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CERTIFICATE OF DESIGNATIONS
OF
SERIES H PREFERRED STOCK
OF
WASHINGTON MUTUAL, INC.
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Pursuant to Section 23B.06.020 of the
Washington Business Corporation Act
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RESOLVED, that 2,000,000 shares of preferred stock, designated as Series H
Preferred Stock, $50 liquidation preference per share, no par value, be and
hereby are authorized and created with the preferences and privileges, voting
rights, relative, participating, optional and other special rights, and
qualifications, limitations and restrictions, in addition to those set forth in
the Amended and Restated Articles of Incorporation of the Washington Mutual,
Inc. (the "Company"), set forth herein:
1. DESIGNATION. The designation of this Series shall be Series H Preferred
Stock (hereinafter referred to as this "Series"), and the number of shares
constituting this Series shall be 2,000,000. Shares of this Series shall have a
liquidation preference of $50.
2. DIVIDENDS. (a) The holders of shares of this Series shall be entitled to
receive cash dividends, when, as and if declared by the Board of Directors, out
of funds legally available for that purpose, at the rates set forth below in
this Section 2. Dividends on the shares of this Series shall be payable, when,
as and if declared by the Board of Directors, quarterly in arrears on February
16, May 16, August 16 and November 16 of each year (each, a "Dividend Payment
Date"), commencing on the first Dividend Payment Date following the effective
date (the "Initial Dividend Payment Date") of the merger of Bank United Corp.
with and into the Company, or if any such date is not a Business Day (as defined
below), the next succeeding Business Day. Each such dividend shall be paid to
the holders of record of shares of this Series as they appear on the stock
register of the Company on the applicable Record Date, as shall be fixed by the
Board of Directors; provided, however, that holders of shares of this Series
called for redemption on a Redemption Date falling between the record date
associated with a Dividend Payment Date and such Dividend Payment Date shall
receive the applicable dividend payment, together with all other accumulated and
unpaid dividends on such date as shall be fixed for redemption. Dividends on the
shares of this Series shall accumulate and be cumulative from the date of
original issuance. "Business Day" shall mean any day other than a Saturday or
Sunday or a day on which banking institutions in New York City are authorized or
required by law or executive order to remain closed.
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(b) For each quarterly dividend period (each, a "Dividend Period") from the
Initial Dividend Payment Date, through and including the Dividend Period ending
August 16, 2002, dividends payable on the shares of this Series shall be payable
at a rate per annum of the liquidation preference thereof equal to 7.25% (the
"Initial Rate Period"). For each Dividend Period after the Initial Rate Period,
dividends payable on the shares of this Series shall be payable at a rate per
annum of the liquidation preference thereof equal to the Reset Rate (as defined
below). The amount of dividends per share for each Dividend Period shall be
computed by dividing the applicable rate for such Dividend Period by four and
applying the resulting rate to the liquidation preference per share of this
Series. Each Dividend Period (other than the Initial Dividend Period) shall
commence on a Dividend Payment Date and shall end on and include the day next
preceding the next Dividend Payment Date.
(c) Dividends payable on this Series for any period greater or less than a
full Dividend Period, other than the Initial Dividend Period, shall be computed
on the basis of a 360-day year consisting of twelve 30-day months and, for any
period less than one month, the actual number of days elapsed in the period.
(d) No full dividends shall be declared or paid or set apart for payment on
the Preferred Stock of any series ranking, as to dividends, on a parity with or
junior to this Series for any period unless full cumulative dividends on the
shares of this Series for all full Dividend Periods ending on or prior to the
date of such dividends on such other series of Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment. When dividends are not paid in full,
as aforesaid, upon the shares of this Series and any other series of Preferred
Stock ranking on a parity as to dividends with this Series, all dividends
declared upon shares of this Series and any other series of Preferred Stock
ranking on a parity as to dividends with this Series shall be declared pro rata
so that the amount of dividends declared per share on this Series and such other
Preferred Stock shall in all cases bear to each other the same ratio that
accrued and unpaid dividends per share on the shares of this Series and such
other Preferred Stock bear to each other. No interest, or sum of money in lieu
of interest, shall be payable in respect of any dividend payment or payments on
this Series which may be in arrears.
(e) So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation and other than as provided in
paragraph (d) of this Section 2) shall be declared or paid or set aside for
payment or other distribution declared or made upon the Common Stock or upon any
other stock ranking junior to or on a parity with this Series as to dividends or
upon liquidation, nor shall any Common Stock or any other stock of the Company
ranking junior to or on a parity with this Series as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Company (except by conversion
into or exchange for stock of the Company ranking junior to this Series as to
dividends and
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upon liquidation), unless, in each case, full cumulative dividends on all
outstanding shares of this Series for all full Dividend Periods ending on or
prior to the date of such other dividend, distribution, redemption, purchase
or other acquisition, shall have been or contemporaneously are paid or
declared and a sum sufficient for the payment thereof set aside for such
payment.
3. REMARKETING. (a) The dividend rate on this Series shall be reset to the
Reset Rate on the Purchase Contract Settlement Date (as defined below). The
Company shall request, not later than 15 nor more than 30 calendar days prior to
the Remarketing Date (as defined below), that the Depositary (as defined below)
notify the Holders of shares of this Series and the holders of Corporate PIES of
the Remarketing and of the procedures that must be followed if a Holder of
Corporate PIES wishes to make a cash settlement of its obligation to purchase
Common Stock of the Company pursuant to the Purchase Contract Agreement.
(b) Not later than 5:00 p.m., New York City time, on the seventh Business
Day preceding the Purchase Contract Settlement Date, each Holder may elect to
have the shares of this Series held by such Holder remarketed in the
Remarketing. Holders of Corporate PIES that do not give notice of their
intention to make a cash settlement of the purchase contract component of their
Corporate PIES prior to such time in the manner specified in the Purchase
Contract Agreement, or that give such notice but fail to deliver cash prior to
11:00 a.m., New York City time, on or prior to the fifth Business Day preceding
the Purchase Contract Settlement Date, shall be deemed to have consented to the
disposition of the shares of this Series that are a component of their Corporate
PIES in the Remarketing. Holders of the shares of this Series that are not a
component of Corporate PIES wishing to have their shares of this Series
remarketed shall give to the Purchase Contract Agent notice of their election
prior to 11:00 a.m., New York City time on such fifth Business Day. Any such
notice shall be irrevocable and may not be conditioned upon the level at which
the Reset Rate is established in the Remarketing. Promptly after 11:00 a.m., New
York City time, on such fifth Business Day, the Purchase Contract Agent, based
on the notices received by it prior to such time (including notices from the
Purchase Contract Agent as to purchase contracts for which cash settlement has
been elected and cash received), shall notify the Remarketing Agent of the
number of shares of this Series to be tendered for purchase in the Remarketing.
(c) If any Holder of shares of this Series does not give a notice of its
intention to make a cash settlement or gives such notice but fails to deliver
cash as described in Section 3(b) above, or gives a notice of election to have
shares of this Series that are not a component of Corporate PIES remarketed,
then the shares of this Series of such Holder shall be deemed tendered for
purchase in the Remarketing, notwithstanding any failure by such Holder to
deliver or properly deliver such shares to the Remarketing Agent for purchase.
(d) The right of each Holder to have shares of this Series tendered for
purchase shall be limited to the extent that (i) the Remarketing Agent conducts
a remarketing pursuant to the terms of the Remarketing Agreement, (ii) the
shares of this Series
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tendered have not been called for redemption, (iii) the Remarketing Agent is
able to find a purchaser or purchasers for the tendered shares of this Series
and (iv) such purchaser or purchasers deliver the purchase price therefor to the
Remarketing Agent.
(e) On the Remarketing Date, the Remarketing Agent shall use commercially
reasonable efforts to remarket, at a price equal to 100.50% of the aggregate
liquidation preference thereof, the shares of this Series tendered or deemed
tendered for purchase.
(f) If, as a result of the efforts described in Section 3(e), the
Remarketing Agent determines that it will be able to remarket all of the shares
of this Series tendered or deemed tendered for purchase at a price of 100.50% of
the aggregate liquidation preference of such shares prior to 4:00 p.m., New York
City time, on the Remarketing Date, the Remarketing Agent shall determine the
Reset Rate, which shall be the rate per annum (rounded to the nearest
one-thousandth (0.001) of one percent per annum) that the Remarketing Agent
determines, in its sole judgment, to be the lowest rate per annum that will
enable it to remarket all of the shares of this Series tendered or deemed
tendered for Remarketing.
(g) If none of the Holders of the shares of this Series or the holders of
the Corporate PIES elects to have shares of this Series remarketed in the
Remarketing, the Reset Rate shall be the rate determined by the Remarketing
Agent, in its sole discretion, as the rate that would have been established had
a Remarketing of all the shares of this Series been held on the Remarketing
Date.
(h) If, by 4:00 p.m., New York City time, on the Remarketing Date, the
Remarketing Agent is unable to remarket all of the Preferred Securities tendered
or deemed tendered for purchase, a "Failed Remarketing" shall be deemed to have
occurred and the Remarketing Agent shall so advise by telephone the Depositary
and the Company. In the event of a Failed Remarketing, the Reset Rate shall
equal (1) the "AA" Composite Commercial Paper Rate (as defined below), plus (2)
the Applicable Margin (as defined below).
(i) By approximately 4:30 p.m., New York City time, on the Remarketing
Date, provided that there has not been a Failed Remarketing, the Remarketing
Agent shall advise, by telephone (i) the Depositary and the Company of the Reset
Rate determined in the Remarketing and the number of shares of this Series sold
in the Remarketing, (ii) each purchaser (or the Depositary Participant thereof)
of the Reset Rate and the number of shares of this Series such purchaser is to
purchase and (iii) each purchaser to give instructions to its Depositary
Participant to pay the purchase price on the Purchase Contract Settlement Date
in same day funds against delivery of the shares of this Series purchased
through the facilities of the Depositary.
(j) In accordance with the Depositary's normal procedures, on the Purchase
Contract Settlement Date, the transactions described above with respect to each
Preferred Security tendered for purchase and sold in the Remarketing shall be
executed through the Depositary, and the accounts of the respective Depositary
Participants shall be debited
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and credited and such shares of this Series delivered by book-entry as necessary
to effect purchases and sales of such shares of this Series. The Depositary
shall make payment in accordance with its normal procedures.
(k) If any Holder of shares of this Series selling shares of this Series in
the Remarketing fails to deliver such shares, the Depositary Participant of such
selling holder and of any other Person that was to have purchased shares of this
Series in the Remarketing may deliver to any such other Person a number of
shares of this Series that is less than the number of shares of this Series that
otherwise was to be purchased by such Person. In such event, the number of
shares of this Series to be so delivered shall be determined by such Depositary
Participant, and delivery of such lesser number of shares of this Series shall
constitute good delivery.
(l) Under the Remarketing Agreement, the Company shall be liable for, and
shall pay, any and all costs and expenses incurred in connection with the
Remarketing.
(m) The tender and settlement procedures set in this Section 3, including
provisions for payment by purchasers of the shares of this Series in the
Remarketing, shall be subject to modification to the extent required by the
Depositary or if the book-entry system is no longer available for the shares of
this Series at the time of the Remarketing, to facilitate the tendering and
remarketing of the shares of this Series in certificated form. In addition, the
Remarketing Agent may modify the settlement procedures set forth herein in order
to facilitate the settlement process.
(n) Definitions:
"`AA' Composite Commercial Paper Rate" on any date shall mean (i) the
interest equivalent of the 60-day rate on commercial paper placed on behalf of
issuers whose corporate bonds are rated "AA" by S&P or the equivalent of such
rating by S&P or the equivalent of such rating by S&P or another rating agency,
as made available on a discount basis or otherwise by the Federal Reserve Board
for the business day immediately preceding such date or (ii) if the Federal
Reserve Board does not make available any such rate, then the arithmetic average
of those rates, as quoted on a discount basis or otherwise, by the Commercial
Paper Dealers to the Remarketing Agent for the close of business on the Business
Day next preceding such date. If any Commercial Paper Dealer does not quote a
rate required to determine the "AA" Composite Commercial Paper Rate, the "AA"
Composite Commercial Paper Rate will be determined on the basis of the quotation
or quotations furnished by the remaining Commercial Paper Dealer or Commercial
Paper Dealers and any substitute commercial paper dealer or substitute
commercial paper dealers selected by the Remarketing Agent or, if the
Remarketing Agent does not select any such substitute commercial paper dealer or
substitute commercial paper dealers, by the remaining Commercial Paper Dealer or
Commercial Paper Dealers.
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"Applicable Margin" shall mean the spread determined as set forth below,
based on the prevailing rating of the Remarketed shares of this Series in effect
at the close of business on the Business Day immediately preceding the date of a
Failed Remarketing:
Prevailing Rating Spread
AA/ "aa" 3.00%
A/ "a" 4.00%
BBB/ "baa" 5.00%
Below BBB/ "baa" 7.00%
For purposes of this definition, the "prevailing rating" of the Remarketed
shares of this Series shall be:
(i) AA/ aa if such shares have a credit rating of AA- or
better by S&P and "aa3" or better by Moody's or the equivalent
of such ratings by such agencies or a substitute rating agency
or substitute rating agencies selected by the Remarketing
Agent;
(ii) if not under clause (i) above, then A/ a if the
Remarketed Securities have a credit rating of A- or better by
S&P and "a3" or better by Moody's or the equivalent of such
ratings by such agencies or a substitute rating agency or
substitute rating agencies selected by the Remarketing Agent;
(iii) if not under clauses (i) or (ii) above, then BBB/ "baa"
if the Remarketed Securities have a credit rating of BBB- or
better by S&P and "baa3" or better by Moody's or the
equivalent of such ratings by such agencies or a substitute
rating agency or substitute rating agencies selected by the
Remarketing Agent; or
iv) if not under clauses (i) - (iii) above, then below BBB/
"baa."
"Certificate"" shall mean a Corporate PIES Certificate.
"Commercial Paper Dealers" shall mean Lehman Commercial Paper Inc.,
Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated or
their affiliates or successors, if such affiliates or successors are commercial
paper dealers.
"Common Stock" shall mean the Common Stock, no par value, of the Company.
"Corporate PIES" shall mean a stock purchase unit consisting of (A) a stock
purchase contract under which (i) the holder of the unit will purchase from the
Company, for $50.00 in cash, a certain number of shares of common stock of the
Company and (ii)
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the Company will pay such holder contract adjustment payments and (B) beneficial
ownership of a shares of this Series.
"Corporate PIES Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Corporate PIES specified on
such certificate.
"Depositary" shall mean, with respect to shares of this Series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as depositary for
such shares, and initially shall be The Depository Trust Company.
"Depositary Participant" shall mean a member of, or participant in, the
Depositary.
"Exchange Act" shall mean the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Global Certificate" means a Certificate that evidences all or part of the
shares of this Series and is registered in the name of a clearing agency or a
nominee thereof.
"Global Security" shall mean a global Series H Preferred Stock Certificate
registered in the name of a Depositary or its nominee.
"Holder" shall mean any holder of shares of this Series.
"Moody's" shall mean Moody's Investors Service, Inc.
"Purchase Contract Agent" shall mean the purchase contract agent under the
Purchase Contract Agreement, including successor purchase contract agents.
"Purchase Contract Agreement" shall mean the Purchase Contract Agreement
dated as of __________ between the Company and _____________, as Purchase
Contract Agent.
"Purchase Contract Settlement Date" shall mean August 16, 2002.
"Record Date" for dividends on the shares of this Series on any Payment
Date shall mean, as to any Global Certificate, the Business Day next preceding
such Payment Date, and as to any other Certificate, 15 Business Days prior to
such Payment Date.
"Remarketing Agent" shall mean the remarketing agent selected by the
Company, including any successor remarketing agents selected by the Company.
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"Remarketing Date" shall mean the third Business Day preceding the Purchase
Contract Settlement Date.
"Reset Rate" shall mean shall mean the distribution rate per annum that
results from the Remarketing pursuant this Section 3.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
McGraw-Hill Corporation.
4. REDEMPTION. (a) Optional Redemption. The shares of this Series are not
redeemable prior to October 16, 2002. The Company, at its option, may redeem
shares of this Series, as a whole or in part, at any time or from time to time,
on or after October 16, 2002 at a redemption price of $50 per share plus accrued
and unpaid cumulative dividends thereon (whether or not declared) to the date
fixed for redemption.
(b) Mandatory Redemption. The Company shall redeem, from any source of
funds legally available therefor, all issued and outstanding shares of this
Series, in whole and not in part, on August 16, 2004, at a redemption price of
$50 per share plus accrued and unpaid cumulative dividends thereon (whether or
not declared) to the date fixed for redemption.
(c) Redemption Procedures.
(i) In the event that, pursuant to paragraph (a) above, fewer
than all the outstanding shares of this Series are to be
redeemed, the number of shares to be redeemed shall be
determined by the Board of Directors and the shares to be
redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors or by any other method as
may be determined by the Board of Directors in its sole
discretion to be equitable, provided that such method satisfies
any applicable requirements of any securities exchange on which
this Series is listed.
(ii) In the event the Company shall redeem shares of this
Series, notice of such redemption shall be given by first class
mail, postage prepaid, mailed not less than 30 or more than 60
days prior to the redemption date, to each holder of record of
the shares to be redeemed, at such holder's address as the same
appears on the stock register of the Company. Each such notice
shall state: (a) the redemption date; (b) the number of shares
of this Series to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of such
shares to be redeemed from such holder; (c) the redemption
price; (d) the place or places where certificates for such
shares are to be surrendered for payment of the redemption
price; and (e) that dividends on the shares to be redeemed
shall cease to accrue on the redemption date.
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(iii) Notice having been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the
Company in providing money for the payment of the redemption
price) dividends on the shares of this Series so called for
redemption shall cease to accrue, and said shares shall no
longer be deemed to be outstanding, and all rights of the
holders thereof as stockholders of the Company (except the
right to receive from the Company the redemption price) shall
cease. Upon surrender in accordance with said notice of the
certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors shall so by
the Company at the redemption price aforesaid. In case fewer
than all the shares represented by any such certificate are
redeemed, a without cost to the holder thereof.
(iv) Any shares of this Series which shall at any time have
been redeemed shall, after such redemption, have the status of
authorized but unissued shares of Preferred Stock, without
designation as to series until such shares are once more
designated as part of a particular series by the Board of
Directors.
(v) Notwithstanding the foregoing provisions of this Section 4,
if full cumulative dividends on all outstanding shares of this
Series are in arrears, no shares of this Series shall be
redeemed unless all outstanding shares of this Series are
simultaneously redeemed, and the Company shall not purchase or
otherwise acquire any shares of this Series; provided, however,
that the foregoing shall not prevent the purchase or
acquisition of shares of this Series pursuant to a purchase or
exchange offer made on the same terms to holders of all
outstanding shares of this Series.
5. CONVERSION. The holders of shares of this Series shall not have any
rights to convert such shares into shares of any other class or series of
capital stock of the Company.
6. LIQUIDATION RIGHTS. (a) Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Company, the holders of the shares of this
Series shall be entitled to receive and to be paid out of the assets of the
Company available for distribution to its stockholders, before any payment or
distribution shall be made on the Common Stock or on any other class of stock
ranking junior to this Series upon liquidation, the amount of $50 per share,
plus accrued and unpaid cumulative dividends (whether or not declared) to the
date of the liquidating distribution.
(b) After the payment to the holders of the shares of this Series of the
full preferential amounts provided for in this Section 6, the holders of this
Series as such shall have no right or claim to any of the remaining assets of
the Company.
(c) If, upon any voluntary or involuntary dissolution, liquidation, or
winding up of the Company, the amounts payable with respect to the shares of
this Series and any
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other shares of stock of the Company ranking as to any such distribution on a
parity with the shares of this Series are not paid in full, the holders of the
shares of this Series and of such other shares shall share ratably in any such
distribution of assets of the Company in proportion to the full respective
distributions to which they are entitled.
(d) Neither the sale of all or substantially all the property or business
of the Company, nor the merger or consolidation of the Company into or with any
other corporation or the merger or consolidation of any other corporation into
or with the Company, shall be deemed to be a dissolution, liquidation or winding
up, voluntary or involuntary, for the purposes of this Section 6.
7. RANKING. For purposes of this resolution, any stock of any class or
classes of the Company shall be deemed to rank:
(a) prior to the shares of this Series, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to the
receipt of dividends or of amounts distributable upon dissolution, liquidation
or winding up of the Company, as the case may be, in preference or priority to
the holders of shares of this Series;
(b) on a parity with shares of this Series, either as to dividends or upon
liquidation, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share or sinking fund provisions, if any,
be different from those of this Series (and whether or not such dividends shall
accumulate), if the holders of such stock shall be entitled to the receipt of
dividends or of amounts distributable upon dissolution, liquidation or winding
up of the Company, as the case may be, without preference or priority, one over
the other, as between the holders of such stock and the holders of shares of
this Series; and
(c) junior to shares of this Series, either as to dividends or upon
liquidation, if such class shall be Common Stock or if the holders of shares of
this Series shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the Company, as the
case may be, in preference or priority to the holders of shares of such class or
classes.
(d) The shares of each of the other series of preferred stock of the
Company shall rank on a parity with the shares of this Series.
8. VOTING RIGHTS. The holders of the shares of this Series shall have the
following voting rights:
(a) Each share of this Series will have the right to vote, with each share
of this Series having 0.10 vote, in connection with matters submitted generally
to the holders of the common stock and other capital stock of the Company
entitled to vote in respect of matters submitted to the stockholders of the
Company generally. For these purposes, the holders of the shares of this Series
and the holders of the common stock and such other capital stock of the Company,
so entitled to vote, shall vote as a single class.
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(b) Unless the vote or consent of the holders of a greater number of shares
shall then be required by law, the approval of the holders of at least
two-thirds of the then-outstanding shares of this Series, given in person or by
proxy, either in writing or by a vote at a meeting called for the purpose at
which the holders of shares of this Series shall vote together as a separate
class, shall be required for authorizing, effecting or validating any amendment,
alteration or repeal, whether by merger, consolidation or otherwise, of any of
the provisions of the Amended and Restated Articles of Incorporation of the
Company or of any certificate amendatory thereof or supplemental thereto
(including any Certificate of Designations or any similar document relating to
any series of Preferred Stock) that adversely affect the powers, preferences,
privileges or rights of this Series; provided, however, that the creation and
issuance of any other class or series of preferred stock, or any increase in the
number of authorized shares of any Preferred Stock of any other class or series,
in each case ranking on a parity with or junior to this Series with respect to
the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up of the affairs of the Company shall not be deemed to
adversely affect such powers, preferences or other special rights.
(c) Unless the vote or consent of the holders of a greater number of shares
shall then be required by law, the approval of the holders of at least
two-thirds of all of the then-outstanding shares of this Series and all other
series of preferred stock ranking on a parity with shares of this Series, either
as to dividends or upon liquidation, given in person or by proxy, either in
writing or by a vote at a meeting called for the purpose at which the holders of
shares of this Series and such other series of Preferred Stock shall vote
together as a single class without regard to series, shall be necessary for
authorizing, effecting or validating (i) the creation, authorization or issuance
of, (ii) the reclassification of any authorized stock of the Company into, or
(iii) the creation, authorization or issuance of any obligation or security
convertible into or evidencing the right to purchase, any additional class or
series of stock ranking prior to this Series, either as to dividends or upon
liquidation.
(d) (i) If at any time dividends on this Series shall be in arrears in an
amount equal to six quarterly dividends thereon, the occurrence of
such contingency shall mark the beginning of a period (herein called a
"default period") which shall extend until such time as all accrued
and unpaid dividends for all previous dividend periods and for the
current dividend period on all shares of this Series then outstanding
shall have been declared and paid or set apart for payment. During
each default period, the holders of shares of this Series and other
shares of Preferred Stock on which dividends are in arrears and as to
which similar voting rights have been conferred, voting as a class,
irrespective of series, shall have the right to elect two Directors to
the Board of Directors of the Company.
(ii) During any default period, such voting right of the holders of
this Series may be exercised by written consent, at a special meeting
called pursuant to Section 7(d)(iii) hereof or at any annual meeting
of
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stockholders. The absence of a quorum of the holders of Common Stock
at any such special or annual meeting shall not affect the exercise by
the holders of Preferred Stock of such voting right. At any meeting at
which the holders of Preferred Stock shall exercise such voting right
initially during an existing default period, they shall have the
right, voting as a class, to elect Directors to fill such vacancies,
if any, in the Board of Directors as may then exist up to two
Directors or, if such right is exercised at an annual meeting, to
elect two Directors. If the number which may be so elected at any
special meeting does not amount to the required number, the holders of
Preferred Stock shall have the right to make such increase in the
number of Directors as shall be necessary to permit the election by
them of the required number. After the holders of the Preferred Stock
shall have exercised their right to elect Directors in any default
period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided. Any Director elected by
a vote of the holders of Preferred Stock may be removed from office,
with or without cause, only by the affirmative vote of the requisite
percentage of holders of Preferred Stock required to elect Directors
as specified in this Section 8(d).
(iii) Unless the holders of Preferred Stock, during an existing
default period, shall have previously exercised their right to elect
Directors, the Board of Directors may order, or any shareholder or
shareholders owning in the aggregate not less than ten percent (10%)
of the total number of shares of Preferred Stock outstanding,
irrespective of series, on which dividends are in arrears and as to
which similar voting rights have been conferred, may request, the
calling of a special meeting of the holders of Preferred Stock, which
meeting shall thereupon be called by the Chairman, a Vice Chairman or
the Secretary of the Company. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to vote
pursuant to this Section 7(d)(iii) shall be given to each holder of
record of Preferred Stock entitled to vote thereat by mailing a copy
of such notice to him at his last address as the same appears on the
books of the Company on such record date, not more than 45 days prior
to the date of such notice, as the Board of Directors may fix for this
purpose. Such meeting shall be called for a time not earlier than 10
days and not later than 60 days after such order or request or, in
default of the calling of such meeting within 60 days after such order
or request, such meeting may be called on similar notice by any
shareholder or shareholders owning in the aggregate not less than 10%
of the total number of shares of Preferred Stock outstanding,
irrespective of series, entitled to vote thereat.
(iv) In any default period the holders of Common Stock, and other
classes of stock of the Company if applicable, shall continue to be
entitled to elect the whole number of Directors constituting the Board
of Directors until
<PAGE>
the holders of Preferred Stock, voting as a class, shall have
exercised their right to elect two Directors, after the exercise of
which right (A) the Directors so elected by the holders of Preferred
Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period,
and (B) any vacancy on the Board of Directors may (except as provided
in Section 8(d)(ii) hereof) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of
stock which elected the Director whose office shall have become
vacant. References in this Section 8(d) to Directors elected by the
holders of a particular class of stock shall include Directors elected
by such Directors to fill vacancies as provided in clause (B) of the
foregoing sentence.
(v) Immediately upon the expiration of a default period, (A) the right
of the holders of Preferred Stock as a class to elect Directors shall
cease, (B) the term of any Directors elected by the holders of
Preferred Stock as a class shall terminate, and (C) the number of
Directors shall be such number as may be provided for in the Amended
and Restated Articles of Incorporation or Bylaws of the Company or by
resolution of the Board of Directors, irrespective of any increase
made pursuant to the provisions of Section 8(d)(ii) hereof (such
number being subject, however, to change thereafter in any manner
provided by law or in the Amended and Restated Articles of
Incorporation or Bylaws of the Company). Any vacancies on the Board of
Directors effected by the provisions of clauses (B) and (C) in the
preceding sentence may be filled by a majority of the remaining
Directors.
(e) Except as set forth herein or required by applicable law, holders of
shares of this Series shall have no voting rights and their consent shall not be
required for taking any corporate action.
