of a series of Preferred Stock and the number of shares constituting such
series:
NOW, THEREFORE, BE IT
RESOLVED that there is hereby authorized and created a series of
Preferred Stock on the terms and with the provisions (in addition to those set
forth in the Restated Certificate of Incorporation of the Corporation that are
applicable to all Preferred Stock) as follows:
SECTION 1. Designation, Number of Shares and Stated Value. The
series of Preferred Stock shall be designated the "Convertible Exchangeable
Preferred Stock, Series A" (the "Convertible Preferred Stock"). The number of
authorized shares of Convertible Preferred Stock shall be 2,500,000. The number
of shares of Convertible Preferred Stock may be decreased (but not below the
number of shares of Convertible Preferred Stock at the time outstanding), in the
manner specified in the General Corporation Law of the State of Delaware, by an
amendment to this Section 1 approved by the Board, but may not be increased
(except, by an amendment to this Section 1 approved by the Board in the manner
specified in the General Corporation Law of the State of Delaware, as necessary
to permit the issuance of additional shares of Convertible Preferred Stock
pursuant to Section 3(c)) or otherwise decreased without the affirmative vote of
the Required Holders (as defined in Section 3(b)). The stated value of each
share of Convertible Preferred Stock ("Stated Value") shall be $100.
SECTION 2. Rank. The Convertible Preferred Stock shall, as to the
payment of dividends and the distribution of assets upon the liquidation,
dissolution or winding up of the Corporation, rank (i) prior to the Common
Stock, par value $.0l per share (the "Common Stock"), of the Corporation and any
other capital stock of the Corporation (other than (a) the Preferred Stock,
Series B, par value $1.00 per share, of the Corporation (the "Series B Preferred
Stock") and (b) any other class or series of a class of capital stock of the
Corporation the terms of which expressly provide that the shares thereof rank
senior or on a parity as to the payment of dividends and the distribution of
assets upon the liquidation, dissolution or winding up of the Corporation with
the shares of the Convertible Preferred Stock) (such securities, other than
those described in the immediately preceding parenthetical clause, collectively
referred to herein as the "Junior Securities") and (ii) on a parity with the
Series B Preferred Stock and any other class
<PAGE>
3
or series of a class of capital stock of the Corporation the terms of which
expressly provide that the shares thereof rank on a parity as to the payment of
dividends and the distribution of assets upon the liquidation, dissolution or
winding up of the Corporation with the shares of the Convertible Preferred Stock
(the "Parity Securities").
SECTION 3. Dividends. (a) The holders of outstanding shares of
Convertible Preferred Stock, in preference to the holders of outstanding shares
of any Junior Securities, shall be entitled to receive, when, as and if declared
by the Board, out of funds of the Corporation legally available for the payment
of dividends, a cumulative quarterly cash dividend per share in an amount for
each Dividend Period (as defined below) calculated by multiplying the Stated
Value by the Dividend Rate (as defined below) for such Dividend Period.
"Dividend Rate" means, for a Dividend Period, the product of (i) the lesser of
10% and the LIBOR Rate (determined pursuant to Section 3(b)) for such Dividend
Period, multiplied by (ii) a fraction, the numerator of which is the number of
days in such Dividend Period and the denominator of which is 360. Quarterly
dividends shall be payable on each July 22, October 22, January 22 and April 22
(each a "Dividend Payment Date"), commencing on October 22, 1992 (the "Initial
Dividend Payment Date"). Each such quarterly dividend shall be cumulative and
shall accumulate, whether or not earned or declared and whether or not there are
funds of the Corporation legally available for payment of dividends, for the
period (each, a "Dividend Period") commencing on and including the most recent
Dividend Payment Date to which dividends have been paid or accumulated to but
excluding the next succeeding Dividend Payment Date, except that (x) the
Dividend Period terminating on the Initial Dividend Payment Date (the "Initial
Dividend Period") shall commence on and include July 22, 1992, (y) with respect
to shares of Convertible Preferred Stock issued pursuant to Section 3(c),
dividends shall accumulate commencing on and including the date of issuance of
such shares of Convertible Preferred Stock and (z) with respect to shares of
Convertible Preferred Stock which are redeemed, exchanged for Debentures,
converted into shares of Common Stock or redeemed upon a Liquidation Transaction
(as defined in Section 7) pursuant to Section 4(a), Section 4(b), Section 5(a),
Section 6(a), Section 6(b) or Section 7, as the case may be, the final Dividend
Period shall terminate on the applicable redemption date, exchange date,
Conversion Date or distribution date, as the case may be. Dividends shall be
payable, net of any amounts required to be withheld for or with respect to
<PAGE>
4
taxes, to holders of record as they appear on the stock books of the Corporation
at the close of business on such record dates, not more than 60 days nor less
than 10 days prior to the respective Dividend Payment Date, as shall be fixed by
the Board. If any Dividend Payment Date is not a business day, the quarterly
dividend to be paid on such Dividend Payment Date shall be paid on the next
following business day. A "business day" means any day that is not a Saturday,
Sunday or other day on which commercial banks in New York City are required or
authorized by law to be closed. Payments of quarterly dividends shall be made in
coin or currency of the United States that as of the date of payment shall be
legal tender for payment of public and private debts by mailing a check to each
holder of shares of Convertible Preferred Stock at the address of such holder as
shown on the stock books of the Corporation.
(b) The LIBOR Rate will be 5.0625% for the Initial Dividend Period
and the next succeeding Dividend Period and will be determined on each January
22 and July 22 thereafter (each, a "Determination Date") for the Dividend
Periods terminating on the two Dividend Payment Dates next following such
Determination Date (and any other Dividend Periods terminating during such
period) and will be the sum of 1.50% plus LIBOR (expressed as a percentage) in
respect of such Determination Date determined as follows:
(i) In respect of each Determination Date, LIBOR will be determined
on the basis of the rate for deposits in U.S. dollars, having a six-month
maturity commencing on such Determination Date, which rate appears on the
display designated as the Telerate Page 3750 on the Dow Jones Telerate
Service (or such other page as may replace that page on that service, or
such other alternative service as may be agreed by the Corporation and the
Required Holders, for the purpose of displaying a rate comparable to the
rate which currently appears on the Telerate Page 3750) (the "Telerate
Page 3750") as of 11:O0 a.m., London time, on the second London Banking
Day prior to such Determination Date. If such rate does not appear on the
Telerate Page 3750 as of such time, LIBOR in respect of such Determination
Date will be determined as described in clause (ii) below.
(ii) In respect of any Determination Date on which the rate for
deposits in U.S. dollars, having a six-month maturity commencing on such
Determination Date, does not appear on the Telerate Page 3750 as described
<PAGE>
5
in clause (i) above, LIBOR will be determined on the basis of the rates at
approximately 11:00 a.m., London time, on the London Banking Day
immediately prior to such Determination Date, for deposits in U.S.
dollars, in an amount comparable to the aggregate Stated Value for all
shares of Convertible Preferred Stock outstanding on such Determination
Date, having a six-month maturity commencing on such Determination Date
offered to prime banks in the London interbank market by four major banks
in the London interbank market selected by the Corporation and approved by
the Required Holders. The Corporation will request the principal London
office of each such bank to provide a quotation of its rate. If at least
two such quotations are provided, LIBOR in respect of such Determination
Date will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR in respect of such Determination Date will
be the arithmetic mean of the rates quoted at approximately 11:00 a.m.,
New York City time, on the Determination Date by three major banks in New
York City, selected by the Corporation and approved by the Required
Holders, for loans in U.S. dollars to leading European banks, in an amount
comparable to the aggregate Stated Value for all shares of Convertible
Preferred Stock outstanding on such Determination Date, having a six-month
maturity commencing on such Determination Date; provided, however, that if
the banks selected as aforesaid by the Corporation are not quoting as
mentioned in this sentence, LIBOR in respect of such Determination Date
will be LIBOR as calculated in respect of the preceding Determination
Date.
(iii) A "London Banking Day" shall mean any day (other than a
Saturday, Sunday or legal holiday) on which banks in New York City and
London, England are open for dealings in dollar deposits in the London
interbank market.
(iv) "Required Holders" means, at any date, the holders of at least
66-2/3% of the aggregate Stated Value of the shares of Convertible
Preferred Stock then outstanding disregarding the aggregate Stated Value
of any of such shares owned by the Corporation or by any of its
Subsidiaries (as defined in Section 6(m)).
(c) On each Dividend Payment Date occurring prior to July 22, 1995,
the Corporation may issue shares of Convertible Preferred Stock in lieu of a
cash payment of any or all of the dividends due in respect of the Convertible
<PAGE>
6
Preferred Stock on such Dividend Payment Date, by giving written notice to the
holders of shares of Convertible Preferred Stock, by first class mail to their
respective addresses as shown on the stock books of the Corporation, of such
election not less than 10 nor more than 30 days prior to such Dividend Payment
Date. If such notice is so given, the Corporation shall issue and deliver or
cause to be delivered to each holder of shares of Convertible Preferred Stock on
such Dividend Payment Date out of its authorized but unissued Convertible
Preferred Stock that number of shares of Convertible Preferred Stock determined
by dividing the aggregate amount of dividends to be paid in shares of
Convertible Preferred Stock on such Dividend Payment Date to such holder by
$100. If such shares are not actually issued to such holders on such Dividend
Payment Date (and certificates representing such shares mailed to such holders
promptly thereafter), the Corporation's right to issue shares of Convertible
Preferred Stock in lieu of a cash payment with respect to the dividends due on
such Dividend Payment Date shall be forfeited. Each issuance of shares of
Convertible Preferred Stock in lieu of cash payment of dividends shall be made
pro rata with respect to all holders of shares of Convertible Preferred Stock
then outstanding, except that the Corporation shall, in lieu of issuing any
fractional shares of Convertible Preferred Stock to any holder, pay cash to such
holder in an amount equal to that fraction of the Stated Value.
(d) On each Dividend Payment Date occurring on or after July 22,
1995, the Corporation may issue shares of Common Stock in lieu of a cash payment
of any or all of the dividends due in respect of the Convertible Preferred Stock
on such Dividend Payment Date, by giving written notice to the holders of shares
of Convertible Preferred Stock, by first class mail to their respective
addresses as shown on the stock books of the Corporation, of such election not
less than 10 nor more than 30 days prior to such Dividend Payment Date. If such
notice is so given, the Corporation shall issue and deliver or cause to be
delivered to each holder of shares of Convertible Preferred Stock on such
Dividend Payment Date out of its authorized but unissued Common Stock or Common
Stock held in treasury that number of shares of Common Stock determined by
dividing the aggregate amount of dividends to be paid in shares of Common Stock
on such Dividend Payment Date to such holder by the Current Market Price (as
defined in section 6(m)) as of such Dividend Payment Date. If such shares are
not actually issued to such holders on such Dividend Payment Date (and
certificates representing such shares mailed to such holders
<PAGE>
7
promptly thereafter), the Corporation's right to issue shares of Common Stock in
lieu of a cash payment with respect to the dividends due on such Dividend
Payment Date shall be forfeited. Each issuance of shares of Common Stock in lieu
of cash payment of dividends shall be made pro rata with respect to all holders
of shares of Convertible Preferred Stock then outstanding, except that the
Corporation shall, in lieu of issuing any fractional shares of Common Stock to
any holder, pay cash to such holder in an amount equal to that fraction of the
Current Market Price as of the relevant Dividend Payment Date.
(e) All shares of Convertible Preferred Stock or Common Stock issued
and delivered to holders of Convertible Preferred Stock pursuant to Section 3(c)
or 3(d), respectively, will upon issuance by the Corporation and delivery be
duly and validly issued, fully paid and nonassessable and free from all
documentary, stamp, transfer or other transactional taxes and all liens and
charges with respect to the issuance thereof and the Corporation shall take no
action which will cause a contrary result.
(f) Subject to the last sentence of each of Sections 3(c) and 3(d),
all dividends paid with respect to shares of Convertible Preferred Stock shall
be paid pro rata to the holders entitled thereto.
{g) When dividends are not paid in full upon the Convertible
Preferred Stock, any dividends declared or paid upon shares of Convertible
Preferred Stock and any Parity Securities shall be declared or paid, as the case
may be, pro rata so that the amounts of dividends declared or paid, as the case
may be, per share on the Convertible Preferred Stock and such other Parity
Securities in all cases bear to each other the same ratio that accumulated and
unpaid dividends per share on the shares of Convertible Preferred Stock and such
other Parity Securities bear to each other. No interest, or sum of money in lieu
of interest, shall be payable in respect of any dividend payment or payments on
the Convertible Preferred Stock or any Parity Securities which may be in
arrears.
(h) Unless full cumulative dividends have been or contemporaneously
are declared by the Board and paid or declared and a sum set apart sufficient
for such payment by the Corporation on the Convertible Preferred Stock for all
Dividend Periods terminating on or prior to the date of payment of dividends on
any Junior Securities, no dividends shall be declared or paid or sum set apart
for such payment
<PAGE>
8
or any other distribution made on or with respect to such Junior Securities for
any period, other than dividends payable or distributions made in shares of
Junior Securities.
(i) Unless full cumulative dividends have been or contemporaneously
are declared by the Board and paid or declared and a sum set apart sufficient
for payment by the Corporation on the Convertible Preferred Stock for all
Dividend Periods terminating on or prior to the date of any event described in
clause (i) or (ii) of this Section 3(i), the Corporation shall not, and shall
not permit its Subsidiaries to, (i) redeem, purchase, retire or otherwise
acquire for any consideration any shares of Convertible Preferred Stock, unless
(A) all shares of Convertible Preferred Stock outstanding shall be redeemed,
repurchased, retired or otherwise acquired or (B) the shares of Convertible
Preferred Stock are redeemed, purchased, retired or otherwise acquired pro rata
from among the holders of the shares then outstanding or (ii) redeem, purchase,
retire or otherwise acquire for any consideration, or make any payment on
account of a sinking fund or other similar fund for redemption, purchase,
retirement or acquisition of, any Junior Securities or any Parity Securities, or
any warrant, right or option to purchase any thereof, or make any distribution
in respect thereof, directly or indirectly, whether in cash, obligations or
securities of the Corporation or other property, except, (i) in the case of
Junior Securities, redemptions, purchases, retirements, acquisitions or
distributions made in shares of Junior Securities and (ii) in the case of Parity
Securities, pro rata so that the amounts redeemed, purchased, retired or
otherwise acquired or paid or distributed in respect thereof, as the case may
be, per share on the Convertible Preferred Stock and such other Parity
Securities in all cases bear to each other the same ratio that accumulated and
unpaid dividends and required redemption payments per share on the shares of
Convertible Preferred Stock and such other Parity Securities bear to each other.
SECTION 4. Redemption. (a) The Convertible Preferred Stock shall not
be redeemable prior to October 15, 1997. To the extent the Corporation shall
have funds legally available therefor, the Convertible Preferred Stock shall be
subject to redemption in cash, at the option of the Corporation, at any time on
or after October 15, 1997, in part from time to time in a minimum of 200,000
shares (and in each case in an integral multiple thereof) or in whole, at the
following redemption prices per share, together in
<PAGE>
9
each case with accumulated and unpaid dividends thereon to the redemption date,
without interest, if redeemed during the 12-month period commencing on October
15 of the years indicated:
1997 ................ $105
1998 ................ 104
1999 ................ 103
2000 ................ 102
2001 ................ 101
2002 and thereafter ................. $100
If less than all shares of Convertible Preferred Stock then outstanding are to
be redeemed, the shares of Convertible Preferred Stock will be redeemed pro rata
from among the holders of shares of Convertible Preferred Stock then
outstanding.
(b) On October 15, 2007, the Corporation shall redeem all shares of
Convertible Preferred Stock then outstanding at a redemption price per share
equal to the Stated Value, together with accumulated and unpaid dividends
thereon to the redemption date, without interest. In lieu of a cash payment of
the amounts due upon such mandatory redemption, the Corporation may issue shares
of Common Stock to the holders of shares of Convertible Preferred Stock in full
payment of all such amounts, by giving written notice (in the manner described
in Section 4(d)) to such holders. If such notice is so given, the Corporation
shall issue and deliver or cause to be delivered to each holder of shares of
Convertible Preferred Stock out of its authorized but unissued Common Stock or
Common Stock held in treasury that number of shares of Common Stock determined
by dividing the aggregate Stated Value of all shares of Convertible Preferred
Stock owned by such holder as shown on the stock books of the Corporation,
together with accumulated and unpaid dividends thereon to the redemption date,
by the Current Market Price as of the redemption date. The Corporation shall, in
lieu of issuing any fractional shares of Common Stock to any bolder, pay to such
holder cash in an amount equal to that fraction of the Current Market Price as
of the redemption date.
(c) All shares of Common Stock issued and delivered pursuant to
Section 4(b) will upon issuance by the Corporation and delivery be duly and
validly issued, fully paid and nonassessable and free from all documentary,
stamp, transfer or other transactional taxes and all liens and charges with
respect to the issuance thereof and the
<PAGE>
10
Corporation shall take no action which will cause a contrary result.
(d) Notice of any redemption pursuant to Section 4(a) or Section
4(b) will be given to the holders of shares of Convertible Preferred Stock not
less than 10 nor more than 30 days prior to the date fixed for redemption or the
mandatory redemption date, as the case may be. Notice of redemption will be
given by first class mail to such holders' respective addresses as shown on the
stock books of the Corporation and will specify (i) the date fixed for
redemption or the mandatory redemption date, as the case may be, (ii) the
applicable redemption price and (iii) the Conversion Price (as defined in
Section 6(c)) then in effect and that all shares of Convertible Preferred Stock
called for redemption may be converted at any time prior to the close of
business on the date fixed for redemption or the mandatory redemption date, as
the case may be. In the case of a partial redemption pursuant to Section 4(a),
such notice shall also specify the number of shares of Convertible Preferred
Stock to be redeemed from each holder and the aggregate number of shares of
Convertible Preferred Stock which will be outstanding after such redemption.
(e) If funds for the redemption of any or all shares of Convertible
Preferred Stock shall have been irrevocably set apart for redemption on the
redemption date, such shares of Convertible Preferred Stock shall from and after
the redemption date cease to accumulate dividends and the only right of the
holders of such shares shall be to receive payment of the redemption price and
all accumulated and unpaid dividends on such shares to the date of redemption.
(f) If the Corporation shall fail at any time to discharge its
obligation to redeem shares of Convertible Preferred Stock pursuant to paragraph
(4)(b) (the "Mandatory Redemption Obligation"), the Mandatory Redemption
Obligation shall be discharged as soon as the Corporation is able to discharge
the Mandatory Redemption Obligation. If and for so long as the Mandatory
Redemption Obligation shall not have been fully discharged, the Corporation
shall not (i) declare, pay or set apart for payment dividends or make any other
distribution on or with respect to any Parity Securities, except that dividends
may be declared, paid or set apart for payment or other distributions made upon
shares of Convertible Preferred Stock and any Parity Securities pro rata so that
the amounts of dividends declared, paid or set apart or other distributions made
per share on the
<PAGE>
11
Convertible Preferred Stock and such other Parity Securities bear to each other
the same ratio that accumulated and unpaid dividends and required redemption
payments, if any, per share on the shares of Convertible Preferred Stock and
such other Parity Securities bear to each other; (ii) declare, pay or set apart
for payment dividends or make any other distribution on or with respect to any
Junior Securities, other than dividends paid or distributions made in shares of
Junior Securities; or (iii) redeem, purchase, retire or otherwise acquire for
any consideration, or make any payment on account of a sinking fund or other
similar fund for redemption, purchase, retirement or acquisition of, any Junior
Securities or any Parity Securities, or any warrant, right or option to purchase
any thereof, or make any distribution in respect thereof, directly or
indirectly, whether in cash, obligations or securities of the Corporation or
other property, except, (i) in the case of Junior Securities, redemptions,
purchases, retirements, acquisitions or distributions made in shares of Junior
Securities and (ii) in the case of Parity Securities, pro rata so that the
amounts redeemed, purchased, retired or otherwise acquired or paid or
distributed in respect thereof, as the case may be, per share on the Convertible
Preferred Stock and such other Parity Securities in all cases bear to each other
the same ratio that accumulated and unpaid dividends and required redemption
payments per share on the shares of Convertible Preferred Stock and such other
Parity Securities bear to each other.
(g) Any cash payment to a holder of shares of Convertible Preferred
Stock on any redemption date shall be made in coin or currency of the United
States that as of the date of payment shall be legal tender for payment of
public and private debts by mailing a check to such holder at the address of
such holder as shown on the stock books of the Corporation.
SECTION 5. Exchange. (a) The Convertible Preferred Stock shall not
be exchangeable prior to October 15, 1994. On or after October 15, 1994, the
Convertible Preferred Stock shall be exchangeable on any Dividend Payment Date,
in whole but not in part, only upon the written mutual agreement of the
Corporation and the Required Holders, for Convertible Subordinated Debentures of
the Corporation issuable only in registered form, without coupons, in
denominations of $1,000 and any integral multiple thereof containing the terms
set forth in Exhibit A hereto (or such other terms as may be agreed by the
Corporation and the Required Holders) (the "Debentures") at an exchange rate of
<PAGE>
12
$1,000 principal amount or Debentures for shares of Convertible Preferred Stock
with an aggregate Stated Value of $1,000; provided, however, that the
Convertible Preferred Stock shall not be exchangeable for the Debentures unless
full cumulative dividends shall have been paid or contemporaneously declared and
paid or declared and a sum set apart sufficient for payment on the Convertible
Preferred Stock for all Dividend Periods terminating on or prior to the date of
such exchange.
(b) If the Corporation and the Required Holders mutually agree on
such an exchange, all shares of Convertible Preferred Stock then outstanding
shall be exchanged automatically on the Dividend Payment Date mutually agreed
for such exchange, without any further action by the holders of such shares and
whether or not the certificates representing such shares are surrendered to the
Corporation or its transfer agent, for the aggregate principal amount of the
Debentures to which such holder is entitled. The Corporation shall, in lieu of
issuing to any holder any Debenture in a principal amount other than $1,000 or
an integral multiple thereof, pay cash to such holder in an amount equal to that
portion of the principal amount that is not $1,000 or such integral multiple
thereof.
(c) The Corporation shall pay all documentary, stamp, transfer or
other transactional taxes attributable to the issuance and delivery of the
Debentures upon exchange for the Convertible Preferred Stock; provided, however,
that the Corporation shall not be required to pay any taxes payable in respect
of any transfer involved in the issuance or delivery of any certificate for
Debentures in a name other than that of the holder of the shares of Convertible
Preferred Stock in respect of which such certificate is being issued and no such
issuance or delivery shall be made unless and until the holder requesting such
issuance has paid to the Corporation the amount of any such tax or has
established to the reasonable satisfaction of the Corporation that such tax is
not required to be paid.
(d) As promptly as practicable after the exchange date referred to
in Section 5(a) and after surrender by a holder of a certificate or certificates
representing the shares of Convertible Preferred Stock to be exchanged to the
Corporation, or any transfer agent of the Corporation previously designated by
the Corporation to such holders for such purpose, the Corporation shall issue
and deliver or cause to be delivered to or upon the written order of such holder
a Debenture or Debentures dated such exchange date in
<PAGE>
13
an aggregate principal amount to which such holder is entitled and cash as
provided in Section 5(b). All such Debentures will upon issuance by the
Corporation and delivery be duly and validly authorized, executed and delivered
and will constitute legal, valid and binding obligations of the Corporation,
enforceable against the Corporation in accordance with their terms, and the
Corporation shall take no action which will cause a contrary result.
SECTION 6. Conversion. The Convertible Preferred Stock shall be
convertible into shares of Common Stock as follows:
(a) Subject to and upon compliance with the provisions of this
Section 6, the holder or any shares of Convertible Preferred Stock shall have
the right, at such holder's option, at any time in whole and from time to time
in part, to convert any of such shares of Convertible Preferred Stock into fully
paid and nonassessable shares of Common Stock at the Conversion Price (as
defined in Section 6(c)) as of the Conversion Date (as defined in Section 6(d))
upon the terms hereinafter set forth; provided, however, that prior to July 22,
1995, a holder of shares of Convertible Preferred Stock may not convert such
shares to the extent (but only to the extent) that such conversion would result
in the Investor and the Investor Related Parties owning Voting Securities
representing an aggregate Voting Power greater than 49% of the Total Voting
Power (each as defined in Section 6(m)). In case the shares of Convertible
Preferred Stock are called for redemption, such right of conversion shall
terminate at the close of business on the date fixed for redemption unless the
Corporation shall default in the payment due upon redemption. Each share of
Convertible Preferred Stock shall be convertible pursuant to this Section 6(a)
into the number of shares of Common Stock determined by dividing the Stated
Value of such share by the Conversion Price as of the Conversion Date.
(b) Subject to the provisions of this Section 6, if the Closing
Price (as defined in Section 6(m)) of the Common Stock for 20 out of 30
consecutive Trading Days (as defined in Section 6(m)) is equal to or greater
than 150% of the Conversion Price as of the Trading Day preceding the first day
of such 30 consecutive Trading Days, then, on the fifth Trading Day following
the last day of such 30 consecutive Trading Days (the "Automatic Conversion
Date"), all shares of Convertible Preferred Stock then outstanding shall be
converted automatically, without any further action by the holders of such
shares and whether or not the
<PAGE>
14
certificates representing such shares are surrendered to the Corporation or its
transfer agent, into fully paid and nonassessable shares of Common Stock at the
Conversion Price as of the Automatic Conversion Date upon the terms hereinafter
set forth; provided, however, that prior to July 22, 1995, the shares of
Convertible Preferred Stock shall not be convertible to the extent (but only to
the extent) that such conversion would result in the Investor and the Investor
Related Parties owning Voting Securities representing an aggregate Voting Power
greater than 49% of the Total Voting Power; provided further, however, that if
all the shares of Convertible Preferred Stock are not automatically converted
into Common Stock because such conversion would result in the Investor and the
Investor Related Parties owning Voting Securities representing an aggregate
Voting Power greater than 49% of the Total Voting Power, the balance of such
unconverted shares of Convertible Preferred Stock shall at any time in whole or
from time to time in part be automatically converted into Common Stock in
accordance with the provisions of this Section 6(b) if at such time or times (i)
the conditions set forth in this Section 6(b) are satisfied and (ii) as a result
of any such automatic conversion the holders of the Convertible Preferred Stock
would receive at least 10,000 additional shares of Common Stock. In the event
that all the shares of Convertible Preferred Stock are not automatically
converted as a result of the second preceding proviso, such shares shall be
converted in the following order: first, the shares of Convertible Preferred
Stock held by holders other than the Investor or Investor Related Parties shall
be fully converted and second, the shares of Convertible Preferred Stock held by
the Investor and the Investor Related Parties shall be converted on a pro rata
basis until the limits established by such proviso have been reached. Each share
of Convertible Preferred Stock shall be converted pursuant to this Section 6(b)
into the number of shares of Common Stock determined by dividing the Stated
Value of such share by the Conversion Price in effect as of the Automatic
Conversion Date.
(c) The "Conversion Price" shall mean $10.10, as adjusted from time
to time in accordance with the terms of this Section 6.
(d) A holder of shares of Convertible Preferred Stock may exercise
the conversion right specified in Section 6(a) as to any shares owned by such
holder by delivering written notice to the Corporation stating that such holder
elects to convert all or a specified number of the
<PAGE>
15
shares of Convertible Preferred Stock owned by such holder. Except with respect
to shares of Convertible Preferred Stock to be so converted for which the
Corporation shall have given notice of any redemption pursuant to Section 4(a)
or 4(b), such notice shall be given not less than 30 days prior to the date
specified therein for such conversion. The Corporation shall provide the holders
of shares of Convertible Preferred Stock with written notice by first class mail
to such holders' respective addresses as shown on the stock books of the
Corporation of any automatic conversion pursuant to Section 6(b) as soon as
practicable, but in any event no later than the Automatic Conversion Date. The
holders of shares of Convertible Preferred Stock shall surrender to the
Corporation, or any transfer agent of the Corporation previously designated by
the Corporation to such holders for this purpose, (i) on the date specified for
conversion in the notice provided by the holder (which date, with respect to
shares of Convertible Preferred Stock for which the Corporation shall have given
notice of any redemption pursuant to Section 4(a) or 4(b), shall be the date
such notice is delivered to the Corporation), in the case of an exercise by a
holder of such holder's conversion right specified in section 6(a), or (ii)
promptly following the Automatic Conversion Date, in the case of an automatic
conversion as specified in Section 6(b), a certificate or certificates
representing the shares of Convertible Preferred Stock to be converted with
appropriate endorsements and any transfer documents reasonably requested by the
Corporation or such transfer agent. Conversion of the shares of Convertible
Preferred Stock to be converted shall be deemed to have been effected, in the
case of an exercise by the holder of such holder's conversion right specified in
Section 6(a), on the date when such holder surrenders for conversion the
certificate or certificates representing such shares of Convertible Preferred
Stock and, in the case of an automatic conversion, on the Automatic Conversion
Date, and such date is referred to herein with respect to such shares as the
"Conversion Date". As promptly as practicable after the Conversion Date and
after surrender by a holder of a certificate or certificates representing the
shares of Convertible Preferred Stock to be converted to the Corporation, or any
transfer agent of the Corporation previously designated by the Corporation to
such holders for such purpose, the Corporation shall issue and deliver or cause
to be delivered to or upon the written order of such holder (i) a certificate or
certificates representing the number of full shares of Common Stock to which
such holder is entitled, (ii) a check made payable for an amount corresponding
to any fractional interest in a share of Common Stock as
<PAGE>
16
provided in Section 6(e) and (iii) a check made payable for the amount of any
accumulated and unpaid dividends on such shares of Convertible Preferred Stock.
The person in whose name the certificate or certificates representing Common
Stock are to be issued shall be deemed to have become a holder of record of such
Common Stock on the applicable Conversion Date. Upon conversion of only a
portion of the shares of Convertible Preferred Stock represented by any
certificate, the Corporation shall issue and deliver or cause to be delivered to
or upon the written order of the applicable holder of shares of Convertible
Preferred Stock, at the expense of the Corporation, a new certificate
representing the unconverted portion of the certificate so surrendered.
(e) No fractional shares of Common Stock or scrip shall be issued
upon conversion of the shares of Convertible Preferred Stock. If more than one
certificate shall be surrendered for conversion at any one time by the same
holder, the amount of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares of
Convertible Preferred Stock represented by the certificates so surrendered.
Instead of any fractional shares of Common Stock which would otherwise be
issuable upon conversion of shares of Convertible Preferred Stock, the
Corporation shall pay a cash adjustment in respect of such fractional interest
in an amount equal to that fraction of the Current Market Price as of the
Conversion Date.
(f) The Conversion Price and the number and kind of securities
issuable upon conversion of the shares of Convertible Preferred Stock shall be
subject to adjustment from time to time as follows:
(i) In case the Corporation shall, at any time or from time to time
while any shares of the Convertible Preferred Stock are outstanding, (A)
pay a dividend or make a distribution on the Common Stock in shares of
Common Stock; (B) subdivide its outstanding shares of Common Stock into a
greater number of shares; (C) combine its outstanding shares of Common
Stock into a smaller number of shares; (D) make a distribution on its
Common Stock in shares of capital stock of the Corporation other than
Common Stock; or (E) issue by reclassification of its shares of Common
Stock any shares of capital stock of the Corporation, the Conversion Price
in effect immediately prior to the date fixed for the determination of
stockholders affected by
<PAGE>
17
such actions shall be adjusted so that each holder of shares of
Convertible Preferred Stock shall after such date of determination be
entitled to receive, upon surrender for conversion, the number of shares
of Common Stock or other capital stock of the Corporation which such
holder would have owned or have been entitled to receive immediately
following such date of determination if such holder had converted his
shares of Convertible Preferred Stock immediately prior to such date of
determination. An adjustment made pursuant to this clause (i) shall become
effective immediately after such date of determination. If, after an
adjustment pursuant to this clause (i), the holders of shares of
Convertible Preferred Stock upon conversion of such shares of Convertible
Preferred Stock may receive shares of two or more classes of capital stock
of the Corporation, the Board shall in good faith determine the allocation
of the adjusted Conversion Price between the classes of capital stock.
After such allocation, the Conversion Price of each class of capital stock
shall be subject to adjustment on terms comparable to those applicable to
Common Stock in this Section 6.
(ii) In case the Corporation shall, at any time or from time to time
while any shares of the Convertible Preferred Stock are outstanding, issue
to holders of outstanding shares of Common Stock generally rights or
warrants entitling the holders thereof to subscribe for or purchase shares
of Common Stock at a price per share less than the Current Market Price of
the Common Stock on the date fixed for the determination of stockholders
entitled to receive such rights or warrants, the Conversion Price in
effect at the opening of business on the day following the date fixed for
such determination shall be decreased by multiplying such Conversion Price
by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such Current Market
Price, and the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so offered
for subscription or purchase. Such decrease shall become effective
immediately after the opening of business on
<PAGE>
18
the day following the date fixed for the determination of stockholders
entitled to receive such rights or warrants. No adjustment to the
Conversion Price shall be made in respect of any issuance of Common Stock
upon exercise of any right or warrant if an adjustment shall previously
have been made upon issuance of such right or warrant. In case any rights
or warrants referred to in this subparagraph (ii) in respect of which an
adjustment shall have been made shall expire unexercised within 45 days
after the same shall have been distributed or issued by the Corporation,
the Conversion Price shall be readjusted at the time of such expiration to
the Conversion Price that would have been in effect if no adjustment had
been made on account of the distribution or issuance of such expired
rights or warrants.
(iii) In case the Corporation shall, at any time or from time to
time while any shares of the Convertible Preferred Stock are outstanding,
distribute to holders of outstanding shares of Common Stock generally
evidences of indebtedness or assets of the Corporation or any of its
subsidiaries or Affiliates (as defined in section 6(m)), including
securities and cash, but excluding (x) any dividend or distribution or
rights or warrants referred to in clause (i) or (ii) above and (y) regular
quarterly cash dividends of the Corporation declared in the ordinary
course by the Board, then in each such case the Conversion Price in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution shall
be decreased by multiplying such Conversion Price by a fraction, the
numerator of which shall be the Current Market Price on the date fixed for
such determination less the then fair market value (as determined by the
Board in good faith) of the portion of such evidences of indebtedness or
assets so distributed applicable to one share of Common Stock, and the
denominator of which shall be such Current Market Price. Such adjustment
shall be made whenever any such distribution is made and shall become
effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such distribution.
(iv) At any time or from time to time while any shares of
Convertible Preferred Stock are outstanding in case of (A) any capital
reorganization or any
<PAGE>
19
reclassification or change of the Common Stock (other than a
reclassification covered by clause (i) above) of the Corporation, (B) the
consolidation or merger of the Corporation with or into any other
corporation or (C) the sale, lease or other disposition or conveyance of
the property and assets of the Corporation as, or substantially as, an
entirety to any other corporation, in each case as a result of which
holders of outstanding shares of Common Stock generally will be entitled
to receive shares of stock or other securities or other property
(including cash) with respect to or in exchange for the Common Stock,
there shall be no adjustment of the Conversion Price but the shares of
Convertible Preferred Stock shall, after such capital reorganization,
reclassification or change of Common Stock, consolidation, merger or sale,
lease or other disposition or conveyance, be convertible into the kind and
amount of shares of stock or other securities or property (including cash)
which the holder of shares of Convertible Preferred Stock would have been
entitled to receive upon such capital reorganization, reclassification or
change of Common Stock, consolidation, merger or sale, lease or other
disposition or conveyance if such holder had converted the shares of
Convertible Preferred Stock owned by such holder immediately prior to the
time of such capital reorganization, reclassification or change of Common
Stock, consolidation, merger or sale, lease or other disposition or
conveyance (assuming such holder elected to receive the same kind and
amount of shares of stock or other securities or property (including cash)
receivable upon such capital reorganization, reclassification or change of
Common Stock, consolidation, merger or sale, lease or other disposition or
conveyance receivable by a plurality of the holders of shares of Common
Stock); and, in any such case, if necessary, appropriate adjustment shall
be made in the application of the provisions set forth in this Section 6
with respect to the rights and interests of the holder of shares of
Convertible Preferred Stock, so that the provisions set forth in this
Section 6 (including without limitation those set forth in this Section
6(f)) shall be made applicable, as closely as reasonably practicable, to
any shares of stock or other securities or property thereafter deliverable
on the conversion of the shares of Convertible Preferred Stock. The
provisions of this clause (iv) shall apply to successive reorganizations,
reclassifications, changes, consolidations, mergers or sales, leases or
other dispositions or conveyances.
<PAGE>
20
(v) All calculations under this Section 6(f) shall be made to the
nearest cent or to the nearest one hundredth (1/100th) of a share, as the
case may be. Any provision of this Section 6 to the contrary
notwithstanding, no adjustment in the Conversion Price shall be made if
the amount of such adjustment would be less than 1% of the Conversion
Price then in effect, but any such amount shall be carried forward and an
adjustment with respect thereto shall be made at the time of and together
with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate 1% thereof or
more.
(vi) No adjustment provided for in clause (i), (ii) or (iii) of this
Section 6(f) shall be made if a distribution that would otherwise trigger
such adjustment is also made to the holders of shares of Convertible
Preferred Stock in the same manner and amount as if the holders owned the
shares of Common Stock into which the shares of Convertible Preferred
Stock are convertible immediately prior to such distribution.
(vii) The Board may make such adjustments in the Conversion Price,
in addition to those required by this Section 6(f), as shall be determined
by it (as evidenced by a resolution of the Board) to be (A) advisable in
order to avoid or diminish any adverse United States Federal income tax
consequences to holders of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any similar events treated as such for Federal
income tax purposes and (B) not adverse to the holders of the Convertible
Preferred Stock. The Board shall have the power to resolve any ambiguity
or correct any error in this Section 6 in a manner not adverse to the
holders of the Convertible Preferred Stock.
(viii) Notwithstanding the foregoing provisions, the issuance of any
shares of Common Stock pursuant to any plan providing for the reinvestment
of dividends or interest payable on securities of the Corporation and the
investment of additional optional amounts in shares of Common Stock under
any such plan shall not be deemed to constitute an issuance of Common
Stock or rights or warrants by the Corporation to which any of the
provisions of this Section 6(f) applies.
<PAGE>
21
(g) Whenever the Conversion Price shall be adjusted as provided in
Section 6(f), the Corporation shall forthwith give written notice to the holders
of shares of Convertible Preferred Stock by first class mail to such holders'
respective addresses as shown on the stock books of the Corporation, which
notice shall show in detail the facts requiring such adjustment and the
Conversion Price that shall be in effect after such adjustment and the manner of
computation thereof. Where appropriate, such notice may be given in advance and
may be included as part of a notice required to be given under the provisions of
Section 6(h).
(h) In the event the Corporation shall propose to take any action of
the type described in clause (i), (ii), (iii) or (iv) of Section 6(f), the
Corporation shall give written notice to the holders of shares of Convertible
Preferred Stock, by first class mail to such holders' respective addresses as
shown on the stock books of the Corporation, which notice shall specify the date
fixed for the determination of stockholders to be affected, if any, by such
action and the approximate date on which such action is to take place. Such
notice shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action (to the extent such
effect may be known at the date of such notice) on the Conversion Price and the
number, kind or class of shares or other securities or property which shall be
deliverable or purchasable upon the occurrence of such action or deliverable
upon conversion of the shares of Convertible Preferred Stock. In the case of any
action which would require the fixing of such date of determination, such notice
shall be given at least 10 days prior to the date so fixed and, in case of all
other action, such notice shall be given at least 15 days prior to the taking of
such proposed action. The failure to give the notice required by this
subparagraph (h), or any defect therein, shall not affect the legality or
validity of any action of the type described in clause (i), (ii), (iii) or (iv)
of Section 6(f) or any vote authorizing such action.
(i) The Corporation shall pay all documentary, stamp, transfer or
other transactional taxes attributable to the issuance or delivery of shares of
Common Stock upon conversion of the shares of Convertible Preferred Stock;
provided that the Corporation shall not be required to pay any taxes payable in
respect of any transfer involved in the issuance or delivery of any certificates
representing such shares of Common Stock in a name other than that of the holder
of the shares of Convertible Preferred Stock in
<PAGE>
22
respect of which such certificates are being issued and no such issuance or
delivery shall be made unless and until the holder requesting such issuance has
paid to the Corporation the amount of any such tax or has established to the
reasonable satisfaction of the Corporation that such tax is not required to be
paid.
(j) So long as any Convertible Preferred Stock remains outstanding,
the Corporation shall reserve at all times, free from preemptive rights, out of
its authorized but unissued shares of Common Stock or Common Stock held in
treasury, solely for the purpose of effecting the conversion of the Convertible
Preferred Stock, sufficient shares of Common Stock to provide for the conversion
of all outstanding shares of Convertible Preferred Stock.
(k) If, and so long as, any shares of Common Stock into which the
shares of Convertible Preferred Stock are then convertible are listed on any
national securities exchange, the Corporation will, if permitted by the rules of
such exchange, list and keep on such exchange, upon official notice of issuance,
all shares of Common Stock issuable upon conversion.
(1) All shares of Common Stock which may be issued and delivered
upon conversion of the shares of Convertible Preferred Stock will upon issuance
by the Corporation and delivery be duly and validly issued, fully paid and
nonassessable and free from all documentary, stamp, transfer or other
transactional taxes and all liens and charges with respect to the issuance
thereof and the Corporation shall take no action which will cause a contrary
result (including, without limitation, any action which would cause the
Conversion Price to be less than the par value, if any, of the Common Stock).
(m) For purposes of this Section 6:
(i) "Affiliate" shall have the meaning ascribed thereto in the
Standstill Agreement.
(ii) "Closing Price" means, for any Trading Day, the last reported
sales price, regular way, per share of Common Stock or, in case no such
reported sale takes place on such day, the average of the reported closing
bid and asked prices, regular way, per share of Common Stock, in either
case as reported on the New York Stock Exchange Composite Tape or, if the
Common Stock is not then listed or admitted to trading on such exchange,
on
<PAGE>
23
the principal national securities exchange on which the Common Stock is
then listed or admitted to trading or, if the Common Stock is not then
listed or admitted to trading on any national securities exchange, as
quoted through the National Association of Securities Dealers Automated
Quotations National Market System or, if the Common Stock is not then
listed or admitted to trading on any national securities exchange or
quoted through such National Market System, the average of the closing bid
and asked prices per share of Common Stock in the over-the-counter market
as furnished by any New York Stock Exchange member firm that makes a
market in the Common Stock selected from time to time by the Corporation
for that purpose with the consent of the Required Holders.
(iii) "Current Market Price" means, as of any date, the average of
the Closing Prices for the 30 consecutive Trading Days ending on the
Trading Day prior to such date.
(iv) "Investor" shall have the meaning ascribed thereto in the
Standstill Agreement.
(v) "Investor Related Parties" shall have the meaning ascribed
thereto in the Standstill Agreement.
(vi) "Standstill Agreement" means the Standstill and Registration
Rights Agreement dated as of July 18, 1991, among the Corporation, The
Equitable Life Assurance Society of the United States and the Investor, as
amended from time to time.
(vii) "Subsidiary" shall have the meaning ascribed thereto in the
Standstill Agreement.
(viii) "Total Voting Power" shall have the meaning ascribed thereto
in the Standstill Agreement.
(ix) "Trading Day" means any day the New York Stock Exchange is open
for regular trading.
(x) "Voting Power" shall have the meaning ascribed thereto in the
Standstill Agreement.
(xi) "Voting Securities" shall have the meaning ascribed thereto in
the Standstill Agreement.
<PAGE>
24
SECTION 7. Liquidation. The shares of Convertible Preferred Stock
shall rank prior to the shares of Junior Securities upon liquidation,
dissolution or winding-up of the Corporation, whether voluntary or involuntary
(a "Liquidation Transaction"), so that in the event of any Liquidation
Transaction, the holders of shares of Convertible Preferred Stock then
outstanding shall be entitled to receive out of the assets or surplus funds of
the Corporation available for distribution to its stockholders, or proceeds
thereof, whether from capital, surplus or earnings, before any distribution is
made to holders of any Junior Securities, a liquidation preference in an amount
per share of Convertible Preferred Stock equal to, (a) in the case of any
Liquidation Transaction voluntarily entered into by the Corporation, the
redemption price per share applicable to a redemption at such date pursuant to
Section 4(a), or (b) in the case of any Liquidation Transaction involuntarily
effected by the Corporation, the Stated value, plus in the case of clause (a) or
(b) an amount equal to all dividends (whether or not earned or declared)
accumulated and unpaid on the shares of Convertible Preferred Stock to the date
of final distribution. If, upon any Liquidation Transaction, the assets or
surplus funds of the Corporation, or proceeds thereof, whether from capital,
surplus or earnings, distributable among the holders of shares of Convertible
Preferred Stock and any Parity Securities then outstanding are insufficient to
pay in full the preferential liquidation payments due to such holders, such
assets or proceeds shall be distributable among such holders ratably in
accordance with the amounts that would be payable on such shares of Convertible
Preferred Stock and Parity Securities if all amounts payable thereon were
payable in full. In the event of a Liquidation Transaction, the Corporation
shall give written notice to the holders of shares of Convertible Preferred
Stock, by first class mail to such holders' respective addresses as shown on the
stock books of the Corporation. Neither the consolidation, merger or other
business combination of the Corporation with or into any other person or persons
nor the sale of all or substantially all the assets of the Corporation shall be
deemed to be a Liquidation Transaction.
SECTION 8. Voting Rights. (a) The holders of shares of Convertible
Preferred Stock shall not be entitled to any voting rights except as provided in
this Section 8, the Restated Certificate of Incorporation of the Corporation or
as otherwise required by law.
<PAGE>
25
(b} (i) If at any time or times six quarterly dividends payable on
Convertible Preferred Stock shall be in arrears and unpaid, in whole or in part,
or shall not have been declared and a sum sufficient for the payment thereof in
full shall not have been set apart for payment or if the Corporation shall have
failed to discharge the Mandatory Redemption Obligation, then the number of
directors constituting the Board, without further action, shall be increased by
one and the holders of Convertible Preferred Stock shall have the exclusive
right, voting separately as a class, to elect the director of the Corporation to
fill such newly created directorship. The remaining directors constituting the
Board shall continue to be elected by the other class or classes of stock
entitled to vote therefor.
(ii) Whenever such voting right shall have vested, such right may be
exercised at a special meeting of the holders of Convertible Preferred Stock, at
any annual or special meeting of stockholders held for the purpose of electing
directors or by the written consent of the holders of Convertible Preferred
Stock pursuant to Section 228 of the General Corporation Law of the State of
Delaware. The director elected pursuant to such right shall be elected by a
majority of the votes cast, with each outstanding share of Convertible Preferred
Stock carrying one vote. Such voting right shall continue until such time as all
cumulative dividends accumulated on the Convertible Preferred Stock shall have
been paid in full or the Corporation shall have fulfilled the Mandatory
Redemption Obligation, as the case may be, at which time such voting right of
the holders of Convertible Preferred Stock shall terminate and the authorized
number of members of the Board shall automatically be reduced by one, but such
voting right shall again vest in the event of each and every subsequent failure
of the Corporation to pay or declare and set apart for payment dividends for the
requisite number of periods or to discharge the Mandatory Redemption Obligation.
(iii) At any time when such voting right shall have vested in the
holders of Convertible Preferred Stock, a proper officer of the Corporation
shall, upon the written request of holders of record of 10% of the shares of
Convertible Preferred Stock then outstanding, call a special meeting of holders
of Convertible Preferred Stock for the purpose of electing the director to be
elected by such holders or removing any director previously elected. Such
meeting shall be held at the earliest practicable date upon not less than 10
days' notice to such holders. If such meeting; shall not be called within 30
days after receipt of
<PAGE>
26
such written request, then the holders of record of 10% of the shares of
Convertible Preferred Stock then outstanding may designate in writing one of
their number to call such meeting at the expense of the Corporation, and such
meeting may be called by such person so designated upon not less than 10 days'
notice to such holders. Any holder of Convertible Preferred Stock shall have
access to the stock books of the Corporation for the purpose of causing a
meeting of stockholders to be so called.
(iv) At any meeting at which the holders of Convertible Preferred
Stock shall have the right to elect a director, the presence in person or by
proxy of the holders of at least a majority of the then outstanding shares of
Convertible Preferred Stock shall be required and be sufficient to constitute a
quorum. At any such meeting or adjournment thereof, the absence of a quorum of
the holders of Convertible Preferred Stock shall not prevent the election of
directors other than those to be elected by the holders of Convertible Preferred
Stock and the absence of a quorum or quorums of the holders of capital stock
entitled to elect such other directors shall not prevent the election of the
director to be elected by the holders of convertible Preferred Stock.
(v) The director elected by the holders of Convertible Preferred
Stock shall serve until the earlier of (i) the election by the holders of
Convertible Preferred Stock and qualification of such director's successor and
(ii) the time at which the holders of the Convertible Preferred Stock no longer
have the right to elect such director. Upon any termination of such voting
rights, the term of office of such director elected by the holders of
Convertible Preferred Stock shall terminate immediately. Other than as provided
in the two preceding sentences, the director elected by the holders of
Convertible Preferred Stock may be removed only by the holders of the
Convertible Preferred Stock.
(vi) If the director so elected by the holders of Convertible
Preferred Stock shall cease to serve as director before such director's term
shall expire, the holders of Convertible Preferred Stock then outstanding may,
in the manner provided above, elect a successor to hold office for the unexpired
term of the director whose place shall be vacant.
(c) So long as any shares of Convertible Preferred Stock are
outstanding, the Corporation will not,
<PAGE>
27
without the affirmative vote, or the written consent pursuant to Section 228 of
the General Corporation Law of the State of Delaware, of the Required Holders:
(i) increase (except by an amendment to Section 1 approved by the
Board in the manner specified in the General Corporation Law of the State
of Delaware, as necessary to permit the issuance of additional shares of
Convertible Preferred Stock pursuant to Section 3(c)) the authorized
number of shares of Convertible Preferred Stock or reclassify the shares
of Convertible Preferred Stock; or
(ii) amend, alter or repeal any of the provisions hereof or of the
Restated Certificate of Incorporation of the Corporation so as to affect
adversely the holders of the Convertible Preferred Stock.
<PAGE>
(d) For purposes of any vote or consent under this Section 8 by the
holders of shares of the Convertible Preferred Stock, any shares of Convertible
Preferred Stock owned by the Corporation or by any of its Subsidiaries shall be
deemed not to be outstanding (unless otherwise provided by the General
Corporation Law of the State of Delaware).
IN WITNESS WHEREOF, The Equitable Companies Incorporated has caused
this Certificate of Designations, Preferences and Relative, Participating,
Optional and other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions thereof of its Convertible Exchangeable Preferred
Stock, Series A, to be duly executed by its Chairman and Chief Executive Officer
and attested to by its Secretary and has caused its corporate seal to be affixed
hereto, as of this 14th day of October, 1992.
/s/ Richard H. Jenrette
-------------------------------
Name: Richard H. Jenrette
Title: Chairman and
Chief Executive Officer
[Corporate Seal)
ATTEST:
/s/ Molly K. Heines
- -------------------------
Name: Molly K. Heines
Title: Secretary
<PAGE>
Exhibit A
Terms of the Convertible Subordinated Debentures
Issue: Convertible Subordinated Debentures of The Equitable
Companies Incorporated (the "Corporation") (the "Convertible
Subordinated Debentures").
Maturity: October 15, 2007. On the maturity date of the Convertible
Subordinated Debentures, the Company may, in lieu of making
cash payments to the holders of the Convertible Subordinated
Debentures in an amount equal to the aggregate amount of
principal and accrued interest payable, issue to such
holders shares of Common Stock (valued at the average of the
Closing Prices for the 30 consecutive Trading Days ending on
the Trading Day prior to such date).
Interest: Six-month LIBOR plus 1.50%, subject to a maximum rate of
10%, payable semiannually, commencing to accrue on the date
of issuance. Interest will be calculated on the basis of the
actual number of days elapsed over a year of 360 days.
Prior to July 22, 1995, interest will be paid in cash or, at
the option of the Corporation, upon not less than 10 nor
more than 30 days prior written notice to the holders, in
additional Convertible Subordinated Debentures at the rate
of $l,000 principal amount thereof for each $1,000 of
interest not paid in cash. On or after July 22, 1995,
interest will be paid in cash or, at the option of the
Corporation, upon not less than 10 nor more than 30 days
prior written notice to the holders, in the number of shares
of Corporation Common Stock determined by dividing (i) the
interest not paid in cash on such interest payment date by
(ii) the average of the Closing Prices for the 30
consecutive Trading Days ending on the Trading Day prior to
such date.
<PAGE>
2
Optional
Redemption: The Convertible Subordinated Debentures will not be
redeemable prior to October 15, 1997. On or after October
15, 1997, the Corporation may redeem the Convertible
Subordinated Debentures, in whole or in part at its option,
upon not less than 10 nor more than 30 days prior written
notice to the holders, in cash in multiples of $20,000,000
aggregate principal amount, at a redemption price of 105% of
the principal amount thereof declining ratably to 100% of
the principal amount thereof after October 15, 2002,
together with accrued and unpaid interest to the date of
redemption. The Convertible Subordinated Debentures will be
redeemed pro rata from among the Convertible Subordinated
Debentures then outstanding.
Conversion
at Option of
Holders: The Convertible Subordinated Debentures will be convertible,
at the option of the holders, at any time in whole or in
part, upon 30 days prior written notice to the Corporation
(except following notice of redemption), into shares of
Corporation Common Stock at the Conversion Price per share;
provided that, prior to July 22, 1995, conversion cannot
occur to the extent (but only to the extent) that such
conversion will result in the Investor and the Investor
Related Parties owning shares of Voting Securities
representing greater than 49% of the Total Voting Power.
Mandatory
Conversion: If the Closing Price for the Corporation Common Stock is at
least 150% of the Conversion Price for 20 out of 30
consecutive Trading Days ending on the fifth Trading Day
prior to the notice for such mandatory conversion, the
Convertible Subordinated Debentures will automatically
convert into shares of Corporation Common Stock at the
<PAGE>
3
Conversion Price per share; provided that, prior to July 22,
1995, conversion will not occur to the extent (but only to
the extent) that such conversion will result in the Investor
and the Investor Related Parties owning shares of Voting
Securities representing greater than 49% of the Total Voting
Power.
Conversion
Price: $10.10 thereon, subject to adjustment in certain events as
described below.
The Conversion Price is subject to adjustment upon, without
limitation, (i) the issuance of capital stock as a dividend
or distribution on the Corporation Common Stock, (ii)
subdivisions and combinations of the Corporation Common
Stock and (iii) the distribution to all holders of
Corporation Common Stock of evidences of indebtedness or
assets of the Corporation or any of its Subsidiaries or
Affiliates or rights or warrants. No adjustment in the
Conversion Price will be made for regular quarterly cash
dividends declared in the ordinary course by the Board. No
adjustment in the Conversion Price will be required unless
such adjustment will cause a change of at least 1% in the
Conversion Price then in effect; provided, that any
adjustment that would otherwise be required to be made will
be carried forward and taken into account in any subsequent
adjustment.
Reclassification,
Merger, Etc.: In the case or (i) any reclassification or change of the
Corporation Common Stock, (ii) a consolidation or merger
involving the Corporation, or (iii) a sale or conveyance to
another corporation of the property and assets of the
Corporation as an entirety or substantially as an entirety,
in each case as a result of which holders of Corporation
Common Stock will be entitled to receive stock, securities,
other property or
<PAGE>
4
assets (including cash) with respect to or in exchange for
the Corporation Common Stock, the holders of the Convertible
Subordinated Debentures then outstanding will be entitled
thereafter to convert such Convertible Subordinated
Debentures into the kind and amount of shares of stock and
other securities or property which such holders would have
received upon such reclassification, change, consolidation,
merger, combination, sale or conveyance had such Convertible
Subordinated Debentures been converted into the Corporation
Common Stock immediately prior to such reclassification,
change, consolidation, merger, combination, sale or
conveyance.
Subordination: The Convertible Subordinated Debentures are subordinated in
right of payment to all Senior Debt of the Corporation.
Senior Debt of the Corporation is defined as (a) the
principal of, premium, if any, and accrued and unpaid
interest relating to (i) indebtedness of the Corporation for
money borrowed, (ii) guarantees by the Corporation of
indebtedness for money borrowed by any other person and
(iii) indebtedness evidenced by notes, debentures, bonds or
other Instruments of indebtedness for payment of which the
Corporation is responsible or liable unless it is provided
that such indebtedness, obligations or guarantees, are not
superior in right of payment to the Convertible Subordinated
Debentures.
Events of
Default: The Convertible Subordinated Debentures will contain the
following Events of Default, (i) failure to pay principal
when due, (ii) failure to pay interest within 5 Business
Days of when due and (iii) the bankruptcy or insolvency of
the Corporation, The Equitable Life Assurance Society of the
United States or any Significant Subsidiary (as defined in
the Standstill and
<PAGE>
5
Registration Rights Agreement). Upon the occurrence and
continuance of an Event of Default any holder of the
Convertible Subordinated Debentures may declare the
principal thereof to be immediately due and payable (except,
in the case of an Event of Default relating to bankruptcy or
insolvency, in which case the Convertible Subordinated
Debentures shall automatically immediately become due and
payable).
<PAGE>
Exhibit 4.01(c)
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL
AND OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
THE EQUITABLE COMPANIES INCORPORATED
PREFERRED STOCK, SERIES B
---------------------
Pursuant to Section 151
of the General Corporation Law of the State of Delaware
---------------------
The following resolution has been duly adopted by the Board of
Directors (such Board, including any committee thereof duly authorized to act on
behalf of such Board, herein referred to as the "Board") of The Equitable
Companies Incorporated, a Delaware corporation (the "Corporation"), pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, which resolution remains in full force and effect as of the date
hereof:
WHEREAS the Board is authorized, within the limitations and
restrictions stated in the Restated Certificate of Incorporation of the
Corporation, to fix by resolution or resolutions the voting rights, if any, of
each series of Preferred Stock, par value $1.00 per share (the "Preferred
Stock"), of the Corporation and the designations, preferences and relative,
participating, optional and other special rights and qualifications, limitations
and restrictions thereof; and
WHEREAS it is the desire of the Board, pursuant to its authority as
aforesaid, to authorize and fix the terms
<PAGE>
2
of a series of Preferred Stock and the number of shares constituting such
series:
NOW, THEREFORE BE IT
RESOLVED that there is hereby authorized and created a series of
Preferred Stock on the terms and with the provisions (in addition to those set
forth in the Restated Certificate of Incorporation of the Corporation that are
applicable to all Preferred Stock) as follows:
SECTION 1. Designation, Number of Shares and Stated Value. The
series of Preferred Stock shall be designated the "Preferred Stock, Series B"
(the "Series B Preferred Stock"). The number of authorized shares of Series B
Preferred Stock shall be 2,989,116. The number of shares of Series B Preferred
Stock may be decreased (but not below the number of shares of Series B Preferred
Stock at the time outstanding), in the manner specified in the General
Corporation Law of the State of Delaware; by an amendment to this Section 1
approved by the Board, but may not be increased or otherwise decreased without
the affirmative vote of the Required Holders (as defined in Section 3(b)). The
stated value of each share of Series B Preferred Stock ("Stated Value") shall be
$100.
SECTION 2. Rank. The Series B Preferred Stock shall, as to the
payment of dividends and the distribution of assets upon the liquidation,
dissolution or winding up of the Corporation, rank (i) prior to the Common
Stock, par value $.01 per share (the "Common Stock"), of the Corporation and any
other capital stock of the Corporation (other than (a) the Convertible
Exchangeable Preferred Stock, Series A, par value $1.00 per share, of the
Corporation (the "Series A Preferred Stock") and (b) any other class or series
of a class of capital stock of the Corporation the terms of which expressly
provide that the shares thereof rank senior or on a parity as to the payment of
dividends and the distribution of assets upon the liquidation, dissolution or
winding up of the Corporation with the shares of the Series B Preferred Stock)
(such securities, other than those described in the immediately preceding
parenthetical clause, collectively referred to herein as the "Junior
Securities") and (ii) on a parity with the Series A Preferred Stock and any
other class or series of a class of capital stock of the Corporation the terms
of which expressly provide that the shares thereof rank on a parity as to the
payment of dividends and the distribution of assets upon the liquidation,
dissolution or winding up of the
<PAGE>
3
Corporation with the shares of the Series B Preferred Stock (the "Parity
Securities").
SECTION 3. Dividends. (a) The holders of outstanding shares of
Series B Preferred Stock, in preference to the holders of outstanding shares of
any Junior Securities, shall be entitled to receive, when, as and if declared by
the Board, out of funds of the Corporation legally available for the payment of
dividends, a cumulative quarterly cash dividend per share in an amount for each
Dividend Period (as defined below) calculated by multiplying the Stated Value by
the Dividend Rate (as defined below) for such Dividend Period. "Dividend Rate"
means, for a Dividend Period, the product of (i) the lesser of 10% and the LIBOR
Rate (determined pursuant to Section 3(b)) for such Dividend Period, multiplied
by (ii) a fraction, the numerator of which is the number of days in such
Dividend Period and the denominator of which is 360. Quarterly dividends shall
be payable on each July 22, October 22, January 22 and April 22 (each a
"Dividend Payment Date"), commencing on October 22, 1992 (the "Initial Dividend
Payment Date"). Each such quarterly dividend shall be cumulative and shall
accumulate, whether or not earned or declared and whether or not there are funds
of the Corporation legally available for payment of dividends, for the period
(each a "Dividend Period") commencing on and including the most recent Dividend
Payment Date to which dividends have been paid or accumulated to but excluding
the next succeeding Dividend Payment Date, except that (x) the Dividend Period
terminating on the Initial Dividend Payment Date (the "Initial Dividend Period")
shall commence on and include July 22, 1992 and (y) with respect to shares of
Series B Preferred Stock which are redeemed pursuant to Section 4(a) or Section
4(b) or redeemed upon a Liquidation Transaction (as defined in Section 5), as
the case may be, the final Dividend Period shall terminate on the applicable
redemption date or distribution date, as the case may be. Dividends shall be
payable, net of any amounts required to be withheld for or with respect to
taxes, to holders of record as they appear on the stock books of the Corporation
at the close of business on such record dates, not more than 60 days nor less
than 10 days prior to the respective Dividend Payment Date, as shall be fixed by
the Board. If any Dividend Payment Date is not a business day, the quarterly
dividend to be paid on such Dividend Payment Date shall be paid on the next
following business day. A "business day" means any day that is not a Saturday,
Sunday or other day on which commercial banks in New York City are required or
authorized by law to be closed. Payments of quarterly dividends shall be made in
coin or currency of the
<PAGE>
4
United States that as of the date of payment shall be legal tender for payment
of public and private debts by mailing a check to each holder of shares of
Series B Preferred Stock at the address of such holder as shown on the stock
books of the Corporation.
(b) The LIBOR Rate will be 5.0625% for the Initial Dividend Period
and the next succeeding Dividend Period and will be determined on each January
22 and July 22 thereafter (each, a "Determination Date") for the Dividend
Periods terminating on the two Dividend Payment Dates next following such
Determination Date (and any other Dividend Periods terminating during such
period) and will be the sum of 1.50% plus LIBOR (expressed as a percentage) in
respect of such Determination Date determined as follows:
(i) In respect of each Determination Date, LIBOR will be determined
on the basis of the rate for deposits, in U.S. dollars, having a six-month
maturity commencing on such Determination Date, which rate appears on the
display designated as the Telerate Page 3750 on the Dow Jones Telerate
Service (or such other page as may replace that page on that service, or
such other alternative service as may be agreed by the Corporation and the
Required Holders, for the purpose of displaying a rate comparable to the
rate which currently appears on the Telerate Page 3750) (the "Telerate
Page 3750") as of 11:00 a.m., London time, on the second London Banking
Day prior to such Determination Date. If such rate does not appear on the
Telerate Page 3750 as of such time, LIBOR in respect of such Determination
Date will be determined as described in clause (ii) below.
(ii) In respect of any Determination Date on which the rate for
deposits in U.S. dollars, having a six-month maturity commencing on such
Determination Date, does not appear on the Telerate Page 3750 as described
in clause (i) above, LIBOR will be determined on the basis of the rates at
approximately 11:00 a.m., London time, on the London Banking Day
immediately prior to such Determination Date, for deposits in U.S.
dollars, in an amount comparable to the aggregate Stated Value for all
shares of Series B Preferred Stock outstanding on such Determination Date,
having a six-month maturity commencing on such Determination Date offered
to prime banks in the London interbank market by four major banks in the
London interbank market selected by the Corporation and approved by the
Required Holders. The
<PAGE>
5
Corporation will request the principal London office of each such bank to
provide a quotation of its rate. If at least two such quotations are
provided, LIBOR in respect of such Determination Date will be the
arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR in respect of such Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 a.m., New York
City time, on the Determination Date by three major banks in New York
City, selected by the Corporation and approved by the Required Holders,
for loans in U.S. dollars to leading European banks, in an amount
comparable to the aggregate Stated Value for all shares of Series B
Preferred Stock outstanding on such Determination Date, having a six-month
maturity commencing on such Determination Date; provided, however, that if
the banks selected as aforesaid by the Corporation are not quoting as
mentioned in this sentence, LIBOR in respect of such Determination Date
will be LIBOR as calculated in respect of the preceding Determination
Date.
(iii) A "London Banking Day" shall mean any day (other than a
Saturday, Sunday or legal holiday) on which banks in New York City and
London, England are open for dealings in dollar deposits in the London
interbank market.
(iv) "Required Holders" means, at any date, the holders of at least
66-2/3% of the aggregate Stated Value of the shares of Series B Preferred
Stock then outstanding disregarding the aggregate Stated Value of any of
such shares owned by the Corporation or by any of its Subsidiaries (as
defined in Section 7).
(c) All dividends paid with respect to shares of Series B Preferred
Stock shall be paid pro rata to the holders entitled thereto.
(d) When dividends are not paid in full upon the Series B Preferred
Stock, any dividends declared or paid upon shares of Series B Preferred Stock
and any Parity Securities shall be declared or paid, as the case may be, pro
rata so that the amounts of dividends declared or paid, as the case may be, per
share on the Series B Preferred Stock and such other Parity Securities in all
cases bear to each other the same ratio that accumulated and unpaid dividends
per share on the shares of Series B Preferred Stock and such other Parity
Securities bear to each other. No interest, or sum of money in lieu of interest,
shall be
<PAGE>
6
payable in respect of any dividend payment or payments on the Series B Preferred
Stock or any Parity Securities which may be in arrears.
(e) Unless full cumulative dividends have been or contemporaneously
are declared by the Board and paid or declared and a sum set apart sufficient
for such payment by the Corporation on the Series B Preferred Stock for all
Dividend Periods terminating on or prior to the date of payment of dividends on
any Junior Securities, no dividends shall be declared or paid or sum set apart
for such payment or any other distribution made on or with respect to such
Junior Securities for any period, other than dividends payable or distributions
made in shares of Junior Securities.
(f) Unless full cumulative dividends have been or contemporaneously
are declared by the Board and paid or declared, and a sum set apart sufficient
for payment by the Corporation on the Series B Preferred Stock for all Dividend
Periods terminating on or prior to the date of any event described in clause (i)
or (ii) of this Section 3(f), the Corporation shall not, and shall not permit
its Subsidiaries to, (i) redeem, purchase, retire or otherwise acquire for any
consideration any shares of Series B Preferred Stock, unless (A) all shares of
Series B Preferred Stock outstanding shall be redeemed, repurchased, retired or
otherwise acquired or (B) the shares of Series B Preferred Stock are redeemed,
purchased, retired or otherwise acquired pro rata from among the holders of the
shares then outstanding or (ii) redeem, purchase, retire or otherwise acquire
for any consideration, or make any payment on account of a sinking fund or other
similar fund for redemption, purchase, retirement or acquisition of, any Junior
Securities or any Parity Securities, or any warrant, right or option to purchase
any thereof, or make any distribution in respect thereof, directly or
indirectly, whether in cash, obligations or securities of the Corporation or
other property, except, (i) in the case of Junior Securities, other than
redemptions, purchases, retirements, acquisitions or distributions made in
shares of Junior Securities, and (ii) in the case of Parity Securities, pro rata
so that the amounts redeemed, purchased, retired or otherwise acquired or paid
or distributed in respect thereof, as the case may be, per share on the Series B
Preferred Stock and such other Parity Securities in all cases bear to each other
the same ratio that accumulated and unpaid dividends and required redemption
payments per share on the shares of Series B Preferred Stock and such other
Parity Securities bear to each other.
<PAGE>
7
SECTION 4. Redemption. (a) To the extent the Corporation shall have
funds legally available therefor, the Series B Preferred Stock shall be subject
to redemption in cash, at the option of the Corporation, at any time in whole or
from time to time in part, at a redemption price per share equal to the Stated
Value, together with accumulated and unpaid dividends thereon to the redemption
date, without interest. If less than all shares of Series B Preferred Stock then
outstanding are to be redeemed, the shares of Series B Preferred Stock will be
redeemed pro rata from among the holders of shares of Series B Preferred Stock
then outstanding.
(b) Commencing on October 15, 2002 and on each succeeding October 15
through and including October 15, 2007, the Corporation shall redeem in cash the
number of shares of Series B Preferred Stock equal to the number of shares
outstanding on October 15, 2002 divided by six, in each case at a redemption
price per share equal to the Stated Value, together with accumulated and unpaid
dividends thereon to the redemption date, without interest. The shares of Series
B Preferred Stock will be redeemed pro rata from among the holders of the shares
then outstanding. The Corporation may, at its option, reduce or satisfy its
obligation to make any mandatory redemption pursuant to this paragraph (b) by
the number of shares of Series B Preferred Stock previously acquired by the
Corporation and canceled or held in treasury, which were not previously used to
reduce any such mandatory redemption.
(c) Notice of any redemption pursuant to Section 4(a) or Section
4(b) will be given to the holders of shares of Series B Preferred Stock not less
than 10 nor more than 30 days prior to the date fixed for redemption or the
mandatory redemption date, as the case may be. Notice of redemption will be
given by first class mail to such holders' respective addresses as shown on the
stock books of the Corporation and will specify (i) the date fixed for
redemption or the mandatory redemption date, as the case may be, and (ii) the
applicable redemption price. In the case of a partial redemption pursuant to
Section 4(a), such notice shall also specify the number of shares of Series B
Preferred Stock to be redeemed from each holder and the aggregate number of
shares of Series B Preferred Stock which will be outstanding after such
redemption.
(d) If funds for the redemption of any or all shares of Series B
Preferred Stock shall have been irrevocably set apart for redemption on the
redemption date, such
<PAGE>
8
shares of Series B Preferred Stock shall from and after the redemption date
cease to accumulate dividends and the only right of the holders of such shares
shall be to receive payment of the redemption price and all accumulated and
unpaid dividends on such shares to the date of redemption.
(e) If the Corporation shall fail at any time to discharge its
obligation to redeem shares of Series B Preferred Stock pursuant to paragraph
(4)(b) (a "Mandatory Redemption Obligation"), such Mandatory Redemption
Obligation shall be discharged as soon as the Corporation is able to discharge
such Mandatory Redemption Obligation. If and for so long as such Mandatory
Redemption Obligation shall not have been fully discharged, the Corporation
shall not (i) declare, pay or set apart for payment dividends or make any other
distribution on or with respect to any Parity Securities, except that dividends
may be declared, paid or set apart for payment or other distributions made upon
shares of Series B Preferred Stock and any Parity Securities pro rata so that
the amounts of dividends declared, paid or set apart or other distributions made
per share on the Series B Preferred Stock and such other Parity Securities bear
to each other the same ratio that accumulated and unpaid dividends and required
redemption payments, if any, per share on the shares of Series B Preferred Stock
and such other Parity Securities bear to each other; (ii) declare, pay or set
apart for payment dividends or make any other distribution on or with respect to
any Junior Securities, other than dividends paid or distributions made in shares
of Junior Securities; or (iii) redeem, purchase, retire or otherwise acquire for
any consideration, or make any payment on account of a sinking fund or other
similar fund for redemption, purchase, retirement or acquisition of, any Junior
Securities or any Parity Securities, or any warrant, right or option to purchase
any thereof, or make any distribution in respect thereof, directly or
indirectly, whether in cash, obligations or securities of the Corporation or
other property, except, (i) in the case of Junior Securities, other than
redemptions, purchases, retirements, acquisitions or distributions made in
shares of Junior Securities and (ii) in the case of Parity Securities, pro rata
so that the amounts redeemed, purchased, retired or otherwise acquired or paid
or distributed in respect thereof, as the case may be, per share on the Series B
Preferred Stock and such other Parity Securities in all cases bear to each other
the same ratio that accumulated and unpaid dividends and required redemption
payments per share on the shares of Series B Preferred Stock and such other
Parity Securities bear to each other.
<PAGE>
9
(f) Any cash payment to a holder of shares of Series B Preferred
Stock on any redemption date shall be made in coin or currency of the United
States that as of the date of payment shall be legal tender for payment of
public and private debts by mailing a check to such holder at the address of
such holder as shown on the stock books of the Corporation.
SECTION 5. Liquidation. The shares of Series B Preferred Stock shall
rank prior to the shares of Junior Securities upon liquidation, dissolution or
winding-up of the Corporation, whether voluntary or involuntary (a "Liquidation
Transaction"), so that in the event of any Liquidation Transaction, the holders
of shares of Series B Preferred Stock then outstanding shall be entitled to
receive out of the assets or surplus funds of the Corporation available for
distribution to its stockholders, or proceeds thereof, whether from capital,
surplus or earnings, before any distribution is made to holders of any Junior
Securities, a liquidation preference in an amount per share of Series B
Preferred Stock equal to the Stated Value, plus an amount equal to all dividends
(whether or not earned or declared) accumulated and unpaid on the shares of
Series B Preferred Stock to the date of final distribution. If, upon any
Liquidation Transaction, the assets or surplus funds of the Corporation, or
proceeds thereof, whether from capital, surplus or earnings, distributable among
the holders of shares of Series B Preferred Stock and any Parity Securities then
outstanding are insufficient to pay in full the preferential liquidation
payments due to such holders, such assets or proceeds shall be distributable
among such holders ratably in accordance with the amounts that would be payable
on such shares of Series B Preferred Stock and Parity Securities if all amounts
payable thereon were payable in full. In the event of a Liquidation Transaction,
the Corporation shall give written notice to the holders of shares of Series B
Preferred Stock, by first class mail to such holders' respective addresses as
shown on the stock books of the Corporation. Neither the consolidation, merger
or other business combination of the Corporation with or into any other person
or persons nor the sale of all or substantially all the assets of the
Corporation shall be deemed to be a Liquidation Transaction.
SECTION 6. Voting Rights. (a) The holders of shares of Series B
Preferred Stock shall not be entitled to any voting rights except as provided in
this Section 6, the Restated Certificate of Incorporation of the Corporation or
as otherwise required by law.
<PAGE>
10
(b) (i) If at any time or times six quarterly dividends payable on
Series B Preferred Stock shall be in arrears and unpaid, in whole or in part, or
shall not have been declared and a sum sufficient for the payment thereof in
full shall not have been set apart for payment or if the Corporation shall have
failed to discharge any Mandatory Redemption Obligation, then the number of
directors constituting the Board, without further action, shall be increased by
one and the holders of Series B Preferred Stock shall have the exclusive right,
voting separately as a class, to elect the director of the Corporation to fill
such newly created directorship. The remaining directors constituting the Board
shall continue to be elected by the other class or classes of stock entitled to
vote therefor.
(ii) Whenever such voting right shall have vested, such right may be
exercised at a special meeting of the holders of Series B Preferred Stock, at
any annual or special meeting of stockholders held for the purpose of electing
directors or by the written consent of the holders of Series B Preferred Stock
pursuant to Section 228 of the General Corporation Law of the State of Delaware.
The director elected pursuant to such right shall be elected by a majority of
the votes cast, with each outstanding share of Series B Preferred Stock carrying
one vote. Such voting right shall continue until such time as all cumulative
dividends accumulated on the Series B Preferred Stock shall have been paid in
full or the Corporation shall have fulfilled all Mandatory Redemption
Obligations, as the case may be, at which time such voting right of the holders
of Series B Preferred Stock shall terminate and the authorized number of members
of the Board shall automatically be reduced by one, but such voting right shall
again vest in the event of each and every subsequent failure of the Corporation
to pay or declare and set apart for payment dividends for the requisite number
of periods or to discharge any Mandatory Redemption Obligation.
(iii) At any time when such voting right shall have vested in the
holders of Series B Preferred Stock, a proper officer of the Corporation shall,
upon the written request of holders of record of 10% of the shares of Series B
Preferred Stock then outstanding, call a special meeting of holders of Series B
Preferred Stock for the purpose of electing the director to be elected by such
holders or removing any director previously elected. Such meeting shall be held
at the earliest practicable date upon not less than 10 days' notice to such
holders. If such meeting shall not be called within 30 days after receipt of
such written
<PAGE>
11
request, then the holders of record of 10% of the shares of Series B Preferred
Stock then outstanding may designate in writing one of their number to call such
meeting at the expense of the Corporation, and such meeting may be called by
such person so designated upon not less than 10 days' notice to such holders.
Any holder of Series B Preferred Stock shall have access to the stock books of
the Corporation for the purpose of causing a meeting of stockholders to be so
called.
(iv) At any meeting at which the holders of Series B Preferred
Stock shall have the right to elect a director, the presence in person or by
proxy of the holders of at least a majority of the then outstanding shares of
Series B Preferred Stock shall be required and be sufficient to constitute a
quorum. At any such meeting or adjournment thereof, the absence of a quorum of
the holders of Series B Preferred Stock shall not prevent the election of
directors other than those to be elected by the holders of Series B Preferred
Stock and the absence of a quorum or quorums of the holders of capital stock
entitled to elect such other directors shall not prevent the election of the
director to be elected by the holders of Series B Preferred Stock.
(v) The director elected by the holders of Series B Preferred Stock
shall serve until the earlier of (i) the election by the holders of Series B
Preferred Stock and qualification of such director's successor and (ii) the time
at which the holders of the Series B Preferred Stock no longer have the right to
elect such director. Upon any termination of such voting rights, the term of
office of such director elected by the holders of Series B Preferred Stock shall
terminate immediately. Other than as provided in the two preceding sentences,
the director elected by the holders of Series B Preferred Stock may be removed
only by the holders of the Series B Preferred Stock.
(vi) If the director so elected by the holders of Series B Preferred
Stock shall cease to serve as director before such director's term shall expire,
the holders of Series B Preferred Stock then outstanding may, in the manner
provided above, elect a successor to hold office for the unexpired term of the
director whose place shall be vacant.
(c) So long as any shares of Series B Preferred Stock are
outstanding, the Corporation will not, without the
<PAGE>
12
affirmative vote, or the written consent pursuant to Section 228 of the General
Corporation Law of the State of Delaware, of the Required Holders:
(i) increase the authorized number of shares of Series B Preferred
Stock or reclassify the shares of Series B Preferred Stock; or
(ii) amend, alter or repeal any of the provisions hereof or of the
Restated Certificate of Incorporation of the Corporation so as to affect
adversely the holders of the Series B Preferred Stock.
(d) For purposes of any vote or consent under this Section 6 by the
holders of shares of the Series B Preferred Stock, any shares of Series B
Preferred Stock owned by the Corporation or by any of its Subsidiaries shall be
deemed not to be outstanding (unless otherwise provided by the General
Corporation Law of the State of Delaware).
SECTION 7 Definitions. For purposes of this Certificate:
(i) "Standstill Agreement" means the Standstill and Registration
Rights Agreement dated as of July 18, 1991, among the Corporation, the
Equitable Life Assurance Society of the United States and AXA, as amended
from time to time.
<PAGE>
13
(ii) "Subsidiary" has the meaning ascribed to such term in the
Standstill Agreement.
IN WITNESS WHEREOF, The Equitable Companies Incorporated has caused
this Certificate of Designations, Preferences and Relative, Participating,
Optional and other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions thereof of its Preferred Stock, Series B, to be
duly executed by its Chairman and Chief Executive Officer and attested to by its
Secretary and has caused its corporate seal to be affixed hereto, as of this
14th day of October, 1992.
/s/ Richard H. Jenrette
------------------------------
Name: Richard H. Jenrette
Title: Chairman and
Chief Executive Officer
[Corporate Seal]
ATTEST:
/s/ Molly K. Heines
- -----------------------------
Name: Molly K. Heines
Title: Secretary
<PAGE>
Exhibit 4.01(d)
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL
AND OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
Of
THE EQUITABLE COMPANIES INCORPORATED
CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES C
-----------------------
Pursuant to Section 151
of the General Corporation Law of the State of Delaware
-----------------------
The following resolution has been duly adopted by the Board of
Directors (such Board, including any committee thereof duly authorized to act on
behalf of such Board, herein referred to as the "Board") of The Equitable
Companies Incorporated, a Delaware corporation (the "Corporation"), pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, which resolution remains in full force and effect as of the date
hereof:
RESOLVED that, pursuant to the authority expressly granted to and
vested in the Board by the provisions of the Restated Certificate of
Incorporation of the Corporation (the "Restated Certificate of Incorporation")
to fix by resolution or resolutions the voting rights, if any, of each series of
Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of the
Corporation and the designations, preferences and relative, participating,
optional and other special rights and qualifications, limitations and
restrictions thereof, the Board hereby authorizes and creates a series of
Preferred Stock on the terms and with the provisions (in addition to those set
forth in the Restated Certificate of Incorporation of the Corporation that are
applicable to all Preferred Stock) as follows:
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SECTION 1. Designation, Number of Shares and Liquidation Preference.
The series of Preferred Stock created by this resolution shall be designated the
"Cumulative Convertible Preferred Stock, Series C" (the "Cumulative Convertible
Preferred Stock"). The number of authorized shares of Cumulative Convertible
Preferred Stock shall be 2,000,000. The liquidation preference of each share of
Cumulative Convertible Preferred Stock (the "Liquidation Preference") shall be
$500.00.
SECTION 2. Rank. The Cumulative Convertible Preferred Stock shall,
as to the payment of dividends and the distribution of assets upon the
liquidation, dissolution or winding up of the Corporation, rank (i) prior to the
Common Stock, par value $.01 per share (the "Common Stock"), and any other
capital stock, of the Corporation (other than (a) the Corporation's Convertible
Exchangeable Preferred Stock, Series A, par value $1.00 per share (the "Series A
Preferred Stock"), (b) the Corporation's Preferred Stock, Series B, par value
$1.00 per share (the "Series B Preferred Stock"), and (c) any other class or
series of a class of capital stock of the Corporation the terms of which
expressly provide that the shares thereof rank senior or on a parity as to the
payment of dividends and the distribution of assets upon the liquidation,
dissolution or winding up of the Corporation with the shares of the Cumulative
Convertible Preferred Stock) (such securities, other than those described in the
immediately preceding parenthetical clause, collectively referred to herein as
the "Junior Securities") and (ii) on a parity with the Series A Preferred Stock,
the Series B Preferred Stock and any other class or series of a class of capital
stock of the Corporation the terms of which expressly provide that the shares
thereof rank on a parity as to the payment of dividends and the distribution of
assets upon the liquidation, dissolution or winding up of the Corporation with
the shares of the Cumulative Convertible Preferred Stock (the "Parity
Securities").
SECTION 3. Dividends. (a) The holders of outstanding shares of
Cumulative Convertible Preferred Stock shall be entitled to receive, in
preference to the holders of shares of Junior Securities, when, as and if
declared by the Board, out of funds of the Corporation legally available for the
payment of dividends, a cumulative cash dividend at the rate per annum of $30
per share of Cumulative Convertible Preferred Stock. Dividends shall accrue and
be payable quarterly, when, as and if
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declared by the Board, in arrears on each July 22, October 22, January 22 and
April 22 (each a "Dividend Payment Date"), commencing on July 22, 1993. Each
such quarterly dividend shall be cumulative and shall accumulate, whether or not
earned or declared and whether or not there are funds of the Corporation legally
available for payment of dividends, for the period (each, a "Dividend Period")
commencing on and including the most recent Dividend Payment Date to which
dividends have been paid or accumulated to but excluding the next succeeding
Dividend Payment Date, except (x) that the Dividend Period terminating on July
22, 1993 (the "Initial Dividend Period" shall commence on and include April 21,
1993 and (y) as otherwise provided in Sections 4, 5 and 7 with respect to shares
of Cumulative Convertible Preferred Stock that are redeemed or converted into
shares of Common Stock or with respect to which distributions are made upon a
Liquidation Transaction (as defined in Section 7). Dividends shall be payable,
net of any amounts required to be withheld for or with respect to taxes, to
holders of record as they appear on the stock books of the Corporation at the
close of business on such record dates, not more than 60 days nor less than 10
days prior to the respective Dividend Payment Date, as shall be fixed by the
Board. If any Dividend Payment Date is not a Business Day, the quarterly
dividend to be paid on such Dividend Payment Date shall be paid on the next
following Business Day. A "Business Day" means any day that is not a Saturday,
Sunday or other day on which commercial banks in New York City are required or
authorized by law to be closed. Payments of quarterly dividends shall be made in
coin or currency of the United States that as of the date of payment shall be
legal tender for payment of public and private debts by mailing a check to each
holder of shares of Cumulative Convertible Preferred Stock at the address of
such holder as shown on the stock books of the Corporation. Accumulated and
unpaid dividends for any past Dividend Periods may be declared and paid at any
time, without reference to any Dividend Payment Date, to holders of record on
such date, not exceeding 45 days preceding the payment date thereof, as may be
fixed by the Board.
(b) The amount of dividends payable for each full Dividend Period
for the Cumulative Convertible Preferred Stock shall be computed by dividing the
annual dividend rate by four. The amount of dividends payable for the Initial
Dividend Period, or any other period shorter or longer than a full Dividend
Period, on the
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Cumulative Convertible Preferred Stock shall be computed on the basis of a
360-day year consisting of twelve 30-day months. Holders of shares of Cumulative
Convertible Preferred Stock shall not be entitled to any dividends, whether
payable in cash, property or stock, in excess of cumulative dividends, as herein
provided, on the Cumulative Convertible Preferred Stock.
(c) All dividends paid with respect to shares of Cumulative
Convertible Preferred Stock shall be paid pro rata to the holders entitled
thereto.
(d) When dividends are not paid in full upon the Cumulative
Convertible Preferred Stock, any dividends declared or paid upon shares of
Cumulative Convertible Preferred Stock and any Parity Securities shall be
declared or paid, as the case may be, pro rata so that the amounts of dividends
declared or paid, as the case may be, per share on the Cumulative Convertible
Preferred Stock and such other Parity Securities in all cases bear to each other
the same ratio that accumulated and unpaid dividends per share on the shares of
Cumulative Convertible Preferred Stock and such other Parity Securities bear to
each other. No interest, or sum of money in lieu of interest, shall be payable
in respect of any dividend payment or payments on the Cumulative Convertible
Preferred Stock, or any Parity Securities, which may be in arrears.
(e) Unless full cumulative dividends on the Cumulative Convertible
Preferred Stock have been or contemporaneously are declared by the Board and
paid or declared and a sum sufficient for the payment thereof set apart by the
Corporation for all Dividend Periods terminating on or prior to the date of
payment of dividends on any Junior Securities, no dividends shall be declared or
paid or any sum set apart for such payment or any other distribution made on or
with respect to such Junior Securities for any period, other than dividends
payable or distributions made in shares of Junior Securities.
(f) Unless full cumulative dividends on the Cumulative Convertible
Preferred Stock have been or contemporaneously are declared by the Board and
paid or declared and a sum sufficient for the payment thereof set apart by the
Corporation for all Dividend Periods terminating on or prior to the date of any
event described
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in clause (x) or (y) of this Section 3(f), the Corporation shall not, and shall
not permit its Subsidiaries (as defined in Section 5(n)) to, (x) redeem,
purchase, retire or otherwise acquire for any consideration any shares of
Cumulative Convertible Preferred Stock, unless (A) all shares of Cumulative
Convertible Preferred Stock outstanding shall be redeemed, purchased, retired or
otherwise acquired or (B) the shares of Cumulative Convertible Preferred Stock
are redeemed, purchased, retired or otherwise acquired pro rata from among the
holders of the shares then outstanding or (y) redeem, purchase, retire or
otherwise acquire for any consideration, or make any payment on account of a
sinking fund or other similar fund for the redemption, purchase, retirement or
acquisition of, any Junior Securities or any Parity Securities, or any warrant,
right or option to purchase any thereof, or make any distribution in respect
thereof, directly or indirectly, whether in cash, obligations or securities of
the Corporation or other property, except (i) in the case of Junior Securities,
redemptions, purchases, retirements, acquisitions or distributions made in
shares of Junior Securities or redemptions, purchases or acquisitions of shares
of Common Stock for purposes of any employee benefit plan or program of the
Corporation or any Subsidiary and (ii) in the case of Parity Securities,
redemptions, purchases, retirements, acquisitions or distributions made pro rata
so that the amounts redeemed, purchased, retired or otherwise acquired or paid
or distributed in respect thereof, as the case may be, per share on the
Cumulative Convertible Preferred Stock and such other Parity Securities in all
cases bear to each other the same ratio that accumulated and unpaid dividends
and required redemption payments per share on the shares of Cumulative
Convertible Preferred Stock and such other Parity Securities bear to each other;
provided that this Section 3(f) shall not apply to any Subsidiary of the
Corporation that is (1) an insurance company or other financial institution, a
broker or a dealer (as such terms are defined in the Securities Exchange Act of
1934, as amended, or the Securities Act of 1933, as amended, as the case may be)
or an investment advisor (as defined in the Investment Advisors Act of 1940, as
amended), in each case acting for the benefit of Persons (as defined in Section
5(n)) other than the Corporation or its Subsidiaries or (2) any investment
vehicle managed or advised by any of the Persons described in clause (1) above
for the benefit of any Persons other than the Corporation or its Subsidiaries.
5
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SECTION 4. Redemption. (a) The Cumulative Convertible Preferred
Stock shall not be redeemable prior to April 21, 1996.
(b) (i) The Cumulative Convertible Preferred Stock shall be subject
to redemption in Common Stock, at the option of the Corporation, at any time on
or after April 21, 1996, in part from time to time or in whole, if for 20
Trading Days (as defined in Section 5(n)) within any period of 30 consecutive
Trading Days, including the last Trading Day of such 30 consecutive Trading
Days, the Closing Price (as defined in Section 5(n)) of the Common Stock on each
of such 20 Trading Days exceeds 125% of the Conversion Price (as defined in
Section 5(b)) in effect on each such Trading Day.
(ii) In order to exercise its redemption option under this Section
4(b), the Corporation must issue a press release announcing the redemption (the
"Press Release") prior to the opening of business on the second Trading Day
after the last Trading Day of any such 30 consecutive Trading Days during which
the Closing Price of the Common Stock on each of 20 Trading Days within such 30
consecutive Trading Days exceeded 125% of the Conversion Price in effect on each
of such 20 Trading Days. The Press Release shall announce the redemption and set
forth the number of shares of Cumulative Convertible Preferred Stock that the
Corporation intends to redeem. The date fixed by the Corporation for such
redemption (a "Call Date") shall be selected by the Corporation, shall be
specified in the notice of redemption and shall be not less than 30 nor more
than 60 days after the date on which the Corporation issues the Press Release.
Upon the redemption of Cumulative Convertible Preferred Stock by the Corporation
pursuant to this Section 4(b) on a Call Date, (x) each such share of Cumulative
Convertible Preferred Stock shall be redeemed for that number of shares of
Common Stock determined by dividing the Liquidation Preference of such share by
the Conversion Price as of the opening of business on the Call Date (such
calculation to be carried out to four (4) decimal places) and (y) the holder of
each such share of Cumulative Convertible Preferred Stock shall have the right
to receive a cash adjustment pursuant to Section 4(i) with respect to any
fractional shares resulting from such conversion, together with accumulated and
unpaid dividends (whether or not earned or declared) to such Call Date on the
shares of
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<PAGE>
Cumulative Convertible Preferred Stock so redeemed, without interest.
(c) To the extent the Corporation shall have funds legally available
therefor, the Cumulative Convertible Preferred Stock shall be subject to
redemption in cash, at the option of the Corporation, at any time on or after
April 21, 2000, in part from time to time or in whole, at $500 per share,
together with accumulated and unpaid dividends thereon (whether or not earned or
declared) to any date fixed by the Corporation for such redemption (a "Cash
Redemption Date"), without interest.
(d) If the Corporation elects to redeem shares of Cumulative
Convertible Preferred Stock pursuant to Section 4(b), notice of such redemption
shall be given not more than four Business Days after the date on which the
Corporation issues the Press Release to each holder of record of the shares to
be redeemed. If the Corporation elects to redeem shares of Cumulative
Convertible Preferred Stock pursuant to Section 4(c), notice of such redemption
shall be given not less than 30 nor more than 60 days prior to the Cash
Redemption Date fixed in such notice to each holder of record of the shares to
be redeemed.
(e) Any notice pursuant to Section 4(d) shall be provided by first
class mail, postage prepaid, at such holder's address as the same appears on the
stock records of the Corporation. Neither the failure to mail any notice
required by Section 4(d), nor any defect therein or in the mailing thereof, to
any particular holder, shall affect the sufficiency of the notice or the
validity of the proceedings for redemption with respect to the other holders.
Any notice mailed in the manner herein provided shall be conclusively presumed
to have been duly given on the date mailed, whether or not the holder receives
the notice. Each such notice shall state, in addition to any other information
the Corporation deems appropriate: (i) the Call Date or the Cash Redemption
Date, as the case may be; (ii) the number of shares of Cumulative Convertible
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) in the case of redemption pursuant to Section 4(b), the number of
shares of Common Stock to be issued with respect to each share of Cumulative
Convertible Preferred Stock; (iv) in the case of redemption pursuant to Section
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<PAGE>
4(c), the applicable redemption price; (v) the place or places where
certificates for shares of Cumulative Convertible Preferred Stock are to be
surrendered for redemption; (vi) the then effective Conversion Price; and (vii)
that the right of holders to convert shares of Cumulative Convertible Preferred
Stock to be redeemed shall terminate at the close of business on the applicable
Call Date or Cash Redemption Date, as the case may be.
(f) (i) From and after a Call Date or a Cash Redemption Date, as the
case may be (unless the Corporation shall fail to make available the number of
shares of Common Stock and/or irrevocably to set apart the cash necessary to
effect such redemption), (x) except as otherwise provided herein, dividends on
the shares of the Cumulative Convertible Preferred Stock so called for
redemption shall cease to accrue, (y) such shares of Cumulative Convertible
Preferred Stock shall no longer be deemed to be outstanding and (z) all rights
of the holders thereof as holders of Cumulative Convertible Preferred Stock
shall cease except as provided in clause (iii) of this Section 4(f).
(ii) The Corporation's obligation to provide any shares of Common
Stock and/or any cash in accordance with clause (i) of this Section 4(f) shall
be deemed fulfilled if, on or before the applicable Call Date or Cash Redemption
Date, as the case may be, the Corporation shall deposit with First Chicago Trust
Company of New York, or with a bank or trust company (which may be an affiliate
of the Corporation) that has an office in the Borough of Manhattan, City of New
York, and that has a capital and surplus of at least $50,000,000, any shares of
Common Stock and/or any cash necessary for such redemption, in trust, with
irrevocable instructions that such shares of Common Stock and/or such cash be
applied to the redemption of the shares of Cumulative Convertible Preferred
Stock called for redemption.
(iii) In the case of any redemption pursuant to Section 4(b), from
and after the close of business on a Call Date (unless the Corporation defaults
in the delivery of the shares of Common Stock and any cash payable on such Call
Date), the shares of Cumulative Convertible Preferred Stock to be redeemed shall
cease to accumulate dividends, each holder of such shares shall be deemed to be
the holder of the number of shares of Common Stock for which such Cumulative
Convertible Preferred
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Stock is to be redeemed, regardless of whether such holder has surrendered the
certificates for such holder's shares of Cumulative Convertible Preferred Stock,
and the only right of such holders shall be to receive (x) such shares of Common
Stock and (y) any cash adjustments made pursuant to Section 4(i) and all
accumulated and unpaid dividends (whether or not earned or declared) on such
shares of Cumulative Convertible Preferred Stock to but excluding the Call Date.
In the case of any redemption pursuant to Section 4(c) (unless the Corporation
defaults in the payment of the applicable redemption price), the shares of
Cumulative Convertible Preferred Stock to be redeemed shall from and after the
close of business on a Cash Redemption Date cease to accumulate dividends and
the only right of the holders of such shares shall be to receive payment of the
redemption price and all accumulated and unpaid dividends (whether or not earned
or declared) on such shares to but excluding the Cash Redemption Date. No
interest shall accrue for the benefit of the holders of Cumulative Convertible
Preferred Stock to be redeemed on any sum set aside by the Corporation in
connection with a redemption pursuant to this Section 4. Subject to applicable
escheat laws, any such cash unclaimed at the end of two years from the
applicable Call Date or Cash Redemption Date, as the case may be, shall revert
to the general funds of the Corporation and, upon demand, such bank or trust
company shall pay over to the Corporation such unclaimed cash and thereupon such
bank or trust company shall be relieved of all responsibility in respect thereof
and any holder of such shares so called for redemption shall look only to the
general funds of the Corporation for the payment of such cash. Any interest
accrued on cash deposited pursuant to this Section 4(f) shall be paid from time
to time to the Corporation for its own account.
(iv) As promptly as possible after the surrender of the certificates
for any shares of Cumulative Convertible Preferred Stock redeemed pursuant to
this Section 4 (with appropriate endorsements and any transfer documents
reasonably requested by the Corporation or any transfer agent designated by the
Corporation), such certificates shall be exchanged (A) in the case of any
redemption pursuant to Section 4(b), for certificates for shares of Common Stock
and any cash for adjustments pursuant to Section 4(i) and (B) in the case of any
redemption pursuant to Section 4(c), for payment of the redemption price, in
either case together with all
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accumulated and unpaid dividends (whether or not earned or declared) payable
thereon.
(g) If fewer than all the outstanding shares of Cumulative
Convertible Preferred Stock are to be redeemed pursuant to this Section 4,
except as otherwise provided by Section 3(f), shares to be redeemed shall be
selected by the Corporation from outstanding shares of Cumulative Convertible
Preferred Stock not previously called for redemption by lot or pro rata (as
nearly as may be) or by any other method determined by the Corporation in its
sole discretion to be equitable. If fewer than all the shares represented by any
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
(h) Any fraction of a share of Cumulative Convertible Preferred
Stock may be redeemed in the same manner in which a whole share of Cumulative
Convertible Preferred Stock may be redeemed pursuant to this Section 4, provided
that any shares of Common Stock deliverable and/or any cash payable upon the
redemption of such fractional interest shall be determined by multiplying the
number of shares of Common Stock deliverable and/or any cash payable upon the
redemption of one share of Cumulative Convertible Preferred Stock by that
fraction. If part of a share of Cumulative Convertible Preferred Stock is
redeemed, a new certificate shall be issued representing the unredeemed portion
of a share without cost to the holder thereof.
(i) In the case of any redemption pursuant to Section 4(b), no
fractional shares of Common Stock or scrip representing fractional shares of
Common Stock shall be issued upon redemption of the shares of Cumulative
Convertible Preferred Stock. If more than one certificate shall be surrendered
for redemption at any one time by the same holder, the number of full shares of
Common Stock issuable upon redemption thereof shall be computed on the basis of
the aggregate number of shares of Cumulative Convertible Preferred Stock
represented by the certificates so surrendered. Instead of any fractional shares
of Common Stock which would otherwise be issuable upon redemption of shares of
Cumulative Convertible Preferred Stock, the Corporation shall pay a cash
adjustment in respect of such fractional interest in an amount equal to that
fraction of the Closing Price of the Common
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Stock as of the Trading Day immediately preceding the Call Date.
(j) All shares of Common Stock issued and delivered pursuant to
Section 4(b) will upon issuance by the Corporation and delivery be duly and
validly issued, fully paid and nonassessable. If any shares of Common Stock are
listed on any national securities exchange, the Corporation shall, if permitted
by the rules of such exchange, list the shares of Common Stock required to be
delivered upon a redemption of the Cumulative Convertible Preferred Stock
pursuant to Section 4(b), prior to such redemption, on such exchange.
(k) Upon any redemption of Cumulative Convertible Preferred Stock,
the Corporation shall pay all accumulated and unpaid dividends (whether or not
earned or declared) to but excluding the applicable Call Date or Cash Redemption
Date, as the case may be. If a Call Date or a Cash Redemption Date, as the case
may be, falls after a dividend payment record date and prior to the
corresponding Dividend Payment Date, then each holder of Cumulative Convertible
Preferred Stock at the close of business on such dividend payment record date
shall be entitled to the dividend payable on such shares on the corresponding
Dividend Payment Date (but without duplication of any amounts payable pursuant
to the preceding sentence in respect of accumulated and unpaid dividends),
notwithstanding the redemption of such shares before such Dividend Payment Date.
The Corporation shall make no payment or allowance for unpaid dividends on any
shares of Common Stock issued upon redemption pursuant to Section 4(b).
(1) Any cash payment to a holder of shares of Cumulative Convertible
Preferred Stock in connection with any redemption of the Cumulative Convertible
Preferred Stock pursuant to this Section 4 shall be made in coin or currency of
the United States that as of the date of payment shall be legal tender for
payment of public and private debts by mailing a check to such holder at the
address of such holder as shown on the stock books of the Corporation.
SECTION 5. Conversion. The Cumulative Convertible Preferred Stock
shall be convertible into shares of Common Stock as follows:
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(a) Subject to and upon compliance with the provisions of this
Section 5, the holder of any shares of Cumulative Convertible Preferred Stock
shall have the right, at such holder's option, at any time after July 22, 1994,
in whole or, from time to time, in part, to convert any of such shares of
Cumulative Convertible Preferred Stock into fully paid and nonassessable shares
of Common Stock at the Conversion Price as of the Conversion Date upon the terms
hereinafter set forth. In case the shares of Cumulative Convertible Preferred
Stock are called for redemption, such right of conversion shall terminate at the
close of business on the applicable Call Date or Cash Redemption Date, as the
case may be, unless the Corporation shall default in the delivery of the shares
of Common Stock and/or the payment of any cash due upon redemption. Each share
of Cumulative Convertible Preferred Stock shall be convertible pursuant to this
Section 5(a) into the number of shares of Common Stock determined by dividing
the Liquidation Preference of such share by the Conversion Price as of the
Conversion Date (such calculation to be carried out to four (4) decimal places).
(b) The "Conversion Price" shall mean $24.50, as adjusted from time
to time in accordance with the terms of this Section 5.
(c) A holder of shares of Cumulative Convertible Preferred Stock may
exercise the conversion right specified in Section 5(a) as to any shares held by
such holder by delivering written notice to the Corporation stating that such
holder elects to convert all or a specified number of the shares of Cumulative
Convertible Preferred Stock held by such holder. Such holder shall surrender to
the Corporation, or any transfer agent of the Corporation previously designated
by the Corporation to such holders for this purpose, a certificate or
certificates representing the shares of Cumulative Convertible Preferred Stock
to be converted with appropriate endorsements and any transfer documents
reasonably requested by the Corporation or such transfer agent. Conversion of
the shares of Cumulative Convertible Preferred Stock to be converted shall be
deemed to have been effected immediately prior to the close of business on the
date when such holder surrenders for conversion the certificate or certificates
representing such shares of Cumulative Convertible Preferred Stock (any such
date is referred to herein with respect to such shares as the "Conversion Date")
and the Person in whose name the certificate or
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certificates representing Common Stock are to be issued shall be deemed to have
become a holder of record of such Common Stock on the applicable Conversion
Date, unless the stock transfer books of the Corporation shall be closed on such
date, in which event such Person shall be deemed to have become such holder of
record at the close of business on the next succeeding day on which such stock
transfer books are open, but such conversion shall be at the Conversion Price in
effect on the applicable Conversion Date. As promptly as practicable after the
Conversion Date and after surrender to the Corporation, or to any transfer agent
of the Corporation previously designated by the Corporation to the holders of
the Cumulative Convertible Preferred Stock for such purpose, by a holder of a
certificate or certificates representing the shares of Cumulative Convertible
Preferred Stock to be converted, the Corporation shall issue and deliver or
cause to be delivered to or upon the written order of such holder (i) a
certificate or certificates representing the number of full shares of Common
Stock to which such holder is entitled and (ii) a check made payable for an
amount corresponding to any fractional interest in a share of Common Stock as
provided in Section 5(e). Upon conversion of only a portion of the shares of
Cumulative Convertible Preferred Stock represented by any certificate, the
Corporation shall issue and deliver or cause to be delivered to or upon the
written order of the applicable holder of shares of Cumulative Convertible
Preferred Stock, at the expense of the Corporation, a new certificate
representing the unconverted portion of the certificate so surrendered.
Holders of shares of Cumulative Convertible Preferred Stock at the
close of business on a dividend payment record date shall be entitled to receive
the dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof following such dividend payment record
date and prior to such Dividend Payment Date. However, shares of Cumulative
Convertible Preferred Stock surrendered for conversion during the period between
the close of business on any dividend payment record date and the opening of
business on the corresponding Dividend Payment Date must be accompanied by
payment of an amount equal to the dividend payable on such shares on such
Dividend Payment Date (except shares of Cumulative Convertible Preferred Stock
converted after the issuance of a notice of redemption with respect to a Call
Date or a Cash Redemption
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Date during such period, which need not be accompanied by payment of such
amount). A holder of shares of Cumulative Convertible Preferred Stock on a
dividend payment record date who tenders any such shares for conversion into
shares of Common Stock on the corresponding Dividend Payment Date will receive
the dividend payable by the Corporation on such shares of Cumulative Convertible
Preferred Stock on such date, and the converting holder need not include payment
of the amount of such dividend upon surrender of shares of Cumulative
Convertible Preferred Stock for conversion. The Corporation shall make no
payment or allowance for unpaid dividends on any shares of Common Stock issued
upon conversion pursuant to this Section 5.
(d) Any fraction of a share of Cumulative Convertible Preferred
Stock may be converted by a holder thereof in the same manner in which a whole
share of Cumulative Convertible Preferred Stock may be converted pursuant to
this Section 5, provided that any shares of Common Stock deliverable and any
cash payable upon the conversion of such fractional interest shall be determined
by multiplying the number of shares of Common Stock deliverable and any cash
payable upon the conversion of one share of Cumulative Convertible Preferred
Stock by that fraction. If part of a share of Cumulative Convertible Preferred
Stock is converted, a new certificate shall be issued representing the
unconverted portion of a share without cost to the holder thereof.
(e) No fractional shares of Common Stock or scrip representing
fractional shares of Common Stock shall be issued upon conversion of the shares
of Cumulative Convertible Preferred Stock. If more than one certificate shall be
surrendered for conversion at any one time by the same holder, the number of
full shares of Common Stock issuable upon conversion thereof shall be computed
on the basis of the aggregate number of shares of Cumulative Convertible
Preferred Stock represented by the certificates so surrendered. Instead of any
fractional shares of Common Stock which would otherwise be issuable upon
conversion of shares of Cumulative Convertible Preferred Stock, the Corporation
shall pay a cash adjustment in respect of such fractional interest in an amount
equal to that fraction of the Closing Price of the Common Stock as of the
Trading Day immediately preceding the Conversion Date.
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(f) The Conversion Price and the number and kind of securities
issuable upon conversion of the shares of Cumulative Convertible Preferred Stock
shall be subject to adjustment from time to time as follows:
(i) In case the Corporation shall, at any time or from tine to time
while any shares of the Cumulative Convertible Preferred Stock are
outstanding, (A) pay a dividend or make a distribution on the Common Stock
in shares of Common Stock; (B) subdivide its outstanding shares of Common
Stock into a greater number of shares; (C) combine its outstanding shares
of Common Stock into a smaller number of shares; (D) make a distribution
on its Common Stock in shares of capital stock of the Corporation other
than Common Stock; or (E) issue by reclassification of its shares of
Common Stock any shares of capital stock of the Corporation, the
Conversion Price in effect immediately prior to the date fixed for the
determination of stockholders affected by such actions shall be adjusted
so that each holder of shares of Cumulative Convertible Preferred Stock
shall after such date of determination be entitled to receive, upon
surrender for conversion, the number of shares of Common Stock or other
capital stock of the Corporation which such holder would have owned or
have been entitled to receive immediately following such date of
determination if such holder had converted its shares of Cumulative
Convertible Preferred Stock immediately prior to such date of
determination. An adjustment made pursuant to this clause (i) shall become
effective immediately after such date of determination. If, after an
adjustment pursuant to this clause (i), the holders of shares of
Cumulative Convertible Preferred Stock upon conversion of such shares of
Cumulative Convertible Preferred Stock may receive shares of two or more
classes of capital stock of the Corporation, the Board shall in good faith
determine the allocation of the adjusted Conversion Price between the
classes of capital stock. After such allocation, the Conversion Price of
each class of capital stock shall be subject to adjustment on terms
comparable to those applicable to Common Stock in this Section 5.
(ii) In case the Corporation shall, at any time or from time to time
while any shares of the Cumulative Convertible Preferred Stock are
outstanding,
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<PAGE>
issue to holders of outstanding shares of Common Stock generally rights or
warrants entitling the holders thereof to subscribe for or purchase shares
of Common Stock at a price per share 1ess than the Current Market Price
(as defined in Section 5(n)) of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights or warrants,
the Conversion Price in effect at the opening of business on the day
following the date fixed for such determination shall be decreased by
multiplying such Conversion Price by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock so offered for subscription or purchase
would purchase at such Current Market Price, and the denominator of which
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of
shares of Common Stock so offered for subscription or purchase. Such
decrease shall become effective immediately after the opening of business
on the day following the date fixed for the determination of stockholders
entitled to receive such rights or warrants. No adjustment to the
Conversion Price shall be made in respect of any issuance of Common Stock
upon exercise of any right or warrant if an adjustment shall previously
have been made upon issuance of such right or warrant. In case any rights
or warrants referred to in this clause (ii) in respect of which an
adjustment shall have been made shall expire unexercised within 45 days
after the same shall have been distributed or issued by the Corporation,
the Conversion Price shall be readjusted at the time of such expiration to
the Conversion Price that would have been in effect if no adjustment had
been made on account of the distribution or issuance of such expired
rights or warrants.
(iii) In case the Corporation shall, at any time or from time to
time while any shares of the Cumulative Convertible Preferred Stock are
outstanding, distribute to holders of outstanding shares of Common Stock
generally evidences of indebtedness or assets of the Corporation or any of
its Subsidiaries or Affiliates (as defined in Section 5(n)), including
16
<PAGE>
securities and cash, but excluding (x) any dividend or distribution or
rights or warrants referred to in clause (i) or (ii) above and (y) regular
quarterly cash dividends of the Corporation declared in the ordinary
course by the Board, then in each such case the Conversion Price in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution shall
be decreased by multiplying such Conversion Price by a fraction, the
numerator of which shall be the Current Market Price on the date fixed for
such determination less the then fair market value (as determined by the
Board in good faith) of the portion of such evidences of indebtedness or
assets so distributed applicable to one share of Common Stock, and the
denominator of which shall be such Current Market Price. Such adjustment
shall be made whenever any such distribution is made and shall become
effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such distribution.
(iv) At any time or from time to time while any shares of Cumulative
Convertible Preferred Stock are outstanding in case of (A) any capital
reorganization or any reclassification or change of the Common Stock
(other than a reclassification covered by clause (i) above) of the
Corporation, (B) the consolidation or merger of the Corporation with or
into any other corporation or (C) the sale, lease or other disposition or
conveyance of the property and assets of the Corporation as, or
substantially as, an entirety to any other corporation, in each case as a
result of which holders of outstanding shares of Common Stock generally
will be entitled to receive shares of stock or other securities or other
property (including cash) with respect to or in exchange for the Common
Stock, there shall be no adjustment of the Conversion Price but the shares
of Cumulative Convertible Preferred Stock shall, after such capital
reorganization, reclassification or change of Common Stock, consolidation,
merger or sale, lease or other disposition or conveyance, be convertible
into the kind and amount of shares of stock or other securities or
property (including cash) which the holder of shares of Cumulative
Convertible Preferred Stock would have been entitled to receive upon such
capital reor-
17
<PAGE>
ganization, reclassification or change of Common Stock, consolidation,
merger or sale, lease or other disposition or conveyance if such holder
had converted the shares of Cumulative Convertible Preferred Stock owned
by such holder immediately prior to the time of such capital
reorganization, reclassification or change of Common Stock, consolidation,
merger or sale, lease or other disposition or conveyance (assuming such
holder elected to receive the same kind and amount of shares of stock or
other securities or property (including cash) receivable upon such capital
reorganization, reclassification or change of Common Stock, consolidation,
merger or sale, lease or other disposition or conveyance receivable by a
plurality of the holders of shares of Common Stock); and, in any such
case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Section 5 with respect to
the rights and interests of the holders of shares of Cumulative
Convertible Preferred Stock, so that the provisions set forth in this
Section 5 (including without limitation those set forth in this Section
5(f)) shall be made applicable, as closely as reasonably practicable, to
any shares of stock or other securities or property thereafter deliverable
on the conversion of the shares of Cumulative Convertible Preferred Stock.
The provisions of this clause (iv) shall apply to successive
reorganizations, reclassifications, changes, consolidations, mergers or
sales, leases or other dispositions or conveyances.
(v) All calculations under this Section 5(f) shall be made to the
nearest cent or to the nearest one hundredth (1/100th) of a share, as the
case may be. Any provision of this Section 5 to the contrary
notwithstanding, no adjustment in the Conversion Price shall be made if
the amount of such adjustment would be less than 1% of the Conversion
Price then in effect, but any such amount shall be carried forward and an
adjustment with respect thereto shall be made at the time of and together
with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate 1% thereof or
more.
(vi) No adjustment provided for in clause (i), (ii) or (iii) of this
Section 5(f) shall be made if a
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<PAGE>
distribution that would otherwise trigger such adjustment is also made to
the holders of shares of Cumulative Convertible Preferred Stock in the
same manner and amount as if the holders owned the shares of Common Stock
into which the shares of Cumulative Convertible Preferred Stock are
convertible immediately prior to such distribution.
(vii) The Board may make such adjustments in the Conversion Price,
in addition to those required by this Section 5(f), as shall be determined
by it (as evidenced by a resolution of the Board) to be advisable in order
to avoid or diminish any adverse United States Federal income tax
consequences to holders of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any similar events treated as such for Federal
income tax purposes. The Board shall have the power to resolve any
ambiguity or correct any error in this Section 5 in a manner not adverse
to the holders of the Cumulative Convertible Preferred Stock.
(viii) Notwithstanding the foregoing provisions, the issuance of any
shares of Common Stock pursuant to any plan providing for the reinvestment
of dividends or interest payable on securities of the Corporation and the
investment of additional optional amounts in shares of Common Stock under
any such plan shall not be deemed to constitute an issuance of Common
Stock or rights or warrants by the Corporation to which any of the
provisions of this Section 5(f) applies.
(g) Whenever the Conversion Price shall be adjusted as provided in
Section 5(f), the Corporation shall forthwith give written notice to the holders
of shares of Cumulative Convertible Preferred Stock by first class mail, to such
holders' respective addresses as shown on the stock books of the Corporation
setting forth the Conversion Price that shall be in effect after such
adjustment. Where appropriate, such notice may be given in advance and may be
included as part of a notice required to be given under the provisions of
Section 5(h). The Corporation shall also file with any transfer agent designated
by the Corporation pursuant to Section 5(c) a notice stating the adjusted
Conversion Price and setting
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<PAGE>
forth a brief statement of the facts upon which such adjustment is based.
(h) In the event the Corporation shall propose to take any action of
the type described in clause (i), (ii), (iii) or (iv) of Section 5(f), the
Corporation shall give written notice to the holders of shares of Cumulative
Convertible Preferred Stock, by first class mail to such holders' respective
addresses as shown on the stock books of the Corporation which notice shall
specify the date fixed for the determination of stockholders to be affected, if
any, by such action and the approximate date on which such action is to take
place. Such notice shall also set forth the number, kind or class of shares or
other securities or property which shall be deliverable or purchasable upon the
occurrence of such action or deliverable upon conversion of the shares of
Cumulative Convertible Preferred Stock. In the case of any action which would
require the fixing of such date of determination, such notice shall be given at
least 10 days prior to the date so fixed, and, in case of all other action, such
notice shall be given at least 15 days prior to the taking of such proposed
action. The failure to give the notice required by this Section 5(h), or any
defect therein, shall not affect the legality or validity of any action of the
type described in clause (i), (ii), (iii) or (iv) of Section 5(f) or any vote
authorizing such action.
(i) The Corporation shall pay all documentary, stamp, transfer or
other transactional taxes attributable to the issuance or delivery of shares of
Common Stock upon conversion of the shares of Cumulative Convertible Preferred
Stock; provided that the Corporation shall not be required to pay any taxes
payable in respect of any transfer involved in the issuance or delivery of any
certificates representing such shares of Common Stock in a name other than that
of the holder of the shares of Cumulative Convertible Preferred Stock in respect
of which such certificates are being issued and no such issuance or delivery
shall be made unless and until the holder requesting such issuance has paid to
the Corporation the amount of any such tax or has established to the reasonable
satisfaction of the Corporation that such tax is not required to be paid.
(j) So long as any Cumulative Convertible Preferred Stock remains
outstanding, the Corporation shall reserve at all times, free from preemptive
rights,
20
<PAGE>
out of its authorized but unissued shares of Common Stock or Common Stock held
in treasury, solely for the purpose of effecting the conversion of the
Cumulative Convertible Preferred Stock, sufficient shares of Common Stock to
provide for the conversion of all outstanding shares of Cumulative Convertible
Preferred Stock.
(k) If, and so long as, any shares of Common Stock into which the
shares of Cumulative Convertible Preferred Stock are then convertible are listed
on any national securities exchange, the Corporation will, if permitted by the
rules of such exchange, list and keep on such exchange, upon official notice of
issuance, all shares of Common Stock issuable upon conversion.
(l) All shares of Common Stock which may be issued and delivered
upon conversion of the shares of Cumulative Convertible Preferred Stock will
upon issuance by the Corporation and delivery be duly and validly issued, fully
paid and nonassessable and the Corporation shall not take any action which would
cause the Conversion Price to be less than the par value of the Common Stock.
(m) In any case in which Section 5(f) provides that an adjustment
shall become effective on, or on the day following, the record date for any
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of Cumulative Convertible Preferred Stock converted
after such record date and before the occurrence of such event the additional
shares of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (ii) paying to such
holder any amount in cash in lieu of any fractional share pursuant to Section
5(e).
(n) For purposes of this Section 5:
(i) "Affiliate" has the meaning given to such term in Rule 12b-2
under the Securities Exchange Act of 1934, as amended.
(ii) "Closing Price" means, for any Trading Day, the last reported
sales price, regular way, per share of Common Stock or, in case no such
reported sale takes place on such day, the average of the reported closing
bid and asked prices, regular way,
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<PAGE>
per share of Common Stock, in either case as reported on the New York
Stock Exchange Composite Transactions Tape or, if the Common Stock is not
then listed or admitted to trading on such exchange, on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading or, if the Common Stock is not then listed or admitted
to trading on any national securities exchange, as quoted through the
National Association of Securities Dealers Automated Quotations National
Market System or, if the Common Stock is not then listed or admitted to
trading on any national securities exchange or quoted through such
National Market System, the average of the closing bid and asked prices
per share of Common Stock in the over-the-counter market as furnished by
any New York Stock Exchange member firm that makes a market in the Common
Stock selected from time to time by the Corporation for that purpose.
(iii) "Current Market Price" means, as of any date, the average of
the Closing Prices for the 30 consecutive Trading Days ending on the
Trading Day prior to such date.
(iv) "Person" means any individual, corporation, partnership, firm,
joint venture, association, joint stock company, trust, unincorporated
organization, governmental or regulatory authority or other entity.
(v) "Subsidiary" means any corporation, association or other
business entity more than 50% of the shares of stock of any class or
classes (or equivalent interests) of which is at the time owned by the
Corporation or by one or more Subsidiaries of the Corporation or by the
Corporation and one or more Subsidiaries of the Corporation, if the
holders of the stock of such class or classes (or equivalent interests)
are ordinarily, in the absence of contingencies, entitled to vote for the
election of a majority of the directors (or Persons performing similar
functions) of such business entity.
(vi) "Trading Day" means any day the New York Stock Exchange is open
for regular trading.
SECTION 6. Shares to be Retired. All shares of Cumulative
Convertible Preferred Stock purchased or
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<PAGE>
redeemed by the Corporation (excluding, until the Corporation elects to retire
them, shares that are held as treasury shares) or converted 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.
SECTION 7. Liquidation. (a) The shares of Cumulative Convertible
Preferred Stock shall rank prior to the shares of Junior Securities upon
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary (a "Liquidation Transaction"), so that in the event of any
Liquidation Transaction, the holders of shares of Cumulative Convertible
Preferred Stock then outstanding shall be entitled to receive out of the assets
or surplus funds of the Corporation available for distribution to its
stockholders, or proceeds thereof, whether from capital, surplus or earnings,
before any distribution is made to holders of any Junior Securities, a
liquidation preference in an amount per share of Cumulative Convertible
Preferred Stock equal to the Liquidation Preference, plus an amount equal to all
dividends (whether or not earned or declared) accumulated and unpaid on the
shares of Cumulative Convertible Preferred Stock to the date of final
distribution.
(b) If, upon any Liquidation Transaction, the assets or surplus
funds of the Corporation, or proceeds thereof, whether from capital, surplus or
earnings, distributable among the holders of shares of Cumulative Convertible
Preferred Stock and any Parity Securities then outstanding are insufficient to
pay in full the preferential liquidation payments due to such holders, such
assets, surplus funds or proceeds shall be distributable among such holders
ratably in accordance with the amounts that would be payable on such shares of
Cumulative Convertible Preferred Stock and Parity Securities if all amounts
payable thereon were payable in full.
(c) Neither the consolidation, merger or other business combination
of the Corporation with or into any other Person or Persons nor the sale or
transfer of all or substantially all the assets of the Corporation shall be
deemed to be a Liquidation Transaction.
SECTION 8. Voting Rights. (a) The holders of shares of Cumulative
Convertible Preferred Stock shall not be entitled to any voting rights except as
provided in
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<PAGE>
this Section 8, the Restated Certificate of Incorporation of the Corporation or
as otherwise required by law.
(b) (i) If at any time or times six quarterly dividends (whether or
not consecutive) payable on the Cumulative Convertible Preferred Stock shall be
in arrears and unpaid, in whole or in part, or shall not have been declared and
a sum sufficient for the payment thereof in full shall not have been set apart
for payment, then the number of directors constituting the Board, without
further action, shall be increased by two and the holders of the Cumulative
Convertible Preferred Stock, together with the holders of shares of every other
series of Preferred Stock upon which rights to vote for the election of two
additional directors have been conferred and are then exercisable, such other
series not including the Series A Preferred Stock and the Series B Preferred
Stock (any such other series, the "Parity Voting Preferred Stock"), shall have
the exclusive right, voting separately as a class, to elect the two directors of
the Corporation to fill such newly created directorships. The remaining
directors constituting the Board shall continue to be elected by the other class
or classes (or series thereof) of stock entitled to vote therefor.
(ii) Whenever such voting right shall have vested, such right may be
exercised at a special meeting of the holders of Cumulative Convertible
Preferred Stock and Parity Voting Preferred Stock, at any annual or special
meeting of stockholders held for the purpose of electing directors. Each
director elected pursuant to such right shall be elected by a majority of the
votes cast. The voting right of the holders of Cumulative Convertible Preferred
Stock shall continue until such time as all cumulative dividends accumulated on
the Cumulative Convertible Preferred Stock shall have been paid in full, at
which time such voting right of the holders of Cumulative Convertible Preferred
Stock shall terminate and, subject to the voting right of the holders of Parity
Voting Preferred Stock, the authorized number of members of the Board shall
automatically be reduced by two, but such voting right shall again vest in the
event of each and every subsequent failure of the Corporation to pay or declare
and set apart for payment dividends for the requisite number of periods.
(iii) At any time when such voting right shall have vested in the
holders of Cumulative Convertible
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Preferred Stock, a proper officer of the Corporation shall, upon the written
request of holders of record of 10% of the shares of Cumulative Convertible
Preferred Stock then outstanding, call a special meeting of holders of
Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock for the
purpose of electing the two directors to be elected by such holders or removing
any director previously elected. Such meeting shall be held at the earliest
practicable date upon not less than 10 days' notice to such holders. If such
meeting shall not be called within 30 days after receipt of such written
request, then the holders of record of 10% of the shares of Cumulative
Convertible Preferred Stock then outstanding may designate in writing one of
their number to call such meeting at the expense of the Corporation, and such
meeting may be called by such Person so designated upon not less than 10 days'
notice to such holders. Any holder of Cumulative Convertible Preferred Stock
shall have access to the stock books of the Corporation for the purpose of
causing a meeting of stockholders to be so called.
(iv) At any meeting at which the holders of Cumulative Convertible
Preferred Stock and Parity Voting Preferred Stock shall have the right to elect
directors, the presence in person or by proxy of the holders of at least a
majority of the votes entitled to be cast by the then outstanding shares of
Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall
be required and be sufficient to constitute a quorum. At any such meeting or
adjournment thereof, the absence of a quorum of the holders of Cumulative
Convertible Preferred Stock and Parity Voting Preferred Stock shall not prevent
the election of directors other than those to be elected by the holders of
Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock and the
absence of a quorum or quorums of the holders of capital stock entitled to elect
such other directors shall not prevent the election of the directors to be
elected by the holders of Cumulative Convertible Preferred Stock and Parity
Voting Preferred Stock.
(v) Each director elected by the holders of Cumulative Convertible
Preferred Stock and Parity Voting Preferred Stock shall serve until the earlier
of (i) the election by the holders of Cumulative Convertible Preferred Stock and
Parity Voting Preferred Stock and qualification of such director's successor and
(ii) the time at
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<PAGE>
which the holders of the Cumulative Convertible Preferred Stock and Parity
Voting Preferred Stock no longer have the right to elect such director. Upon any
termination of such voting rights, the term of office of each director elected
by the holders of Cumulative Convertible Preferred Stock and Parity Voting
Preferred Stock shall terminate immediately. Other than as provided in the two
preceding sentences, the directors elected by the holders of Cumulative
Convertible Preferred Stock and Parity Voting Preferred Stock may be removed
only by the holders of the Cumulative Convertible Preferred Stock and the Parity
Voting Preferred Stock.
(vi) If a director so elected by the holders of Cumulative
Convertible Preferred Stock and Parity Voting Preferred Stock shall cease to
serve as director before such director's term shall expire, the holders of
Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock then
outstanding may, in the manner provided above, elect a successor to hold office
for the unexpired term of the director whose place shall be vacant.
(c) So long as any shares of Cumulative Convertible Preferred Stock
are outstanding, unless the vote or consent of the holders of a greater number
of shares shall be required by law or by the Restated Certificate of
Incorporation, the affirmative vote of at least 66 2/3% of the votes entitled to
be cast by the holders of the shares of Cumulative Convertible Preferred Stock
given in person or by proxy, either in writing without a meeting or by vote at
any meeting called for the purpose, shall be necessary for effecting or
validating:
(i) any amendment, alteration or repeal of any of the provisions of
the Restated Certificate of Incorporation that materially adversely
affects the voting powers, rights or preferences of the holders of the
Cumulative Convertible Preferred Stock; provided, however, that the
amendment of the provisions of the Restated Certificate of Incorporation
so as to authorize or create, or to increase the authorized amount of, any
shares of any Junior Securities or any shares of any class of Parity
Securities shall not be deemed to have a material adverse effect on the
voting powers, rights or preferences of the holders of Cumulative
Convertible Preferred Stock; or
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<PAGE>
(ii) the authorization or creation of, or the increase in the
authorized amount of, any shares of (x) any class or series of a class of
capital stock of the Corporation the terms of which expressly provide that
the shares thereof rank senior as to the payment of dividends or the
distribution of assets upon the liquidation, dissolution or winding up of
the Corporation to the shares of the Cumulative Convertible Preferred
Stock (the "Senior Securities") or (y) any security convertible into, or
exchangeable or exercisable for, shares of any Senior Securities;
provided, however, that no such vote of the holders of Cumulative Convertible
Preferred Stock shall be required if, at or prior to the time when such
amendment, alteration or repeal is to take effect, or when the issuance of any
such Senior Securities or security convertible into, or exchangeable or
exercisable for, Senior Securities is to be made, as the case may be, all shares
of Cumulative Convertible Preferred Stock at the time outstanding shall have
been called for redemption by the Corporation pursuant to Section 4 and such
shares of Common Stock and/or cash necessary for such redemption shall have been
irrevocably deposited as provided in clause (ii) of Section 4(f).
For purposes of the foregoing provisions of this Section 8, each
share of Cumulative Convertible Preferred Stock shall have one vote per share,
except that when any other series of Preferred Stock shall have the right to
vote with the Cumulative Convertible Preferred Stock as a single class on any
matter, then the Cumulative Convertible Preferred Stock and such other series
shall have with respect to such matters one vote per $50.00 of stated
liquidation preference. Except as otherwise required by applicable law or as set
forth herein, the shares of Cumulative Convertible Preferred Stock shall not
have any relative, participating, optional or other special voting rights and
powers and the consent of the holders thereof shall not be required for the
taking of any corporate action.
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<PAGE>
IN WITNESS WHEREOF, The Equitable Companies Incorporated has caused
this Certificate of Designations, Preferences and Relative, Participating,
Optional and other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions thereof of its Cumulative Convertible Preferred
Stock, Series C, to be duly executed by its Chairman and Chief Executive Officer
and attested to by its Secretary and has caused its corporate seal to be affixed
hereto, as of this 19th day of April, 1993.
/s/ Richard H. Jenrette
---------------------------------
Name: Richard H. Jenrette
Title: Chairman and Chief
Executive Officer
[Corporate Seal]
ATTEST:
/s/ Molly K. Heines
- -----------------------------------
Name: Molly K. Heines
Title: Vice President and Secretary
28
<PAGE>
Exhibit 4.01(e)
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL
AND OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
THE EQUITABLE COMPANIES INCORPORATED
CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES D
----------------------
Pursuant to Section 151
of the General Corporation Law of the State of Delaware
----------------------
The following resolution has been duly adopted by the Board of
Directors (such Board, including any committee thereof duly authorized to act on
behalf of such Board, herein referred to as the "Board") of The Equitable
Companies Incorporated, a Delaware corporation (the "Corporation"), pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, which resolution remains in full force and effect as of the date
hereof:
RESOLVED that, pursuant to the authority expressly granted to and
vested in the Board by the provisions of the Restated Certificate of
Incorporation of the Corporation (the "Restated Certificate of Incorporation")
to fix by
<PAGE>
resolution or resolutions the voting rights, if any, of each series of Preferred
Stock, par value $1.00 per share (the "Preferred Stock"), of the Corporation and
the designations, preferences and relative, participating, optional and other
special rights and qualifications, limitations and restrictions thereof, the
Board hereby authorizes and creates a series of Preferred Stock on the terms
and with the provisions (in addition to those set forth in the Restated
Certificate of Incorporation of the Corporation that are applicable to all
Preferred Stock) as follows:
SECTION 1. Designation, Number of Shares and Liquidation Preference.
The series of Preferred Stock created by this resolution shall be designated
the "Cumulative Convertible Preferred Stock, Series D" (the "Series D Preferred
Stock"). The number of authorized shares of the Series D Preferred Stock shall
be ________________. The liquidation preference of each share of Series D
Preferred Stock (the "Liquidation Preference") shall be $500.00.
SECTION 2. Rank. The Series D Preferred Stock shall, as to the
payment of Cumulative Dividends (as defined below) and the distribution of
assets upon the liquidation, dissolution or winding up of the Corporation, rank
(i) prior to the Common Stock, par value $.01 per share (the "Common Stock"),
and any other capital stock, of the Corporation (other than (a) the
Corporation's Convertible Exchangeable Preferred Stock, Series A, par value
$1.00 per share (the "Series A Preferred Stock"), (b) the Corporation's
Preferred Stock, Series B, par value $1.00 per share (the "Series B Preferred
Stock"), (c) the Corporation's Cumulative Convertible Preferred Stock, Series C,
par value $1.00 per share (the "Cumulative Convertible Preferred Stock"), and
(d) any other class or series of a class of capital stock of the Corporation the
terms of which expressly provide that the shares thereof rank senior or on a
parity as to the payment of dividends and the distribution of assets upon the
liquidation, dissolution or winding up of the Corporation
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<PAGE>
with the shares of the Series D Preferred Stock) (such securities, other than
those described in the immediately preceding parenthetical clause, collectively
referred to herein as the "Junior Securities") and (ii) on a parity with the
Series A Preferred Stock, the Series B Preferred Stock, the Cumulative
Convertible Preferred Stock and any other class or series of a class of capital
stock of the Corporation the terms of which expressly provide that the shares
thereof rank on a parity as to the payment of dividends and the distribution of
assets upon the liquidation, dissolution or winding up of the Corporation with
the shares of the Series A Preferred Stock, the Series B Preferred Stock and the
Cumulative Convertible Preferred Stock (the "Parity Securities"). The Series D
Preferred Stock shall, as to the payment of the Additional Dividends (as defined
below), rank junior to the Parity Securities and on a parity with the Common
Stock.
SECTION 3. Dividends. (a) The holders of outstanding shares of
Series D Preferred Stock shall be entitled to receive, in preference to the
holders of shares of Junior Securities, when, as and if declared by the Board,
out of funds of the Corporation legally available for the payment of dividends,
a cumulative cash dividend (the "Cumulative Dividends") at the rate per annum of
$1.00 per share of Series D Preferred Stock. Cumulative Dividends shall accrue
and be payable quarterly, when, as and if declared by the Board, in arrears on
each January 22, April 22, July 22 and October 22 (each a "Dividend Payment
Date"), commencing on January 22, 1994. Each such quarterly Cumulative Dividend
shall be cumulative and shall accumulate, whether or not earned or declared and
whether or not there are funds of the Corporation legally available for payment
of dividends, for the period (each, a "Dividend Period") commencing on and
including the most recent Dividend Payment Date to which dividends have been
paid or accumulated to but excluding the next succeeding Dividend Payment Date,
except (x) that the Dividend Period
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terminating on January 22, 1994 (the "Initial Dividend Period") shall commence
on and include ___________ and (y) as otherwise provided in Sections 4, 5 and 7
with respect to shares of Series D Preferred Stock that are redeemed or
converted into shares of Common Stock or with respect to which distributions are
made upon a Liquidation Transaction (as defined in Section 7). Cumulative
Dividends shall be payable, net of any amounts required to be withheld for or
with respect to taxes, to holders of record as they appear on the stock books of
the Corporation at the close of business on such record dates, not more than 60
days nor less than 10 days prior to the respective Dividend Payment Date, as
shall be fixed by the Board. If any Dividend Payment Date is not a Business Day,
the quarterly Cumulative Dividend to be paid on such Dividend Payment Date shall
be paid on the next following Business Day. A "Business Day" means any day that
is not a Saturday, Sunday or other day on which commercial banks in New York
City or New Jersey are required or authorized by law to be closed. Payments of
quarterly Cumulative Dividends shall be made in coin or currency of the United
States that as of the date of payment shall be legal tender for payment of
public and private debts by mailing a check to each holder of shares of Series D
Preferred Stock at the address of such holder as shown on the stock books of the
Corporation. Accumulated and unpaid Cumulative Dividends for any past Dividend
Periods may be declared and paid at any time, without reference to any Dividend
Payment Date, to holders of record on such date, not exceeding 45 days preceding
the payment date thereof, as may be fixed by the Board.
(b) The amount of Cumulative Dividends payable for each full
Dividend Period for the Series D Preferred Stock shall be computed by dividing
the annual dividend rate by four. The amount of Cumulative Dividends payable for
the Initial Dividend Period, or any other period shorter or longer than a full
Dividend Period, on the Series D Preferred Stock shall be computed on the basis
of a 360-day
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<PAGE>
year consisting of twelve 30-day months. Other than as provided in Section 3(g)
below, holders of shares of Series D Preferred Stock shall not be entitled to
any dividends, whether payable in cash, property or stock, in excess of
Cumulative Dividends, as herein provided, on the Series D Preferred Stock.
(c) All dividends paid with respect to shares of Series D Preferred
Stock shall be paid pro rata to the holders entitled thereto.
(d) When Cumulative Dividends are not paid in full upon the Series D
Preferred Stock, any dividends (other than Additional Dividends (as defined in
Section 3(g) below)) declared or paid upon shares of Series D Preferred Stock
and any Parity Securities shall be declared or paid, as the case may be, pro
rata so that the amounts of dividends (other than Additional Dividends) declared
or paid, as the case may be, per share on the Series D Preferred Stock and any
Parity Securities in all cases bear to each other the same ratio that
accumulated and unpaid dividends (other than Additional Dividends) per share on
the shares of Series D Preferred Stock and any Parity Securities bear to each
other. No interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on the Series D Preferred Stock, or
any Parity Securities, which may be in arrears.
(e) Unless full Cumulative Dividends on the Series D Preferred
Stock have been or contemporaneously are declared by the Board and paid or
declared and a sum sufficient for the payment thereof set apart by the
Corporation for all Dividend Periods terminating on or prior to the date of
payment of dividends on any Junior Securities or Additional Dividends, no
dividends shall be declared or paid or any sum set apart for such payment or any
other distribution made on or with respect to such Junior Securities for any
period, other than dividends payable or
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<PAGE>
distributions made in shares of Junior Securities, and no Additional Dividends
shall be declared or paid or any sum set apart for such payment.
(f) Unless full Cumulative Dividends on the Series D Preferred Stock
have been or contemporaneously are declared by the Board and paid or declared
and a sum sufficient for the payment thereof set apart by the Corporation for
all Dividend Periods terminating on or prior to the date of any event described
in clause (x) or (y) of this Section 3(f), the Corporation shall not, and shall
not permit its Subsidiaries (as defined in Section 5(n)) to, (x) redeem,
purchase, retire or otherwise acquire for any consideration any shares of Series
D Preferred Stock, unless (A) all shares of Series D Preferred Stock outstanding
shall be redeemed, purchased, retired or otherwise acquired or (B) the shares of
Series D Preferred Stock are redeemed, purchased, retired or otherwise acquired
pro rata from among the holders of the shares then outstanding or (y) redeem,
purchase, retire or otherwise acquire for any consideration, or make any payment
on account of a sinking fund or other similar fund for the redemption, purchase,
retirement or acquisition of, any Junior Securities or any Parity Securities, or
any warrant, right or option to purchase any thereof, or make any distribution
in respect thereof, directly or indirectly, whether in cash, obligations or
securities of the Corporation or other property, except (i) in the case of
Junior Securities, redemptions, purchases, retirements, acquisitions or
distributions made in shares of Junior Securities or redemptions, purchases or
acquisitions of shares of Common Stock for purposes of any employee benefit plan
or program of the Corporation or any Subsidiary and (ii) in the case of Parity
Securities, redemptions, purchases, retirements, acquisitions or distributions
made pro rata so that the amounts redeemed, purchased, retired or otherwise
acquired or paid or distributed in respect thereof, as the case may be, per
share on the Series D Preferred Stock and any Parity Securities in all
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<PAGE>
cases bear to each other the same ratio that accumulated and unpaid dividends
(other than Additional Dividends) and required redemption payments per share on
the shares of Series D Preferred Stock and any Parity Securities bear to each
other; provided that this Section 3(f) shall not apply to any Subsidiary of the
Corporation that is (1) an insurance company or other financial institution, a
broker or a dealer (as such terms are defined in the Securities Exchange Act of
1934, as amended, or the Securities Act of 1933, as amended, as the case may be)
or an investment advisor (as defined in the Investment Advisors Act of 1940, as
amended), in each case acting for the benefit of Persons (as defined in Section
5(n)) other than the Corporation or its Subsidiaries or (2) any investment
vehicle managed or advised by any of the Persons described in clause (1) above
for the benefit of any Persons other than the Corporation or its Subsidiaries.
(g) Notwithstanding anything to the contrary contained herein,
holders of outstanding shares of Series D Preferred Stock shall be entitled to
receive, when, as and if declared by the Board, out of funds of the Corporation
legally available therefor, additional dividends (the "Additional Dividends") in
an amount per share of Series D Preferred Stock equal to (x) the amount per
share of Common Stock of any cash dividends declared on the Common Stock
multiplied by the number of shares of Common Stock into which a share of Series
D Preferred Stock is then convertible (without giving effect to the prohibition
on conversion of Series D Preferred Stock prior to July 22, 1994 as set forth in
Section 5(a)) reduced by (y) the amount per share of Series D Preferred Stock of
any Cumulative Dividends paid to the holders of Series D Convertible Stock and
not previously used to offset payments of Additional Dividends. Such Additional
Dividends shall be declared and paid in the same manner and at the same time as
dividends are declared and paid on the Common Stock to the holders of record of
the shares of Series D Preferred Stock.
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<PAGE>
SECTION 4. Redemption. (a) The Series D Preferred Stock shall not
be redeemable prior to July 22, 1994.
(b)(i) The Series D Preferred Stock shall be subject to redemption
in Common Stock, at the option of the Corporation, at any time after July 22,
1994, in part from time to time or in whole.
(ii) If the Corporation elects to redeem shares of Series D
Preferred Stock pursuant to Section 4(b)(i), notice of such redemption shall be
given not less than 30 nor more than 60 days prior to the date fixed by the
Corporation for such redemption (a "Call Date") to each holder of record of the
shares to be redeemed. Upon the redemption of Series D Preferred Stock by the
Corporation pursuant to this Section 4(b) on a Call Date, (x) each such share of
Series D Preferred Stock shall be redeemed for that number of shares of Common
Stock determined by dividing $5,000 by the Conversion Price as of the opening of
business on the Call Date (such calculation to be carried out to four (4)
decimal places) and (y) the holder of each such share of Series D Preferred
Stock shall have the right to receive a cash adjustment pursuant to Section 4(i)
with respect to any fractional shares resulting from such redemption, together
with accumulated and unpaid Cumulative Dividends (whether or not earned or
declared) to such Call Date on the shares of Series D Preferred Stock so
redeemed, without interest.
(c) To the extent the Corporation shall have funds legally available
therefor, the Series D Preferred Stock shall be subject to redemption in cash,
at the option of the Corporation, at any time on or after December 15, 2003, in
part from time to time or in whole, at the redemption prices per share indicated
below, together in each case with accumulated and unpaid Cumulative Dividends
thereon (whether or not earned or declared) to any date fixed by the Corporation
for such redemption (a "Cash Redemption Date"), without interest:
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<PAGE>
12-month period Per Share
ending December 15, Redemption Price
------------------- ----------------
2004 . . . . . . . . . . . $5,250
2005 . . . . . . . . . . . 5,200
2006 . . . . . . . . . . . 5,150
2007 . . . . . . . . . . . 5,100
2008 . . . . . . . . . . . 5,050
2009 and thereafter. . . . 5,000
(d) If the Corporation elects to redeem shares of Series D Preferred
Stock pursuant to Section 4(c), notice of such redemption shall be given not
less than 30 nor more than 60 days prior to the Cash Redemption Date fixed in
such notice to each holder of record of the shares to be redeemed.
(e) Any notice pursuant to Section 4(b) or 4(d) shall be provided by
first class mail, postage prepaid, at such holder's address as the same appears
on the stock records of the Corporation. Neither the failure to mail any notice
required by Section 4(b) or 4(d), nor any defect therein or in the mailing
thereof, to any particular holder, shall affect the sufficiency of the notice or
the validity of the proceedings for redemption with respect to the other
holders. Any notice mailed in the manner herein provided shall be conclusively
presumed to have been duly given on the date mailed, whether or not the holder
receives the notice. Each such notice shall state, in addition to any other
information the Corporation deems appropriate: (i) the Call Date or the Cash
Redemption Date, as the case may be; (ii) the number of shares of Series D
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) in the case of redemption pursuant to Section 4(b), the number of
shares of Common Stock to be issued with respect to each share of Series D
Preferred Stock; (iv) in the case of redemption pursuant to
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<PAGE>
Section 4(c), the applicable redemption price; (v) the place or places where
certificates for shares of Series D Preferred Stock are to be surrendered for
redemption; (vi) the then effective Conversion Price; and (vii) that the right
of holders to convert shares of Series D Preferred Stock to be redeemed shall
terminate at the close of business on the applicable Call Date or Cash
Redemption Date, as the case may be.
(f)(i) Notice having been given as aforesaid, from and after a Call
Date or a Cash Redemption Date, as the case may be (unless the Corporation shall
fail to make available the number of shares of Common Stock and/or irrevocably
to set apart the cash necessary to effect such redemption), (x) except as
otherwise provided herein, dividends on the shares of the Series D Preferred
Stock so called for redemption shall cease to accrue, (y) such shares of Series
D Preferred Stock shall no longer be deemed to be outstanding and (z) all rights
of the holders thereof as holders of Series D Preferred Stock shall cease except
as provided in clause (iii) of this Section 4(f).
(ii) The Corporation's obligation to provide any shares of Common
Stock and/or any cash in accordance with clause (i) of this Section 4(f) shall
be deemed fulfilled if, on or before the applicable Call Date or Cash Redemption
Date, as the case may be, the Corporation shall deposit with First Chicago Trust
Company of New York, or with a bank or trust company (which may be an affiliate
of the Corporation) that has an office in the Borough of Manhattan, City of New
York, and that has a capital and surplus of at least $50,000,000, any shares of
Common Stock and/or any cash necessary for such redemption, in trust, with
irrevocable instructions that such shares of Common Stock and/or such cash be
applied to the redemption of the shares of Series D Preferred Stock called for
redemption.
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<PAGE>
(iii) In the case of any redemption pursuant to Section 4(b), notice
having been given as aforesaid, from and after the close of business on a Call
Date (unless the Corporation defaults in the delivery of the shares of Common
Stock and any cash payable on such Call Date), the shares of Series D Preferred
Stock to be redeemed shall cease to accumulate dividends, each holder of such
shares shall be deemed to be the holder of the number of shares of Common Stock
for which such Series D Preferred Stock is to be redeemed, regardless of whether
such holder has surrendered the certificates for such holder's shares of Series
D Preferred Stock, and the only right of such holders shall be to receive (x)
such shares of Common Stock and (y) any cash adjustments made pursuant to
Section 4(i) and all accumulated and unpaid Cumulative Dividends (whether or not
earned or declared) on such shares of Series D Preferred Stock to but excluding
the Call Date. In the case of any redemption pursuant to Section 4(c) (unless
the Corporation defaults in the payment of the applicable redemption price),
notice having been given as aforesaid, the shares of Series D Preferred Stock to
be redeemed shall from and after the close of business on a Cash Redemption Date
cease to accumulate dividends and the only right of the holders of such shares
shall be to receive payment of the redemption price and all accumulated and
unpaid Cumulative Dividends (whether or not earned or declared) on such shares
to but excluding the Cash Redemption Date. No interest shall accrue for the
benefit of the holders of Series D Preferred Stock to be redeemed on any sum set
aside by the Corporation in connection with a redemption pursuant to this
Section 4. Subject to applicable escheat laws, any such cash unclaimed at the
end of two years from the applicable Call Date or Cash Redemption Date, as the
case may be, shall revert to the general funds of the Corporation and, upon
demand, such bank or trust company shall pay over to the Corporation such
unclaimed cash and thereupon such bank or trust company shall be relieved of all
responsibility in respect thereof and any holder of such shares so called for
redemption shall
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<PAGE>
look only to the general funds of the Corporation for the payment of such cash.
Any interest accrued on cash deposited pursuant to this Section 4(f) shall be
paid from time to time to the Corporation for its own account.
(iv) As promptly as possible after the surrender of the certificates
for any shares of Series D Stock redeemed pursuant to this Section 4 (with
appropriate endorsements and any transfer documents reasonably requested by the
Corporation or any transfer agent designated by the Corporation), such
certificates shall be exchanged (A) in the case of any redemption pursuant to
Section 4(b), for certificates for shares of Common Stock and any cash for
adjustments pursuant to Section 4(i) and (B) in the case of any redemption
pursuant to Section 4(c), for payment of the redemption price, in either case
together with all accumulated and unpaid Cumulative Dividends (whether or not
earned or declared) payable thereon.
(g) If fewer than all the outstanding shares of Series D Preferred
Stock are to be redeemed pursuant to this Section 4, except as otherwise
provided by Section 3(f), shares to be redeemed shall be selected by the
Corporation from outstanding shares of Series D Preferred Stock not previously
called for redemption by lot or pro rata (as nearly as may be) or by any other
method determined by the Corporation in its sole discretion to be equitable. If
fewer than all the shares represented by any certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof.
(h) Any fraction of a share of Series D Preferred Stock may be
redeemed in the same manner in which a whole share of Series D Preferred Stock
may be redeemed pursuant to this Section 4, provided that any shares of Common
Stock deliverable and/or any cash payable upon the redemption of such fractional
interest shall be determined by multiplying the number of shares of Common Stock
deliverable and/or any
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<PAGE>
cash payable upon the redemption of one share of Series D Preferred Stock by
that fraction. If part of a share of Series D Preferred Stock is redeemed, a new
certificate shall be issued representing the unredeemed portion of a share
without cost to the holder thereof.
(i) In the case of any redemption pursuant to Section 4(b), no
fractional shares of Common Stock or scrip representing fractional shares of
Common Stock shall be issued upon redemption of the shares of Series D Preferred
Stock. If more than one certificate shall be surrendered for redemption at any
one time by the same holder, the number of full shares of Common Stock issuable
upon redemption thereof shall be computed on the basis of the aggregate number
of shares of Series D Preferred Stock represented by the certificates so
surrendered. Instead of any fractional shares of Common Stock which would
otherwise be issuable upon redemption of shares of Series D Preferred Stock, the
Corporation shall pay a cash adjustment in respect of such fractional interest
in an amount equal to that fraction of the Closing Price (as defined in Section
5(n)) of the Common Stock as of the Trading Day (as defined in Section 5(n))
immediately preceding the Call Date.
(j) All shares of Common Stock issued and delivered pursuant to
Section 4(b) will upon issuance by the Corporation and delivery be duly and
validly issued, fully paid and nonassessable. If any shares of Common Stock are
listed on any national securities exchange, the Corporation shall, if permitted
by the rules of such exchange, list the shares of Common Stock required to be
delivered upon a redemption of the Cumulative Convertible Preferred Stock
pursuant to Section 4(b), prior to such redemption, on such exchange.
(k) Upon any redemption of Series D Preferred Stock, the Corporation
shall pay on each share so redeemed all accumulated and unpaid Cumulative
Dividends (whether or
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<PAGE>
not earned or declared) to but excluding the applicable Call Date or Cash
Redemption Date, as the case may be. If a Call Date or a Cash Redemption Date,
as the case may be, falls after a dividend payment record date and prior to the
corresponding Dividend Payment Date, then each holder of shares of Series D
Preferred Stock to be redeemed, at the close of business on such dividend
payment record date, shall be entitled to the dividend payable on such shares on
the corresponding Dividend Payment Date (but without duplication of any amounts
payable pursuant to the preceding sentence in respect of accumulated and unpaid
dividends), notwithstanding the redemption of such shares before such Dividend
Payment Date. The Corporation shall make no payment or allowance for Additional
Dividends or unpaid dividends on any shares of Common Stock issued upon
redemption pursuant to Section 4(b).
(l) Any cash payment to a holder of shares of Series D Preferred
Stock in connection with any redemption of the Series D Preferred Stock pursuant
to this Section 4 shall be made in coin or currency of the United States that as
of the date of payment shall be legal tender for payment of public and private
debts by mailing a check to such holder at the address of such holder as shown
on the stock books of the Corporation.
SECTION 5. Conversion. The Series D Preferred Stock shall be
convertible into shares of Common Stock as follows:
(a) Subject to and upon compliance with the provisions of this
Section 5, the holder of any shares of Series D Preferred Stock shall have
the right, at such holder's option, at any time after July 22, 1994, in
whole or, from time to time, in part, to convert any of such shares of
Series D Preferred Stock into fully paid and nonassessable shares of
Common Stock at the Conversion Price as of the Conversion Date upon the
terms
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<PAGE>
hereinafter set forth. In case the shares of Series D Preferred Stock are
called for redemption, such right of conversion shall terminate at the
close of business on the applicable Call Date or Cash Redemption Date, as
the case may be, unless the Corporation shall default in the delivery of
the shares of Common Stock and/or the payment of any cash due upon
redemption. Each share of Series D Preferred Stock shall be convertible
pursuant to this Section 5(a) into the number of shares of Common Stock
determined by dividing the $5,000 by the Conversion Price as of the
Conversion Date (such calculation to be carried out to four (4) decimal
places).
(b) The "Conversion Price" shall mean $_____________, as adjusted
from time to time in accordance with the terms of this Section 5.
(c) A holder of shares of Series D Preferred Stock may exercise the
conversion right specified in Section 5(a) as to any shares held by such
holder by delivering written notice to the Corporation stating that such
holder elects to convert all or a specified number of the shares of Series
D Preferred Stock held by such holder. Such holder shall surrender to the
Corporation, or any transfer agent of the Corporation previously
designated by the Corporation to such holders for this purpose, a
certificate or certificates representing the shares of Series D Preferred
Stock to be converted with appropriate endorsements and any transfer
documents reasonably requested by the Corporation or such transfer agent.
Conversion of the shares of Series D Preferred Stock to be converted shall
be deemed to have been effected immediately prior to the close of business
on the date when such holder surrenders for conversion the certificate or
certificates representing such shares of Series D Preferred Stock (any
such date is referred to herein with respect to
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<PAGE>
such shares as the "Conversion Date") and the Person in whose name the
certificate or certificates representing Common Stock are to be issued
shall be deemed to have become a holder of record of such Common Stock on
the applicable Conversion Date, unless the stock transfer books of the
Corporation shall be closed on such date, in which event such Person shall
be deemed to have become such holder of record at the close of business on
the next succeeding day on which such stock transfer books are open, but
such conversion shall be at the Conversion Price in effect on the
applicable Conversion Date. As promptly as practicable after the
Conversion Date and after surrender to the Corporation, or to any transfer
agent of the Corporation previously designated by the Corporation to the
holders of the Series D Preferred Stock for such purpose, by a holder of
a certificate or certificates representing the shares of Series D
Preferred Stock to be converted, the Corporation shall issue and deliver
or cause to be delivered to or upon the written order of such holder (i) a
certificate or certificates representing the number of full shares of
Common Stock to which such holder is entitled and (ii) a check made
payable for an amount corresponding to any fractional interest in a share
of Common Stock as provided in Section 5(e). Upon conversion of only a
portion of the shares of Series D Preferred Stock represented by any
certificate, the Corporation shall issue and deliver or cause to be
delivered to or upon the written order of the applicable holder of shares
of Series D Preferred Stock, at the expense of the Corporation, a new
certificate representing the unconverted portion of the certificate so
surrendered.
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<PAGE>
Holders of shares of Series D Preferred Stock at the close of
business on a dividend payment record date shall be entitled to receive
any Cumulative Dividends or Additional Dividends payable on such shares on
the corresponding dividend payment date notwithstanding the conversion
thereof following such dividend payment record date and prior to such
dividend payment date. However, shares of Series D Preferred Stock
surrendered for conversion during the period between the close of business
on any dividend payment record date and the opening of business on the
corresponding dividend payment date must be accompanied by payment of an
amount equal to the Cumulative Dividends or Additional Dividends payable
on such shares on such dividend payment date (except shares of Series D
Preferred Stock converted after the issuance of a notice of redemption
with respect to a Call Date or a Cash Redemption Date during such period,
which need not be accompanied by payment of such amount). A holder of
shares of Series D Preferred Stock at the close of business on a dividend
payment record date who tenders any such shares for conversion into shares
of Common Stock on the corresponding dividend payment date will receive
the Cumulative Dividends or Additional Dividends payable by the
Corporation on such shares of Series D Preferred Stock on such date, and
the converting holder need not include payment of the amount of such
Cumulative Dividends or Additional Dividends upon surrender of shares of
Series D Preferred Stock for conversion. The Corporation shall make no
payment or allowance for unpaid dividends on any shares of Common Stock
issued upon conversion pursuant to this Section 5.
(d) Any fraction of a share of Series D Preferred Stock may be
converted by a holder thereof in the same manner in which a whole share of
Series D Preferred Stock may be converted pursuant to this Section 5,
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<PAGE>
provided that any shares of Common Stock deliverable upon the conversion
of such fractional interest shall be determined by multiplying the number
of shares of Common Stock deliverable upon the conversion of one share of
Series D Preferred Stock by that fraction. If part of a share of Series D
Preferred Stock is converted, a new certificate shall be issued
representing the unconverted portion of a share without cost to the holder
thereof.
(e) No fractional shares of Common Stock or scrip representing
fractional shares of Common Stock shall be issued upon conversion of the
shares of Series D Preferred Stock. If more than one certificate shall be
surrendered for conversion at any one time by the same holder, the number
of full shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series D
Preferred Stock represented by the certificates so surrendered. Instead of
any fractional shares of Common Stock which would otherwise be issuable
upon conversion of shares of Series D Preferred Stock, the Corporation
shall pay a cash adjustment in respect of such fractional interest in an
amount equal to that fraction of the Closing Price of the Common Stock as
of the Trading Day immediately preceding the Conversion Date.
(f) The Conversion Price and the number and kind of securities
issuable upon conversion of the shares of Series D Preferred Stock shall
be subject to adjustment from time to time as follows:
(i) In case the Corporation shall, at any time or from time to
time while any shares of the Series D Preferred Stock are
outstanding, (A) pay a dividend or make a distribution on the Common
Stock in shares of Common Stock; (B) subdivide its
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<PAGE>
outstanding shares of Common Stock into a greater number of shares;
(C) combine its outstanding shares of Common Stock into a smaller
number of shares; (D) make a distribution on its Common Stock in
shares of capital stock of the Corporation other than Common Stock;
or (E) issue by reclassification of its shares of Common Stock any
shares of capital stock of the Corporation, the Conversion Price in
effect immediately prior to the date fixed for the determination of
stockholders affected by such actions shall be adjusted so that
each holder of shares of Series D Preferred Stock shall after such
date of determination be entitled to receive, upon surrender for
conversion, the number of shares of Common Stock or other capital
stock of the Corporation which such holder would have owned or have
been entitled to receive immediately following such date of
determination if such holder had converted its shares of Series D
Preferred Stock immediately prior to such date of determination. An
adjustment made pursuant to this clause (i) shall become effective
immediately after such date of determination. If, after an
adjustment pursuant to this clause (i), the holders of shares of
Series D Preferred Stock upon conversion of such shares of Series D
Preferred Stock may receive shares of two or more classes of capital
stock of the Corporation, the Board shall in good faith determine
the allocation of the adjusted Conversion Price between the classes
of capital stock. After such allocation, the Conversion Price of
each class of capital stock shall be subject to adjustment on terms
comparable to those applicable to Common Stock in this Section 5.
(ii) In case the Corporation shall, at any time or from time
to time while any shares of the
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<PAGE>
Series D Preferred Stock are outstanding, issue to holders of
outstanding shares of Common Stock generally rights or warrants
entitling the holders thereof to subscribe for or purchase shares of
Common Stock at a price per share less than the Current Market Price
(as defined in Section 5(n)) of the Common Stock on the date fixed
for the determination of stockholders entitled to receive such
rights or warrants, the Conversion Price in effect at the opening of
business on the day following the date fixed for such determination
shall be decreased by multiplying such Conversion Price by a
fraction, the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase
at such Current Market Price, and the denominator of which shall be
the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of
shares of Common Stock so offered for subscription or purchase.
Such decrease shall become effective immediately after the opening
of business on the day following the date fixed for the
determination of stockholders entitled to receive such rights or
warrants. No adjustment to the Conversion Price shall be made in
respect of any issuance of Common Stock upon exercise of any right
or warrant if an adjustment shall previously have been made upon
issuance of such right or warrant. In case any rights or warrants
referred to in this clause (ii) in respect of which an adjustment
shall have been made shall expire unexercised within 45 days after
the same shall have been distributed or issued by the Corporation,
the
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<PAGE>
Conversion Price shall be readjusted at the time of such expiration
to the Conversion Price that would have been in effect if no
adjustment had been made on account of the distribution or issuance
of such expired rights or warrants.
(iii) In case the Corporation shall, at any time or from time
to time while any shares of the Series D Preferred Stock are
outstanding, distribute to holders of outstanding shares of Common
Stock generally evidences of indebtedness or assets of the
Corporation or any of its Subsidiaries or Affiliates (as defined in
Section 5(n)), including securities, but excluding (x) any dividend
or distribution or rights or warrants referred to in clause (i) or
(ii) above and (y) cash dividends of the Corporation on the Common
Stock, then in each such case the Conversion Price in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution
shall be decreased by multiplying such Conversion Price by a
fraction, the numerator of which shall be the Current Market Price
on the date fixed for such determination less the then fair market
value (as determined by the Board in good faith) of the portion of
such evidences of indebtedness or assets so distributed applicable
to one share of Common Stock, and the denominator of which shall be
such Current Market Price. Such adjustment shall be made whenever
any such distribution is made and shall become effective immediately
prior to the opening of business on the day following the date fixed
for the determination of stockholders entitled to receive such
distribution.
(iv) At any time or from time to time while any shares of
Series D Preferred Stock are out-
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<PAGE>
standing in case of (A) any capital reorganization or any
reclassification or change of the Common Stock (other than a
reclassification covered by clause (i) above) of the Corporation,
(B) the consolidation or merger of the Corporation with or into any
other corporation or (C) the sale, lease or other disposition or
conveyance of the property and assets of the Corporation as, or
substantially as, an entirety to any other corporation, in each case
as a result of which holders of outstanding shares of Common Stock
generally will be entitled to receive shares of stock or other
securities or other property (including cash) with respect to or in
exchange for the Common Stock, there shall be no adjustment of the
Conversion Price but the shares of Series D Preferred Stock shall,
after such capital reorganization, reclassification or change of
Common Stock, consolidation, merger or sale, lease or other
disposition or conveyance, be convertible into the kind and amount
of shares of stock or other securities or property (including cash)
which the holder of shares of Series D Preferred Stock would have
owned or been entitled to receive upon such capital reorganization,
reclassification or change of Common Stock, consolidation, merger
or sale, lease or other disposition or conveyance if such holder had
converted the shares of Series D Preferred Stock owned by such
holder immediately prior to the time of such capital reorganization,
reclassification or change of Common Stock, consolidation, merger or
sale, lease or other disposition or conveyance (assuming such holder
elected to receive the same kind and amount of shares of stock or
other securities or property (including cash) receivable upon such
capital reorganization, reclassification or change of Common Stock,
consolidation, merger or sale, lease or other disposition or
conveyance
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receivable by a plurality of the holders of shares of Common Stock);
and, in any such case, if necessary, appropriate adjustment shall be
made in the application of the provisions set forth in this Section
5 with respect to the rights and interests of the holders of shares
of Series D Preferred Stock, so that the provisions set forth in
this Section 5 (including without limitation those set forth in this
Section 5(f)) shall be made applicable, as closely as reasonably
practicable, to any shares of stock or other securities or property
thereafter deliverable on the conversion of the shares of Series D
Preferred Stock. The provisions of this clause (iv) shall apply to
successive reorganizations, reclassifications, changes,
consolidations, mergers or sales, leases or other dispositions or
conveyances.
(v) All calculations under this Section 5(f) shall be made to
the nearest cent or to the nearest one hundredth (1/100th) of a
share, as the case may be. Any provision of this Section 5 to the
contrary notwithstanding, no adjustment in the Conversion Price
shall be made if the amount of such adjustment would be less than 1%
of the Conversion Price then in effect, but any such amount shall
be carried forward and an adjustment with respect thereto shall be
made at the time of and together with any subsequent adjustment
which, together with such amount and any other amount or amounts so
carried forward, shall aggregate 1% thereof or more.
(vi) No adjustment provided for in clause (i), (ii) or (iii)
of this Section 5(f) shall be made if a distribution that would
otherwise trigger such adjustment is also made to the
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holders of shares of Series D Preferred Stock in the same manner and
amount as if the holders owned the shares of Common Stock into which
the shares of Series D Preferred Stock are convertible immediately
prior to such distribution.
(vii) The Board may make such adjustments in the Conversion
Price, in addition to those required by this Section 5(f), as shall
be determined by it (as evidenced by a resolution of the Board) to
be advisable in order to avoid or diminish any adverse United
States Federal income tax consequences to holders of Common Stock
resulting from any dividend or distribution of stock or issuance of
rights or warrants to purchase or subscribe for stock or from any
similar events treated as such for Federal income tax purposes. The
Board shall have the power to resolve any ambiguity or correct any
error in this Section 5 in a manner not adverse to the holders of
the Series D Preferred Stock.
(viii) Notwithstanding the foregoing provisions, the issuance
of any shares of Common Stock pursuant to any plan providing for the
reinvestment of dividends or interest payable on securities of the
Corporation and the investment of additional optional amounts in
shares of Common Stock under any such plan shall not be deemed to
constitute an issuance of Common Stock or rights or warrants by the
Corporation to which any of the provisions of this Section 5(f)
applies.
(g) Whenever the Conversion Price shall be adjusted as provided in
Section 5(f), the Corporation shall forthwith give written notice to the
holders of shares of Series D Preferred Stock by first class mail, to such
holders' respective addresses as shown on the
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stock books of the Corporation setting forth the Conversion Price that
shall be in effect after such adjustment. Where appropriate, such notice
may be given in advance and may be included as part of a notice required
to be given under the provisions of Section 5(h). The Corporation shall
also file with any transfer agent designated by the Corporation pursuant
to Section 5(c) a notice stating the adjusted Conversion Price and
setting forth a brief statement of the facts upon which such adjustment is
based.
(h) In the event the Corporation shall propose to take any action of
the type described in clause (i), (ii), (iii) or (iv) of Section 5(f), the
Corporation shall give written notice to the holders of shares of Series D
Preferred Stock, by first class mail to such holders' respective addresses
as shown on the stock books of the Corporation which notice shall specify
the date fixed for the determination of stockholders to be affected, if
any, by such action and the approximate date on which such action is to
take place. Such notice shall also set forth the number, kind or class of
shares or other securities or property which shall be deliverable or
purchasable upon the occurrence of such action or deliverable upon
conversion of the shares of Series D Preferred Stock. In the case of any
action which would require the fixing of such date of determination, such
notice shall be given at least 10 days prior to the date so fixed, and, in
case of all other action, such notice shall be given at least 15 days
prior to the taking of such proposed action. The failure to give the
notice required by this Section 5(h), or any defect therein, shall not
affect the legality or validity of any action of the type described in
clause (i), (ii), (iii) or (iv) of Section 5(f) or any vote authorizing
such action.
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(i) The Corporation shall pay all documentary, stamp, transfer or
other transactional taxes attributable to the issuance or delivery of
shares of Common Stock upon conversion of the shares of Series D Preferred
Stock; provided that the Corporation shall not be required to pay
any taxes payable in respect of any transfer involved in the issuance or
delivery of any certificates representing such shares of Common Stock in a
name other than that of the holder of the shares of Series D Preferred
Stock in respect of which such certificates are being issued and no such
issuance or delivery shall be made unless and until the holder requesting
such issuance has paid to the Corporation the amount of any such tax or
has established to the reasonable satisfaction of the Corporation that
such tax is not required to be paid.
(j) So long as any Series D Preferred Stock remains outstanding,
the Corporation shall reserve at all times, free from preemptive rights,
out of its authorized but unissued shares of Common Stock or Common Stock
held in treasury, solely for the purpose of effecting the conversion of
the Series D Preferred Stock, sufficient shares of Common Stock to provide
for the conversion of all outstanding shares of Series D Preferred Stock.
(k) If, and so long as, any shares of Common Stock into which the
shares of Series D Preferred Stock are then convertible are listed on any
national securities exchange, the Corporation will, if permitted by the
rules of such exchange, list and keep on such exchange, upon official
notice of issuance, all shares of Common Stock issuable upon conversion.
(l) All shares of Common Stock which may be issued and delivered
upon conversion of the shares of Series D Preferred Stock will upon
issuance by the
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<PAGE>
Corporation and delivery be duly and validly issued, fully paid and
nonassessable and the Corporation shall not take any action which would
cause the Conversion Price to be less than the par value of the Common
Stock.
(m) In any case in which Section 5(f) provides that an adjustment
shall become effective on, or on the day following, the record date for
any event, the Corporation may defer until the occurrence of such event
(i) issuing to the holder of any share of Series D Preferred Stock
converted after such record date and before the occurrence of such event
the additional shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the Common
Stock issuable upon such conversion before giving effect to such
adjustment and (ii) paying to such holder any amount in cash in lieu of
any fractional share pursuant to Section 5(e).
(n) For purposes of this Section 5:
(i) "Affiliate" has the meaning given to such term in Rule
12b-2 under the Securities Exchange Act of 1934, as amended.
(ii) "Closing Price" means, for any Trading Day, the last
reported sales price, regular way, per share of Common Stock or, in
case no such reported sale takes place on such day, the average of
the reported closing bid and asked prices, regular way, per share of
Common Stock, in either case as reported on the New York Stock
Exchange Composite Transactions Tape or, if the Common Stock is not
then listed or admitted to trading on such exchange, on the
principal national securities exchange on which the Common Stock is
then listed or admitted to trading or, if the Common
27
<PAGE>
Stock is not then listed or admitted to trading on any national
securities exchange, as quoted through the National Association of
Securities Dealers Automated Quotations National Market System or,
if the Common Stock is not then listed or admitted to trading on any
national securities exchange or quoted through such National Market
System, the average of the closing bid and asked prices per share of
Common Stock in the over-the-counter market as furnished by any New
York Stock Exchange member firm that makes a market in the Common
Stock selected from time to time by the Corporation for that
purpose.
(iii) "Current Market Price" means, as of any date, the
average of the Closing Prices for the 30 consecutive Trading Days
ending on the Trading Day prior to such date.
(iv) "Person" means any individual, corporation, partnership,
firm, joint venture, association, joint stock company, trust,
unincorporated organization, governmental or regulatory authority or
other entity.
(v) "Subsidiary" means any corporation, association or other
business entity more than 50% of the shares of stock of any class or
classes (or equivalent interests) of which is at the time owned by
the Corporation or by one or more Subsidiaries of the Corporation or
by the Corporation and one or more Subsidiaries of the Corporation,
if the holders of the stock of such class or classes (or
equivalent interests) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of
the directors (or Persons performing similar functions) of such
business entity.
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<PAGE>
(vi) "Trading Day" means any day the New York Stock Exchange
is open for regular trading.
SECTION 6. Shares to be Retired. All shares of Series D Preferred
Stock purchased or redeemed by the Corporation (excluding, until the
Corporation elects to retire them, shares that are held as treasury shares) or
converted 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.
SECTION 7. Liquidation. (a) The shares of Series D Preferred Stock
shall rank prior to the shares of Junior Securities upon liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary
(a "Liquidation Transaction"), so that in the event of any Liquidation
Transaction, the holders of shares of Series D Preferred Stock then outstanding
shall be entitled to receive out of the assets or surplus funds of the
Corporation available for distribution to its stockholders, or proceeds thereof,
whether from capital, surplus or earnings, before any distribution is made to
holders of any Junior Securities, a liquidation preference in an amount per
share of Series D Preferred Stock equal to the Liquidation Preference, plus an
amount equal to all Cumulative Dividends (whether or not earned or declared)
accumulated and unpaid on the shares of Series D Preferred Stock to the date of
final distribution.
(b) If, upon any Liquidation Transaction, the assets or surplus
funds of the Corporation, or proceeds thereof, whether from capital, surplus or
earnings, distributable among the holders of shares of Series D Preferred Stock
and any Parity Securities then outstanding are insufficient to pay in full the
preferential liquidation payments due to such holders, such assets or proceeds
shall be distributable among such holders ratably in accordance with the amounts
that would be payable on such shares of Series D
29
<PAGE>
Preferred Stock and Parity Securities if all amounts payable thereon upon such
Liquidation Transaction were payable in full.
(c) Neither the consolidation, merger or other business combination
of the Corporation with or into any other Person or Persons nor the sale or
transfer of all or substantially all the assets of the Corporation shall be
deemed to be a Liquidation Transaction.
SECTION 8. Voting Rights. Except as otherwise required by applicable
law, the shares of Series D Preferred Stock shall not have any relative,
participating, optional or special voting rights or powers and the vote or
consent of the holders thereof shall not be required for the taking of any
corporate action.
* * *
The following resolution has been duly adopted by the Series D
Preferred Stock Pricing Committee of the Board (the "Pricing Committee"),
pursuant to the provisions of Section 151 of the General Corporation Law of the
State of Delaware and pursuant to the authority granted to the Pricing Committee
by the Board, which resolution remains in full force and effect as of the date
hereof:
RESOLVED, That, pursuant to the authority expressly granted to the
Series D Preferred Stock Pricing Committee of the Board of Directors (the
"Series D Pricing Committee") by the Board of Directors of The Equitable
Companies Incorporated (the "Corporation") at a meeting held on November 18,
1993, at which meeting the Board of Directors adopting resolutions authorizing
and creating the Cumulative Convertible Preferred Stock, Series D, par value
$1.00 per share (the "Series D Preferred Stock"), the
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<PAGE>
following additional terms of the Series D Preferred Stock are hereby approved
by this Committee:
(a) the number of authorized shares of the Series D Preferred Stock
shall be 60,000;
(b) the Initial Dividend Period for the Series D Preferred Stock
shall commence on and include December 15, 1993; and
(c) the initial Conversion Price for the Series D Preferred Stock
shall be $25.125.
IN WITNESS WHEREOF, The Equitable Companies Incorporated has caused
this Certificate of Designations, Preferences and Relative, Participating,
Optional and other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions thereof of its Preferred Stock, Series D, to be
duly executed by its Senior Vice President and attested to by its Secretary and
has caused its corporate seal to be affixed hereto, as of this 8th day of
December, 1993.
/s/ George A. Williams
--------------------------
Name: George A. Williams
Title: Senior Vice President
[Corporate Seal]
ATTEST:
/s/ Molly Heines
- --------------------------
Name: Molly Heines
Title: Secretary
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<PAGE>
Exhibit 4.01(f)
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL
AND OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
Of
THE EQUITABLE COMPANIES INCORPORATED
CUMULATIVE CONVERTIBLE PREFERRED STOCK, Series E
----------------------
Pursuant to Section 151
of the General Corporation Law of the State of Delaware
----------------------
The following resolution has been duly adopted by the Board of Directors
(such Board, including any committee thereof duly authorized to act on behalf of
such Board, herein referred to as the "Board") of The Equitable Companies
Incorporated, a Delaware corporation (the "Corporation"), pursuant to the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, which resolution remains in full force and effect as of the date
hereof:
RESOLVED that, pursuant to the authority expressly granted to and vested
in the Board by the provisions of the Restated Certificate of Incorporation of
the Corporation (the "Restated Certificate of Incorporation") to fix by
<PAGE>
resolution or resolutions the voting rights, if any, of each series of Preferred
Stock, par value $1.00 per share (the "Preferred Stock"), of the Corporation and
the designations, preferences and relative, participating, optional and other
special rights and qualifications, limitations and restrictions thereof, the
Board hereby authorizes and creates a series of Preferred Stock on the terms and
with the provisions (in addition to those set forth in the Restated Certificate
of Incorporation of the Corporation that are applicable to all Preferred Stock)
as follows:
SECTION 1. Designation, Number of Shares and Liquidation Preference. The
series of Preferred Stock created by this resolution shall be designated the
"Cumulative Convertible Preferred Stock, Series E" (the "Cumulative Convertible
Preferred Stock"). The number of authorized shares of Cumulative Convertible
Preferred Stock shall be 822,460. The liquidation preference of each share of
Cumulative Convertible Preferred Stock (the "Liquidation Preference") shall be
$500.00.
SECTION 2. Rank. The Cumulative Convertible Preferred Stock shall, as to
the payment of dividends and the distribution of assets upon the liquidation,
dissolution or winding up of the Corporation, rank (i) prior to the Common
Stock, par value $.01 per share (the "Common Stock"), and any other capital
stock, of the Corporation (other than (a) the Corporation's Convertible
Exchangeable Preferred Stock, Series A, par value $1.00 per share (the "Series A
Preferred Stock"), (b) the Corporation's Preferred Stock, Series B, par value
$1.00 per share (the "Series B Preferred Stock"), (c) the Corporation's
Cumulative Convertible Preferred Stock, Series C, par value $1.00 per share
(the "Series C Preferred Stock") (d) the Corporation's Cumulative Convertible
Preferred Stock, Series D, par value $1.00 per share (the "Series D Preferred
Stock") and (e) any other class or series of a class of capital stock of the
Corporation the terms of which expressly provide that the shares
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<PAGE>
thereof rank senior or on a parity as to the payment of dividends and the
distribution of assets upon the liquidation, dissolution or winding up of the
Corporation with the shares of the Cumulative Convertible Preferred Stock) (such
securities, other than those described in the immediately preceding
parenthetical clause, collectively referred to herein as the "Junior
Securities") and (ii) on a parity with the Series A Preferred Stock, the Series
B Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock
and any other class or series of a class of capital stock of the Corporation the
terms of which expressly provide that the shares thereof rank on a parity as to
the payment of dividends and the distribution of assets upon the liquidation,
dissolution or winding up of the Corporation with the shares of the Cumulative
Convertible Preferred Stock (the "Parity Securities").
SECTION 3. Dividends. (a) (i) The holders of outstanding shares of
Cumulative Convertible Preferred Stock shall be entitled to receive, in
preference to the holders of shares of Junior Securities, when, as and if
declared by the Board, out of funds of the Corporation legally available for the
payment of dividends, a cumulative dividend at the rate per annum of $30 per
share of Cumulative Convertible Preferred Stock from and including October 22,
1994 to but excluding December 19, 1994 (the "Exchange Offer Dividend Period"),
and thereafter at a rate per annum of $__ per share of Cumulative Convertible
Preferred Stock. Dividends shall accrue and be payable quarterly, when, as and
if declared by the Board, in arrears on each January 22, April 22, July 22 and
October 22 (each a "Dividend Payment Date"), commencing on January 22, 1995.
Each such quarterly dividend shall be cumulative and shall accumulate, whether
or not earned or declared and whether or not there are funds of the Corporation
legally available for payment of dividends, for the period (each, a "Dividend
Period") commencing on and including the most recent Dividend Payment Date to
which dividends have been paid or accumulated to but excluding the
3
<PAGE>
next succeeding Dividend Payment Date, except (x) that the Dividend Period
terminating on January 22, 1995 (the "Initial Dividend Period") shall commence
on and include October 22, 1994 and (y) as otherwise provided in Sections 4, 5
and 7 with respect to shares of Cumulative Convertible Preferred Stock that are
redeemed or converted into shares of Common Stock or with respect to which
distributions are made upon a Liquidation Transaction (as defined in Section 7).
(ii) Dividends shall be payable, net of any amounts required to be
withheld for or with respect to taxes, to holders of record as they appear on
the stock books of the Corporation at the close of business on such record
dates, not more than 60 days nor less than 10 days prior to the respective
Dividend Payment Date, as shall be fixed by the Board. If any Dividend Payment
Date is not a Business Day, the quarterly dividend to be paid on such Dividend
Payment Date shall be paid on the next following Business Day. A "Business Day"
means any day that is not a Saturday, Sunday or other day on which commercial
banks in New York City are required or authorized by law to be closed. Except as
provided in the next sentence, dividends shall be payable (x) on any date
occurring on or prior to October 22, 1999 on which dividends are required to be
paid hereunder, in such number of shares of Common Stock as equals the amount of
dividends to be paid on such date divided by the average of the Closing Price
(as defined in Section 5(n)) for the ten consecutive Trading Days (as defined in
Section 5(n)) prior to such date (the "Dividend Market Price") and (y)
thereafter, at the option of the Corporation, in cash or in a number of shares
of Common Stock determined as aforesaid in clause (x), provided, that, in the
event the Corporation elects to make the dividend payment payable on any
Dividend Payment Date occurring after October 22, 1999 in a form different from
the dividend payment made on the immediately preceding Dividend Payment Date,
the Corporation shall give notice of such change to the holders of shares of
Cumulative
4
<PAGE>
Convertible Preferred Stock, by, at the Corporation's option, a press release
announcing such change or by first class mail at such holders' respective
addresses as shown on the stock books of the Corporation, not less than 10 days
nor more than 30 days prior to such Dividend Payment Date. Dividends accumulated
during the Exchange Offer Dividend Period shall be paid in cash on the first
Dividend Payment Date immediately following the Exchange Offer Dividend Period.
Accumulated and unpaid dividends for any past Dividend Periods may be declared
and paid at any time, without reference to any Dividend Payment Date, to
holders of record on such date, not exceeding 45 days preceding the payment date
thereof, as may be fixed by the Board.
(iii) Payments of dividends in cash shall be made in coin or currency of
the United States that as of the date of payment shall be legal tender for
payment of public and private debts by mailing a check to each holder of shares
of Cumulative Convertible Preferred Stock at the address of such holder as shown
on the stock books of the Corporation.
(iv) Payments of dividends in Common Stock shall be made by mailing to
each holder of shares of Cumulative Convertible Preferred Stock at the address
of such holder as shown on the stock books of the Corporation (a) a certificate
or certificates representing the shares of Common Stock to which such holder is
entitled and (b) a check made payable for an amount corresponding to any
fractional interest in a share of Common Stock as provided in this clause (iv).
All shares of Common Stock issued and delivered pursuant to this Section 3 will
upon issuance by the Corporation and delivery be duly and validly issued, fully
paid and nonassessable. If any shares of Common Stock are listed on any national
securities exchange, the Corporation shall, if permitted by the rules of such
exchange, list the shares of Common Stock to be delivered pursuant to this
Section 3, prior to such payment, on such exchange. The Corporation shall have
the option of issuing
5
<PAGE>
fractional shares of Common Stock or scrip representing fractional shares of
Common Stock upon payment of dividends or, in lieu thereof, paying a cash
adjustment in respect of such fractional interest in an amount equal to that
fraction of the Dividend Market Price. The Corporation shall pay all
documentary, stamp, transfer or other transactional taxes attributable to the
issuance or delivery of shares of Common Stock pursuant to this Section 3;
provided that the Corporation shall not be required to pay any taxes payable in
respect of any transfer involved in the issuance or delivery of any certificates
representing such shares of Common Stock in a name other than that of the holder
of the shares of Cumulative Convertible Preferred Stock in respect of which such
certificates are being issued and no such issuance or delivery shall be made
unless and until the holder requesting such issuance has paid to the
Corporation the amount of any such tax or has established to the reasonable
satisfaction of the Corporation that such tax is not required to be paid.
(b) The amount of dividends payable for each full Dividend Period for the
Cumulative Convertible Preferred Stock shall be computed by dividing the annual
dividend rate by four. The amount of dividends payable for the Initial Dividend
Period, or any other period shorter or longer than a full Dividend Period, on
the Cumulative Convertible Preferred Stock shall be computed on the basis of a
360-day year consisting of twelve 30-day months. Holders of shares of Cumulative
Convertible Preferred Stock shall not be entitled to any dividends, whether
payable in cash, property or stock, in excess of cumulative dividends, as herein
provided, on the Cumulative Convertible Preferred Stock.
(c) All dividends paid with respect to shares of Cumulative Convertible
Preferred Stock shall be paid pro rata to the holders entitled thereto.
6
<PAGE>
(d) When dividends are not paid in full upon the Cumulative Convertible
Preferred Stock, any dividends declared or paid upon shares of Cumulative
Convertible Preferred Stock and any Parity Securities shall be declared or
paid, as the case may be, pro rata so that the amounts of dividends declared or
paid, as the case may be, per share on the Cumulative Convertible Preferred
Stock and such other Parity Securities in all cases bear to each other the same
ratio that accumulated and unpaid dividends per share on the shares of
Cumulative Convertible Preferred Stock and such other Parity Securities bear to
each other. No interest, or sum of money in lieu of interest, shall be payable
in respect of any dividend payment or payments on the Cumulative Convertible
Preferred Stock, or any Parity Securities, which may be in arrears.
(e) Unless full cumulative dividends on the Cumulative Convertible
Preferred Stock have been or contemporaneously are declared by the Board and
paid or declared and an amount of cash or shares of Common Stock, as the case
may be, sufficient for the payment thereof set apart by the Corporation for all
Dividend Periods terminating on or prior to the date of payment of dividends on
any Junior Securities, no dividends shall be declared or paid or any sum set
apart for such payment or any other distribution made on or with respect to such
Junior Securities for any period, other than dividends payable or distributions
made in shares of Junior Securities.
(f) Unless full cumulative dividends on the Cumulative Convertible
Preferred Stock have been or contemporaneously are declared by the Board and
paid or declared and an amount of cash or shares of Common Stock, as the case
may be, sufficient for the payment thereof set apart by the Corporation for all
Dividend Periods terminating on or prior to the date of any event described in
clause (x) or (y) of this Section 3(f), the Corporation shall not, and shall not
permit its Subsidiaries (as defined in Section 5(n)) to,
7
<PAGE>
(x) redeem, purchase, retire or otherwise acquire for any consideration any
shares of Cumulative Convertible Preferred Stock, unless (A) all shares of
Cumulative Convertible Preferred Stock outstanding shall be redeemed,
purchased, retired or otherwise acquired or (B) the shares of Cumulative
Convertible Preferred Stock are redeemed, purchased, retired or otherwise
acquired pro rata from among the holders of the shares then outstanding or (y)
redeem, purchase, retire or otherwise acquire for any consideration, or make any
payment on account of a sinking fund or other similar fund for the redemption,
purchase, retirement or acquisition of, any Junior Securities or any Parity
Securities, or any warrant, right or option to purchase any thereof, or make any
distribution in respect thereof, directly or indirectly, whether in cash,
obligations or securities of the Corporation or other property, except (i) in
the case of Junior Securities, redemptions, purchases, retirements, acquisitions
or distributions made in shares of Junior Securities or redemptions, purchases
or acquisitions of shares of Common Stock for purposes of any employee benefit
plan or program of the Corporation or any Subsidiary and (ii) in the case of
Parity Securities, redemptions, purchases, retirements, acquisitions or
distributions made pro rata so that the amounts redeemed, purchased, retired or
otherwise acquired or paid or distributed in respect thereof, as the case may
be, per share on the Cumulative Convertible Preferred Stock and such other
Parity Securities in all cases bear to each other the same ratio that
accumulated and unpaid dividends and required redemption payments per share on
the shares of Cumulative Convertible Preferred Stock and such other Parity
Securities bear to each other; provided that this Section 3(f) shall not apply
to any Subsidiary of the Corporation that is (1) an insurance company or other
financial institution, a broker or a dealer (as such terms are defined in the
Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as
amended, as the case may be) or an investment advisor (as defined in the
Investment Advisors Act of 1940, as amended), in each case acting for the
bene-
8
<PAGE>
fit of Persons (as defined in Section 5(n)) other than the Corporation or its
Subsidiaries or (2) any investment vehicle managed or advised by any of the
Persons described in clause (1) above for the benefit of any Persons other than
the Corporation or its Subsidiaries.
SECTION 4. Redemption. (a) The Cumulative Convertible Preferred Stock
shall not be redeemable prior to April 21, 1996.
(b) (i) The Cumulative Convertible Preferred Stock shall be subject to
redemption in Common Stock, at the option of the Corporation, at any time on or
after April 21, 1996, in part from time to time or in whole, if for 20 Trading
Days (as defined in Section 5(n)) within any period of 30 consecutive Trading
Days, including the last Trading Day of such 30 consecutive Trading Days, the
Closing Price (as defined in Section 5(n)) of the Common Stock on each of such
20 Trading Days exceeds 125% of the Conversion Price (as defined in Section
5(b)) in effect on each such Trading Day.
(ii) In order to exercise its redemption option under this Section 4(b),
the Corporation must issue a press release announcing the redemption (the "Press
Release") prior to the opening of business on the second Trading Day after the
last Trading Day of any such 30 consecutive Trading Days during which the
Closing Price of the Common Stock on each of 20 Trading Days within such 30
consecutive Trading Days exceeded 125% of the Conversion Price in effect on
each of such 20 Trading Days. The Press Release shall announce the redemption
and set forth the number of shares of Cumulative Convertible Preferred Stock
that the Corporation intends to redeem. The date fixed by the Corporation for
such redemption (a "Call Date") shall be selected by the Corporation, shall be
specified in the notice of redemption and shall be not less than 30 nor more
than 60 days after the date on which the Corporation issues the Press Release.
Upon the redemption of Cumulative Convertible Preferred
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Stock by the Corporation pursuant to this Section 4(b) on a Call Date, (x) each
such share of Cumulative Convertible Preferred Stock shall be redeemed for that
number of shares of Common Stock determined by dividing the Liquidation
Preference of such share by the Conversion Price as of the opening of business
on the Call Date (such calculation to be carried out to four (4) decimal places)
and (y) the holder of each such share of Cumulative Convertible Preferred Stock
shall have the right to receive any cash adjustment pursuant to Section 4(i)
with respect to any fractional shares resulting from such conversion, together
with accumulated and unpaid dividends (whether or not earned or declared) to
such Call Date on the shares of Cumulative Convertible Preferred Stock so
redeemed, without interest, payable in cash or shares of Common Stock as
provided in Section 3(a).
(c) To the extent the Corporation shall have funds legally available
therefor, the Cumulative Convertible Preferred Stock shall be subject to
redemption in cash, at the option of the Corporation, at any time on or after
April 21, 2000, in part from time to time or in whole, at $500 per share,
together with accumulated and unpaid dividends thereon (whether or not earned
or declared) to any date fixed by the Corporation for such redemption (a "Cash
Redemption Date"), without interest, payable in cash or shares of Common Stock
as provided in Section 3(a).
(d) If the Corporation elects to redeem shares of Cumulative Convertible
Preferred Stock pursuant to Section 4(b), notice of such redemption shall be
given not more than four Business Days after the date on which the Corporation
issues the Press Release to each holder of record of the shares to be redeemed.
If the Corporation elects to redeem shares of Cumulative Convertible Preferred
Stock pursuant to Section 4(c), notice of such redemption shall be given not
less than 30 nor more than 60 days prior to the Cash Redemption Date fixed in
such notice to each holder of record of the shares to be redeemed.
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<PAGE>
(e) Any notice pursuant to Section 4(d) shall be provided by first class
mail, postage prepaid, at such holder's address as the same appears on the stock
records of the Corporation. Neither the failure to mail any notice required by
Section 4(d), nor any defect therein or in the mailing thereof, to any
particular holder, shall affect the sufficiency of the notice or the validity of
the proceedings for redemption with respect to the other holders. Any notice
mailed in the manner herein provided shall be conclusively presumed to have
been duly given on the date mailed, whether or not the holder receives the
notice. Each such notice shall state, in addition to any other information the
Corporation deems appropriate: (i) the Call Date or the Cash Redemption Date, as
the case may be; (ii) the number of shares of Cumulative Convertible 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)
in the case of redemption pursuant to Section 4(b), the number of shares of
Common Stock to be issued with respect to each share of Cumulative Convertible
Preferred Stock; (iv) in the case of redemption pursuant to Section 4(c), the
applicable redemption price; (v) the place or places where certificates for
shares of Cumulative Convertible Preferred Stock are to be surrendered for
redemption; (vi) the then effective Conversion Price; and (vii) that the right
of holders to convert shares of Cumulative Convertible Preferred Stock to be
redeemed shall terminate at the close of business on the applicable Call Date
or Cash Redemption Date, as the case may be.
(f) (i) From and after a Call Date or a Cash Redemption Date, as the case
may be (unless the Corporation shall fail to make available the number of shares
of Common Stock and/or irrevocably to set apart the cash necessary to effect
such redemption), (x) except as otherwise provided herein, dividends on the
shares of the Cumulative Convertible Preferred Stock so called for redemption
shall cease to accrue, (y) such shares of Cumulative Convertible Preferred
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<PAGE>
Stock shall no longer be deemed to be outstanding and (z) all rights of the
holders thereof as holders of Cumulative Convertible Preferred Stock shall
cease except as provided in clause (iii) of this Section 4(f).
(ii) The Corporation's obligation to provide any shares of Common Stock
and/or any cash in accordance with clause (i) of this Section 4(f) shall be
deemed fulfilled if, on or before the applicable Call Date or Cash Redemption
Date, as the case may be, the Corporation shall deposit with First Chicago Trust
Company of New York, or with a bank or trust company (which may be an affiliate
of the Corporation) that has an office in the Borough of Manhattan, City of New
York, and that has a capital and surplus of at least $50,000,000, any shares of
Common Stock and/or any cash necessary for such redemption, in trust, with
irrevocable instructions that such shares of Common Stock and/or such cash be
applied to the redemption of the shares of Cumulative Convertible Preferred
Stock called for redemption.
(iii) In the case of any redemption pursuant to Section 4(b), from and
after the close of business on a Call Date (unless the Corporation defaults in
the delivery of the shares of Common Stock and any cash payable on such Call
Date), the shares of Cumulative Convertible Preferred Stock to be redeemed shall
cease to accumulate dividends, each holder of such shares shall be deemed to be
the holder of the number of shares of Common Stock for which such Cumulative
Convertible Preferred Stock is to be redeemed, regardless of whether such
holder has surrendered the certificates for such holder's shares of Cumulative
Convertible Preferred Stock, and the only right of such holders shall be to
receive (x) such shares of Common Stock, (y) any cash adjustments made pursuant
to Section 4(i) and (z) all accumulated and unpaid dividends (whether or not
earned or declared) on such shares of Cumulative Convertible Preferred Stock to
but excluding the Call Date. In the case of any redemption pursuant to Section
4(c) (unless the Corporation defaults in
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<PAGE>
the payment of the applicable redemption price), the shares of Cumulative
Convertible Preferred Stock to be redeemed shall from and after the close of
business on a Cash Redemption Date cease to accumulate dividends and the only
right of the holders of such shares shall be to receive payment of the
redemption price and all accumulated and unpaid dividends (whether or not
earned or declared) on such shares to but excluding the Cash Redemption Date. No
interest shall accrue for the benefit of the holders of Cumulative Convertible
Preferred Stock to be redeemed on any sum set aside by the Corporation in
connection with a redemption pursuant to this Section 4. Subject to applicable
escheat laws, any cash or shares of Common Stock, unclaimed at the end of two
years from the applicable Call Date or Cash Redemption Date, as the case may be,
shall revert to the general funds of the Corporation and, upon demand, such bank
or trust company shall pay over to the Corporation such unclaimed cash or shares
of Common Stock, as the case may be, and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and any holder of
such shares so called for redemption shall look only to the general funds of the
Corporation for the payment of such cash or shares of Common Stock, as the case
may be. Any interest accrued on cash deposited pursuant to this Section 4(f)
shall be paid from time to time to the Corporation for its own account.
(iv) As promptly as possible after the surrender of the certificates for
any shares of Cumulative Convertible Preferred Stock redeemed pursuant to this
Section 4 (with appropriate endorsements and any transfer documents reasonably
requested by the Corporation or any transfer agent designated by the
Corporation), such certificates shall be exchanged (A) in the case of any
redemption pursuant to Section 4(b), for certificates for shares of Common Stock
and any cash for adjustments pursuant to Section 4(i) and (B) in the case of any
redemption pursuant to Section 4(c), for payment of the redemption price, in
either case together with all accumulated and unpaid dividends (whether or not
13
<PAGE>
earned or declared) payable thereon, payable in cash or shares of Common Stock
as provided in Section 3(a).
(g) If fewer than all the outstanding shares of Cumulative Convertible
Preferred Stock are to be redeemed pursuant to this Section 4, except as
otherwise provided by Section 3(f), shares to be redeemed shall be selected by
the Corporation from outstanding shares of Cumulative Convertible Preferred
Stock not previously called for redemption by lot or pro rata (as nearly as may
be) or by any other method determined by the Corporation in its sole discretion
to be equitable. If fewer than all the shares represented by any certificate are
redeemed, a new certificate shall be issued representing the unredeemed shares
without cost to the holder thereof.
(h) Any fraction of a share of Cumulative Convertible Preferred Stock may
be redeemed in the same manner in which a whole share of Cumulative Convertible
Preferred Stock may be redeemed pursuant to this Section 4, provided that any
shares of Common Stock deliverable and/or any cash payable upon the redemption
of such fractional interest shall be determined by multiplying the number of
shares of Common Stock deliverable and/or any cash payable upon the redemption
of one share of Cumulative Convertible Preferred Stock by that fraction. If part
of a share of Cumulative Convertible Preferred Stock is redeemed, a new
certificate shall be issued representing the unredeemed portion of a share
without cost to the holder thereof.
(i) In the case of any redemption pursuant to Section 4(b), the
Corporation shall have the option of issuing fractional shares of Common Stock
or scrip representing fractional shares of Common Stock upon redemption of the
shares of Cumulative Convertible Preferred Stock, or, in lieu thereof, paying a
cash adjustment in respect of such fractional interest in an amount equal to
that fraction of the average of the Closing Price of the
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<PAGE>
Common Stock for the ten consecutive Trading Days prior to the Call Date. If
more than one certificate shall be surrendered for redemption at any one time by
the same holder, the number of full shares of Common Stock issuable upon
redemption thereof shall be computed on the basis of the aggregate number of
shares of Cumulative Convertible Preferred Stock represented by the
certificates so surrendered.
(j) All shares of Common Stock issued and delivered pursuant to Section
4(b) will upon issuance by the Corporation and delivery be duly and validly
issued, fully paid and nonassessable. If any shares of Common Stock are listed
on any national securities exchange, the Corporation shall, if permitted by the
rules of such exchange, list the shares of Common Stock required to be delivered
upon a redemption of the Cumulative Convertible Preferred Stock pursuant to
Section 4(b), prior to such redemption, on such exchange.
(k) Upon any redemption of Cumulative Convertible Preferred Stock, the
Corporation shall pay all accumulated and unpaid dividends (whether or not
earned or declared) to but excluding the applicable Call Date or Cash Redemption
Date, as the case may be. If a Call Date or a Cash Redemption Date, as the case
may be, falls after a dividend payment record date and prior to the
corresponding Dividend Payment Date, then each holder of Cumulative Convertible
Preferred Stock at the close of business on such dividend payment record date
shall be entitled to the dividend payable on such shares on the corresponding
Dividend Payment Date (but without duplication of any amounts payable pursuant
to the preceding sentence in respect of accumulated and unpaid dividends),
notwithstanding the redemption of such shares before such Dividend Payment Date.
The Corporation shall make no payment or allowance for unpaid dividends on any
shares of Common Stock issued upon redemption pursuant to Section 4(b).
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<PAGE>
(l) Any cash payment to a holder of shares of Cumulative Convertible
Preferred Stock in connection with any redemption of the Cumulative Convertible
Preferred Stock pursuant to this Section 4 shall be made in coin or currency of
the United States that as of the date of payment shall be legal tender for
payment of public and private debts by mailing a check to such holder at the
address of such holder as shown on the stock books of the Corporation.
SECTION 5. Conversion. The Cumulative Convertible Preferred Stock shall
be convertible into shares of Common Stock as follows:
(a) Subject to and upon compliance with the provisions of this Section 5,
the holder of any shares of Cumulative Convertible Preferred Stock shall have
the right, at such holder's option, at any time, in whole or, from time to time,
in part, to convert any of such shares of Cumulative Convertible Preferred Stock
into fully paid and nonassessable shares of Common Stock at the Conversion Price
as of the Conversion Date upon the terms hereinafter set forth. In case the
shares of Cumulative Convertible Preferred Stock are called for redemption, such
right of conversion shall terminate at the close of business on the applicable
Call Date or Cash Redemption Date, as the case may be, unless the Corporation
shall default in the delivery of the shares of Common Stock and/or the payment
of any cash due upon redemption. Each share of Cumulative Convertible Preferred
Stock shall be convertible pursuant to this Section 5(a) into the number of
shares of Common Stock determined by dividing the Liquidation Preference of such
share by the Conversion Price as of the Conversion Date (such calculation to be
carried out to four (4) decimal places).
(b) The "Conversion Price" shall mean $24.50, as adjusted from time to
time in accordance with the terms of this Section 5.
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<PAGE>
(c) A holder of shares of Cumulative Convertible Preferred Stock may
exercise the conversion right specified in Section 5(a) as to any shares held by
such holder by delivering written notice to the Corporation stating that such
holder elects to convert all or a specified number of the shares of Cumulative
Convertible Preferred Stock held by such holder. Such holder shall surrender to
the Corporation, or any transfer agent of the Corporation previously designated
by the Corporation to such holders for this purpose, a certificate or
certificates representing the shares of Cumulative Convertible Preferred Stock
to be converted with appropriate endorsements and any transfer documents
reasonably requested by the Corporation or such transfer agent. Conversion of
the shares of Cumulative Convertible Preferred Stock to be converted shall be
deemed to have been effected immediately prior to the close of business on the
date when such holder surrenders for conversion the certificate or certificates
representing such shares of Cumulative Convertible Preferred Stock (any such
date is referred to herein with respect to such shares as the "Conversion Date")
and the Person in whose name the certificate or certificates representing Common
Stock are to be issued shall be deemed to have become a holder of record of such
Common Stock on the applicable Conversion Date, unless the stock transfer books
of the Corporation shall be closed on such date, in which event such Person
shall be deemed to have become such holder of record at the close of business on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the applicable
Conversion Date. As promptly as practicable after the Conversion Date and after
surrender to the Corporation, or to any transfer agent of the Corporation
previously designated by the Corporation to the holders of the Cumulative
Convertible Preferred Stock for such purpose, by a holder of a certificate or
certificates representing the shares of Cumulative Convertible Preferred Stock
to be converted, the Corporation shall issue and deliver or cause to be
delivered to or upon the written order of such holder
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<PAGE>
(i) a certificate or certificates representing the number of full shares of
Common Stock to which such holder is entitled and (ii) a check made payable for
an amount corresponding to any fractional interest in a share of Common Stock as
provided in Section 5(e). Upon conversion of only a portion of the shares of
Cumulative Convertible Preferred Stock represented by any certificate, the
Corporation shall issue and deliver or cause to be delivered to or upon the
written order of the applicable holder of shares of Cumulative Convertible
Preferred Stock, at the expense of the Corporation, a new certificate
representing the unconverted portion of the certificate so surrendered.
Holders of shares of Cumulative Convertible Preferred Stock at the close
of business on a dividend payment record date shall be entitled to receive the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof following such dividend payment record
date and prior to such Dividend Payment Date. However, if shares of Cumulative
Convertible Preferred Stock are surrendered for conversion during the period
between the close of business on any dividend payment record date and the
opening of business on the corresponding Dividend Payment Date (except shares of
Cumulative Convertible Preferred Stock converted after the issuance of a notice
of redemption with respect to a Call Date or a Cash Redemption Date during such
period), (i) so long as dividends on the Cumulative Convertible Preferred Stock
are required to be payable in shares of Common Stock, and thereafter unless the
dividends payable on such Dividend Payment Date are specified by the Corporation
to be payable in cash pursuant to Section 3(a)(ii), the shares of Common Stock
which the converting holder shall be entitled to receive shall be reduced by the
number of shares of Common Stock payable as a dividend on such Dividend Payment
Date on the total number of shares surrendered for conversion (including any
fractional shares), and (ii) if the dividends payable on such Dividend Payment
Date are specified by the Corporation
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<PAGE>
to be payable in cash pursuant to Section 3(a)(ii), such shares of Cumulative
Convertible Preferred Stock surrendered for conversion must be accompanied by an
amount of cash equal to the cash dividends payable on such shares on such
Dividend Payment Date. A holder of shares of Cumulative Convertible Preferred
Stock on a dividend payment record date who tenders any such shares for
conversion into shares of Common Stock on the corresponding Dividend Payment
Date will receive the dividend payable by the Corporation on such shares of
Cumulative Convertible Preferred Stock on such date, and the shares of Common
Stock which the converting holder shall be entitled to receive shall not be
reduced as provided in this Section 5, and the converting holder need not
include payment of the amount of any cash dividend upon surrender of shares of
Cumulative Convertible Preferred Stock for conversion, as the case may be. The
Corporation shall make no payment or allowance for unpaid dividends on any
shares of Common Stock issued upon conversion pursuant to this Section 5.
(d) Any fraction of a share of Cumulative Convertible Preferred Stock may
be converted by a holder thereof in the same manner in which a whole share of
Cumulative Convertible Preferred Stock may be converted pursuant to this Section
5, provided that any shares of Common Stock deliverable and any cash payable
upon the conversion of such fractional interest shall be determined by
multiplying the number of shares of Common Stock deliverable and any cash
payable upon the conversion of one share of Cumulative Convertible Preferred
Stock by that fraction. If part of a share of Cumulative Convertible Preferred
Stock is converted, a new certificate shall be issued representing the
unconverted portion of a share without cost to the holder thereof.
(e) The Corporation shall have the option of issuing fractional shares of
Common Stock or scrip representing fractional shares of Common Stock upon
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<PAGE>
conversion of the shares of Cumulative Convertible Preferred Stock, or, in lieu
thereof, paying a cash adjustment in respect of such fractional interest in an
amount equal to that fraction of the average of the Closing Price of the Common
Stock for the ten consecutive Trading Days prior to the Conversion Date. If more
than one certificate shall be surrendered for conversion at any one time by the
same holder, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares of
Cumulative Convertible Preferred Stock represented by the certificates so
surrendered.
(f) The Conversion Price and the number and kind of securities issuable
upon conversion of the shares of Cumulative Convertible Preferred Stock shall be
subject to adjustment from time to time as follows:
(i) In case the Corporation shall, at any time or from time to time
while any shares of the Cumulative Convertible Preferred Stock are
outstanding, (A) pay a dividend or make a distribution on the Common Stock
in shares of Common Stock; (B) subdivide its outstanding shares of Common
Stock into a greater number of shares; (C) combine its outstanding shares
of Common Stock into a smaller number of shares; (D) make a distribution
on its Common Stock in shares of capital stock of the Corporation other
than Common Stock; or (E) issue by reclassification of its shares of
Common Stock any shares of capital stock of the Corporation, the
Conversion Price in effect immediately prior to the date fixed for the
determination of stockholders affected by such actions shall be adjusted
so that each holder of shares of Cumulative Convertible Preferred Stock
shall after such date of determination be entitled to receive, upon
surrender for conversion, the number of shares of Common Stock or other
capital stock of the Corporation which such holder would have owned or
have
20
<PAGE>
been entitled to receive immediately following such date of determination
if such holder had converted its shares of Cumulative Convertible
Preferred Stock immediately prior to such date of determination. An
adjustment made pursuant to this clause (i) shall become effective
immediately after such date of determination. If, after an adjustment
pursuant to this clause (i), the holders of shares of Cumulative
Convertible Preferred Stock upon conversion of such shares of Cumulative
Convertible Preferred Stock may receive shares of two or more classes of
capital stock of the Corporation, the Board shall in good faith determine
the allocation of the adjusted Conversion Price between the classes of
capital stock. After such allocation, the Conversion Price of each class
of capital stock shall be subject to adjustment on terms comparable to
those applicable to Common Stock in this Section 5.
(ii) In case the Corporation shall, at any time or from time to time
while any shares of the Cumulative Convertible Preferred Stock are
outstanding, issue to holders of outstanding shares of Common Stock
generally rights or warrants entitling the holders thereof to subscribe
for or purchase shares of Common Stock at a price per share less than the
Current Market Price (as defined in Section 5(n)) of the Common Stock on
the date fixed for the determination of stockholders entitled to receive
such rights or warrants, the Conversion Price in effect at the opening of
business on the day following the date fixed for such determination shall
be decreased by multiplying such Conversion Price by a fraction, the
numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such Current Market
Price, and the
21
<PAGE>
denominator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase. Such decrease shall become effective immediately
after the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such rights or warrants.
No adjustment to the Conversion Price shall be made in respect of any
issuance of Common Stock upon exercise of any right or warrant if an
adjustment shall previously have been made upon issuance of such right or
warrant. In case any rights or warrants referred to in this clause (ii) in
respect of which an adjustment shall have been made shall expire
unexercised within 45 days after the same shall have been distributed or
issued by the Corporation, the Conversion Price shall be readjusted at the
time of such expiration to the Conversion Price that would have been in
effect if no adjustment had been made on account of the distribution or
issuance of such expired rights or warrants.
(iii) In case the Corporation shall, at any time or from time to
time while any shares of the Cumulative Convertible Preferred Stock are
outstanding, distribute to holders of outstanding shares of Common Stock
generally evidences of indebtedness or assets of the Corporation or any
of its Subsidiaries or Affiliates (as defined in Section 5(n)), including
securities and cash, but excluding (x) any dividend or distribution or
rights or warrants referred to in clause (i) or (ii) above and (y) regular
quarterly cash dividends of the Corporation declared in the ordinary
course by the Board, then in each such case the Conversion Price in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution shall
be decreased by multiplying such Conversion Price by a frac-
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<PAGE>
tion, the numerator of which shall be the Current Market Price on the
date fixed for such determination less the then fair market value (as
determined by the Board in good faith) of the portion of such evidences of
indebtedness or assets so distributed applicable to one share of Common
Stock, and the denominator of which shall be such Current Market Price.
Such adjustment shall be made whenever any such distribution is made and
shall become effective immediately prior to the opening of business on the
day following the date fixed for the determination of stockholders
entitled to receive such distribution.
(iv) At any time or from time to time while any shares of Cumulative
Convertible Preferred Stock are outstanding in case of (A) any capital
reorganization or any reclassification or change of the Common Stock
(other than a reclassification covered by clause (i) above) of the
Corporation, (B) the consolidation or merger of the Corporation with or
into any other corporation or (C) the sale, lease or other disposition or
conveyance of the property and assets of the Corporation as, or
substantially as, an entirety to any other corporation, in each case as a
result of which holders of outstanding shares of Common Stock generally
will be entitled to receive shares of stock or other securities or other
property (including cash) with respect to or in exchange for the Common
Stock, there shall be no adjustment of the Conversion Price but the shares
of Cumulative Convertible Preferred Stock shall, after such capital
reorganization, reclassification or change of Common Stock, consolidation,
merger or sale, lease or other disposition or conveyance, be convertible
into the kind and amount of shares of stock or other securities or
property (including cash) which the holder of shares of Cumulative
Convertible Preferred Stock would have been entitled to receive upon such
capital reorganization, reclassification or change of Common Stock,
23
<PAGE>
consolidation, merger or sale, lease or other disposition or conveyance
if such holder had converted the shares of Cumulative Convertible
Preferred Stock owned by such holder immediately prior to the time of such
capital reorganization, reclassification or change of Common Stock,
consolidation, merger or sale, lease or other disposition or conveyance
(assuming such holder elected to receive the same kind and amount of
shares of stock or other securities or property (including cash)
receivable upon such capital reorganization, reclassification or change of
Common Stock, consolidation, merger or sale, lease or other disposition
or conveyance receivable by a plurality of the holders of shares of Common
Stock); and, in any such case, if necessary, appropriate adjustment shall
be made in the application of the provisions set forth in this Section 5
with respect to the rights and interests of the holders of shares of
Cumulative Convertible Preferred Stock, so that the provisions set forth
in this Section 5 (including without limitation those set forth in this
Section 5(f)) shall be made applicable, as closely as reasonably
practicable, to any shares of stock or other securities or property
thereafter deliverable on the conversion of the shares of Cumulative
Convertible Preferred Stock. The provisions of this clause (iv) shall
apply to successive reorganizations, reclassifications, changes,
consolidations, mergers or sales, leases or other dispositions or
conveyances.
(v) All calculations under this Section 5(f) shall be made to the
nearest cent or to the nearest one hundredth (1/100th) of a share, as the
case may be. Any provision of this Section 5 to the contrary
notwithstanding, no adjustment in the Conversion Price shall be made if
the amount of such adjustment would be less than 1% of the Conversion
Price then in effect, but any such amount shall be carried forward and an
adjustment with respect thereto shall be made at the
24
<PAGE>
time of and together with any subsequent adjustment which, together with
such amount and any other amount or amounts so carried forward, shall
aggregate 1% thereof or more.
(vi) No adjustment provided for in clause (i), (ii) or (iii) of this
Section 5(f) shall be made if a distribution that would otherwise trigger
such adjustment is also made to the holders of shares of Cumulative
Convertible Preferred Stock in the same manner and amount as if the
holders owned the shares of Common Stock into which the shares of
Cumulative Convertible Preferred Stock are convertible immediately prior
to such distribution.
(vii) The Board may make such adjustments in the Conversion Price,
in addition to those required by this Section 5(f), as shall be determined
by it (as evidenced by a resolution of the Board) to be advisable in
order to avoid or diminish any adverse United States Federal income tax
consequences to holders of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any similar events treated as such for Federal
income tax purposes. The Board shall have the power to resolve any
ambiguity or correct any error in this Section 5 in a manner not adverse
to the holders of the Cumulative Convertible Preferred Stock.
(viii) Notwithstanding the foregoing provisions, the issuance of any
shares of Common Stock pursuant to any plan providing for the reinvestment
of dividends or interest payable on securities of the Corporation and the
investment of additional optional amounts in shares of Common Stock under
any such plan shall not be deemed to constitute an issuance of Common
Stock or rights or
25
<PAGE>
warrants by the Corporation to which any of the provisions of this
Section 5(f) applies.
(g) Whenever the Conversion Price shall be adjusted as provided in
Section 5(f), the Corporation shall forthwith give written notice to the holders
of shares of Cumulative Convertible Preferred Stock by first class mail, to such
holders' respective addresses as shown on the stock books of the Corporation
setting forth the Conversion Price that shall be in effect after such
adjustment. Where appropriate, such notice may be given in advance and may be
included as part of a notice required to be given under the provisions of
Section 5(h). The Corporation shall also file with any transfer agent designated
by the Corporation pursuant to Section 5(c) a notice stating the adjusted
Conversion Price and setting forth a brief statement of the facts upon which
such adjustment is based.
(h) In the event the Corporation shall propose to take any action of the
type described in clause (i), (ii), (iii) or (iv) of Section 5(f), the
Corporation shall give written notice to the holders of shares of Cumulative
Convertible Preferred Stock, by first class mail to such holders' respective
addresses as shown on the stock books of the Corporation which notice shall
specify the date fixed for the determination of stockholders to be affected, if
any, by such action and the approximate date on which such action is to take
place. Such notice shall also set forth the number, kind or class of shares or
other securities or property which shall be deliverable or purchasable upon the
occurrence of such action or deliverable upon conversion of the shares of
Cumulative Convertible Preferred Stock. In the case of any action which would
require the fixing of such date of determination, such notice shall be given at
least 10 days prior to the date so fixed, and, in case of all other action, such
notice shall be given at least 15 days prior to the taking of such proposed
action. The failure to give the notice required by this Section 5(h), or any
defect
26
<PAGE>
therein, shall not affect the legality or validity of any action of the type
described in clause (i), (ii), (iii) or (iv) of Section 5(f) or any vote
authorizing such action.
(i) The Corporation shall pay all documentary, stamp, transfer or other
transactional taxes attributable to the issuance or delivery of shares of Common
Stock upon conversion of the shares of Cumulative Convertible Preferred Stock;
provided that the Corporation shall not be required to pay any taxes payable in
respect of any transfer involved in the issuance or delivery of any certificates
representing such shares of Common Stock in a name other than that of the holder
of the shares of Cumulative Convertible Preferred Stock in respect of which such
certificates are being issued and no such issuance or delivery shall be made
unless and until the holder requesting such issuance has paid to the Corporation
the amount of any such tax or has established to the reasonable satisfaction of
the Corporation that such tax is not required to be paid.
(j) So long as any Cumulative Convertible Preferred Stock remains
outstanding, the Corporation shall reserve at all times, free from preemptive
rights, out of its authorized but unissued shares of Common Stock or Common
Stock held in treasury, solely for the purpose of effecting the conversion of
the Cumulative Convertible Preferred Stock, sufficient shares of Common Stock to
provide for the conversion of all outstanding shares of Cumulative Convertible
Preferred Stock.
(k) If, and so long as, any shares of Common Stock into which the shares
of Cumulative Convertible Preferred Stock are then convertible are listed on
any national securities exchange, the Corporation will, if permitted by the
rules of such exchange, list and keep on such exchange, upon official notice of
issuance, all shares of Common Stock issuable upon conversion.
27
<PAGE>
(l) All shares of Common Stock which may be issued and delivered upon
conversion of the shares of Cumulative Convertible Preferred Stock will upon
issuance by the Corporation and delivery be duly and validly issued, fully paid
and nonassessable and the Corporation shall not take any action which would
cause the Conversion Price to be less than the par value of the Common Stock.
(m) In any case in which Section 5(f) provides that an adjustment shall
become effective on, or on the day following, the record date for any event, the
Corporation may defer until the occurrence of such event (i) issuing to the
holder of any share of Cumulative Convertible Preferred Stock converted after
such record date and before the occurrence of such event the additional shares
of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (ii) paying to such
holder any amount in cash in lieu of any fractional share pursuant to Section
5(e).
(n) For purposes of this Section 5:
(i) "Affiliate" has the meaning given to such term in Rule 12b-2
under the Securities Exchange Act of 1934, as amended.
(ii) "Closing Price" means, for any Trading Day, the last reported
sales price, regular way, per share of Common Stock or, in case no such
reported sale takes place on such day, the average of the reported closing
bid and asked prices, regular way, per share of Common Stock, in either
case as reported on the New York Stock Exchange Composite Transactions
Tape or, if the Common Stock is not then listed or admitted to trading on
such exchange, on the principal national securities exchange on which the
Common Stock is then listed or admitted to trading or, if the Common Stock
is not then listed or
28
<PAGE>
admitted to trading on any national securities exchange, as quoted
through the National Association of Securities Dealers Automated
Quotations National Market System or, if the Common Stock is not then
listed or admitted to trading on any national securities exchange or
quoted through such National Market System, the average of the closing bid
and asked prices per share of Common Stock in the over-the-counter market
as furnished by any New York Stock Exchange member firm that makes a
market in the Common Stock selected from time to time by the Corporation
for that purpose.
(iii) "Current Market Price" means, as of any date, the average of
the Closing Prices for the 30 consecutive Trading Days ending on the
Trading Day prior to such date.
(iv) "Person" means any individual, corporation, partnership, firm,
joint venture, association, joint stock company, trust, unincorporated
organization, governmental or regulatory authority or other entity.
(v) "Subsidiary" means any corporation, association or other
business entity more than 50% of the shares of stock of any class or
classes (or equivalent interests) of which is at the time owned by the
Corporation or by one or more Subsidiaries of the Corporation or by the
Corporation and one or more Subsidiaries of the Corporation, if the
holders of the stock of such class or classes (or equivalent interests)
are ordinarily, in the absence of contingencies, entitled to vote for the
election of a majority of the directors (or Persons performing similar
functions) of such business entity.
(vi) "Trading Day" means any day the New York Stock Exchange is open
for regular trading.
29
<PAGE>
SECTION 6. Shares to be Retired. All shares of Cumulative Convertible
Preferred Stock purchased or redeemed by the Corporation (excluding, until the
Corporation elects to retire them, shares that are held as treasury shares) or
converted 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.
SECTION 7. Liquidation. (a) The shares of Cumulative Convertible Preferred
Stock shall rank prior to the shares of Junior Securities upon liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary
(a "Liquidation Transaction"), so that in the event of any Liquidation
Transaction, the holders of shares of Cumulative Convertible Preferred Stock
then outstanding shall be entitled to receive out of the assets or surplus funds
of the Corporation available for distribution to its stockholders, or proceeds
thereof, whether from capital, surplus or earnings, before any distribution is
made to holders of any Junior Securities, a liquidation preference in an amount
per share of Cumulative Convertible Preferred Stock equal to the Liquidation
Preference, plus an amount equal to all dividends (whether or not earned or
declared) accumulated and unpaid on the shares of Cumulative Convertible
Preferred Stock to the date of final distribution.
(b) If, upon any Liquidation Transaction, the assets or surplus funds of
the Corporation, or proceeds thereof, whether from capital, surplus or earnings,
distributable among the holders of shares of Cumulative Convertible Preferred
Stock and any Parity Securities then outstanding are insufficient to pay in full
the preferential liquidation payments due to such holders, such assets, surplus
funds or proceeds shall be distributable among such holders ratably in
accordance with the amounts that would be payable on such shares of Cumulative
Convertible Preferred Stock and Parity Securities if all amounts payable thereon
were payable in full.
30
<PAGE>
(c) Neither the consolidation, merger or other business combination of the
Corporation with or into any other Person or Persons nor the sale or transfer of
all or substantially all the assets of the Corporation shall be deemed to be a
Liquidation Transaction.
SECTION 8. Voting Rights. (a) The holders of shares of Cumulative
Convertible Preferred Stock shall not be entitled to any voting rights except as
provided in this Section 8, the Restated Certificate of Incorporation of the
Corporation or as otherwise required by law.
(b) (i) If at any time or times six quarterly dividends (whether or not
consecutive) payable on the Cumulative Convertible Preferred Stock shall be in
arrears and unpaid, in whole or in part, or shall not have been declared and a
sum sufficient for the payment thereof in full shall not have been set apart for
payment, then the number of directors constituting the Board, without further
action, shall be increased by two and the holders of the Cumulative Convertible
Preferred Stock, together with the holders of shares of every other series of
Preferred Stock upon which rights to vote for the election of two additional
directors have been conferred and are then exercisable (any such other series,
the "Parity Voting Preferred Stock"), shall have the exclusive right, voting
separately as a class, to elect the two directors of the Corporation to fill
such newly created directorships. The remaining directors constituting the Board
shall continue to be elected by the other class or classes (or series thereof)
of stock entitled to vote therefor.
(ii) Whenever such voting right shall have vested, such right may be
exercised at a special meeting of the holders of Cumulative Convertible
Preferred Stock and Parity Voting Preferred Stock, at any annual or special
meeting of stockholders held for the purpose of electing directors. Each
director elected pursuant to such right shall be elect-
31
<PAGE>
ed by a majority of the votes cast. The voting right of the holders of
Cumulative Convertible Preferred Stock shall continue until such time as all
cumulative dividends accumulated on the Cumulative Convertible Preferred Stock
shall have been paid in full, at which time such voting right of the holders of
Cumulative Convertible Preferred Stock shall terminate and, subject to the
voting right of the holders of Parity Voting Preferred Stock, the authorized
number of members of the Board shall automatically be reduced by two, but such
voting right shall again vest in the event of each and every subsequent failure
of the Corporation to pay or declare and set apart for payment dividends for the
requisite number of periods.
(iii) At any time when such voting right shall have vested in the holders
of Cumulative Convertible Preferred Stock, a proper officer of the Corporation
shall, upon the written request of holders of record of 10% of the shares of
Cumulative Convertible Preferred Stock then outstanding, call a special meeting
of holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred
Stock for the purpose of electing the two directors to be elected by such
holders or removing any director previously elected. Such meeting shall be held
at the earliest practicable date upon not less than 10 days' notice to such
holders. If such meeting shall not be called within 30 days after receipt of
such written request, then the holders of record of 10% of the shares of
Cumulative Convertible Preferred Stock then outstanding may designate in
writing one of their number to call such meeting at the expense of the
Corporation, and such meeting may be called by such Person so designated upon
not less than 10 days' notice to such holders. Any holder of Cumulative
Convertible Preferred Stock shall have access to the stock books of the
Corporation for the purpose of causing a meeting of stockholders to be so
called.
32
<PAGE>
(iv) At any meeting at which the holders of Cumulative Convertible
Preferred Stock and Parity Voting Preferred Stock shall have the right to elect
directors, the presence in person or by proxy of the holders of at least a
majority of the votes entitled to be cast by the then outstanding shares of
Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall
be required and be sufficient to constitute a quorum. At any such meeting or
adjournment thereof, the absence of a quorum of the holders of Cumulative
Convertible Preferred Stock and Parity Voting Preferred Stock shall not prevent
the election of directors other than those to be elected by the holders of
Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock and the
absence of a quorum or quorums of the holders of capital stock entitled to elect
such other directors shall not prevent the election of the directors to be
elected by the holders of Cumulative Convertible Preferred Stock and Parity
Voting Preferred Stock.
(v) Each director elected by the holders of Cumulative Convertible
Preferred Stock and Parity Voting Preferred Stock shall serve until the earlier
of (i) the election by the holders of Cumulative Convertible Preferred Stock
and Parity Voting Preferred Stock and qualification of such director's successor
and (ii) the time at which the holders of the Cumulative Convertible Preferred
Stock and Parity Voting Preferred Stock no longer have the right to elect such
director. Upon any termination of such voting rights, the term of office of each
director elected by the holders of Cumulative Convertible Preferred Stock and
Parity Voting Preferred Stock shall terminate immediately. Other than as
provided in the two preceding sentences, the directors elected by the holders
of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock may
be removed only by the holders of the Cumulative Convertible Preferred Stock
and the Parity Voting Preferred Stock.
33
<PAGE>
(vi) If a director so elected by the holders of Cumulative Convertible
Preferred Stock and Parity Voting Preferred Stock shall cease to serve as
director before such director's term shall expire, the holders of Cumulative
Convertible Preferred Stock and Parity Voting Preferred Stock then outstanding
may, in the manner provided above, elect a successor to hold office for the
unexpired term of the director whose place shall be vacant.
(c) So long as any shares of Cumulative Convertible Preferred Stock are
outstanding, unless the vote or consent of the holders of a greater number of
shares shall be required by law or by the Restated Certificate of Incorporation,
the affirmative vote of at least 66 2/3% of the votes entitled to be cast by the
holders of the shares of Cumulative Convertible Preferred Stock given in person
or by proxy, either in writing without a meeting or by vote at any meeting
called for the purpose, shall be necessary for effecting or validating:
(i) any amendment, alteration or repeal of any of the provisions of
the Restated Certificate of Incorporation that materially adversely
affects the voting powers, rights or preferences of the holders of the
Cumulative Convertible Preferred Stock; provided, however, that the
amendment of the provisions of the Restated Certificate of Incorporation
so as to authorize or create, or to increase the authorized amount of,
any shares of any Junior Securities or any shares of any class of Parity
Securities shall not be deemed to have a material adverse effect on the
voting powers, rights or preferences of the holders of Cumulative
Convertible Preferred Stock; or
(ii) the authorization or creation of, or the increase in the
authorized amount of, any shares of (x) any class or series of a class of
capital stock of the Corporation the terms of which expressly provide
34
<PAGE>
that the shares thereof rank senior as to the payment of dividends or the
distribution of assets upon the liquidation, dissolution or winding up of
the Corporation to the shares of the Cumulative Convertible Preferred
Stock (the "Senior Securities") or (y) any security convertible into, or
exchangeable or exercisable for, shares of any Senior Securities;
provided, however, that no such vote of the holders of Cumulative Convertible
Preferred Stock shall be required if, at or prior to the time when such
amendment, alteration or repeal is to take effect, or when the issuance of any
such Senior Securities or security convertible into, or exchangeable or
exercisable for, Senior Securities is to be made, as the case may be, all shares
of Cumulative Convertible Preferred Stock at the time outstanding shall have
been called for redemption by the Corporation pursuant to Section 4 and such
shares of Common Stock and/or cash necessary for such redemption shall have been
irrevocably deposited as provided in clause (ii) of Section 4(f).
For purposes of the foregoing provisions of this Section 8, each share of
Cumulative Convertible Preferred Stock shall have one vote per share, except
that when any other series of Preferred Stock shall have the right to vote with
the Cumulative Convertible Preferred Stock as a single class on any matter, then
the Cumulative Convertible Preferred Stock and such other series shall have
with respect to such matters one vote per $50.00 of stated liquidation
preference. Except as otherwise required by applicable law or as set forth
herein, the shares of Cumulative Convertible Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers and
the consent of the holders thereof shall not be required for the taking of any
corporate action.
* * *
35
<PAGE>
The following resolution has been duly adopted by the Transaction
Committee of the Board (the "Transaction Committee"), pursuant to the provisions
of Section 151 of the General Corporation Law of the State of Delaware and
pursuant to the authority granted to the Transaction Committee by the Board,
which resolution remains in full force and effect as of the date hereof:
RESOLVED, That, pursuant to the authority expressly granted to the
Transaction Committee of the Board of Directors by the Board of Directors of the
Company at a meeting held on September 27, 1994, at which meeting the Board of
Directors adopted resolutions authorizing the creation of the Series E
Convertible Preferred Stock, the following term of the Series E Convertible
Preferred Stock is hereby approved by this Committee:
(a) the dividend rate for the Series E Convertible Preferred Stock from
the issue date of the Series E Convertible Preferred Stock shall be 6-1/8% per
share per annum.
37
<PAGE>
IN WITNESS WHEREOF, The Equitable Companies Incorporated has caused this
Certificate of Designations, Preferences and Relative, Participating, Optional
and other Special Rights of Preferred Stock and Qualifications, Limitations and
Restrictions thereof of its Cumulative Convertible Preferred Stock, Series E,
to be duly executed by its Treasurer and Vice President and attested to by its
Secretary and has caused its corporate seal to be affixed hereto, as of this
19th day of December, 1994.
/s/ Kevin R. Byrne
------------------------------------------
Name: Kevin R. Byrne
Title: Treasurer and Vice President
[Corporate Seal]
ATTEST:
/s/ Molly K. Heines
- -----------------------------------
Name: Molly K. Heines
Title: Vice President and Secretary
38
<PAGE>
EXHIBIT 4.01(G)
AMENDMENT TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
THE EQUITABLE COMPANIES INCORPORATED
Pursuant to Section 242
of the General Corporation Law
of the State of Delaware
THE EQUITABLE COMPANIES INCORPORATED, a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
certifies as follows:
1. The text of Clause (e) of ARTICLE FIFTH of the Restated Certificate of
Incorporation of the Corporation is hereby amended to read in its entirety as
follows:
"(e) The Board of Directors shall have the express power, without a vote
of stockholders, to adopt any By-Law, and to amend, alter or repeal the
By-Laws of the Corporation, except to the extent that the By-Laws or this
Restated Certificate of Incorporation otherwise expressly provide. The Board
of Directors may exercise such power upon the affirmative vote of a majority
of the entire Board of Directors. Stockholders may adopt any By-Law, or
amend, alter or repeal the By-Laws of the Corporation, upon the affirmative
vote of the holders of shares having at least a majority of the voting power
of the then outstanding shares of capital stock of the Corporation entitled
(at all times and without regard to the occurrence of a contingency) to vote
generally on the election of Directors and other matters submitted for
stockholder approval, voting together as a single class."
2. This Amendment to the Restated Certificate of Incorporation was duly
adopted in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, THE EQUITABLE COMPANIES INCORPORATED has caused this
certificate to be signed by Joseph J. Melone, its President and Chief Executive
Officer, and attested by Pauline Sherman, its Vice President and Secretary, this
15th day of May 1997.
THE EQUITABLE COMPANIES INCORPORATED
By /s/ JOSEPH J. MELONE
------------------------------------------
President and Chief Executive Officer
ATTEST:
<TABLE>
<S> <C> <C>
By /s/ PAULINE SHERMAN
---------------------------------------
Vice President and Secretary
</TABLE>
<PAGE>
Exhibit 4.02
================================================================================
THE EQUITABLE COMPANIES INCORPORATED
BY-LAWS
-------
As Amended Effective May 15, 1997
================================================================================
<PAGE>
THE EQUITABLE COMPANIES INCORPORATED
BY-LAWS
-------
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
ARTICLE I STOCKHOLDERS 1
Section 1.01. Annual Meetings.................................................1
Section 1.02. Special Meetings................................................3
Section 1.03. Notice of Meetings; Waiver......................................5
Section 1.04. Quorum..........................................................5
Section 1.05. Voting..........................................................6
Section 1.06. Voting by Ballot................................................6
Section 1.07. Adjournment.....................................................6
Section 1.08. Proxies.........................................................7
Section 1.09. Organization; Procedure.........................................7
ARTICLE II BOARD OF DIRECTORS 9
Section 2.01. General Powers..................................................8
Section 2.02. Number and Term of Office.......................................8
Section 2.03. Nomination and Election of Directors............................8
Section 2.04. Annual and Regular Meetings....................................12
Section 2.05. Special Meetings; Notice.......................................12
Section 2.06. Quorum; Voting.................................................13
Section 2.07. Adjournment....................................................13
Section 2.08. Action Without a Meeting.......................................14
Section 2.09. Regulations; Manner of Acting..................................14
i
<PAGE>
PAGE
----
Section 2.10. Action by Telephonic Communications............................14
Section 2.11. Resignations...................................................14
Section 2.12. Vacancies and Newly Created Directorships......................14
Section 2.13. Compensation...................................................15
Section 2.14. Reliance on Accounts and Reports, etc..........................15
ARTICLE III EXECUTIVE COMMITTEE AND OTHER COMMITTEES 16
Section 3.01. How Constituted................................................15
Section 3.02. Powers.........................................................16
Section 3.03. Proceedings....................................................17
Section 3.04. Quorum and Manner of Acting....................................17
Section 3.05. Action by Telephonic Communications............................17
Section 3.06. Resignations...................................................18
Section 3.07. Removal........................................................18
Section 3.08. Vacancies......................................................18
ARTICLE IV OFFICERS 19
Section 4.01. Number.........................................................18
Section 4.02. Election.......................................................19
Section 4.03. Removal and Resignation; Vacancies.............................19
Section 4.04. Authority and Duties of Officers...............................19
ii
<PAGE>
PAGE
----
Section 4.05. Chairman of the Board..........................................19
Section 4.06. Vice-Chairmen of the Board.....................................20
Section 4.07. President......................................................20
Section 4.08. Chief Executive Officer........................................20
Section 4.09. The Secretary..................................................21
Section 4.10. The Treasurer..................................................22
Section 4.11. Additional Officers............................................23
Section 4.12. Security.......................................................23
ARTICLE V CAPITAL STOCK 25
Section 5.01. Certificates of Stock,
Uncertificated Shares..........................................24
Section 5.02. Signatures; Facsimile..........................................24
Section 5.03. Lost, Stolen or Destroyed Certificates.........................24
Section 5.04. Transfer of Stock..............................................25
Section 5.05. Record Date....................................................25
Section 5.06. Registered Stockholders........................................26
Section 5.07. Transfer Agent and Registrar...................................26
ARTICLE VI INDEMNIFICATION
Section 6.01. Nature of Indemnity............................................27
Section 6.02. Successful Defense.............................................28
iii
<PAGE>
Section 6.03. Determination That
Indemnification Is Proper......................................28
Section 6.04. Advance Payment of Expenses....................................29
Section 6.05. Procedure for Indemnification of Directors and Officers........29
Section 6.06. Survival; Preservation of Other Rights.........................31
Section 6.07. Insurance......................................................31
Section 6.08. Severability...................................................32
ARTICLE VII OFFICES
Section 7.01. Registered Office..............................................32
Section 7.02. Other Offices..................................................32
ARTICLE VIII GENERAL PROVISIONS
Section 8.01. Dividends......................................................33
Section 8.02. Reserves.......................................................33
Section 8.03. Execution of Instruments.......................................33
Section 8.04. Corporate Indebtedness.........................................34
Section 8.05. Deposits.......................................................34
Section 8.06. Checks.........................................................35
Section 8.07. Sale, Transfer, etc. of Securities.............................35
Section 8.08. Voting as Stockholder..........................................35
Section 8.09. Fiscal Year....................................................36
iv
<PAGE>
Section 8.10. Seal...........................................................36
Section 8.11. Books and Records..............................................36
ARTICLE IX AMENDMENT OF BY-LAWS
Section 9.01. Amendment......................................................36
ARTICLE X CONSTRUCTION
Section 10.01. Construction..................................................37
ARTICLE XI INVESTOR ACQUISITIONS OF VOTING SECURITIES 38
Section 11.01. Limitation on Acquisitions....................................37
Section 11.02. Certain Definitions...........................................38
v
<PAGE>
THE EQUITABLE COMPANIES INCORPORATED
BY-LAWS
-------
ARTICLE I
STOCKHOLDERS
Section 1.01. Annual Meetings. The annual meeting of the
stockholders of the Corporation for the election of Directors and for the
transaction of such other business as properly may come, as hereinafter
provided, before such meeting shall be held at such place, either within or
without the State of Delaware, and at 11:00 a.m., local time, on the third
Wednesday of May in each year (or, if such day is a legal holiday, then on
the next succeeding business day), or at such other earlier or later date and
hour, as may be fixed from time to time by resolution of the Board of
Directors and set forth in the notice or waiver of notice of the meeting.
[Sections 211(a), (b).](*)
Subject to the final paragraph of this Section 1.01, to be properly
brought before an annual meeting, business must be (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors, (b) otherwise properly brought before the meeting by
or at the direction of the Board of Directors, or (c) otherwise properly
brought before the meeting by a stockholder of the Corporation who was a
stockholder of record at the time of giving of notice provided for in this
Section 1.01, who is entitled to vote at the meeting and who complied with
the notice procedures set forth in this Section 1.01. For business to be
properly brought before an annual meeting by a stockholder, if such business
is related to the election of Directors of the Corporation, the procedures in
Section 2.03 of these By-Laws must be complied with. If such business
relates to any other matter, the stockholder must have given timely notice
- ----------------------------------
(*) Citations are to the General Corporation Law of the State of Delaware
as in effect on May 1, 1997, and are inserted for reference only, and do
not constitute a part of the By-Laws.
<PAGE>
thereof in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice shall be delivered to and received at the principal
executive offices of the Corporation not less than 60 days nor more than 90
days prior to the first anniversary of the preceding year's annual meeting;
provided that in the event that the date of the annual meeting is advanced by
more than 30 days or delayed by more than 60 days from such anniversary date,
notice by the stockholder to be timely must be so delivered and received not
earlier than the 90th day prior to such annual meeting and not later than the
close of business on the later of the 60th day prior to such annual meeting
and the 10th day following the day on which public announcement of the date
of such meeting is first made. Such stockholder's notice shall set forth in
writing as to each matter the stockholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before
the annual meeting, the reasons for conducting such business at the annual
meeting, and any material interest in such business of such stockholder and
the beneficial owner, if any, on whose behalf the proposal is made; and (ii)
as to the stockholder giving the notice and the beneficial owner, if any, on
whose behalf the nomination or proposal is made, (A) the name and address of
such stockholder, as they appear on the Corporation's books, and of such
beneficial owner and (B) the class and number of shares of the Corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner. Notwithstanding anything in these By-Laws to the contrary,
no business shall be conducted at any annual meeting except in accordance
with the procedures set forth in this Section 1.01. The Chairman of the
meeting shall, if the facts warrant, determine and declare to the meeting
that business was not properly brought before the meeting in accordance with
the provisions of this Section 1.01, and if he should so determine, the
Chairman shall declare to the meeting that any such business not properly
brought before the meeting shall not be transacted. For purposes of this
Section 1.01 and Section 2.03, "public announcement" shall mean disclosure in
a press release reported by the Dow Jones News
2
<PAGE>
Service or in a document publicly filed by the Corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In
addition to the provisions of this Section 1.01, a stockholder desiring to
bring business before an annual meeting shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations thereunder
with respect to the matters set forth herein, and any other applicable laws
or rules or regulations of any governmental authority or of any national
securities exchange or similar body overseeing any trading market on which
shares of the Corporation are traded. Nothing in these By-Laws shall be
deemed to affect any rights of stockholders to request inclusion of proposals
in the Corporation's proxy statement pursuant to Rule 14a-8 under the
Exchange Act.
The provisions of this Section 1.01 requiring prior notice for a
stockholder to bring business before a meeting of stockholders shall not be
applicable to any stockholder that beneficially owns, under Rule 13d-3 of the
General Rules and Regulations under the Exchange Act (excluding, however,
securities acquired solely due to Rule 13d-5 of such General Rules and
Regulations), shares representing at least 25% of the voting power of the
then outstanding voting shares of the Corporation (a "Major Stockholder").
As used in these By-Laws, "voting shares of the Corporation" are those shares
of capital stock of the Corporation entitled (at all times and without regard
to the occurrence of a contingency) to vote generally on the election of
directors and other matters required to be submitted for stockholder
approval. Subject to compliance with applicable law, a Major Stockholder may
bring before any meeting of stockholders any business, without the need to
give any advance notice of such business. [Section 109(b).]
Section 1.02. Special Meetings. Special meetings of the stockholders
may be called at any time by the Chairman of the Board, the President or the
Board of
3
<PAGE>
Directors pursuant to a written request signed by not less than one-third of
the total number of Directors then in office. A special meeting shall be
called by the President (or, in the event of his absence or disability, by
any Vice President), or by the Secretary, in the event a vacancy exists on
the Board of Directors due to removal of a Director by vote of the
stockholders of the Corporation or upon receipt of a written request therefor
by a stockholder or stockholders holding in the aggregate not less than 25%
of the outstanding shares of the Corporation at the time entitled to vote on
the particular matter or matters for which the meeting is called. Such
written request by a stockholder or stockholders shall set forth the purpose
or purposes for which such meeting is called. If such officers or the Board
of Directors shall fail to call such meeting within 20 days after creation of
such vacancy or receipt of such request or shall schedule such meeting to
occur later than 65 days after such creation or receipt, any stockholder
executing such request may call such meeting. Such special meetings of the
stockholders shall be held at such places, within or without the State of
Delaware, as shall be specified in the respective notices or waivers of
notice thereof. [Section 211(d).]
The purpose or purposes of any special meeting of stockholders shall
be set forth in the notice of meeting (which notice for a meeting called at
the request of stockholders shall include all business specified in the
request of the stockholder or stockholders for the meeting), and, except as
otherwise required by law or by the Restated Certificate of Incorporation, no
business shall be transacted at any special meeting of stockholders other
than the items of business stated in the notice of meeting. The Chairman of
the meeting shall, if the facts warrant, determine and declare to the meeting
that business was not properly brought before the meeting in accordance with
the provisions of this Section 1.02, and if he or she should so determine,
the Chairman shall declare to the meeting that any such business not properly
brought before the meeting shall not be transacted. [Section 109(b).]
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Section 1.03. Notice of Meetings; Waiver. The Secretary or any
Assistant Secretary shall cause written notice of the place, date and hour of
each meeting of the stockholders, and, in the case of a special meeting, the
purpose or purposes for which such meeting is called, to be given personally
or by mail, not less than 10 nor more than 60 days prior to the meeting, to
each stockholder of record entitled to vote at such meeting. If such notice
is mailed, it shall be deemed to have been given to a stockholder when
deposited in the United States mail, postage prepaid, or delivered to a
nationally recognized overnight delivery service for overnight delivery, in
each case directed to the stockholder at his or her address as it appears on
the record of stockholders of the Corporation, or, if he or she shall have
filed with the Secretary of the Corporation a written request that notices to
him or her be mailed to some other address, then directed to him or her at
such other address. Such further notice shall be given as may be required by
law.
No notice of any meeting of stockholders need be given to any
stockholder who submits a signed waiver of notice, whether before or after
the meeting. Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the stockholders need be specified in a
written waiver of notice. The attendance of any stockholder at a meeting of
stockholders in person or by proxy shall constitute a waiver of notice of
such meeting, except when the stockholder attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of
any business on the ground that the meeting is not lawfully called or
convened. [Sections 222, 229.]
Section 1.04. Quorum. Except as otherwise required by law or by the
Restated Certificate of Incorporation, the presence in person or by proxy of
the holders of record of a majority of the shares entitled to vote at a
meeting of stockholders shall constitute a quorum for the transaction of
business at such meeting. [Section 216.]
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Section 1.05. Voting. If, pursuant to Section 5.05 of these By-Laws,
a record date has been fixed, every holder of record of shares entitled to
vote at a meeting of stockholders shall be entitled to one vote for each
share outstanding in his or her name on the books of the Corporation at the
close of business on such record date. If no record date has been fixed,
then every holder of record of shares entitled to vote at a meeting of
stockholders shall be entitled to one vote for each share of stock standing
in his or her name on the books of the Corporation at the close of business
on the day next preceding the day on which notice of the meeting is given.
Except as otherwise required by law or by the Restated Certificate of
Incorporation or these By-Laws, the vote of a majority of the shares
represented in person or by proxy at any meeting at which a quorum is present
shall be sufficient for the transaction of any business at such meeting.
[Sections 212(a), 216.]
Section 1.06. Voting by Ballot. No vote of the stockholders need be
taken by written ballot, unless otherwise required by law. Any vote which
need not be taken by ballot may be conducted in any manner approved by the
meeting.
Section 1.07. Adjournment. Notice of any adjourned meeting of the
stockholders of the Corporation need not be given if the place, date and hour
thereof are announced at the meeting at which the adjournment is taken,
provided that if the adjournment is for more than thirty days, or if after
the adjournment a new record date for the adjourned meeting is fixed pursuant
to Section 5.05 of these By-Laws, a notice of the adjourned meeting,
conforming to the requirements of Section 1.03 hereof, shall be given to each
stockholder of record entitled to vote at such meeting. At any adjourned
meeting at which a quorum is present, any business may be transacted that
might have been transacted on the original date of the meeting.
[Section 222(c).]
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Section 1.08. Proxies. Any stockholder entitled to vote at any
meeting of the stockholders may, by (a) a written instrument signed by such
stockholder or his attorney-in-fact, or (b) transmitting or authorizing the
transmission of a telegram, cablegram, or other means of electronic
transmission (which may include telephone, datagram, or communication through
the internet) to the person who will be the holder of the proxy or to an
agent duly authorized by the person who will be the holder of the proxy,
together with authenticating information deemed appropriate by the inspectors
or other persons determining that such transmission was authorized by the
stockholder, authorize another person or persons to vote at any such meeting
for him by proxy. No such proxy shall be voted after the expiration of three
years from the date of such proxy, unless such proxy provides for a longer
period. Every proxy shall be revocable at the pleasure of the stockholder
executing it, except in those cases where applicable law provides that a
proxy shall be irrevocable. A stockholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy or by filing another duly executed
proxy bearing a later date with the Secretary. [Section 212(b), (c), (e).]
Section 1.09. Organization; Procedure. At every meeting of
stockholders the presiding officer shall be the Chairman of the Board or, in
the event of his or her absence or disability, a presiding officer chosen by
a majority of the stockholders present in person or by proxy. The Secretary,
or in the event of his or her absence or disability, the Assistant Secretary,
if any, or if there be no Assistant Secretary, in the absence of the
Secretary, an appointee of the presiding officer, shall act as Secretary of
the meeting. The order of business and all other matters of procedure at
every meeting of stockholders may be determined by such presiding officer.
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ARTICLE II
BOARD OF DIRECTORS
Section 2.01. General Powers. Except as may otherwise be provided by
law, by the Restated Certificate of Incorporation or by these By-Laws, the
property, affairs and business of the Corporation shall be managed by or under
the direction of the Board of Directors and the Board of Directors may exercise
all the powers of the Corporation. [Section 141(a).]
Section 2.02. Number and Term of Office. The Board of Directors
shall consist of not less than thirteen nor more than thirty-six Directors. The
exact number of Directors shall be determined from time to time by a resolution
or resolutions adopted by the affirmative vote of a majority of the total number
of Directors which the Corporation would have if there were no vacancies (the
"entire Board of Directors").
A Director shall hold office until the annual meeting next following
his or her election and until his or her successor shall be elected and shall
qualify, subject, however, to the Director's prior death, resignation,
disqualification or removal from office. [Section 141(b).]
Section 2.03. Nomination and Election of Directors. Subject to the
final paragraph of this Section 2.03, only persons who are nominated in
accordance with the procedures set forth in this Section 2.03 shall be eligible
for election as Directors of the Corporation.
Nominations of persons for election to the Board of Directors of the
Corporation may be made at any annual meeting of stockholders by or at the
direction of the Board of Directors or by any stockholder of the Corporation
entitled to vote for the election of Directors at the meeting who was a
stockholder of record at the time of giving of notice provided for in this
Section 2.03 and who
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complies with the notice procedures set forth in this Section 2.03. Any such
nomination by a stockholder shall be made pursuant to timely notice in writing
to the Secretary of the Corporation. To be timely notice for an annual meeting,
a stockholder's notice shall be delivered to and received by the Secretary of
the Corporation at the principal executive offices of the Corporation not less
than 60 days nor more than 90 days prior to the first anniversary of the
preceding year's annual meeting; provided that in the event that the date of the
annual meeting is advanced by more than 30 days or delayed by more than 60 days
from such anniversary date, notice by the stockholder to be timely must be so
delivered and received not earlier than the 90th day prior to such annual
meeting and not later than the close of business on the later of the 60th day
prior to such annual meeting and the 10th day following the day on which public
announcement (as defined in Section 1.01) of the date of such meeting is first
made. Notwithstanding anything in the foregoing sentence to the contrary, in
the event that the number of Directors to be elected to the Board of Directors
of the Corporation is increased and there is no public announcement naming all
of the nominees for Director or specifying the size of the increased Board of
Directors made by the Corporation at least 70 days prior to the first
anniversary of the preceding year's annual meeting, a stockholder's notice
required by this Section 2.03 shall also be considered timely, but only with
respect to nominees for any new positions created by such increase, if it shall
be delivered to the Secretary of the Corporation at the principal executive
offices of the Corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by the
Corporation.
Nominations of persons for election to the Board of Directors of the
Corporation may be made at a special meeting of stockholders at which Directors
are to be elected pursuant to the Corporation's notice of meeting (i) by or at
the direction of the Board of Directors or (ii) subject to the final paragraph
of this Section 2.03, by any stockholder of the Corporation who is a stockholder
of record at the
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time of giving of notice provided for in this Section 2.03, who shall be
entitled to vote at the meeting and who complies with the notice procedures set
forth in this Section 2.03. In the event the Corporation calls a special
meeting of stockholders for the purpose of electing one or more Directors to the
Board of Directors, any such stockholder may nominate a person or persons (as
the case may be), for election to such position(s) as specified in the
Corporation's notice of meeting, if the stockholder's notice shall be delivered
to and received by the Secretary of the Corporation at the principal executive
offices of the Corporation not earlier than the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting and the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting.
Any stockholder's notice delivered pursuant to this Section 2.03 shall
set forth in writing (i) as to each person whom the stockholder proposes to
nominate for election or re-election as a Director (A) the name, age, business
address and residence address of such person, (B) the principal occupation or
employment of such person, (C) the number of shares of stock of the Corporation
which are beneficially owned by such person, and (D) any other information
relating to such person that is required to be disclosed in connection with the
solicitation of proxies for election of Directors, or as otherwise required, in
each case pursuant to Regulation 14A under the Exchange Act (including, without
limitation, such person's written consent to being named in a proxy statement as
a nominee and to serving as a Director if elected), and any other applicable
laws or rules or regulations of any governmental authority or of any national
securities exchange or similar body overseeing any trading market on which
shares of the Corporation are traded; and (ii) as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination is made
(A) the name and address of
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such stockholder, as they appear on the Corporation's books, and of such
beneficial owner and (B) the class and number of shares of the Corporation which
are owned beneficially and of record by such stockholder and such beneficial
owner.
At the request of the Board of Directors, any person nominated by the
Board of Directors for election as a Director shall furnish to the Secretary of
the Corporation that information required to be set forth in a stockholder's
notice of nomination which pertains to the nominee. No person shall be eligible
for election as a Director of the Corporation unless nominated in accordance
with the procedures set forth in this Section 2.03. The Chairman of the meeting
shall, if the facts warrant, determine and declare to the meeting that a
nomination was not made in accordance with the procedures prescribed by these
By-Laws and in that event the defective nomination shall be disregarded. In
addition to the provisions of this Section 2.03, a stockholder shall also comply
with all applicable requirements of the Exchange Act and the rules and
regulations thereunder, and any other applicable laws or rules or regulations of
any governmental authority or any national securities exchange or similar body
overseeing any trading market on which shares of the Corporation are traded,
with respect to the matters set forth herein. [Section 109(b).]
At each meeting of the stockholders for the election of Directors,
provided a quorum is present, the Directors nominated in accordance with this
Section 2.03 for election at such meeting shall be elected by a plurality of the
votes validly cast in such election. [Sections 211(b), (c), 216.]
The provisions of this Section 2.03 requiring prior notice for a
stockholder to nominate Directors shall not be applicable to any Major
Stockholder, and, subject to compliance with applicable law, a Major Stockholder
may nominate persons for election as Directors at any meeting
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where any Director is to be elected, without the need to give any advance notice
of such nominations.
Section 2.04. Annual and Regular Meetings. The annual meeting of the
Board of Directors for the purpose of electing officers and for the transaction
of such other business as may come before the meeting shall be held as soon as
possible following adjournment of the annual meeting of the stockholders at the
place of such annual meeting of the stockholders. Notice of such annual meeting
of the Board of Directors need not be given. The Board of Directors from time
to time may by resolution provide for the holding of regular meetings and fix
the place (which may be within or without the State of Delaware) and the date
and hour of such meetings. Unless and until otherwise specified in a resolution
or resolutions adopted by a majority of the entire Board of Directors, regular
meetings of the Board of Directors shall be held at the principal office of the
Corporation on the third Thursday of each month, except January and August.
Notice of regular meetings need not be given, provided that if the Board of
Directors shall fix or change the time or place of any regular meeting, notice
of such action shall be given to each Director who shall not have been present
at the meeting at which such action was taken at least ten days in advance
thereof in writing and by telephone or telecopy. Any such notice not
specifically required to be given by telephone or telecopy shall be deemed given
to a Director when sent by mail, telegram, telex or other electronic means of
transmission addressed to him or her at his or her address furnished to the
Secretary. Notice of such action need not be given to any Director who attends
such regular meeting without protesting the lack of notice to him or her, prior
to or at the commencement of such meeting, or to any Director who submits a
signed waiver of notice, whether before or after such meeting.
[Section 141(g).]
Section 2.05. Special Meetings; Notice. Special meetings of the
Board of Directors shall be held whenever called by the Chairman of the Board
or, in the event of his
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or her absence or disability, by the President, or by not less than one-quarter
of the Directors then in office, at such place (within or without the State of
Delaware), date and hour as may be specified in the respective notices or
waivers of notice of such meetings. Notice of each special meeting of the Board
of Directors shall be given to each Director at least twenty-four hours in
advance thereof in writing and by telephone or telecopy. Such notice shall
state in general terms the purpose or purposes of the meeting. Any such notice
for a special meeting not specifically required to be given by telephone or
telecopy shall be deemed given to a Director when sent by mail, telegram, telex
or other electronic means of transmission addressed to him or her at his or her
address furnished to the Secretary. Notice of any special meeting need not be
given to any Director who attends such meeting without protesting the lack of
notice to him or her, prior to or at the commencement of such meeting, or to any
Director who submits a signed waiver of notice, whether before or after such
meeting. [Sections 141(g), 229.]
Section 2.06. Quorum; Voting. At all meetings of the Board of
Directors, the presence of not less than a majority of the entire Board of
Directors shall constitute a quorum for the transaction of business. Except as
otherwise required by law, the Restated Certificate of Incorporation or these
By-Laws, the vote of a majority of the Directors present at any meeting at which
a quorum is present shall be the act of the Board of Directors.
[Section 141(b).]
Section 2.07. Adjournment. A majority of the Directors present,
whether or not a quorum is present, may adjourn any meeting of the Board of
Directors to another time or place. No notice need be given of any adjourned
meeting unless the time and place of the adjourned meeting are not announced at
the time of adjournment, in which case notice conforming to the requirements of
Section 2.05 shall be given to each Director.
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Section 2.08. Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if all members of the Board of Directors consent thereto in
writing, and such writing or writings are filed with the minutes of proceedings
of the Board of Directors. [Section 141(f).]
Section 2.09. Regulations; Manner of Acting. To the extent
consistent with applicable law, the Restated Certificate of Incorporation and
these By-Laws, the Board of Directors may adopt such rules and regulations for
the conduct of meetings of the Board of Directors and for the management of the
property, affairs and business of the Corporation as the Board of Directors may
deem appropriate. The Directors shall act only as a Board, and the individual
Directors shall have no power as such.
Section 2.10. Action by Telephonic Communications. Members of the
Board of Directors may participate in a meeting of the Board of Directors by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this provision shall constitute presence
in person at such meeting. [Section 141(i).]
Section 2.11. Resignations. Any Director may resign at any time by
delivering a written notice of resignation, signed by such Director, to the
President or the Secretary. Unless otherwise specified therein, such
resignation shall take effect upon delivery. [Section 141(b).]
Section 2.12. Vacancies and Newly Created Directorships. Subject to
the rights of the holders of any series of Preferred Stock of the Corporation,
any newly created Directorship and any other vacancy occurring on the Board of
Directors may be filled by a majority of the Directors then in office, although
less than a quorum, or by a
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sole remaining Director, except that the stockholders shall fill any vacancy
resulting from the removal of a Director by the stockholders. [Section 223.]
Section 2.13. Compensation. The amount, if any, which each Director
shall be entitled to receive as compensation for his services as such shall be
fixed from time to time by resolution of the Board of Directors.
[Section 141(h).]
Section 2.14. Reliance on Accounts and Reports, etc. A Director, or
a member of any Committee designated by the Board of Directors, shall, in the
performance of his duties, be fully protected in relying in good faith upon the
records of the Corporation and upon information, opinions, reports or statements
presented to the Corporation by any of the Corporation's officers or employees,
or Committees designated by the Board of Directors, or by any other person as to
the matters the member reasonably believes are within such other person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Corporation. [Section 141(e).]
ARTICLE III
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 3.01. How Constituted. The Board of Directors may designate
one or more Committees, each Committee to consist of one or more of the
Directors of the Corporation, including an Executive Committee, and designate
the Directors who are to serve as members of each such Committee. Any member of
a Committee may designate in writing to the Board of Directors, and upon such
designation the Board of Directors shall appoint, one or more other Directors as
an alternative member of such Committee, who may replace such appointing
Committee member at any meeting of such Committee where such appointing member
is absent or disqualified. Each member (and each alternate member) of
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any such Committee (whether designated at an annual meeting of the Board of
Directors or to fill a vacancy or otherwise) shall hold office until his or her
successor shall have been designated or until he or she shall cease to be a
Director, or until his or her earlier death, resignation or removal.
[Section 141(c).]
Section 3.02. Powers. During the intervals between the meetings of
the Board of Directors, the Executive Committee, except as otherwise provided in
this section and subject to the Restated Certificate of Incorporation and these
By-Laws, shall have and may exercise all the powers and authority of the Board
of Directors in the day to day management of the property, affairs and business
of the Corporation. Each such other Committee, except as otherwise provided in
this section, shall have and may exercise such powers of the Board of Directors
as may be provided by resolution or resolutions of the Board of Directors.
Neither the Executive Committee nor any such other Committee shall have the
power or authority:
(a) to approve or adopt, or recommend to the stockholders, any action
or matter expressly required by the General Corporation Law to be submitted
to stockholders for approval, or
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(b) to adopt, amend or repeal any of these By-Laws.
The Executive Committee shall have, and any such other Committee may be granted
by the Board of Directors, power to authorize the seal of the Corporation to be
affixed to any or all papers which may require it. [Section 141(c).]
Section 3.03. Proceedings. Each such Committee may fix its own rules
of procedure consistent with these By-Laws and may meet at such place (within or
without the State of Delaware), at such time and upon such notice, if any, as it
shall determine from time to time. Each such Committee shall keep minutes of
its proceedings and shall report such proceedings to the Board of Directors at
the meeting of the Board of Directors next following any such proceedings.
Section 3.04. Quorum and Manner of Acting. Except as may be
otherwise provided in the resolution creating such Committee, at all meetings of
any Committee the presence of members (or alternate members) constituting a
majority of the total authorized membership of such Committee shall constitute a
quorum for the transaction of business. The act of the majority of the members
present at any meeting at which a quorum is present shall be the act of such
Committee. Any action required or permitted to be taken at any meeting of any
such Committee may be taken without a meeting, if all members of such Committee
shall consent to such action in writing and such writing or writings are filed
with the minutes of the proceedings of the Committee. The members of any such
Committee shall act only as a Committee, and the individual members of such
Committee shall have no power as such. [Section 141(c).]
Section 3.05. Action by Telephonic Communications. Members of any
Committee designated by the Board of Directors may participate in a meeting of
such Committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting
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pursuant to this provision shall constitute presence in person at such meeting.
[Section 141(i).]
Section 3.06. Resignations. Any member (and any alternate member) of
any Committee may resign at any time by delivering a written notice of
resignation, signed by such member, to the Chairman of the Board or the
President. Unless otherwise specified therein, such resignation shall take
effect upon delivery.
Section 3.07. Removal. Any member (and any alternate member) of any
Committee may be removed at any time, either for or without cause, by resolution
adopted by a majority of the entire Board of Directors.
Section 3.08. Vacancies. If any vacancy shall occur in any
Committee, by reason of disqualification, death, resignation, removal or
otherwise, the remaining members (and any alternate members) shall continue to
act, and any such vacancy may be filled by the Board of Directors.
ARTICLE IV
OFFICERS
Section 4.01. Number. The officers of the Corporation shall be
chosen by the Board of Directors and may include a Chairman of the Board and
Vice Chairmen of the Board (who shall be chosen from among the Directors) and
shall include a President (who shall be chosen from among the Directors), a
Secretary, a Treasurer and such other officers as the Board of Directors may
determine. The Board of Directors also may elect one or more Assistant
Secretaries and Assistant Treasurers in such numbers as the Board of Directors
may determine. Any number of offices may be held by the same person. Except as
otherwise provided in these By-Laws, no officer need be a Director of the
Corporation. [Section 142(a), (b).]
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Section 4.02. Election. Unless otherwise determined by the Board of
Directors, the officers of the Corporation shall be elected by the Board of
Directors at the annual meeting of the Board of Directors, and shall be elected
to hold office until the next succeeding annual meeting of the Board of
Directors. In the event of the failure to elect officers at such annual
meeting, officers may be elected at any regular or special meeting of the Board
of Directors. Each officer shall hold office until his or her successor has
been elected and qualified, or until his or her earlier death, resignation or
removal. [Section 142(b).]
Section 4.03. Removal and Resignation; Vacancies. Any officer may be
removed for or without cause at any time by the Board of Directors. Any officer
may resign at any time by delivering a written notice of resignation, signed by
such officer, to the Board of Directors or the President. Unless otherwise
specified therein, such resignation shall take effect upon delivery. Any
vacancy occurring in any office of the Corporation by death, resignation,
removal or otherwise, shall be filled by the Board of Directors.
[Section 142(b), (e).]
Section 4.04. Authority and Duties of Officers. The officers of the
Corporation shall have such authority and shall exercise such powers and perform
such duties as may be specified in these By-Laws, except that in any event each
officer shall exercise such powers and perform such duties as may be required by
law. [Section 142(a).]
Section 4.05. Chairman of the Board. The Board of Directors may at a
regular or special meeting elect from among their number a Chairman of the Board
who shall hold office, at the pleasure of the Board of Directors, until the next
annual meeting. The Chairman of the Board shall preside at all meetings of the
Board of Directors and also shall exercise such powers and perform such duties
as may be delegated or assigned to or required of him or her by these
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By-Laws or by or pursuant to authorization of the Board of Directors.
Section 4.06. Vice-Chairmen of the Board. The Board of Directors may
at a regular or special meeting elect from among their number one or more
Vice-Chairmen of the Board who shall hold office, at the pleasure of the Board
of Directors, until the next annual meeting. The Vice-Chairmen of the Board
shall exercise such powers and perform such duties as may be delegated or
assigned to or required of him, her or them by these By-Laws or by or pursuant
to authorization of the Board of Directors or by the Chairman of the Board.
Section 4.07. President. The Board of Directors shall at a regular
or special meeting elect from among their number a President who shall hold
office, at the pleasure of the Board of Directors, until the next annual meeting
and until the election of his or her successor. The President shall exercise
such powers and perform such duties as may be delegated or assigned to or
required of him or her by these By-Laws or by or pursuant to authorization of
the Board of Directors or (if the President is not the chief executive officer)
by the chief executive officer.
Section 4.08. Chief Executive Officer. The Chairman of the Board or
the President shall be the chief executive officer of the Corporation as the
Board of Directors from time to time shall determine, and the Board of Directors
from time to time may determine who shall act as chief executive officer in the
absence or inability to act of the then incumbent. Subject to the control of
the Board of Directors, and to the extent not otherwise prescribed by these
By-Laws, the chief executive officer shall have plenary power over all
departments, officers, employees, and agents of the Corporation, and shall be
responsible for the general management and direction of all the business and
affairs of the Corporation.
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Section 4.09. The Secretary. The Secretary shall have the following
powers and duties:
(a) He or she shall keep or cause to be kept a record of all the
proceedings of the meetings of the stockholders and of the Board of
Directors in books provided for that purpose.
(b) He or she shall cause all notices to be duly given in accordance
with the provisions of these By-Laws and as required by law.
(c) Whenever any Committee shall be appointed pursuant to a
resolution or resolutions of the Board of Directors, he or she shall
furnish a copy of such resolution or resolutions to the members of such
Committee.
(d) He or she shall be the custodian of the records and of the seal
of the Corporation and cause such seal (or a facsimile thereof) to be
affixed to all certificates representing shares of the Corporation prior to
the issuance thereof and to all instruments the execution of which on
behalf of the Corporation under its seal shall have been duly authorized in
accordance with these By-Laws, and when so affixed he or she may attest the
same.
(e) He or she shall properly maintain and file all books, reports,
statements, certificates and all other documents and records required by
law, the Restated Certificate of Incorporation or these ByLaws.
(f) He or she shall have charge of the stock books and ledgers of the
Corporation and shall cause the stock and transfer books to be kept in such
manner as to show at any time the number of shares of stock of the
Corporation of each class issued and outstanding, the names (alphabetically
arranged) and the addresses of the holders of record of such shares, the
number of shares held by each holder and the date as of which each became
such holder of record.
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(g) He or she shall sign (unless the Treasurer, an Assistant
Treasurer or Assistant Secretary shall have signed) certificates
representing shares of the Corporation the issuance of which shall have
been authorized by the Board of Directors.
(h) He or she shall perform, in general, all duties incident to the
office of secretary and such other duties as may be specified in these
By-Laws or as may be assigned to him or her from time to time by the Board
of Directors or the chief executive officer.
Section 4.10. The Treasurer. The Treasurer shall have the following
powers and duties:
(a) He or she shall have charge and supervision over and be
responsible for the moneys, securities, receipts and disbursements of the
Corporation and shall keep or cause to be kept full and accurate records of
all receipts of the Corporation.
(b) He or she shall cause the moneys and other valuable effects of
the Corporation to be deposited in the name and to the credit of the
Corporation in such banks or trust companies or with such bankers or other
depositaries as shall be selected in accordance with Section 8.05 of these
By-Laws.
(c) He or she shall cause the moneys of the Corporation to be
disbursed by checks or drafts (signed as provided in Section 8.06 of these
By-Laws) upon the authorized depositaries of the Corporation and cause to
be taken and preserved proper vouchers for all moneys disbursed.
(d) He or she shall render to the Board of Directors or the
President, whenever requested, a statement of the financial condition of
the Corporation and of all his or her transactions as Treasurer, and
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render a full financial report at the annual meeting of the stockholders,
if called upon to do so.
(e) He or she shall be empowered from time to time to require from
all officers or agents of the Corporation reports or statements giving such
information as he or she may desire with respect to any and all financial
transactions of the Corporation.
(f) He or she may sign (unless an Assistant Treasurer or the
Secretary or an Assistant Secretary shall have signed) certificates
representing stock of the Corporation the issuance of which shall have been
duly authorized by the Board of Directors.
(g) He or she shall perform, in general, all duties incident to the
office of treasurer and such other duties as may be specified in these
By-Laws or as may be assigned to him or her from time to time by the Board
of Directors or the chief executive officer.
Section 4.11. Additional Officers. The Board of Directors may
appoint such other officers and agents as it may deem appropriate, and such
other officers and agents shall hold their offices for such terms and shall
exercise such powers and perform such duties as may be determined from time to
time by the Board of Directors. The Board of Directors from time to time may
delegate to any officer or agent the power to appoint subordinate officers or
agents and to prescribe their respective rights, terms of office, authorities
and duties. Any such officer or agent may remove any such subordinate officer
or agent appointed by him or her, for or without cause. [Section 142(a), (b).]
Section 4.12. Security. The Board of Directors may require any
officer, agent or employee of the Corporation to provide security for the
faithful performance of his or her duties, in such amount and of such character
as may be determined from time to time by the Board of Directors.
[Section 142(c).]
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ARTICLE V
CAPITAL STOCK
Section 5.01. Certificates of Stock, Uncertificated Shares. The
shares of the Corporation shall be represented by certificates, provided that
the Board of Directors may provide by resolution or resolutions that some or all
of any or all classes or series of the stock of the Corporation shall be
uncertificated shares. Any such resolution shall not apply to shares
represented by a certificate until each certificate is surrendered to the
Corporation. Notwithstanding the adoption of such a resolution by the Board of
Directors, every holder of stock in the Corporation represented by certificates
and upon request every holder of uncertificated shares shall be entitled to have
a certificate signed by, or in the name of the Corporation, by the Chairman of
the Board or the President or a Vice President, and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary, representing
the number of shares registered in certificate form. Such certificate shall be
in such form as the Board of Directors may determine, to the extent consistent
with applicable law, the Restated Certificate of Incorporation and these
By-Laws. [Section 158.]
Section 5.02. Signatures; Facsimile. All of such signatures on the
certificate may be a facsimile, engraved or printed, to the extent permitted by
law. In case any officer, transfer agent or registrar who has signed, or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he or she were such
officer, transfer agent or registrar at the date of issue. [Section 158.]
Section 5.03. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct that a new
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certificate be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon delivery to the
Board of Directors of an affidavit of the owner or owners of such certificate,
setting forth such allegation. The Board of Directors may require the owner of
such lost, stolen or destroyed certificate, or his or her legal representative,
to give the Corporation a bond sufficient to indemnify it against any claim that
may be made against it on account of the alleged loss, theft or destruction of
any such certificate or the issuance of any such new certificate.
[Section 167.]
Section 5.04. Transfer of Stock. Upon surrender to the Corporation
or the transfer agent of the Corporation of a certificate for shares, duly
endorsed or accompanied by appropriate evidence of succession, assignment or
authority to transfer, the Corporation shall issue a new certificate to the
person entitled thereto, cancel the old certificate and record the transaction
upon its books. Within a reasonable time after the transfer of uncertificated
stock, the Corporation shall send to the registered owner thereof a written
notice containing the information required to be set forth or stated on
certificates pursuant to Sections 151, 156, 202(a) or 218(a) of the General
Corporation Law of the State of Delaware. Subject to the provisions of the
Restated Certificate of Incorporation and these By-Laws, the Board of Directors
may prescribe such additional rules and regulations as it may deem appropriate
relating to the issue, transfer and registration of shares of the Corporation.
[Section 151.]
Section 5.05. Record Date. In order to determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix, in advance, a record date,
which record date shall not precede the date on which the resolution fixing the
record date is adopted by the Board of Directors, and which shall not be more
than sixty nor less than ten days before the date of such meeting. A
determination of stockholders of record entitled to notice
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of or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting, provided that the Board of Directors may fix a new record date for the
adjourned meeting.
In order that the Corporation may determine the stockholders entitled
to receive payment of any dividend or other distribution or allotment of any
rights of the stockholders entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty days prior to such
action. If no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
[Section 213.]
Section 5.06. Registered Stockholders. Prior to due surrender of a
certificate for registration of transfer, the Corporation may treat the
registered owner as the person exclusively entitled to receive dividends and
other distributions, to vote, to receive notice and otherwise to exercise all
the rights and powers of the owner of the shares represented by such
certificate, and the Corporation shall not be bound to recognize any equitable
or legal claim to or interest in such shares on the part of any other person,
whether or not the Corporation shall have notice of such claim or interests.
Whenever any transfer of shares shall be made for collateral security, and not
absolutely, it shall be so expressed in the entry of the transfer if, when the
certificates are presented to the Corporation for transfer or uncertificated
shares are requested to be transferred, both the transferor and transferee
request the Corporation to do so. [Section 159.]
Section 5.07. Transfer Agent and Registrar. The Board of Directors
may appoint one or more transfer agents
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and one or more registrars, and may require all certificates representing shares
to bear the signature of any such transfer agents or registrars.
ARTICLE VI
INDEMNIFICATION
Section 6.01. Nature of Indemnity. The Corporation shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or she
is or was or has agreed to become a Director or officer of the Corporation, or
is or was serving or has agreed to serve at the request of the Corporation as a
Director or officer of another corporation (including, without limitation, The
Equitable Life Assurance Society of the United States and its subsidiaries),
partnership, joint venture, trust or other enterprise, including an employee
benefit plan, or by reason of any action alleged to have been taken or omitted
in such capacity, and may indemnify any person who was or is a party or is
threatened to be made a party to such an action, suit or proceeding by reason of
the fact that he or she is or was or has agreed to become an employee or agent
of the Corporation, or is or was serving or has agreed to serve at the request
of the Corporation as an employee or agent of another corporation (including,
without limitation, The Equitable Life Assurance Society of the United States
and its subsidiaries), partnership, joint venture, trust or other enterprise,
including an employee benefit plan, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her or on his or her behalf in connection with such action,
suit or proceeding and any appeal therefrom, if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the Corporation, and, with respect to any criminal action or
proceeding had no reasonable cause
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to believe his or her conduct was unlawful; except that in the case of an action
or suit by or in the right of the Corporation to procure a judgment in its favor
(i) such indemnification shall be limited to expenses (including attorneys'
fees) actually and reasonably incurred by such person in the defense or
settlement of such action or suit, and (ii) no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Delaware Court of
Chancery or such other court shall deem proper.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful. [Section 145(a), (b)]
Section 6.02. Successful Defense. To the extent that a Director,
officer, employee or agent of the Corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in
Section 6.01 hereof or in defense of any claim, issue or matter therein, he or
she shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him or her in connection therewith.
Section 6.03. Determination That Indemnification Is Proper. Any
indemnification of a Director or officer of the Corporation under Section 6.01
hereof (unless ordered by a court) shall be made by the Corporation unless a
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determination is made that indemnification of the Director or officer is not
proper in the circumstances because he or she has not met the applicable
standard of conduct set forth in Section 6.01 hereof. Any indemnification of an
employee or agent of the Corporation under Section 6.01 hereof (unless ordered
by a court) may be made by the Corporation upon a determination that
indemnification of the employee or agent is proper in the circumstances because
he or she has met the applicable standard of conduct set forth in Section 6.01
hereof. Any such determination shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of Directors who were not parties to such
action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested Directors so directs, by independent
legal counsel in a written opinion, or (iii) by the stockholders.
[Section 145(d), (f)]
Section 6.04. Advance Payment of Expenses. Expenses (including
attorneys' fees) incurred by a Director or officer in defending any civil,
criminal, administrative or investigative action, suit or proceeding shall be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of the Director or
officer to repay such amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the Corporation as authorized in this
Article VI. Such expenses (including attorneys' fees) incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the Board of Directors deems appropriate. The Board of Directors may authorize
the Corporation's counsel to represent such Director, officer, employee or agent
in any action, suit or proceeding, whether or not the Corporation is a party to
such action, suit or proceeding. [Section 145(e)]
Section 6.05. Procedure for Indemnification of Directors and
Officers. Any indemnification of a Director or officer of the Corporation under
Sections 6.01 and 6.02, or advance of costs, charges and expenses to a Director
or
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officer under Section 6.04 of this Article VI, shall be made promptly, and in
any event within 30 days, upon the written request of the Director or officer.
If a determination by the Corporation that the Director or officer is entitled
to indemnification pursuant to this Article is required, and the Corporation
fails to respond within sixty days to a written request for indemnity, the
Corporation shall be deemed to have approved such request. If the Corporation
denies a written request for indemnity or advancement of expenses, in whole or
in part, or if payment in full pursuant to such request is not made within 30
days, the right to indemnification or advances as granted by this Article VI
shall be enforceable by the Director or officer in any court of competent
jurisdiction. Such person's costs and expenses incurred in connection with
successfully establishing his or her right to indemnification, in whole or in
part, in any such action shall also be indemnified by the Corporation. It shall
be a defense to any such action (other than an action brought to enforce a claim
for the advance of costs, charges and expenses under Section 6.04 of this
Article VI where the required undertaking, if any, has been received by the
Corporation) that the claimant has not met the standard of conduct set forth in
Section 6.01 of this Article, but the burden of proving such defense shall be on
the Corporation. Neither the failure of the Corporation (including its Board of
Directors, its independent legal counsel, and its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in Section 6.01 of this Article VI, nor
the fact that there has been an actual determination by the Corporation
(including its Board of Directors, its independent legal counsel, and its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
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Section 6.06. Survival; Preservation of Other Rights. The foregoing
indemnification provisions shall be deemed to be a contract between the
Corporation and each Director, officer, employee and agent who serves in any
such capacity at any time while these provisions as well as the relevant
provisions of the General Corporation Law of the State of Delaware are in
effect, and any repeal or modification thereof shall not affect any right or
obligation then existing with respect to any state of facts then or previously
existing or any action, suit or proceeding previously or thereafter brought or
threatened based in whole or in part upon any such state of facts. Such a
"contract right" may not be modified retroactively without the consent of such
Director, officer, employee or agent.
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a Director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
[Section 145(f)]
Section 6.07. Insurance. The Corporation shall purchase and maintain
insurance on behalf of any person who is or was or has agreed to become a
Director or officer of the Corporation, or is or was serving at the request of
the Corporation as a Director or officer of another corporation (including,
without limitation, The Equitable Life Assurance Society of the United States
and its subsidiaries), partnership, joint venture, trust or other enterprise,
including an employee benefit plan, against any liability asserted against him
or her and incurred by him or her or on his or her behalf in any such capacity,
or arising out of his or her status as such, whether or not the Corporation
would have the power to indemnify him or her against such
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liability under the provisions of this Article, provided that such insurance is
available on acceptable terms, which determination shall be made by a vote of a
majority of the entire Board of Directors.
Section 6.08. Severability. If this Article or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each Director or officer and may
indemnify each employee or agent of the Corporation as to costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article VI that shall not have been invalidated and to the
fullest extent permitted by applicable law.
ARTICLE VII
OFFICES
Section 7.01. Registered Office. The registered office of the
Corporation in the State of Delaware shall be located at Corporation Trust
Center, 1209 Orange Street in the City of Wilmington, County of New Castle.
Section 7.02. Other Offices. The Corporation may maintain offices or
places of business at such other locations within or without the State of
Delaware as the Board of Directors may from time to time determine or as the
business of the Corporation may require.
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ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Dividends. Subject to any applicable provisions of law
and the Restated Certificate of Incorporation, dividends upon the shares of the
Corporation may be declared by the Board of Directors at any regular or special
meeting of the Board of Directors and any such dividend may be paid in cash,
property, or shares of the Corporation's Capital Stock.
A member of the Board of Directors shall be fully protected in relying
in good faith upon the records of the Corporation and upon such information,
opinions, reports or statements presented to the Corporation by any of its
officers or employees, or Committees of the Board of Directors, or by any other
person as to matters the Director reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation, as to the value and amount
of the assets, liabilities and/or net profits of the Corporation, or any other
facts pertinent to the existence and amount of surplus or other funds from which
dividends might properly be declared and paid. [Section 172, 173.]
Section 8.02. Reserves. There may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the Board of
Directors from time to time, in its absolute discretion, thinks proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation or for such other
purpose as the Board of Directors shall think conducive to the interest of the
Corporation, and the Board of Directors may similarly modify or abolish any such
reserve. [Section 171.]
Section 8.03. Execution of Instruments. The Chairman of the Board,
any Vice-Chairman of the Board, the
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President, any Vice President, the Secretary or the Treasurer may in the
ordinary course of business enter into any contract or execute and deliver any
instrument in the name and on behalf of the Corporation. The Board of Directors
may authorize any officer or agent to enter into any contract or execute and
deliver any instrument in the name and on behalf of the Corporation. Any such
authorization may be general or limited to specific contracts or instruments.
Section 8.04. Corporate Indebtedness. No loan shall be contracted on
behalf of the Corporation, and no evidence of indebtedness shall be issued in
its name, unless authorized by the Board of Directors, or, to the extent
authorized by a resolution adopted by the Board of Directors, the chief
executive officer. Such authorization may be general or confined to specific
instances. Loans so authorized may be effected at any time for the Corporation
from any bank, trust company or other institution, or from any firm, corporation
or individual. All bonds, debentures, notes and other obligations or evidences
of indebtedness of the Corporation issued for such loans shall be made, executed
and delivered as the Board of Directors or (to the extent so authorized) the
chief executive officer shall authorize. When authorized by the Board of
Directors, any part of or all the properties, including contract rights, assets,
business or good will of the Corporation, whether then owned or thereafter
acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in
trust as security for the payment of such bonds, debentures, notes and other
obligations or evidences of indebtedness of the Corporation, and of the interest
thereon, by instruments executed and delivered in the name of the Corporation.
Section 8.05. Deposits. Any funds of the Corporation may be
deposited from time to time in such banks, trust companies or other depositaries
as may be determined by the Board of Directors, the Chairman of the Board or the
President, or by such officers or agents as may
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be authorized by the Board of Directors, the Chairman of the Board or the
President to make such determination.
Section 8.06. Checks. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such agent or
agents of the Corporation, and in such manner, as the Board of Directors, the
Chairman of the Board or the President from time to time may determine.
Section 8.07. Sale, Transfer, etc. of Securities. To the extent
authorized by the Board of Directors, by the Chairman of the Board or by the
President, any Vice President, the Secretary or the Treasurer or any other
officers designated by the Board of Directors, the Chairman of the Board or the
President may sell, transfer, endorse, and assign, in each case in the ordinary
course of business, any shares of stock (other than stock of a subsidiary if
such transaction has not been approved by the Board of Directors), bonds or
other securities owned by or held in the name of the Corporation, and may make,
execute and deliver in the name of the Corporation, under its corporate seal,
any instruments that may be appropriate to effect any such sale, transfer,
endorsement or assignment.
Section 8.08. Voting as Stockholder. Unless otherwise determined by
resolution of the Board of Directors, the Chairman of the Board, the President
or any Vice President shall have full power and authority on behalf of the
Corporation to attend any meeting of stockholders of any corporation in which
the Corporation may hold stock, and to act, vote (or execute proxies to vote)
and exercise in person or by proxy all other rights, powers and privileges
incident to the ownership of such stock. Such officers acting on behalf of the
Corporation shall have full power and authority to execute any instrument
expressing consent to or dissent from any action of any such corporation without
a meeting. The Board of Directors may by resolution from time to time confer
such power and authority upon any other person or persons.
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Section 8.09. Fiscal Year. The fiscal year of the Corporation shall
commence on the first day of January of each year (except for the Corporation's
first fiscal year which shall commence on the date of incorporation) and shall
terminate in each case on December 31.
Section 8.10. Seal. The seal of the Corporation shall be circular in
form and shall contain the name of the Corporation, the year of its
incorporation and the words "Corporate Seal" and "Delaware". The form of such
seal shall be subject to alteration by the Board of Directors. The seal may be
used by causing it or a facsimile thereof to be impressed, affixed or
reproduced, or may be used in any other lawful manner.
Section 8.11. Books and Records. Except to the extent otherwise
required by law, the books and records of the Corporation shall be kept at such
place or places within or without the State of Delaware as may be determined
from time to time by the Board of Directors.
ARTICLE IX
AMENDMENT OF BY-LAWS
Section 9.01. Amendment. The Board of Directors shall have the
express power, without a vote of stockholders, to adopt any By-Law, and to
amend, alter or repeal the By-Laws of the Corporation, except to the extent that
the By-Laws or the Restated Certificate of Incorporation, including but not
limited to the provisions of paragraph (e) of Article FIFTH thereof, otherwise
provide. The Board of Directors may exercise such power upon the affirmative
vote of a majority of the entire Board of Directors. Stockholders may adopt any
By-Law, or amend, alter or repeal the By-Laws of the Corporation, upon the
affirmative vote of the holders of at least a majority of the votes entitled to
be cast by the holders of all then outstanding voting shares of the Corporation,
voting together as a single class.
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ARTICLE X
CONSTRUCTION
Section 10.01. Construction. In the event of any conflict between
the provisions of these By-Laws as in effect from time to time and the
provisions of the Restated Certificate of Incorporation of the Corporation as in
effect from time to time, the provisions of such Restated Certificate of
Incorporation shall be controlling.
ARTICLE XI
INVESTOR ACQUISITIONS OF VOTING SECURITIES
Section 11.01. Limitation on Acquisitions. The Investor shall not,
and shall cause each of the Investor Related Parties not to, acquire any Voting
Securities if, immediately after such acquisition, the percentage of the Total
Voting Power represented by the aggregate Voting Power of all Voting Securities
then owned, directly or indirectly, by the Investor and the Investor Related
Parties would exceed the percentage equal to 90% minus the percentage of the
Total Voting Power represented by the aggregate Voting Power of all Voting
Securities (x) acquired by the holders of the Other Debt Securities upon the
exchange of the Other Debt Securities and (y) not subsequently sold or otherwise
disposed of by such holders in a manner which effectuated a reasonably broad
distribution, unless (i) the Investor or such Investor Related Party, as the
case may be, substantially concurrently with such acquisition offers to purchase
all shares of the Common Stock then outstanding (other than such shares then
owned by the Investor and the Investor Related Parties) and (ii) a special
committee of the Board of Directors of the Corporation (consisting of directors
of the Corporation other than nominees of the Investor or officers of the
Corporation or any of its Subsidiaries) is appointed to evaluate such offer.
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Section 11.02. Certain Definitions. For purposes of this Article
ELEVENTH:
"Affiliate" means such term as it is defined in Rule 12b-2 under the
Exchange Act.
"Common Stock" means the Corporation's Common Stock, par value $.01
per share.
"Investor" means AXA, a corporation organized under the laws of
France.
"Investor Related Parties" means, collectively, (i) all Subsidiaries
of the Investor, (ii) Axa Assurances I.A.R.D. Mutuelle, Axa Assurances Vie
Mutuelle, La Mutuelle Generale Assurances Risques Divers, Uni Europe Assurance
Mutuelle, Alpha Assurances Vie Mutuelle, La Nouvelle Mutuelle Assurance, FINAXA,
Midi Participations, A.N.F., and their respective Subsidiaries (other than the
Investor), (iii) any other person of which the Investor is or becomes a
Subsidiary and (iv) each person of which voting securities or other ownership
interests representing 25% or more of the ordinary voting power are owned by the
Investor or one or more Subsidiaries of the Investor or a combination thereof,
which person is not a Subsidiary of the Investor but is actually controlled by
the Investor.
"Other Debt Securities" means the two series of Debt Securities the
Corporation may sell under Section 4.11 of that certain Investment Agreement
dated as of July 18, 1991, among The Equitable Life Assurance Society of the
United States, the Corporation and the Investor.
"Person" means any individual, corporation, partnership, firm, joint
venture, association, joint stock company, trust, unincorporated organization,
governmental or regulatory authority or other entity.
"Subsidiary" means a second person of which securities or other
ownership interests representing more
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than 50% of the ordinary voting power are, at the time any determination is
being made, owned or controlled by the first person or one or more Subsidiaries
of such person or a combination thereof, except that in no event shall the
Corporation or any of its Subsidiaries be considered a Subsidiary of the
Investor or any of its Affiliates.
"Total Voting Power" means, at any time, the total number of votes
that may be cast in the election of Directors of the Corporation at any meeting
of the holders of Voting Securities held at such time for such purpose, without
regard to any voting limitation on any Voting Securities imposed by Section
7312(v) of the New York Insurance Law, if all then outstanding Voting Securities
were present and voted at such meeting.
"Voting Power" means, as to any Voting Security at any time, the
number of votes such Voting Security is entitled to cast for Directors of the
Corporation at any meeting of the holders of Voting Securities held at such time
for such purpose, without regard to any voting limitation on any Voting
Securities imposed by Section 7312(v) of the New York Insurance Law.
"Voting Securities" means the Common Stock and any other securities
issued by the Corporation having the power to vote in the election of Directors
of the Corporation, including without limitation any securities having such
power only upon the occurrence of a default or any other extraordinary
contingency, but excluding any preferred stock issued by the Corporation having
only such rights to elect up to two Directors as are required by the rules of
the principal stock exchange on which such preferred stock is listed.
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Exhibit 10.02
This FIRST AMENDMENT TO THE EQUITABLE COMPANIES INCORPORATED STOCK TRUST
AGREEMENT (the "Amendment") is dated as of September 19, 1996 and entered into
between The Equitable Companies Incorporated, a Delaware corporation (the
"Company"), and The Chase Manhattan Bank, a New York banking corporation
(successor in interest to The Chase Manhattan Bank, N.A., a national banking
corporation), as trustee (the "Trustee"), parties to The Equitable Companies
Incorporated Stock Trust Agreement effective as of December 2, 1993 (the
"Agreement"). Capitalized terms used herein without definition have the meanings
specified in the Agreement.
WHEREAS, it is in the best interests of the Plans and the Plan participants
to facilitate the sale of the Company's common stock by the Trust through
offerings registered pursuant to the Securities Act of 1933, as amended; and
WHEREAS, in order to facilitate such offerings it is desirable to modify
the definition of Trust Year in the Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. The definition of "Trust Year" in Section 1.5 of the Agreement is
hereby amended to read in its entirety as follows:
TRUST YEAR. "Trust Year" means each 12-month period beginning on
October 1 and ending on September 30 thereafter, PROVIDED that the initial
Trust Year shall be the period beginning on the date hereof and ending on
January 31, 1995, that the second Trust Year shall be the period beginning
on February 1, 1995 and ending on January 31, 1996 and that the third Trust
Year shall be the period beginning on February 1, 1996 and ending on
September 30, 1997.
<PAGE>
2. This Amendment shall be effective as of the date first set forth above
upon execution by the parties hereto.
3. Except as specifically amended by this Amendment, the Agreement remains
in full force and effect.
4. The laws of the State of New York shall be controlling law in all
matters relating to this Amendment, without regard to conflicts of laws.
<PAGE>
IN WITNESS WHEREOF, the Company and the Trustee have caused this Amendment
to be signed, and their seals affixed thereto, by their authorized officers all
as of the date first above written.
THE EQUITABLE COMPANIES THE CHASE MANHATTAN
INCORPORATED BANK, AS TRUSTEE
By: /s/ Kevin R. Byrne By: /s/ Mark J. Altschuler
---------------------- -------------------------
<PAGE>
SCHEDULE B
----------
(Revised)
CUMULATIVE MAXIMUM DISTRIBUTION IN DOLLARS
------------------------------------------
FROM THE TRUST
--------------
Trust Year Ending January 31,
1995 $127,200,000*
1996 166,400,000
Trust Year Ending September 30,
1997 204,000,000
1998 240,000,000
1999 274,400,000
2000 307,200,000
2001 338,400,000
2002 368,000,000
2003 396,000,000
2004 422,400,000
2005 447,200,000
2006 470,400,000
2007 492,000,000
2008 and thereafter 100% of remaining
amount of Trust Assets
________________________
* Dollar figures to be adjusted for inflation pursuant to Section 3.1.
<PAGE>
EXHIBIT 23.01
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 10, 1997 appearing on page F-1 of The Equitable Companies
Incorporated's Annual Report on Form 10-K for the year ended December 31, 1996.
We also consent to the incorporation by reference of our report on the
Consolidated Financial Statement Schedules, which appears on page F-57 of such
Annual Report on Form 10-K. We also consent to the references to us under the
headings "Experts" and "Selected Consolidated Financial Data" in such
Prospectus. However, it should be noted that Price Waterhouse LLP has not
prepared or certified such "Selected Consolidated Financial Data."
/s/ PRICE WATERHOUSE LLP
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Price Waterhouse LLP
New York, New York
May 27, 1997
