exv3w1
EXHIBIT 3.1
Amended and Restated Articles of Incorporation
of
PepsiCo, Inc.
FIRST: The name of the corporation is PepsiCo, Inc., hereinafter referred to as the
“Corporation”.
SECOND: The Corporation is to have perpetual existence.
THIRD:
Intentionally omitted.
FOURTH: The purpose or purposes for which the Corporation is organized and the objects
proposed to be transacted, promoted or carried on by it are as follows:
(1) To engage in the manufacture, purchase, sale, bottling and distribution, either at
wholesale, retail or otherwise, of beverages, syrups, flavors and extracts, carbonated and aerated
water, soda water, mineral waters, soft drinks and non-alcoholic beverages of every kind, and any
and all other commodities, substances and products of every kind, nature and description;
(2) To purchase, lease, construct or otherwise acquire, and to hold, own, use,
maintain, manage and operate, plants, factories, warehouses, stores, shops and other
establishments, facilities and equipment, of every kind, nature and description, used or useful in
the conduct of the business of the Corporation;
(3) To manufacture, purchase, sell and generally to trade and deal in and with goods,
wares, products and merchandise of every kind, nature and description, and to engage or participate
in any mercantile, manufacturing or trading business of any kind or character whatsoever;
(4) To build, erect, construct, purchase, hold or otherwise acquire, own, provide,
maintain, establish, lease and operate, buy, sell, exchange or otherwise dispose of mills,
factories, warehouses, agencies, buildings, structures, offices, works, plants and work shops, with
suitable plant, engines, boilers, machinery and equipment, and all things of whatsoever kind and
nature suitable, necessary, useful or advisable in connection with any or all of the objects herein
set forth;
(5) To acquire by purchase, lease or otherwise, upon such terms and conditions and in
such manner as the board of directors of the Corporation shall determine or agree to, and to the
extent to which the same may be allowed by law, all or any part of the property, real and personal,
tangible or intangible, of any nature whatsoever, including the good will, business and rights of
all kinds, of any other corporation or of any person, firm or association, which may be useful or
convenient in the business of the Corporation and to pay for the same in cash, stocks, bonds or in
other securities of the Corporation, or partly in cash and partly in such stocks, bonds or other
securities, or in such other manner as may be agreed, and to hold, possess and improve
such properties, and to assume in connection with the acquisition of any such property any
liabilities of any such corporation, person, firm or association, and to conduct in any legal
manner the whole or any part of any business so acquired, and to pledge, mortgage, sell or
otherwise dispose of the same. To carry on the business of warehousing and all business incidental
thereto, including the issue of warehouse receipts, negotiable or otherwise, and the making of
advances or loans upon the security of goods warehoused; to maintain and conduct stores for the
general sale of merchandise, both at wholesale and retail;
(6) To borrow money, and, from time to time, to make, accept, endorse, execute and
issue bonds, debentures, promissory notes, bills of exchange and other obligations of the
Corporation for moneys borrowed or in payment of property acquired or for any of the other objects
or purposes of the Corporation or its business, and to secure the payment of any such obligations
by mortgage, pledge, deed, indenture, agreement or other instrument of trust, or by other lien
upon, assignment of, or agreement in regard to all or any part of the property, rights, privileges
or franchises of the Corporation wheresoever situated, whether now owned or hereafter to be
acquired;
(7) To apply for, obtain, register, purchase, lease, or otherwise acquire, and to
hold, use, own, operate and introduce, and to sell, assign or otherwise dispose of, any trade
marks, trade names, patents, inventions, improvements and processes used in connection with or
acquired under letters patent of the United States or elsewhere, and to use, exercise, develop,
grant licenses in respect of, or otherwise turn to account any such trade marks, patents, licenses,
processes and the like;
(8) To guarantee and to acquire, by purchase, subscription or otherwise, and to hold
and own and to sell, assign, transfer, pledge or otherwise dispose of the stock, or certificates of
interest in shares of stock, bonds, debentures and other securities and obligations of any other
corporation, domestic or foreign, and to issue in exchange therefor the stock, bonds, or other
obligations of the Corporation, and while the owner of any such stock, certificates of interest in
shares of stock, bonds, debentures, obligations and other evidences of indebtedness, to possess and
exercise in respect thereof all of the rights, powers and privileges of ownership, including the
right to vote thereon, and also in the manner, and to the extent now or hereafter authorized or
permitted by the laws of the State of North Carolina, to purchase, acquire, own and hold and to
dispose of the stock, bonds or other evidence of indebtedness of the Corporation;
(9) To guarantee the payment of dividends upon any shares of the capital stock of, or
the performance of any contract by any other corporation or association in which the Corporation
shall have an interest, and to endorse or otherwise guarantee the payment of the principal and
interest, or either, of any bonds, debentures, notes, securities, or other evidences of
indebtedness created or issued by any such other corporation or association or by individuals or
partnerships, to aid in any manner any other corporation or association, any bonds or other
securities or evidences of indebtedness of which, or shares of stock in which (or voting trust
certificates therefor) are held by or for the Corporation, or in which, or in the welfare of which,
the Corporation shall have any interest, and to do any acts or things designed to protect,
preserve, improve or enhance the value of any such bonds or other securities or property of the
Corporation, but nothing contained herein shall be construed to authorize the Corporation to engage
in the business of a guaranty or trust company;
(10) In general, to do any or all of the things hereinbefore set forth, and such other
things as are incidental or conducive to the attainment of the objects and purposes of the
Corporation, as principal, factor, agent, contractor or otherwise, either alone or in conjunction
with any person, firm, association or corporation, and in carrying on its business, and for the
purpose of attaining or furthering any of its objects, to make and perform contracts, and to do all
such acts and things, and to exercise any and all such powers, to the same extent as a natural
person might or could lawfully do to the extent allowed by law;
(11) To have one or more offices and to carry on its operations and transact its
business within and without the State of North Carolina and in other states of the United States of
America, and in the districts, territories or dependencies of the United States and in any and all
foreign countries and, without restriction or limit as to the amount, to purchase or otherwise
acquire, hold, own, mortgage, sell, convey or otherwise dispose of real and personal property of
every class and description in any of the states, districts, territories or dependencies of the
United States, and in any and all foreign countries, subject always to the laws of such state,
district, territory, dependency or foreign country; and
(12) To do any or all of the things herein set forth, and such other things as are
incidental or conducive to the attainment of the above objects, to the same extent a natural person
might or could do, and in any part of the world, in so far as the same are not inconsistent with
the laws of the State of North Carolina.
The purposes and powers specified in any clause contained in this Fourth Article shall, except
where otherwise expressed in said articles, be in nowise limited or restricted by reference to or
inferences from the terms of any other clause of this or any other article of these Articles of
Incorporation, but the purposes and powers specified in each of the clauses of this article shall
be regarded as independent purposes and powers.
In general, the Corporation shall have the authority to carry on any other business in
connection with the foregoing, whether manufacturing or otherwise, and to have and to exercise all
the powers conferred by the laws of the State of North Carolina upon corporations formed under the
North Carolina Business Corporation Act.
FIFTH: The total number of shares of Common Stock which the Corporation shall have authority
to issue is 3,600,000,000 of the par value of one and two-thirds cents (1-2/3(cent)) per share. The
total number of shares of Convertible Preferred Stock which the Corporation shall have authority to
issue is 3,000,000 of no par per share. The preferences, limitations and relative rights of the
shares of the Convertible Preferred Stock are attached to these Amended and Restated Articles of
Incorporation as “Exhibit A,” and made a part hereof as if set forth in full herein.
SIXTH: The private property of the stockholders shall not be subject to the payment of
corporate debts to any extent whatever.
SEVENTH: No holder of the Corporation’s Common Stock and no holder of the Corporation’s
Convertible Preferred Stock shall be entitled, as of right, to subscribe for, purchase or receive
any part of any new or additional issue of its capital stock, of any class, whether now or
hereafter authorized (including treasury stock), or of any bonds, debentures or other securities
convertible into stock, or warrants or options to purchase stock of any class, but all such
additional shares of stock or bonds, debentures or other securities convertible into stock,
including all stock now or hereafter authorized, may be issued and disposed of by the board of
directors from time to time to such person or persons and upon such terms and for such
consideration (so far as may be permitted by law) as the board of directors in their absolute
discretion may from time to time fix and determine.
EIGHTH: The following provisions are intended for the regulation of the business and for the
conduct of the internal affairs of the Corporation, and it is expressly provided that the same are
intended to be in furtherance and not in limitation of the powers conferred by statute:
(1) The number of directors of the Corporation shall be fixed and may be altered from
time to time, as may be provided in the by-laws, but at no time is the number of directors to be
less than three. The directors need not be stockholders. In case of any increase in the number of
directors, the additional directors may be elected by the directors or by the stockholders entitled
to vote therefor at an annual or special meeting, as shall be provided in the by-laws;
(2) The board of directors may, by resolution passed by a majority of the whole board,
designate three or more of their number to constitute an executive committee, to the extent
provided in said resolution or in the by-laws, shall have and exercise the powers of the board of
directors in the management of the business and affairs of the Corporation, and may have power to
authorize the seal of the Corporation to be affixed to all papers which may require it. From time
to time the by-laws, or the board of directors by resolution, may provide methods for the permanent
or temporary filling of any vacancy in the executive committee or in any other committee appointed
by the board;
(3) The board of directors shall have power to sell, assign, transfer, convey,
exchange, or otherwise dispose of the property, effects, assets, franchises and good will of the
Corporation as an entirety, for cash, for the securities of any other corporation, or for any other
consideration, pursuant to the vote at the special meeting called for the purpose, of the holders
of at least two-thirds of the issued and outstanding Common Stock and Convertible Preferred Stock
of the Corporation voting as a single class.
(4) The board of directors may make by-laws from time to time, and may alter, amend or
repeal any by-laws, but any by-laws made by the board of directors may be altered, amended or
repealed by the stockholders entitled to vote;
(5) In case of any vacancy in the board of directors, through death, resignation,
disqualification or other cause, the remaining directors by an affirmative vote of a majority
thereof, may elect a successor to hold office for the unexpired portion of the term of the
directors whose place shall be vacant, and until the election of a successor;
(6) The directors shall have power, from time to time, to determine whether and to
what extent, and at what times and places and under what conditions and regulations, the accounts
and books of the Corporation, or any of them, shall be open to the inspection of stockholders; and
no stockholder shall have any right to inspect any books or account or document of the Corporation
except as conferred by the statutes of the State of North Carolina, or authorized by the directors;
(7) The board of directors shall have power to appoint such standing committees as
they may determine, with such powers as shall be conferred by them or as may be authorized by the
by-laws;
(8) The board of directors shall elect a president and vice president and appoint a
secretary and treasurer. Any two of such offices may be held by the same person, except that the
president shall hold no other of such offices. The board of directors may also appoint one or more
additional vice presidents, one or more assistant secretaries, and one or more assistant
treasurers, and to the extent provided by the by-laws or by the board of directors by resolution
from time to time, the persons so appointed shall have and exercise the powers of the president,
secretary and treasurer, respectively. The board of directors may appoint other and additional
officers, with such powers as the directors may deem advisable;
(9) Both stockholders and directors shall have power, if the by-laws so provide, to
hold their meetings and have one or more offices without the State of North Carolina, and to keep
the books of the Corporation (subject to the provisions of the statutes) outside of the State of
North Carolina, at such places as may be from time to time designated;
(10) The Corporation may in its by-laws confer powers additional to the foregoing upon
the directors, in addition to the powers and authorities expressly conferred upon them by the
statutes;
(11) No contract or other transaction between the Corporation and any other
corporation shall be affected or invalidated by the fact that any one or more of the directors of
the Corporation is or are interested in, or is a director or officer, or are directors or officers
of, such other corporation, and any director or directors, individually or jointly, may be a party
or parties to, or may be interested in, any contract or transaction of the Corporation or in which
the Corporation is interested; and no contract, act or transaction of the Corporation with any
person or persons, firm or corporation, shall be affected or invalidated by the fact that any
director or directors of the Corporation is a party, or are parties, to or interested in such
contract, act or transaction, or in any way connected with such person or person, firm or
corporation, and each and every such person or persons, firm or corporation, and each and every
person who may become a director of the Corporation is hereby relieved from any liability that
might otherwise exist from contracting with the Corporation for the benefit of himself or any firm,
association or corporation in which he may be in any wise interested;
(12) The Corporation reserves the right to amend, alter, change, or repeal any
provision herein contained, in the manner now or hereafter prescribed by law, and all the rights
conferred on stockholders hereunder are granted and are to be held and enjoyed subject to such
rights of amendment, alteration, change or repeal.
(13) Except as provided in Section (5) of this Article, each director shall be elected by a
majority of the votes cast with respect to the director by the shares represented in person or by
proxy and entitled to vote at any meeting for the election of directors at which a quorum is
present; provided, however, that if the number of director nominees exceeds the number of directors
to be elected, each director shall be elected by a vote of the plurality of the shares represented
in person or by proxy at any such meeting and entitled to vote on the election
of directors. For purposes of this Section, a majority of the votes cast means that the number
of shares voted “for” a director must exceed the number of votes cast “against” that director.
NINTH: The number of directors constituting the initial Board of Directors shall be twelve;
and the names and addresses of the persons who are to serve as directors until the first meeting of
stockholders, or until their successors are elected and qualified, are:
| |
|
|
| Name |
|
Address |
D. Wayne Calloway
|
|
700 Anderson Hill Road |
|
|
Purchase, New York 10577 |
Frank T. Cary
|
|
700 Anderson Hill Road |
|
|
Purchase, New York 10577 |
William T. Coleman, Jr.
|
|
700 Anderson Hill Road |
|
|
Purchase, New York 10577 |
Clifton C. Garvin, Jr.
|
|
700 Anderson Hill Road |
|
|
Purchase, New York 10577 |
Michael H. Jordan
|
|
700 Anderson Hill Road |
|
|
Purchase, New York 10577 |
Donald M. Kendall
|
|
700 Anderson Hill Road |
|
|
Purchase, New York 10577 |
John J. Murphy
|
|
700 Anderson Hill Road |
|
|
Purchase, New York 10577 |
Andrall E. Pearson
|
|
700 Anderson Hill Road |
|
|
Purchase, New York 10577 |
Sharon Percy Rockefeller
|
|
700 Anderson Hill Road |
|
|
Purchase, New York 10577 |
Robert H. Stewart, III
|
|
700 Anderson Hill Road |
|
|
Purchase, New York 10577 |
| |
|
|
|
Robert S. Strauss
|
|
700 Anderson Hill Road |
|
|
Purchase, New York 10577 |
Arnold R. Weber
|
|
700 Anderson Hill Road |
|
|
Purchase, New York 10577 |
TENTH: Stockholders do not have the right to cumulate their vote for the election of
directors.
ELEVENTH:
The name and address of the incorporator is:
| |
|
|
|
Arch E. Lynch, Jr. |
|
360 Glenwood Avenue |
|
|
Raleigh, North Carolina
27605 |
|
|
|
EXHIBIT A
Section 1. Designation and Amount; Special Purpose Restricted Transfer Issue.
(A) Shares of Convertible Preferred Stock shall be issued only to Fidelity Trust Management
Co., or any duly appointed successor trustee (the “Trustee”) of The Quaker 401(k) Plan for Salaried
Employees, as amended, or any successor plan (the “Plan”). All references to the holder of shares
of Convertible Preferred Stock shall mean the Trustee. In the event of any transfer of record
ownership of shares of Convertible Preferred Stock to any person other than any successor trustee
under the Plan, the shares of Convertible Preferred Stock so transferred, upon such transfer and
without any further action by the Corporation or the holder thereof, shall be automatically
converted into shares of Common Stock of the Corporation pursuant to Section 5 hereof and no such
transferee shall have any of the voting powers, preferences and relative, participating, optional
or special rights ascribed to shares of Convertible Preferred Stock hereunder but, rather, only the
powers and rights pertaining to the Common Stock into which such shares of Convertible Preferred
Stock shall be so converted. In the event of such a conversion, the transferee of the shares of
Convertible Preferred Stock shall be treated for all purposes as the record holder of the shares of
Common Stock into which such shares of Convertible Preferred Stock have been automatically
converted as of the date of such transfer. Certificates representing shares of Convertible
Preferred Stock shall bear a legend to reflect the foregoing provisions. Notwithstanding the
foregoing provisions of this Section 1, shares of Convertible Preferred Stock (i) may be converted
into shares of Common Stock as provided by Section 5 hereof and the shares of Common Stock issued
upon such conversion may be transferred by the holder thereof as permitted by law and (ii) shall be
redeemable by the Corporation upon the terms and conditions provided by Sections 6, 7 and 8 hereof.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any stock of the Corporation ranking senior to the
Convertible Preferred Stock in respect of dividends and subject to the provisions for adjustment
hereinafter set forth, the holders of shares of Convertible Preferred Stock shall be entitled to
receive, when, as and if declared by the board of directors out of funds legally available
therefor, cumulative cash dividends (“preferred dividends”) in an amount per share equal to $5.46
per share per annum, and no more, payable quarterly in arrears, one-fourth on each fifteenth day of
January, April, July and October of each year (each a “dividend payment date”) commencing on
October 15, 2001, to holders of record at the start of business on such dividend payment date. In
the event that any dividend payment date shall fall on any day other than a “business day” (as
hereinafter defined), the dividend payment due on such dividend payment date shall be paid on the
business day immediately succeeding such dividend payment date. Preferred dividends shall begin to
accrue on outstanding shares of Convertible Preferred Stock from the date of issuance of such
shares of Convertible Preferred Stock. Preferred dividends shall accrue on a daily basis, but
preferred dividends accrued after issuance of the shares of Convertible Preferred Stock for any
period less than a full quarterly period between dividend payment dates shall be computed on the
basis of a 360-day year of 30-day months. If, at the date shares of Convertible Preferred Stock are
first issued, there are accrued but unpaid dividends on shares of Series B ESOP Convertible
Preferred Stock of The Quaker Oats Company, such accrued but unpaid dividends will be carried
forward and paid on October 15, 2001, without interest, in addition to the dividends on shares of
Convertible Preferred Stock which are accrued and payable as of such date. Accrued but unpaid
preferred dividends shall cumulate as of the dividend payment date on which they first became
payable, but no interest shall accrue on accumulated but unpaid preferred dividends.
(B) So long as any shares of Convertible Preferred Stock shall be outstanding, no dividend
shall be declared or paid or set apart for payment on any other series of stock of the Corporation
ranking on a parity with the Convertible Preferred Stock as to dividends, unless there shall also
be or have been declared and paid or set apart for payment on the Convertible Preferred Stock
dividends for all dividend payment periods of the Convertible Preferred Stock ending on or before
the dividend payment date of such parity stock, ratably in proportion to the respective amounts of
dividends accumulated and unpaid through such dividend period on the Convertible Preferred Stock
and accumulated and unpaid on such parity stock through the dividend payment period on such parity
stock next preceding such dividend payment date. In the event that full cumulative dividends on the
Convertible Preferred Stock have not been declared and paid or set apart for payment when due, the
Corporation shall not declare or pay or set apart for payment any dividends or make any other
distributions on, or make any payment on account of the purchase, redemption or other retirement of
any other class of stock or series thereof of the Corporation ranking, as to dividends or as to
distributions in the event of a liquidation, dissolution or winding-up of the Corporation, junior
to the Convertible Preferred Stock until full cumulative dividends on the Convertible Preferred
Stock shall have been paid or declared and set apart for payment; provided, however, that the
foregoing shall not apply to (i) any dividend payable solely in any shares of any stock of the
Corporation ranking, as to dividends and as to distributions in the event of a liquidation,
dissolution or winding-up of the Corporation, junior to the Convertible Preferred Stock or (ii) the
acquisition of shares of any stock of the Corporation ranking as to dividends or as to
distributions in the event of a liquidation, dissolution or winding-up of the Corporation, junior
to the Convertible Preferred Stock in exchange solely for shares of any other stock of the
Corporation ranking, as to dividends and as to distributions in the event of a liquidation,
dissolution or winding-up of the Corporation, junior to the Convertible Preferred Stock.
Section 3. Voting Rights.
The holders of shares of Convertible Preferred Stock shall have the following voting rights:
(A) The holders of Convertible Preferred Stock shall be entitled to vote on all matters
submitted to a vote of the shareholders of the Corporation, voting together with the holders of
Common Stock as one class. The holder of each share of Convertible Preferred Stock shall be
entitled to a number of votes equal to the number of shares of Common Stock into which such share
of Convertible Preferred Stock could be converted on the record date for determining the
shareholders entitled to vote, rounded to the nearest one-tenth of a vote; it being understood that
whenever the “conversion price” (as defined in Section 5 hereof) is adjusted as provided in Section
9 hereof, the voting rights of the Convertible Preferred Stock shall also be similarly adjusted.
(B) Except as otherwise required by law or set forth herein, holders of Convertible Preferred
Stock shall have no special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth herein) for the taking
of any corporate action; provided, however, that the vote of at least two-thirds of the outstanding
shares of Convertible Preferred Stock, voting separately as a series, shall be necessary to adopt
any alteration, amendment or repeal of any provision of the Corporation’s articles of
incorporation, as amended from time to time (including any such alteration, amendment or repeal
effected by any merger or consolidation in which the Corporation is the surviving or resulting
corporation), if such amendment, alteration or repeal would alter or change the powers,
preferences, or special rights of the shares of Convertible Preferred Stock so as to affect them
adversely.
Section 4. Liquidation, Dissolution or Winding Up.
(A) Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of Convertible Preferred Stock shall be entitled to receive out of assets
of the Corporation which remain after satisfaction in full of all valid claims of creditors of the
Corporation and which are available for payment to shareholders, and subject to the rights of the
holders of any the Corporation’s stock ranking senior to or on a parity with the Convertible
Preferred Stock in respect of distribution upon liquidation, dissolution or winding up of the
Corporation, before any amount shall be paid or distributed among the holders of Common Stock or
any other shares ranking junior to the Convertible Preferred Stock in respect of distributions upon
liquidation, dissolution or winding up of the Corporation, liquidating distributions in the amount
of $78.00 per share (the “Liquidation Preference”), plus an amount equal to all accrued and unpaid
dividends thereon to the date fixed for distribution, and no more. If upon any liquidation,
dissolution or winding up of the Corporation, the amounts payable with respect to the Convertible
Preferred Stock and any other stock of the Corporation ranking as to any such distribution on a
parity with the Convertible Preferred Stock are not paid in full, the holders of the Convertible
Preferred Stock and such other stock shall share ratably in any distribution of assets in
proportion to the full respective preferential amounts to which they are entitled. After payment of
the full amount to which they are entitled as provided by the foregoing provisions of this Section
4(A), the holders of shares of Convertible Preferred Stock shall not be entitled to any further
right or claim to any of the remaining assets of the Corporation.
(B) Neither the merger or consolidation of the Corporation with or into any other corporation,
nor the merger or consolidation of any other corporation with or into the Corporation, nor the
sale, lease, exchange or other transfer of all or any portion of the assets of the Corporation,
shall be deemed to be a dissolution, liquidation or winding up of the affairs of the Corporation
for purposes of this Section 4, but the holders of Convertible Preferred Stock shall nevertheless
be entitled in the event of any such merger or consolidation to the rights provided by Section 8
hereof.
(C) Written notice of any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, stating the payment date or dates when, and the place or places where, the amounts
distributable to holders of Convertible Preferred Stock in such circumstances shall be payable,
shall be given by first-class mail, postage prepaid, mailed not less than twenty (20) days prior to
any payment date stated therein, to the holders of Convertible Preferred Stock, at the address
shown on the books of the Corporation or any transfer agent for the Convertible Preferred Stock.
Section 5. Conversion into Common Stock.
(A) A holder of shares of Convertible Preferred Stock shall be entitled, at any time prior to
the close of business on the date fixed for redemption of such shares pursuant to Sections 6, 7 and
8 hereof, to cause any or all of such shares to be converted into shares of Common Stock, initially
at a conversion rate equal to the ratio of:
| |
(i) |
|
$78.00; to |
| |
| |
(ii) |
|
the amount which initially shall be $15.7180, and which shall be
adjusted as hereinafter provided (and, as so adjusted, rounded to the
nearest ten-thousandth, is hereinafter sometimes referred to as the
“conversion price”). |
(B) Any holder of shares of Convertible Preferred Stock desiring to convert such shares into
shares of Common Stock shall surrender the certificate or certificates representing the shares of
Convertible Preferred Stock being converted, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating thereto), at the Corporation’s
principal executive office or the offices of the transfer agent for the Convertible Preferred Stock
or such office or offices in the continental United States of an agent for conversion as may from
time to time be designated by notice to the holders of the Convertible Preferred Stock by the
Corporation or the transfer agent for the Convertible Preferred Stock, accompanied by written
notice of conversion. Such notice of conversion shall specify (i) the number of shares of
Convertible Preferred Stock to be converted and the name or names in which such holder wishes the
certificate or certificates for Common Stock and for any shares of Convertible Preferred Stock not
to be so converted to be issued and (ii) the address to which such holder wishes delivery to be
made of such new certificates to be issued upon such conversion.
(C) Upon surrender of a certificate representing a share or shares of Convertible Preferred
Stock for conversion, the Corporation shall issue and send by hand delivery (with receipt to be
acknowledged) or by first class mail, postage prepaid, to the holder thereof or to such holder’s
designee, at the address designated by such holder, a certificate or certificates for the number of
shares of Common Stock to which such holder shall be entitled upon conversion. In the event that
there shall have been surrendered a certificate or certificates representing shares of Convertible
Preferred Stock, only part of which are to be converted, the Corporation shall issue and deliver to
such holder or such holder’s designee a new certificate or certificates representing the number of
shares of Convertible Preferred Stock which shall not have been converted.
(D) The issuance by the Corporation of shares of Common Stock upon a conversion of shares of
Convertible Preferred Stock into shares of Common Stock made at the option of the holder thereof
shall be effective as of the earlier of (i) the delivery to such holder or such holder’s designee
of the certificates representing the shares of Common Stock issued upon conversion thereof or (ii)
the commencement of business on the second business day after the surrender of the certificate or
certificates for the shares of Convertible Preferred Stock to be converted, duly assigned or
endorsed for transfer to the Corporation (or accompanied by duly executed stock powers relating
thereto) as provided by this resolution. On and after the effective day of conversion, the person
or persons entitled to receive the Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock, but no allowance or
adjustment shall be made in respect of dividends payable to holders of Common Stock in respect of
any period prior to such effective date. The Corporation shall not be obligated to pay any
dividends which shall have been declared and shall be payable
to holders of shares of Convertible Preferred Stock on a dividend payment date if such dividend
payment date for such dividend is subsequent to the effective date of conversion of such shares.
(E) The Corporation shall not be obligated to deliver to holders of Convertible Preferred
Stock any fractional share of a share of Common Stock issuable upon any conversion of such shares
of Convertible Preferred Stock, but in lieu thereof may make a cash payment in respect thereof in
any manner permitted by law.
(F) The Corporation shall at all times reserve and keep available out of its authorized and
unissued Common Stock, solely for issuance upon the conversion of shares of Convertible Preferred
Stock as herein provided, free from any preemptive rights, such number of shares of Common Stock as
shall from time to time be issuable upon the conversion of all the shares of Convertible Preferred
Stock then outstanding. Nothing contained herein shall preclude the Corporation from issuing shares
of Common Stock held in its treasury upon the conversion of shares of Convertible Preferred Stock
into Common Stock pursuant to the terms hereof. The Corporation shall prepare and shall use its
best efforts to obtain and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all requirements as to registration
or qualification of the Common Stock, in order to enable the Corporation lawfully to issue and
deliver to each holder of record of Convertible Preferred Stock such number of shares of its Common
Stock as shall from time to time be sufficient to effect the conversion of all shares of
Convertible Preferred Stock then outstanding and convertible into shares of Common Stock.
Section 6. Redemption At the Corporation’s Option.
(A) The Convertible Preferred Stock shall be redeemable, in whole or in part, at any time
after the date of issuance, to the extent permitted by paragraphs 6(D) and 8(C), at the Liquidation
Preference, plus, in each case, an amount equal to all accrued and unpaid dividends thereon to the
date fixed for redemption. Payment of the redemption price shall be made by the Corporation in cash
or shares of Common Stock or a combination thereof, as permitted by paragraph (E) of this Section
6. From and after the date fixed for redemption, dividends on shares of Convertible Preferred Stock
called for redemption will cease to accrue, such shares will no longer be deemed to be outstanding
and all rights in respect of such shares of the Corporation shall cease, except the right to
receive the redemption price. If less than all of the outstanding shares of Convertible Preferred
Stock are to be redeemed, the Corporation shall either redeem a portion of the shares of each
holder determined pro rata based on the number of shares held by each holder or shall select the
shares to be redeemed by lot, as may be determined by the board of directors of the Corporation.
(B) Unless otherwise required by law, notice of any redemption effected pursuant to Sections 6
or 7 hereof will be sent to the holders of Convertible Preferred Stock at the address shown on the
Corporation’s books or any transfer agent for the Convertible Preferred Stock by first class mail,
postage prepaid, mailed not less than thirty (30) days nor more than sixty (60) days prior to the
redemption date. Each such notice shall state: (i) the redemption date; (ii) the total number of
shares of the Convertible Preferred Stock to be redeemed and, if fewer than all the shares held by
such holder are to be redeemed, the number of such shares to be redeemed from such holder; (iii)
the redemption price; (iv) the place or places where certificates for such shares are to be
surrendered for conversion or payment of the redemption price; (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption date; and (vi) the
conversion rights of the shares to be redeemed, the period within which conversion rights may be
exercised, and the conversion price and number of shares of Common Stock issuable upon conversion
of a share of Convertible Preferred Stock at the time. Upon surrender of the certificate for any
shares so called for redemption and not previously converted (properly endorsed or assigned for
transfer, if the Corporation’s board of directors shall so require and the notice shall so state),
such shares shall be redeemed by the Corporation at the date fixed for redemption and at the
redemption price set forth in paragraph (A) of this Section 6.
(C) In the event of a change in the federal tax law of the United States of America which has
the effect of precluding the Corporation from claiming any of the tax deductions for dividends paid
on the Convertible Preferred Stock when such dividends are used as provided under Section 404(k)(2)
of the Internal Revenue Code, as in effect on the date shares of Convertible Preferred Stock are
initially issued, or if the Plan is determined by the Internal Revenue Service not to be initially
qualified within the meaning of Sections 401(a) and 4975(e)(7) of the Internal Revenue Code, the
Corporation may, in its sole discretion, and notwithstanding anything to the contrary in paragraph
(A) of this Section 6, within 60 days of such event, elect to redeem any or all of such shares for
the greater of (A) the fair market value of the shares of Convertible Preferred Stock to be so
redeemed or (B) the amount payable in respect of the shares upon liquidation of the Corporation
pursuant to Section 4 hereof.
(D) In the event that the Plan is terminated in accordance with its terms, and notwithstanding
anything to the contrary in paragraph (A) of this Section 6, the Corporation shall, as soon
thereafter as practicable, call for redemption all then outstanding shares of Convertible Preferred
Stock for an amount equal to the greater of the fair market value or the redemption price, as
calculated pursuant to Section 6(A). The Corporation shall give 30 business days’ notice to all
record holders of Convertible Preferred Stock prior to any such termination, provided, however,
that the failure to give any such notice shall not affect the validity of such corporate action.
(E) The Corporation, at its option, may make payment of the redemption price required upon
redemption of shares of Convertible Preferred Stock in cash or in shares of Common Stock or in a
combination of such shares and cash, any such shares of Common Stock to be valued for such purposes
at their fair market value (as defined in paragraph (G) of Section 9 hereof).
Section 7. Other Redemption Rights.
Shares of Convertible Preferred Stock shall be redeemed by the Corporation for cash or, if the
Corporation so elects, in shares of Common Stock, or a combination of such shares and cash, any
such shares of Common Stock to be valued for such purpose as provided by paragraph (E) of Section
6, at the redemption price as set forth in the following sentence, at the option of the holder at
any time and from time to time upon notice to the Corporation given not less than five (5) business
days prior to the date fixed by the holder in such notice for such redemption, upon certification
by such holder to the Corporation of the following events: (i) when and to the extent necessary for
such holder to provide for distributions required to be made to participants under, or to satisfy
an investment election provided to participants in accordance with, the Plan, or any successor
plan; (ii) when and to the extent necessary for such holder to make any payments of principal,
interest or premium due and payable (whether as scheduled or upon acceleration)
under (a) the Loan Agreement between the Trustee and the lenders, (b) any refinancing of or
substitution for the foregoing; or (c) any other indebtedness incurred by the holder for the
benefit of the Plan; or (iii) in the event that the Plan is not initially determined by the
Internal Revenue Service to be qualified within the meaning of Sections 401(a) and 4975(e) (7) of
the Internal Revenue Code. The redemption price for shares of Convertible Preferred Stock to be
redeemed under this Section 7 shall be equal to: (I) in the case of clause (i) next above, the fair
market value of the shares of Convertible Preferred Stock to be so redeemed; (II) in the case of
clause (ii) next above, the greater of (A) the fair market value of the shares of Convertible
Preferred Stock to be so redeemed or (B) the redemption price set forth in paragraph (A) of Section
6 hereof; or (III) in the case of clause (iii) next above, the greater of (A) the fair market value
of the shares of Convertible Preferred Stock to be so redeemed or (B) the amount payable in respect
of the shares upon liquidation of the Corporation pursuant to Section 4 hereof.
Section 8. Consolidation, Merger, etc.
(A) In the event that the Corporation shall consummate any consolidation or merger or similar
business combination, pursuant to which the outstanding shares of Common Stock are by operation of
law exchanged solely for or changed, reclassified or converted solely into stock that constitutes
“employer securities” with respect to a holder of Convertible Preferred Stock within the meaning of
Section 409(1) of the Internal Revenue Code, and “qualifying employer securities” within the
meaning of Section 407(d)(5) of the Employee Retirement Income Security Act of 1974, as amended, or
any successor provisions of law (“Qualifying Securities”), and, if applicable, for a cash payment
in lieu of fractional shares, if any, the shares of Convertible Preferred Stock of such holder
shall, in connection with such consolidation, merger or similar business combination, be converted
into and exchanged for preferred stock of the issuer of such Qualifying Securities, having in
respect of such issuer, insofar as possible, the same powers, preferences and relative,
participating, optional or other special rights (including the redemption rights provided by
Sections 6, 7 and 8 hereof), and the qualifications, limitations or restrictions thereon, that the
Convertible Preferred Stock had immediately prior to such transaction, except that after such
transaction each share of the Convertible Preferred Stock shall be convertible, otherwise on the
terms and conditions provided by Section 5 hereof, into the number and kind of Qualifying
Securities so receivable by a holder of the number of shares of Common Stock into which such shares
of Convertible Preferred Stock could have been converted immediately prior to such transaction;
provided, however, that if by virtue of the structure of such transaction, a holder of Common Stock
is required to make an election with respect to the nature and kind of consideration to be received
in such transaction, which election cannot practicably be made by the holders of the Convertible
Preferred Stock, then the shares of Convertible Preferred Stock shall, by virtue of such
transaction and on the same terms as apply to the holders of Common Stock, be converted into or
exchanged for the aggregate amount of stock, securities, cash or other property (payable in kind)
receivable by a holder of the number of shares of Common Stock into which such shares of
Convertible Preferred Stock could have been converted immediately prior to such transaction if such
holder of Common Stock failed to exercise any rights of election to receive any kind or amount of
stock, securities, cash or other property (other than such Qualifying Securities and a cash
payment, if applicable, in lieu of fractional shares) receivable upon such transaction (provided
that, if the kind or amount of Qualifying Securities receivable upon such transaction is not the
same for each non-electing share, then the kind and amount so receivable upon such transaction for
each non-electing share shall be the kind and amount so receivable per share by the plurality of
the non-electing shares). The rights of the Convertible
Preferred Stock as preferred stock of such issuer of Qualifying Securities shall successively be
subject to adjustments pursuant to Section 9 hereof after any such transaction as nearly equivalent
as practicable to the adjustment provided for by such section prior to such transaction. The
Corporation shall not consummate any such merger, consolidation or similar transaction unless the
issuer of Qualifying Securities shall have agreed to recognize and honor the rights of the holders
of shares of Convertible Preferred Stock as set forth in this paragraph (A).
(B) In the event that the Corporation shall consummate any consolidation or merger or similar
business combination, pursuant to which the outstanding shares of Common Stock are by operation of
law exchanged for or changed, reclassified or converted into other stock or securities or cash or
any other property, or any combination thereof, other than any such consideration which is
constituted solely of Qualifying Securities (as referred to in paragraph (A) of this Section 8) and
cash payments, if applicable, in lieu of fractional shares, outstanding shares of Convertible
Preferred Stock shall, without any action on the part of the Corporation or any holder thereof (but
subject to paragraph (C) of this Section 8), be deemed to have been automatically converted
immediately prior to the consummation of such merger, consolidation or similar transaction into the
number of shares of Common Stock into which such shares of Convertible Preferred Stock could have
been converted at such time so that each share of Convertible Preferred Stock shall, by virtue of
such transaction and on the same terms as apply to the holders of Common Stock, be converted into
or exchanged for the aggregate amount of stock, securities, cash or other property (payable in like
kind) receivable by a holder of the number of shares of Common Stock into which such shares of
Convertible Preferred Stock could have been converted immediately prior to such transaction;
provided, however, that if by virtue of the structure of such transaction, a holder of Common Stock
is required to make an election with respect to the nature and kind of consideration to be received
in such transaction, which election cannot practicably be made by the holders of the Convertible
Preferred Stock, then the shares of Convertible Preferred Stock shall, by virtue of such
transaction and on the same terms as apply to the holders of Common Stock, be converted into or
exchanged for the aggregate amount of stock, securities, cash or other property (payable in kind)
receivable by a holder of the number of shares of Common Stock into which such shares of
Convertible Preferred Stock could have been converted immediately prior to such transaction if such
holder of Common Stock failed to exercise any rights of election as to the kind or amount of stock,
securities, cash or other property receivable upon such transaction (provided that, if the kind or
amount of stock, securities, cash or other property receivable upon such transaction is not the
same for each non-electing share, then the kind and amount of stock, securities, cash or other
property receivable upon such transaction for each non-electing share shall be the kind and amount
so receivable per share by a plurality of the non-electing shares).
(C) In the event the Corporation shall enter into any agreement providing for any
consolidation or merger or similar business combination described in paragraph (B) of this Section
8, then the Corporation shall as soon as practicable thereafter (and in any event at least 10
business days before the closing of such transaction) give notice of such agreement and the
material terms thereof to each holder of Convertible Preferred Stock and each such holder shall
have the right to elect, by written notice to the Corporation, to receive, upon consummation of
such transaction (if and when such transaction is consummated), from the Corporation or the
successor of the Corporation, in redemption and retirement of such Convertible Preferred Stock, a
cash payment equal to the higher of the redemption price as determined in accordance with paragraph
6(A) or the fair market value of shares of Convertible Preferred Stock. No such notice
of redemption shall be effective unless given to the Corporation prior to the close of business on
the second business day prior to the closing of such transaction, unless the Corporation or its
successor shall waive such prior notice, but any notice of redemption so given prior to such time
may be withdrawn by notice of withdrawal given to the Corporation prior to the close of business on
the second business day prior to the closing of such transaction.
Section 9. Anti-dilution Adjustments.
(A) In the event the Corporation shall, at any time or from time to time while any of the
shares of the Convertible Preferred Stock are outstanding, (i) pay a dividend or make a
distribution in respect of the Common Stock in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, in each case whether by reclassification of shares, recapitalization of
the Corporation (including a recapitalization effected by a merger or consolidation to which
Section B hereof does not apply) or otherwise, the conversion price in effect immediately prior to
such action shall be adjusted by multiplying such conversion price by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately before such event, and the
denominator of which is the number of shares of Common Stock outstanding immediately after such
event. An adjustment made pursuant to this paragraph 9(A) shall be given effect, upon payment of
such a dividend or distribution, as of the record date for the determination of shareholders
entitled to receive such dividend or distribution (on a retroactive basis) and in the case of a
subdivision or combination shall become effective immediately as of the effective date thereof.
(B) In the event that the Corporation shall, at any time or from time to time while any of the
shares of Convertible Preferred Stock are outstanding, issue to holders of shares of Common Stock
as a dividend or distribution, including by way of a reclassification of shares or a
recapitalization of the Corporation, any right or warrant to purchase shares of Common Stock (but
not including as such a right or warrant any security convertible into or exchangeable for shares
of Common Stock) at a purchase price per share less than the fair market value (as hereinafter
defined) of a share of Common Stock on the date of issuance of such right or warrant, then, subject
to the provisions of paragraphs (E) and (F) of this Section 9, the conversion price shall be
adjusted by multiplying such conversion price by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately before such issuance of rights or warrants
plus the number of shares of Common Stock which could be purchased at the fair market value of a
share of Common Stock at the time of such issuance for the maximum aggregate consideration payable
upon exercise in full of all such rights or warrants, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately before such issuance of rights or warrants
plus the maximum number of shares of Common Stock that could be acquired upon exercise in full of
all such rights and warrants.
(C) In the event the Corporation shall, at any time or from time to time while any of the
shares of Convertible Preferred Stock are outstanding, issue, sell or exchange shares of Common
Stock (other than pursuant to (i) any right or warrant to purchase or acquire shares of Common
Stock for which adjustment has been made pursuant to paragraph (B) of this Section 9 (including as
such a right or warrant any security convertible into or exchangeable for shares of Common Stock)
and (ii) any employee or director incentive or benefit plan or arrangement, including any
employment, severance or consulting agreement, of the Corporation or any subsidiary of the
Corporation heretofore or hereafter adopted) for a consideration having a fair market value, on the
date of such issuance, sale or exchange, less than the fair market value of such shares on the date
of issuance, sale or exchange, then, subject to the provisions of paragraphs (E) and (F) of this
Section 9, the conversion price shall be adjusted by multiplying such conversion price by a
fraction, the numerator of which shall be the sum of (i) the fair market value of all the shares of
Common Stock outstanding on the day immediately preceding the first public announcement of such
issuance, sale or exchange plus (ii) the fair market value of the consideration received by the
Corporation in respect of such issuance, sale or exchange of shares of Common Stock, and the
denominator of which shall be the product of (a) the fair market value of a share of Common Stock
on the day immediately preceding the first public announcement of such issuance, sale or exchange
multiplied by (b) the sum of the number of shares of Common Stock outstanding on such day plus the
number of shares of Common Stock so issued, sold or exchanged by the Corporation. In the event the
Corporation shall, at any time or from time to time while any shares of Convertible Preferred Stock
are outstanding, issue, sell or exchange any right or warrant to purchase or acquire shares of
Common Stock (including as such a right or warrant any security convertible into or exchangeable
for shares of Common Stock), other than any such issuance to holders of shares of Common Stock as a
dividend or distribution (including by way of a reclassification of shares or a recapitalization of
the Corporation) and other than pursuant to any employee or director incentive or benefit plan or
arrangement (including any employment, severance or consulting agreement) of the Corporation or any
subsidiary of the Corporation heretofore or hereafter adopted, for a consideration having a fair
market value, on the date of such issuance, sale or exchange, less than the non-dilutive amount (as
hereinafter defined), then, subject to the provisions of paragraphs (E) and (F) of this Section 9,
the conversion price shall be adjusted by multiplying such conversion price by a fraction the
numerator of which shall be the sum of (I) the fair market value of all the shares of Common Stock
outstanding on the day immediately preceding the first public announcement of such issuance, sale
or exchange plus (II) the fair market value of the consideration received by the Corporation in
respect of such issuance, sale or exchange of such right or warrant plus (III) the fair market
value at the time of such issuance of the consideration which the Corporation would receive upon
exercise in full of all such rights or warrants, and the denominator of which shall be the product
of (i) the fair market value of a share of Common Stock on the day immediately preceding the first
public announcement of such issuance, sale or exchange multiplied by (ii) the sum of the number of
shares of Common Stock outstanding on such day plus the maximum number of shares of Common Stock
which could be acquired pursuant to such right or warrant at the time of the issuance, sale or
exchange of such right or warrant (assuming shares of Common Stock could be acquired pursuant to
such right or warrant at such time).
(D) In the event the Corporation shall, at any time or from time to time while any of the
shares of Convertible Preferred Stock are outstanding, make an extraordinary distribution (as
hereinafter defined) in respect of the Common Stock, whether by dividend, distribution,
reclassification of shares or recapitalization of the Corporation (including a recapitalization or
reclassification effected by a merger or consolidation to which Section 8 hereof does not apply) or
effect a pro rata repurchase (as hereinafter defined) of Common Stock, the conversion price in
effect immediately prior to such extraordinary distribution or pro rata repurchase shall, subject
to paragraphs (E) and (F) of this Section 9, be adjusted by multiplying such conversion price by
the fraction the numerator of which is (i) the fair market value of all the shares of Common Stock
outstanding on the day before the ex-dividend date with respect to an extraordinary distribution
which is paid in cash and on the distribution date with respect to an extraordinary distribution
which is paid other than in cash, or on the applicable expiration date (including all extensions
thereof) of any tender offer which is a pro rata repurchase, or on the date of purchase with
respect to any pro rata repurchase which is not a tender offer, as the case may be, minus (ii) the
fair market value of the extraordinary distribution or the aggregate purchase price of the pro rata
repurchase, as the case may be, and the denominator of which shall be the product of (a) the number
of shares of Common Stock outstanding immediately before such extraordinary distribution or pro
rata repurchase minus, in the case of a pro rata repurchase, the number of shares of Common Stock
repurchased by the Corporation multiplied by (b) the fair market value of a share of Common Stock
on the day before the ex-dividend date with respect to an extraordinary distribution which is paid
in cash and on the distribution date with respect to an extraordinary distribution which is paid
other than in cash, or on the applicable expiration date (including all extensions thereof) of any
tender offer which is a pro rata repurchase or on the date of purchase with respect to any pro rata
repurchase which is not a tender offer, as the case may be. The Corporation shall send each holder
of Convertible Preferred Stock (i) notice of its intent to make any dividend or distribution and
(ii) notice of any offer by the Corporation to make a pro rata repurchase, in each case at the same
time as, or as soon as practicable after, such offer is first communicated (including by
announcement of a record date in accordance with the rules of any stock exchange on which the
Common Stock is listed or admitted to trading) to holders of Common Stock. Such notice shall
indicate the intended record date and the amount and nature of such dividend or distribution, or
the number of shares subject to such offer for a pro rata repurchase and the purchase price payable
by the Corporation pursuant to such offer, as well as the conversion price and the number of shares
of Common Stock into which a share of Convertible Preferred Stock may be converted at such time.
(E) Notwithstanding any other provisions of this Section 9, the Corporation shall not be
required to make any adjustment to the conversion price unless such adjustment would require an
increase or decrease of at least one percent (1%) in the conversion price. Any lesser adjustment
shall be carried forward and shall be made no later than the time of, and together with, the next
subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least one percent (1%) in the conversion price.
(F) If the Corporation shall make any dividend or distribution on the Common Stock or issue
any Common Stock, other capital stock or other security of the Corporation or any rights or
warrants to purchase or acquire any such security, which transaction does not result in an
adjustment to the conversion price pursuant to the foregoing provisions of this Section 9, the
Corporation’s board of directors shall consider whether such action is of such a nature that an
adjustment to the conversion price should equitably be made in respect of such transaction. If in
such case the Corporation’s board of directors determines that an adjustment to the conversion
price should be made, an adjustment shall be made effective as of such date, as determined by the
Corporation’s board of directors (which adjustment shall in no event adversely affect the powers,
preferences, or special rights of this Convertible Preferred Stock as set forth herein). The
determination of the Corporation’s board of directors as to whether an adjustment to the conversion
price should be made pursuant to the foregoing provisions of this paragraph 9(F), and, if so, as to
what adjustment should be made and when, shall be final and binding on the Corporation and all
shareholders of the Corporation. The Corporation shall be entitled to make such additional
adjustments in the conversion price, in addition to those required by the foregoing provisions of
this Section 9, as shall be necessary in order that any dividend or distribution in shares of
capital stock of the Corporation, subdivision, reclassification or
combination of shares of stock of the Corporation or any recapitalization of the Corporation shall
not be taxable to the holders of the Common Stock.
(G) For purposes of this description of the Convertible Preferred Stock, the following
definitions shall apply:
“business day” shall mean each day that is not a Saturday, Sunday or a day on which state or
federally chartered banking institutions in Chicago, Illinois or New York, New York are not
required to be open.
“current market price” of publicly traded shares of Common Stock or any other class of capital
stock or other security of the Corporation or any other issuer for any day shall mean the last
reported sales price, regular way, or, in the event that no sale takes place on such day, the
average of the reported closing bid and asked prices, regular way, in either case as reported on
the New York Stock Exchange Composite Tape or, if such security is not listed or admitted to
trading on the New York Stock Exchange, on the principal national securities exchange on which such
security is listed or admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the NASDAQ National Market System or, if such security is not quoted on
such National Market System, the average of the closing bid and asked prices on each such day in
the over-the-counter market as reported by NASDAQ or, if bid and asked prices for such security on
each such day shall not have been reported through NASDAQ, the average of the bid and asked prices
for such day as furnished by any New York Stock Exchange member firm regularly making a market in
such security selected for such purpose by the Corporation’s board of directors or a committee
thereof, in each case, on each trading day during the adjustment period. “adjustment period” shall
mean the period of five (5) consecutive trading days preceding, and including, the date as of which
the fair market value of a security is to be determined.
“extraordinary distribution” shall mean any dividend or other distribution to holders of
Common Stock (effected while any of the shares of Convertible Preferred Stock are outstanding) (i)
of cash, where the aggregate amount of such cash dividend or distribution together with the amount
of all cash dividends and distributions made during the preceding period of 12 months, when
combined with the aggregate amount of all pro rata repurchases (for this purpose, including only
that portion of the aggregate purchase price of such “pro rata repurchase” (as hereinafter defined)
which is in excess of the fair market value of the Common Stock repurchased as determined on the
applicable expiration date (including all extensions thereof) of any tender offer or exchange offer
which is a Pro Rata Repurchase, or the date of purchase with respect to any other pro rata
repurchase which is not a tender offer or exchange offer made during such period), exceeds 12 1/2%
of the aggregate fair market value of all shares of Common Stock outstanding on the day before the
ex-dividend date with respect to such extraordinary distribution which is paid in cash and on the
distribution date with respect to an extraordinary distribution which is paid other than in cash,
and/or (ii) of any shares of the Corporation’s capital stock (other than shares of Common Stock),
other securities of the Corporation (other than the securities of the type referred to in paragraph
(B) or (C) of this Section 9), evidences of indebtedness of the Corporation or any other person or
any other property (including shares of any subsidiary of the Corporation) or any combination
thereof. The fair market value of an extraordinary distribution for purposes of paragraph (D) of
this Section 9 shall be equal to the sum of the fair market value of such extraordinary
distribution plus the
amount of any cash dividends which are not extraordinary distributions made during such 12-month
period and not previously included in the calculation of an adjustment pursuant to paragraph (D) of
this Section 9.
“fair market value” shall mean the amount of cash received or, as to shares of Common Stock or
any other class of capital stock or securities of the Corporation or any other issuer which are
publicly traded, the average of the current market prices of such shares or securities for each day
of the adjustment period. The “fair market value” of any security which is not publicly traded or
of any other property shall mean the fair value thereof as determined by an independent commercial
or investment banking or appraisal firm experienced in the valuation of such securities or property
selected in good faith by the Corporation’s board of directors or a committee thereof, or, if no
such commercial or investment banking or appraisal firm is in the good faith judgment of the board
of directors or such committee available to make such determination, as determined in good faith by
the Corporation’s board of directors or such committee.
“non-dilutive amount” in respect of an issuance, sale or exchange by the Corporation of any
right or warrant to purchase or acquire shares of Common Stock (including any security convertible
into or exchangeable for shares of Common Stock) shall mean the remainder of (i) the product of the
fair market value of a share of Common Stock on the day preceding the first public announcement of
such issuance, sale or exchange multiplied by the maximum number of shares of Common Stock which
could be acquired on such date upon the exercise in full of such rights and warrants (including
upon the conversion or exchange of all such convertible or exchangeable securities), whether or not
exercisable (or convertible or exchangeable) at such date, minus (ii) the aggregate amount payable
pursuant to such right or warrant to purchase or acquire such maximum number of shares of Common
Stock; provided, however, that in no event shall the non-dilutive amount be less than zero. For
purposes of the foregoing sentence, in the case of a security convertible into or exchangeable for
shares of Common Stock, the amount payable pursuant to a right or warrant to purchase or acquire
shares of Common Stock shall be the fair market value of such security on the date of the issuance,
sale or exchange of such security by the Corporation.
“pro rata repurchase” shall mean any purchase of shares of Common Stock by the Corporation or
any subsidiary thereof, whether for cash, shares of capital stock of the Corporation, other
securities of the Corporation, evidences of indebtedness of the Corporation or any other person or
any other property (including shares of a subsidiary of the Corporation), or any combination
thereof, effected while any of the shares of Convertible Preferred Stock are outstanding, pursuant
to any tender offer or exchange offer subject to Section 13(e) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), or any successor provision of law, or pursuant to any other
offer available to substantially all holders of Common Stock; provided, however, that no purchase
of shares by the Corporation, or any subsidiary thereof made in open market transactions shall be
deemed a pro rata repurchase. For purposes of this paragraph 9(G), shares shall be deemed to have
been purchased by the Corporation or any subsidiary thereof “in open market transactions” if they
have been purchased substantially in accordance with the requirements of Rule l0b-18 as such rule
is in effect under the Exchange Act on the date shares of Convertible Preferred Stock are initially
issued by the Corporation, or on such other terms and conditions as the Corporation’s board of
directors or a committee thereof
shall have determined are reasonably designed to prevent such purchases from having a material
effect on the trading market for the Common Stock.
(H) Whenever an adjustment to the conversion price and the related voting rights of the
Convertible Preferred Stock is required, the Corporation shall forthwith place on file with the
transfer agent(s) for the Common Stock and for the Convertible Preferred Stock, if any, and with
the Secretary of the Corporation, a statement signed by two officers of the Corporation stating the
adjusted conversion price determined as provided herein, and the resulting conversion ratio, and
the voting rights (as appropriately adjusted), of the Convertible Preferred Stock. Such statement
shall set forth in reasonable detail such facts as shall be necessary to show the reason for and
the manner of computing such adjustment, including any determination of fair market value involved
in such computation. Promptly after each adjustment to the conversion price and the related voting
rights of the Convertible Preferred Stock, the Corporation shall mail a notice thereof and of the
then prevailing conversion rate to each holder of shares of the Convertible Preferred Stock.
Section 10. Ranking; Retirement of Shares.
(A) The Convertible Preferred Stock shall rank senior to the Common Stock as to the payment of
dividends and the distribution of assets on liquidation, dissolution and winding up of the
Corporation, and, unless otherwise provided in the articles of incorporation of the Corporation, as
the same may be amended, the Convertible Preferred Stock shall rank pari passu with
all future series of the Corporation’s preferred stock as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up.
(B) Any shares of Convertible Preferred Stock acquired by the Corporation by reason of the
conversion or redemption of such shares, or otherwise so acquired, shall be restored to the status
of authorized but unissued shares of preferred stock, with no par value per share, of the
Corporation, undesignated as to series, and may thereafter be reissued as part of a new or existing
series of such preferred stock as permitted by law.
Section 11. Miscellaneous.
(A) All notices referred to herein shall be in writing, and all notices hereunder shall be
deemed to have been given upon the earlier of receipt thereof or three (3) business days after the
mailing thereof if sent by registered mail (unless first-class mail shall be specifically permitted
for such notice elsewhere herein) with postage prepaid, addressed: (i) if to the Corporation, to
its office at 700 Anderson Hill Road, Purchase, New York, 10577-1441 (Attention: Secretary), or to
the transfer agent for the Convertible Preferred Stock, or other agent of the Corporation
designated as permitted herein or (ii) if to any holder of the Convertible Preferred Stock or
Common Stock, as the case may be, to such holder at the address of such holder as listed in the
stock record books of the Corporation (which may include the records of any transfer agent for the
Convertible Preferred Stock or Common Stock, as the case may be) or (iii) to such other address as
the Corporation or any such holder, as the case may be, shall have designated by notice similarly
given.
(B) The Corporation shall give 15 business days’ notice to all record holders of Convertible
Preferred Stock prior to the record date to be established with respect to any extraordinary event,
setting forth the material provisions relating to such extraordinary event, provided, however, that
the failure to give any such notice shall not affect the validity of any such corporate action.
“extraordinary event” as used herein means (i) any non-cash dividend payable with respect to
the Common Stock, (ii); any cash dividend in an amount exceeding 10% of the conversion price on the
date the dividend is declared, (iii) any recapitalization, reclassification, consolidation, merger
or similar event as a result of which shares of Common Stock are converted into or exchanged for
any other securities or property, (iv) any sale of all or substantially all of the assets of the
Corporation, or (v) the adoption of any repurchase program under which the Corporation may purchase
more than 15% of the Corporation’s then outstanding Common Stock.
(C) The term “Common Stock” as used in this description of the Convertible Preferred Stock
means the Corporation’s Common Stock, par value one and two-thirds cents (12/3 cents)
per share, or any other class of stock resulting from successive changes or reclassifications of
such Common Stock consisting solely of changes in par value, or from par value to no par value, or
from no par value to par value. In the event that, at any time as a result of an adjustment made
pursuant to Section 9 hereof, the holder of any share of the Convertible Preferred Stock upon
thereafter surrendering such shares for conversion, shall become entitled to receive any shares or
other securities of the Corporation other than shares of Common Stock, the conversion price in
respect of such other shares or securities so receivable upon conversion of shares of Convertible
Preferred Stock shall thereafter be adjusted, and shall be subject to further adjustment from time
to time, in a manner and on terms as nearly equivalent as practicable to the provisions with
respect to Common Stock contained in Section 9 hereof, and the provisions of Sections 1 through 8,
10 and 11 hereof with respect to the Common Stock shall apply on like or similar terms to any such
other shares or securities.
(D) The Corporation shall pay any and all stock transfer and documentary stamp taxes that may
be payable in respect of any issuance or delivery of shares of Convertible Preferred Stock or
shares of Common Stock or other securities issued on account of Convertible Preferred Stock
pursuant hereto or certificates representing such shares or securities. The Corporation shall not,
however, be required to pay any such tax which may be payable in respect of any transfer involved
in the issuance or delivery of shares of Convertible Preferred Stock or Common Stock or other
securities in a name other than that in which the shares of Convertible Preferred Stock with
respect to which such shares or other securities are issued or delivered were registered, or in
respect of any payment to any person with respect to any such shares or securities other than a
payment to the registered holder thereof, and shall not be required to make any such issuance,
delivery or payment unless and until the person otherwise entitled to such issuance, delivery or
payment has paid to the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid or is not payable.
(E) In the event that a holder of shares of Convertible Preferred Stock shall not by written
notice designate the name in which shares of Common Stock to be issued upon conversion of such
shares should be registered or to whom payment upon redemption of shares of Convertible Preferred
Stock should be made or the address to which the certificate or certificates representing such
shares, or such payment, should be sent, the Corporation shall be entitled to register such shares,
and make such payment, in the name of the holder of such Convertible Preferred Stock as shown on
the records of the Corporation and to send the certificate or certificates representing
such shares, or such payment, to the address of such holder shown on the records of the
Corporation.
(F) Unless otherwise provided in the Corporation’s articles of incorporation, as the same may
be amended, all payments in the form of dividends, distributions on voluntary or involuntary
dissolution, liquidation or winding up or otherwise made upon the shares of Convertible Preferred
Stock and any other stock ranking on a parity with the Convertible Preferred Stock with respect to
such dividend or distribution shall be pro rata, so that amounts paid per share on the Convertible
Preferred Stock and such other stock shall in all cases bear to each other the same ratio that the
required dividends, distributions or payments, as the case may be, then payable per share on the
shares of the Convertible Preferred Stock and such other stock bear to each other.
(G) The Corporation may appoint, and from time to time discharge and change, a transfer agent
for the Convertible Preferred Stock. Upon any such appointment or discharge of a transfer agent,
the Corporation shall send notice thereof by first-class mail, postage prepaid, to each holder of
record of Convertible Preferred Stock.
(H) Unless otherwise indicated, references in this Exhibit A to Sections or paragraphs are
references to a Section or paragraph of this Exhibit A.
