SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------------
DEAN WITTER, DISCOVER & CO. (To be renamed
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.)
(Exact name of registrant as specified in charter)
Delaware 36-3145972
(State of incorporation or (I.R.S. Employer
organization) Identification No.)
Two World Trade Center
New York, New York 10048
(Address of principal executive offices) (Zip Code)
------------------------
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- ------------------- ------------------------------
Depositary Shares, each representing New York Stock Exchange, Inc.
ownership of a 1/8 interest in a
share of Dean Witter, Discover &
Co.'s 7-3/8% Cumulative Preferred
Stock, par value $.01 per share,
stated value $200.00 per share
Depositary Shares, each representing New York Stock Exchange, Inc.
ownership of a 1/4 interest in a
share of Dean Witter, Discover &
Co.'s 7-3/4% Cumulative Preferred
Stock, par value $.01 per share,
stated value $200.00 per share
Depositary Shares, each representing New York Stock Exchange, Inc.
ownership of a 1/4 interest in a
share of Dean Witter, Discover &
Co.'s Series A Fixed/Adjustable Rate
Cumulative Preferred Stock, par
value $.01 per share, stated value
$200.00 per share
Securities to be registered pursuant to Section 12(g) of the Act: None
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Registrant's Securities to be Registered.
--------------------------------------------------------
The titles of the securities to be registered hereunder
(collectively, the "Depositary Shares") are: 8,000,000
Depositary Shares, each representing ownership of a 1/8
interest in a share of Dean Witter, Discover & Co.'s 7-3/8%
Cumulative Preferred Stock ($200.00 Stated Value) ("7-3/8%
Depositary Shares"); 4,000,000 Depositary Shares, each
representing ownership of a 1/4 interest in a share of Dean
Witter, Discover & Co.'s 7-3/4% Cumulative Preferred Stock
($200.00 Stated Value) ("7-3/4% Depositary Shares"); and
6,900,000 Depositary Shares, each representing ownership of
a 1/4 interest in a share of Dean Witter, Discover & Co.'s
Series A Fixed/Adjustable Rate Cumulative Preferred Stock
($200.00 Stated Value) ("Series A Depositary Shares").
Each Depositary Share being registered hereunder, and each
share of the Registrant's Preferred Stock in which each such
Depositary Share represents an ownership interest
(collectively, the "Dean Witter Discover Preferred Shares"),
will be issued in connection with the merger (the "Merger")
of Morgan Stanley Group Inc. ("Morgan Stanley") with and
into Dean Witter, Discover & Co. ("Dean Witter Discover")
pursuant to an Amended and Restated Agreement and Plan of
Merger between Dean Witter Discover and Morgan Stanley dated
as of April 10, 1997 (the "Merger Agreement"). Each Dean
Witter Discover Preferred Share has terms that are
substantially identical to shares of corresponding Morgan
Stanley preferred stock (which will be exchangeable pursuant
to the Merger Agreement on a 1-for-1 basis for a
corresponding Dean Witter Discover preferred share) except
that it will be issued by Dean Witter Discover. Each
Depositary Share has terms that are identical to
corresponding depositary shares of Morgan Stanley, each of
which was issued pursuant to a Deposit Agreement among
Morgan Stanley, the Bank of New York and the holders from
time to time of the Morgan Stanley depositary shares. By
operation of law as a result of the Merger, Dean Witter
Discover will assume all the obligations of Morgan Stanley
under the Deposit Agreements, and each Morgan Stanley
depositary share will be exchangeable pursuant to the Merger
Agreement for a corresponding Depositary Share being
registered hereunder.
The Merger is expected to be effective May 31, 1997, and the
Registrant will be the surviving corporation of the Merger
and will continue its corporate existence under Delaware law
under the name "Morgan Stanley, Dean Witter, Discover & Co."
The 7-3/8% Depositary Shares will be evidenced by Depositary
Receipts ("7-3/8% Depositary Receipts") issued under the
Deposit Agreement dated as of August 25, 1993. Descriptions
of the 7-3/8% Depositary Shares are set forth under the
captions (i) "Description of Capital Stock--Depositary
Shares" in the Morgan Stanley Prospectus dated August 4,
1993 (the "1993 Prospectus") that is part of Morgan
Stanley's Registration Statement on Form S-3 (Registration
No. 33-65838) and (ii) "Description of Depositary Shares" in
the Prospectus Supplement dated August 18, 1993 (the "7-3/8%
Prospectus Supplement") supplementing the 1993 Prospectus,
each as filed by Morgan Stanley pursuant to the Securities
Act of 1933, as amended, on August 4, 1993 and August 20,
1993, respectively, and are incorporated herein by this
reference. The descriptions of the 7-3/8% Cumulative
Preferred Stock set forth under the captions "Description of
Capital Stock--Offered Preferred Stock" in the 1993
Prospectus and "Description of Cumulative Preferred Stock"
in the 7-3/8% Prospectus Supplement are incorporated herein
by this reference.
The 7-3/4% Depositary Shares will be evidenced by Depositary
Receipts ("7-3/4% Depositary Receipts") issued under the
Deposit Agreement dated as of July 22, 1996. Descriptions of
the 7-3/4% Depositary Shares are set forth under the
captions (i) "Description of Capital Stock--Depositary
Shares" in the Morgan Stanley Prospectus dated May 1, 1996
(the "1996 Prospectus") that is part of Morgan Stanley's
Registration Statement on Form S-3 (Registration No.
333-01655) and (ii) "Description of Depositary Shares" in
the Prospectus Supplement dated July 17, 1996 (the "7-3/4%
Prospectus Supplement") supplementing the 1996 Prospectus,
each as filed by Morgan Stanley pursuant to the Securities
Act of 1933, as amended, on April 26, 1996 and July 19,
1996, respectively, and are incorporated herein by this
reference. The descriptions of the 7-3/4% Cumulative
Preferred Stock set forth under the captions "Description of
Capital Stock--Offered Preferred Stock" in the 1996
Prospectus and "Description of Cumulative Preferred Stock"
in the 7-3/4% Prospectus Supplement are incorporated herein
by this reference.
The Series A Depositary Shares will be evidenced by
Depositary Receipts ("Series A Depositary Receipts") issued
under the Deposit Agreement dated as of November 14, 1996.
Descriptions of
<PAGE>
the Series A Depositary Shares are set forth under the
captions (i) "Description of Capital Stock--Depositary
Shares" in the 1996 Prospectus and (ii) "Description of
Depositary Shares" in the Prospectus Supplement dated
November 8, 1996 (the "Series A Prospectus Supplement")
supplementing the 1996 Prospectus, each as filed by the
Morgan Stanley pursuant to the Securities Act of 1933, as
amended, on April 26, 1996 and November 12, 1996,
respectively, and are incorporated herein by this reference.
The descriptions of the Series A Preferred Stock set forth
under the captions "Description of Capital Stock--Offered
Preferred Stock" in the 1996 Prospectus and "Description of
Series A Fixed/Adjustable Rate Preferred Stock" in the
Series A Prospectus Supplement are incorporated herein by
this reference.
Item 2. Exhibits.
1. Form of Certificate of Designation of Preferences and
Rights of the 7-3/8% Cumulative Preferred Stock.
2. Form of Certificate of Designation of Preferences and
Rights of the 7-3/4% Cumulative Preferred Stock.
3. Form of Certificate of Designation of Preferences and
Rights of the Series A Fixed/Adjustable Rate Preferred
Stock.
4. Certificate of Incorporation of Dean Witter Discover
immediately following the Merger (incorporated by
reference to Exhibit A-1 to the Merger Agreement
previously filed as Annex I to the Joint Proxy
Statement/Prospectus included in the Registration
Statement on Form S-4 dated April 11, 1997
(Registration No. 333-25003) of Dean Witter Discover).
5. Bylaws of Dean Witter Discover immediately following
the Merger (incorporated by reference to Exhibit A-2 to
the Merger Agreement previously filed as Annex I to the
Joint Proxy Statement/Prospectus included in the
Registration Statement on Form S-4 dated April 11, 1997
(Registration No. 333-25003) of Dean Witter Discover).
6. Form of Deposit Agreement among Morgan Stanley, The
Bank of New York and the holders from time to time of
the Depositary Receipts evidencing the Depositary
Shares (previously filed as an exhibit to Morgan
Stanley's Registration Statement on Form S-3 (File No.
33-43542) and incorporated herein by this reference).
7. Amended and Restated Agreement and Plan of Merger
between Dean Witter Discover and Morgan Stanley dated
as of April 10, 1997, (incorporated by reference to
Annex I to the Joint Proxy Statement/Prospectus
included in the Registration Statement on Form S-4
dated April 11, 1997 (Registration No. 333-25003) of
Dean Witter Discover).
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized.
DEAN WITTER, DISCOVER & CO.
(To Be Renamed Morgan Stanley,
Dean Witter, Discover & Co.)
By: /s/ Ronald T. Carman
----------------------------
Name: Ronald T. Carman
Title: Senior Vice President
Date: May 23, 1997
<PAGE>
Exhibit 1
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
7-3/8% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
DEAN WITTER, DISCOVER & CO.
------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of
Directors (the "Board") of Dean Witter, Discover & Co., a Delaware
corporation (hereinafter called the "Corporation"), by unanimous vote
thereof at a meeting on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted to
and vested in the Board by provisions of the Amended and Restated
Certificate of Incorporation of the Corporation (the "Certificate
of Incorporation"), the issuance of a series of Preferred Stock,
par value $0.01 per share (the "Preferred Stock"), which shall
consist of 1,000,000 of the shares of Preferred Stock which the
Corporation has authority to issue, is authorized, and the Board
hereby fixes the powers, designations, preferences and relative,
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the
shares of such series (in addition to the powers, designations,
preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or
restrictions thereof, set forth in the Certificate of
Incorporation which may be applicable to the Preferred Stock) as
follows:
1. Designation and Amount; Fractional Shares. The
designation for such series of the Preferred Stock
authorized by this resolution
<PAGE>
shall be the 7-3/8% Cumulative Preferred Stock, par value
$0.01 per share, with a stated value of $200.00 per share
(the "Cumulative Preferred Stock"). The stated value per
share of Cumulative Preferred Stock shall not for any
purpose be considered to be a determination by the Board
with respect to the capital and surplus of the Corporation.
The number of shares of Cumulative Preferred Stock shall be
1,000,000. The Cumulative Preferred Stock is issuable in
whole shares only.
2. Dividends. Holders of shares of Cumulative Preferred
Stock will be entitled to receive, when, as and if declared
by the Board or the Committee (as hereinafter defined) out
of assets of the Corporation legally available for payment,
cash dividends payable quarterly at the rate of 7-3/8% per
annum. Dividends on the Cumulative Preferred Stock,
calculated as a percentage of the stated value, will be
payable quarterly on February 28, May 30, August 30 and
November 30 (each a "dividend payment date"). Dividends on
shares of the Cumulative Preferred Stock will be cumulative
from the date of initial issuance of such shares of
Cumulative Preferred Stock. Dividends will be payable, in
arrears, to holders of record as they appear on the stock
books of the Corporation on such record dates, not more than
60 days nor less than 10 days preceding the payment dates
thereof, as shall be fixed by the Board or the Committee.
The amount of dividends payable for the initial dividend
period or any period shorter than a full dividend period
shall be calculated on the basis of a 360-day year of twelve
30-day months. No dividends may be declared or paid or set
apart for payment on any Parity Preferred Stock (as defined
in paragraph 9(b) below) with regard to the payment of
dividends unless there shall also be or have been declared
and paid or set apart for payment on the Cumulative
Preferred Stock, like dividends for all dividend payment
periods of the Cumulative Preferred Stock ending on or
before the dividend payment date of such Parity Preferred
Stock, ratably in proportion to the respective amounts of
dividends (x) accumulated and unpaid or payable on such
Parity Preferred Stock, on the one hand, and (y) accumulated
and unpaid through the dividend payment period or periods of
the Cumulative Preferred Stock next preceding such dividend
<PAGE>
payment date, on the other hand. For the purposes of this
Certificate of Designation, the "Committee" shall mean any
committee of the Board to whom the Board, pursuant to
Section 141(c) of the General Corporation Law of the State
of Delaware, delegates authority to perform the functions of
the Board set forth in this Certificate of Designation.
Except as set forth in the preceding sentence, unless
full cumulative dividends on the Cumulative Preferred Stock
have been paid, no dividends (other than in Common Stock of
the Corporation) may be paid or declared and set aside for
payment or other distribution made upon the Common Stock or
on any other stock of the Corporation ranking junior to or
on a parity with the Cumulative Preferred Stock as to
dividends, nor may any Common Stock or any other stock of
the Corporation ranking junior to or on a parity with the
Cumulative Preferred Stock as to dividends be redeemed,
purchased or otherwise acquired for any consideration (or
any payment be made to or available for a sinking fund for
the redemption of any shares of such stock; provided,
however, that any moneys theretofore deposited in any
sinking fund with respect to any Preferred Stock of the
Corporation in compliance with the provisions of such
sinking fund may thereafter be applied to the purchase or
redemption of such Preferred Stock in accordance with the
terms of such sinking fund, regardless of whether at the
time of such application full cumulative dividends upon
shares of the Cumulative Preferred Stock outstanding to the
last dividend payment date shall have been paid or declared
and set apart for payment) by the Corporation; provided that
any such junior or parity Preferred Stock or Common Stock
may be converted into or exchanged for stock of the
Corporation ranking junior to the Cumulative Preferred Stock
as to dividends.
3. Liquidation Preference. The shares of Cumulative
Preferred Stock shall rank, as to liquidation, dissolution
or winding up of the Corporation, prior to the shares of
Common Stock and any other class of stock of the Corporation
ranking junior to the Cumulative Preferred Stock as to
rights upon liquidation, dissolution or winding up of the
Corporation, so that in the event of any liquidation,
dissolution or winding
<PAGE>
up of the Corporation, whether voluntary or involuntary, the
holders of the Cumulative Preferred Stock shall be entitled
to receive out of the assets of the Corporation available
for distribution to its stockholders, whether from capital,
surplus or earnings, before any distribution is made to
holders of shares of Common Stock or any other such junior
stock, an amount equal to $200.00 per share (the
"Liquidation Preference" of a share of Cumulative Preferred
Stock) plus an amount equal to all dividends (whether or not
earned or declared) accrued and accumulated and unpaid on
the shares of Cumulative Preferred Stock to the date of
final distribution. The holders of the Cumulative Preferred
Stock will not be entitled to receive the Liquidation
Preference until the liquidation preference of any other
class of stock of the Corporation ranking senior to the
Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set
aside therefor sufficient to provide for payment) in full.
After payment of the full amount of the Liquidation
Preference and such dividends, the holders of shares of
Cumulative Preferred Stock will not be entitled to any
further participation in any distribution of assets by the
Corporation. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the
holders of shares of Parity Preferred Stock shall be
insufficient to pay in full the preferential amount
aforesaid, then such assets, or the proceeds thereof, shall
be distributable among such holders ratably in accordance
with the respective amounts which would be payable on such
shares if all amounts payable thereon were paid in full. For
the purposes hereof, neither a consolidation or merger of
the Corporation with or into any other corporation, nor a
merger of any other corporation with or into the
Corporation, nor a sale or transfer of all or any part of
the Corporation's assets for cash or securities shall be
considered a liquidation, dissolution or winding up of the
Corporation.
4. Conversion. The Cumulative Preferred Stock is not
convertible into shares of any other class or series of
stock of the Corporation.
<PAGE>
5. Voting Rights. The holders of shares of Cumulative
Preferred Stock shall have no voting rights whatsoever,
except for any voting rights to which they may be entitled
under the laws of the State of Delaware, and except as
follows:
(a) Whenever, at any time or times, dividends
payable on the shares of Cumulative Preferred Stock or
on any Parity Preferred Stock with respect to payment
of dividends, shall be in arrears for an aggregate
number of days equal to six calendar quarters or more,
whether or not consecutive, the holders of the
outstanding shares of Cumulative Preferred Stock shall
have the right, with holders of shares of any one or
more other class or series of stock upon which like
voting rights have been conferred and are exercisable
(voting together as a class), to elect two of the
authorized number of members of the Board at the
Corporation's next annual meeting of stockholders and
at each subsequent annual meeting of stockholders until
such arrearages have been paid or set apart for
payment, at which time such right shall terminate,
except as herein or by law expressly provided, subject
to revesting in the event of each and every subsequent
default of the character above mentioned. Upon any
termination of the right of the holders of shares of
Cumulative Preferred Stock as a class to vote for
directors as herein provided, the term of office of all
directors then in office elected by the holders of
shares of Cumulative Preferred Stock shall terminate
immediately.
Any director who shall have been so elected pursuant to
this paragraph may be removed at any time, either with
or without cause. Any vacancy thereby created may be
filled only by the affirmative vote of the holders of
shares of Cumulative Preferred Stock voting separately
as a class (together with the holders of shares of any
other class or series of stock upon which like voting
rights have been conferred and are exercisable). If the
office of any director elected by the holders of shares
of Cumulative Preferred Stock voting as a class becomes
vacant for any reason other than removal from office as
<PAGE>
aforesaid, the remaining director elected pursuant to
this paragraph may choose a successor who shall hold
office for the unexpired term in respect of which such
vacancy occurred. At elections for such directors, each
holder of shares of Cumulative Preferred Stock shall be
entitled to one vote for each share held (the holders
of shares of any other class or series of preferred
stock having like voting rights being entitled to such
number of votes, if any, for each share of such stock
held as may be granted to them).
(b) So long as any shares of Cumulative Preferred
Stock remain outstanding, the consent of the holders of
at least two-thirds of the shares of Cumulative
Preferred Stock outstanding at the time and all other
classes or series of stock upon which like voting
rights have been conferred and are exercisable (voting
together as a class) given in person or by proxy,
either in writing or at any meeting called for the
purpose, shall be necessary to permit, effect or
validate any one or more of the following:
(i) the issuance or increase of the
authorized amount of any class or series of shares
ranking prior (as that term is defined in
paragraph 9(a) hereof) to the shares of the
Cumulative Preferred Stock; or
(ii) the amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of
any of the provisions of the Certificate of
Incorporation (including this resolution or any
provision hereof) that would materially and
adversely affect any power, preference, or special
right of the shares of Cumulative Preferred Stock
or of the holders thereof; provided, however, that
any increase in the amount of authorized Common
Stock or authorized Preferred Stock or any
increase or decrease in the number of shares of
any series of Preferred Stock or the creation and
issuance of other series of Common Stock or
Preferred Stock, in each
<PAGE>
case ranking on a parity with or junior to the
shares of Cumulative Preferred Stock with respect
to the payment of dividends and the distribution
of assets upon liquidation, dissolution or winding
up, shall not be deemed to materially and
adversely affect such powers, preferences or
special rights.
(c) The foregoing voting provisions shall not
apply if, at or prior to the time when the act with
respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Cumulative
Preferred Stock shall have been redeemed or called for
redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
6. Redemption. The shares of the Cumulative
Preferred Stock may be redeemed at the option of the
Corporation, as a whole, or from time to time in part,
at any time, upon not less than 30 days' prior notice
mailed to the holders of the shares to be redeemed at
their addresses as shown on the stock books of the
Corporation; provided, however, that shares of the
Cumulative Preferred Stock shall not be redeemable
prior to August 30, 1998. Subject to the foregoing, on
or after such date, shares of the Cumulative Preferred
Stock are redeemable at $200.00 per share together with
an amount equal to all dividends (whether or not earned
or declared) accrued and accumulated and unpaid to, but
excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative
Preferred Stock have not been paid, the Cumulative
Preferred Stock may not be redeemed in part and the
Corporation may not purchase or acquire any shares of
the Cumulative Preferred Stock otherwise than pursuant
to a purchase or exchange offer made on the same terms
to all holders of the Cumulative Preferred Stock. If
fewer than all the outstanding shares of Cumulative
Preferred Stock are to be redeemed, the Corporation
will select those to be redeemed by lot or a
substantially equivalent method.
<PAGE>
If a notice of redemption has been given pursuant
to this paragraph 6 and if, on or before the date fixed
for redemption, the funds necessary for such redemption
shall have been set aside by the Corporation, separate
and apart from its other funds, in trust for the pro
rata benefit of the holders of the shares of Cumulative
Preferred Stock so called for redemption, then,
notwithstanding that any certificates for such shares
have not been surrendered for cancelation, on the
redemption date dividends shall cease to accrue on the
shares to be redeemed, and at the close of business on
the redemption date the holders of such shares shall
cease to be stockholders with respect to such shares
and shall have no interest in or claims against the
Corporation by virtue thereof and shall have no voting
or other rights with respect to such shares, except the
right to receive the moneys payable upon surrender (and
endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no
longer be outstanding. Subject to applicable escheat
laws, any moneys so set aside by the Corporation and
unclaimed at the end of two years from the redemption
date shall revert to the general funds of the
Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the
general funds of the Corporation for the payment of the
amounts payable upon such redemption. Any interest
accrued on funds so deposited shall be paid to the
Corporation from time to time.
7. Authorization and Issuance of Other Securities.
No consent of the holders of the Cumulative Preferred
Stock shall be required for (a) the creation of any
indebtedness of any kind of the Corporation, (b) the
creation, or increase or decrease in the amount, of any
class or series of stock of the Corporation not ranking
prior as to dividends or upon liquidation, dissolution
or winding up to the Cumulative Preferred Stock or (c)
any increase or decrease in the amount of authorized
Common Stock or any increase, decrease or change in the
par value thereof or in any other terms thereof.
<PAGE>
8. Amendment of Resolution. The Board and the
Committee each reserves the right by subsequent
amendment of this resolution from time to time to
increase or decrease the number of shares that
constitute the Cumulative Preferred Stock (but not
below the number of shares thereof then outstanding)
and in other respects to amend this resolution within
the limitations provided by law, this resolution and
the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any
stock of any class or classes of the Corporation shall
be deemed to rank:
(a) prior to shares of the Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both,
if the holders of stock of such class or classes
shall be entitled by the terms thereof to the
receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as
the case may be, in preference or priority to the
holders of shares of the Cumulative Preferred
Stock;
(b) on a parity with shares of the Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both,
whether or not the dividend rates, dividend
payment dates, or redemption or liquidation prices
per share thereof be different from those of the
Cumulative Preferred Stock, if the holders of
stock of such class or classes shall be entitled
by the terms thereof to the receipt of dividends
or of amounts distributed upon liquidation,
dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or
liquidation prices, without preference or priority
of one over the other as between the holders of
such stock and the holders of shares of Cumulative
Preferred Stock (the term "Parity Preferred Stock"
being used to refer to any stock on a parity
<PAGE>
with the shares of Cumulative Preferred Stock,
either as to dividends or upon liquidation,
dissolution or winding up, or both, as the context
may require); and
(c) junior to shares of the Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both,
if such class shall be Common Stock or if the
holders of the Cumulative Preferred Stock shall be
entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or
priority to the holders of stock of such class or
classes.
The Cumulative Preferred Stock shall rank prior,
as to dividends and upon liquidation, dissolution or
winding up, to the Common Stock and the Corporation's
Series A Junior Participating Preferred Stock, and on a
parity with (i) the Corporation's ESOP Convertible
Preferred Stock, with a liquidation value of $35.88 per
share, (ii) the Corporation's 7-3/4% Cumulative
Preferred Stock, with a liquidation value of $200.00
per share, (iii) the Corporation's Series A
Fixed/Adjustable Rate Preferred Stock, with a
liquidation value of $200.00 per share,(iv) if issued,
the Corporation's 7.82% Cumulative Preferred Stock,
with a liquidation value of $200.00 per share, (v) if
issued, the Corporation's 7.80% Cumulative Preferred
Stock, with a liquidation value of $200.00 per share,
(vi) if issued, the Corporation's 9.00% Cumulative
Preferred Stock, with a liquidation value of $200.00
per share, (vii) if issued, the Corporation's 8.40%
Cumulative Preferred Stock, with a liquidation value of
$200.00 per share, (viii) if issued, the Corporation's
8.20% Cumulative Preferred Stock, with a liquidation
value of $200.00 per share and (ix) if issued, the
Corporation's 8.03% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share.
<PAGE>
B. This Certificate of Designation shall not become
effective until, and shall become effective at, 12:01 a.m. on May 31,
1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused
this Certificate of Designation to be signed by Christine A. Edwards,
its Executive Vice President, General Counsel and Secretary, this 30th
day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By:
----------------------------
Name: Christine A. Edwards
Title: Executive Vice
President, General
Counsel and Secretary
<PAGE>
Exhibit 2
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
7-3/4% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
DEAN WITTER, DISCOVER & CO.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of
Directors (the "Board") of Dean Witter, Discover & Co., a Delaware
corporation (hereinafter called the "Corporation"), by unanimous vote
thereof at a meeting on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted
to and vested in the Board by provisions of the Amended and
Restated Certificate of Incorporation of the Corporation
(the "Certificate of Incorporation"), the issuance of a
series of Preferred Stock, par value $0.01 per share (the
"Preferred Stock"), which shall consist of 1,000,000 of the
shares of Preferred Stock which the Corporation has
authority to issue, is authorized, and the Board hereby
fixes the powers, designations, preferences and relative,
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the
shares of such series (in addition to the powers,
designations, preferences and relative participating,
optional or other special rights, and the qualifications,
limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the
Preferred Stock) as follows:
1. Designation and Amount; Fractional Shares. The
designation for such series of the Preferred Stock
authorized by this resolution shall be the 7-3/4%
Cumulative Preferred Stock, par value $0.01 per share,
with a stated value of
<PAGE>
$200.00 per share (the "Cumulative Preferred Stock").
The stated value per share of Cumulative Preferred
Stock shall not for any purpose be considered to be a
determination by the Board with respect to the capital
and surplus of the Corporation. The number of shares of
Cumulative Preferred Stock shall be 1,000,000. The
Cumulative Preferred Stock is issuable in whole shares
only.
2. Dividends. (a) Holders of shares of Cumulative
Preferred Stock will be entitled to receive, when, as
and if declared by the Board or the Committee (as
hereinafter defined) out of assets of the Corporation
legally available for payment, cash dividends payable
quarterly at the rate of 7-3/4% per annum. Dividends on
the Cumulative Preferred Stock, calculated as a
percentage of the stated value, will be payable
quarterly on February 28, May 30, August 30 and
November 30 (each a "dividend payment date"). Dividends
on shares of the Cumulative Preferred Stock will be
cumulative from the date of initial issuance of such
shares of Cumulative Preferred Stock. Dividends will be
payable, in arrears, to holders of record as they
appear on the stock books of the Corporation on such
record dates, not more than 60 days nor less than 10
days preceding the payment dates thereof, as shall be
fixed by the Board or the Committee. The amount of
dividends payable for the initial dividend period or
any period shorter than a full dividend period shall be
calculated on the basis of a 360-day year of twelve
30-day months. No dividends may be declared or paid or
set apart for payment on any Parity Preferred Stock (as
such term is defined in paragraph 9(b) below) with
regard to the payment of dividends unless there shall
also be or have been declared and paid or set apart for
payment on the Cumulative Preferred Stock, like
dividends for all dividend payment periods of the
Cumulative Preferred Stock ending on or before the
dividend payment date of such Parity Preferred Stock,
ratably in proportion to the respective amounts of
dividends (x) accumulated and unpaid or payable on such
Parity Preferred Stock, on the one hand, and (y)
accumulated and unpaid through the dividend payment
period or periods of the Cumulative Preferred Stock
next preceding such dividend payment date, on the other
hand. For the purposes of this Certificate of
Designation, the
<PAGE>
"Committee" shall mean any committee of the Board to
whom the Board, pursuant to Section 141(c) of the
General Corporation Law of the State of Delaware,
delegates authority to perform the functions of the
Board set forth in this Certificate of Designation.
Except as set forth in the preceding sentence,
unless full cumulative dividends on the Cumulative
Preferred Stock have been paid, no dividends (other
than in Common Stock of the Corporation) may be paid or
declared and set aside for payment or other
distribution made upon the Common Stock or on any other
stock of the Corporation ranking junior to or on a
parity with the Cumulative Preferred Stock as to
dividends, nor may any Common Stock or any other stock
of the Corporation ranking junior to or on a parity
with the Cumulative Preferred Stock as to dividends be
redeemed, purchased or otherwise acquired for any
consideration (or any payment be made to or available
for a sinking fund for the redemption of any shares of
such stock; provided, however, that any moneys
theretofore deposited in any sinking fund with respect
to any Preferred Stock of the Corporation in compliance
with the provisions of such sinking fund may thereafter
be applied to the purchase or redemption of such
Preferred Stock in accordance with the terms of such
sinking fund, regardless of whether at the time of such
application full cumulative dividends upon shares of
the Cumulative Preferred Stock outstanding to the last
dividend payment date shall have been paid or declared
and set apart for payment) by the Corporation; provided
that any such junior or parity Preferred Stock or
Common Stock may be converted into or exchanged for
stock of the Corporation ranking junior to the
Cumulative Preferred Stock as to dividends.
(b) If one or more amendments to the Internal Revenue
Code of 1986, as amended (the "Code"), are enacted that
reduce the percentage of the dividends received deduction as
specified in Section 243(a)(1) of the Code or any successor
provision (the "Dividends Received Percentage") to below
70%, the amount of each dividend payable per share of the
Cumulative Preferred Stock for dividend payments made on or
after the date of enactment of such change will be adjusted
by multiplying the amount of the dividend payable determined
as described above (before adjustment) by a
<PAGE>
factor, which will be the number determined in accordance
with the following formula (the "DRD Formula"), and rounding
the result to the nearest cent:
1 - (.35(1 - .70))
1 - (.35(1 - DRP))
For the purposes of the DRD Formula, "DRP" means the
Dividends Received Percentage applicable to the dividend in
question. No amendment to the Code, other than a change in
the percentage of the dividends received deduction set forth
in Section 243(a)(1) of the Code or any successor provision,
will give rise to an adjustment. Notwithstanding the
foregoing provisions, in the event that, with respect to any
such amendment, the Corporation will receive either an
unqualified opinion of nationally recognized independent tax
counsel selected by the Corporation or a private letter
ruling or similar form of authorization from the Internal
Revenue Service to the effect that such an amendment would
not apply to dividends payable on the Cumulative Preferred
Stock, then any such amendment will not result in the
adjustment provided for pursuant to the DRD Formula. The
opinion referenced in the previous sentence will be based
upon a specific exception in the legislation amending the
DRP or upon a published pronouncement of the Internal
Revenue Service addressing such legislation. Unless the
context otherwise requires, references to dividends in this
Certificate of Designation will mean dividends as adjusted
by the DRD Formula. The Corporation's calculation of the
dividends payable, as so adjusted and as certified accurate
as to calculation and reasonable as to method by the
independent certified public accountants then regularly
engaged by the Corporation, will be final and not subject to
review absent manifest error.
If any amendment to the Code which reduces the
Dividends Received Percentage to below 70% is enacted after
a dividend payable on a dividend payment date has been
declared, the amount of dividend payable on such dividend
payment date will not be increased. Instead, an amount,
equal to the excess of (x) the product of the dividends paid
by the Corporation on such dividend payment date and the DRD
Formula (where the DRP used in the DRD Formula would be
equal to the reduced Dividends Received Percentage) over (y)
the dividends paid by the Corporation on such dividend
payment date, will be payable to holders of record on the
next succeeding
<PAGE>
dividend payment date in addition to any other amounts
payable on such date.
In the event that the amount of dividends payable per
share of the Cumulative Preferred Stock will be adjusted
pursuant to the DRD Formula, the Corporation will cause
notice of each such adjustment to be sent to the holders of
record as they appear on the stock books of the Corporation
on such record dates, not more than 60 days nor less than 10
days preceding the payment dates thereof as shall be fixed
by the Board or the Committee.
In the event that the Dividends Received Percentage is
reduced to 40% or less, the Corporation may, at its option,
redeem the Cumulative Preferred Stock, in whole but not in
part, as described in paragraph 6 hereof.
3. Liquidation Preference. The shares of Cumulative
Preferred Stock shall rank, as to liquidation, dissolution
or winding up of the Corporation, prior to the shares of
Common Stock and any other class of stock of the Corporation
ranking junior to the Cumulative Preferred Stock as to
rights upon liquidation, dissolution or winding up of the
Corporation, so that in the event of any liquidation,
dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the Cumulative
Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of
Common Stock or any other such junior stock, an amount equal
to $200.00 per share (the "Liquidation Preference" of a
share of Cumulative Preferred Stock) plus an amount equal to
all dividends (whether or not earned or declared) accrued
and accumulated and unpaid on the shares of Cumulative
Preferred Stock to the date of final distribution. The
holders of the Cumulative Preferred Stock will not be
entitled to receive the Liquidation Preference until the
liquidation preference of any other class of stock of the
Corporation ranking senior to the Cumulative Preferred Stock
as to rights upon liquidation, dissolution or winding up
shall have been paid (or a sum set aside therefor sufficient
to provide for payment) in full. After payment of the full
amount of the Liquidation Preference and such dividends, the
holders of shares of Cumulative Preferred Stock will not be
entitled to any further participation in any distribution of
assets by the
<PAGE>
Corporation. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the
holders of shares of Parity Preferred Stock shall be
insufficient to pay in full the preferential amount
aforesaid, then such assets, or the proceeds thereof, shall
be distributable among such holders ratably in accordance
with the respective amounts which would be payable on such
shares if all amounts payable thereon were paid in full. For
the purposes hereof, neither a consolidation or merger of
the Corporation with or into any other corporation, nor a
merger of any other corporation with or into the
Corporation, nor a sale or transfer of all or any part of
the Corporation's assets for cash or securities shall be
considered a liquidation, dissolution or winding up of the
Corporation.
4. Conversion. The Cumulative Preferred Stock is not
convertible into shares of any other class or series of
stock of the Corporation.
5. Voting Rights. The holders of Shares of Cumulative
Preferred Stock shall have no voting rights whatsoever,
except for any voting rights to which they may be entitled
under the laws of the State of Delaware, and except as
follows:
(a) Whenever, at any time or times, dividends
payable on the shares of Cumulative Preferred Stock or
on any Parity Preferred Stock with respect to payment
of dividends, shall be in arrears for an aggregate
number of days equal to six calendar quarters or more,
whether or not consecutive, the holders of the
outstanding shares of Cumulative Preferred Stock shall
have the right, with holders of shares of any one or
more other class or series of stock upon which like
voting rights have been conferred and are exercisable
(voting together as a class), to elect two of the
authorized number of members of the Board at the
Corporation's next annual meeting of stockholders and
at each subsequent annual meeting of stockholders until
such arrearages have been paid or set apart for
payment, at which time such right shall terminate,
except as herein or by law expressly provided, subject
to revesting in the event of each and every subsequent
default of the character above mentioned. Upon any
termination of the right of the holders of shares of
Cumulative Preferred Stock as a class to vote for
<PAGE>
directors as herein provided, the term of office of all
directors then in office elected by the holders of
shares of Cumulative Preferred Stock shall terminate
immediately.
Any director who shall have been so elected pursuant to
this paragraph may be removed at any time, either with
or without cause. Any vacancy thereby created may be
filled only by the affirmative vote of the holders of
shares of Cumulative Preferred Stock voting separately
as a class (together with the holders of shares of any
other class or series of stock upon which like voting
rights have been conferred and are exercisable). If the
office of any director elected by the holders of shares
of Cumulative Preferred Stock voting as a class becomes
vacant for any reason other than removal from office as
aforesaid, the remaining director elected pursuant to
this paragraph may choose a successor who shall hold
office for the unexpired term in respect of which such
vacancy occurred. At elections for such directors, each
holder of shares of Cumulative Preferred Stock shall be
entitled to one vote for each share held (the holders
of shares of any other class or series of preferred
stock having like voting rights being entitled to such
number of votes, if any, for each share of such stock
held as may be granted to them).
(b) So long as any shares of Cumulative Preferred
Stock remain outstanding, the consent of the holders of
at least two-thirds of the shares of Cumulative
Preferred Stock outstanding at the time and all other
classes or series of stock upon which like voting
rights have been conferred and are exercisable (voting
together as a class) given in person or by proxy,
either in writing or at any meeting called for the
purpose, shall be necessary to permit, effect or
validate any one or more of the following:
(i) the issuance or increase of the
authorized amount of any class or series of shares
ranking prior (as that term is defined in
paragraph 9(a) hereof) to the shares of the
Cumulative Preferred Stock; or
(ii) the amendment, alteration or repeal,
whether by merger, consolidation or otherwise of
any of the provisions of the Certificate
<PAGE>
of Incorporation (including this resolution or any
provision hereof) that would materially and
adversely affect any power, preference, or special
right of the shares of Cumulative Preferred Stock
or of the holders thereof; provided, however, that
any increase in the amount of authorized Common
Stock or authorized Preferred Stock or any
increase or decrease in the number of shares of
any series of Preferred Stock or the creation and
issuance of other series of Common Stock or
Preferred Stock, in each case ranking on a parity
with or junior to the shares of Cumulative
Preferred Stock with respect to the payment of
dividends and the distribution of assets upon
liquidation, dissolution or winding up, shall not
be deemed to materially and adversely affect such
powers, preferences or special rights.
(c) The foregoing voting provisions shall not
apply if, at or prior to the time when the act with
respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Cumulative
Preferred Stock shall have been redeemed or called for
redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
6. Redemption. The shares of the Cumulative Preferred
Stock may be redeemed at the option of the Corporation, as a
whole, or from time to time in part, at any time, upon not
less than 30 days' prior notice mailed to the holders of the
shares to be redeemed at their addresses as shown on the
stock books of the Corporation; provided, however, that
shares of the Cumulative Preferred Stock shall not be
redeemable prior to August 30, 2001, except as stated below.
Subject to the foregoing, on or after such date, shares of
the Cumulative Preferred Stock are redeemable at $200.00 per
share together with an amount equal to all dividends
(whether or not earned or declared) accrued and accumulated
and unpaid to, but excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative
Preferred Stock have not been paid, the Cumulative Preferred
Stock may not be redeemed in part and the Corporation may
not purchase or acquire any shares of the Cumulative
Preferred Stock otherwise than pursuant to a purchase or
exchange offer made on the same terms
<PAGE>
to all holders of the Cumulative Preferred Stock. If fewer
than all the outstanding shares of Cumulative Preferred
Stock are to be redeemed, the Corporation will select those
to be redeemed by lot or a substantially equivalent method.
If a notice of redemption has been given pursuant to
this paragraph 6 and if, on or before the date fixed for
redemption, the funds necessary for such redemption shall
have been set aside by the Corporation, separate and apart
from its other funds, in trust for the pro rata benefit of
the holders of the shares of Cumulative Preferred Stock so
called for redemption, then, notwithstanding that any
certificates for such shares have not been surrendered for
cancellation, on the redemption date dividends shall cease
to accrue on the shares to be redeemed, and at the close of
business on the redemption date the holders of such shares
shall cease to be stockholders with respect to such shares
and shall have no interest in or claims against the
Corporation by virtue thereof and shall have no voting or
other rights with respect to such shares, except the right
to receive the moneys payable upon surrender (and
endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no
longer be outstanding. Subject to applicable escheat laws,
any moneys so set aside by the Corporation and unclaimed at
the end of two years from the redemption date shall revert
to the general funds of the Corporation, after which
reversion the holders of such shares so called for
redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such
redemption. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
Notwithstanding the foregoing provisions, if the
Dividends Received Percentage is equal to or less than 40%
and, as a result, the amount of dividends on the Cumulative
Preferred Stock payable on any dividend payment date will be
or is adjusted upwards as described in paragraph 2(b)
hereof, the Corporation, at its option, may redeem all, but
not less than all, of the outstanding shares of the
Cumulative Preferred Stock (and the Depositary Shares) (a
"Dividends Received Deduction Redemption"); provided that
within sixty days of the date on which an amendment to the
Code is enacted which reduces the Dividends Received
Percentage to 40% or less, the Corporation sends notice to
holders of the Cumulative Preferred Stock relating to any
Dividends Received Deduction Redemption of such
<PAGE>
redemption. A redemption of the Cumulative Preferred Stock
will take place on the date specified in the notice, which
shall be not less than thirty nor more than sixty days from
the date such notice is sent to holders of the Cumulative
Preferred Stock. A Dividends Received Deduction Redemption
shall be at the applicable redemption price set forth in the
following table, in each case plus accrued and unpaid
dividends (whether or not declared) thereon to but excluding
the date fixed for redemption, including any changes in
dividends payable due to changes in the Dividends Received
Percentage, if any:
Redemption Period Redemption Price
----------------- ----------------
Per
Depositary
Per Share Share
--------- -----
May 31, 1997 to August 29, 1997 $210.00 $52.50
August 30, 1997 to August 29, 1998 208.00 52.00
August 30, 1998 to August 29, 1999 206.00 51.50
August 30, 1999 to August 29, 2000 204.00 51.00
August 30, 2000 to August 29, 2001 202.00 50.50
On or after August 30, 2001 200.00 50.00
7. Authorization and Issuance of Other Securities. No
consent of the holders of the Cumulative Preferred Stock
shall be required for (a) the creation of any indebtedness
of any kind of the Corporation, (b) the creation, or
increase or decrease in the amount, of any class or series
of stock of the Corporation not ranking prior as to
dividends or upon liquidation, dissolution or winding up to
the Cumulative Preferred Stock or (c) any increase or
decrease in the amount of authorized Common Stock or any
increase, decrease or change in the par value thereof or in
any other terms thereof.
8. Amendment of Resolution. The Board and the
Committee each reserves the right by subsequent amendment of
this resolution from time to time to increase or decrease
the number of shares that constitute the Cumulative
Preferred Stock (but not below the number of shares thereof
then outstanding) and in other respects to amend this
resolution within the limitations provided by law, this
resolution and the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any
stock of any class or classes of the Corporation shall be
deemed to rank:
(a) prior to shares of the Cumulative Preferred
Stock,
<PAGE>
either as to dividends or upon liquidation, dissolution
or winding up, or both, if the holders of stock of such
class or classes shall be entitled by the terms thereof
to the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders
of shares of the Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both,
whether or not the dividend rates, dividend payment
dates, or redemption or liquidation prices per share
thereof be different from those of the Cumulative
Preferred Stock, if the holders of stock of such class
or classes shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributed upon
liquidation, dissolution or winding up, as the case may
be, in proportion to their respective dividend rates or
liquidation prices, without preference or priority of
one over the other as between the holders of such stock
and the holders of shares of Cumulative Preferred Stock
(the term "Parity Preferred Stock" being used to refer
to any stock on a parity with the shares of Cumulative
Preferred Stock, either as to dividends or upon
liquidation, dissolution or winding up, or both, as the
context may require); and
(c) junior to shares of the Cumulative Preferred
Stock, either as to dividends or upon liquidation,
dissolution or winding up, or both, if such class shall
be Common Stock or if the holders of the Cumulative
Preferred Stock shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in
preference or priority to the holders of stock of such
class or classes.
The Cumulative Preferred Stock shall rank prior, as to
dividends and upon liquidation, dissolution or winding up,
to the Common Stock and the Corporation's Series A Junior
Participating Preferred Stock, and on a parity with (i) the
Corporation's ESOP Convertible Preferred Stock, with a
liquidation value of $35.88 per share, (ii) the
Corporation's 7-_% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (iii) the
Corporation's Series A
<PAGE>
Fixed/Adjustable Rate Preferred Stock, with a liquidation
value of $200.00 per share, (iv) if issued, the
Corporation's 7.82% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (v) if issued, the
Corporation's 7.80% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vi) if issued, the
Corporation's 9.00% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vii) if issued, the
Corporation's 8.40% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (viii) if issued,
the Corporation's 8.20% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share and (ix) if issued,
the Corporation's 8.03% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share.
B. This Certificate of Designation shall not become
effective until, and shall become effective at, 12:01 a.m. on May 31,
1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused
this Certificate of Designation to be signed by Christine A. Edwards,
its Executive Vice President, General Counsel and Secretary, this 30th
day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By:
----------------------------
Name: Christine A. Edwards
Title: Executive Vice
President, General
Counsel and Secretary
<PAGE>
Exhibit 3
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
SERIES A FIXED/ADJUSTABLE RATE PREFERRED STOCK
($200.00 Stated Value)
OF
DEAN WITTER, DISCOVER & CO.
-----------------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
-----------------------------------------
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of
Directors (the "Board") of Dean Witter, Discover & Co., a Delaware
corporation (hereinafter called the "Corporation"), by unanimous vote
thereof at a meeting on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted to
and vested in the Board by provisions of the Amended and Restated
Certificate of Incorporation of the Corporation (the "Certificate
of Incorporation"), the issuance of a series of Preferred Stock,
par value $0.01 per share (the "Preferred Stock"), which shall
consist of 1,725,000 of the shares of Preferred Stock which the
Corporation has authority to issue, is authorized, and the Board
hereby fixes the powers, designations, preferences and relative,
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the
shares of such series (in addition to the powers, designations,
preferences and relative participating, optional or other special
rights, and the qualifications, limitations or restrictions
thereof, set forth in the Certificate of Incorporation which may
be applicable to the Preferred Stock) as follows:
1. Designation and Amount; Fractional Shares. The
designation for such series of the Preferred Stock
authorized by this resolution shall be the Series A
Fixed/Adjustable Rate
<PAGE>
Cumulative Preferred Stock, par value $0.01 per share, with
a stated value of $200.00 per share (the "Series A
Fixed/Adjustable Rate Preferred Stock"). The stated value
per share of Series A Fixed/Adjustable Rate Preferred Stock
shall not for any purpose be considered to be a
determination by the Board with respect to the capital and
surplus of the Corporation. The number of shares of Series A
Fixed/Adjustable Rate Preferred Stock shall be 1,725,000.
The Series A Fixed/Adjustable Rate Preferred Stock is
issuable in whole shares only.
2. Dividends. (a) Holders of shares of Series A
Fixed/Adjustable Rate Preferred Stock will be entitled to
receive cash dividends, when, as and if declared by the
Board or the Committee (as hereinafter defined) out of
assets of the Corporation legally available for payment.
Dividends on the Series A Fixed/Adjustable Rate Preferred
Stock, calculated as a percentage of the stated value, will
be payable quarterly on February 28, May 30, August 30 and
November 30 (each a "dividend payment date"). From the date
of issuance of the Series A Fixed/Adjustable Rate Preferred
Stock and continuing through November 30, 2001, the rate of
such dividend will be 5.91% per annum. For the purposes of
this Certificate of Designation, the "Committee" shall mean
any committee of the Board to whom the Board, pursuant to
Section 141(c) of the General Corporation Law of the State
of Delaware, delegates authority to perform the functions of
the Board set forth in this Certificate of Designation.
After November 30, 2001, dividends on the Series A
Fixed/Adjustable Rate Preferred Stock will be payable
quarterly on each dividend payment date at the Applicable
Rate (as defined in paragraph 3) from time to time in
effect. The Applicable Rate per annum for any dividend
period beginning on or after November 30, 2001 will be equal
to .37% plus the highest of the Treasury Bill Rate, the Ten-
Year Constant Maturity Rate and the Thirty-Year Constant
Maturity Rate (each as defined in paragraph 3), as
determined in advance of such
<PAGE>
dividend period. The Applicable Rate per annum for any
dividend period beginning on or after November 30, 2001,
will not be less then 6.41% nor greater then 12.41% (without
taking into account any adjustments set forth in paragraph
2(b)).
Dividends on shares of the Series A Fixed/Adjustable
Rate Preferred Stock will be cumulative from the date of
initial issuance of such shares of Series A Fixed/Adjustable
Rate Preferred Stock. Dividends will be payable, in arrears,
to holders of record as they appear on the stock books of
the Corporation on such record dates, not more than 60 days
nor less than 10 days preceding the payment dates thereof,
as shall be fixed by the Board or the Committee. The amount
of dividends payable for the initial dividend period or any
period shorter than a full dividend period shall be
calculated on the basis of a 360-day year of twelve 30-day
months. No dividends may be declared or paid or set apart
for payment on any Parity Preferred Stock (as defined in
paragraph 10(b)) with regard to the payment of dividends
unless there shall also be or have been declared and paid or
set apart for payment on the Series A Fixed/Adjustable Rate
Preferred Stock, like dividends for all dividend payment
periods of the Series A Fixed/Adjustable Rate Preferred
Stock ending on or before the dividend payment date of such
Parity Preferred Stock ratably in proportion to the
respective amounts of dividends (x) accumulated and unpaid
or payable on such Parity Preferred Stock, on the one hand,
and (y) accumulated and unpaid through the dividend payment
period or periods of the Series A Fixed/Adjustable Rate
Preferred Stock next preceding such dividend payment date,
on the other hand.
Except as set forth in the preceding sentence, unless
full cumulative dividends on the Series A Fixed/Adjustable
Rate Preferred Stock have been paid, no dividends (other
than in Common Stock of the Corporation) may be paid or
declared and set aside for payment or other distribution
made upon the Common Stock or on any other stock of the
Corporation ranking junior to or on a
<PAGE>
parity with the Series A Fixed/Adjustable Rate Preferred
Stock as to dividends, nor may any Common Stock or any other
stock of the Corporation ranking junior to or on a parity
with the Series A Fixed/Adjustable Rate Preferred Stock as
to dividends be redeemed, purchased or otherwise acquired
for any consideration (or any payment be made to or
available for a sinking fund for the redemption of any
shares of such stock; provided, however, that any moneys
theretofore deposited in any sinking fund with respect to
any preferred stock of the Corporation in compliance with
the provisions of such sinking fund may thereafter be
applied to the purchase or redemption of such preferred
stock in accordance with the terms of such sinking fund,
regardless of whether at the time of such application full
cumulative dividends upon shares of the Series A
Fixed/Adjustable Rate Preferred Stock outstanding to the
last dividend payment date shall have been paid or declared
and set apart for payment) by the Corporation; provided that
any such junior or parity Preferred Stock or Common Stock
may be converted into or exchanged for stock of the
Corporation ranking junior to the Series A Fixed/Adjustable
Rate Preferred Stock as to dividends.
(b) If one or more amendments to the Internal Revenue
Code of 1986, as amended (the "Code"), are enacted that
reduce the percentage of the dividends received deduction as
specified in Section 243(a)(1) of the Code or any successor
provision (the "Dividends Received Percentage") to below
70%, the amount of each dividend payable per share of the
Series A Fixed/Adjustable Rate Preferred Stock for dividend
payments made on or after the date of enactment of such
change will be adjusted by multiplying the amount of the
dividend payable determined as described above (before
adjustment) by a factor, which will be the number determined
in accordance with the following formula (the "DRD
Formula"), and rounding the result to the nearest cent:
1 - (.35 (1 - .70))
-------------------
1 - (.35 (1 - DRP))
<PAGE>
For the purposes of the DRD Formula, "DRP" means the
Dividends Received Percentage applicable to the dividend in
question. No amendment to the Code, other than a change in
the percentage of the dividends received deduction set forth
in Section 243(a)(1) of the Code or any successor provision,
will give rise to an adjustment. Notwithstanding the
foregoing provisions, in the event that, with respect to any
such amendment, the Corporation will receive either an
unqualified opinion of nationally recognized independent tax
counsel selected by the Corporation or a private letter
ruling or similar form of authorization from the Internal
Revenue Service to the effect that such an amendment would
not apply to dividends payable on the Series A
Fixed/Adjustable Rate Preferred Stock, then any such
amendment will not result in the adjustment provided for
pursuant to the DRD Formula. The opinion referenced in the
previous sentence will be based upon a specific exception in
the legislation amending the DRP or upon a published
pronouncement of the Internal Revenue Service addressing
such legislation. Unless the context otherwise requires,
references to dividends in this Certificate of Designation
will mean dividends as adjusted by the DRD Formula. The
Corporation's calculation of the dividends payable, as so
adjusted and as certified accurate as to calculation and
reasonable as to method by the independent certified public
accountants then regularly engaged by the Corporation, will
be final and not subject to review absent manifest error.
If any amendment to the Code which reduces the
Dividends Received Percentage to below 70% is enacted after
a dividend payable on a dividend payment date has been
declared, the amount of dividend payable on such dividend
payment date will not be increased. Instead, an amount,
equal to the excess of (x) the product of the dividends paid
by the Corporation on such dividend payment date and the DRD
Formula (where the DRP used in the DRD Formula would be
equal to the reduced Dividends Received Percentage) over (y)
the dividends paid by the Corporation on such dividend
payment date, will be payable on the next
<PAGE>
succeeding dividend payment date to holders of record in
addition to any other amounts payable on such date.
In addition, if prior to May 31, 1997, an amendment to
the Code is enacted that reduces the Dividends Received
Percentage to below 70% and such reduction retroactively
applies to a dividend payment date for the Series A
Fixed/Adjustable Rate Cumulative Preferred Stock, no par
value, with a stated value of $200.00 per share ("Morgan
Stanley Series A Fixed/Adjustable Rate Preferred Stock") of
Morgan Stanley Group Inc. ("Morgan Stanley") as to which
Morgan Stanley previously paid dividends on the Morgan
Stanley Series A Fixed/Adjustable Rate Preferred Stock (each
an "Affected Dividend Payment Date"), holders of the Series
A Fixed/Adjustable Rate Preferred Stock shall be entitled to
receive when, as and if declared by the Board out of assets
of the corporation legally available for payment, additional
dividends (the "Additional Dividends") on the next
succeeding dividend payment date (or if such amendment is
enacted after the dividend payable on such dividend payment
date has been declared and on or before such dividend is
paid, on the second succeeding dividend payment date
following the date of enactment) payable on such succeeding
dividend payment date to holders of record in an amount
equal to the excess of (x) the product of the dividends paid
by Morgan Stanley on each Affected Dividend Payment Date and
the DRD Formula (where the DRP used in the DRD Formula would
be equal to the reduced Dividends Received Percentage
applied to each Affected Dividend Payment Date) over (y) the
dividends paid by Morgan Stanley on each Affected Dividend
Payment Date.
Additional Dividends will not be paid in respect of the
enactment of any amendment to the Code on or after May 31,
1997 which retroactively reduces the Dividends Received
Percentage to below 70%, or if prior to May 31, 1997, such
amendment would not result in an adjustment due to the
Corporation having received either an opinion of counsel or
tax ruling referred to in the third preceding paragraph. The
Corporation will only make one payment of Additional
Dividends.
In the event that the amount of dividends payable per
share of the Series A Fixed/Adjustable
<PAGE>
Rate Preferred Stock will be adjusted pursuant to the DRD
Formula and/or Additional Dividends are to be paid, the
Corporation will cause notice of each such adjustment and,
if applicable, any Additional Dividends, to be sent to the
holders of record as they appear on the stock books of the
Corporation on such record date, not more than 60 days nor
less than 10 days preceding the payment date thereof as
shall be fixed by the Board or the Committee.
In the event that the Dividends Received Percentage is
reduced to 50% or less, the Corporation may, at its option,
redeem the Series A Fixed/Adjustable Rate Preferred Stock,
in whole but not in part, as described in paragraph 7
hereof.
3. Applicable Rate. Except as provided above in
paragraph 2, the "Applicable Rate" per annum for any
dividend period beginning on or after November 30, 2001 will
be equal to .37% plus the Effective Rate (as defined
herein), but not less than 6.41% nor greater than 12.41%
(without taking into account any adjustments as described in
paragraph 2(b)). The "Effective Rate" for any dividend
period beginning on or after November 30, 2001 will be equal
to the highest of the Treasury Bill Rate, the Ten-Year
Constant Maturity Rate and the Thirty-Year Constant Maturity
Rate (each as defined herein) for such dividend period. If
the Corporation determines in good faith that for any
reason: (i) any one of the Treasury Bill Rate, the Ten-Year
Constant Maturity Rate or the
<PAGE>
Thirty-Year Constant Maturity Rate cannot be determined for
any dividend period beginning on or after November 30, 2001,
then the Effective Rate for such dividend period will be
equal to the higher of whichever two of such rates can be so
determined; (ii) only one of the Treasury Bill Rate, the
Ten- Year Constant Maturity Rate or the Thirty-Year Constant
Maturity Rate can be determined for any dividend period
beginning on or after November 30, 2001, then the Effective
Rate for such dividend period will be equal to whichever
such rate can be so determined; or (iii) none of the
Treasury Bill Rate, the Ten-Year Constant Maturity Rate or
the Thirty-Year Constant Maturity Rate can be determined for
any dividend period beginning on or after November 30, 2001,
then the Effective Rate for the preceding dividend period
will be continued for such dividend period.
The "Treasury Bill Rate" for each dividend period will
be the arithmetic average of the two most recent weekly per
annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate is published
during the relevant Calendar Period (as defined herein) for
three-month U.S. Treasury bills, as published weekly by the
Federal Reserve Board (as defined herein) during the
Calendar Period immediately preceding the tenth calendar day
preceding the dividend period for which the dividend rate on
the Series A Fixed/Adjustable Rate Preferred Stock is being
determined.
The "Ten-Year Constant Maturity Rate" for each dividend
period will be the arithmetic average of the two most recent
weekly per annum Ten-Year Average Yields (as defined herein)
(or the one weekly per annum Ten-Year Average Yield, if only
one such yield is published during the relevant Calendar
Period), as published weekly by the Federal Reserve Board
during the Calendar Period immediately preceding the tenth
calendar day preceding the dividend period for which the
dividend rate on the Series A Fixed/Adjustable Rate
Preferred Stock is being determined.
The "Thirty-Year Constant Maturity Rate" for each
dividend period will be the arithmetic average of the two
most recent weekly per annum Thirty-Year Average Yields (as
defined herein) the one weekly per annum Thirty-Year Average
Yield, if only one such yield is published during the
relevant Calendar Period), as published weekly by the
Federal Reserve Board during the Calendar Period immediately
preceding the tenth calendar day preceding the dividend
period for which the dividend rate on the Series A
Fixed/Adjustable Rate Preferred Stock is being determined.
<PAGE>
If the Federal Reserve Board does not publish a weekly
per annum market discount rate, Ten-Year Average Yield or
Thirty-Year Average Yield during any applicable Calendar
Period, then the Treasury Bill Rate, Ten-Year Constant
Maturity Rate or Thirty-Year Constant Maturity Rate, as the
case may be, for such dividend period will be the arithmetic
average of the two most recent weekly per annum market
discount rates for three-month U.S. Treasury bills, Ten-Year
Average Yields or Thirty-Year Average Yields, as the case
may be (or the one weekly per annum rate, if only one such
rate is published during the relevant Calendar Period), as
published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. If any such rate is not
published by the Federal Reserve Board or by any Federal
Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Treasury Bill Rate,
Ten-Year Constant Maturity Rate or Thirty-Year Constant
Maturity Rate for such dividend period will be the
arithmetic average of the two most recent weekly per annum
(i) in the case of the Treasury Bill Rate, market discount
rates (or the one weekly per annum market discount rate, if
only one such rate is published during the relevant Calendar
Period) for all of the U.S. Treasury bills then having
remaining
<PAGE>
maturities of not less than 80 nor more than 100 days, and
(ii) in the case of the Ten-Year Constant Maturity Rate,
average yields to maturity (or the one weekly per annum
average yield to maturity, if only one such yield is
published during the relevant Calendar Period) for all of
the actively traded marketable U.S. Treasury fixed interest
rate securities (other then Special Securities (as defined
herein)) then having remaining maturities of not less than
eight nor more than twelve years, and (iii) in the case of
the Thirty-Year Constant Maturity Rate, average yields to
maturity (or the one weekly per annum average yield to
maturity, if only one such yield is published during the
relevant Calendar Period) for all of the actively traded
marketable U.S. Treasury fixed interest rate securities
(other than Special Securities) then having remaining
maturities of not less than twenty-eight nor more than
thirty years, in each case as published during such Calendar
Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such rates, by any Federal
Reserve Bank or by any U.S. Government department or agency
selected by the Corporation. If the Corporation determines
in good faith that for any reason (i) no such U.S. Treasury
bill rates are published as provided above during such
Calendar Period or (ii) the Corporation cannot determine the
Treasury Bill Rate for any dividend period; then the
Treasury Bill Rate for such dividend period will be the
arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for
each of the issues of marketable non- interest-bearing U.S.
Treasury securities with a remaining maturity of not less
than 80 nor more than 100 days from the date of each such
quotation, as chosen and quoted daily for each business day
in New York City (or less frequently if daily quotations are
not generally available) to the Corporation by at least
three recognized dealers in U.S. Government securities
selected by the Corporation. If the Corporation determines
in good faith that for any reason the Corporation cannot
determine the Ten-Year Constant Maturity Rate or Thirty-Year
Constant Maturity Rate for any dividend period as provided
above, then the applicable rate for such dividend period
will be the arithmetic average of the per annum average
yields to maturity based upon the closing bids during such
Calendar Period for each of the issues of actively traded
marketable U.S. Treasury fixed interest rate securities
(other then Special Securities) with a final maturity date
(i) in the case of the Ten-Year Constant Maturity Rate, not
less than eight nor more then twelve years from the date of
each such quotation, and (ii) in the case of the Thirty-Year
Constant Maturity Rate, no less than twenty-eight nor more
than thirty years from the date of each such quotation, in
each case as chosen and quoted daily for each business day
in New York City (or less frequently if daily quotations are
not generally available) to the Corporation by at least
three recognized dealers in the United States.
<PAGE>
The Treasury Bill Rate, the Ten-Year Constant Maturity
Rate and the Thirty-Year Constant Maturity Rate will each be
rounded to the nearest five hundredths of a percent, with
.025% being rounded upward.
The Applicable Rate with respect to each dividend
period beginning on or after November 30, 2001 will be
calculated as promptly as practicable by the Corporation
according to the appropriate method described above. The
Corporation will cause notice of each Applicable Rate to be
given to the holders of Series A Fixed/Adjustable Rate
Preferred Stock when payment is made of the dividend for the
immediately preceding dividend period.
As used in this paragraph 3, the term "Calendar Period"
means a period of fourteen calendar days; the term "Federal
Reserve Board" means the Board of Governors of the Federal
Reserve System; the term "Special Securities" means
securities which can, at the option of the holder, be
surrendered at face value in payment of any Federal estate
tax or which provide tax benefits to the holder and are
priced to reflect such tax benefits or which were originally
issued at a deep or substantial discount; the term "Ten-
Year Average Yield" means the average yield to maturity for
actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of ten years);
and the term "Thirty-Year Average Yield" means the average
yield to maturity for actively traded marketable U.S.
Treasury fixed interest rate securities (adjusted to
constant maturities of thirty years).
4. Liquidation Preference. The shares of Series A
Fixed/Adjustable Rate Preferred Stock shall rank, as to
liquidation, dissolution or winding up of the Corporation,
prior to the shares of Common Stock and any other class of
stock of the Corporation ranking junior to the Series A
Fixed/Adjustable Rate Preferred Stock as to rights upon
liquidation, dissolution or winding up of the Corporation,
so that in the event of any liquidation, dissolution or
winding up of the
<PAGE>
Corporation, whether voluntary or involuntary, the holders
of the Series A Fixed/Adjustable Rate Preferred Stock shall
be entitled to receive out of the assets of the Corporation
available for distribution to its stockholders, whether from
capital, surplus or earnings, before any distribution is
made to holders of shares of Common Stock or any other such
junior stock, an amount equal to $200.00 per share (the
"Liquidation Preference" of a share of Series A
Fixed/Adjustable Rate Preferred Stock) plus an amount equal
to all dividends (whether or not earned or declared) accrued
and accumulated and unpaid on the shares of Series A
Fixed/Adjustable Rate Preferred Stock to the date of final
distribution. The holders of the Series A Fixed/Adjustable
Rate Preferred Stock will not be entitled to receive the
Liquidation Preference until the liquidation preference of
any other class of stock of the Corporation ranking senior
to the Series A Fixed/Adjustable Rate Preferred Stock as to
rights upon liquidation, dissolution or winding up shall
have been paid (or a sum set aside therefor sufficient to
provide for payment) in full. After payment of the full
amount of the Liquidation Preference and such dividends, the
holders of shares of Series A Fixed/Adjustable Rate
Preferred Stock will not be entitled to any further
participation in any distribution of assets by the
Corporation. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the
holders of shares of Parity Preferred Stock shall be
insufficient to pay in full the preferential amount
aforesaid, then such assets, or the proceeds thereof, shall
be distributable among such holders ratably in accordance
with the respective amounts which would be payable on such
shares if all amounts payable thereon were paid in full. For
the purposes hereof, neither a consolidation or merger of
the Corporation with or into any other corporation, nor a
merger of any other corporation with or into the
Corporation, nor a sale or transfer of all or any part of
the Corporation's assets for cash or securities shall
<PAGE>
be considered a liquidation, dissolution or winding up of
the Corporation.
5. Conversion. The Series A Fixed/Adjustable Rate
Preferred Stock is not convertible into shares of any other
class or series of stock of the Corporation.
6. Voting Rights. The holders of shares of Series A
Fixed/Adjustable Rate Preferred Stock shall have no voting
rights whatsoever, except for any voting rights to which
they may be entitled under the laws of the State of
Delaware, and except as follows:
(a) Whenever, at any time or times, dividends
payable on the shares of Series A Fixed/Adjustable Rate
Preferred Stock or on any Parity Preferred Stock with
respect to payment of dividends, shall be in arrears
for an aggregate number of days equal to six calendar
quarters or more, whether or not consecutive, the
holders of the outstanding shares of Series A
Fixed/Adjustable Rate Preferred Stock shall have the
right, with holders of shares of any one or more other
class or series of stock upon which like voting rights
have been conferred and are exercisable (voting
together as a class), to elect two of the authorized
number of members of the Board at the Corporation's
next annual meeting of stockholders and at each
subsequent annual meeting of stockholders until such
arrearages have been paid or set apart for payment, at
which time such right shall terminate, except as herein
or by law expressly provided, subject to revesting in
the event of each and every subsequent default of the
character above mentioned. Upon any termination of the
right of the holders of shares of Series A
Fixed/Adjustable Rate Preferred Stock as a class to
vote for directors as herein provided, the term of
office of all directors then in office elected by the
holders of shares of Series A Fixed/Adjustable Rate
Preferred Stock shall terminate immediately.
<PAGE>
Any director who shall have been so elected
pursuant to this paragraph may be removed at any time,
either with or without cause. Any vacancy thereby
created may be filled only by the affirmative vote of
the holders of shares of Series A Fixed/Adjustable Rate
Preferred Stock voting separately as a class (together
with the holders of shares of any other class or series
of stock upon which like voting rights have been
conferred and are exercisable). If the office of any
director elected by the holders of shares of Series A
Fixed/Adjustable Rate Preferred Stock voting as a class
becomes vacant for any reason other than removal from
office as aforesaid, the remaining director elected
pursuant to this paragraph may choose a successor who
shall hold office for the unexpired term in respect of
which such vacancy occurred. At elections for such
directors, each holder of shares of Series A
Fixed/Adjustable Rate Preferred Stock shall be entitled
to one vote for each share held (the holders of shares
of any other class or series of Preferred Stock having
like voting rights being entitled to such number of
votes, if any, for each share of such stock held as may
be granted to them).
(b) So long as any shares of Series A
Fixed/Adjustable Rate Preferred Stock remain
outstanding, the consent of the holders of at least
two-thirds of the shares of Series A Fixed/Adjustable
Rate Preferred Stock outstanding at the time and all
other classes or series of stock upon which like voting
rights have been conferred and are exercisable (voting
together as a class) given in person or by proxy,
either in writing or at any meeting called for the
purpose, shall be necessary to permit, effect or
validate any one or more of the following:
(i) the issuance or increase of the
authorized amount of any class or series of shares
ranking prior (as that term is
<PAGE>
defined in paragraph 10(a) hereof) to the shares
of the Series A Fixed/Adjustable Rate Preferred
Stock; or
(ii) the amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of
any of the provisions of the Certificate of
Incorporation (including this resolution or any
provision hereof) that would materially and
adversely affect any power, preference, or special
right of the shares of Series A Fixed/Adjustable
Rate Preferred Stock or of the holders thereof;
provided, however, that any increase in the amount
of authorized Common Stock or authorized Preferred
Stock or any increase or decrease in the number of
shares of any series of Preferred Stock or the
creation and issuance of other series of Common
Stock or Preferred Stock, in each case ranking on
a parity with or junior to the shares of Series A
Fixed/Adjustable Rate Preferred Stock with respect
to the payment of dividends and the distribution
of assets upon liquidation, dissolution or winding
up, shall not be deemed to materially and
adversely affect such powers, preferences or
special rights.
(c) The foregoing voting provisions shall not
apply if, at or prior to the time when the act with
respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Series A
Fixed/Adjustable Rate Preferred Stock shall have been
redeemed or called for redemption and sufficient funds
shall have been deposited in trust to effect such
redemption.
7. Redemption. The shares of the Series A
Fixed/Adjustable Rate Preferred Stock may be redeemed at the
option of the Corporation, as a whole, or from time to time
in part, at any time,
<PAGE>
upon not less than 30 days' prior notice mailed to the
holders of the shares to be redeemed at their addresses as
shown on the stock books of the Corporation; provided,
however, that shares of the Series A Fixed/Adjustable Rate
Preferred Stock shall not be redeemable prior to November
30, 2001, except as stated below. Subject to the foregoing,
on or after such date, shares of the Series A
Fixed/Adjustable Rate Preferred Stock are redeemable at
$200.00 per share together with an amount equal to all
dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for
redemption.
If full cumulative dividends on the Series A
Fixed/Adjustable Rate Preferred Stock have not been paid,
the Series A Fixed/Adjustable Rate Preferred Stock may not
be redeemed in part and the Corporation may not purchase or
acquire any shares of the Series A Fixed/Adjustable Rate
Preferred Stock otherwise than pursuant to a purchase or
exchange offer made on the same terms to all holders of the
Series A Fixed/Adjustable Rate Preferred Stock. If fewer
than all the outstanding shares of Series A Fixed/Adjustable
Rate Preferred Stock are to be redeemed, the Corporation
will select those to be redeemed by lot or a substantially
equivalent method.
If a notice of redemption has been given pursuant to
this paragraph 7 and if, on or before the date fixed for
redemption, the funds necessary for such redemption shall
have been set aside by the Corporation, separate and apart
from its other funds, in trust for the pro rata benefit of
the holders of the shares of Series A Fixed/Adjustable Rate
Preferred Stock so called for redemption, then,
notwithstanding that any certificates for such shares have
not been surrendered for cancellation, on the redemption
date dividends shall cease to accrue on the shares to be
redeemed, and at the close of business on the redemption
date the holders of such shares shall cease to be
stockholders with respect to such shares and shall have no
interest in or claims against the Corporation by virtue
thereof and
<PAGE>
shall have no voting or other rights with respect to such
shares, except the right to receive the moneys payable upon
surrender (and endorsement, if required by the Corporation)
of their certificates, and the shares evidenced thereby
shall no longer be outstanding. Subject to applicable
escheat laws, any moneys so set aside by the Corporation and
unclaimed at the end of two years from the redemption date
shall revert to the general funds of the Corporation, after
which reversion the holders of such shares so called for
redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such
redemption. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
Notwithstanding the foregoing provisions, if the
Dividends Received Percentage is equal to or less than 50%
and, as a result, the amount of dividends on the Series A
Fixed/Adjustable Rate Preferred Stock payable on any
dividend payment date will be or is adjusted upwards as
described in paragraph 2(b) hereof, the Corporation, at its
option, may redeem all, but not less than all, of the
outstanding shares of the Series A Fixed/Adjustable Rate
Preferred Stock (the Depositary Shares) (a "Dividends
Received Deduction Redemption") provided that within sixty
days of the date on which an amendment to the Code is
enacted which reduces the Dividends Received Percentage to
50% or less, the Corporation sends notice to holders of the
Series A Fixed/Adjustable Rate Preferred Stock of such
redemption. A Dividends Received Deduction Redemption, in
accordance with this paragraph, will take place on the date
specified in the notice, which shall be not less than thirty
nor more then sixty days from the date such notice is sent
to holders of the Series A Fixed/Adjustable Rate Preferred
Stock. A Dividends Received Deduction Redemption shall be at
the applicable redemption price set forth in the following
table, in each case plus accrued and unpaid dividends
(whether or not declared) thereon to but excluding the date
fixed for redemption, including any changes in dividends
payable due to
<PAGE>
changes in the Dividends Received Percentage and Additional
Dividends, if any:
Redeemable Price
Per
Depositary
Redemption Period Per Share Share
May 31, 1997 to
November 29, 1997 $210.00 $52.50
November 30, 1997 to
November 29, 1998 208.00 52.00
November 30, 1998 to
November 29, 1999 206.00 51.50
November 30, 1999 to
November 29, 2000 204.00 51.00
November 30, 2000 to
November 29, 2001 202.00 50.50
On or after November 30, 2001 200.00 50.00
8. Authorization and Issuance of Other Securities. No
consent of the holders of the Series A Fixed/Adjustable Rate
Preferred Stock shall be required for (a) the creation of
any indebtedness of any kind of the Corporation, (b) the
creation, or increase or decrease in the amount, of any
class or series of stock of the Corporation not ranking
prior as to dividends or upon liquidation, dissolution or
winding up to the Series A Fixed/Adjustable Rate Preferred
Stock or (c) any increase or decrease in the amount of
authorized Common Stock or any increase, decrease or change
in the par value thereof or in any other terms thereof.
9. Amendment of Resolution. The Board and the Committee
each reserves the right by subsequent amendment of this
resolution from time to time to increase or decrease the
number of shares that constitute the Series A
Fixed/Adjustable Rate Preferred Stock (but not below the
number of shares thereof then outstanding) and in other
respects to amend this resolution within the limitations
provided by law, this resolution and the Certificate of
Incorporation.
<PAGE>
10. Rank. For the purposes of this resolution, any
stock of any class or classes of the Corporation shall be
deemed to rank:
(a) prior to shares of the Series A
Fixed/Adjustable Rate Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding
up, or both, if the holders of stock of such class or
classes shall be entitled by the terms thereof to the
receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may
be, in preference or priority to the holders of shares
of the Series A Fixed/Adjustable Rate Preferred Stock;
(b) on a parity with shares of the Series A
Fixed/Adjustable Rate Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding
up, or both, whether or not the dividend rates,
dividend payment dates, or redemption or liquidation
prices per share thereof be different from those of the
Series A Fixed/Adjustable Rate Preferred Stock, if the
holders of stock of such class or classes shall be
entitled by the terms thereof to the receipt of
dividends or of amounts distributed upon liquidation,
dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or
liquidation prices, without preference or priority of
one over the other as between the holders of such stock
and the holders of shares of Series A Fixed/Adjustable
Rate Preferred Stock (the term "Parity Preferred Stock"
being used to refer to any stock on a parity with the
shares of Series A Fixed/Adjustable Preferred Stock,
either as to dividends or upon liquidation, dissolution
or winding up, or both, as the context may require);
and
(c) junior to shares of the Series A
Fixed/Adjustable Rate Preferred Stock, either as to
dividends or upon liquidation,
<PAGE>
dissolution or winding up, or both, if such class shall
be Common Stock or if the holders of the Series A
Fixed/Adjustable Rate Preferred Stock shall be entitled
to the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders
of stock of such class or classes.
The Series A Fixed/Adjustable Rate Preferred Stock
shall rank prior, as to dividends and upon liquidation,
dissolution or winding up, to the Common Stock and the
Corporation's Series A Junior Participating Preferred Stock,
and on a parity with (i) the Corporation's ESOP Convertible
Preferred Stock, with a liquidation value of $35.88 per
share, (ii) the Corporation's 7-_% Cumulative Preferred
Stock, with a liquidation value of $200.00 per share, (iii)
the Corporation's 7-3/4% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (iv) if issued, the
Corporation's 7.82% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (v) if issued, the
Corporation's 7.80% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vi) if issued, the
Corporation's 9.00% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vii) if issued, the
Corporation's 8.40% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (viii) if issued,
the Corporation's 8.20% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share and (ix) if issued,
the Corporation's 8.03% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share.
<PAGE>
B. This Certificate of Designation shall not become
effective until, and shall become effective at, 12:01 a.m. on May 31,
1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused
this Certificate of Designation to be signed by Christine A. Edwards,
its Executive Vice President, General Counsel and Secretary, this 30th
day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By:
---------------------------
Name: Christine A. Edwards
Title: Executive Vice
President, General
Counsel and Secretary
