-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VexSB86ueloBn7t+nB1gGixDKXTFXyTs7LhJPm96FDBk4a22Cywv/vpejiiChT1o NH1Rmaf8/OaR8bqDRD31NA== 0000912057-97-019022.txt : 19970530 0000912057-97-019022.hdr.sgml : 19970530 ACCESSION NUMBER: 0000912057-97-019022 CONFORMED SUBMISSION TYPE: POS AM PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19970529 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUITABLE COMPANIES INC CENTRAL INDEX KEY: 0000888002 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 133623351 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AM SEC ACT: 1933 Act SEC FILE NUMBER: 333-03224 FILM NUMBER: 97616179 BUSINESS ADDRESS: STREET 1: 787 SEVENTH AVE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125541234 POS AM 1 POS AM AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 29, 1997 REGISTRATION NO. 333-03224 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- THE EQUITABLE COMPANIES INCORPORATED (Exact name of registrant as specified in its charter) ------------------------------ DELAWARE 1290 AVENUE OF THE AMERICAS 13-3623351 (State or other jurisdiction NEW YORK, NEW YORK 10104 (I.R.S. Employer of (212) 554-1234 Identification Number) incorporation or organization)
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) ------------------------------ ROBERT E. GARBER, ESQ. EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL THE EQUITABLE COMPANIES INCORPORATED 1290 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10104 (212) 554-1234 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------------------------ PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO: MICHAEL W. BLAIR, ESQ. DEBEVOISE & PLIMPTON 875 THIRD AVENUE NEW YORK, NEW YORK 10022 (212) 909-6000 ------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time as determined by market conditions, after the effective date of this Registration Statement. ------------------------ If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / / ------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 11,940,299 SHARES THE [LOGO]EQUITABLE COMPANIES INCORPORATED COMMON STOCK (PAR VALUE $.01 PER SHARE) ---------------- This Prospectus relates to the resale, from time to time, by The Chase Manhattan Bank, acting solely as trustee (the "SECT Trustee") of The Equitable Companies Incorporated Stock Trust (the "SECT Trust" or "Selling Stockholder"), of up to 11,940,299 shares (the "Offered Shares") of Common Stock, $.01 par value ("Common Stock"), of The Equitable Companies Incorporated (the "Company"). The Offered Shares were or will be issued to the SECT Trust upon conversion of certain shares of the Company's Series D Convertible Preferred Stock sold in a private transaction by the Company to the SECT Trust in 1993. The SECT Trust was established to provide a source of funding for a portion of the obligations arising under certain employee compensation and benefit programs of the Company's subsidiaries (the "Plans"). A committee (the "Committee") comprised of officers, directors and/or employees of the Company, its subsidiaries or companies affiliated with AXA-UAP ("AXA"), the Company's largest stockholder, will give instructions to the SECT Trustee concerning the time and manner of sale or disposition of the Offered Shares. See "Selling Stockholder" and "Plan of Distribution". SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE OFFERED SHARES. The Common Stock of the Company is listed on the New York Stock Exchange (the "NYSE") under the symbol "EQ". ---------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------------- The Offered Shares may be sold from time to time to or through underwriters, through dealers or agents or directly to purchasers, in transactions on the NYSE or on other exchanges on which the Common Stock may be traded, in the over-the-counter market, through negotiated transactions or otherwise, at market prices prevailing at the time of sale or at other prices. See "Plan of Distribution". ---------------- The date of this Prospectus is , 1997. CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION." FOR NORTH CAROLINA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA, NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities of the Commission at Room 1024, 450 Fifth Street, NW, Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of the Commission located at 7 World Trade Center, 13th Floor, Suite 1300, New York, New York 10048 and Suite 1400, Northwest Atrium Center, 14th Floor, 500 West Madison Street, Chicago, Illinois 60611. Copies of such material can also be obtained at prescribed rates by writing to the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. In addition, such reports, proxy statements and other information can be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. The Commission maintains a Website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. The address of the Commission's Website is http://www.sec.gov. The Company has filed with the Commission a Registration Statement on Form S-3 (together with any amendments thereto, the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the securities offered hereby. This Prospectus, which constitutes a part of the Registration Statement, omits certain information contained in the Registration Statement as permitted by the rules and regulations of the Commission. For further information with respect to the Company and the securities offered hereby, reference is made to the Registration Statement and the exhibits and the financial statements, notes and schedules filed as a part thereof or incorporated by reference therein, which may be inspected at the public reference facilities of the Commission, at the addresses set forth above. Statements made in this Prospectus concerning the contents of any documents referred to herein are not necessarily complete, and in each instance are qualified in all respects by reference to the copy of such document filed as an exhibit to the Registration Statement or incorporated by reference therein. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission are incorporated into this Prospectus by reference: 1. the Company's Annual Report on Form 10-K for the year ended December 31, 1996 (the "1996 10-K"); 2. the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 (the "First Quarter 10-Q"); and 3. the Company's Registration Statement on Form 8-A, dated May 26, 1992, incorporating the description of the Company's Common Stock in the Company's Registration Statement on Form S-1 (Registration No. 33-48115). All documents or reports subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of the offering described herein shall be deemed to be incorporated by reference into this Prospectus and to be a part of this 2 Prospectus from the date of filing of such document. Any statement contained herein, or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of the Registration Statement or this Prospectus. The Company will provide without charge to any person to whom this Prospectus is delivered, on the written or oral request of such person, a copy of any or all of the foregoing documents incorporated by reference (other than exhibits not specifically incorporated by reference into the texts of such documents). Requests for such documents should be directed to: The Equitable Companies Incorporated, 1290 Avenue of the Americas, New York, New York 10104 Attention: Corporate Secretary (telephone (212) 554-1234). 3 THE EQUITABLE FOR THE PURPOSE OF THIS PROSPECTUS, THE TERM "THE EQUITABLE" REFERS TO THE EQUITABLE COMPANIES INCORPORATED (THE "COMPANY") AND ITS SUBSIDIARIES. The Equitable is a diversified financial services organization serving a broad spectrum of insurance, investment management and investment banking customers. The Equitable Life Assurance Society of the United States ("Equitable Life"), a subsidiary of the Company, was established in the State of New York in 1859. For more than 100 years it has been among the largest life insurance companies in the United States. Equitable Life and its subsidiaries distribute a variety of insurance, annuity and investment products through a career agency force, which at December 31, 1996 consisted of over 7,200 professional insurance agents. At March 31, 1997, the Company's holdings in its investment subsidiaries included an approximately 78% interest in Donaldson, Lufkin & Jenrette, Inc. ("DLJ"), an approximately 58% interest in Alliance Capital Management L.P. ("Alliance") and a 100% interest in Equitable Real Estate Investment Management, Inc., Equitable Agri-Business, Inc. and EQ Services, Inc. (collectively, "Equitable Real Estate"). The Company's investment subsidiaries provide investment management and investment banking services to institutional and individual clients, including the Company's insurance subsidiaries. On April 10, 1997, Equitable Life entered into an agreement to sell Equitable Real Estate (other than EQ Services, Inc. and its interest in Column Financial, Inc.) to Lend Lease Corporation Limited. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Combined Results of Operations by Segment--Investment Services--Equitable Real Estate" in the First Quarter 10-Q. AXA is the Company's largest stockholder, beneficially owning at December 31, 1996 60.8% of the outstanding shares of Common Stock and $392.2 million of the Company's Series E Convertible Preferred Stock. The Company is a Delaware corporation with its principal headquarters located at 1290 Avenue of the Americas, New York, New York 10104 (telephone (212) 554-1234). BUSINESS The Equitable is engaged in two related financial services businesses: an insurance business, which is comprised of the Insurance Operations segment and operates through the Insurance Group (consisting principally of Equitable Life) and an investment management and investment banking business, which comprises the Investment Services segment and operates through the Investment Subsidiaries (consisting of DLJ, Alliance and, until the completion of its pending sale, Equitable Real Estate). INSURANCE BUSINESS Insurance Operations accounted for $3.74 billion, or approximately 45.1% of consolidated revenues for the year ended December 31, 1996. The Insurance Group offers a variety of products which include traditional, variable and interest-sensitive life insurance products, annuity products and mutual fund and other investment products, as well as disability income products and association plans. The Insurance Group emphasizes the sale of individual variable and interest-sensitive life insurance and annuity products. The Insurance Group maintains a substantial market share in sales of individual variable life insurance in the United States and also maintains a strong position in the market for individual variable annuity products. This segment also includes the Insurance Group's Separate Accounts for certain individual insurance and annuity products in which customers may invest their accumulated policy funds. The Equitable believes the experience and training of its career agency force constitutes a key competitive advantage in the sale of the Insurance Group's sophisticated insurance products, including 4 variable life insurance and annuity products which offer a broad range of investment options. At December 31, 1996, the Insurance Group led the insurance industry in the number of agents and employees who hold both the Chartered Life Underwriter (CLU) and Chartered Financial Consultant (ChFC) designation. The Insurance Group's Income Manager Series of annuity products, which was introduced in May 1995, is also distributed through securities firms, financial planners and banks, as well as the career agency force. In 1996, Equitable Distributors, Inc. ("EDI"), an indirect wholly owned subsidiary of the Company, began actively to facilitate the marketing of the Income Manager Series through these distribution channels. INVESTMENT BUSINESS The Investment Services segment, which accounted for $4.54 billion, or approximately 54.7%, of consolidated revenues for the year ended December 31, 1996, provides investment management, investment banking, securities transaction and brokerage services to both corporate and institutional clients, including the Insurance Group, and to high net worth individuals. Sales of mutual fund shares to individuals and retail clients augment the traditional focus on institutional markets. The Investment Subsidiaries have steadily added to third party assets under management, while continuing to provide investment management services to the Insurance Group. Of the $240.8 billion of assets under management at March 31, 1997, $184.1 billion (76.5%) were managed by the Investment Subsidiaries for third parties, including domestic and overseas investors, mutual funds, pension funds, endowment funds and, through the Insurance Group's Separate Accounts, insurance and annuity customers of the Insurance Group. During 1996, approximately $128.8 million (14.8%) of the fees earned by the Investment Subsidiaries from asset management consisted of fees for services provided to the Insurance Group. DLJ is a leading integrated investment and merchant bank that serves institutional, corporate, governmental and individual clients both domestically and internationally. DLJ's businesses include securities underwriting, sales and trading; merchant banking; financial advisory services; investment research; correspondent brokerage services; and asset management. DLJ's revenues for the year ended December 31, 1996 were $3.49 billion. DLJ conducts its operations through three principal operating groups each of which is an important contributor to revenue and earnings: the Banking Group, which includes DLJ's Investment Banking, Merchant Banking and Emerging Markets groups; the Capital Markets Group, consisting of DLJ's Fixed Income, Institutional Equities and Equities Derivatives Divisions, Autranet, a distributor of investment research products, and Sprout, its venture capital affiliate; and the Financial Services Group, comprised of the Pershing Division, the Investment Services Group and the Asset Management Group. Alliance is one of the largest investment advisors in the United States and provides diversified investment management services to a variety of institutions including The Equitable, pension funds, endowments and foreign financial institutions as well as to individual investors through a broad line of mutual funds. Alliance had assets under management at March 31, 1997 of $182.0 billion (including $158.4 billion for third party clients). For a discussion of the possible restructuring of Alliance, see "Risk Factors--Risk-Based and Statutory Capital" herein and "Business--Investment Services--Alliance-- Other" and "Management's Discussion and Analysis of Financial Conditions and Results of Operations--Liquidity and Capital Resources--Insurance Group--Risk-Based Capital" in the 1996 10-K. 5 RISK FACTORS IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, THE FOLLOWING FACTORS SHOULD BE CAREFULLY CONSIDERED PRIOR TO DECIDING WHETHER OR NOT TO PURCHASE THE OFFERED SHARES. INVESTMENT ASSETS As of March 31, 1997, commercial mortgages and equity real estate comprise 9.6% ($3.60 billion) and 11.8% ($4.45 billion), respectively, of the $37.6 billion aggregate amortized cost net of valuation allowances ("net amortized cost") of assets held in the Insurance Group's General Account ("General Account Investment Assets") and assets held in the General Account associated with the Insurance Group's discontinued guaranteed investment contract ("GIC") Segment ("GIC Segment Investment Assets"). Since December 31, 1990, The Equitable has substantially reduced its exposure to commercial mortgages. The percentage of General Account and GIC Segment Investment Assets represented by The Equitable's equity real estate portfolio has declined modestly since December 31, 1990, as sales offset the acquisition of properties through foreclosure. At March 31, 1997, the equity real estate portfolio included properties acquired as investment real estate having an aggregate amortized cost of $3.21 billion (70.5% of the aggregate amortized cost of all equity real estate held) and properties acquired through foreclosure (including in-substance foreclosure) having an aggregate amortized cost of $1.34 billion (29.5% of the aggregate amortized cost of all equity real estate held). It is management's continuing objective to reduce the size of the equity real estate portfolio relative to total assets over the next several years. Management anticipates that reductions will depend on real estate market conditions, the level of mortgage foreclosures and expenditures required to fund necessary or desired improvements to properties. Due to real estate market conditions, proceeds from the sale of most equity real estate properties have been less than amortized cost at the date of sale. The Equitable intends to continue to seek to sell individual equity real estate properties on an opportunistic basis. If a significant amount of equity real estate not currently held for sale is sold, material investment losses would likely be incurred. Since 1990, General Account and GIC Segment Investment Assets have included a large amount of problem, potential problem and restructured assets, particularly problem commercial mortgages and restructured commercial mortgages. While the amounts of problem, potential problem and restructured commercial mortgages have decreased significantly since the beginning of 1992, both the General Account and GIC Segment portfolios continue to have a significant amount of such commercial mortgages. At March 31, 1997, these commercial mortgages aggregated $761.4 million (2.0% of the aggregate amortized cost of General Account and GIC Segment Investment Assets). In the last three quarters of 1997, approximately $696.4 million of commercial mortgage principal payments are scheduled, including $622.1 million of payments at maturity on commercial mortgage balloon loans. An additional $906.9 million of payments at maturity on commercial mortgage balloon loans are scheduled in 1998 and 1999. Depending on market conditions and lending practices in future years, many maturing commercial mortgages may have to be refinanced, restructured or foreclosed upon. Since 1990, The Equitable has recognized significant additions to asset valuation allowances and writedowns on commercial mortgages and equity real estate. At March 31, 1997, such asset valuation allowance balances for continuing and discontinued operations totaled $175.0 million. As a result of the adoption of SFAS No. 121 on January 1, 1996, $224.3 million of asset valuation allowances related to equity real estate were released and impairment losses of $219.4 million were recognized on equity real estate held and used. The determination of asset valuation allowances and writedowns requires numerous forecasts and the exercise of a significant degree of judgment, and is an inherently subjective process. No assurance can be given as to the amount of future writedowns and additions to the asset valuation allowances. For more information concerning The Equitable's General Account Investment Assets and GIC Segment Investment Assets, including problem, potential problem and restructured investments and asset valuation allowances, see "Management's Discussion and Analysis of Financial 6 Condition and Results of Operations--Continuing Operations Investment Portfolio" in the First Quarter 10-Q and the 1996 10-K and Notes 4, 8 and 9 of Notes to Consolidated Financial Statements in the First Quarter 10-Q. At March 31, 1997, the net amortized cost of below investment grade fixed maturities in General Account and GIC Segment Investment Assets (including redeemable preferred stock) was $2.85 billion (representing 7.6% of the net amortized cost of all General Account and GIC Segment Investment Assets). See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Continuing Operations Investment Portfolio" in the First Quarter 10-Q and the 1996 10-K, Note 9 of Notes to Consolidated Financial Statements in the First Quarter 10-Q and Note 3 of Notes to Consolidated Financial Statements in the 1996 10-K. DISCONTINUED OPERATIONS At March 31, 1997, $1.32 billion of liabilities in the GIC Segment, of which $279.7 million related to GIC products and the balance to Wind-Up Annuities, were outstanding to contractholders as compared to $14.29 billion at December 31, 1986. The GIC Segment had total assets of $2.67 billion at March 31, 1997 which are not reflected in total assets within The Equitable's consolidated balance sheet but are netted against total GIC Segment liabilities. The Equitable experienced pre-tax losses from operations in the GIC Segment of $17.3 million, $10.4 million, $23.7 million, $25.1 million and $21.7 million in the three months ended March 31, 1997 and 1996 and for the years 1996, 1995 and 1994, respectively. All such pre-tax losses were charged to the GIC Segment loss allowances. The Equitable's quarterly process for evaluating the loss provisions applies the current period's results of discontinued operations against the allowance, re-estimates future losses, and adjusts the provisions, if appropriate. Additionally, as part of The Equitable's annual planning process, investment and benefit cash flow projections are prepared. The evaluations performed for the fourth quarter of 1996 and the first quarter of 1997 resulted in management's decision to strengthen the loss provisions by $129.0 million and $5.1 million, respectively, resulting in post-tax charges of $83.8 million and $3.3 million to discontinued operations' results for the fourth quarter of 1996 and the first quarter of 1997, respectively. Management believes the loss provisions for Wind-Up Annuities and GIC contracts at March 31, 1997 (aggregating $246.9 million) are adequate to provide for all future losses; however, the determination of loss provisions continues to involve numerous estimates and subjective judgments regarding the expected performance of discontinued operations investment assets. There can be no assurance the losses provided for will not differ from the losses ultimately realized. To the extent actual results or future projections of discontinued operations differ from management's current best estimates and assumptions underlying the loss provisions, the difference would be reflected in the consolidated statements of earnings in discontinued operations. In particular, to the extent income, sales proceeds and holding periods for equity real estate differ from management's previous assumptions, periodic adjustments to the loss provisions are likely to result. See Footnotes 2, 8 and 9 to the "Selected Consolidated Financial Data" herein and "Management's Discussion and Analysis of Financial Condition and Results of Operations--Discontinued Operations" in the 1996 10-K and Note 9 of Notes to Consolidated Financial Statements in the First Quarter 10-Q. VOLATILE NATURE OF SECURITIES BUSINESS In recent periods, DLJ has contributed a significant portion of The Equitable's earnings. In October 1995, DLJ completed an initial public offering which reduced The Equitable's ownership position in DLJ common stock to approximately 80% (78% at the date hereof). Assuming full vesting of certain forfeitable restricted stock units and the exercise of stock options granted to certain DLJ employees in connection 7 with the initial public offering and all other vested DLJ employee stock options, The Equitable's ownership position in DLJ common stock would be reduced to approximately 63%. The securities industry generally experienced favorable market conditions in 1996, as strong rallies in the stock and bond markets and strong trading volumes on all major exchanges led to increased merger and acquisition activity as well as underwriting activity. Although the strong conditions that existed in 1996 continued through the first quarter of 1997, certain market factors weakened from the fourth quarter of 1996. DLJ's principal business activities, investment and merchant banking, securities sales and trading and correspondent brokerage services are, by their nature, highly competitive and subject to various risks, volatile trading markets and fluctuations in the volume of market activity. Consequently, DLJ's net income and revenue have been, and are likely to continue to be, subject to wide fluctuations, reflecting the impact of many factors beyond DLJ's control, including securities market conditions, the level and volatility of interest rates, competitive conditions and the size and timing of transactions. There can be no assurance that such fluctuations in DLJ's earnings will not affect the level of The Equitable's future earnings. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Combined Results of Continuing Operations by Segment--Investment Services" in the First Quarter 10-Q and "Management's Discussion and Analysis of Financial Condition and Results of Operations--Combined Results of Operations--Combined Results of Continuing Operations by Segment--Investment Services" in the 1996 10-K. For a discussion of Alliance's acquisition of Cursitor Holdings, L.P. and Cursitor Holdings Limited (collectively, "Cursitor") and the potential impairment of that investment see "Management's Discussion and Analysis of Financial Condition and Results of Operations--Combined Results of Operations by Segment--Investment Services--Alliance" in the First Quarter 10-Q. PAYMENT OF DIVIDENDS AND LIQUIDITY The Company's ability to make cash payments with respect to its securities, including the payment of dividends on its Common Stock, depends on the availability of adequate sources of funds. The New York Insurance Law gives the Superintendent of Insurance of the State of New York (the "New York Superintendent") broad discretion in determining whether the financial condition of a New York domiciled insurer, such as Equitable Life, supports the payment of dividends to its shareholders. Dividends from Equitable Life are not expected to be a source of liquidity for the Company for several years. Management believes the Company's primary sources of liquidity will be sufficient to meet its cash requirements for several years. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources--Liquidity Requirements" and "--Liquidity Sources" in the 1996 10-K. RATINGS Ratings are an important factor in establishing the competitive position of insurance companies. A significant downgrade in the financial strength or claims-paying ratings of Equitable Life could have a material adverse effect on the Insurance Group's business, liquidity and results of operations. For a discussion of the Insurance Group's current ratings, see "The Equitable--Insurance Business" herein and "Business--Competition--Insurance and Annuities" in the 1996 10-K. RISK-BASED AND STATUTORY CAPITAL Since 1993, life insurers, including Equitable Life, have been subject to certain risk-based capital ("RBC") guidelines. The RBC guidelines provide a method to measure the adjusted capital (statutory capital and surplus plus the asset valuation reserve and other adjustments) that a life insurance company should have for regulatory purposes, taking into account the risk characteristics of the company's investments and products. A life insurance company's RBC ratio will vary over time depending upon many factors, including its earnings, the mix of assets in its investment portfolio, the nature of the 8 products it sells and its rate of sales growth. Under the RBC formula, Equitable Life's year end RBC ratio depends in part on the closing price of units representing assignments of beneficial ownership of limited partnership interests in Alliance (the "Alliance Units") on the last trading day of the year. At December 31, 1996, the valuation formula for Alliance Units increased the statutory carrying value of Equitable Life's investment in Alliance Units to $1.06 billion from $914.3 million at December 31, 1995, compared to a statutory carrying value based on adjusted cost of $292.3 million. The management of Equitable Life has begun to examine possible responses to the expiration on December 31, 1997 of the exemption from Federal income taxes for publicly traded limited partnerships and is discussing with regulators alternative bases on which to value its Alliance holdings for statutory purposes in the event Equitable Life were to cease to own publicly traded Alliance Units. Management believes that these discussions should result in an approach which would, in such event, continue to take into account for statutory purposes a significant portion of the value of Equitable Life's investment in Alliance in excess of such statutory carrying value based on adjusted cost. If Equitable Life were to cease to own publicly traded Alliance Units, and if a significant portion of such excess were not recognized for statutory purposes, and if other offsetting corporate actions available to Equitable Life were not taken, Equitable Life would have a significant decline in its statutory capital and RBC ratio, which may adversely affect the market's perception of the Insurance Group relative to its principal competitors and could, therefore, make it more difficult to market certain of its insurance and annuity products and also result in higher levels of surrenders and withdrawals. See "The Equitable--Investment Business" herein and "Management's Discussion and Analysis of Financial Conditions and Results of Operations--Liquidity and Capital Resources--Insurance Group--Risk-Based Capital" in the 1996 10-K. The RBC guidelines are intended to be a regulatory tool only, and are not intended as a means to rank insurers generally. However, comparisons of RBC ratios of life insurers have become generally available. Equitable Life was above its target RBC ratio at year end 1996. Management believes that principally because of the RBC formula's treatment of Equitable Life's large holdings of subsidiary common stock (including its interests in Alliance, DLJ and, until the completion of its pending sale, Equitable Real Estate), equity real estate and mortgages, Equitable Life's year end 1996 RBC ratio was lower than those of its competitors in the life insurance industry. See "Business--Regulation--Risk-Based Capital" in the 1996 10-K. The NAIC has undertaken a comprehensive codification of statutory accounting practices for insurers. The resulting changes, once the codification project has been completed and the new principles adopted and implemented, could have a significant adverse effect on the Insurance Group's statutory results and financial position. The codification is not expected to become effective until 1998 or later. CHANGES IN INTEREST RATES Changes in prevailing interest rates can affect both the Insurance Group's investment results and its results of operations. For a discussion of the effects on the Insurance Group of changes in prevailing interest rates, see "Management's Discussion and Analysis of Financial Condition and Results of Operations--Combined Results of Operations--Combined Results of Continuing Operations by Segment--Margins on Individual Insurance and Annuity Products" in the 1996 10-K. PRINCIPAL STOCKHOLDER AXA is the Company's largest stockholder, beneficially owning at December 31, 1996 (i) 60.8% of the outstanding shares of Common Stock (63.6% assuming conversion of the Company's convertible preferred stock owned by AXA) and (ii) $392.2 million of the Company's Series E Convertible Preferred Stock. Accordingly, AXA currently beneficially owns, without acquiring any additional shares of Common Stock, shares of Common Stock in an amount sufficient to permit it to control the outcome of any stockholder vote, including any vote relating to the election of directors to the Company's Board of 9 Directors. In May 1997, Compagnie UAP merged into AXA, with AXA as the surviving corporation, effective retroactive to January 1, 1997. For a discussion of this transaction, see "Security Ownership of Certain Beneficial Owners and Management--Beneficial Ownership of Common Stock by the AXA Group" in the 1996 10-K. Under a Standstill and Registration Rights Agreement, dated as of July 18, 1991, as amended (the "Standstill Agreement"), between the Company and AXA, AXA currently has certain demand and piggyback registration rights with respect to the Common Stock owned by it and has certain preemptive rights entitling it to participate in any sale by the Company of voting securities to the extent necessary to maintain AXA's percentage of voting power. However, all other contractual restrictions in the Standstill Agreement, including restrictions on the ability of AXA and certain affiliates to purchase voting securities, have expired and AXA and such affiliates are currently free to acquire additional shares of Common Stock. Neither AXA nor any of its affiliates has any obligation to provide additional capital or credit support to The Equitable. See "Business--Principal Shareholder" in the 1996 10-K. SELLING STOCKHOLDER The SECT Trust was established in 1993 to provide a source of funding for a portion of the obligations arising under the Plans. The SECT Trust is intended to be a grantor trust within the meaning of Section 671 of the Internal Revenue Code. In the event of insolvency of the Company, the SECT Trust shall be subject to the claims of the Company's general creditors. The Offered Shares were or will be issued to the SECT Trust upon conversion of certain of the shares of the Company's Series D Convertible Preferred Stock purchased by the SECT Trust in a private transaction in 1993. The Company agreed under a 1993 agreement establishing the SECT Trust to prepare and file a registration statement with respect to any shares of Common Stock to be sold by the SECT Trust. As of March 31, 1997, the SECT Trust held 60,000 shares of Series D Convertible Preferred Stock which are convertible into 11,940,299 shares of Common Stock, subject to certain anti-dilution adjustments, or approximately 6% of the Company's outstanding shares of Common Stock after giving effect to such conversion. USE OF PROCEEDS The SECT Trustee will contribute the net proceeds from the sale of the Offered Shares to the Plans, in accordance with instructions from the Committee, to fund a portion of the obligations arising thereunder. Pending such use, such net proceeds may be invested temporarily in short-term marketable securities. In consideration of such contributions to the Plans, the Company's subsidiaries sponsoring such Plans will pay the Company an amount equal to any such contributions. 10 SELECTED CONSOLIDATED FINANCIAL DATA The following table sets forth selected historical consolidated financial information for The Equitable. The selected historical consolidated financial information (other than General Account Investment Assets and assets under management) at December 31, 1996 and 1995 and for each of the years in the three-year period ended December 31, 1996 has been derived from consolidated financial statements audited by Price Waterhouse LLP, independent accountants, included in the 1996 10-K incorporated by reference herein and should be read in conjunction with and is qualified by reference to such statements and related notes. The selected historical consolidated financial information (other than General Account Investment Assets and assets under management) at December 31, 1994, 1993 and 1992 and for the two-year period ended December 31, 1993 have been derived from consolidated financial statements not included or incorporated herein. The selected historical consolidated financial information at and for the three months ended March 31, 1997 and 1996 (other than General Account Investment Assets and assets under management) has been derived from the Company's unaudited financial statements included in the First Quarter 10-Q incorporated by reference herein and should be read in conjunction with and is qualified by reference to such statements and related notes. This unaudited interim information reflects, in the view of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of such information. Results for the three months ended March 31, 1997 are not necessarily indicative of results which may be expected for any other interim period or for the year as a whole. 11 SELECTED CONSOLIDATED FINANCIAL DATA--CONTINUED
THREE MONTHS ENDED MARCH 31, YEARS ENDED DECEMBER 31, ---------------------- ---------------------------------------------- 1997 1996 1996 1995 1994 1993 ---------- ---------- ---------- ---------- ---------- ---------- (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) CONSOLIDATED STATEMENTS OF EARNINGS DATA(1) REVENUES Universal life and investment-type product policy fee income..................... $ 230.5 $ 212.9 $ 874.0 $ 788.2 $ 715.0 $ 644.5 Premiums......................... 151.8 141.0 597.6 606.8 625.6 599.1 Net investment income(2)......... 872.0 780.5 3,308.6 3,047.4 2,838.4 2,715.0 Investment gains, net(3)(4)...... 178.0 170.3 599.2 552.3 338.6 526.4 Commissions, fees and other income......................... 768.5 599.3 2,800.5 2,142.4 1,748.4 1,851.5 Contribution from the Closed Block(3)(11)................... 35.8 32.1 125.0 143.2 137.0 137.9 ---------- ---------- ---------- ---------- ---------- ---------- Total revenues................. 2,236.6 1,936.1 8,304.9 7,280.3 6,403.0 6,474.4 ---------- ---------- ---------- ---------- ---------- ---------- BENEFITS AND OTHER DEDUCTIONS Interest credited to policyholders' account balances................. 312.9 320.6 1,271.1 1,249.2 1,202.2 1,325.6 Policyholders' benefits(5)......... 254.9 254.2 1,317.7 1,008.6 914.9 1,001.7 Other operating costs and expenses(5)(6)(7)................ 1,392.7 1,147.2 5,200.3 4,377.3 3,739.3 3,770.8 ---------- ---------- ---------- ---------- ---------- ---------- Total benefits and other deductions....................... 1,960.5 1,722.0 7,789.1 6,635.1 5,856.4 6,098.1 ---------- ---------- ---------- ---------- ---------- ---------- EARNINGS FROM CONTINUING OPERATIONS BEFORE FEDERAL INCOME TAXES AND MINORITY INTEREST(5)............. 276.1 214.1 515.8 645.2 546.6 376.3 Federal income tax expense......... 87.4 64.7 137.4 192.3 157.0 111.7 Minority interest in net income of consolidated subsidiaries........ 49.4 39.7 172.4 87.5 68.3 31.9 ---------- ---------- ---------- ---------- ---------- ---------- Earnings (loss) from continuing operations(5).................... 139.3 109.7 206.0 365.4 321.3 232.7 Discontinued operations, net of Federal income taxes(2)(5)(6)(8)(9)............. (3.3) -- (83.8) -- -- -- Extraordinary charge for demutualization expenses......... -- -- -- -- -- -- Cumulative effect of accounting changes, net of Federal income taxes(10)........................ -- (23.1) (23.1) -- (27.1) -- ---------- ---------- ---------- ---------- ---------- ---------- Net Earnings (Loss)................ $ 136.0 $ 86.6 $ 99.1 $ 365.4 $ 294.2 $ 232.7 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net earnings after demutualization.................. $ 136.0 $ 86.6 $ 99.1 $ 365.4 $ 294.2 $ 232.7 Dividends on preferred stocks...... 6.7 6.7 26.7 26.7 80.1 65.4 ---------- ---------- ---------- ---------- ---------- ---------- Net Earnings (Loss) Applicable to Common Shares.................... $ 129.3 $ 79.9 $ 72.4 $ 338.7 $ 214.1 $ 167.3 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- NET EARNINGS (LOSS) PER COMMON SHARE: Assuming No Dilution............. $ .68 $ .43 $ .36 $ 1.83 $ 1.49 $ 1.18 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Assuming Full Dilution........... $ .62 $ .41 $ .36 $ 1.74 $ 1.37 $ 1.08 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Cash Dividend Per Common Share..... $ .05 $ .05 $ .20 $ .20 $ .20 $ .20 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- 1992 ---------- CONSOLIDATED STATEMENTS OF EARNINGS DATA(1) REVENUES Universal life and investment-type product policy fee income..................... $ 571.7 Premiums......................... 1,185.3 Net investment income(2)......... 2,681.5 Investment gains, net(3)(4)...... 371.8 Commissions, fees and other income......................... 1,412.5 Contribution from the Closed Block(3)(11)................... 51.5 ---------- Total revenues................. 6,274.3 ---------- BENEFITS AND OTHER DEDUCTIONS Interest credited to policyholders' account balances................. 1,440.8 Policyholders' benefits(5)......... 1,754.0 Other operating costs and expenses(5)(6)(7)................ 3,070.3 ---------- Total benefits and other deductions....................... 6,265.1 ---------- EARNINGS FROM CONTINUING OPERATIONS BEFORE FEDERAL INCOME TAXES AND MINORITY INTEREST(5)............. 9.2 Federal income tax expense......... 12.8 Minority interest in net income of consolidated subsidiaries........ 35.0 ---------- Earnings (loss) from continuing operations(5).................... (38.6) Discontinued operations, net of Federal income taxes(2)(5)(6)(8)(9)............. -- Extraordinary charge for demutualization expenses......... (101.3) Cumulative effect of accounting changes, net of Federal income taxes(10)........................ 4.9 ---------- Net Earnings (Loss)................ $ (135.0) ---------- ---------- Net earnings after demutualization.................. $ -- Dividends on preferred stocks...... 14.5 ---------- Net Earnings (Loss) Applicable to Common Shares.................... $ (14.5) ---------- ---------- NET EARNINGS (LOSS) PER COMMON SHARE: Assuming No Dilution............. $ (.10) ---------- ---------- Assuming Full Dilution........... $ (.10) ---------- ---------- Cash Dividend Per Common Share..... $ .10 ---------- ----------
12 SELECTED CONSOLIDATED FINANCIAL DATA--CONTINUED
THREE MONTHS ENDED MARCH 31, YEARS ENDED DECEMBER 31, ---------------------- ---------------------------------------------- 1997 1996 1996 1995 1994 1993 ---------- ---------- ---------- ---------- ---------- ---------- (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) REVENUES BY SEGMENT: Insurance operations(2)(3)(4)...... $ 983.1 $ 905.7 $ 3,742.9 $ 3,614.6 $ 3,507.4 $ 3,464.4 Investment services(4)............. 1,250.5 1,027.3 4,540.0 3,689.8 2,908.6 3,024.1 Corporate, other and eliminations..................... 3.0 3.1 22.0 (24.1) (13.0) (14.1) ---------- ---------- ---------- ---------- ---------- ---------- Total Revenues..................... $ 2,236.6 $ 1,936.1 $ 8,304.9 $ 7,280.3 $ 6,403.0 $ 6,474.4 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE FEDERAL INCOME TAXES AND MINORITY INTEREST, BY SEGMENT: Insurance operations............... $ 126.8 $ 84.6 $ (36.6) $ 303.1 $ 327.5 $ 128.2 Investment services................ 181.7 159.5 663.2 466.3 375.2 359.3 Corporate interest expense and other eliminations............... (32.4) (30.0) (110.8) (124.2) (156.1) (111.2) ---------- ---------- ---------- ---------- ---------- ---------- EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE FEDERAL INCOME TAXES AND MINORITY INTEREST...... $ 276.1 $ 214.1 $ 515.8 $ 645.2 $ 546.6 $ 376.3 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- GENERAL ACCOUNT INVESTMENT ASSETS (AT PERIOD END)(12)(13).......... $ 35,160.1 $ 33,872.6 $ 34,676.0 $ 33,777.1 $ 32,338.6 $ 32,695.4 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ASSETS UNDER MANAGEMENT (AT PERIOD END): The Equitable...................... $ 56,684 $ 50,819 $ 54,990 $ 50,900 $ 47,376 $ 51,003 Third Party(14).................... 184,137 161,231 184,784 144,441 125,145 121,643 ---------- ---------- ---------- ---------- ---------- ---------- Total.............................. $ 240,821 $ 212,050 $ 239,774 $ 195,341 $ 172,521 $ 172,646 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- CONSOLIDATED BALANCE SHEETS DATA (AT PERIOD END):(1) Total assets(13)(15)............... $139,601.8 $116,394.7 $128,811.2 $113,716.2 $ 94,785.3 $100,382.3 Long-term debt..................... 4,012.3 3,994.3 3,920.7 3,852.0 2,925.9 2,662.3 Total liabilities(13)(15).......... 135,716.7 112,496.2 124,823.2 109,607.5 91,605.2 96,670.9 Redeemable preferred stock......... 264.9 Shareholders' equity............... 3,885.1 3,898.5 3,988.0 4,108.7 3,180.1 3,446.5 Book value per common share........ 18.49 18.72 19.12 19.88 14.93 16.83 1992 ---------- REVENUES BY SEGMENT: Insurance operations(2)(3)(4)...... $ 4,069.1 Investment services(4)............. 2,314.4 Corporate, other and eliminations..................... (109.2) ---------- Total Revenues..................... $ 6,274.3 ---------- ---------- EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE FEDERAL INCOME TAXES AND MINORITY INTEREST, BY SEGMENT: Insurance operations............... $ (158.7) Investment services................ 324.8 Corporate interest expense and other eliminations............... (156.9) ---------- EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE FEDERAL INCOME TAXES AND MINORITY INTEREST...... $ 9.2 ---------- ---------- GENERAL ACCOUNT INVESTMENT ASSETS (AT PERIOD END)(12)(13).......... $ 31,419.7 ---------- ---------- ASSETS UNDER MANAGEMENT (AT PERIOD END): The Equitable...................... $ 45,141 Third Party(14).................... 104,784 ---------- Total.............................. $ 149,925 ---------- ---------- CONSOLIDATED BALANCE SHEETS DATA (AT PERIOD END):(1) Total assets(13)(15)............... $ 80,743.7 Long-term debt..................... 1,897.9 Total liabilities(13)(15).......... 78,010.9 Redeemable preferred stock......... 262.1 Shareholders' equity............... 2,470.7 Book value per common share........ 15.60
- ------------------------------ (1) In 1996, The Equitable changed its method of accounting for long-duration participating life insurance contracts, primarily within the Closed Block, in accordance with the provisions prescribed by Statement of Financial Accounting Standards ("SFAS") No. 120, "Accounting and Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain Long-Duration Participating Contracts". The financial statements for the three months ended March 31, 1996, and the years ended December 31, 1995, 1994, 1993 and 1992 have been restated for the change. Shareholders' equity increased $194.9 million as of January 1, 1992 for the effect of retroactive application of the new method. See Note 2 of Notes to Consolidated Financial Statements in the 1996 10-K and Note 2 of Notes to Consolidated Financial Statements in the First Quarter 10-Q. (2) Net investment income and discontinued operations included $14.8 million, $37.6 million, $114.3 million, $154.6 million, $219.7 million, $197.1 million and $132.8 million for the three months ended March 31, 1997 and 1996 and for the years ended December 31, 1996, 1995, 1994, 1993 and 1992, respectively, recognized as investment income by continuing operations and as interest expense by the GIC Segment relating to intersegment loans. (3) Investment gains, net, included additions to asset valuation allowances and writedowns of publicly traded securities for continuing operations aggregating $25.1 million ($34.3 million including amounts related to the Closed Block), $51.4 million ($65.5 million including amounts related to the Closed Block), $178.6 million ($205.8 million including amounts related to the Closed Block), $197.6 million ($224.9 million including amounts related to the Closed Block), $100.5 million ($137.5 million including amounts related to the Closed Block), $108.7 million ($147.3 million including amounts related to the Closed Block) and $278.6 million ($300.2 million including amounts related to the Closed Block) for the three months ended March 31, 1997 and 1996 and for the years ended December 31, 1996, 1995, 1994, 1993 and 1992, respectively. Additionally, as a result of the adoption of SFAS No. 121, $152.4 million of allowances on assets held for investment were released and impairment losses of $144.0 million ($149.6 million including amounts related to the Closed Block) were recognized on real estate held and used as of January 1, 1996. (4) Investment gains, net for the three months ended March 31, 1996 included a $20.6 million gain resulting from the issuance of Alliance Units to third parties upon completion of the Cursitor acquisition. Investment gains, net for the year ended December 31, 1996 included a $79.4 million gain (before variable compensation and related expenses) related to the sale of shares of 13 SELECTED CONSOLIDATED FINANCIAL DATA--CONTINUED one investment in the DLJ long-term corporate development portfolio. Investment gains, net for the year ended December 31, 1995 included a $34.7 million gain resulting from the sale of a minority interest in DLJ. Investment gains, net for the year ended December 31, 1994 included a $52.4 million gain related to the sale by Alliance of 4.96 million of newly issued Alliance Units. Investment gains, net for the year ended December 31, 1993 included a $49.3 million gain (before variable compensation and related expenses) related to the sale of shares on that same investment in the DLJ long-term corporate development portfolio. Investment gains, net for the year ended December 31, 1992 included a gain on that same investment of $166.2 million, which consisted of an $82.4 million net gain on shares sold and an $83.8 million investment gain from the recognition of an increase in fair value of the investment. (5) During the fourth quarter of 1996, The Equitable completed experience and loss recognition studies of participating group annuity contracts and conversion annuities ("Pension Par") and disability income ("DI") products. Additionally, The Equitable's management reviewed the loss provisions for the GIC Segment lines of business. As a result of these studies, $145.0 million of unamortized DI deferred policy acquisition costs ("DAC") were written off and reserves were strengthened by $248.0 million for these lines of business. Consequently, earnings from continuing operations for the year ended December 31, 1996 decreased by $255.5 million ($393.0 million pre-tax) and net earnings decreased by $339.3 million. See Notes 2 and 7 of Notes to Consolidated Financial Statements in the 1996 10-K. (6) Other operating costs and expenses included corporate interest expenses of $34.7 million, $34.6 million, $139.6 million, $100.5 million, $50.6 million, $28.4 million and $58.4 million for the three months ended March 31, 1997 and 1996 and for the years ended December 31, 1996, 1995, 1994, 1993 and 1992, respectively, and interest credited to the discontinued GIC Segment of $88.2 million, $97.7 million and $94.2 million for the years ended December 31, 1994, 1993 and 1992, respectively. (7) Other operating costs and expenses included provisions associated with employee termination and exit costs of $5.2 million, $0.7 million, $24.4 million, $39.2 million, $20.4 million, $96.4 million and $24.8 million for the three months ended March 31, 1997 and 1996 and for the years ended December 31, 1996, 1995, 1994, 1993 and 1992, respectively (including $5.2 million, $0.7 million, $22.3 million, $28.1 million, $20.4 million, $45.6 million and $24.8 million attributable to Insurance Operations for the three months ended March 31, 1997 and 1996 and for the years ended December 31, 1996, 1995, 1994, 1993 and 1992, respectively; and $2.1 million, $11.1 million and $50.8 million attributable to Investment Services for the years ended December 31, 1996, 1995 and 1993, respectively). (8) Discontinued operations, net of Federal income taxes, included additions to asset valuation allowances and writedowns of fixed securities and, in 1996, equity real estate for the discontinued GIC Segment aggregating $3.1 million, $3.7 million, $36.0 million, $38.2 million, $50.8 million, $53.0 million and $105.6 million for the three months ended March 31, 1997 and 1996 and for the years ended December 31, 1996, 1995, 1994, 1993, and 1992, respectively. Additionally, the implementation of SFAS No. 121 as of January 1, 1996 resulted in the release of existing valuation allowances of $71.9 million on equity real estate and recognition of impairment losses of $69.8 million on real estate held and used. (9) Discontinued operations, net of Federal income taxes, included GIC Segment after-tax losses of $3.3 million and $83.8 million for the three months ended March 31, 1997 and for the year ended December 31, 1996, respectively. Pre-tax losses of $17.3 million, $10.4 million, $23.7 million, $25.1 million, $21.7 million, $24.7 million and $160.9 million for the three months ended March 31, 1997 and 1996 and for the years ended December 31, 1996, 1995, 1994, 1993 and 1992, respectively, were charged to the GIC Segment allowance for future losses. See Notes 9 and 7 of Notes to Consolidated Financial Statements included in the First Quarter 10-Q and the 1996 10-K, respectively. (10) Cumulative effect of accounting changes, net of Federal income taxes, included a charge of $23.1 million, net of a Federal income tax benefit of $12.4 million, related to SFAS No. 121 for the three months ended March 31, 1996 and the year ended December 31, 1996, a charge of $27.1 million, net of a Federal income tax benefit of $14.6 million related to SFAS No. 112 for the year ended December 31, 1994 and a credit of $252.3 million related to SFAS No. 109 and a charge of $247.4 million, net of a Federal income tax benefit of $130.9 million, related to SFAS No. 106 for the year ended December 31, 1992. (11) The results of the Closed Block for the periods subsequent to July 22, 1992 are reported on one line in the consolidated statements of earnings. Accordingly, the line-by-line statements of earnings data are not comparable for all periods presented. Total assets and total liabilities include the assets and liabilities of the Closed Block, respectively, and therefore amounts are comparable for all periods presented. See Notes 8 and 6 of Notes to Consolidated Financial Statements in the First Quarter 10-Q and the 1996 10-K, respectively. (12) General Account Investment Assets does not include the GIC Segment Investment Assets, which had an aggregate carrying value of $2.44 billion, $3.47 billion, $2.49 billion, $3.26 billion, $3.90 billion, $4.82 billion and $5.73 billion at March 31, 1997 and 1996 and at December 31, 1996, 1995, 1994, 1993, and 1992, respectively. (13) Total assets, total liabilities and General Account Investment Assets included the assets and liabilities of the Closed Block and, therefore, are comparable for all periods presented. See Notes 8 and 6 of Notes to Consolidated Financial Statements included in the First Quarter 10-Q and the 1996 10-K, respectively. (14) Third party assets under management included Separate Accounts assets under management of $30.22 billion, $25.98 billion, $29.87 billion, $24.72 billion, $20.67 billion, $19.74 billion and $18.07 billion at March 31, 1997 and 1996 and at December 31, 1996, 1995, 1994, 1993 and 1992, respectively. (15) Assets and liabilities relating to the discontinued GIC Segment are not reflected on the consolidated balance sheets of The Equitable, except that as of March 31, 1997 and 1996 and December 31, 1996, 1995, 1994, 1993 and 1992, the net amount due to continuing operations for intersegment loans made to the discontinued GIC Segment in excess of continuing operations' obligations to fund the discontinued GIC Segment's accumulated deficit (the amount required to make assets equal to liabilities) is reflected as "Amounts due from discontinued GIC Segment." In 1995, continuing operations transferred $1,215.4 million in cash to the GIC Segment in settlement of its obligation. Subsequently, the GIC Segment remitted $1,155.4 million in cash to continuing operations in partial repayment of borrowings by the GIC Segment. See Notes 9 and 7 of Notes to Consolidated Financial Statements included in the First Quarter 10-Q and the 1996 10-K, respectively. 14 DESCRIPTION OF CAPITAL STOCK The following summary descriptions with respect to the capital stock of the Company are summaries and are subject to the detailed provisions of the Company's restated certificate of incorporation, as amended (the "Restated Certificate") and by-laws (the "By-Laws"). These statements do not purport to be complete, do not give effect to the provisions of statutory or common law, and are subject to, and are qualified in their entirety by reference to, the terms of the Restated Certificate and the By-Laws. The Restated Certificate authorizes the Company to issue 510 million shares of capital stock, of which 500 million shares are designated as Common Stock having a par value of $.01 per share and 10 million shares are designated as preferred stock having a par value of $1.00 per share. The preferred stock may be issued by the Company's Board of Directors in one or more series and may have such voting rights, if any, designations, preferences and relative, participating, optional and other special rights, and such qualifications, limitations and restrictions, as the Board of Directors (or a duly authorized committee thereof) may fix by resolution or resolutions. Moreover, the Company's Board of Directors may issue such preferred stock from time to time in transactions that may not require the approval of the stockholders of the Company and the preferences, designations, voting and other rights of any such shares of preferred stock may materially limit or qualify the rights of the outstanding shares of Common Stock. As of the date hereof, there are three series of preferred stock outstanding. For a description of the Company's preferred stock, see Note 10 to Notes to Consolidated Financial Statements in the 1995 10-K. DESCRIPTION OF COMMON STOCK DIVIDENDS. Subject to the rights of any holders of preferred stock, each holder of Common Stock is entitled to receive dividends out of funds legally available therefor when, as and if declared by the Company's Board of Directors. Dividends may be paid in cash, property or shares of the Company's capital stock. VOTING RIGHTS. The holders of Common Stock possess exclusive voting rights in the Company, except to the extent that the Company's Board of Directors shall have designated voting power with respect to any preferred stock issued. Each holder of Common Stock is entitled, on each matter submitted for a vote of holders of Common Stock, to one vote for each share of such stock registered in such holder's name on the books of the Company. Except as otherwise required by law and subject to the rights of any holders of preferred stock, the presence in person or by proxy of the holders of record of a majority of the shares entitled to vote at a meeting of stockholders constitutes a quorum for the transaction of business at that meeting. Actions requiring approval of stockholders will generally require approval by a majority vote at a meeting at which a quorum is present, except that at each stockholder meeting for the election of directors, provided a quorum is present, directors will be elected by a plurality of votes validly cast in the election. Stockholders will not have any right to cumulate votes in the election of directors. The holders of preferred stock issued by the Company may be given the right to vote for the election of directors generally or to elect a specified number or percentage of the members of the Company's Board of Directors. The number of directors that may be elected by the holders of any class or series of preferred stock having the right, voting separately by class or series, to elect directors will be in addition to the number of directors fixed by or pursuant to the Restated Certificate. LIQUIDATION RIGHTS. In the event of liquidation, dissolution or winding-up of the Company, the holders of the Common Stock will be entitled to share ratably in the distribution of all assets of the Company remaining after payment of all of the Company's debts and liabilities and of all sums to which holders of any preferred stock may be entitled. 15 PREEMPTIVE RIGHTS. Holders of the Common Stock are not generally entitled to preemptive rights with respect to any shares of capital stock which may be issued by the Company. Under the Standstill Agreement, AXA has preemptive rights with respect to voting securities and securities convertible into voting securities of the Company. MISCELLANEOUS. The issued and outstanding shares of Common Stock are duly authorized, validly issued, fully paid and nonassessable and, upon issuance as herein described, the Offered Shares will be duly authorized, validly issued, fully paid and nonassessable. The transfer agent for the Common Stock is First Chicago Trust Company of New York. RESTRICTIONS ON ACQUISITIONS OF SECURITIES OF THE COMPANY Section 7312 of the New York Insurance Law ("Section 7312") provides that, for a period of five years after the effective date of Equitable Life's demutualization (July 22, 1992), no person may directly or indirectly offer to acquire or acquire in any manner the beneficial ownership (defined as the power to vote or dispose of, or to direct the voting or disposition of a security) of 5% or more of any class of the Company's voting security (which term includes the Common Stock) or any class of security convertible into a voting security of the Company without the prior approval of the New York Superintendent. Pursuant to Section 7312, voting securities acquired in excess of the 5% threshold without such prior approval will be deemed non-voting. State insurance laws also regulate changes of control (generally presumed upon acquisitions of 10% or more of securities then having voting power for the election of directors) of insurance holding companies, such as the Company. State insurance laws, including the New York Insurance Law, require certain filings concerning changes in ownership of insurance companies. Although the specific provisions vary, insurance laws in states such as New York generally prohibit a person from acquiring a controlling interest in an insurer incorporated in the state or in any other person controlling such insurer unless the insurance regulatory authority has approved the proposed acquisition in accordance with the applicable regulations. In accordance with these restrictions, the issuance of Common Stock and preferred stock to AXA required the prior approval of the New York Superintendent and the prior approval of the insurance regulatory authorities in the other states where Equitable Life's insurance company subsidiaries were domiciled. AXA has obtained the requisite approvals described above and in the preceding paragraph for its acquisitions of Common Stock and the Company's preferred stock. In addition, Section 203 of the Delaware General Corporation law prohibits an "interested stockholder" of a Delaware corporation from engaging in certain business combinations with the corporation, including mergers or consolidations or acquisitions of additional shares of the corporation, for a period of three years following the date the stockholder becomes an "interested stockholder." An "interested stockholder" is defined to include persons owning directly or indirectly 15% or more of the outstanding voting stock of a corporation. The prohibitions under Section 203 are not applicable in certain circumstances, including those in which (i) the business combination or the transaction which results in the stockholder becoming an "interested stockholder" is approved by the corporation's board of directors prior to the date the stockholder becomes an "interested stockholder," (ii) the "interested stockholder" upon consummation of such transaction owns at least 85% of the voting stock of the corporation outstanding prior to such transaction or (iii) the corporation has elected not to be governed by such prohibitions. The Company's Board of Directors approved AXA's acquisition of Common Stock as part of its approval of AXA's original investment and, accordingly, the prohibitions under Section 203 do not apply to any business combination with AXA. 16 PLAN OF DISTRIBUTION The SECT Trust, at the discretion of the Committee, may from time to time offer and sell all or a portion of the Offered Shares to or through one or more underwriters, through one or more dealers or agents or directly to purchasers. The offer and sale of the Offered Shares may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. Sales may be effected from time to time in one or more transactions (which may involve block transactions) (i) on the NYSE, or on other national securities exchanges on which the Common Stock may be traded, in transactions that may include special offerings, exchange distributions pursuant to and in accordance with the rules of such exchanges or otherwise, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or in the over-the-counter market, (iv) in negotiated transactions through the writing of options on shares of Common Stock (whether such options are listed on an options exchange or otherwise) or otherwise, (v) pursuant to a distribution through one or more underwriters on a firm commitment or best-efforts basis or (vi) in a combination of any such transactions. The SECT Trust may effect such transactions by selling Offered Shares to or through underwriters, agents or dealers, and such underwriters, agents or dealers may receive compensation in the form of discounts or commissions from the SECT Trust and may receive commissions from the purchasers of Offered Shares for whom they may act as agent, in each case in amounts which will not exceed those customary in the types of transactions involved. If required, a prospectus supplement to this Prospectus may be distributed in connection with an offer and sale of the Offered Shares. Such prospectus supplement may identify underwriters, dealers or agents participating in such offer and sale and any discounts, commissions or other terms thereof, and may set forth such additional information as may be determined to be required. Offers to purchase Offered Shares may be solicited directly by the Company and the sale thereof may be made by the SECT Trust directly to institutional investors or others, who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale thereof. In connection with the distribution of the Offered Shares, underwriters and any other persons participating in such distribution may purchase and sell Common Stock in the open market. These transactions may include over-allotment and stabilizing transactions and, in the case of underwriters, purchases to cover short positions created in connection with the offering. Stabilizing transactions consist of certain bids or purchases for the purpose of preventing or retarding a decline in the market price of the Common Stock; and short positions created by underwriters involve the sale by underwriters of a greater number of Offered Shares than they are required to purchase from the Company in an offering. Underwriters also may impose a penalty bid, whereby selling concessions allowed to broker-dealers in respect of the Offered Shares may be reclaimed by such underwriters if such Offered Shares are repurchased by the underwriters in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the Common Stock, which may be higher than the price that might otherwise prevail in the open market; and these activities, if commenced, may be discontinued at any time. These transactions may be effected on the NYSE, in the over-the-counter-market or otherwise. In making any offer on behalf of the SECT Trust, underwriters, agents and any other broker or dealer may be deemed to be underwriters within the meaning of the Securities Act, and the compensation of the underwriter, agent or other broker or dealer may be deemed to be underwriting commissions or discounts. 17 Underwriters, agents and dealers may be entitled under relevant agreements with the Company and the SECT Trustee to indemnification by the Company against certain liabilities, including liabilities under the Securities Act. The offering of the Offered Shares is being conducted in accordance with Section 2720 of the NASD Conduct Rules. In addition, underwriters and other persons participating in the distribution may not confirm sales to any discretionary accounts without the prior specific written approval of the customer. Underwriters, agents and dealers who participate in offers and sales of the Offered Shares may be customers of, engage in transactions with, or perform services for, the Company and its subsidiaries from time to time in the ordinary course of business. LEGAL OPINIONS The validity of the Common Stock offered hereby will be passed upon for the Company by Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022. EXPERTS The consolidated financial statements and consolidated financial statement schedules of The Equitable as of December 31, 1996 and 1995 and for each of the years in the three-year period ended December 31, 1996 incorporated by reference in this Prospectus have been so incorporated in reliance on the reports of Price Waterhouse LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. The United States firm of Price Waterhouse has registered as a Registered Limited Liability Partnership (LLP) under the laws of the State of Delaware and from August 10, 1994 has conducted its practice under the name of Price Waterhouse LLP. All references to Price Waterhouse and the documents incorporated herein by reference are to Price Waterhouse LLP. ERISA MATTERS The Company and certain affiliates of the Company, including Equitable Life, Alliance and DLJ, may each be considered a "party in interest" within the meaning of ERISA or a "disqualified person" within the meaning of ERISA or a "disqualified person" within the meaning of the Internal Revenue Code of 1986, as amended (the "Code") with respect to many employee benefit plans. Prohibited transactions within the meaning of ERISA or the Code may arise, for example, if the Offered Shares are acquired by or on behalf of a pension or other employee benefit plan with respect to which the Company or any of its affiliates is a service provider, unless such Offered Shares are acquired pursuant to an exemption for transactions effected on behalf of such plan by a "qualified professional asset manager" or pursuant to any other available exemption. Any such pension or employee benefit plan or other person proposing to invest in the Offered Shares should consult with its legal counsel. 18 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SECT TRUST, THE SECT TRUSTEE, OR ANY AGENT, DEALER OR UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE EQUITABLE COMPANIES INCORPORATED SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION. ------------------------ TABLE OF CONTENTS
PROSPECTUS PAGE ----- Available Information................ 2 Incorporation of Certain Documents by Reference.......................... 2 The Equitable........................ 4 Risk Factors......................... 6 Selling Stockholder.................. 10 Use of Proceeds...................... 10 Selected Consolidated Financial Data............................... 11 Description of Capital Stock......... 15 Description of Common Stock.......... 15 Restrictions on Acquisitions of Securities of the Company.......... 16 Plan of Distribution................. 17 Legal Opinions....................... 18 Experts.............................. 18 ERISA Matters........................ 18
11,940,299 SHARES THE EQUITABLE COMPANIES INCORPORATED COMMON STOCK (PAR VALUE $.01 PER SHARE) --------------------- PROSPECTUS --------------------- , 1997 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth those expenses to be incurred by the Company in connection with the issuance and distribution of the securities being registered. Except for the Securities and Exchange Commission filing fee and the NASD filing fee, all amounts shown are estimates. Securities and Exchange Commission filing fee.................................... $ 101,905 NASD filing fee.................................................................. 30,500 Blue Sky fees and expenses....................................................... 15,000 Printing expenses................................................................ 8,000 Accountants' fees and expenses................................................... 25,000 Legal fees and expenses.......................................................... 85,000 Trustee fees and expenses........................................................ 13,000 Miscellaneous expenses........................................................... 5,595 --------- Total........................................................................ $ 284,000 --------- ---------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law, as amended, provides in regard to indemnification of directors and officers as follows: 145. Indemnification of Officers, Directors, Employees and Agents; Insurance. (a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. (b) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense of settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect II-1 of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (c) To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made (1) by a majority vote of the directors who were not parties to such action, suit or proceeding, even though less than a quorum, or (2) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (3) by the stockholders. (e) Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys' fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. (f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. (g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under this section. (h) For purposes of this section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. (i) For purposes of this section, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with II-2 respect to any employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this section. (j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. (k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation's obligation to advance expenses (including attorneys' fees). Article SIXTH of the Company's Restated Certificate of Incorporation provides in regard to indemnification of directors and officers as follows: ARTICLE SIXTH: (i) Each person who is or was or had agreed to become a Director or officer of the Corporation, and each person who is or was or was serving or who had agreed to serve at the request of the Board of Directors or an officer of the Corporation as a director or officer of another corporation (including, without limitation, The Equitable Life Assurance Society of the United States and its subsidiaries), partnership, joint venture, trust, employee benefit plan or other enterprise (including the heirs, executor, administrators or estate of such person), shall be indemnified by the Corporation, and (ii) each person who is or was or who had agreed to become an employee or agent of the Corporation or who is or was serving or who had agreed to serve at the request of the Board of Directors or an officer of the Corporation as an employee or agent of another corporation (including, without limitation, The Equitable Life Assurance Society of the United States and its subsidiaries), partnership, joint venture, trust, employee benefit plan or other enterprise (including the heirs, executor, administrators or estate of such person) may be indemnified by the Corporation, in each case in accordance with the By-Laws, to the full extent permitted from time to time by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader amendment rights than said law permitted the Corporation to provide prior to such amendment) or any other applicable laws as presently or hereafter in effect. Without limiting the generality or the effect of the foregoing, the Corporation may enter into one or more agreements with any person which provide for indemnification greater or different than provided in this Article SIXTH. Any amendment or repeal of this Article SIXTH shall not adversely affect any right or protection existing hereunder immediately prior to such amendment or repeal. Article VI of the Company's By-Laws provides in regard to indemnification of directors and officers as follows: Section 6.01. NATURE OF INDEMNITY. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was or has agreed to become a Director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a Director or officer of another corporation (including, without limitation, The Equitable Life Assurance Society of the United States and its subsidiaries), partnership, joint venture, trust or other enterprise, including an employee benefit II-3 plan, or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify any person who was or is a party or is threatened to be made a party to such an action, suit or proceeding by reason of the fact that he or she is or was or has agreed to become an employee or agent of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of another corporation (including, without limitation, The Equitable Life Assurance Society of the United States and its subsidiaries), partnership, joint venture, trust or other enterprise, including an employee benefit plan, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such action, suit or proceeding and any appeal therefrom, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding had no reasonable cause to believe his or her conduct was unlawful; except that in the case of an action or suit by or in the right of the Corporation to procure a judgment in its favor (i) such indemnification shall be limited to expenses (including attorneys' fees) actually and reasonably incurred by such person in the defense or settlement of such action or suit, and (ii) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. [Section 145(a), (b)] Section 6.02. SUCCESSFUL DEFENSE. To the extent that a Director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 6.01 hereof or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith. Section 6.03. DETERMINATION THAT INDEMNIFICATION IS PROPER. Any indemnification of a Director or officer of the Corporation under Section 6.01 hereof (unless ordered by a court) shall be made by the Corporation unless a determination is made that indemnification of the Director or officer is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in Section 6.01 hereof. Any indemnification of an employee or agent of the Corporation under Section 6.01 hereof (unless ordered by a court) may be made by the Corporation upon a determination that indemnification of the employee or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section 6.01 hereof. Any such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders. [Section 145(d), (f)] Section 6.04. ADVANCE PAYMENT OF EXPENSES. Expenses (including attorneys' fees) incurred by a Director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the Director or officer to repay II-4 such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Corporation as authorized in this Article VI. Such expenses (including attorneys' fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. The Board of Directors may authorize the Corporation's counsel to represent such Director, officer, employee or agent in any action, suit or proceeding, whether or not the Corporation is a party to such action, suit or proceeding. [Section 145(e)] Section 6.05. PROCEDURE FOR INDEMNIFICATION OF DIRECTORS AND OFFICERS. Any indemnification of a Director or officer of the Corporation under Sections 6.01 and 6.02, or advance of costs, charges and expenses to a Director or officer under Section 6.04 of this Article VI, shall be made promptly, and in any event within 30 days, upon the written request of the Director or officer. If a determination by the Corporation that the Director or officer is entitled to indemnification pursuant to this Article is required, and the Corporation fails to respond within sixty days to a written request for indemnity, the Corporation shall be deemed to have approved such request. If the Corporation denies a written request for indemnity or advancement of expenses, in whole or in part, or if payment in full pursuant to such request is not made within 30 days, the right to indemnification or advances as granted by this Article VI shall be enforceable by the Director or officer in any court of competent jurisdiction. Such person's cost and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 6.04 of this Article VI where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Section 6.01 of this Article, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section 6.01 of this Article VI, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 6.06. SURVIVAL, PRESERVATION OF OTHER RIGHTS. The foregoing indemnification provisions shall be deemed to be a contract between the Corporation and each Director, officer, employee and agent who serves in any such capacity at any time while these provisions as well as the relevant provisions of the General Corporation Law of the State of Delaware are in effect, and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a "contract right" may not be modified retroactively without the consent of such Director, officer, employee or agent. The indemnification provided by this Article VI shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested Directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a Director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. Section 6.07. INSURANCE. The Corporation shall purchase and maintain insurance on behalf of any person who is or was or has agreed to become a Director or officer of the Corporation, or is or was serving at the request of the Corporation as a Director or officer of another corporation (including, without limitation, The Equitable Life Assurance Society of the United States and its II-5 subsidiaries), partnership, joint venture, trust or other enterprise, including an employee benefit plan, against any liability asserted against him or her and incurred by him or her or on his or her behalf in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of this Article, provided that such insurance is available on acceptable terms, which determination shall be made by a vote of a majority of the entire Board of Directors. Section 6.08. SEVERABILITY. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each Director or officer and may indemnify each employee or agent of the Corporation as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article VI that shall not have been invalidated and to the fullest extent permitted by applicable law. Section 102(b)(7) of the Delaware General Corporation Law, as amended, provides in regard to the limitation of liability of directors and officers as follows: (b) In addition to the matters required to be set forth in the certificate of incorporation by subsection (a) of this section, the certificate of incorporation may also contain any or all of the following matters: * * * * (7) A provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under section 174 of this Title, or (iv) for any transaction from which the director derived an improper personal benefit. No such provision shall eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective. All references in this paragraph to a director shall also be deemed to refer (x) to a member of the governing body of a corporation which is not authorized to issue capital stock, and (y) to such other person or persons, if any, who, pursuant to a provision of the certificate of incorporation in accordance with subsection (a) of Section 141 of this title, exercise or perform any of the powers or duties otherwise conferred or imposed upon the board of directors by this title. Article FIFTH (f) of the Company's Restated Certificate of Incorporation, as amended, provides in regard to the limitation of liability of directors and officers as follows: (f) No Director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as a Director, PROVIDED that nothing contained in this paragraph (f) of this Article FIFTH shall eliminate or limit the liability of a director (i) for any breach of the Director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, (iii) under Section 174 of the General Corporation Law of the State of Delaware or (iv) for any transaction from which the Director derived an improper personal benefit. No amendment, modification or repeal of this paragraph (f) of this Article FIFTH shall adversely affect any right or protection of a Director that exists at the time of such amendment, modification or repeal. Reference is made to the Standstill Agreement and the Company's and AXA's respective agreements made therein to indemnify each other, and to provide contribution in circumstances where indemnification is unavailable. II-6 ITEM 16. EXHIBITS.
1.01 Form of Sales Agreement for Common Stock.* 4.01 (a) Restated Certificate of Incorporation of the Registrant. 4.01 (b) Certificate of Designation of Convertible Preferred Stock, Series A. 4.01 (c) Certificate of Designation of Redeemable Preferred Stock, Series B. 4.01 (d) Certificate of Designation of Cumulative Convertible Preferred Stock, Series C. 4.01 (e) Certificate of Designation of Cumulative Convertible Preferred Stock, Series D. 4.01 (f) Certificate of Designation of Cumulative Convertible Preferred Stock, Series E. 4.01 (g) Amendment to Restated Certificate of Incorporation of the Registrant, dated as of May 15, 1997. 4.02 By-Laws of the Registrant. 5.01 Opinion of Debevoise & Plimpton.* 10.01 The Equitable Companies Incorporated Stock Trust Agreement, effective as of December 2, 1993, filed as Exhibit 10.01 to the registrant's Form S-4 Registration Statement No. 33-73102, dated December 17, 1993 and incorporated herein by reference. 10.02 The First Amendment to The Equitable Companies Incorporated Stock Trust Agreement, dated as of September 19, 1996. 23.01 Consent of Price Waterhouse LLP. 23.02 Consent of Debevoise & Plimpton (included in Exhibit 5.01). 24.01 Powers of Attorney of certain officers and directors of the Company (previously filed on the signature page hereto).
- ------------------------ * Previously filed. ITEM 17. UNDERTAKINGS. (A) RULE 415 OFFERING. The undersigned Registrants hereby undertake: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (B) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE. II-7 The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Company's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (C) ACCELERATION OF EFFECTIVENESS. Insofar as indemnifications for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons, if any, of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a registrant of expenses incurred or paid by a director, officer or controlling person, if any, of such registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, such registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (D) RULE 430A. (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-8 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, The Equitable Companies Incorporated certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on this 29th day of May, 1997. THE EQUITABLE COMPANIES INCORPORATED By /s/ JOSEPH J. MELONE ___________________________________ Name: Joseph J. Melone Title: President, Chief Executive Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - --------------------------------------- ------------------------------------ ------------- PRINCIPAL EXECUTIVE OFFICERS: /s/ JOSEPH J. MELONE President, Chief Executive Officer May 29, 1997 Joseph J. Melone and Director PRINCIPAL FINANCIAL OFFICER: /s/ STANLEY B. TULIN Executive Vice President and Chief May 29, 1997 Stanley B. Tulin Financial Officer PRINCIPAL ACCOUNTING OFFICER: /s/ ALVIN H. FENICHEL Senior Vice President and Controller May 29, 1997 Alvin H. Fenichel * Chairman of the Board, Director Claude Bebear * Director Henri de Castries * Director John S. Chalsty Francoise Colloc'h Director * Director Joseph L. Dionne
II-9
SIGNATURE TITLE DATE - --------------------------------------- ------------------------------------ ------------- * Director William T. Esrey Jean-Rene Fourtou Director * Director Donald J. Greene * Director Anthony J. Hamilton * Director John T. Hartley John H.F. Haskell, Jr. Director Mary R. (Nina) Henderson Director * Director W. Edwin Jarmain * Director Winthrop Knowlton Arthur L. Liman Director Didier Pineau-Valencienne Director * Director George J. Sella, Jr. Dave H. Williams Director *By /s/ HENRY Q. CONLEY (Attorney-in-Fact) May 29, 1997
II-10 INDEX TO EXHIBITS
EXHIBITS. - ----------- 1.01 Form of Sales Agreement for Common Stock.* 4.01(a) Restated Certificate of Incorporation of the Registrant. 4.01(b) Certificate of Designation of Convertible Preferred Stock, Series A. 4.01(c) Certificate of Designation of Redeemable Preferred Stock, Series B. 4.01(d) Certificate of Designation of Cumulative Convertible Preferred Stock, Series C. 4.01(e) Certificate of Designation of Cumulative Convertible Preferred Stock, Series D. 4.01(f) Certificate of Designation of Cumulative Convertible Preferred Stock, Series E. 4.01(g) Amendment to Restated Certificate of Incorporation of the Registrant, dated as of May 15, 1997. 4.02 By-Laws of the Registrant. 5.01 Opinion of Debevoise & Plimpton.* 10.01 The Equitable Companies Incorporated Stock Trust Agreement, effective as of December 2, 1993, filed as Exhibit 10.01 to the registrant's Form S-4 Registration Statement No. 33-73102, dated December 17, 1993 and incorporated herein by reference. 10.02 The First Amendment to The Equitable Companies Incorporated Stock Trust Agreement, dated as of September 19, 1996. 23.01 Consent of Price Waterhouse LLP. 23.02 Consent of Debevoise & Plimpton (included in Exhibit 5.01). 24.01 Powers of Attorney of certain officers and directors of the Company (previously filed on the signature page hereto).
- ------------------------ * Previously filed. EX-4.01(A) 2 EXHIBIT 4.01(A): RESTATED CERT. OF INCORPORATION Exhibit 4.01(a) [CONFORMED COPY] RESTATED CERTIFICATE OF INCORPORATION OF THE EQUITABLE COMPANIES INCORPORATED Pursuant to Section 242 and 245 of the General Corporation Law of the State of Delaware THE EQUITABLE COMPANIES INCORPORATED, a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), certifies as follows: 1. The name of the Corporation is THE EQUITABLE COMPANIES INCORPORATED. 2. The Corporation's original Certificate of Incorporation was filed with the Secretary of State on July 15, 1991. 3. This Restated Certificate of Incorporation integrates, amends and restates the Certificate of Incorporation by among other things: (a) changing the authorized capital stock of the Corporation; (b) providing for certain restrictions on the authority of the Board of Directors of the Corporation to issue certain shares of capital stock of the Corporation; (c) providing for advance notice of stockholder nominations for the election of Directors and of business to be brought by stockholders before any meeting of stockholders of the Corporation; and (d) changing the By-Laws that the Board of Directors shall have the power to adopt, amend, alter or repeal without a vote of stockholders. 4. The text of the Certificate of Incorporation of the Corporation is hereby integrated, amended and restated to read as herein set forth in full: FIRST: The name of the Corporation is THE EQUITABLE COMPANIES INCORPORATED. SECOND: The Corporation's registered office in the State of Delaware is at Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. THIRD: The nature of the business of the Corporation and its purpose is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: 1. The amount of total authorized capital stock of the Corporation is 510,000,000 shares, of which 500,000,000 shares shall be Common Stock, having a par value of $.01 per share, and 10,000,000 shares shall be Preferred Stock, having a par value of $1.00 per share. 2. The Board of Directors of the Corporation is hereby expressly authorized, at any time and from time to time by a resolution or resolutions adopted by the affirmative vote of a majority of the total number of Directors which the Corporation would have if there were no vacancies (the "entire Board of Directors"), to divide the shares of Preferred Stock into one or more series, to issue from time to time in whole or in part the shares of Preferred Stock or the shares of any series thereof, and subject to Section 5 of this Article FOURTH to fix and determine in the resolution or resolutions providing for the issue of shares of Preferred Stock of a particular series the voting rights, if any, of the holders of shares of such series, the designations, preferences and relative, participating, optional and other special rights of such series, and the qualifications, limitations and restrictions thereof, to the fullest extent now or hereafter permitted by the laws of the State of Delaware. The voting rights, if any, of each such series and the preferences and relative, participating, optional and other special rights of each such series, and the qualifications, limitations and restrictions 2 thereof, if any, may differ from those of any and all other series. Unless otherwise provided in the resolution or resolutions of the Board of Directors providing for the issuance thereof, shares of any series of Preferred Stock which shall be issued and thereafter acquired by the Corporation through purchase, redemption, exchange, conversion or otherwise shall return to the status of authorized but unissued Preferred Stock. Without limiting the generality of the foregoing authority of the Board of Directors, but subject to Section 5 of this Article FOURTH, the Board of Directors from time to time may (if otherwise permitted under the General Corporation Law of the State of Delaware): (a) designate a series of Preferred Stock, which may be distinguished by number, letter or title from other Preferred Stock of the Corporation; (b) fix and thereafter increase or decrease (but not below the number of shares thereof then outstanding) the number of shares of Preferred Stock that shall constitute such series; (c) provide for dividends on shares of Preferred Stock of such series and, if provisions are made for dividends, determine the dividend rate and the times at which holders of shares of Preferred Stock of such series shall be entitled to receive the dividends, whether the dividends shall be cumulative and, if so, from what date or dates, and the other conditions, if any, including rights of priority, if any, upon which the dividends shall be paid; 3 (d) determine the rights, if any, to which holders of the shares of Preferred Stock of such series shall be entitled in the event of any liquidation, dissolution or winding up of the Corporation; (e) provide for the redemption or purchase of shares of Preferred Stock of such series and, if provisions are made for redemption, determine the time or times and the price or prices at which the shares of Preferred Stock of such series shall be subject to redemption in whole or in part, and the other terms and conditions, if any, on which shares of Preferred Stock of such series may be redeemed or purchased; (f) provide for a sinking fund or purchase fund for the redemption or purchase of shares of Preferred Stock of such series and, if any such fund is so provided for the benefit of such shares of Preferred Stock, the amount of such fund and the manner of its application; (g) determine the extent of the voting rights, if any, of the shares of Preferred Stock of such series, including but not limited to the right of the holders of such shares to vote as a separate class acting alone or with the holders of one or more other series of Preferred Stock and the right to have more (or less) than one vote per share; (h) provide whether or not the shares of Preferred Stock of such series shall be convertible into, or exchangeable for, shares of any other class or classes of capital stock, or any series thereof, of the Corporation and, if so convertible or exchangeable, determine the conversion or exchange price or rate, the adjustments thereof and the other terms and conditions, if any, on which such shares of Preferred Stock shall be so convertible or exchangeable; and (i) provide for any other preferences, any relative, participating, optional or other special rights, any qualifications, limitations or restrictions 4 thereof, or any other terms or provisions of shares of Preferred Stock of such series as the Board of Directors may deem appropriate or desirable. 3. Except for and subject to those rights expressly granted to the holders of Preferred Stock, or any series thereof, by the Board of Directors, pursuant to the authority hereby vested in the Board of Directors or as provided by the laws of the State of Delaware, the holders of the Corporation's Common Stock shall have exclusively all rights of stockholders and shall possess exclusively all voting power. Each holder of Common Stock of the Corporation shall be entitled, on each matter submitted for a vote to holders of Common Stock, to one vote for each share of such stock standing in such holder's name on the books of the Corporation. 4. Shares of Common Stock or Preferred Stock may be issued by the Corporation from time to time for such consideration, having a value of not less than the par value, if any, thereof, as is determined from time to time by the Board of Directors. Any and all shares issued and for which full consideration has been paid or delivered shall be deemed fully paid stock and the holder thereof shall not be liable for any further payment thereon. 5. Notwithstanding the foregoing provisions, until the obligations of the Corporation under that certain Standstill and Registration Rights Agreement dated as of July 18, 1991 among the Corporation, The Equitable Life Assurance Society of the United States and AXA, as amended from time to time (the "Standstill Agreement"), shall terminate in accordance with the terms of the Standstill Agreement, the Board of Directors is not authorized to issue any shares of capital stock of the Corporation having a vote on any matter (whether or not such voting rights are contingent upon the occurrence of a contingency) in violation of the restrictions contained in the Standstill Agreement. The Corporation shall promptly provide written notice to its stockholders of the termination of such restrictions under the Standstill Agreement. A copy of the Standstill Agreement shall be 5 available for inspection at the office of the Secretary at the corporate headquarters of the Corporation. FIFTH: The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation and for the purpose of creating, defining, limiting and regulating the powers of the Corporation and its Directors and stockholders: (a) The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. (b) The Board of Directors shall consist of not less than thirteen nor more than thirty-six Directors. The exact number of Directors shall be determined from time to time by a resolution or resolutions adopted by the affirmative vote of a majority of the entire Board of Directors. A Director shall hold office until the annual meeting next following his or her election and until his or her successor shall be elected and shall qualify, subject, however, to the Director's prior death, resignation, disqualification or removal from office. Subject to the rights of the holders of any series of Preferred Stock, any newly created Directorship and any other vacancy occurring on the Board of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by a sole remaining Director, except that the stockholders shall fill any vacancy resulting from the removal of a Director by the stockholders. Election of Directors need not be by written ballot unless the By-Laws so provide. (c) Notwithstanding the foregoing, whenever the holders of any one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect Directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such Directorships shall be governed by the terms of this Restated Certificate of Incorporation applicable 6 thereto (including the resolutions adopted by the Board of Directors pursuant to Article FOURTH). The number of Directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the number of Directors fixed by or pursuant to paragraph (b) of this Article FIFTH. (d) Advance notice of stockholder nominations for the election of Directors and of business to be brought by stockholders before any meeting of stockholders of the Corporation shall be given if required by, and in the manner provided in, the By-Laws. At any annual meeting or special meeting of stockholders of the Corporation, only such business shall be conducted as shall have been brought before such meeting in the manner provided in the By-Laws. (e) The Board of Directors shall have the express power, without a vote of stockholders, to adopt any By-Law not inconsistent with this Restated Certificate of Incorporation, or with Sections 1.02, 1.05, 1.10, 2.05, 2.06 and 3.02, the final paragraph of Section 1.01, and the final paragraph of Section 2.03 of the original By-Laws of the Corporation (the "Governance By-Laws") or with any By-Law adopted by vote of the stockholders of the Corporation, and to amend, alter or repeal the By-Laws of the Corporation other than the Governance By-Laws and any By-Law adopted by vote of the stockholders of the Corporation, except to the extent that the By-Laws or this Restated Certificate of Incorporation otherwise provide. The Board of Directors may exercise such power upon the affirmative vote of a majority of the entire Board of Directors. Stockholders may adopt any By-Law, or amend, alter or repeal the By-Laws of the Corporation, upon the affirmative vote of the holders of shares having at least a majority of the voting power of the then outstanding shares of capital stock of the Corporation entitled (at all times and without regard to the occurrence of a contingency) to vote generally on the election of Directors and other matters submitted for stockholder approval, voting together as a single class. 7 (f) No Director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as a Director, provided that nothing contained in this paragraph (f) of this Article FIFTH shall eliminate or limit the liability of a director (i) for any breach of the Director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, (iii) under Section 174 of the General Corporation Law of the State of Delaware or (iv) for any transaction from which the Director derived an improper personal benefit. No amendment, modification or repeal of this paragraph (f) of this Article FIFTH shall adversely affect any right or protection of a Director that exists at the time of such amendment, modification or repeal. SIXTH: (i) Each person who is or was or had agreed to become a Director or officer of the Corporation, and each person who is or was serving or who had agreed to serve at the request of the Board of Directors or an officer of the Corporation as a director or officer of another corporation (including, without limitation, The Equitable Life Assurance Society of the United States and its subsidiaries), partnership, joint venture, trust, employee benefit plan or other enterprise (including the heirs, executor, administrators or estate of such person), shall be indemnified by the Corporation, and (ii) each person who is or was or who had agreed to become an employee or agent of the Corporation or who is or was serving or who had agreed to serve at the request of the Board of Directors or an officer of the Corporation as an employee or agent of another corporation (including, without limitation, The Equitable Life Assurance Society of the United States and its subsidiaries), partnership, joint venture, trust, employee benefit plan or other enterprise (including the heirs, executor, administrators or estate of such person) may be indemnified by the Corporation, in each case in accordance with the By-Laws, to the full extent permitted from time to time by the General Corporation Law of the State of Delaware as the same exists or 8 may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment) or any other applicable laws as presently or hereafter in effect. Without limiting the generality or the effect of the foregoing, the Corporation may enter into one or more agreements with any person which provide for indemnification greater or different than that provided in this Article SIXTH. Any amendment or repeal of this Article SIXTH shall not adversely affect any right or protection existing hereunder immediately prior to such amendment or repeal. SEVENTH: The Corporation reserves the right to amend or repeal any provision contained in this Restated Certificate of Incorporation in the manner now or hereafter prescribed by the laws of the State of Delaware, and all rights herein conferred upon stockholders or Directors are granted subject to this reservation. 5. This Restated Certificate of Incorporation was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware. The Board of Directors adopted resolutions setting forth the Restated Certificate of Incorporation, declaring their advisability and directing the consideration of the Restated Certificate of Incorporation by the sole stockholder of the Corporation. Pursuant to Section 228 of the General Corporation Law of the State of 9 Delaware, such stockholder of the Corporation duly consented to this Restated Certificate of Incorporation. IN WITNESS WHEREOF, THE EQUITABLE COMPANIES INCORPORATED has caused this certificate to be signed by Richard H. Jenrette, its Chairman and Chief Executive Officer, and attested by Molly K. Heines, its Secretary, this 20th day of May 1992. THE EQUITABLE COMPANIES INCORPORATED By /s/ Richard H. Jenrette -------------------------- Chairman and Chief Executive Officer ATTEST: By /s/ Molly K. Heines ---------------------- Secretary 10 EX-4.01(B) 3 EXH 4.01(B) CERT. OF DESIGNATION-SERIES A Exhibit 4.01(b) CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF PREFERRED STOCK AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF OF THE EQUITABLE COMPANIES INCORPORATED CONVERTIBLE EXCHANGEABLE PREFERRED STOCK, SERIES A --------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware --------------- The following resolution has been duly adopted by the Board of Directors (such Board, including any committee thereof duly authorized to act on behalf of such Board, herein referred to as the "Board") of The Equitable Companies Incorporated, a Delaware corporation (the "Corporation"), pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, which resolution remains in full force and effect as of the date hereof: WHEREAS the Board is authorized, within the limitations and restrictions stated in the Restated Certificate of Incorporation of the Corporation, to fix by resolution or resolutions the voting rights, if any, of each series of Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of the Corporation and the designations, preferences and relative, participating, optional and other special rights and qualifications, limitations and restrictions thereof; and WHEREAS it is the desire of the Board, pursuant to its authority as aforesaid, to authorize and fix the terms 2 of a series of Preferred Stock and the number of shares constituting such series: NOW, THEREFORE, BE IT RESOLVED that there is hereby authorized and created a series of Preferred Stock on the terms and with the provisions (in addition to those set forth in the Restated Certificate of Incorporation of the Corporation that are applicable to all Preferred Stock) as follows: SECTION 1. Designation, Number of Shares and Stated Value. The series of Preferred Stock shall be designated the "Convertible Exchangeable Preferred Stock, Series A" (the "Convertible Preferred Stock"). The number of authorized shares of Convertible Preferred Stock shall be 2,500,000. The number of shares of Convertible Preferred Stock may be decreased (but not below the number of shares of Convertible Preferred Stock at the time outstanding), in the manner specified in the General Corporation Law of the State of Delaware, by an amendment to this Section 1 approved by the Board, but may not be increased (except, by an amendment to this Section 1 approved by the Board in the manner specified in the General Corporation Law of the State of Delaware, as necessary to permit the issuance of additional shares of Convertible Preferred Stock pursuant to Section 3(c)) or otherwise decreased without the affirmative vote of the Required Holders (as defined in Section 3(b)). The stated value of each share of Convertible Preferred Stock ("Stated Value") shall be $100. SECTION 2. Rank. The Convertible Preferred Stock shall, as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation, rank (i) prior to the Common Stock, par value $.0l per share (the "Common Stock"), of the Corporation and any other capital stock of the Corporation (other than (a) the Preferred Stock, Series B, par value $1.00 per share, of the Corporation (the "Series B Preferred Stock") and (b) any other class or series of a class of capital stock of the Corporation the terms of which expressly provide that the shares thereof rank senior or on a parity as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation with the shares of the Convertible Preferred Stock) (such securities, other than those described in the immediately preceding parenthetical clause, collectively referred to herein as the "Junior Securities") and (ii) on a parity with the Series B Preferred Stock and any other class 3 or series of a class of capital stock of the Corporation the terms of which expressly provide that the shares thereof rank on a parity as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation with the shares of the Convertible Preferred Stock (the "Parity Securities"). SECTION 3. Dividends. (a) The holders of outstanding shares of Convertible Preferred Stock, in preference to the holders of outstanding shares of any Junior Securities, shall be entitled to receive, when, as and if declared by the Board, out of funds of the Corporation legally available for the payment of dividends, a cumulative quarterly cash dividend per share in an amount for each Dividend Period (as defined below) calculated by multiplying the Stated Value by the Dividend Rate (as defined below) for such Dividend Period. "Dividend Rate" means, for a Dividend Period, the product of (i) the lesser of 10% and the LIBOR Rate (determined pursuant to Section 3(b)) for such Dividend Period, multiplied by (ii) a fraction, the numerator of which is the number of days in such Dividend Period and the denominator of which is 360. Quarterly dividends shall be payable on each July 22, October 22, January 22 and April 22 (each a "Dividend Payment Date"), commencing on October 22, 1992 (the "Initial Dividend Payment Date"). Each such quarterly dividend shall be cumulative and shall accumulate, whether or not earned or declared and whether or not there are funds of the Corporation legally available for payment of dividends, for the period (each, a "Dividend Period") commencing on and including the most recent Dividend Payment Date to which dividends have been paid or accumulated to but excluding the next succeeding Dividend Payment Date, except that (x) the Dividend Period terminating on the Initial Dividend Payment Date (the "Initial Dividend Period") shall commence on and include July 22, 1992, (y) with respect to shares of Convertible Preferred Stock issued pursuant to Section 3(c), dividends shall accumulate commencing on and including the date of issuance of such shares of Convertible Preferred Stock and (z) with respect to shares of Convertible Preferred Stock which are redeemed, exchanged for Debentures, converted into shares of Common Stock or redeemed upon a Liquidation Transaction (as defined in Section 7) pursuant to Section 4(a), Section 4(b), Section 5(a), Section 6(a), Section 6(b) or Section 7, as the case may be, the final Dividend Period shall terminate on the applicable redemption date, exchange date, Conversion Date or distribution date, as the case may be. Dividends shall be payable, net of any amounts required to be withheld for or with respect to 4 taxes, to holders of record as they appear on the stock books of the Corporation at the close of business on such record dates, not more than 60 days nor less than 10 days prior to the respective Dividend Payment Date, as shall be fixed by the Board. If any Dividend Payment Date is not a business day, the quarterly dividend to be paid on such Dividend Payment Date shall be paid on the next following business day. A "business day" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are required or authorized by law to be closed. Payments of quarterly dividends shall be made in coin or currency of the United States that as of the date of payment shall be legal tender for payment of public and private debts by mailing a check to each holder of shares of Convertible Preferred Stock at the address of such holder as shown on the stock books of the Corporation. (b) The LIBOR Rate will be 5.0625% for the Initial Dividend Period and the next succeeding Dividend Period and will be determined on each January 22 and July 22 thereafter (each, a "Determination Date") for the Dividend Periods terminating on the two Dividend Payment Dates next following such Determination Date (and any other Dividend Periods terminating during such period) and will be the sum of 1.50% plus LIBOR (expressed as a percentage) in respect of such Determination Date determined as follows: (i) In respect of each Determination Date, LIBOR will be determined on the basis of the rate for deposits in U.S. dollars, having a six-month maturity commencing on such Determination Date, which rate appears on the display designated as the Telerate Page 3750 on the Dow Jones Telerate Service (or such other page as may replace that page on that service, or such other alternative service as may be agreed by the Corporation and the Required Holders, for the purpose of displaying a rate comparable to the rate which currently appears on the Telerate Page 3750) (the "Telerate Page 3750") as of 11:O0 a.m., London time, on the second London Banking Day prior to such Determination Date. If such rate does not appear on the Telerate Page 3750 as of such time, LIBOR in respect of such Determination Date will be determined as described in clause (ii) below. (ii) In respect of any Determination Date on which the rate for deposits in U.S. dollars, having a six-month maturity commencing on such Determination Date, does not appear on the Telerate Page 3750 as described 5 in clause (i) above, LIBOR will be determined on the basis of the rates at approximately 11:00 a.m., London time, on the London Banking Day immediately prior to such Determination Date, for deposits in U.S. dollars, in an amount comparable to the aggregate Stated Value for all shares of Convertible Preferred Stock outstanding on such Determination Date, having a six-month maturity commencing on such Determination Date offered to prime banks in the London interbank market by four major banks in the London interbank market selected by the Corporation and approved by the Required Holders. The Corporation will request the principal London office of each such bank to provide a quotation of its rate. If at least two such quotations are provided, LIBOR in respect of such Determination Date will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR in respect of such Determination Date will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., New York City time, on the Determination Date by three major banks in New York City, selected by the Corporation and approved by the Required Holders, for loans in U.S. dollars to leading European banks, in an amount comparable to the aggregate Stated Value for all shares of Convertible Preferred Stock outstanding on such Determination Date, having a six-month maturity commencing on such Determination Date; provided, however, that if the banks selected as aforesaid by the Corporation are not quoting as mentioned in this sentence, LIBOR in respect of such Determination Date will be LIBOR as calculated in respect of the preceding Determination Date. (iii) A "London Banking Day" shall mean any day (other than a Saturday, Sunday or legal holiday) on which banks in New York City and London, England are open for dealings in dollar deposits in the London interbank market. (iv) "Required Holders" means, at any date, the holders of at least 66-2/3% of the aggregate Stated Value of the shares of Convertible Preferred Stock then outstanding disregarding the aggregate Stated Value of any of such shares owned by the Corporation or by any of its Subsidiaries (as defined in Section 6(m)). (c) On each Dividend Payment Date occurring prior to July 22, 1995, the Corporation may issue shares of Convertible Preferred Stock in lieu of a cash payment of any or all of the dividends due in respect of the Convertible 6 Preferred Stock on such Dividend Payment Date, by giving written notice to the holders of shares of Convertible Preferred Stock, by first class mail to their respective addresses as shown on the stock books of the Corporation, of such election not less than 10 nor more than 30 days prior to such Dividend Payment Date. If such notice is so given, the Corporation shall issue and deliver or cause to be delivered to each holder of shares of Convertible Preferred Stock on such Dividend Payment Date out of its authorized but unissued Convertible Preferred Stock that number of shares of Convertible Preferred Stock determined by dividing the aggregate amount of dividends to be paid in shares of Convertible Preferred Stock on such Dividend Payment Date to such holder by $100. If such shares are not actually issued to such holders on such Dividend Payment Date (and certificates representing such shares mailed to such holders promptly thereafter), the Corporation's right to issue shares of Convertible Preferred Stock in lieu of a cash payment with respect to the dividends due on such Dividend Payment Date shall be forfeited. Each issuance of shares of Convertible Preferred Stock in lieu of cash payment of dividends shall be made pro rata with respect to all holders of shares of Convertible Preferred Stock then outstanding, except that the Corporation shall, in lieu of issuing any fractional shares of Convertible Preferred Stock to any holder, pay cash to such holder in an amount equal to that fraction of the Stated Value. (d) On each Dividend Payment Date occurring on or after July 22, 1995, the Corporation may issue shares of Common Stock in lieu of a cash payment of any or all of the dividends due in respect of the Convertible Preferred Stock on such Dividend Payment Date, by giving written notice to the holders of shares of Convertible Preferred Stock, by first class mail to their respective addresses as shown on the stock books of the Corporation, of such election not less than 10 nor more than 30 days prior to such Dividend Payment Date. If such notice is so given, the Corporation shall issue and deliver or cause to be delivered to each holder of shares of Convertible Preferred Stock on such Dividend Payment Date out of its authorized but unissued Common Stock or Common Stock held in treasury that number of shares of Common Stock determined by dividing the aggregate amount of dividends to be paid in shares of Common Stock on such Dividend Payment Date to such holder by the Current Market Price (as defined in section 6(m)) as of such Dividend Payment Date. If such shares are not actually issued to such holders on such Dividend Payment Date (and certificates representing such shares mailed to such holders 7 promptly thereafter), the Corporation's right to issue shares of Common Stock in lieu of a cash payment with respect to the dividends due on such Dividend Payment Date shall be forfeited. Each issuance of shares of Common Stock in lieu of cash payment of dividends shall be made pro rata with respect to all holders of shares of Convertible Preferred Stock then outstanding, except that the Corporation shall, in lieu of issuing any fractional shares of Common Stock to any holder, pay cash to such holder in an amount equal to that fraction of the Current Market Price as of the relevant Dividend Payment Date. (e) All shares of Convertible Preferred Stock or Common Stock issued and delivered to holders of Convertible Preferred Stock pursuant to Section 3(c) or 3(d), respectively, will upon issuance by the Corporation and delivery be duly and validly issued, fully paid and nonassessable and free from all documentary, stamp, transfer or other transactional taxes and all liens and charges with respect to the issuance thereof and the Corporation shall take no action which will cause a contrary result. (f) Subject to the last sentence of each of Sections 3(c) and 3(d), all dividends paid with respect to shares of Convertible Preferred Stock shall be paid pro rata to the holders entitled thereto. {g) When dividends are not paid in full upon the Convertible Preferred Stock, any dividends declared or paid upon shares of Convertible Preferred Stock and any Parity Securities shall be declared or paid, as the case may be, pro rata so that the amounts of dividends declared or paid, as the case may be, per share on the Convertible Preferred Stock and such other Parity Securities in all cases bear to each other the same ratio that accumulated and unpaid dividends per share on the shares of Convertible Preferred Stock and such other Parity Securities bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Convertible Preferred Stock or any Parity Securities which may be in arrears. (h) Unless full cumulative dividends have been or contemporaneously are declared by the Board and paid or declared and a sum set apart sufficient for such payment by the Corporation on the Convertible Preferred Stock for all Dividend Periods terminating on or prior to the date of payment of dividends on any Junior Securities, no dividends shall be declared or paid or sum set apart for such payment 8 or any other distribution made on or with respect to such Junior Securities for any period, other than dividends payable or distributions made in shares of Junior Securities. (i) Unless full cumulative dividends have been or contemporaneously are declared by the Board and paid or declared and a sum set apart sufficient for payment by the Corporation on the Convertible Preferred Stock for all Dividend Periods terminating on or prior to the date of any event described in clause (i) or (ii) of this Section 3(i), the Corporation shall not, and shall not permit its Subsidiaries to, (i) redeem, purchase, retire or otherwise acquire for any consideration any shares of Convertible Preferred Stock, unless (A) all shares of Convertible Preferred Stock outstanding shall be redeemed, repurchased, retired or otherwise acquired or (B) the shares of Convertible Preferred Stock are redeemed, purchased, retired or otherwise acquired pro rata from among the holders of the shares then outstanding or (ii) redeem, purchase, retire or otherwise acquire for any consideration, or make any payment on account of a sinking fund or other similar fund for redemption, purchase, retirement or acquisition of, any Junior Securities or any Parity Securities, or any warrant, right or option to purchase any thereof, or make any distribution in respect thereof, directly or indirectly, whether in cash, obligations or securities of the Corporation or other property, except, (i) in the case of Junior Securities, redemptions, purchases, retirements, acquisitions or distributions made in shares of Junior Securities and (ii) in the case of Parity Securities, pro rata so that the amounts redeemed, purchased, retired or otherwise acquired or paid or distributed in respect thereof, as the case may be, per share on the Convertible Preferred Stock and such other Parity Securities in all cases bear to each other the same ratio that accumulated and unpaid dividends and required redemption payments per share on the shares of Convertible Preferred Stock and such other Parity Securities bear to each other. SECTION 4. Redemption. (a) The Convertible Preferred Stock shall not be redeemable prior to October 15, 1997. To the extent the Corporation shall have funds legally available therefor, the Convertible Preferred Stock shall be subject to redemption in cash, at the option of the Corporation, at any time on or after October 15, 1997, in part from time to time in a minimum of 200,000 shares (and in each case in an integral multiple thereof) or in whole, at the following redemption prices per share, together in 9 each case with accumulated and unpaid dividends thereon to the redemption date, without interest, if redeemed during the 12-month period commencing on October 15 of the years indicated: 1997 ................ $105 1998 ................ 104 1999 ................ 103 2000 ................ 102 2001 ................ 101 2002 and thereafter ................. $100 If less than all shares of Convertible Preferred Stock then outstanding are to be redeemed, the shares of Convertible Preferred Stock will be redeemed pro rata from among the holders of shares of Convertible Preferred Stock then outstanding. (b) On October 15, 2007, the Corporation shall redeem all shares of Convertible Preferred Stock then outstanding at a redemption price per share equal to the Stated Value, together with accumulated and unpaid dividends thereon to the redemption date, without interest. In lieu of a cash payment of the amounts due upon such mandatory redemption, the Corporation may issue shares of Common Stock to the holders of shares of Convertible Preferred Stock in full payment of all such amounts, by giving written notice (in the manner described in Section 4(d)) to such holders. If such notice is so given, the Corporation shall issue and deliver or cause to be delivered to each holder of shares of Convertible Preferred Stock out of its authorized but unissued Common Stock or Common Stock held in treasury that number of shares of Common Stock determined by dividing the aggregate Stated Value of all shares of Convertible Preferred Stock owned by such holder as shown on the stock books of the Corporation, together with accumulated and unpaid dividends thereon to the redemption date, by the Current Market Price as of the redemption date. The Corporation shall, in lieu of issuing any fractional shares of Common Stock to any bolder, pay to such holder cash in an amount equal to that fraction of the Current Market Price as of the redemption date. (c) All shares of Common Stock issued and delivered pursuant to Section 4(b) will upon issuance by the Corporation and delivery be duly and validly issued, fully paid and nonassessable and free from all documentary, stamp, transfer or other transactional taxes and all liens and charges with respect to the issuance thereof and the 10 Corporation shall take no action which will cause a contrary result. (d) Notice of any redemption pursuant to Section 4(a) or Section 4(b) will be given to the holders of shares of Convertible Preferred Stock not less than 10 nor more than 30 days prior to the date fixed for redemption or the mandatory redemption date, as the case may be. Notice of redemption will be given by first class mail to such holders' respective addresses as shown on the stock books of the Corporation and will specify (i) the date fixed for redemption or the mandatory redemption date, as the case may be, (ii) the applicable redemption price and (iii) the Conversion Price (as defined in Section 6(c)) then in effect and that all shares of Convertible Preferred Stock called for redemption may be converted at any time prior to the close of business on the date fixed for redemption or the mandatory redemption date, as the case may be. In the case of a partial redemption pursuant to Section 4(a), such notice shall also specify the number of shares of Convertible Preferred Stock to be redeemed from each holder and the aggregate number of shares of Convertible Preferred Stock which will be outstanding after such redemption. (e) If funds for the redemption of any or all shares of Convertible Preferred Stock shall have been irrevocably set apart for redemption on the redemption date, such shares of Convertible Preferred Stock shall from and after the redemption date cease to accumulate dividends and the only right of the holders of such shares shall be to receive payment of the redemption price and all accumulated and unpaid dividends on such shares to the date of redemption. (f) If the Corporation shall fail at any time to discharge its obligation to redeem shares of Convertible Preferred Stock pursuant to paragraph (4)(b) (the "Mandatory Redemption Obligation"), the Mandatory Redemption Obligation shall be discharged as soon as the Corporation is able to discharge the Mandatory Redemption Obligation. If and for so long as the Mandatory Redemption Obligation shall not have been fully discharged, the Corporation shall not (i) declare, pay or set apart for payment dividends or make any other distribution on or with respect to any Parity Securities, except that dividends may be declared, paid or set apart for payment or other distributions made upon shares of Convertible Preferred Stock and any Parity Securities pro rata so that the amounts of dividends declared, paid or set apart or other distributions made per share on the 11 Convertible Preferred Stock and such other Parity Securities bear to each other the same ratio that accumulated and unpaid dividends and required redemption payments, if any, per share on the shares of Convertible Preferred Stock and such other Parity Securities bear to each other; (ii) declare, pay or set apart for payment dividends or make any other distribution on or with respect to any Junior Securities, other than dividends paid or distributions made in shares of Junior Securities; or (iii) redeem, purchase, retire or otherwise acquire for any consideration, or make any payment on account of a sinking fund or other similar fund for redemption, purchase, retirement or acquisition of, any Junior Securities or any Parity Securities, or any warrant, right or option to purchase any thereof, or make any distribution in respect thereof, directly or indirectly, whether in cash, obligations or securities of the Corporation or other property, except, (i) in the case of Junior Securities, redemptions, purchases, retirements, acquisitions or distributions made in shares of Junior Securities and (ii) in the case of Parity Securities, pro rata so that the amounts redeemed, purchased, retired or otherwise acquired or paid or distributed in respect thereof, as the case may be, per share on the Convertible Preferred Stock and such other Parity Securities in all cases bear to each other the same ratio that accumulated and unpaid dividends and required redemption payments per share on the shares of Convertible Preferred Stock and such other Parity Securities bear to each other. (g) Any cash payment to a holder of shares of Convertible Preferred Stock on any redemption date shall be made in coin or currency of the United States that as of the date of payment shall be legal tender for payment of public and private debts by mailing a check to such holder at the address of such holder as shown on the stock books of the Corporation. SECTION 5. Exchange. (a) The Convertible Preferred Stock shall not be exchangeable prior to October 15, 1994. On or after October 15, 1994, the Convertible Preferred Stock shall be exchangeable on any Dividend Payment Date, in whole but not in part, only upon the written mutual agreement of the Corporation and the Required Holders, for Convertible Subordinated Debentures of the Corporation issuable only in registered form, without coupons, in denominations of $1,000 and any integral multiple thereof containing the terms set forth in Exhibit A hereto (or such other terms as may be agreed by the Corporation and the Required Holders) (the "Debentures") at an exchange rate of 12 $1,000 principal amount or Debentures for shares of Convertible Preferred Stock with an aggregate Stated Value of $1,000; provided, however, that the Convertible Preferred Stock shall not be exchangeable for the Debentures unless full cumulative dividends shall have been paid or contemporaneously declared and paid or declared and a sum set apart sufficient for payment on the Convertible Preferred Stock for all Dividend Periods terminating on or prior to the date of such exchange. (b) If the Corporation and the Required Holders mutually agree on such an exchange, all shares of Convertible Preferred Stock then outstanding shall be exchanged automatically on the Dividend Payment Date mutually agreed for such exchange, without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent, for the aggregate principal amount of the Debentures to which such holder is entitled. The Corporation shall, in lieu of issuing to any holder any Debenture in a principal amount other than $1,000 or an integral multiple thereof, pay cash to such holder in an amount equal to that portion of the principal amount that is not $1,000 or such integral multiple thereof. (c) The Corporation shall pay all documentary, stamp, transfer or other transactional taxes attributable to the issuance and delivery of the Debentures upon exchange for the Convertible Preferred Stock; provided, however, that the Corporation shall not be required to pay any taxes payable in respect of any transfer involved in the issuance or delivery of any certificate for Debentures in a name other than that of the holder of the shares of Convertible Preferred Stock in respect of which such certificate is being issued and no such issuance or delivery shall be made unless and until the holder requesting such issuance has paid to the Corporation the amount of any such tax or has established to the reasonable satisfaction of the Corporation that such tax is not required to be paid. (d) As promptly as practicable after the exchange date referred to in Section 5(a) and after surrender by a holder of a certificate or certificates representing the shares of Convertible Preferred Stock to be exchanged to the Corporation, or any transfer agent of the Corporation previously designated by the Corporation to such holders for such purpose, the Corporation shall issue and deliver or cause to be delivered to or upon the written order of such holder a Debenture or Debentures dated such exchange date in 13 an aggregate principal amount to which such holder is entitled and cash as provided in Section 5(b). All such Debentures will upon issuance by the Corporation and delivery be duly and validly authorized, executed and delivered and will constitute legal, valid and binding obligations of the Corporation, enforceable against the Corporation in accordance with their terms, and the Corporation shall take no action which will cause a contrary result. SECTION 6. Conversion. The Convertible Preferred Stock shall be convertible into shares of Common Stock as follows: (a) Subject to and upon compliance with the provisions of this Section 6, the holder or any shares of Convertible Preferred Stock shall have the right, at such holder's option, at any time in whole and from time to time in part, to convert any of such shares of Convertible Preferred Stock into fully paid and nonassessable shares of Common Stock at the Conversion Price (as defined in Section 6(c)) as of the Conversion Date (as defined in Section 6(d)) upon the terms hereinafter set forth; provided, however, that prior to July 22, 1995, a holder of shares of Convertible Preferred Stock may not convert such shares to the extent (but only to the extent) that such conversion would result in the Investor and the Investor Related Parties owning Voting Securities representing an aggregate Voting Power greater than 49% of the Total Voting Power (each as defined in Section 6(m)). In case the shares of Convertible Preferred Stock are called for redemption, such right of conversion shall terminate at the close of business on the date fixed for redemption unless the Corporation shall default in the payment due upon redemption. Each share of Convertible Preferred Stock shall be convertible pursuant to this Section 6(a) into the number of shares of Common Stock determined by dividing the Stated Value of such share by the Conversion Price as of the Conversion Date. (b) Subject to the provisions of this Section 6, if the Closing Price (as defined in Section 6(m)) of the Common Stock for 20 out of 30 consecutive Trading Days (as defined in Section 6(m)) is equal to or greater than 150% of the Conversion Price as of the Trading Day preceding the first day of such 30 consecutive Trading Days, then, on the fifth Trading Day following the last day of such 30 consecutive Trading Days (the "Automatic Conversion Date"), all shares of Convertible Preferred Stock then outstanding shall be converted automatically, without any further action by the holders of such shares and whether or not the 14 certificates representing such shares are surrendered to the Corporation or its transfer agent, into fully paid and nonassessable shares of Common Stock at the Conversion Price as of the Automatic Conversion Date upon the terms hereinafter set forth; provided, however, that prior to July 22, 1995, the shares of Convertible Preferred Stock shall not be convertible to the extent (but only to the extent) that such conversion would result in the Investor and the Investor Related Parties owning Voting Securities representing an aggregate Voting Power greater than 49% of the Total Voting Power; provided further, however, that if all the shares of Convertible Preferred Stock are not automatically converted into Common Stock because such conversion would result in the Investor and the Investor Related Parties owning Voting Securities representing an aggregate Voting Power greater than 49% of the Total Voting Power, the balance of such unconverted shares of Convertible Preferred Stock shall at any time in whole or from time to time in part be automatically converted into Common Stock in accordance with the provisions of this Section 6(b) if at such time or times (i) the conditions set forth in this Section 6(b) are satisfied and (ii) as a result of any such automatic conversion the holders of the Convertible Preferred Stock would receive at least 10,000 additional shares of Common Stock. In the event that all the shares of Convertible Preferred Stock are not automatically converted as a result of the second preceding proviso, such shares shall be converted in the following order: first, the shares of Convertible Preferred Stock held by holders other than the Investor or Investor Related Parties shall be fully converted and second, the shares of Convertible Preferred Stock held by the Investor and the Investor Related Parties shall be converted on a pro rata basis until the limits established by such proviso have been reached. Each share of Convertible Preferred Stock shall be converted pursuant to this Section 6(b) into the number of shares of Common Stock determined by dividing the Stated Value of such share by the Conversion Price in effect as of the Automatic Conversion Date. (c) The "Conversion Price" shall mean $10.10, as adjusted from time to time in accordance with the terms of this Section 6. (d) A holder of shares of Convertible Preferred Stock may exercise the conversion right specified in Section 6(a) as to any shares owned by such holder by delivering written notice to the Corporation stating that such holder elects to convert all or a specified number of the 15 shares of Convertible Preferred Stock owned by such holder. Except with respect to shares of Convertible Preferred Stock to be so converted for which the Corporation shall have given notice of any redemption pursuant to Section 4(a) or 4(b), such notice shall be given not less than 30 days prior to the date specified therein for such conversion. The Corporation shall provide the holders of shares of Convertible Preferred Stock with written notice by first class mail to such holders' respective addresses as shown on the stock books of the Corporation of any automatic conversion pursuant to Section 6(b) as soon as practicable, but in any event no later than the Automatic Conversion Date. The holders of shares of Convertible Preferred Stock shall surrender to the Corporation, or any transfer agent of the Corporation previously designated by the Corporation to such holders for this purpose, (i) on the date specified for conversion in the notice provided by the holder (which date, with respect to shares of Convertible Preferred Stock for which the Corporation shall have given notice of any redemption pursuant to Section 4(a) or 4(b), shall be the date such notice is delivered to the Corporation), in the case of an exercise by a holder of such holder's conversion right specified in section 6(a), or (ii) promptly following the Automatic Conversion Date, in the case of an automatic conversion as specified in Section 6(b), a certificate or certificates representing the shares of Convertible Preferred Stock to be converted with appropriate endorsements and any transfer documents reasonably requested by the Corporation or such transfer agent. Conversion of the shares of Convertible Preferred Stock to be converted shall be deemed to have been effected, in the case of an exercise by the holder of such holder's conversion right specified in Section 6(a), on the date when such holder surrenders for conversion the certificate or certificates representing such shares of Convertible Preferred Stock and, in the case of an automatic conversion, on the Automatic Conversion Date, and such date is referred to herein with respect to such shares as the "Conversion Date". As promptly as practicable after the Conversion Date and after surrender by a holder of a certificate or certificates representing the shares of Convertible Preferred Stock to be converted to the Corporation, or any transfer agent of the Corporation previously designated by the Corporation to such holders for such purpose, the Corporation shall issue and deliver or cause to be delivered to or upon the written order of such holder (i) a certificate or certificates representing the number of full shares of Common Stock to which such holder is entitled, (ii) a check made payable for an amount corresponding to any fractional interest in a share of Common Stock as 16 provided in Section 6(e) and (iii) a check made payable for the amount of any accumulated and unpaid dividends on such shares of Convertible Preferred Stock. The person in whose name the certificate or certificates representing Common Stock are to be issued shall be deemed to have become a holder of record of such Common Stock on the applicable Conversion Date. Upon conversion of only a portion of the shares of Convertible Preferred Stock represented by any certificate, the Corporation shall issue and deliver or cause to be delivered to or upon the written order of the applicable holder of shares of Convertible Preferred Stock, at the expense of the Corporation, a new certificate representing the unconverted portion of the certificate so surrendered. (e) No fractional shares of Common Stock or scrip shall be issued upon conversion of the shares of Convertible Preferred Stock. If more than one certificate shall be surrendered for conversion at any one time by the same holder, the amount of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Convertible Preferred Stock represented by the certificates so surrendered. Instead of any fractional shares of Common Stock which would otherwise be issuable upon conversion of shares of Convertible Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to that fraction of the Current Market Price as of the Conversion Date. (f) The Conversion Price and the number and kind of securities issuable upon conversion of the shares of Convertible Preferred Stock shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall, at any time or from time to time while any shares of the Convertible Preferred Stock are outstanding, (A) pay a dividend or make a distribution on the Common Stock in shares of Common Stock; (B) subdivide its outstanding shares of Common Stock into a greater number of shares; (C) combine its outstanding shares of Common Stock into a smaller number of shares; (D) make a distribution on its Common Stock in shares of capital stock of the Corporation other than Common Stock; or (E) issue by reclassification of its shares of Common Stock any shares of capital stock of the Corporation, the Conversion Price in effect immediately prior to the date fixed for the determination of stockholders affected by 17 such actions shall be adjusted so that each holder of shares of Convertible Preferred Stock shall after such date of determination be entitled to receive, upon surrender for conversion, the number of shares of Common Stock or other capital stock of the Corporation which such holder would have owned or have been entitled to receive immediately following such date of determination if such holder had converted his shares of Convertible Preferred Stock immediately prior to such date of determination. An adjustment made pursuant to this clause (i) shall become effective immediately after such date of determination. If, after an adjustment pursuant to this clause (i), the holders of shares of Convertible Preferred Stock upon conversion of such shares of Convertible Preferred Stock may receive shares of two or more classes of capital stock of the Corporation, the Board shall in good faith determine the allocation of the adjusted Conversion Price between the classes of capital stock. After such allocation, the Conversion Price of each class of capital stock shall be subject to adjustment on terms comparable to those applicable to Common Stock in this Section 6. (ii) In case the Corporation shall, at any time or from time to time while any shares of the Convertible Preferred Stock are outstanding, issue to holders of outstanding shares of Common Stock generally rights or warrants entitling the holders thereof to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price of the Common Stock on the date fixed for the determination of stockholders entitled to receive such rights or warrants, the Conversion Price in effect at the opening of business on the day following the date fixed for such determination shall be decreased by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price, and the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase. Such decrease shall become effective immediately after the opening of business on 18 the day following the date fixed for the determination of stockholders entitled to receive such rights or warrants. No adjustment to the Conversion Price shall be made in respect of any issuance of Common Stock upon exercise of any right or warrant if an adjustment shall previously have been made upon issuance of such right or warrant. In case any rights or warrants referred to in this subparagraph (ii) in respect of which an adjustment shall have been made shall expire unexercised within 45 days after the same shall have been distributed or issued by the Corporation, the Conversion Price shall be readjusted at the time of such expiration to the Conversion Price that would have been in effect if no adjustment had been made on account of the distribution or issuance of such expired rights or warrants. (iii) In case the Corporation shall, at any time or from time to time while any shares of the Convertible Preferred Stock are outstanding, distribute to holders of outstanding shares of Common Stock generally evidences of indebtedness or assets of the Corporation or any of its subsidiaries or Affiliates (as defined in section 6(m)), including securities and cash, but excluding (x) any dividend or distribution or rights or warrants referred to in clause (i) or (ii) above and (y) regular quarterly cash dividends of the Corporation declared in the ordinary course by the Board, then in each such case the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution shall be decreased by multiplying such Conversion Price by a fraction, the numerator of which shall be the Current Market Price on the date fixed for such determination less the then fair market value (as determined by the Board in good faith) of the portion of such evidences of indebtedness or assets so distributed applicable to one share of Common Stock, and the denominator of which shall be such Current Market Price. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately prior to the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such distribution. (iv) At any time or from time to time while any shares of Convertible Preferred Stock are outstanding in case of (A) any capital reorganization or any 19 reclassification or change of the Common Stock (other than a reclassification covered by clause (i) above) of the Corporation, (B) the consolidation or merger of the Corporation with or into any other corporation or (C) the sale, lease or other disposition or conveyance of the property and assets of the Corporation as, or substantially as, an entirety to any other corporation, in each case as a result of which holders of outstanding shares of Common Stock generally will be entitled to receive shares of stock or other securities or other property (including cash) with respect to or in exchange for the Common Stock, there shall be no adjustment of the Conversion Price but the shares of Convertible Preferred Stock shall, after such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance, be convertible into the kind and amount of shares of stock or other securities or property (including cash) which the holder of shares of Convertible Preferred Stock would have been entitled to receive upon such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance if such holder had converted the shares of Convertible Preferred Stock owned by such holder immediately prior to the time of such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance (assuming such holder elected to receive the same kind and amount of shares of stock or other securities or property (including cash) receivable upon such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance receivable by a plurality of the holders of shares of Common Stock); and, in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 6 with respect to the rights and interests of the holder of shares of Convertible Preferred Stock, so that the provisions set forth in this Section 6 (including without limitation those set forth in this Section 6(f)) shall be made applicable, as closely as reasonably practicable, to any shares of stock or other securities or property thereafter deliverable on the conversion of the shares of Convertible Preferred Stock. The provisions of this clause (iv) shall apply to successive reorganizations, reclassifications, changes, consolidations, mergers or sales, leases or other dispositions or conveyances. 20 (v) All calculations under this Section 6(f) shall be made to the nearest cent or to the nearest one hundredth (1/100th) of a share, as the case may be. Any provision of this Section 6 to the contrary notwithstanding, no adjustment in the Conversion Price shall be made if the amount of such adjustment would be less than 1% of the Conversion Price then in effect, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate 1% thereof or more. (vi) No adjustment provided for in clause (i), (ii) or (iii) of this Section 6(f) shall be made if a distribution that would otherwise trigger such adjustment is also made to the holders of shares of Convertible Preferred Stock in the same manner and amount as if the holders owned the shares of Common Stock into which the shares of Convertible Preferred Stock are convertible immediately prior to such distribution. (vii) The Board may make such adjustments in the Conversion Price, in addition to those required by this Section 6(f), as shall be determined by it (as evidenced by a resolution of the Board) to be (A) advisable in order to avoid or diminish any adverse United States Federal income tax consequences to holders of Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any similar events treated as such for Federal income tax purposes and (B) not adverse to the holders of the Convertible Preferred Stock. The Board shall have the power to resolve any ambiguity or correct any error in this Section 6 in a manner not adverse to the holders of the Convertible Preferred Stock. (viii) Notwithstanding the foregoing provisions, the issuance of any shares of Common Stock pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the Corporation and the investment of additional optional amounts in shares of Common Stock under any such plan shall not be deemed to constitute an issuance of Common Stock or rights or warrants by the Corporation to which any of the provisions of this Section 6(f) applies. 21 (g) Whenever the Conversion Price shall be adjusted as provided in Section 6(f), the Corporation shall forthwith give written notice to the holders of shares of Convertible Preferred Stock by first class mail to such holders' respective addresses as shown on the stock books of the Corporation, which notice shall show in detail the facts requiring such adjustment and the Conversion Price that shall be in effect after such adjustment and the manner of computation thereof. Where appropriate, such notice may be given in advance and may be included as part of a notice required to be given under the provisions of Section 6(h). (h) In the event the Corporation shall propose to take any action of the type described in clause (i), (ii), (iii) or (iv) of Section 6(f), the Corporation shall give written notice to the holders of shares of Convertible Preferred Stock, by first class mail to such holders' respective addresses as shown on the stock books of the Corporation, which notice shall specify the date fixed for the determination of stockholders to be affected, if any, by such action and the approximate date on which such action is to take place. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Conversion Price and the number, kind or class of shares or other securities or property which shall be deliverable or purchasable upon the occurrence of such action or deliverable upon conversion of the shares of Convertible Preferred Stock. In the case of any action which would require the fixing of such date of determination, such notice shall be given at least 10 days prior to the date so fixed and, in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action. The failure to give the notice required by this subparagraph (h), or any defect therein, shall not affect the legality or validity of any action of the type described in clause (i), (ii), (iii) or (iv) of Section 6(f) or any vote authorizing such action. (i) The Corporation shall pay all documentary, stamp, transfer or other transactional taxes attributable to the issuance or delivery of shares of Common Stock upon conversion of the shares of Convertible Preferred Stock; provided that the Corporation shall not be required to pay any taxes payable in respect of any transfer involved in the issuance or delivery of any certificates representing such shares of Common Stock in a name other than that of the holder of the shares of Convertible Preferred Stock in 22 respect of which such certificates are being issued and no such issuance or delivery shall be made unless and until the holder requesting such issuance has paid to the Corporation the amount of any such tax or has established to the reasonable satisfaction of the Corporation that such tax is not required to be paid. (j) So long as any Convertible Preferred Stock remains outstanding, the Corporation shall reserve at all times, free from preemptive rights, out of its authorized but unissued shares of Common Stock or Common Stock held in treasury, solely for the purpose of effecting the conversion of the Convertible Preferred Stock, sufficient shares of Common Stock to provide for the conversion of all outstanding shares of Convertible Preferred Stock. (k) If, and so long as, any shares of Common Stock into which the shares of Convertible Preferred Stock are then convertible are listed on any national securities exchange, the Corporation will, if permitted by the rules of such exchange, list and keep on such exchange, upon official notice of issuance, all shares of Common Stock issuable upon conversion. (1) All shares of Common Stock which may be issued and delivered upon conversion of the shares of Convertible Preferred Stock will upon issuance by the Corporation and delivery be duly and validly issued, fully paid and nonassessable and free from all documentary, stamp, transfer or other transactional taxes and all liens and charges with respect to the issuance thereof and the Corporation shall take no action which will cause a contrary result (including, without limitation, any action which would cause the Conversion Price to be less than the par value, if any, of the Common Stock). (m) For purposes of this Section 6: (i) "Affiliate" shall have the meaning ascribed thereto in the Standstill Agreement. (ii) "Closing Price" means, for any Trading Day, the last reported sales price, regular way, per share of Common Stock or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, regular way, per share of Common Stock, in either case as reported on the New York Stock Exchange Composite Tape or, if the Common Stock is not then listed or admitted to trading on such exchange, on 23 the principal national securities exchange on which the Common Stock is then listed or admitted to trading or, if the Common Stock is not then listed or admitted to trading on any national securities exchange, as quoted through the National Association of Securities Dealers Automated Quotations National Market System or, if the Common Stock is not then listed or admitted to trading on any national securities exchange or quoted through such National Market System, the average of the closing bid and asked prices per share of Common Stock in the over-the-counter market as furnished by any New York Stock Exchange member firm that makes a market in the Common Stock selected from time to time by the Corporation for that purpose with the consent of the Required Holders. (iii) "Current Market Price" means, as of any date, the average of the Closing Prices for the 30 consecutive Trading Days ending on the Trading Day prior to such date. (iv) "Investor" shall have the meaning ascribed thereto in the Standstill Agreement. (v) "Investor Related Parties" shall have the meaning ascribed thereto in the Standstill Agreement. (vi) "Standstill Agreement" means the Standstill and Registration Rights Agreement dated as of July 18, 1991, among the Corporation, The Equitable Life Assurance Society of the United States and the Investor, as amended from time to time. (vii) "Subsidiary" shall have the meaning ascribed thereto in the Standstill Agreement. (viii) "Total Voting Power" shall have the meaning ascribed thereto in the Standstill Agreement. (ix) "Trading Day" means any day the New York Stock Exchange is open for regular trading. (x) "Voting Power" shall have the meaning ascribed thereto in the Standstill Agreement. (xi) "Voting Securities" shall have the meaning ascribed thereto in the Standstill Agreement. 24 SECTION 7. Liquidation. The shares of Convertible Preferred Stock shall rank prior to the shares of Junior Securities upon liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a "Liquidation Transaction"), so that in the event of any Liquidation Transaction, the holders of shares of Convertible Preferred Stock then outstanding shall be entitled to receive out of the assets or surplus funds of the Corporation available for distribution to its stockholders, or proceeds thereof, whether from capital, surplus or earnings, before any distribution is made to holders of any Junior Securities, a liquidation preference in an amount per share of Convertible Preferred Stock equal to, (a) in the case of any Liquidation Transaction voluntarily entered into by the Corporation, the redemption price per share applicable to a redemption at such date pursuant to Section 4(a), or (b) in the case of any Liquidation Transaction involuntarily effected by the Corporation, the Stated value, plus in the case of clause (a) or (b) an amount equal to all dividends (whether or not earned or declared) accumulated and unpaid on the shares of Convertible Preferred Stock to the date of final distribution. If, upon any Liquidation Transaction, the assets or surplus funds of the Corporation, or proceeds thereof, whether from capital, surplus or earnings, distributable among the holders of shares of Convertible Preferred Stock and any Parity Securities then outstanding are insufficient to pay in full the preferential liquidation payments due to such holders, such assets or proceeds shall be distributable among such holders ratably in accordance with the amounts that would be payable on such shares of Convertible Preferred Stock and Parity Securities if all amounts payable thereon were payable in full. In the event of a Liquidation Transaction, the Corporation shall give written notice to the holders of shares of Convertible Preferred Stock, by first class mail to such holders' respective addresses as shown on the stock books of the Corporation. Neither the consolidation, merger or other business combination of the Corporation with or into any other person or persons nor the sale of all or substantially all the assets of the Corporation shall be deemed to be a Liquidation Transaction. SECTION 8. Voting Rights. (a) The holders of shares of Convertible Preferred Stock shall not be entitled to any voting rights except as provided in this Section 8, the Restated Certificate of Incorporation of the Corporation or as otherwise required by law. 25 (b} (i) If at any time or times six quarterly dividends payable on Convertible Preferred Stock shall be in arrears and unpaid, in whole or in part, or shall not have been declared and a sum sufficient for the payment thereof in full shall not have been set apart for payment or if the Corporation shall have failed to discharge the Mandatory Redemption Obligation, then the number of directors constituting the Board, without further action, shall be increased by one and the holders of Convertible Preferred Stock shall have the exclusive right, voting separately as a class, to elect the director of the Corporation to fill such newly created directorship. The remaining directors constituting the Board shall continue to be elected by the other class or classes of stock entitled to vote therefor. (ii) Whenever such voting right shall have vested, such right may be exercised at a special meeting of the holders of Convertible Preferred Stock, at any annual or special meeting of stockholders held for the purpose of electing directors or by the written consent of the holders of Convertible Preferred Stock pursuant to Section 228 of the General Corporation Law of the State of Delaware. The director elected pursuant to such right shall be elected by a majority of the votes cast, with each outstanding share of Convertible Preferred Stock carrying one vote. Such voting right shall continue until such time as all cumulative dividends accumulated on the Convertible Preferred Stock shall have been paid in full or the Corporation shall have fulfilled the Mandatory Redemption Obligation, as the case may be, at which time such voting right of the holders of Convertible Preferred Stock shall terminate and the authorized number of members of the Board shall automatically be reduced by one, but such voting right shall again vest in the event of each and every subsequent failure of the Corporation to pay or declare and set apart for payment dividends for the requisite number of periods or to discharge the Mandatory Redemption Obligation. (iii) At any time when such voting right shall have vested in the holders of Convertible Preferred Stock, a proper officer of the Corporation shall, upon the written request of holders of record of 10% of the shares of Convertible Preferred Stock then outstanding, call a special meeting of holders of Convertible Preferred Stock for the purpose of electing the director to be elected by such holders or removing any director previously elected. Such meeting shall be held at the earliest practicable date upon not less than 10 days' notice to such holders. If such meeting; shall not be called within 30 days after receipt of 26 such written request, then the holders of record of 10% of the shares of Convertible Preferred Stock then outstanding may designate in writing one of their number to call such meeting at the expense of the Corporation, and such meeting may be called by such person so designated upon not less than 10 days' notice to such holders. Any holder of Convertible Preferred Stock shall have access to the stock books of the Corporation for the purpose of causing a meeting of stockholders to be so called. (iv) At any meeting at which the holders of Convertible Preferred Stock shall have the right to elect a director, the presence in person or by proxy of the holders of at least a majority of the then outstanding shares of Convertible Preferred Stock shall be required and be sufficient to constitute a quorum. At any such meeting or adjournment thereof, the absence of a quorum of the holders of Convertible Preferred Stock shall not prevent the election of directors other than those to be elected by the holders of Convertible Preferred Stock and the absence of a quorum or quorums of the holders of capital stock entitled to elect such other directors shall not prevent the election of the director to be elected by the holders of convertible Preferred Stock. (v) The director elected by the holders of Convertible Preferred Stock shall serve until the earlier of (i) the election by the holders of Convertible Preferred Stock and qualification of such director's successor and (ii) the time at which the holders of the Convertible Preferred Stock no longer have the right to elect such director. Upon any termination of such voting rights, the term of office of such director elected by the holders of Convertible Preferred Stock shall terminate immediately. Other than as provided in the two preceding sentences, the director elected by the holders of Convertible Preferred Stock may be removed only by the holders of the Convertible Preferred Stock. (vi) If the director so elected by the holders of Convertible Preferred Stock shall cease to serve as director before such director's term shall expire, the holders of Convertible Preferred Stock then outstanding may, in the manner provided above, elect a successor to hold office for the unexpired term of the director whose place shall be vacant. (c) So long as any shares of Convertible Preferred Stock are outstanding, the Corporation will not, 27 without the affirmative vote, or the written consent pursuant to Section 228 of the General Corporation Law of the State of Delaware, of the Required Holders: (i) increase (except by an amendment to Section 1 approved by the Board in the manner specified in the General Corporation Law of the State of Delaware, as necessary to permit the issuance of additional shares of Convertible Preferred Stock pursuant to Section 3(c)) the authorized number of shares of Convertible Preferred Stock or reclassify the shares of Convertible Preferred Stock; or (ii) amend, alter or repeal any of the provisions hereof or of the Restated Certificate of Incorporation of the Corporation so as to affect adversely the holders of the Convertible Preferred Stock. (d) For purposes of any vote or consent under this Section 8 by the holders of shares of the Convertible Preferred Stock, any shares of Convertible Preferred Stock owned by the Corporation or by any of its Subsidiaries shall be deemed not to be outstanding (unless otherwise provided by the General Corporation Law of the State of Delaware). IN WITNESS WHEREOF, The Equitable Companies Incorporated has caused this Certificate of Designations, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of its Convertible Exchangeable Preferred Stock, Series A, to be duly executed by its Chairman and Chief Executive Officer and attested to by its Secretary and has caused its corporate seal to be affixed hereto, as of this 14th day of October, 1992. /s/ Richard H. Jenrette ------------------------------- Name: Richard H. Jenrette Title: Chairman and Chief Executive Officer [Corporate Seal) ATTEST: /s/ Molly K. Heines - ------------------------- Name: Molly K. Heines Title: Secretary Exhibit A Terms of the Convertible Subordinated Debentures Issue: Convertible Subordinated Debentures of The Equitable Companies Incorporated (the "Corporation") (the "Convertible Subordinated Debentures"). Maturity: October 15, 2007. On the maturity date of the Convertible Subordinated Debentures, the Company may, in lieu of making cash payments to the holders of the Convertible Subordinated Debentures in an amount equal to the aggregate amount of principal and accrued interest payable, issue to such holders shares of Common Stock (valued at the average of the Closing Prices for the 30 consecutive Trading Days ending on the Trading Day prior to such date). Interest: Six-month LIBOR plus 1.50%, subject to a maximum rate of 10%, payable semiannually, commencing to accrue on the date of issuance. Interest will be calculated on the basis of the actual number of days elapsed over a year of 360 days. Prior to July 22, 1995, interest will be paid in cash or, at the option of the Corporation, upon not less than 10 nor more than 30 days prior written notice to the holders, in additional Convertible Subordinated Debentures at the rate of $l,000 principal amount thereof for each $1,000 of interest not paid in cash. On or after July 22, 1995, interest will be paid in cash or, at the option of the Corporation, upon not less than 10 nor more than 30 days prior written notice to the holders, in the number of shares of Corporation Common Stock determined by dividing (i) the interest not paid in cash on such interest payment date by (ii) the average of the Closing Prices for the 30 consecutive Trading Days ending on the Trading Day prior to such date. 2 Optional Redemption: The Convertible Subordinated Debentures will not be redeemable prior to October 15, 1997. On or after October 15, 1997, the Corporation may redeem the Convertible Subordinated Debentures, in whole or in part at its option, upon not less than 10 nor more than 30 days prior written notice to the holders, in cash in multiples of $20,000,000 aggregate principal amount, at a redemption price of 105% of the principal amount thereof declining ratably to 100% of the principal amount thereof after October 15, 2002, together with accrued and unpaid interest to the date of redemption. The Convertible Subordinated Debentures will be redeemed pro rata from among the Convertible Subordinated Debentures then outstanding. Conversion at Option of Holders: The Convertible Subordinated Debentures will be convertible, at the option of the holders, at any time in whole or in part, upon 30 days prior written notice to the Corporation (except following notice of redemption), into shares of Corporation Common Stock at the Conversion Price per share; provided that, prior to July 22, 1995, conversion cannot occur to the extent (but only to the extent) that such conversion will result in the Investor and the Investor Related Parties owning shares of Voting Securities representing greater than 49% of the Total Voting Power. Mandatory Conversion: If the Closing Price for the Corporation Common Stock is at least 150% of the Conversion Price for 20 out of 30 consecutive Trading Days ending on the fifth Trading Day prior to the notice for such mandatory conversion, the Convertible Subordinated Debentures will automatically convert into shares of Corporation Common Stock at the 3 Conversion Price per share; provided that, prior to July 22, 1995, conversion will not occur to the extent (but only to the extent) that such conversion will result in the Investor and the Investor Related Parties owning shares of Voting Securities representing greater than 49% of the Total Voting Power. Conversion Price: $10.10 thereon, subject to adjustment in certain events as described below. The Conversion Price is subject to adjustment upon, without limitation, (i) the issuance of capital stock as a dividend or distribution on the Corporation Common Stock, (ii) subdivisions and combinations of the Corporation Common Stock and (iii) the distribution to all holders of Corporation Common Stock of evidences of indebtedness or assets of the Corporation or any of its Subsidiaries or Affiliates or rights or warrants. No adjustment in the Conversion Price will be made for regular quarterly cash dividends declared in the ordinary course by the Board. No adjustment in the Conversion Price will be required unless such adjustment will cause a change of at least 1% in the Conversion Price then in effect; provided, that any adjustment that would otherwise be required to be made will be carried forward and taken into account in any subsequent adjustment. Reclassification, Merger, Etc.: In the case or (i) any reclassification or change of the Corporation Common Stock, (ii) a consolidation or merger involving the Corporation, or (iii) a sale or conveyance to another corporation of the property and assets of the Corporation as an entirety or substantially as an entirety, in each case as a result of which holders of Corporation Common Stock will be entitled to receive stock, securities, other property or 4 assets (including cash) with respect to or in exchange for the Corporation Common Stock, the holders of the Convertible Subordinated Debentures then outstanding will be entitled thereafter to convert such Convertible Subordinated Debentures into the kind and amount of shares of stock and other securities or property which such holders would have received upon such reclassification, change, consolidation, merger, combination, sale or conveyance had such Convertible Subordinated Debentures been converted into the Corporation Common Stock immediately prior to such reclassification, change, consolidation, merger, combination, sale or conveyance. Subordination: The Convertible Subordinated Debentures are subordinated in right of payment to all Senior Debt of the Corporation. Senior Debt of the Corporation is defined as (a) the principal of, premium, if any, and accrued and unpaid interest relating to (i) indebtedness of the Corporation for money borrowed, (ii) guarantees by the Corporation of indebtedness for money borrowed by any other person and (iii) indebtedness evidenced by notes, debentures, bonds or other Instruments of indebtedness for payment of which the Corporation is responsible or liable unless it is provided that such indebtedness, obligations or guarantees, are not superior in right of payment to the Convertible Subordinated Debentures. Events of Default: The Convertible Subordinated Debentures will contain the following Events of Default, (i) failure to pay principal when due, (ii) failure to pay interest within 5 Business Days of when due and (iii) the bankruptcy or insolvency of the Corporation, The Equitable Life Assurance Society of the United States or any Significant Subsidiary (as defined in the Standstill and 5 Registration Rights Agreement). Upon the occurrence and continuance of an Event of Default any holder of the Convertible Subordinated Debentures may declare the principal thereof to be immediately due and payable (except, in the case of an Event of Default relating to bankruptcy or insolvency, in which case the Convertible Subordinated Debentures shall automatically immediately become due and payable). EX-4.01(C) 4 EXH 4.01(C) CERT. OF DESIGNATION-SERIES B Exhibit 4.01(c) CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF PREFERRED STOCK AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF OF THE EQUITABLE COMPANIES INCORPORATED PREFERRED STOCK, SERIES B --------------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware --------------------- The following resolution has been duly adopted by the Board of Directors (such Board, including any committee thereof duly authorized to act on behalf of such Board, herein referred to as the "Board") of The Equitable Companies Incorporated, a Delaware corporation (the "Corporation"), pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, which resolution remains in full force and effect as of the date hereof: WHEREAS the Board is authorized, within the limitations and restrictions stated in the Restated Certificate of Incorporation of the Corporation, to fix by resolution or resolutions the voting rights, if any, of each series of Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of the Corporation and the designations, preferences and relative, participating, optional and other special rights and qualifications, limitations and restrictions thereof; and WHEREAS it is the desire of the Board, pursuant to its authority as aforesaid, to authorize and fix the terms 2 of a series of Preferred Stock and the number of shares constituting such series: NOW, THEREFORE BE IT RESOLVED that there is hereby authorized and created a series of Preferred Stock on the terms and with the provisions (in addition to those set forth in the Restated Certificate of Incorporation of the Corporation that are applicable to all Preferred Stock) as follows: SECTION 1. Designation, Number of Shares and Stated Value. The series of Preferred Stock shall be designated the "Preferred Stock, Series B" (the "Series B Preferred Stock"). The number of authorized shares of Series B Preferred Stock shall be 2,989,116. The number of shares of Series B Preferred Stock may be decreased (but not below the number of shares of Series B Preferred Stock at the time outstanding), in the manner specified in the General Corporation Law of the State of Delaware; by an amendment to this Section 1 approved by the Board, but may not be increased or otherwise decreased without the affirmative vote of the Required Holders (as defined in Section 3(b)). The stated value of each share of Series B Preferred Stock ("Stated Value") shall be $100. SECTION 2. Rank. The Series B Preferred Stock shall, as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation, rank (i) prior to the Common Stock, par value $.01 per share (the "Common Stock"), of the Corporation and any other capital stock of the Corporation (other than (a) the Convertible Exchangeable Preferred Stock, Series A, par value $1.00 per share, of the Corporation (the "Series A Preferred Stock") and (b) any other class or series of a class of capital stock of the Corporation the terms of which expressly provide that the shares thereof rank senior or on a parity as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation with the shares of the Series B Preferred Stock) (such securities, other than those described in the immediately preceding parenthetical clause, collectively referred to herein as the "Junior Securities") and (ii) on a parity with the Series A Preferred Stock and any other class or series of a class of capital stock of the Corporation the terms of which expressly provide that the shares thereof rank on a parity as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the 3 Corporation with the shares of the Series B Preferred Stock (the "Parity Securities"). SECTION 3. Dividends. (a) The holders of outstanding shares of Series B Preferred Stock, in preference to the holders of outstanding shares of any Junior Securities, shall be entitled to receive, when, as and if declared by the Board, out of funds of the Corporation legally available for the payment of dividends, a cumulative quarterly cash dividend per share in an amount for each Dividend Period (as defined below) calculated by multiplying the Stated Value by the Dividend Rate (as defined below) for such Dividend Period. "Dividend Rate" means, for a Dividend Period, the product of (i) the lesser of 10% and the LIBOR Rate (determined pursuant to Section 3(b)) for such Dividend Period, multiplied by (ii) a fraction, the numerator of which is the number of days in such Dividend Period and the denominator of which is 360. Quarterly dividends shall be payable on each July 22, October 22, January 22 and April 22 (each a "Dividend Payment Date"), commencing on October 22, 1992 (the "Initial Dividend Payment Date"). Each such quarterly dividend shall be cumulative and shall accumulate, whether or not earned or declared and whether or not there are funds of the Corporation legally available for payment of dividends, for the period (each a "Dividend Period") commencing on and including the most recent Dividend Payment Date to which dividends have been paid or accumulated to but excluding the next succeeding Dividend Payment Date, except that (x) the Dividend Period terminating on the Initial Dividend Payment Date (the "Initial Dividend Period") shall commence on and include July 22, 1992 and (y) with respect to shares of Series B Preferred Stock which are redeemed pursuant to Section 4(a) or Section 4(b) or redeemed upon a Liquidation Transaction (as defined in Section 5), as the case may be, the final Dividend Period shall terminate on the applicable redemption date or distribution date, as the case may be. Dividends shall be payable, net of any amounts required to be withheld for or with respect to taxes, to holders of record as they appear on the stock books of the Corporation at the close of business on such record dates, not more than 60 days nor less than 10 days prior to the respective Dividend Payment Date, as shall be fixed by the Board. If any Dividend Payment Date is not a business day, the quarterly dividend to be paid on such Dividend Payment Date shall be paid on the next following business day. A "business day" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are required or authorized by law to be closed. Payments of quarterly dividends shall be made in coin or currency of the 4 United States that as of the date of payment shall be legal tender for payment of public and private debts by mailing a check to each holder of shares of Series B Preferred Stock at the address of such holder as shown on the stock books of the Corporation. (b) The LIBOR Rate will be 5.0625% for the Initial Dividend Period and the next succeeding Dividend Period and will be determined on each January 22 and July 22 thereafter (each, a "Determination Date") for the Dividend Periods terminating on the two Dividend Payment Dates next following such Determination Date (and any other Dividend Periods terminating during such period) and will be the sum of 1.50% plus LIBOR (expressed as a percentage) in respect of such Determination Date determined as follows: (i) In respect of each Determination Date, LIBOR will be determined on the basis of the rate for deposits, in U.S. dollars, having a six-month maturity commencing on such Determination Date, which rate appears on the display designated as the Telerate Page 3750 on the Dow Jones Telerate Service (or such other page as may replace that page on that service, or such other alternative service as may be agreed by the Corporation and the Required Holders, for the purpose of displaying a rate comparable to the rate which currently appears on the Telerate Page 3750) (the "Telerate Page 3750") as of 11:00 a.m., London time, on the second London Banking Day prior to such Determination Date. If such rate does not appear on the Telerate Page 3750 as of such time, LIBOR in respect of such Determination Date will be determined as described in clause (ii) below. (ii) In respect of any Determination Date on which the rate for deposits in U.S. dollars, having a six-month maturity commencing on such Determination Date, does not appear on the Telerate Page 3750 as described in clause (i) above, LIBOR will be determined on the basis of the rates at approximately 11:00 a.m., London time, on the London Banking Day immediately prior to such Determination Date, for deposits in U.S. dollars, in an amount comparable to the aggregate Stated Value for all shares of Series B Preferred Stock outstanding on such Determination Date, having a six-month maturity commencing on such Determination Date offered to prime banks in the London interbank market by four major banks in the London interbank market selected by the Corporation and approved by the Required Holders. The 5 Corporation will request the principal London office of each such bank to provide a quotation of its rate. If at least two such quotations are provided, LIBOR in respect of such Determination Date will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR in respect of such Determination Date will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., New York City time, on the Determination Date by three major banks in New York City, selected by the Corporation and approved by the Required Holders, for loans in U.S. dollars to leading European banks, in an amount comparable to the aggregate Stated Value for all shares of Series B Preferred Stock outstanding on such Determination Date, having a six-month maturity commencing on such Determination Date; provided, however, that if the banks selected as aforesaid by the Corporation are not quoting as mentioned in this sentence, LIBOR in respect of such Determination Date will be LIBOR as calculated in respect of the preceding Determination Date. (iii) A "London Banking Day" shall mean any day (other than a Saturday, Sunday or legal holiday) on which banks in New York City and London, England are open for dealings in dollar deposits in the London interbank market. (iv) "Required Holders" means, at any date, the holders of at least 66-2/3% of the aggregate Stated Value of the shares of Series B Preferred Stock then outstanding disregarding the aggregate Stated Value of any of such shares owned by the Corporation or by any of its Subsidiaries (as defined in Section 7). (c) All dividends paid with respect to shares of Series B Preferred Stock shall be paid pro rata to the holders entitled thereto. (d) When dividends are not paid in full upon the Series B Preferred Stock, any dividends declared or paid upon shares of Series B Preferred Stock and any Parity Securities shall be declared or paid, as the case may be, pro rata so that the amounts of dividends declared or paid, as the case may be, per share on the Series B Preferred Stock and such other Parity Securities in all cases bear to each other the same ratio that accumulated and unpaid dividends per share on the shares of Series B Preferred Stock and such other Parity Securities bear to each other. No interest, or sum of money in lieu of interest, shall be 6 payable in respect of any dividend payment or payments on the Series B Preferred Stock or any Parity Securities which may be in arrears. (e) Unless full cumulative dividends have been or contemporaneously are declared by the Board and paid or declared and a sum set apart sufficient for such payment by the Corporation on the Series B Preferred Stock for all Dividend Periods terminating on or prior to the date of payment of dividends on any Junior Securities, no dividends shall be declared or paid or sum set apart for such payment or any other distribution made on or with respect to such Junior Securities for any period, other than dividends payable or distributions made in shares of Junior Securities. (f) Unless full cumulative dividends have been or contemporaneously are declared by the Board and paid or declared, and a sum set apart sufficient for payment by the Corporation on the Series B Preferred Stock for all Dividend Periods terminating on or prior to the date of any event described in clause (i) or (ii) of this Section 3(f), the Corporation shall not, and shall not permit its Subsidiaries to, (i) redeem, purchase, retire or otherwise acquire for any consideration any shares of Series B Preferred Stock, unless (A) all shares of Series B Preferred Stock outstanding shall be redeemed, repurchased, retired or otherwise acquired or (B) the shares of Series B Preferred Stock are redeemed, purchased, retired or otherwise acquired pro rata from among the holders of the shares then outstanding or (ii) redeem, purchase, retire or otherwise acquire for any consideration, or make any payment on account of a sinking fund or other similar fund for redemption, purchase, retirement or acquisition of, any Junior Securities or any Parity Securities, or any warrant, right or option to purchase any thereof, or make any distribution in respect thereof, directly or indirectly, whether in cash, obligations or securities of the Corporation or other property, except, (i) in the case of Junior Securities, other than redemptions, purchases, retirements, acquisitions or distributions made in shares of Junior Securities, and (ii) in the case of Parity Securities, pro rata so that the amounts redeemed, purchased, retired or otherwise acquired or paid or distributed in respect thereof, as the case may be, per share on the Series B Preferred Stock and such other Parity Securities in all cases bear to each other the same ratio that accumulated and unpaid dividends and required redemption payments per share on the shares of Series B Preferred Stock and such other Parity Securities bear to each other. 7 SECTION 4. Redemption. (a) To the extent the Corporation shall have funds legally available therefor, the Series B Preferred Stock shall be subject to redemption in cash, at the option of the Corporation, at any time in whole or from time to time in part, at a redemption price per share equal to the Stated Value, together with accumulated and unpaid dividends thereon to the redemption date, without interest. If less than all shares of Series B Preferred Stock then outstanding are to be redeemed, the shares of Series B Preferred Stock will be redeemed pro rata from among the holders of shares of Series B Preferred Stock then outstanding. (b) Commencing on October 15, 2002 and on each succeeding October 15 through and including October 15, 2007, the Corporation shall redeem in cash the number of shares of Series B Preferred Stock equal to the number of shares outstanding on October 15, 2002 divided by six, in each case at a redemption price per share equal to the Stated Value, together with accumulated and unpaid dividends thereon to the redemption date, without interest. The shares of Series B Preferred Stock will be redeemed pro rata from among the holders of the shares then outstanding. The Corporation may, at its option, reduce or satisfy its obligation to make any mandatory redemption pursuant to this paragraph (b) by the number of shares of Series B Preferred Stock previously acquired by the Corporation and canceled or held in treasury, which were not previously used to reduce any such mandatory redemption. (c) Notice of any redemption pursuant to Section 4(a) or Section 4(b) will be given to the holders of shares of Series B Preferred Stock not less than 10 nor more than 30 days prior to the date fixed for redemption or the mandatory redemption date, as the case may be. Notice of redemption will be given by first class mail to such holders' respective addresses as shown on the stock books of the Corporation and will specify (i) the date fixed for redemption or the mandatory redemption date, as the case may be, and (ii) the applicable redemption price. In the case of a partial redemption pursuant to Section 4(a), such notice shall also specify the number of shares of Series B Preferred Stock to be redeemed from each holder and the aggregate number of shares of Series B Preferred Stock which will be outstanding after such redemption. (d) If funds for the redemption of any or all shares of Series B Preferred Stock shall have been irrevocably set apart for redemption on the redemption date, such 8 shares of Series B Preferred Stock shall from and after the redemption date cease to accumulate dividends and the only right of the holders of such shares shall be to receive payment of the redemption price and all accumulated and unpaid dividends on such shares to the date of redemption. (e) If the Corporation shall fail at any time to discharge its obligation to redeem shares of Series B Preferred Stock pursuant to paragraph (4)(b) (a "Mandatory Redemption Obligation"), such Mandatory Redemption Obligation shall be discharged as soon as the Corporation is able to discharge such Mandatory Redemption Obligation. If and for so long as such Mandatory Redemption Obligation shall not have been fully discharged, the Corporation shall not (i) declare, pay or set apart for payment dividends or make any other distribution on or with respect to any Parity Securities, except that dividends may be declared, paid or set apart for payment or other distributions made upon shares of Series B Preferred Stock and any Parity Securities pro rata so that the amounts of dividends declared, paid or set apart or other distributions made per share on the Series B Preferred Stock and such other Parity Securities bear to each other the same ratio that accumulated and unpaid dividends and required redemption payments, if any, per share on the shares of Series B Preferred Stock and such other Parity Securities bear to each other; (ii) declare, pay or set apart for payment dividends or make any other distribution on or with respect to any Junior Securities, other than dividends paid or distributions made in shares of Junior Securities; or (iii) redeem, purchase, retire or otherwise acquire for any consideration, or make any payment on account of a sinking fund or other similar fund for redemption, purchase, retirement or acquisition of, any Junior Securities or any Parity Securities, or any warrant, right or option to purchase any thereof, or make any distribution in respect thereof, directly or indirectly, whether in cash, obligations or securities of the Corporation or other property, except, (i) in the case of Junior Securities, other than redemptions, purchases, retirements, acquisitions or distributions made in shares of Junior Securities and (ii) in the case of Parity Securities, pro rata so that the amounts redeemed, purchased, retired or otherwise acquired or paid or distributed in respect thereof, as the case may be, per share on the Series B Preferred Stock and such other Parity Securities in all cases bear to each other the same ratio that accumulated and unpaid dividends and required redemption payments per share on the shares of Series B Preferred Stock and such other Parity Securities bear to each other. 9 (f) Any cash payment to a holder of shares of Series B Preferred Stock on any redemption date shall be made in coin or currency of the United States that as of the date of payment shall be legal tender for payment of public and private debts by mailing a check to such holder at the address of such holder as shown on the stock books of the Corporation. SECTION 5. Liquidation. The shares of Series B Preferred Stock shall rank prior to the shares of Junior Securities upon liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a "Liquidation Transaction"), so that in the event of any Liquidation Transaction, the holders of shares of Series B Preferred Stock then outstanding shall be entitled to receive out of the assets or surplus funds of the Corporation available for distribution to its stockholders, or proceeds thereof, whether from capital, surplus or earnings, before any distribution is made to holders of any Junior Securities, a liquidation preference in an amount per share of Series B Preferred Stock equal to the Stated Value, plus an amount equal to all dividends (whether or not earned or declared) accumulated and unpaid on the shares of Series B Preferred Stock to the date of final distribution. If, upon any Liquidation Transaction, the assets or surplus funds of the Corporation, or proceeds thereof, whether from capital, surplus or earnings, distributable among the holders of shares of Series B Preferred Stock and any Parity Securities then outstanding are insufficient to pay in full the preferential liquidation payments due to such holders, such assets or proceeds shall be distributable among such holders ratably in accordance with the amounts that would be payable on such shares of Series B Preferred Stock and Parity Securities if all amounts payable thereon were payable in full. In the event of a Liquidation Transaction, the Corporation shall give written notice to the holders of shares of Series B Preferred Stock, by first class mail to such holders' respective addresses as shown on the stock books of the Corporation. Neither the consolidation, merger or other business combination of the Corporation with or into any other person or persons nor the sale of all or substantially all the assets of the Corporation shall be deemed to be a Liquidation Transaction. SECTION 6. Voting Rights. (a) The holders of shares of Series B Preferred Stock shall not be entitled to any voting rights except as provided in this Section 6, the Restated Certificate of Incorporation of the Corporation or as otherwise required by law. 10 (b) (i) If at any time or times six quarterly dividends payable on Series B Preferred Stock shall be in arrears and unpaid, in whole or in part, or shall not have been declared and a sum sufficient for the payment thereof in full shall not have been set apart for payment or if the Corporation shall have failed to discharge any Mandatory Redemption Obligation, then the number of directors constituting the Board, without further action, shall be increased by one and the holders of Series B Preferred Stock shall have the exclusive right, voting separately as a class, to elect the director of the Corporation to fill such newly created directorship. The remaining directors constituting the Board shall continue to be elected by the other class or classes of stock entitled to vote therefor. (ii) Whenever such voting right shall have vested, such right may be exercised at a special meeting of the holders of Series B Preferred Stock, at any annual or special meeting of stockholders held for the purpose of electing directors or by the written consent of the holders of Series B Preferred Stock pursuant to Section 228 of the General Corporation Law of the State of Delaware. The director elected pursuant to such right shall be elected by a majority of the votes cast, with each outstanding share of Series B Preferred Stock carrying one vote. Such voting right shall continue until such time as all cumulative dividends accumulated on the Series B Preferred Stock shall have been paid in full or the Corporation shall have fulfilled all Mandatory Redemption Obligations, as the case may be, at which time such voting right of the holders of Series B Preferred Stock shall terminate and the authorized number of members of the Board shall automatically be reduced by one, but such voting right shall again vest in the event of each and every subsequent failure of the Corporation to pay or declare and set apart for payment dividends for the requisite number of periods or to discharge any Mandatory Redemption Obligation. (iii) At any time when such voting right shall have vested in the holders of Series B Preferred Stock, a proper officer of the Corporation shall, upon the written request of holders of record of 10% of the shares of Series B Preferred Stock then outstanding, call a special meeting of holders of Series B Preferred Stock for the purpose of electing the director to be elected by such holders or removing any director previously elected. Such meeting shall be held at the earliest practicable date upon not less than 10 days' notice to such holders. If such meeting shall not be called within 30 days after receipt of such written 11 request, then the holders of record of 10% of the shares of Series B Preferred Stock then outstanding may designate in writing one of their number to call such meeting at the expense of the Corporation, and such meeting may be called by such person so designated upon not less than 10 days' notice to such holders. Any holder of Series B Preferred Stock shall have access to the stock books of the Corporation for the purpose of causing a meeting of stockholders to be so called. (iv) At any meeting at which the holders of Series B Preferred Stock shall have the right to elect a director, the presence in person or by proxy of the holders of at least a majority of the then outstanding shares of Series B Preferred Stock shall be required and be sufficient to constitute a quorum. At any such meeting or adjournment thereof, the absence of a quorum of the holders of Series B Preferred Stock shall not prevent the election of directors other than those to be elected by the holders of Series B Preferred Stock and the absence of a quorum or quorums of the holders of capital stock entitled to elect such other directors shall not prevent the election of the director to be elected by the holders of Series B Preferred Stock. (v) The director elected by the holders of Series B Preferred Stock shall serve until the earlier of (i) the election by the holders of Series B Preferred Stock and qualification of such director's successor and (ii) the time at which the holders of the Series B Preferred Stock no longer have the right to elect such director. Upon any termination of such voting rights, the term of office of such director elected by the holders of Series B Preferred Stock shall terminate immediately. Other than as provided in the two preceding sentences, the director elected by the holders of Series B Preferred Stock may be removed only by the holders of the Series B Preferred Stock. (vi) If the director so elected by the holders of Series B Preferred Stock shall cease to serve as director before such director's term shall expire, the holders of Series B Preferred Stock then outstanding may, in the manner provided above, elect a successor to hold office for the unexpired term of the director whose place shall be vacant. (c) So long as any shares of Series B Preferred Stock are outstanding, the Corporation will not, without the 12 affirmative vote, or the written consent pursuant to Section 228 of the General Corporation Law of the State of Delaware, of the Required Holders: (i) increase the authorized number of shares of Series B Preferred Stock or reclassify the shares of Series B Preferred Stock; or (ii) amend, alter or repeal any of the provisions hereof or of the Restated Certificate of Incorporation of the Corporation so as to affect adversely the holders of the Series B Preferred Stock. (d) For purposes of any vote or consent under this Section 6 by the holders of shares of the Series B Preferred Stock, any shares of Series B Preferred Stock owned by the Corporation or by any of its Subsidiaries shall be deemed not to be outstanding (unless otherwise provided by the General Corporation Law of the State of Delaware). SECTION 7 Definitions. For purposes of this Certificate: (i) "Standstill Agreement" means the Standstill and Registration Rights Agreement dated as of July 18, 1991, among the Corporation, the Equitable Life Assurance Society of the United States and AXA, as amended from time to time. 13 (ii) "Subsidiary" has the meaning ascribed to such term in the Standstill Agreement. IN WITNESS WHEREOF, The Equitable Companies Incorporated has caused this Certificate of Designations, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of its Preferred Stock, Series B, to be duly executed by its Chairman and Chief Executive Officer and attested to by its Secretary and has caused its corporate seal to be affixed hereto, as of this 14th day of October, 1992. /s/ Richard H. Jenrette ------------------------------ Name: Richard H. Jenrette Title: Chairman and Chief Executive Officer [Corporate Seal] ATTEST: /s/ Molly K. Heines - ----------------------------- Name: Molly K. Heines Title: Secretary EX-4.01(D) 5 EXH 4.01(D) CERT. OF DESIGNATION-SERIES C Exhibit 4.01(d) CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF PREFERRED STOCK AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF Of THE EQUITABLE COMPANIES INCORPORATED CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES C ----------------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware ----------------------- The following resolution has been duly adopted by the Board of Directors (such Board, including any committee thereof duly authorized to act on behalf of such Board, herein referred to as the "Board") of The Equitable Companies Incorporated, a Delaware corporation (the "Corporation"), pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, which resolution remains in full force and effect as of the date hereof: RESOLVED that, pursuant to the authority expressly granted to and vested in the Board by the provisions of the Restated Certificate of Incorporation of the Corporation (the "Restated Certificate of Incorporation") to fix by resolution or resolutions the voting rights, if any, of each series of Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of the Corporation and the designations, preferences and relative, participating, optional and other special rights and qualifications, limitations and restrictions thereof, the Board hereby authorizes and creates a series of Preferred Stock on the terms and with the provisions (in addition to those set forth in the Restated Certificate of Incorporation of the Corporation that are applicable to all Preferred Stock) as follows: SECTION 1. Designation, Number of Shares and Liquidation Preference. The series of Preferred Stock created by this resolution shall be designated the "Cumulative Convertible Preferred Stock, Series C" (the "Cumulative Convertible Preferred Stock"). The number of authorized shares of Cumulative Convertible Preferred Stock shall be 2,000,000. The liquidation preference of each share of Cumulative Convertible Preferred Stock (the "Liquidation Preference") shall be $500.00. SECTION 2. Rank. The Cumulative Convertible Preferred Stock shall, as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation, rank (i) prior to the Common Stock, par value $.01 per share (the "Common Stock"), and any other capital stock, of the Corporation (other than (a) the Corporation's Convertible Exchangeable Preferred Stock, Series A, par value $1.00 per share (the "Series A Preferred Stock"), (b) the Corporation's Preferred Stock, Series B, par value $1.00 per share (the "Series B Preferred Stock"), and (c) any other class or series of a class of capital stock of the Corporation the terms of which expressly provide that the shares thereof rank senior or on a parity as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation with the shares of the Cumulative Convertible Preferred Stock) (such securities, other than those described in the immediately preceding parenthetical clause, collectively referred to herein as the "Junior Securities") and (ii) on a parity with the Series A Preferred Stock, the Series B Preferred Stock and any other class or series of a class of capital stock of the Corporation the terms of which expressly provide that the shares thereof rank on a parity as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation with the shares of the Cumulative Convertible Preferred Stock (the "Parity Securities"). SECTION 3. Dividends. (a) The holders of outstanding shares of Cumulative Convertible Preferred Stock shall be entitled to receive, in preference to the holders of shares of Junior Securities, when, as and if declared by the Board, out of funds of the Corporation legally available for the payment of dividends, a cumulative cash dividend at the rate per annum of $30 per share of Cumulative Convertible Preferred Stock. Dividends shall accrue and be payable quarterly, when, as and if 2 declared by the Board, in arrears on each July 22, October 22, January 22 and April 22 (each a "Dividend Payment Date"), commencing on July 22, 1993. Each such quarterly dividend shall be cumulative and shall accumulate, whether or not earned or declared and whether or not there are funds of the Corporation legally available for payment of dividends, for the period (each, a "Dividend Period") commencing on and including the most recent Dividend Payment Date to which dividends have been paid or accumulated to but excluding the next succeeding Dividend Payment Date, except (x) that the Dividend Period terminating on July 22, 1993 (the "Initial Dividend Period" shall commence on and include April 21, 1993 and (y) as otherwise provided in Sections 4, 5 and 7 with respect to shares of Cumulative Convertible Preferred Stock that are redeemed or converted into shares of Common Stock or with respect to which distributions are made upon a Liquidation Transaction (as defined in Section 7). Dividends shall be payable, net of any amounts required to be withheld for or with respect to taxes, to holders of record as they appear on the stock books of the Corporation at the close of business on such record dates, not more than 60 days nor less than 10 days prior to the respective Dividend Payment Date, as shall be fixed by the Board. If any Dividend Payment Date is not a Business Day, the quarterly dividend to be paid on such Dividend Payment Date shall be paid on the next following Business Day. A "Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are required or authorized by law to be closed. Payments of quarterly dividends shall be made in coin or currency of the United States that as of the date of payment shall be legal tender for payment of public and private debts by mailing a check to each holder of shares of Cumulative Convertible Preferred Stock at the address of such holder as shown on the stock books of the Corporation. Accumulated and unpaid dividends for any past Dividend Periods may be declared and paid at any time, without reference to any Dividend Payment Date, to holders of record on such date, not exceeding 45 days preceding the payment date thereof, as may be fixed by the Board. (b) The amount of dividends payable for each full Dividend Period for the Cumulative Convertible Preferred Stock shall be computed by dividing the annual dividend rate by four. The amount of dividends payable for the Initial Dividend Period, or any other period shorter or longer than a full Dividend Period, on the 3 Cumulative Convertible Preferred Stock shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Holders of shares of Cumulative Convertible Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of cumulative dividends, as herein provided, on the Cumulative Convertible Preferred Stock. (c) All dividends paid with respect to shares of Cumulative Convertible Preferred Stock shall be paid pro rata to the holders entitled thereto. (d) When dividends are not paid in full upon the Cumulative Convertible Preferred Stock, any dividends declared or paid upon shares of Cumulative Convertible Preferred Stock and any Parity Securities shall be declared or paid, as the case may be, pro rata so that the amounts of dividends declared or paid, as the case may be, per share on the Cumulative Convertible Preferred Stock and such other Parity Securities in all cases bear to each other the same ratio that accumulated and unpaid dividends per share on the shares of Cumulative Convertible Preferred Stock and such other Parity Securities bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Cumulative Convertible Preferred Stock, or any Parity Securities, which may be in arrears. (e) Unless full cumulative dividends on the Cumulative Convertible Preferred Stock have been or contemporaneously are declared by the Board and paid or declared and a sum sufficient for the payment thereof set apart by the Corporation for all Dividend Periods terminating on or prior to the date of payment of dividends on any Junior Securities, no dividends shall be declared or paid or any sum set apart for such payment or any other distribution made on or with respect to such Junior Securities for any period, other than dividends payable or distributions made in shares of Junior Securities. (f) Unless full cumulative dividends on the Cumulative Convertible Preferred Stock have been or contemporaneously are declared by the Board and paid or declared and a sum sufficient for the payment thereof set apart by the Corporation for all Dividend Periods terminating on or prior to the date of any event described 4 in clause (x) or (y) of this Section 3(f), the Corporation shall not, and shall not permit its Subsidiaries (as defined in Section 5(n)) to, (x) redeem, purchase, retire or otherwise acquire for any consideration any shares of Cumulative Convertible Preferred Stock, unless (A) all shares of Cumulative Convertible Preferred Stock outstanding shall be redeemed, purchased, retired or otherwise acquired or (B) the shares of Cumulative Convertible Preferred Stock are redeemed, purchased, retired or otherwise acquired pro rata from among the holders of the shares then outstanding or (y) redeem, purchase, retire or otherwise acquire for any consideration, or make any payment on account of a sinking fund or other similar fund for the redemption, purchase, retirement or acquisition of, any Junior Securities or any Parity Securities, or any warrant, right or option to purchase any thereof, or make any distribution in respect thereof, directly or indirectly, whether in cash, obligations or securities of the Corporation or other property, except (i) in the case of Junior Securities, redemptions, purchases, retirements, acquisitions or distributions made in shares of Junior Securities or redemptions, purchases or acquisitions of shares of Common Stock for purposes of any employee benefit plan or program of the Corporation or any Subsidiary and (ii) in the case of Parity Securities, redemptions, purchases, retirements, acquisitions or distributions made pro rata so that the amounts redeemed, purchased, retired or otherwise acquired or paid or distributed in respect thereof, as the case may be, per share on the Cumulative Convertible Preferred Stock and such other Parity Securities in all cases bear to each other the same ratio that accumulated and unpaid dividends and required redemption payments per share on the shares of Cumulative Convertible Preferred Stock and such other Parity Securities bear to each other; provided that this Section 3(f) shall not apply to any Subsidiary of the Corporation that is (1) an insurance company or other financial institution, a broker or a dealer (as such terms are defined in the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, as the case may be) or an investment advisor (as defined in the Investment Advisors Act of 1940, as amended), in each case acting for the benefit of Persons (as defined in Section 5(n)) other than the Corporation or its Subsidiaries or (2) any investment vehicle managed or advised by any of the Persons described in clause (1) above for the benefit of any Persons other than the Corporation or its Subsidiaries. 5 SECTION 4. Redemption. (a) The Cumulative Convertible Preferred Stock shall not be redeemable prior to April 21, 1996. (b) (i) The Cumulative Convertible Preferred Stock shall be subject to redemption in Common Stock, at the option of the Corporation, at any time on or after April 21, 1996, in part from time to time or in whole, if for 20 Trading Days (as defined in Section 5(n)) within any period of 30 consecutive Trading Days, including the last Trading Day of such 30 consecutive Trading Days, the Closing Price (as defined in Section 5(n)) of the Common Stock on each of such 20 Trading Days exceeds 125% of the Conversion Price (as defined in Section 5(b)) in effect on each such Trading Day. (ii) In order to exercise its redemption option under this Section 4(b), the Corporation must issue a press release announcing the redemption (the "Press Release") prior to the opening of business on the second Trading Day after the last Trading Day of any such 30 consecutive Trading Days during which the Closing Price of the Common Stock on each of 20 Trading Days within such 30 consecutive Trading Days exceeded 125% of the Conversion Price in effect on each of such 20 Trading Days. The Press Release shall announce the redemption and set forth the number of shares of Cumulative Convertible Preferred Stock that the Corporation intends to redeem. The date fixed by the Corporation for such redemption (a "Call Date") shall be selected by the Corporation, shall be specified in the notice of redemption and shall be not less than 30 nor more than 60 days after the date on which the Corporation issues the Press Release. Upon the redemption of Cumulative Convertible Preferred Stock by the Corporation pursuant to this Section 4(b) on a Call Date, (x) each such share of Cumulative Convertible Preferred Stock shall be redeemed for that number of shares of Common Stock determined by dividing the Liquidation Preference of such share by the Conversion Price as of the opening of business on the Call Date (such calculation to be carried out to four (4) decimal places) and (y) the holder of each such share of Cumulative Convertible Preferred Stock shall have the right to receive a cash adjustment pursuant to Section 4(i) with respect to any fractional shares resulting from such conversion, together with accumulated and unpaid dividends (whether or not earned or declared) to such Call Date on the shares of 6 Cumulative Convertible Preferred Stock so redeemed, without interest. (c) To the extent the Corporation shall have funds legally available therefor, the Cumulative Convertible Preferred Stock shall be subject to redemption in cash, at the option of the Corporation, at any time on or after April 21, 2000, in part from time to time or in whole, at $500 per share, together with accumulated and unpaid dividends thereon (whether or not earned or declared) to any date fixed by the Corporation for such redemption (a "Cash Redemption Date"), without interest. (d) If the Corporation elects to redeem shares of Cumulative Convertible Preferred Stock pursuant to Section 4(b), notice of such redemption shall be given not more than four Business Days after the date on which the Corporation issues the Press Release to each holder of record of the shares to be redeemed. If the Corporation elects to redeem shares of Cumulative Convertible Preferred Stock pursuant to Section 4(c), notice of such redemption shall be given not less than 30 nor more than 60 days prior to the Cash Redemption Date fixed in such notice to each holder of record of the shares to be redeemed. (e) Any notice pursuant to Section 4(d) shall be provided by first class mail, postage prepaid, at such holder's address as the same appears on the stock records of the Corporation. Neither the failure to mail any notice required by Section 4(d), nor any defect therein or in the mailing thereof, to any particular holder, shall affect the sufficiency of the notice or the validity of the proceedings for redemption with respect to the other holders. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given on the date mailed, whether or not the holder receives the notice. Each such notice shall state, in addition to any other information the Corporation deems appropriate: (i) the Call Date or the Cash Redemption Date, as the case may be; (ii) the number of shares of Cumulative Convertible Preferred Stock to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (iii) in the case of redemption pursuant to Section 4(b), the number of shares of Common Stock to be issued with respect to each share of Cumulative Convertible Preferred Stock; (iv) in the case of redemption pursuant to Section 7 4(c), the applicable redemption price; (v) the place or places where certificates for shares of Cumulative Convertible Preferred Stock are to be surrendered for redemption; (vi) the then effective Conversion Price; and (vii) that the right of holders to convert shares of Cumulative Convertible Preferred Stock to be redeemed shall terminate at the close of business on the applicable Call Date or Cash Redemption Date, as the case may be. (f) (i) From and after a Call Date or a Cash Redemption Date, as the case may be (unless the Corporation shall fail to make available the number of shares of Common Stock and/or irrevocably to set apart the cash necessary to effect such redemption), (x) except as otherwise provided herein, dividends on the shares of the Cumulative Convertible Preferred Stock so called for redemption shall cease to accrue, (y) such shares of Cumulative Convertible Preferred Stock shall no longer be deemed to be outstanding and (z) all rights of the holders thereof as holders of Cumulative Convertible Preferred Stock shall cease except as provided in clause (iii) of this Section 4(f). (ii) The Corporation's obligation to provide any shares of Common Stock and/or any cash in accordance with clause (i) of this Section 4(f) shall be deemed fulfilled if, on or before the applicable Call Date or Cash Redemption Date, as the case may be, the Corporation shall deposit with First Chicago Trust Company of New York, or with a bank or trust company (which may be an affiliate of the Corporation) that has an office in the Borough of Manhattan, City of New York, and that has a capital and surplus of at least $50,000,000, any shares of Common Stock and/or any cash necessary for such redemption, in trust, with irrevocable instructions that such shares of Common Stock and/or such cash be applied to the redemption of the shares of Cumulative Convertible Preferred Stock called for redemption. (iii) In the case of any redemption pursuant to Section 4(b), from and after the close of business on a Call Date (unless the Corporation defaults in the delivery of the shares of Common Stock and any cash payable on such Call Date), the shares of Cumulative Convertible Preferred Stock to be redeemed shall cease to accumulate dividends, each holder of such shares shall be deemed to be the holder of the number of shares of Common Stock for which such Cumulative Convertible Preferred 8 Stock is to be redeemed, regardless of whether such holder has surrendered the certificates for such holder's shares of Cumulative Convertible Preferred Stock, and the only right of such holders shall be to receive (x) such shares of Common Stock and (y) any cash adjustments made pursuant to Section 4(i) and all accumulated and unpaid dividends (whether or not earned or declared) on such shares of Cumulative Convertible Preferred Stock to but excluding the Call Date. In the case of any redemption pursuant to Section 4(c) (unless the Corporation defaults in the payment of the applicable redemption price), the shares of Cumulative Convertible Preferred Stock to be redeemed shall from and after the close of business on a Cash Redemption Date cease to accumulate dividends and the only right of the holders of such shares shall be to receive payment of the redemption price and all accumulated and unpaid dividends (whether or not earned or declared) on such shares to but excluding the Cash Redemption Date. No interest shall accrue for the benefit of the holders of Cumulative Convertible Preferred Stock to be redeemed on any sum set aside by the Corporation in connection with a redemption pursuant to this Section 4. Subject to applicable escheat laws, any such cash unclaimed at the end of two years from the applicable Call Date or Cash Redemption Date, as the case may be, shall revert to the general funds of the Corporation and, upon demand, such bank or trust company shall pay over to the Corporation such unclaimed cash and thereupon such bank or trust company shall be relieved of all responsibility in respect thereof and any holder of such shares so called for redemption shall look only to the general funds of the Corporation for the payment of such cash. Any interest accrued on cash deposited pursuant to this Section 4(f) shall be paid from time to time to the Corporation for its own account. (iv) As promptly as possible after the surrender of the certificates for any shares of Cumulative Convertible Preferred Stock redeemed pursuant to this Section 4 (with appropriate endorsements and any transfer documents reasonably requested by the Corporation or any transfer agent designated by the Corporation), such certificates shall be exchanged (A) in the case of any redemption pursuant to Section 4(b), for certificates for shares of Common Stock and any cash for adjustments pursuant to Section 4(i) and (B) in the case of any redemption pursuant to Section 4(c), for payment of the redemption price, in either case together with all 9 accumulated and unpaid dividends (whether or not earned or declared) payable thereon. (g) If fewer than all the outstanding shares of Cumulative Convertible Preferred Stock are to be redeemed pursuant to this Section 4, except as otherwise provided by Section 3(f), shares to be redeemed shall be selected by the Corporation from outstanding shares of Cumulative Convertible Preferred Stock not previously called for redemption by lot or pro rata (as nearly as may be) or by any other method determined by the Corporation in its sole discretion to be equitable. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof. (h) Any fraction of a share of Cumulative Convertible Preferred Stock may be redeemed in the same manner in which a whole share of Cumulative Convertible Preferred Stock may be redeemed pursuant to this Section 4, provided that any shares of Common Stock deliverable and/or any cash payable upon the redemption of such fractional interest shall be determined by multiplying the number of shares of Common Stock deliverable and/or any cash payable upon the redemption of one share of Cumulative Convertible Preferred Stock by that fraction. If part of a share of Cumulative Convertible Preferred Stock is redeemed, a new certificate shall be issued representing the unredeemed portion of a share without cost to the holder thereof. (i) In the case of any redemption pursuant to Section 4(b), no fractional shares of Common Stock or scrip representing fractional shares of Common Stock shall be issued upon redemption of the shares of Cumulative Convertible Preferred Stock. If more than one certificate shall be surrendered for redemption at any one time by the same holder, the number of full shares of Common Stock issuable upon redemption thereof shall be computed on the basis of the aggregate number of shares of Cumulative Convertible Preferred Stock represented by the certificates so surrendered. Instead of any fractional shares of Common Stock which would otherwise be issuable upon redemption of shares of Cumulative Convertible Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to that fraction of the Closing Price of the Common 10 Stock as of the Trading Day immediately preceding the Call Date. (j) All shares of Common Stock issued and delivered pursuant to Section 4(b) will upon issuance by the Corporation and delivery be duly and validly issued, fully paid and nonassessable. If any shares of Common Stock are listed on any national securities exchange, the Corporation shall, if permitted by the rules of such exchange, list the shares of Common Stock required to be delivered upon a redemption of the Cumulative Convertible Preferred Stock pursuant to Section 4(b), prior to such redemption, on such exchange. (k) Upon any redemption of Cumulative Convertible Preferred Stock, the Corporation shall pay all accumulated and unpaid dividends (whether or not earned or declared) to but excluding the applicable Call Date or Cash Redemption Date, as the case may be. If a Call Date or a Cash Redemption Date, as the case may be, falls after a dividend payment record date and prior to the corresponding Dividend Payment Date, then each holder of Cumulative Convertible Preferred Stock at the close of business on such dividend payment record date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date (but without duplication of any amounts payable pursuant to the preceding sentence in respect of accumulated and unpaid dividends), notwithstanding the redemption of such shares before such Dividend Payment Date. The Corporation shall make no payment or allowance for unpaid dividends on any shares of Common Stock issued upon redemption pursuant to Section 4(b). (1) Any cash payment to a holder of shares of Cumulative Convertible Preferred Stock in connection with any redemption of the Cumulative Convertible Preferred Stock pursuant to this Section 4 shall be made in coin or currency of the United States that as of the date of payment shall be legal tender for payment of public and private debts by mailing a check to such holder at the address of such holder as shown on the stock books of the Corporation. SECTION 5. Conversion. The Cumulative Convertible Preferred Stock shall be convertible into shares of Common Stock as follows: 11 (a) Subject to and upon compliance with the provisions of this Section 5, the holder of any shares of Cumulative Convertible Preferred Stock shall have the right, at such holder's option, at any time after July 22, 1994, in whole or, from time to time, in part, to convert any of such shares of Cumulative Convertible Preferred Stock into fully paid and nonassessable shares of Common Stock at the Conversion Price as of the Conversion Date upon the terms hereinafter set forth. In case the shares of Cumulative Convertible Preferred Stock are called for redemption, such right of conversion shall terminate at the close of business on the applicable Call Date or Cash Redemption Date, as the case may be, unless the Corporation shall default in the delivery of the shares of Common Stock and/or the payment of any cash due upon redemption. Each share of Cumulative Convertible Preferred Stock shall be convertible pursuant to this Section 5(a) into the number of shares of Common Stock determined by dividing the Liquidation Preference of such share by the Conversion Price as of the Conversion Date (such calculation to be carried out to four (4) decimal places). (b) The "Conversion Price" shall mean $24.50, as adjusted from time to time in accordance with the terms of this Section 5. (c) A holder of shares of Cumulative Convertible Preferred Stock may exercise the conversion right specified in Section 5(a) as to any shares held by such holder by delivering written notice to the Corporation stating that such holder elects to convert all or a specified number of the shares of Cumulative Convertible Preferred Stock held by such holder. Such holder shall surrender to the Corporation, or any transfer agent of the Corporation previously designated by the Corporation to such holders for this purpose, a certificate or certificates representing the shares of Cumulative Convertible Preferred Stock to be converted with appropriate endorsements and any transfer documents reasonably requested by the Corporation or such transfer agent. Conversion of the shares of Cumulative Convertible Preferred Stock to be converted shall be deemed to have been effected immediately prior to the close of business on the date when such holder surrenders for conversion the certificate or certificates representing such shares of Cumulative Convertible Preferred Stock (any such date is referred to herein with respect to such shares as the "Conversion Date") and the Person in whose name the certificate or 12 certificates representing Common Stock are to be issued shall be deemed to have become a holder of record of such Common Stock on the applicable Conversion Date, unless the stock transfer books of the Corporation shall be closed on such date, in which event such Person shall be deemed to have become such holder of record at the close of business on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Price in effect on the applicable Conversion Date. As promptly as practicable after the Conversion Date and after surrender to the Corporation, or to any transfer agent of the Corporation previously designated by the Corporation to the holders of the Cumulative Convertible Preferred Stock for such purpose, by a holder of a certificate or certificates representing the shares of Cumulative Convertible Preferred Stock to be converted, the Corporation shall issue and deliver or cause to be delivered to or upon the written order of such holder (i) a certificate or certificates representing the number of full shares of Common Stock to which such holder is entitled and (ii) a check made payable for an amount corresponding to any fractional interest in a share of Common Stock as provided in Section 5(e). Upon conversion of only a portion of the shares of Cumulative Convertible Preferred Stock represented by any certificate, the Corporation shall issue and deliver or cause to be delivered to or upon the written order of the applicable holder of shares of Cumulative Convertible Preferred Stock, at the expense of the Corporation, a new certificate representing the unconverted portion of the certificate so surrendered. Holders of shares of Cumulative Convertible Preferred Stock at the close of business on a dividend payment record date shall be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the conversion thereof following such dividend payment record date and prior to such Dividend Payment Date. However, shares of Cumulative Convertible Preferred Stock surrendered for conversion during the period between the close of business on any dividend payment record date and the opening of business on the corresponding Dividend Payment Date must be accompanied by payment of an amount equal to the dividend payable on such shares on such Dividend Payment Date (except shares of Cumulative Convertible Preferred Stock converted after the issuance of a notice of redemption with respect to a Call Date or a Cash Redemption 13 Date during such period, which need not be accompanied by payment of such amount). A holder of shares of Cumulative Convertible Preferred Stock on a dividend payment record date who tenders any such shares for conversion into shares of Common Stock on the corresponding Dividend Payment Date will receive the dividend payable by the Corporation on such shares of Cumulative Convertible Preferred Stock on such date, and the converting holder need not include payment of the amount of such dividend upon surrender of shares of Cumulative Convertible Preferred Stock for conversion. The Corporation shall make no payment or allowance for unpaid dividends on any shares of Common Stock issued upon conversion pursuant to this Section 5. (d) Any fraction of a share of Cumulative Convertible Preferred Stock may be converted by a holder thereof in the same manner in which a whole share of Cumulative Convertible Preferred Stock may be converted pursuant to this Section 5, provided that any shares of Common Stock deliverable and any cash payable upon the conversion of such fractional interest shall be determined by multiplying the number of shares of Common Stock deliverable and any cash payable upon the conversion of one share of Cumulative Convertible Preferred Stock by that fraction. If part of a share of Cumulative Convertible Preferred Stock is converted, a new certificate shall be issued representing the unconverted portion of a share without cost to the holder thereof. (e) No fractional shares of Common Stock or scrip representing fractional shares of Common Stock shall be issued upon conversion of the shares of Cumulative Convertible Preferred Stock. If more than one certificate shall be surrendered for conversion at any one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Cumulative Convertible Preferred Stock represented by the certificates so surrendered. Instead of any fractional shares of Common Stock which would otherwise be issuable upon conversion of shares of Cumulative Convertible Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to that fraction of the Closing Price of the Common Stock as of the Trading Day immediately preceding the Conversion Date. 14 (f) The Conversion Price and the number and kind of securities issuable upon conversion of the shares of Cumulative Convertible Preferred Stock shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall, at any time or from tine to time while any shares of the Cumulative Convertible Preferred Stock are outstanding, (A) pay a dividend or make a distribution on the Common Stock in shares of Common Stock; (B) subdivide its outstanding shares of Common Stock into a greater number of shares; (C) combine its outstanding shares of Common Stock into a smaller number of shares; (D) make a distribution on its Common Stock in shares of capital stock of the Corporation other than Common Stock; or (E) issue by reclassification of its shares of Common Stock any shares of capital stock of the Corporation, the Conversion Price in effect immediately prior to the date fixed for the determination of stockholders affected by such actions shall be adjusted so that each holder of shares of Cumulative Convertible Preferred Stock shall after such date of determination be entitled to receive, upon surrender for conversion, the number of shares of Common Stock or other capital stock of the Corporation which such holder would have owned or have been entitled to receive immediately following such date of determination if such holder had converted its shares of Cumulative Convertible Preferred Stock immediately prior to such date of determination. An adjustment made pursuant to this clause (i) shall become effective immediately after such date of determination. If, after an adjustment pursuant to this clause (i), the holders of shares of Cumulative Convertible Preferred Stock upon conversion of such shares of Cumulative Convertible Preferred Stock may receive shares of two or more classes of capital stock of the Corporation, the Board shall in good faith determine the allocation of the adjusted Conversion Price between the classes of capital stock. After such allocation, the Conversion Price of each class of capital stock shall be subject to adjustment on terms comparable to those applicable to Common Stock in this Section 5. (ii) In case the Corporation shall, at any time or from time to time while any shares of the Cumulative Convertible Preferred Stock are outstanding, 15 issue to holders of outstanding shares of Common Stock generally rights or warrants entitling the holders thereof to subscribe for or purchase shares of Common Stock at a price per share 1ess than the Current Market Price (as defined in Section 5(n)) of the Common Stock on the date fixed for the determination of stockholders entitled to receive such rights or warrants, the Conversion Price in effect at the opening of business on the day following the date fixed for such determination shall be decreased by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price, and the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase. Such decrease shall become effective immediately after the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such rights or warrants. No adjustment to the Conversion Price shall be made in respect of any issuance of Common Stock upon exercise of any right or warrant if an adjustment shall previously have been made upon issuance of such right or warrant. In case any rights or warrants referred to in this clause (ii) in respect of which an adjustment shall have been made shall expire unexercised within 45 days after the same shall have been distributed or issued by the Corporation, the Conversion Price shall be readjusted at the time of such expiration to the Conversion Price that would have been in effect if no adjustment had been made on account of the distribution or issuance of such expired rights or warrants. (iii) In case the Corporation shall, at any time or from time to time while any shares of the Cumulative Convertible Preferred Stock are outstanding, distribute to holders of outstanding shares of Common Stock generally evidences of indebtedness or assets of the Corporation or any of its Subsidiaries or Affiliates (as defined in Section 5(n)), including 16 securities and cash, but excluding (x) any dividend or distribution or rights or warrants referred to in clause (i) or (ii) above and (y) regular quarterly cash dividends of the Corporation declared in the ordinary course by the Board, then in each such case the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution shall be decreased by multiplying such Conversion Price by a fraction, the numerator of which shall be the Current Market Price on the date fixed for such determination less the then fair market value (as determined by the Board in good faith) of the portion of such evidences of indebtedness or assets so distributed applicable to one share of Common Stock, and the denominator of which shall be such Current Market Price. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately prior to the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such distribution. (iv) At any time or from time to time while any shares of Cumulative Convertible Preferred Stock are outstanding in case of (A) any capital reorganization or any reclassification or change of the Common Stock (other than a reclassification covered by clause (i) above) of the Corporation, (B) the consolidation or merger of the Corporation with or into any other corporation or (C) the sale, lease or other disposition or conveyance of the property and assets of the Corporation as, or substantially as, an entirety to any other corporation, in each case as a result of which holders of outstanding shares of Common Stock generally will be entitled to receive shares of stock or other securities or other property (including cash) with respect to or in exchange for the Common Stock, there shall be no adjustment of the Conversion Price but the shares of Cumulative Convertible Preferred Stock shall, after such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance, be convertible into the kind and amount of shares of stock or other securities or property (including cash) which the holder of shares of Cumulative Convertible Preferred Stock would have been entitled to receive upon such capital reor- 17 ganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance if such holder had converted the shares of Cumulative Convertible Preferred Stock owned by such holder immediately prior to the time of such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance (assuming such holder elected to receive the same kind and amount of shares of stock or other securities or property (including cash) receivable upon such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance receivable by a plurality of the holders of shares of Common Stock); and, in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 5 with respect to the rights and interests of the holders of shares of Cumulative Convertible Preferred Stock, so that the provisions set forth in this Section 5 (including without limitation those set forth in this Section 5(f)) shall be made applicable, as closely as reasonably practicable, to any shares of stock or other securities or property thereafter deliverable on the conversion of the shares of Cumulative Convertible Preferred Stock. The provisions of this clause (iv) shall apply to successive reorganizations, reclassifications, changes, consolidations, mergers or sales, leases or other dispositions or conveyances. (v) All calculations under this Section 5(f) shall be made to the nearest cent or to the nearest one hundredth (1/100th) of a share, as the case may be. Any provision of this Section 5 to the contrary notwithstanding, no adjustment in the Conversion Price shall be made if the amount of such adjustment would be less than 1% of the Conversion Price then in effect, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate 1% thereof or more. (vi) No adjustment provided for in clause (i), (ii) or (iii) of this Section 5(f) shall be made if a 18 distribution that would otherwise trigger such adjustment is also made to the holders of shares of Cumulative Convertible Preferred Stock in the same manner and amount as if the holders owned the shares of Common Stock into which the shares of Cumulative Convertible Preferred Stock are convertible immediately prior to such distribution. (vii) The Board may make such adjustments in the Conversion Price, in addition to those required by this Section 5(f), as shall be determined by it (as evidenced by a resolution of the Board) to be advisable in order to avoid or diminish any adverse United States Federal income tax consequences to holders of Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any similar events treated as such for Federal income tax purposes. The Board shall have the power to resolve any ambiguity or correct any error in this Section 5 in a manner not adverse to the holders of the Cumulative Convertible Preferred Stock. (viii) Notwithstanding the foregoing provisions, the issuance of any shares of Common Stock pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the Corporation and the investment of additional optional amounts in shares of Common Stock under any such plan shall not be deemed to constitute an issuance of Common Stock or rights or warrants by the Corporation to which any of the provisions of this Section 5(f) applies. (g) Whenever the Conversion Price shall be adjusted as provided in Section 5(f), the Corporation shall forthwith give written notice to the holders of shares of Cumulative Convertible Preferred Stock by first class mail, to such holders' respective addresses as shown on the stock books of the Corporation setting forth the Conversion Price that shall be in effect after such adjustment. Where appropriate, such notice may be given in advance and may be included as part of a notice required to be given under the provisions of Section 5(h). The Corporation shall also file with any transfer agent designated by the Corporation pursuant to Section 5(c) a notice stating the adjusted Conversion Price and setting 19 forth a brief statement of the facts upon which such adjustment is based. (h) In the event the Corporation shall propose to take any action of the type described in clause (i), (ii), (iii) or (iv) of Section 5(f), the Corporation shall give written notice to the holders of shares of Cumulative Convertible Preferred Stock, by first class mail to such holders' respective addresses as shown on the stock books of the Corporation which notice shall specify the date fixed for the determination of stockholders to be affected, if any, by such action and the approximate date on which such action is to take place. Such notice shall also set forth the number, kind or class of shares or other securities or property which shall be deliverable or purchasable upon the occurrence of such action or deliverable upon conversion of the shares of Cumulative Convertible Preferred Stock. In the case of any action which would require the fixing of such date of determination, such notice shall be given at least 10 days prior to the date so fixed, and, in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action. The failure to give the notice required by this Section 5(h), or any defect therein, shall not affect the legality or validity of any action of the type described in clause (i), (ii), (iii) or (iv) of Section 5(f) or any vote authorizing such action. (i) The Corporation shall pay all documentary, stamp, transfer or other transactional taxes attributable to the issuance or delivery of shares of Common Stock upon conversion of the shares of Cumulative Convertible Preferred Stock; provided that the Corporation shall not be required to pay any taxes payable in respect of any transfer involved in the issuance or delivery of any certificates representing such shares of Common Stock in a name other than that of the holder of the shares of Cumulative Convertible Preferred Stock in respect of which such certificates are being issued and no such issuance or delivery shall be made unless and until the holder requesting such issuance has paid to the Corporation the amount of any such tax or has established to the reasonable satisfaction of the Corporation that such tax is not required to be paid. (j) So long as any Cumulative Convertible Preferred Stock remains outstanding, the Corporation shall reserve at all times, free from preemptive rights, 20 out of its authorized but unissued shares of Common Stock or Common Stock held in treasury, solely for the purpose of effecting the conversion of the Cumulative Convertible Preferred Stock, sufficient shares of Common Stock to provide for the conversion of all outstanding shares of Cumulative Convertible Preferred Stock. (k) If, and so long as, any shares of Common Stock into which the shares of Cumulative Convertible Preferred Stock are then convertible are listed on any national securities exchange, the Corporation will, if permitted by the rules of such exchange, list and keep on such exchange, upon official notice of issuance, all shares of Common Stock issuable upon conversion. (l) All shares of Common Stock which may be issued and delivered upon conversion of the shares of Cumulative Convertible Preferred Stock will upon issuance by the Corporation and delivery be duly and validly issued, fully paid and nonassessable and the Corporation shall not take any action which would cause the Conversion Price to be less than the par value of the Common Stock. (m) In any case in which Section 5(f) provides that an adjustment shall become effective on, or on the day following, the record date for any event, the Corporation may defer until the occurrence of such event (i) issuing to the holder of any share of Cumulative Convertible Preferred Stock converted after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (ii) paying to such holder any amount in cash in lieu of any fractional share pursuant to Section 5(e). (n) For purposes of this Section 5: (i) "Affiliate" has the meaning given to such term in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. (ii) "Closing Price" means, for any Trading Day, the last reported sales price, regular way, per share of Common Stock or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, regular way, 21 per share of Common Stock, in either case as reported on the New York Stock Exchange Composite Transactions Tape or, if the Common Stock is not then listed or admitted to trading on such exchange, on the principal national securities exchange on which the Common Stock is then listed or admitted to trading or, if the Common Stock is not then listed or admitted to trading on any national securities exchange, as quoted through the National Association of Securities Dealers Automated Quotations National Market System or, if the Common Stock is not then listed or admitted to trading on any national securities exchange or quoted through such National Market System, the average of the closing bid and asked prices per share of Common Stock in the over-the-counter market as furnished by any New York Stock Exchange member firm that makes a market in the Common Stock selected from time to time by the Corporation for that purpose. (iii) "Current Market Price" means, as of any date, the average of the Closing Prices for the 30 consecutive Trading Days ending on the Trading Day prior to such date. (iv) "Person" means any individual, corporation, partnership, firm, joint venture, association, joint stock company, trust, unincorporated organization, governmental or regulatory authority or other entity. (v) "Subsidiary" means any corporation, association or other business entity more than 50% of the shares of stock of any class or classes (or equivalent interests) of which is at the time owned by the Corporation or by one or more Subsidiaries of the Corporation or by the Corporation and one or more Subsidiaries of the Corporation, if the holders of the stock of such class or classes (or equivalent interests) are ordinarily, in the absence of contingencies, entitled to vote for the election of a majority of the directors (or Persons performing similar functions) of such business entity. (vi) "Trading Day" means any day the New York Stock Exchange is open for regular trading. SECTION 6. Shares to be Retired. All shares of Cumulative Convertible Preferred Stock purchased or 22 redeemed by the Corporation (excluding, until the Corporation elects to retire them, shares that are held as treasury shares) or converted shall be retired and cancelled and shall be restored to the status of authorized but unissued shares of Preferred Stock, without designation as to series. SECTION 7. Liquidation. (a) The shares of Cumulative Convertible Preferred Stock shall rank prior to the shares of Junior Securities upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (a "Liquidation Transaction"), so that in the event of any Liquidation Transaction, the holders of shares of Cumulative Convertible Preferred Stock then outstanding shall be entitled to receive out of the assets or surplus funds of the Corporation available for distribution to its stockholders, or proceeds thereof, whether from capital, surplus or earnings, before any distribution is made to holders of any Junior Securities, a liquidation preference in an amount per share of Cumulative Convertible Preferred Stock equal to the Liquidation Preference, plus an amount equal to all dividends (whether or not earned or declared) accumulated and unpaid on the shares of Cumulative Convertible Preferred Stock to the date of final distribution. (b) If, upon any Liquidation Transaction, the assets or surplus funds of the Corporation, or proceeds thereof, whether from capital, surplus or earnings, distributable among the holders of shares of Cumulative Convertible Preferred Stock and any Parity Securities then outstanding are insufficient to pay in full the preferential liquidation payments due to such holders, such assets, surplus funds or proceeds shall be distributable among such holders ratably in accordance with the amounts that would be payable on such shares of Cumulative Convertible Preferred Stock and Parity Securities if all amounts payable thereon were payable in full. (c) Neither the consolidation, merger or other business combination of the Corporation with or into any other Person or Persons nor the sale or transfer of all or substantially all the assets of the Corporation shall be deemed to be a Liquidation Transaction. SECTION 8. Voting Rights. (a) The holders of shares of Cumulative Convertible Preferred Stock shall not be entitled to any voting rights except as provided in 23 this Section 8, the Restated Certificate of Incorporation of the Corporation or as otherwise required by law. (b) (i) If at any time or times six quarterly dividends (whether or not consecutive) payable on the Cumulative Convertible Preferred Stock shall be in arrears and unpaid, in whole or in part, or shall not have been declared and a sum sufficient for the payment thereof in full shall not have been set apart for payment, then the number of directors constituting the Board, without further action, shall be increased by two and the holders of the Cumulative Convertible Preferred Stock, together with the holders of shares of every other series of Preferred Stock upon which rights to vote for the election of two additional directors have been conferred and are then exercisable, such other series not including the Series A Preferred Stock and the Series B Preferred Stock (any such other series, the "Parity Voting Preferred Stock"), shall have the exclusive right, voting separately as a class, to elect the two directors of the Corporation to fill such newly created directorships. The remaining directors constituting the Board shall continue to be elected by the other class or classes (or series thereof) of stock entitled to vote therefor. (ii) Whenever such voting right shall have vested, such right may be exercised at a special meeting of the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock, at any annual or special meeting of stockholders held for the purpose of electing directors. Each director elected pursuant to such right shall be elected by a majority of the votes cast. The voting right of the holders of Cumulative Convertible Preferred Stock shall continue until such time as all cumulative dividends accumulated on the Cumulative Convertible Preferred Stock shall have been paid in full, at which time such voting right of the holders of Cumulative Convertible Preferred Stock shall terminate and, subject to the voting right of the holders of Parity Voting Preferred Stock, the authorized number of members of the Board shall automatically be reduced by two, but such voting right shall again vest in the event of each and every subsequent failure of the Corporation to pay or declare and set apart for payment dividends for the requisite number of periods. (iii) At any time when such voting right shall have vested in the holders of Cumulative Convertible 24 Preferred Stock, a proper officer of the Corporation shall, upon the written request of holders of record of 10% of the shares of Cumulative Convertible Preferred Stock then outstanding, call a special meeting of holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock for the purpose of electing the two directors to be elected by such holders or removing any director previously elected. Such meeting shall be held at the earliest practicable date upon not less than 10 days' notice to such holders. If such meeting shall not be called within 30 days after receipt of such written request, then the holders of record of 10% of the shares of Cumulative Convertible Preferred Stock then outstanding may designate in writing one of their number to call such meeting at the expense of the Corporation, and such meeting may be called by such Person so designated upon not less than 10 days' notice to such holders. Any holder of Cumulative Convertible Preferred Stock shall have access to the stock books of the Corporation for the purpose of causing a meeting of stockholders to be so called. (iv) At any meeting at which the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall have the right to elect directors, the presence in person or by proxy of the holders of at least a majority of the votes entitled to be cast by the then outstanding shares of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall be required and be sufficient to constitute a quorum. At any such meeting or adjournment thereof, the absence of a quorum of the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall not prevent the election of directors other than those to be elected by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock and the absence of a quorum or quorums of the holders of capital stock entitled to elect such other directors shall not prevent the election of the directors to be elected by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock. (v) Each director elected by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall serve until the earlier of (i) the election by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock and qualification of such director's successor and (ii) the time at 25 which the holders of the Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock no longer have the right to elect such director. Upon any termination of such voting rights, the term of office of each director elected by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall terminate immediately. Other than as provided in the two preceding sentences, the directors elected by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock may be removed only by the holders of the Cumulative Convertible Preferred Stock and the Parity Voting Preferred Stock. (vi) If a director so elected by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall cease to serve as director before such director's term shall expire, the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock then outstanding may, in the manner provided above, elect a successor to hold office for the unexpired term of the director whose place shall be vacant. (c) So long as any shares of Cumulative Convertible Preferred Stock are outstanding, unless the vote or consent of the holders of a greater number of shares shall be required by law or by the Restated Certificate of Incorporation, the affirmative vote of at least 66 2/3% of the votes entitled to be cast by the holders of the shares of Cumulative Convertible Preferred Stock given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating: (i) any amendment, alteration or repeal of any of the provisions of the Restated Certificate of Incorporation that materially adversely affects the voting powers, rights or preferences of the holders of the Cumulative Convertible Preferred Stock; provided, however, that the amendment of the provisions of the Restated Certificate of Incorporation so as to authorize or create, or to increase the authorized amount of, any shares of any Junior Securities or any shares of any class of Parity Securities shall not be deemed to have a material adverse effect on the voting powers, rights or preferences of the holders of Cumulative Convertible Preferred Stock; or 26 (ii) the authorization or creation of, or the increase in the authorized amount of, any shares of (x) any class or series of a class of capital stock of the Corporation the terms of which expressly provide that the shares thereof rank senior as to the payment of dividends or the distribution of assets upon the liquidation, dissolution or winding up of the Corporation to the shares of the Cumulative Convertible Preferred Stock (the "Senior Securities") or (y) any security convertible into, or exchangeable or exercisable for, shares of any Senior Securities; provided, however, that no such vote of the holders of Cumulative Convertible Preferred Stock shall be required if, at or prior to the time when such amendment, alteration or repeal is to take effect, or when the issuance of any such Senior Securities or security convertible into, or exchangeable or exercisable for, Senior Securities is to be made, as the case may be, all shares of Cumulative Convertible Preferred Stock at the time outstanding shall have been called for redemption by the Corporation pursuant to Section 4 and such shares of Common Stock and/or cash necessary for such redemption shall have been irrevocably deposited as provided in clause (ii) of Section 4(f). For purposes of the foregoing provisions of this Section 8, each share of Cumulative Convertible Preferred Stock shall have one vote per share, except that when any other series of Preferred Stock shall have the right to vote with the Cumulative Convertible Preferred Stock as a single class on any matter, then the Cumulative Convertible Preferred Stock and such other series shall have with respect to such matters one vote per $50.00 of stated liquidation preference. Except as otherwise required by applicable law or as set forth herein, the shares of Cumulative Convertible Preferred Stock shall not have any relative, participating, optional or other special voting rights and powers and the consent of the holders thereof shall not be required for the taking of any corporate action. 27 IN WITNESS WHEREOF, The Equitable Companies Incorporated has caused this Certificate of Designations, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of its Cumulative Convertible Preferred Stock, Series C, to be duly executed by its Chairman and Chief Executive Officer and attested to by its Secretary and has caused its corporate seal to be affixed hereto, as of this 19th day of April, 1993. /s/ Richard H. Jenrette --------------------------------- Name: Richard H. Jenrette Title: Chairman and Chief Executive Officer [Corporate Seal] ATTEST: /s/ Molly K. Heines - ----------------------------------- Name: Molly K. Heines Title: Vice President and Secretary 28 EX-4.01(E) 6 EXH 4.01(E) CERT. OF DESIGNATION-SERIES D Exhibit 4.01(e) CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF PREFERRED STOCK AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF OF THE EQUITABLE COMPANIES INCORPORATED CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES D ---------------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware ---------------------- The following resolution has been duly adopted by the Board of Directors (such Board, including any committee thereof duly authorized to act on behalf of such Board, herein referred to as the "Board") of The Equitable Companies Incorporated, a Delaware corporation (the "Corporation"), pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, which resolution remains in full force and effect as of the date hereof: RESOLVED that, pursuant to the authority expressly granted to and vested in the Board by the provisions of the Restated Certificate of Incorporation of the Corporation (the "Restated Certificate of Incorporation") to fix by resolution or resolutions the voting rights, if any, of each series of Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of the Corporation and the designations, preferences and relative, participating, optional and other special rights and qualifications, limitations and restrictions thereof, the Board hereby authorizes and creates a series of Preferred Stock on the terms and with the provisions (in addition to those set forth in the Restated Certificate of Incorporation of the Corporation that are applicable to all Preferred Stock) as follows: SECTION 1. Designation, Number of Shares and Liquidation Preference. The series of Preferred Stock created by this resolution shall be designated the "Cumulative Convertible Preferred Stock, Series D" (the "Series D Preferred Stock"). The number of authorized shares of the Series D Preferred Stock shall be ________________. The liquidation preference of each share of Series D Preferred Stock (the "Liquidation Preference") shall be $500.00. SECTION 2. Rank. The Series D Preferred Stock shall, as to the payment of Cumulative Dividends (as defined below) and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation, rank (i) prior to the Common Stock, par value $.01 per share (the "Common Stock"), and any other capital stock, of the Corporation (other than (a) the Corporation's Convertible Exchangeable Preferred Stock, Series A, par value $1.00 per share (the "Series A Preferred Stock"), (b) the Corporation's Preferred Stock, Series B, par value $1.00 per share (the "Series B Preferred Stock"), (c) the Corporation's Cumulative Convertible Preferred Stock, Series C, par value $1.00 per share (the "Cumulative Convertible Preferred Stock"), and (d) any other class or series of a class of capital stock of the Corporation the terms of which expressly provide that the shares thereof rank senior or on a parity as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation 2 with the shares of the Series D Preferred Stock) (such securities, other than those described in the immediately preceding parenthetical clause, collectively referred to herein as the "Junior Securities") and (ii) on a parity with the Series A Preferred Stock, the Series B Preferred Stock, the Cumulative Convertible Preferred Stock and any other class or series of a class of capital stock of the Corporation the terms of which expressly provide that the shares thereof rank on a parity as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation with the shares of the Series A Preferred Stock, the Series B Preferred Stock and the Cumulative Convertible Preferred Stock (the "Parity Securities"). The Series D Preferred Stock shall, as to the payment of the Additional Dividends (as defined below), rank junior to the Parity Securities and on a parity with the Common Stock. SECTION 3. Dividends. (a) The holders of outstanding shares of Series D Preferred Stock shall be entitled to receive, in preference to the holders of shares of Junior Securities, when, as and if declared by the Board, out of funds of the Corporation legally available for the payment of dividends, a cumulative cash dividend (the "Cumulative Dividends") at the rate per annum of $1.00 per share of Series D Preferred Stock. Cumulative Dividends shall accrue and be payable quarterly, when, as and if declared by the Board, in arrears on each January 22, April 22, July 22 and October 22 (each a "Dividend Payment Date"), commencing on January 22, 1994. Each such quarterly Cumulative Dividend shall be cumulative and shall accumulate, whether or not earned or declared and whether or not there are funds of the Corporation legally available for payment of dividends, for the period (each, a "Dividend Period") commencing on and including the most recent Dividend Payment Date to which dividends have been paid or accumulated to but excluding the next succeeding Dividend Payment Date, except (x) that the Dividend Period 3 terminating on January 22, 1994 (the "Initial Dividend Period") shall commence on and include ___________ and (y) as otherwise provided in Sections 4, 5 and 7 with respect to shares of Series D Preferred Stock that are redeemed or converted into shares of Common Stock or with respect to which distributions are made upon a Liquidation Transaction (as defined in Section 7). Cumulative Dividends shall be payable, net of any amounts required to be withheld for or with respect to taxes, to holders of record as they appear on the stock books of the Corporation at the close of business on such record dates, not more than 60 days nor less than 10 days prior to the respective Dividend Payment Date, as shall be fixed by the Board. If any Dividend Payment Date is not a Business Day, the quarterly Cumulative Dividend to be paid on such Dividend Payment Date shall be paid on the next following Business Day. A "Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City or New Jersey are required or authorized by law to be closed. Payments of quarterly Cumulative Dividends shall be made in coin or currency of the United States that as of the date of payment shall be legal tender for payment of public and private debts by mailing a check to each holder of shares of Series D Preferred Stock at the address of such holder as shown on the stock books of the Corporation. Accumulated and unpaid Cumulative Dividends for any past Dividend Periods may be declared and paid at any time, without reference to any Dividend Payment Date, to holders of record on such date, not exceeding 45 days preceding the payment date thereof, as may be fixed by the Board. (b) The amount of Cumulative Dividends payable for each full Dividend Period for the Series D Preferred Stock shall be computed by dividing the annual dividend rate by four. The amount of Cumulative Dividends payable for the Initial Dividend Period, or any other period shorter or longer than a full Dividend Period, on the Series D Preferred Stock shall be computed on the basis of a 360-day 4 year consisting of twelve 30-day months. Other than as provided in Section 3(g) below, holders of shares of Series D Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of Cumulative Dividends, as herein provided, on the Series D Preferred Stock. (c) All dividends paid with respect to shares of Series D Preferred Stock shall be paid pro rata to the holders entitled thereto. (d) When Cumulative Dividends are not paid in full upon the Series D Preferred Stock, any dividends (other than Additional Dividends (as defined in Section 3(g) below)) declared or paid upon shares of Series D Preferred Stock and any Parity Securities shall be declared or paid, as the case may be, pro rata so that the amounts of dividends (other than Additional Dividends) declared or paid, as the case may be, per share on the Series D Preferred Stock and any Parity Securities in all cases bear to each other the same ratio that accumulated and unpaid dividends (other than Additional Dividends) per share on the shares of Series D Preferred Stock and any Parity Securities bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series D Preferred Stock, or any Parity Securities, which may be in arrears. (e) Unless full Cumulative Dividends on the Series D Preferred Stock have been or contemporaneously are declared by the Board and paid or declared and a sum sufficient for the payment thereof set apart by the Corporation for all Dividend Periods terminating on or prior to the date of payment of dividends on any Junior Securities or Additional Dividends, no dividends shall be declared or paid or any sum set apart for such payment or any other distribution made on or with respect to such Junior Securities for any period, other than dividends payable or 5 distributions made in shares of Junior Securities, and no Additional Dividends shall be declared or paid or any sum set apart for such payment. (f) Unless full Cumulative Dividends on the Series D Preferred Stock have been or contemporaneously are declared by the Board and paid or declared and a sum sufficient for the payment thereof set apart by the Corporation for all Dividend Periods terminating on or prior to the date of any event described in clause (x) or (y) of this Section 3(f), the Corporation shall not, and shall not permit its Subsidiaries (as defined in Section 5(n)) to, (x) redeem, purchase, retire or otherwise acquire for any consideration any shares of Series D Preferred Stock, unless (A) all shares of Series D Preferred Stock outstanding shall be redeemed, purchased, retired or otherwise acquired or (B) the shares of Series D Preferred Stock are redeemed, purchased, retired or otherwise acquired pro rata from among the holders of the shares then outstanding or (y) redeem, purchase, retire or otherwise acquire for any consideration, or make any payment on account of a sinking fund or other similar fund for the redemption, purchase, retirement or acquisition of, any Junior Securities or any Parity Securities, or any warrant, right or option to purchase any thereof, or make any distribution in respect thereof, directly or indirectly, whether in cash, obligations or securities of the Corporation or other property, except (i) in the case of Junior Securities, redemptions, purchases, retirements, acquisitions or distributions made in shares of Junior Securities or redemptions, purchases or acquisitions of shares of Common Stock for purposes of any employee benefit plan or program of the Corporation or any Subsidiary and (ii) in the case of Parity Securities, redemptions, purchases, retirements, acquisitions or distributions made pro rata so that the amounts redeemed, purchased, retired or otherwise acquired or paid or distributed in respect thereof, as the case may be, per share on the Series D Preferred Stock and any Parity Securities in all 6 cases bear to each other the same ratio that accumulated and unpaid dividends (other than Additional Dividends) and required redemption payments per share on the shares of Series D Preferred Stock and any Parity Securities bear to each other; provided that this Section 3(f) shall not apply to any Subsidiary of the Corporation that is (1) an insurance company or other financial institution, a broker or a dealer (as such terms are defined in the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, as the case may be) or an investment advisor (as defined in the Investment Advisors Act of 1940, as amended), in each case acting for the benefit of Persons (as defined in Section 5(n)) other than the Corporation or its Subsidiaries or (2) any investment vehicle managed or advised by any of the Persons described in clause (1) above for the benefit of any Persons other than the Corporation or its Subsidiaries. (g) Notwithstanding anything to the contrary contained herein, holders of outstanding shares of Series D Preferred Stock shall be entitled to receive, when, as and if declared by the Board, out of funds of the Corporation legally available therefor, additional dividends (the "Additional Dividends") in an amount per share of Series D Preferred Stock equal to (x) the amount per share of Common Stock of any cash dividends declared on the Common Stock multiplied by the number of shares of Common Stock into which a share of Series D Preferred Stock is then convertible (without giving effect to the prohibition on conversion of Series D Preferred Stock prior to July 22, 1994 as set forth in Section 5(a)) reduced by (y) the amount per share of Series D Preferred Stock of any Cumulative Dividends paid to the holders of Series D Convertible Stock and not previously used to offset payments of Additional Dividends. Such Additional Dividends shall be declared and paid in the same manner and at the same time as dividends are declared and paid on the Common Stock to the holders of record of the shares of Series D Preferred Stock. 7 SECTION 4. Redemption. (a) The Series D Preferred Stock shall not be redeemable prior to July 22, 1994. (b)(i) The Series D Preferred Stock shall be subject to redemption in Common Stock, at the option of the Corporation, at any time after July 22, 1994, in part from time to time or in whole. (ii) If the Corporation elects to redeem shares of Series D Preferred Stock pursuant to Section 4(b)(i), notice of such redemption shall be given not less than 30 nor more than 60 days prior to the date fixed by the Corporation for such redemption (a "Call Date") to each holder of record of the shares to be redeemed. Upon the redemption of Series D Preferred Stock by the Corporation pursuant to this Section 4(b) on a Call Date, (x) each such share of Series D Preferred Stock shall be redeemed for that number of shares of Common Stock determined by dividing $5,000 by the Conversion Price as of the opening of business on the Call Date (such calculation to be carried out to four (4) decimal places) and (y) the holder of each such share of Series D Preferred Stock shall have the right to receive a cash adjustment pursuant to Section 4(i) with respect to any fractional shares resulting from such redemption, together with accumulated and unpaid Cumulative Dividends (whether or not earned or declared) to such Call Date on the shares of Series D Preferred Stock so redeemed, without interest. (c) To the extent the Corporation shall have funds legally available therefor, the Series D Preferred Stock shall be subject to redemption in cash, at the option of the Corporation, at any time on or after December 15, 2003, in part from time to time or in whole, at the redemption prices per share indicated below, together in each case with accumulated and unpaid Cumulative Dividends thereon (whether or not earned or declared) to any date fixed by the Corporation for such redemption (a "Cash Redemption Date"), without interest: 8 12-month period Per Share ending December 15, Redemption Price ------------------- ---------------- 2004 . . . . . . . . . . . $5,250 2005 . . . . . . . . . . . 5,200 2006 . . . . . . . . . . . 5,150 2007 . . . . . . . . . . . 5,100 2008 . . . . . . . . . . . 5,050 2009 and thereafter. . . . 5,000 (d) If the Corporation elects to redeem shares of Series D Preferred Stock pursuant to Section 4(c), notice of such redemption shall be given not less than 30 nor more than 60 days prior to the Cash Redemption Date fixed in such notice to each holder of record of the shares to be redeemed. (e) Any notice pursuant to Section 4(b) or 4(d) shall be provided by first class mail, postage prepaid, at such holder's address as the same appears on the stock records of the Corporation. Neither the failure to mail any notice required by Section 4(b) or 4(d), nor any defect therein or in the mailing thereof, to any particular holder, shall affect the sufficiency of the notice or the validity of the proceedings for redemption with respect to the other holders. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given on the date mailed, whether or not the holder receives the notice. Each such notice shall state, in addition to any other information the Corporation deems appropriate: (i) the Call Date or the Cash Redemption Date, as the case may be; (ii) the number of shares of Series D Preferred Stock to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (iii) in the case of redemption pursuant to Section 4(b), the number of shares of Common Stock to be issued with respect to each share of Series D Preferred Stock; (iv) in the case of redemption pursuant to 9 Section 4(c), the applicable redemption price; (v) the place or places where certificates for shares of Series D Preferred Stock are to be surrendered for redemption; (vi) the then effective Conversion Price; and (vii) that the right of holders to convert shares of Series D Preferred Stock to be redeemed shall terminate at the close of business on the applicable Call Date or Cash Redemption Date, as the case may be. (f)(i) Notice having been given as aforesaid, from and after a Call Date or a Cash Redemption Date, as the case may be (unless the Corporation shall fail to make available the number of shares of Common Stock and/or irrevocably to set apart the cash necessary to effect such redemption), (x) except as otherwise provided herein, dividends on the shares of the Series D Preferred Stock so called for redemption shall cease to accrue, (y) such shares of Series D Preferred Stock shall no longer be deemed to be outstanding and (z) all rights of the holders thereof as holders of Series D Preferred Stock shall cease except as provided in clause (iii) of this Section 4(f). (ii) The Corporation's obligation to provide any shares of Common Stock and/or any cash in accordance with clause (i) of this Section 4(f) shall be deemed fulfilled if, on or before the applicable Call Date or Cash Redemption Date, as the case may be, the Corporation shall deposit with First Chicago Trust Company of New York, or with a bank or trust company (which may be an affiliate of the Corporation) that has an office in the Borough of Manhattan, City of New York, and that has a capital and surplus of at least $50,000,000, any shares of Common Stock and/or any cash necessary for such redemption, in trust, with irrevocable instructions that such shares of Common Stock and/or such cash be applied to the redemption of the shares of Series D Preferred Stock called for redemption. 10 (iii) In the case of any redemption pursuant to Section 4(b), notice having been given as aforesaid, from and after the close of business on a Call Date (unless the Corporation defaults in the delivery of the shares of Common Stock and any cash payable on such Call Date), the shares of Series D Preferred Stock to be redeemed shall cease to accumulate dividends, each holder of such shares shall be deemed to be the holder of the number of shares of Common Stock for which such Series D Preferred Stock is to be redeemed, regardless of whether such holder has surrendered the certificates for such holder's shares of Series D Preferred Stock, and the only right of such holders shall be to receive (x) such shares of Common Stock and (y) any cash adjustments made pursuant to Section 4(i) and all accumulated and unpaid Cumulative Dividends (whether or not earned or declared) on such shares of Series D Preferred Stock to but excluding the Call Date. In the case of any redemption pursuant to Section 4(c) (unless the Corporation defaults in the payment of the applicable redemption price), notice having been given as aforesaid, the shares of Series D Preferred Stock to be redeemed shall from and after the close of business on a Cash Redemption Date cease to accumulate dividends and the only right of the holders of such shares shall be to receive payment of the redemption price and all accumulated and unpaid Cumulative Dividends (whether or not earned or declared) on such shares to but excluding the Cash Redemption Date. No interest shall accrue for the benefit of the holders of Series D Preferred Stock to be redeemed on any sum set aside by the Corporation in connection with a redemption pursuant to this Section 4. Subject to applicable escheat laws, any such cash unclaimed at the end of two years from the applicable Call Date or Cash Redemption Date, as the case may be, shall revert to the general funds of the Corporation and, upon demand, such bank or trust company shall pay over to the Corporation such unclaimed cash and thereupon such bank or trust company shall be relieved of all responsibility in respect thereof and any holder of such shares so called for redemption shall 11 look only to the general funds of the Corporation for the payment of such cash. Any interest accrued on cash deposited pursuant to this Section 4(f) shall be paid from time to time to the Corporation for its own account. (iv) As promptly as possible after the surrender of the certificates for any shares of Series D Stock redeemed pursuant to this Section 4 (with appropriate endorsements and any transfer documents reasonably requested by the Corporation or any transfer agent designated by the Corporation), such certificates shall be exchanged (A) in the case of any redemption pursuant to Section 4(b), for certificates for shares of Common Stock and any cash for adjustments pursuant to Section 4(i) and (B) in the case of any redemption pursuant to Section 4(c), for payment of the redemption price, in either case together with all accumulated and unpaid Cumulative Dividends (whether or not earned or declared) payable thereon. (g) If fewer than all the outstanding shares of Series D Preferred Stock are to be redeemed pursuant to this Section 4, except as otherwise provided by Section 3(f), shares to be redeemed shall be selected by the Corporation from outstanding shares of Series D Preferred Stock not previously called for redemption by lot or pro rata (as nearly as may be) or by any other method determined by the Corporation in its sole discretion to be equitable. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof. (h) Any fraction of a share of Series D Preferred Stock may be redeemed in the same manner in which a whole share of Series D Preferred Stock may be redeemed pursuant to this Section 4, provided that any shares of Common Stock deliverable and/or any cash payable upon the redemption of such fractional interest shall be determined by multiplying the number of shares of Common Stock deliverable and/or any 12 cash payable upon the redemption of one share of Series D Preferred Stock by that fraction. If part of a share of Series D Preferred Stock is redeemed, a new certificate shall be issued representing the unredeemed portion of a share without cost to the holder thereof. (i) In the case of any redemption pursuant to Section 4(b), no fractional shares of Common Stock or scrip representing fractional shares of Common Stock shall be issued upon redemption of the shares of Series D Preferred Stock. If more than one certificate shall be surrendered for redemption at any one time by the same holder, the number of full shares of Common Stock issuable upon redemption thereof shall be computed on the basis of the aggregate number of shares of Series D Preferred Stock represented by the certificates so surrendered. Instead of any fractional shares of Common Stock which would otherwise be issuable upon redemption of shares of Series D Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to that fraction of the Closing Price (as defined in Section 5(n)) of the Common Stock as of the Trading Day (as defined in Section 5(n)) immediately preceding the Call Date. (j) All shares of Common Stock issued and delivered pursuant to Section 4(b) will upon issuance by the Corporation and delivery be duly and validly issued, fully paid and nonassessable. If any shares of Common Stock are listed on any national securities exchange, the Corporation shall, if permitted by the rules of such exchange, list the shares of Common Stock required to be delivered upon a redemption of the Cumulative Convertible Preferred Stock pursuant to Section 4(b), prior to such redemption, on such exchange. (k) Upon any redemption of Series D Preferred Stock, the Corporation shall pay on each share so redeemed all accumulated and unpaid Cumulative Dividends (whether or 13 not earned or declared) to but excluding the applicable Call Date or Cash Redemption Date, as the case may be. If a Call Date or a Cash Redemption Date, as the case may be, falls after a dividend payment record date and prior to the corresponding Dividend Payment Date, then each holder of shares of Series D Preferred Stock to be redeemed, at the close of business on such dividend payment record date, shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date (but without duplication of any amounts payable pursuant to the preceding sentence in respect of accumulated and unpaid dividends), notwithstanding the redemption of such shares before such Dividend Payment Date. The Corporation shall make no payment or allowance for Additional Dividends or unpaid dividends on any shares of Common Stock issued upon redemption pursuant to Section 4(b). (l) Any cash payment to a holder of shares of Series D Preferred Stock in connection with any redemption of the Series D Preferred Stock pursuant to this Section 4 shall be made in coin or currency of the United States that as of the date of payment shall be legal tender for payment of public and private debts by mailing a check to such holder at the address of such holder as shown on the stock books of the Corporation. SECTION 5. Conversion. The Series D Preferred Stock shall be convertible into shares of Common Stock as follows: (a) Subject to and upon compliance with the provisions of this Section 5, the holder of any shares of Series D Preferred Stock shall have the right, at such holder's option, at any time after July 22, 1994, in whole or, from time to time, in part, to convert any of such shares of Series D Preferred Stock into fully paid and nonassessable shares of Common Stock at the Conversion Price as of the Conversion Date upon the terms 14 hereinafter set forth. In case the shares of Series D Preferred Stock are called for redemption, such right of conversion shall terminate at the close of business on the applicable Call Date or Cash Redemption Date, as the case may be, unless the Corporation shall default in the delivery of the shares of Common Stock and/or the payment of any cash due upon redemption. Each share of Series D Preferred Stock shall be convertible pursuant to this Section 5(a) into the number of shares of Common Stock determined by dividing the $5,000 by the Conversion Price as of the Conversion Date (such calculation to be carried out to four (4) decimal places). (b) The "Conversion Price" shall mean $_____________, as adjusted from time to time in accordance with the terms of this Section 5. (c) A holder of shares of Series D Preferred Stock may exercise the conversion right specified in Section 5(a) as to any shares held by such holder by delivering written notice to the Corporation stating that such holder elects to convert all or a specified number of the shares of Series D Preferred Stock held by such holder. Such holder shall surrender to the Corporation, or any transfer agent of the Corporation previously designated by the Corporation to such holders for this purpose, a certificate or certificates representing the shares of Series D Preferred Stock to be converted with appropriate endorsements and any transfer documents reasonably requested by the Corporation or such transfer agent. Conversion of the shares of Series D Preferred Stock to be converted shall be deemed to have been effected immediately prior to the close of business on the date when such holder surrenders for conversion the certificate or certificates representing such shares of Series D Preferred Stock (any such date is referred to herein with respect to 15 such shares as the "Conversion Date") and the Person in whose name the certificate or certificates representing Common Stock are to be issued shall be deemed to have become a holder of record of such Common Stock on the applicable Conversion Date, unless the stock transfer books of the Corporation shall be closed on such date, in which event such Person shall be deemed to have become such holder of record at the close of business on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Price in effect on the applicable Conversion Date. As promptly as practicable after the Conversion Date and after surrender to the Corporation, or to any transfer agent of the Corporation previously designated by the Corporation to the holders of the Series D Preferred Stock for such purpose, by a holder of a certificate or certificates representing the shares of Series D Preferred Stock to be converted, the Corporation shall issue and deliver or cause to be delivered to or upon the written order of such holder (i) a certificate or certificates representing the number of full shares of Common Stock to which such holder is entitled and (ii) a check made payable for an amount corresponding to any fractional interest in a share of Common Stock as provided in Section 5(e). Upon conversion of only a portion of the shares of Series D Preferred Stock represented by any certificate, the Corporation shall issue and deliver or cause to be delivered to or upon the written order of the applicable holder of shares of Series D Preferred Stock, at the expense of the Corporation, a new certificate representing the unconverted portion of the certificate so surrendered. 16 Holders of shares of Series D Preferred Stock at the close of business on a dividend payment record date shall be entitled to receive any Cumulative Dividends or Additional Dividends payable on such shares on the corresponding dividend payment date notwithstanding the conversion thereof following such dividend payment record date and prior to such dividend payment date. However, shares of Series D Preferred Stock surrendered for conversion during the period between the close of business on any dividend payment record date and the opening of business on the corresponding dividend payment date must be accompanied by payment of an amount equal to the Cumulative Dividends or Additional Dividends payable on such shares on such dividend payment date (except shares of Series D Preferred Stock converted after the issuance of a notice of redemption with respect to a Call Date or a Cash Redemption Date during such period, which need not be accompanied by payment of such amount). A holder of shares of Series D Preferred Stock at the close of business on a dividend payment record date who tenders any such shares for conversion into shares of Common Stock on the corresponding dividend payment date will receive the Cumulative Dividends or Additional Dividends payable by the Corporation on such shares of Series D Preferred Stock on such date, and the converting holder need not include payment of the amount of such Cumulative Dividends or Additional Dividends upon surrender of shares of Series D Preferred Stock for conversion. The Corporation shall make no payment or allowance for unpaid dividends on any shares of Common Stock issued upon conversion pursuant to this Section 5. (d) Any fraction of a share of Series D Preferred Stock may be converted by a holder thereof in the same manner in which a whole share of Series D Preferred Stock may be converted pursuant to this Section 5, 17 provided that any shares of Common Stock deliverable upon the conversion of such fractional interest shall be determined by multiplying the number of shares of Common Stock deliverable upon the conversion of one share of Series D Preferred Stock by that fraction. If part of a share of Series D Preferred Stock is converted, a new certificate shall be issued representing the unconverted portion of a share without cost to the holder thereof. (e) No fractional shares of Common Stock or scrip representing fractional shares of Common Stock shall be issued upon conversion of the shares of Series D Preferred Stock. If more than one certificate shall be surrendered for conversion at any one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series D Preferred Stock represented by the certificates so surrendered. Instead of any fractional shares of Common Stock which would otherwise be issuable upon conversion of shares of Series D Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to that fraction of the Closing Price of the Common Stock as of the Trading Day immediately preceding the Conversion Date. (f) The Conversion Price and the number and kind of securities issuable upon conversion of the shares of Series D Preferred Stock shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall, at any time or from time to time while any shares of the Series D Preferred Stock are outstanding, (A) pay a dividend or make a distribution on the Common Stock in shares of Common Stock; (B) subdivide its 18 outstanding shares of Common Stock into a greater number of shares; (C) combine its outstanding shares of Common Stock into a smaller number of shares; (D) make a distribution on its Common Stock in shares of capital stock of the Corporation other than Common Stock; or (E) issue by reclassification of its shares of Common Stock any shares of capital stock of the Corporation, the Conversion Price in effect immediately prior to the date fixed for the determination of stockholders affected by such actions shall be adjusted so that each holder of shares of Series D Preferred Stock shall after such date of determination be entitled to receive, upon surrender for conversion, the number of shares of Common Stock or other capital stock of the Corporation which such holder would have owned or have been entitled to receive immediately following such date of determination if such holder had converted its shares of Series D Preferred Stock immediately prior to such date of determination. An adjustment made pursuant to this clause (i) shall become effective immediately after such date of determination. If, after an adjustment pursuant to this clause (i), the holders of shares of Series D Preferred Stock upon conversion of such shares of Series D Preferred Stock may receive shares of two or more classes of capital stock of the Corporation, the Board shall in good faith determine the allocation of the adjusted Conversion Price between the classes of capital stock. After such allocation, the Conversion Price of each class of capital stock shall be subject to adjustment on terms comparable to those applicable to Common Stock in this Section 5. (ii) In case the Corporation shall, at any time or from time to time while any shares of the 19 Series D Preferred Stock are outstanding, issue to holders of outstanding shares of Common Stock generally rights or warrants entitling the holders thereof to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price (as defined in Section 5(n)) of the Common Stock on the date fixed for the determination of stockholders entitled to receive such rights or warrants, the Conversion Price in effect at the opening of business on the day following the date fixed for such determination shall be decreased by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price, and the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase. Such decrease shall become effective immediately after the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such rights or warrants. No adjustment to the Conversion Price shall be made in respect of any issuance of Common Stock upon exercise of any right or warrant if an adjustment shall previously have been made upon issuance of such right or warrant. In case any rights or warrants referred to in this clause (ii) in respect of which an adjustment shall have been made shall expire unexercised within 45 days after the same shall have been distributed or issued by the Corporation, the 20 Conversion Price shall be readjusted at the time of such expiration to the Conversion Price that would have been in effect if no adjustment had been made on account of the distribution or issuance of such expired rights or warrants. (iii) In case the Corporation shall, at any time or from time to time while any shares of the Series D Preferred Stock are outstanding, distribute to holders of outstanding shares of Common Stock generally evidences of indebtedness or assets of the Corporation or any of its Subsidiaries or Affiliates (as defined in Section 5(n)), including securities, but excluding (x) any dividend or distribution or rights or warrants referred to in clause (i) or (ii) above and (y) cash dividends of the Corporation on the Common Stock, then in each such case the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution shall be decreased by multiplying such Conversion Price by a fraction, the numerator of which shall be the Current Market Price on the date fixed for such determination less the then fair market value (as determined by the Board in good faith) of the portion of such evidences of indebtedness or assets so distributed applicable to one share of Common Stock, and the denominator of which shall be such Current Market Price. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately prior to the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such distribution. (iv) At any time or from time to time while any shares of Series D Preferred Stock are out- 21 standing in case of (A) any capital reorganization or any reclassification or change of the Common Stock (other than a reclassification covered by clause (i) above) of the Corporation, (B) the consolidation or merger of the Corporation with or into any other corporation or (C) the sale, lease or other disposition or conveyance of the property and assets of the Corporation as, or substantially as, an entirety to any other corporation, in each case as a result of which holders of outstanding shares of Common Stock generally will be entitled to receive shares of stock or other securities or other property (including cash) with respect to or in exchange for the Common Stock, there shall be no adjustment of the Conversion Price but the shares of Series D Preferred Stock shall, after such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance, be convertible into the kind and amount of shares of stock or other securities or property (including cash) which the holder of shares of Series D Preferred Stock would have owned or been entitled to receive upon such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance if such holder had converted the shares of Series D Preferred Stock owned by such holder immediately prior to the time of such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance (assuming such holder elected to receive the same kind and amount of shares of stock or other securities or property (including cash) receivable upon such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance 22 receivable by a plurality of the holders of shares of Common Stock); and, in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 5 with respect to the rights and interests of the holders of shares of Series D Preferred Stock, so that the provisions set forth in this Section 5 (including without limitation those set forth in this Section 5(f)) shall be made applicable, as closely as reasonably practicable, to any shares of stock or other securities or property thereafter deliverable on the conversion of the shares of Series D Preferred Stock. The provisions of this clause (iv) shall apply to successive reorganizations, reclassifications, changes, consolidations, mergers or sales, leases or other dispositions or conveyances. (v) All calculations under this Section 5(f) shall be made to the nearest cent or to the nearest one hundredth (1/100th) of a share, as the case may be. Any provision of this Section 5 to the contrary notwithstanding, no adjustment in the Conversion Price shall be made if the amount of such adjustment would be less than 1% of the Conversion Price then in effect, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate 1% thereof or more. (vi) No adjustment provided for in clause (i), (ii) or (iii) of this Section 5(f) shall be made if a distribution that would otherwise trigger such adjustment is also made to the 23 holders of shares of Series D Preferred Stock in the same manner and amount as if the holders owned the shares of Common Stock into which the shares of Series D Preferred Stock are convertible immediately prior to such distribution. (vii) The Board may make such adjustments in the Conversion Price, in addition to those required by this Section 5(f), as shall be determined by it (as evidenced by a resolution of the Board) to be advisable in order to avoid or diminish any adverse United States Federal income tax consequences to holders of Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any similar events treated as such for Federal income tax purposes. The Board shall have the power to resolve any ambiguity or correct any error in this Section 5 in a manner not adverse to the holders of the Series D Preferred Stock. (viii) Notwithstanding the foregoing provisions, the issuance of any shares of Common Stock pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the Corporation and the investment of additional optional amounts in shares of Common Stock under any such plan shall not be deemed to constitute an issuance of Common Stock or rights or warrants by the Corporation to which any of the provisions of this Section 5(f) applies. (g) Whenever the Conversion Price shall be adjusted as provided in Section 5(f), the Corporation shall forthwith give written notice to the holders of shares of Series D Preferred Stock by first class mail, to such holders' respective addresses as shown on the 24 stock books of the Corporation setting forth the Conversion Price that shall be in effect after such adjustment. Where appropriate, such notice may be given in advance and may be included as part of a notice required to be given under the provisions of Section 5(h). The Corporation shall also file with any transfer agent designated by the Corporation pursuant to Section 5(c) a notice stating the adjusted Conversion Price and setting forth a brief statement of the facts upon which such adjustment is based. (h) In the event the Corporation shall propose to take any action of the type described in clause (i), (ii), (iii) or (iv) of Section 5(f), the Corporation shall give written notice to the holders of shares of Series D Preferred Stock, by first class mail to such holders' respective addresses as shown on the stock books of the Corporation which notice shall specify the date fixed for the determination of stockholders to be affected, if any, by such action and the approximate date on which such action is to take place. Such notice shall also set forth the number, kind or class of shares or other securities or property which shall be deliverable or purchasable upon the occurrence of such action or deliverable upon conversion of the shares of Series D Preferred Stock. In the case of any action which would require the fixing of such date of determination, such notice shall be given at least 10 days prior to the date so fixed, and, in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action. The failure to give the notice required by this Section 5(h), or any defect therein, shall not affect the legality or validity of any action of the type described in clause (i), (ii), (iii) or (iv) of Section 5(f) or any vote authorizing such action. 25 (i) The Corporation shall pay all documentary, stamp, transfer or other transactional taxes attributable to the issuance or delivery of shares of Common Stock upon conversion of the shares of Series D Preferred Stock; provided that the Corporation shall not be required to pay any taxes payable in respect of any transfer involved in the issuance or delivery of any certificates representing such shares of Common Stock in a name other than that of the holder of the shares of Series D Preferred Stock in respect of which such certificates are being issued and no such issuance or delivery shall be made unless and until the holder requesting such issuance has paid to the Corporation the amount of any such tax or has established to the reasonable satisfaction of the Corporation that such tax is not required to be paid. (j) So long as any Series D Preferred Stock remains outstanding, the Corporation shall reserve at all times, free from preemptive rights, out of its authorized but unissued shares of Common Stock or Common Stock held in treasury, solely for the purpose of effecting the conversion of the Series D Preferred Stock, sufficient shares of Common Stock to provide for the conversion of all outstanding shares of Series D Preferred Stock. (k) If, and so long as, any shares of Common Stock into which the shares of Series D Preferred Stock are then convertible are listed on any national securities exchange, the Corporation will, if permitted by the rules of such exchange, list and keep on such exchange, upon official notice of issuance, all shares of Common Stock issuable upon conversion. (l) All shares of Common Stock which may be issued and delivered upon conversion of the shares of Series D Preferred Stock will upon issuance by the 26 Corporation and delivery be duly and validly issued, fully paid and nonassessable and the Corporation shall not take any action which would cause the Conversion Price to be less than the par value of the Common Stock. (m) In any case in which Section 5(f) provides that an adjustment shall become effective on, or on the day following, the record date for any event, the Corporation may defer until the occurrence of such event (i) issuing to the holder of any share of Series D Preferred Stock converted after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (ii) paying to such holder any amount in cash in lieu of any fractional share pursuant to Section 5(e). (n) For purposes of this Section 5: (i) "Affiliate" has the meaning given to such term in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. (ii) "Closing Price" means, for any Trading Day, the last reported sales price, regular way, per share of Common Stock or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, regular way, per share of Common Stock, in either case as reported on the New York Stock Exchange Composite Transactions Tape or, if the Common Stock is not then listed or admitted to trading on such exchange, on the principal national securities exchange on which the Common Stock is then listed or admitted to trading or, if the Common 27 Stock is not then listed or admitted to trading on any national securities exchange, as quoted through the National Association of Securities Dealers Automated Quotations National Market System or, if the Common Stock is not then listed or admitted to trading on any national securities exchange or quoted through such National Market System, the average of the closing bid and asked prices per share of Common Stock in the over-the-counter market as furnished by any New York Stock Exchange member firm that makes a market in the Common Stock selected from time to time by the Corporation for that purpose. (iii) "Current Market Price" means, as of any date, the average of the Closing Prices for the 30 consecutive Trading Days ending on the Trading Day prior to such date. (iv) "Person" means any individual, corporation, partnership, firm, joint venture, association, joint stock company, trust, unincorporated organization, governmental or regulatory authority or other entity. (v) "Subsidiary" means any corporation, association or other business entity more than 50% of the shares of stock of any class or classes (or equivalent interests) of which is at the time owned by the Corporation or by one or more Subsidiaries of the Corporation or by the Corporation and one or more Subsidiaries of the Corporation, if the holders of the stock of such class or classes (or equivalent interests) are ordinarily, in the absence of contingencies, entitled to vote for the election of a majority of the directors (or Persons performing similar functions) of such business entity. 28 (vi) "Trading Day" means any day the New York Stock Exchange is open for regular trading. SECTION 6. Shares to be Retired. All shares of Series D Preferred Stock purchased or redeemed by the Corporation (excluding, until the Corporation elects to retire them, shares that are held as treasury shares) or converted shall be retired and cancelled and shall be restored to the status of authorized but unissued shares of Preferred Stock, without designation as to series. SECTION 7. Liquidation. (a) The shares of Series D Preferred Stock shall rank prior to the shares of Junior Securities upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (a "Liquidation Transaction"), so that in the event of any Liquidation Transaction, the holders of shares of Series D Preferred Stock then outstanding shall be entitled to receive out of the assets or surplus funds of the Corporation available for distribution to its stockholders, or proceeds thereof, whether from capital, surplus or earnings, before any distribution is made to holders of any Junior Securities, a liquidation preference in an amount per share of Series D Preferred Stock equal to the Liquidation Preference, plus an amount equal to all Cumulative Dividends (whether or not earned or declared) accumulated and unpaid on the shares of Series D Preferred Stock to the date of final distribution. (b) If, upon any Liquidation Transaction, the assets or surplus funds of the Corporation, or proceeds thereof, whether from capital, surplus or earnings, distributable among the holders of shares of Series D Preferred Stock and any Parity Securities then outstanding are insufficient to pay in full the preferential liquidation payments due to such holders, such assets or proceeds shall be distributable among such holders ratably in accordance with the amounts that would be payable on such shares of Series D 29 Preferred Stock and Parity Securities if all amounts payable thereon upon such Liquidation Transaction were payable in full. (c) Neither the consolidation, merger or other business combination of the Corporation with or into any other Person or Persons nor the sale or transfer of all or substantially all the assets of the Corporation shall be deemed to be a Liquidation Transaction. SECTION 8. Voting Rights. Except as otherwise required by applicable law, the shares of Series D Preferred Stock shall not have any relative, participating, optional or special voting rights or powers and the vote or consent of the holders thereof shall not be required for the taking of any corporate action. * * * The following resolution has been duly adopted by the Series D Preferred Stock Pricing Committee of the Board (the "Pricing Committee"), pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware and pursuant to the authority granted to the Pricing Committee by the Board, which resolution remains in full force and effect as of the date hereof: RESOLVED, That, pursuant to the authority expressly granted to the Series D Preferred Stock Pricing Committee of the Board of Directors (the "Series D Pricing Committee") by the Board of Directors of The Equitable Companies Incorporated (the "Corporation") at a meeting held on November 18, 1993, at which meeting the Board of Directors adopting resolutions authorizing and creating the Cumulative Convertible Preferred Stock, Series D, par value $1.00 per share (the "Series D Preferred Stock"), the 30 following additional terms of the Series D Preferred Stock are hereby approved by this Committee: (a) the number of authorized shares of the Series D Preferred Stock shall be 60,000; (b) the Initial Dividend Period for the Series D Preferred Stock shall commence on and include December 15, 1993; and (c) the initial Conversion Price for the Series D Preferred Stock shall be $25.125. IN WITNESS WHEREOF, The Equitable Companies Incorporated has caused this Certificate of Designations, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of its Preferred Stock, Series D, to be duly executed by its Senior Vice President and attested to by its Secretary and has caused its corporate seal to be affixed hereto, as of this 8th day of December, 1993. /s/ George A. Williams -------------------------- Name: George A. Williams Title: Senior Vice President [Corporate Seal] ATTEST: /s/ Molly Heines - -------------------------- Name: Molly Heines Title: Secretary 31 EX-4.01(F) 7 EXH 4.01(F) CERT. OF DESIGNATION SERIES-E Exhibit 4.01(f) CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF PREFERRED STOCK AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF Of THE EQUITABLE COMPANIES INCORPORATED CUMULATIVE CONVERTIBLE PREFERRED STOCK, Series E ---------------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware ---------------------- The following resolution has been duly adopted by the Board of Directors (such Board, including any committee thereof duly authorized to act on behalf of such Board, herein referred to as the "Board") of The Equitable Companies Incorporated, a Delaware corporation (the "Corporation"), pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, which resolution remains in full force and effect as of the date hereof: RESOLVED that, pursuant to the authority expressly granted to and vested in the Board by the provisions of the Restated Certificate of Incorporation of the Corporation (the "Restated Certificate of Incorporation") to fix by resolution or resolutions the voting rights, if any, of each series of Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of the Corporation and the designations, preferences and relative, participating, optional and other special rights and qualifications, limitations and restrictions thereof, the Board hereby authorizes and creates a series of Preferred Stock on the terms and with the provisions (in addition to those set forth in the Restated Certificate of Incorporation of the Corporation that are applicable to all Preferred Stock) as follows: SECTION 1. Designation, Number of Shares and Liquidation Preference. The series of Preferred Stock created by this resolution shall be designated the "Cumulative Convertible Preferred Stock, Series E" (the "Cumulative Convertible Preferred Stock"). The number of authorized shares of Cumulative Convertible Preferred Stock shall be 822,460. The liquidation preference of each share of Cumulative Convertible Preferred Stock (the "Liquidation Preference") shall be $500.00. SECTION 2. Rank. The Cumulative Convertible Preferred Stock shall, as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation, rank (i) prior to the Common Stock, par value $.01 per share (the "Common Stock"), and any other capital stock, of the Corporation (other than (a) the Corporation's Convertible Exchangeable Preferred Stock, Series A, par value $1.00 per share (the "Series A Preferred Stock"), (b) the Corporation's Preferred Stock, Series B, par value $1.00 per share (the "Series B Preferred Stock"), (c) the Corporation's Cumulative Convertible Preferred Stock, Series C, par value $1.00 per share (the "Series C Preferred Stock") (d) the Corporation's Cumulative Convertible Preferred Stock, Series D, par value $1.00 per share (the "Series D Preferred Stock") and (e) any other class or series of a class of capital stock of the Corporation the terms of which expressly provide that the shares 2 thereof rank senior or on a parity as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation with the shares of the Cumulative Convertible Preferred Stock) (such securities, other than those described in the immediately preceding parenthetical clause, collectively referred to herein as the "Junior Securities") and (ii) on a parity with the Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock and any other class or series of a class of capital stock of the Corporation the terms of which expressly provide that the shares thereof rank on a parity as to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Corporation with the shares of the Cumulative Convertible Preferred Stock (the "Parity Securities"). SECTION 3. Dividends. (a) (i) The holders of outstanding shares of Cumulative Convertible Preferred Stock shall be entitled to receive, in preference to the holders of shares of Junior Securities, when, as and if declared by the Board, out of funds of the Corporation legally available for the payment of dividends, a cumulative dividend at the rate per annum of $30 per share of Cumulative Convertible Preferred Stock from and including October 22, 1994 to but excluding December 19, 1994 (the "Exchange Offer Dividend Period"), and thereafter at a rate per annum of $__ per share of Cumulative Convertible Preferred Stock. Dividends shall accrue and be payable quarterly, when, as and if declared by the Board, in arrears on each January 22, April 22, July 22 and October 22 (each a "Dividend Payment Date"), commencing on January 22, 1995. Each such quarterly dividend shall be cumulative and shall accumulate, whether or not earned or declared and whether or not there are funds of the Corporation legally available for payment of dividends, for the period (each, a "Dividend Period") commencing on and including the most recent Dividend Payment Date to which dividends have been paid or accumulated to but excluding the 3 next succeeding Dividend Payment Date, except (x) that the Dividend Period terminating on January 22, 1995 (the "Initial Dividend Period") shall commence on and include October 22, 1994 and (y) as otherwise provided in Sections 4, 5 and 7 with respect to shares of Cumulative Convertible Preferred Stock that are redeemed or converted into shares of Common Stock or with respect to which distributions are made upon a Liquidation Transaction (as defined in Section 7). (ii) Dividends shall be payable, net of any amounts required to be withheld for or with respect to taxes, to holders of record as they appear on the stock books of the Corporation at the close of business on such record dates, not more than 60 days nor less than 10 days prior to the respective Dividend Payment Date, as shall be fixed by the Board. If any Dividend Payment Date is not a Business Day, the quarterly dividend to be paid on such Dividend Payment Date shall be paid on the next following Business Day. A "Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are required or authorized by law to be closed. Except as provided in the next sentence, dividends shall be payable (x) on any date occurring on or prior to October 22, 1999 on which dividends are required to be paid hereunder, in such number of shares of Common Stock as equals the amount of dividends to be paid on such date divided by the average of the Closing Price (as defined in Section 5(n)) for the ten consecutive Trading Days (as defined in Section 5(n)) prior to such date (the "Dividend Market Price") and (y) thereafter, at the option of the Corporation, in cash or in a number of shares of Common Stock determined as aforesaid in clause (x), provided, that, in the event the Corporation elects to make the dividend payment payable on any Dividend Payment Date occurring after October 22, 1999 in a form different from the dividend payment made on the immediately preceding Dividend Payment Date, the Corporation shall give notice of such change to the holders of shares of Cumulative 4 Convertible Preferred Stock, by, at the Corporation's option, a press release announcing such change or by first class mail at such holders' respective addresses as shown on the stock books of the Corporation, not less than 10 days nor more than 30 days prior to such Dividend Payment Date. Dividends accumulated during the Exchange Offer Dividend Period shall be paid in cash on the first Dividend Payment Date immediately following the Exchange Offer Dividend Period. Accumulated and unpaid dividends for any past Dividend Periods may be declared and paid at any time, without reference to any Dividend Payment Date, to holders of record on such date, not exceeding 45 days preceding the payment date thereof, as may be fixed by the Board. (iii) Payments of dividends in cash shall be made in coin or currency of the United States that as of the date of payment shall be legal tender for payment of public and private debts by mailing a check to each holder of shares of Cumulative Convertible Preferred Stock at the address of such holder as shown on the stock books of the Corporation. (iv) Payments of dividends in Common Stock shall be made by mailing to each holder of shares of Cumulative Convertible Preferred Stock at the address of such holder as shown on the stock books of the Corporation (a) a certificate or certificates representing the shares of Common Stock to which such holder is entitled and (b) a check made payable for an amount corresponding to any fractional interest in a share of Common Stock as provided in this clause (iv). All shares of Common Stock issued and delivered pursuant to this Section 3 will upon issuance by the Corporation and delivery be duly and validly issued, fully paid and nonassessable. If any shares of Common Stock are listed on any national securities exchange, the Corporation shall, if permitted by the rules of such exchange, list the shares of Common Stock to be delivered pursuant to this Section 3, prior to such payment, on such exchange. The Corporation shall have the option of issuing 5 fractional shares of Common Stock or scrip representing fractional shares of Common Stock upon payment of dividends or, in lieu thereof, paying a cash adjustment in respect of such fractional interest in an amount equal to that fraction of the Dividend Market Price. The Corporation shall pay all documentary, stamp, transfer or other transactional taxes attributable to the issuance or delivery of shares of Common Stock pursuant to this Section 3; provided that the Corporation shall not be required to pay any taxes payable in respect of any transfer involved in the issuance or delivery of any certificates representing such shares of Common Stock in a name other than that of the holder of the shares of Cumulative Convertible Preferred Stock in respect of which such certificates are being issued and no such issuance or delivery shall be made unless and until the holder requesting such issuance has paid to the Corporation the amount of any such tax or has established to the reasonable satisfaction of the Corporation that such tax is not required to be paid. (b) The amount of dividends payable for each full Dividend Period for the Cumulative Convertible Preferred Stock shall be computed by dividing the annual dividend rate by four. The amount of dividends payable for the Initial Dividend Period, or any other period shorter or longer than a full Dividend Period, on the Cumulative Convertible Preferred Stock shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Holders of shares of Cumulative Convertible Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of cumulative dividends, as herein provided, on the Cumulative Convertible Preferred Stock. (c) All dividends paid with respect to shares of Cumulative Convertible Preferred Stock shall be paid pro rata to the holders entitled thereto. 6 (d) When dividends are not paid in full upon the Cumulative Convertible Preferred Stock, any dividends declared or paid upon shares of Cumulative Convertible Preferred Stock and any Parity Securities shall be declared or paid, as the case may be, pro rata so that the amounts of dividends declared or paid, as the case may be, per share on the Cumulative Convertible Preferred Stock and such other Parity Securities in all cases bear to each other the same ratio that accumulated and unpaid dividends per share on the shares of Cumulative Convertible Preferred Stock and such other Parity Securities bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Cumulative Convertible Preferred Stock, or any Parity Securities, which may be in arrears. (e) Unless full cumulative dividends on the Cumulative Convertible Preferred Stock have been or contemporaneously are declared by the Board and paid or declared and an amount of cash or shares of Common Stock, as the case may be, sufficient for the payment thereof set apart by the Corporation for all Dividend Periods terminating on or prior to the date of payment of dividends on any Junior Securities, no dividends shall be declared or paid or any sum set apart for such payment or any other distribution made on or with respect to such Junior Securities for any period, other than dividends payable or distributions made in shares of Junior Securities. (f) Unless full cumulative dividends on the Cumulative Convertible Preferred Stock have been or contemporaneously are declared by the Board and paid or declared and an amount of cash or shares of Common Stock, as the case may be, sufficient for the payment thereof set apart by the Corporation for all Dividend Periods terminating on or prior to the date of any event described in clause (x) or (y) of this Section 3(f), the Corporation shall not, and shall not permit its Subsidiaries (as defined in Section 5(n)) to, 7 (x) redeem, purchase, retire or otherwise acquire for any consideration any shares of Cumulative Convertible Preferred Stock, unless (A) all shares of Cumulative Convertible Preferred Stock outstanding shall be redeemed, purchased, retired or otherwise acquired or (B) the shares of Cumulative Convertible Preferred Stock are redeemed, purchased, retired or otherwise acquired pro rata from among the holders of the shares then outstanding or (y) redeem, purchase, retire or otherwise acquire for any consideration, or make any payment on account of a sinking fund or other similar fund for the redemption, purchase, retirement or acquisition of, any Junior Securities or any Parity Securities, or any warrant, right or option to purchase any thereof, or make any distribution in respect thereof, directly or indirectly, whether in cash, obligations or securities of the Corporation or other property, except (i) in the case of Junior Securities, redemptions, purchases, retirements, acquisitions or distributions made in shares of Junior Securities or redemptions, purchases or acquisitions of shares of Common Stock for purposes of any employee benefit plan or program of the Corporation or any Subsidiary and (ii) in the case of Parity Securities, redemptions, purchases, retirements, acquisitions or distributions made pro rata so that the amounts redeemed, purchased, retired or otherwise acquired or paid or distributed in respect thereof, as the case may be, per share on the Cumulative Convertible Preferred Stock and such other Parity Securities in all cases bear to each other the same ratio that accumulated and unpaid dividends and required redemption payments per share on the shares of Cumulative Convertible Preferred Stock and such other Parity Securities bear to each other; provided that this Section 3(f) shall not apply to any Subsidiary of the Corporation that is (1) an insurance company or other financial institution, a broker or a dealer (as such terms are defined in the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, as the case may be) or an investment advisor (as defined in the Investment Advisors Act of 1940, as amended), in each case acting for the bene- 8 fit of Persons (as defined in Section 5(n)) other than the Corporation or its Subsidiaries or (2) any investment vehicle managed or advised by any of the Persons described in clause (1) above for the benefit of any Persons other than the Corporation or its Subsidiaries. SECTION 4. Redemption. (a) The Cumulative Convertible Preferred Stock shall not be redeemable prior to April 21, 1996. (b) (i) The Cumulative Convertible Preferred Stock shall be subject to redemption in Common Stock, at the option of the Corporation, at any time on or after April 21, 1996, in part from time to time or in whole, if for 20 Trading Days (as defined in Section 5(n)) within any period of 30 consecutive Trading Days, including the last Trading Day of such 30 consecutive Trading Days, the Closing Price (as defined in Section 5(n)) of the Common Stock on each of such 20 Trading Days exceeds 125% of the Conversion Price (as defined in Section 5(b)) in effect on each such Trading Day. (ii) In order to exercise its redemption option under this Section 4(b), the Corporation must issue a press release announcing the redemption (the "Press Release") prior to the opening of business on the second Trading Day after the last Trading Day of any such 30 consecutive Trading Days during which the Closing Price of the Common Stock on each of 20 Trading Days within such 30 consecutive Trading Days exceeded 125% of the Conversion Price in effect on each of such 20 Trading Days. The Press Release shall announce the redemption and set forth the number of shares of Cumulative Convertible Preferred Stock that the Corporation intends to redeem. The date fixed by the Corporation for such redemption (a "Call Date") shall be selected by the Corporation, shall be specified in the notice of redemption and shall be not less than 30 nor more than 60 days after the date on which the Corporation issues the Press Release. Upon the redemption of Cumulative Convertible Preferred 9 Stock by the Corporation pursuant to this Section 4(b) on a Call Date, (x) each such share of Cumulative Convertible Preferred Stock shall be redeemed for that number of shares of Common Stock determined by dividing the Liquidation Preference of such share by the Conversion Price as of the opening of business on the Call Date (such calculation to be carried out to four (4) decimal places) and (y) the holder of each such share of Cumulative Convertible Preferred Stock shall have the right to receive any cash adjustment pursuant to Section 4(i) with respect to any fractional shares resulting from such conversion, together with accumulated and unpaid dividends (whether or not earned or declared) to such Call Date on the shares of Cumulative Convertible Preferred Stock so redeemed, without interest, payable in cash or shares of Common Stock as provided in Section 3(a). (c) To the extent the Corporation shall have funds legally available therefor, the Cumulative Convertible Preferred Stock shall be subject to redemption in cash, at the option of the Corporation, at any time on or after April 21, 2000, in part from time to time or in whole, at $500 per share, together with accumulated and unpaid dividends thereon (whether or not earned or declared) to any date fixed by the Corporation for such redemption (a "Cash Redemption Date"), without interest, payable in cash or shares of Common Stock as provided in Section 3(a). (d) If the Corporation elects to redeem shares of Cumulative Convertible Preferred Stock pursuant to Section 4(b), notice of such redemption shall be given not more than four Business Days after the date on which the Corporation issues the Press Release to each holder of record of the shares to be redeemed. If the Corporation elects to redeem shares of Cumulative Convertible Preferred Stock pursuant to Section 4(c), notice of such redemption shall be given not less than 30 nor more than 60 days prior to the Cash Redemption Date fixed in such notice to each holder of record of the shares to be redeemed. 10 (e) Any notice pursuant to Section 4(d) shall be provided by first class mail, postage prepaid, at such holder's address as the same appears on the stock records of the Corporation. Neither the failure to mail any notice required by Section 4(d), nor any defect therein or in the mailing thereof, to any particular holder, shall affect the sufficiency of the notice or the validity of the proceedings for redemption with respect to the other holders. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given on the date mailed, whether or not the holder receives the notice. Each such notice shall state, in addition to any other information the Corporation deems appropriate: (i) the Call Date or the Cash Redemption Date, as the case may be; (ii) the number of shares of Cumulative Convertible Preferred Stock to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (iii) in the case of redemption pursuant to Section 4(b), the number of shares of Common Stock to be issued with respect to each share of Cumulative Convertible Preferred Stock; (iv) in the case of redemption pursuant to Section 4(c), the applicable redemption price; (v) the place or places where certificates for shares of Cumulative Convertible Preferred Stock are to be surrendered for redemption; (vi) the then effective Conversion Price; and (vii) that the right of holders to convert shares of Cumulative Convertible Preferred Stock to be redeemed shall terminate at the close of business on the applicable Call Date or Cash Redemption Date, as the case may be. (f) (i) From and after a Call Date or a Cash Redemption Date, as the case may be (unless the Corporation shall fail to make available the number of shares of Common Stock and/or irrevocably to set apart the cash necessary to effect such redemption), (x) except as otherwise provided herein, dividends on the shares of the Cumulative Convertible Preferred Stock so called for redemption shall cease to accrue, (y) such shares of Cumulative Convertible Preferred 11 Stock shall no longer be deemed to be outstanding and (z) all rights of the holders thereof as holders of Cumulative Convertible Preferred Stock shall cease except as provided in clause (iii) of this Section 4(f). (ii) The Corporation's obligation to provide any shares of Common Stock and/or any cash in accordance with clause (i) of this Section 4(f) shall be deemed fulfilled if, on or before the applicable Call Date or Cash Redemption Date, as the case may be, the Corporation shall deposit with First Chicago Trust Company of New York, or with a bank or trust company (which may be an affiliate of the Corporation) that has an office in the Borough of Manhattan, City of New York, and that has a capital and surplus of at least $50,000,000, any shares of Common Stock and/or any cash necessary for such redemption, in trust, with irrevocable instructions that such shares of Common Stock and/or such cash be applied to the redemption of the shares of Cumulative Convertible Preferred Stock called for redemption. (iii) In the case of any redemption pursuant to Section 4(b), from and after the close of business on a Call Date (unless the Corporation defaults in the delivery of the shares of Common Stock and any cash payable on such Call Date), the shares of Cumulative Convertible Preferred Stock to be redeemed shall cease to accumulate dividends, each holder of such shares shall be deemed to be the holder of the number of shares of Common Stock for which such Cumulative Convertible Preferred Stock is to be redeemed, regardless of whether such holder has surrendered the certificates for such holder's shares of Cumulative Convertible Preferred Stock, and the only right of such holders shall be to receive (x) such shares of Common Stock, (y) any cash adjustments made pursuant to Section 4(i) and (z) all accumulated and unpaid dividends (whether or not earned or declared) on such shares of Cumulative Convertible Preferred Stock to but excluding the Call Date. In the case of any redemption pursuant to Section 4(c) (unless the Corporation defaults in 12 the payment of the applicable redemption price), the shares of Cumulative Convertible Preferred Stock to be redeemed shall from and after the close of business on a Cash Redemption Date cease to accumulate dividends and the only right of the holders of such shares shall be to receive payment of the redemption price and all accumulated and unpaid dividends (whether or not earned or declared) on such shares to but excluding the Cash Redemption Date. No interest shall accrue for the benefit of the holders of Cumulative Convertible Preferred Stock to be redeemed on any sum set aside by the Corporation in connection with a redemption pursuant to this Section 4. Subject to applicable escheat laws, any cash or shares of Common Stock, unclaimed at the end of two years from the applicable Call Date or Cash Redemption Date, as the case may be, shall revert to the general funds of the Corporation and, upon demand, such bank or trust company shall pay over to the Corporation such unclaimed cash or shares of Common Stock, as the case may be, and thereupon such bank or trust company shall be relieved of all responsibility in respect thereof and any holder of such shares so called for redemption shall look only to the general funds of the Corporation for the payment of such cash or shares of Common Stock, as the case may be. Any interest accrued on cash deposited pursuant to this Section 4(f) shall be paid from time to time to the Corporation for its own account. (iv) As promptly as possible after the surrender of the certificates for any shares of Cumulative Convertible Preferred Stock redeemed pursuant to this Section 4 (with appropriate endorsements and any transfer documents reasonably requested by the Corporation or any transfer agent designated by the Corporation), such certificates shall be exchanged (A) in the case of any redemption pursuant to Section 4(b), for certificates for shares of Common Stock and any cash for adjustments pursuant to Section 4(i) and (B) in the case of any redemption pursuant to Section 4(c), for payment of the redemption price, in either case together with all accumulated and unpaid dividends (whether or not 13 earned or declared) payable thereon, payable in cash or shares of Common Stock as provided in Section 3(a). (g) If fewer than all the outstanding shares of Cumulative Convertible Preferred Stock are to be redeemed pursuant to this Section 4, except as otherwise provided by Section 3(f), shares to be redeemed shall be selected by the Corporation from outstanding shares of Cumulative Convertible Preferred Stock not previously called for redemption by lot or pro rata (as nearly as may be) or by any other method determined by the Corporation in its sole discretion to be equitable. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof. (h) Any fraction of a share of Cumulative Convertible Preferred Stock may be redeemed in the same manner in which a whole share of Cumulative Convertible Preferred Stock may be redeemed pursuant to this Section 4, provided that any shares of Common Stock deliverable and/or any cash payable upon the redemption of such fractional interest shall be determined by multiplying the number of shares of Common Stock deliverable and/or any cash payable upon the redemption of one share of Cumulative Convertible Preferred Stock by that fraction. If part of a share of Cumulative Convertible Preferred Stock is redeemed, a new certificate shall be issued representing the unredeemed portion of a share without cost to the holder thereof. (i) In the case of any redemption pursuant to Section 4(b), the Corporation shall have the option of issuing fractional shares of Common Stock or scrip representing fractional shares of Common Stock upon redemption of the shares of Cumulative Convertible Preferred Stock, or, in lieu thereof, paying a cash adjustment in respect of such fractional interest in an amount equal to that fraction of the average of the Closing Price of the 14 Common Stock for the ten consecutive Trading Days prior to the Call Date. If more than one certificate shall be surrendered for redemption at any one time by the same holder, the number of full shares of Common Stock issuable upon redemption thereof shall be computed on the basis of the aggregate number of shares of Cumulative Convertible Preferred Stock represented by the certificates so surrendered. (j) All shares of Common Stock issued and delivered pursuant to Section 4(b) will upon issuance by the Corporation and delivery be duly and validly issued, fully paid and nonassessable. If any shares of Common Stock are listed on any national securities exchange, the Corporation shall, if permitted by the rules of such exchange, list the shares of Common Stock required to be delivered upon a redemption of the Cumulative Convertible Preferred Stock pursuant to Section 4(b), prior to such redemption, on such exchange. (k) Upon any redemption of Cumulative Convertible Preferred Stock, the Corporation shall pay all accumulated and unpaid dividends (whether or not earned or declared) to but excluding the applicable Call Date or Cash Redemption Date, as the case may be. If a Call Date or a Cash Redemption Date, as the case may be, falls after a dividend payment record date and prior to the corresponding Dividend Payment Date, then each holder of Cumulative Convertible Preferred Stock at the close of business on such dividend payment record date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date (but without duplication of any amounts payable pursuant to the preceding sentence in respect of accumulated and unpaid dividends), notwithstanding the redemption of such shares before such Dividend Payment Date. The Corporation shall make no payment or allowance for unpaid dividends on any shares of Common Stock issued upon redemption pursuant to Section 4(b). 15 (l) Any cash payment to a holder of shares of Cumulative Convertible Preferred Stock in connection with any redemption of the Cumulative Convertible Preferred Stock pursuant to this Section 4 shall be made in coin or currency of the United States that as of the date of payment shall be legal tender for payment of public and private debts by mailing a check to such holder at the address of such holder as shown on the stock books of the Corporation. SECTION 5. Conversion. The Cumulative Convertible Preferred Stock shall be convertible into shares of Common Stock as follows: (a) Subject to and upon compliance with the provisions of this Section 5, the holder of any shares of Cumulative Convertible Preferred Stock shall have the right, at such holder's option, at any time, in whole or, from time to time, in part, to convert any of such shares of Cumulative Convertible Preferred Stock into fully paid and nonassessable shares of Common Stock at the Conversion Price as of the Conversion Date upon the terms hereinafter set forth. In case the shares of Cumulative Convertible Preferred Stock are called for redemption, such right of conversion shall terminate at the close of business on the applicable Call Date or Cash Redemption Date, as the case may be, unless the Corporation shall default in the delivery of the shares of Common Stock and/or the payment of any cash due upon redemption. Each share of Cumulative Convertible Preferred Stock shall be convertible pursuant to this Section 5(a) into the number of shares of Common Stock determined by dividing the Liquidation Preference of such share by the Conversion Price as of the Conversion Date (such calculation to be carried out to four (4) decimal places). (b) The "Conversion Price" shall mean $24.50, as adjusted from time to time in accordance with the terms of this Section 5. 16 (c) A holder of shares of Cumulative Convertible Preferred Stock may exercise the conversion right specified in Section 5(a) as to any shares held by such holder by delivering written notice to the Corporation stating that such holder elects to convert all or a specified number of the shares of Cumulative Convertible Preferred Stock held by such holder. Such holder shall surrender to the Corporation, or any transfer agent of the Corporation previously designated by the Corporation to such holders for this purpose, a certificate or certificates representing the shares of Cumulative Convertible Preferred Stock to be converted with appropriate endorsements and any transfer documents reasonably requested by the Corporation or such transfer agent. Conversion of the shares of Cumulative Convertible Preferred Stock to be converted shall be deemed to have been effected immediately prior to the close of business on the date when such holder surrenders for conversion the certificate or certificates representing such shares of Cumulative Convertible Preferred Stock (any such date is referred to herein with respect to such shares as the "Conversion Date") and the Person in whose name the certificate or certificates representing Common Stock are to be issued shall be deemed to have become a holder of record of such Common Stock on the applicable Conversion Date, unless the stock transfer books of the Corporation shall be closed on such date, in which event such Person shall be deemed to have become such holder of record at the close of business on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Price in effect on the applicable Conversion Date. As promptly as practicable after the Conversion Date and after surrender to the Corporation, or to any transfer agent of the Corporation previously designated by the Corporation to the holders of the Cumulative Convertible Preferred Stock for such purpose, by a holder of a certificate or certificates representing the shares of Cumulative Convertible Preferred Stock to be converted, the Corporation shall issue and deliver or cause to be delivered to or upon the written order of such holder 17 (i) a certificate or certificates representing the number of full shares of Common Stock to which such holder is entitled and (ii) a check made payable for an amount corresponding to any fractional interest in a share of Common Stock as provided in Section 5(e). Upon conversion of only a portion of the shares of Cumulative Convertible Preferred Stock represented by any certificate, the Corporation shall issue and deliver or cause to be delivered to or upon the written order of the applicable holder of shares of Cumulative Convertible Preferred Stock, at the expense of the Corporation, a new certificate representing the unconverted portion of the certificate so surrendered. Holders of shares of Cumulative Convertible Preferred Stock at the close of business on a dividend payment record date shall be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the conversion thereof following such dividend payment record date and prior to such Dividend Payment Date. However, if shares of Cumulative Convertible Preferred Stock are surrendered for conversion during the period between the close of business on any dividend payment record date and the opening of business on the corresponding Dividend Payment Date (except shares of Cumulative Convertible Preferred Stock converted after the issuance of a notice of redemption with respect to a Call Date or a Cash Redemption Date during such period), (i) so long as dividends on the Cumulative Convertible Preferred Stock are required to be payable in shares of Common Stock, and thereafter unless the dividends payable on such Dividend Payment Date are specified by the Corporation to be payable in cash pursuant to Section 3(a)(ii), the shares of Common Stock which the converting holder shall be entitled to receive shall be reduced by the number of shares of Common Stock payable as a dividend on such Dividend Payment Date on the total number of shares surrendered for conversion (including any fractional shares), and (ii) if the dividends payable on such Dividend Payment Date are specified by the Corporation 18 to be payable in cash pursuant to Section 3(a)(ii), such shares of Cumulative Convertible Preferred Stock surrendered for conversion must be accompanied by an amount of cash equal to the cash dividends payable on such shares on such Dividend Payment Date. A holder of shares of Cumulative Convertible Preferred Stock on a dividend payment record date who tenders any such shares for conversion into shares of Common Stock on the corresponding Dividend Payment Date will receive the dividend payable by the Corporation on such shares of Cumulative Convertible Preferred Stock on such date, and the shares of Common Stock which the converting holder shall be entitled to receive shall not be reduced as provided in this Section 5, and the converting holder need not include payment of the amount of any cash dividend upon surrender of shares of Cumulative Convertible Preferred Stock for conversion, as the case may be. The Corporation shall make no payment or allowance for unpaid dividends on any shares of Common Stock issued upon conversion pursuant to this Section 5. (d) Any fraction of a share of Cumulative Convertible Preferred Stock may be converted by a holder thereof in the same manner in which a whole share of Cumulative Convertible Preferred Stock may be converted pursuant to this Section 5, provided that any shares of Common Stock deliverable and any cash payable upon the conversion of such fractional interest shall be determined by multiplying the number of shares of Common Stock deliverable and any cash payable upon the conversion of one share of Cumulative Convertible Preferred Stock by that fraction. If part of a share of Cumulative Convertible Preferred Stock is converted, a new certificate shall be issued representing the unconverted portion of a share without cost to the holder thereof. (e) The Corporation shall have the option of issuing fractional shares of Common Stock or scrip representing fractional shares of Common Stock upon 19 conversion of the shares of Cumulative Convertible Preferred Stock, or, in lieu thereof, paying a cash adjustment in respect of such fractional interest in an amount equal to that fraction of the average of the Closing Price of the Common Stock for the ten consecutive Trading Days prior to the Conversion Date. If more than one certificate shall be surrendered for conversion at any one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Cumulative Convertible Preferred Stock represented by the certificates so surrendered. (f) The Conversion Price and the number and kind of securities issuable upon conversion of the shares of Cumulative Convertible Preferred Stock shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall, at any time or from time to time while any shares of the Cumulative Convertible Preferred Stock are outstanding, (A) pay a dividend or make a distribution on the Common Stock in shares of Common Stock; (B) subdivide its outstanding shares of Common Stock into a greater number of shares; (C) combine its outstanding shares of Common Stock into a smaller number of shares; (D) make a distribution on its Common Stock in shares of capital stock of the Corporation other than Common Stock; or (E) issue by reclassification of its shares of Common Stock any shares of capital stock of the Corporation, the Conversion Price in effect immediately prior to the date fixed for the determination of stockholders affected by such actions shall be adjusted so that each holder of shares of Cumulative Convertible Preferred Stock shall after such date of determination be entitled to receive, upon surrender for conversion, the number of shares of Common Stock or other capital stock of the Corporation which such holder would have owned or have 20 been entitled to receive immediately following such date of determination if such holder had converted its shares of Cumulative Convertible Preferred Stock immediately prior to such date of determination. An adjustment made pursuant to this clause (i) shall become effective immediately after such date of determination. If, after an adjustment pursuant to this clause (i), the holders of shares of Cumulative Convertible Preferred Stock upon conversion of such shares of Cumulative Convertible Preferred Stock may receive shares of two or more classes of capital stock of the Corporation, the Board shall in good faith determine the allocation of the adjusted Conversion Price between the classes of capital stock. After such allocation, the Conversion Price of each class of capital stock shall be subject to adjustment on terms comparable to those applicable to Common Stock in this Section 5. (ii) In case the Corporation shall, at any time or from time to time while any shares of the Cumulative Convertible Preferred Stock are outstanding, issue to holders of outstanding shares of Common Stock generally rights or warrants entitling the holders thereof to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price (as defined in Section 5(n)) of the Common Stock on the date fixed for the determination of stockholders entitled to receive such rights or warrants, the Conversion Price in effect at the opening of business on the day following the date fixed for such determination shall be decreased by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price, and the 21 denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase. Such decrease shall become effective immediately after the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such rights or warrants. No adjustment to the Conversion Price shall be made in respect of any issuance of Common Stock upon exercise of any right or warrant if an adjustment shall previously have been made upon issuance of such right or warrant. In case any rights or warrants referred to in this clause (ii) in respect of which an adjustment shall have been made shall expire unexercised within 45 days after the same shall have been distributed or issued by the Corporation, the Conversion Price shall be readjusted at the time of such expiration to the Conversion Price that would have been in effect if no adjustment had been made on account of the distribution or issuance of such expired rights or warrants. (iii) In case the Corporation shall, at any time or from time to time while any shares of the Cumulative Convertible Preferred Stock are outstanding, distribute to holders of outstanding shares of Common Stock generally evidences of indebtedness or assets of the Corporation or any of its Subsidiaries or Affiliates (as defined in Section 5(n)), including securities and cash, but excluding (x) any dividend or distribution or rights or warrants referred to in clause (i) or (ii) above and (y) regular quarterly cash dividends of the Corporation declared in the ordinary course by the Board, then in each such case the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution shall be decreased by multiplying such Conversion Price by a frac- 22 tion, the numerator of which shall be the Current Market Price on the date fixed for such determination less the then fair market value (as determined by the Board in good faith) of the portion of such evidences of indebtedness or assets so distributed applicable to one share of Common Stock, and the denominator of which shall be such Current Market Price. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately prior to the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such distribution. (iv) At any time or from time to time while any shares of Cumulative Convertible Preferred Stock are outstanding in case of (A) any capital reorganization or any reclassification or change of the Common Stock (other than a reclassification covered by clause (i) above) of the Corporation, (B) the consolidation or merger of the Corporation with or into any other corporation or (C) the sale, lease or other disposition or conveyance of the property and assets of the Corporation as, or substantially as, an entirety to any other corporation, in each case as a result of which holders of outstanding shares of Common Stock generally will be entitled to receive shares of stock or other securities or other property (including cash) with respect to or in exchange for the Common Stock, there shall be no adjustment of the Conversion Price but the shares of Cumulative Convertible Preferred Stock shall, after such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance, be convertible into the kind and amount of shares of stock or other securities or property (including cash) which the holder of shares of Cumulative Convertible Preferred Stock would have been entitled to receive upon such capital reorganization, reclassification or change of Common Stock, 23 consolidation, merger or sale, lease or other disposition or conveyance if such holder had converted the shares of Cumulative Convertible Preferred Stock owned by such holder immediately prior to the time of such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance (assuming such holder elected to receive the same kind and amount of shares of stock or other securities or property (including cash) receivable upon such capital reorganization, reclassification or change of Common Stock, consolidation, merger or sale, lease or other disposition or conveyance receivable by a plurality of the holders of shares of Common Stock); and, in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 5 with respect to the rights and interests of the holders of shares of Cumulative Convertible Preferred Stock, so that the provisions set forth in this Section 5 (including without limitation those set forth in this Section 5(f)) shall be made applicable, as closely as reasonably practicable, to any shares of stock or other securities or property thereafter deliverable on the conversion of the shares of Cumulative Convertible Preferred Stock. The provisions of this clause (iv) shall apply to successive reorganizations, reclassifications, changes, consolidations, mergers or sales, leases or other dispositions or conveyances. (v) All calculations under this Section 5(f) shall be made to the nearest cent or to the nearest one hundredth (1/100th) of a share, as the case may be. Any provision of this Section 5 to the contrary notwithstanding, no adjustment in the Conversion Price shall be made if the amount of such adjustment would be less than 1% of the Conversion Price then in effect, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the 24 time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate 1% thereof or more. (vi) No adjustment provided for in clause (i), (ii) or (iii) of this Section 5(f) shall be made if a distribution that would otherwise trigger such adjustment is also made to the holders of shares of Cumulative Convertible Preferred Stock in the same manner and amount as if the holders owned the shares of Common Stock into which the shares of Cumulative Convertible Preferred Stock are convertible immediately prior to such distribution. (vii) The Board may make such adjustments in the Conversion Price, in addition to those required by this Section 5(f), as shall be determined by it (as evidenced by a resolution of the Board) to be advisable in order to avoid or diminish any adverse United States Federal income tax consequences to holders of Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any similar events treated as such for Federal income tax purposes. The Board shall have the power to resolve any ambiguity or correct any error in this Section 5 in a manner not adverse to the holders of the Cumulative Convertible Preferred Stock. (viii) Notwithstanding the foregoing provisions, the issuance of any shares of Common Stock pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the Corporation and the investment of additional optional amounts in shares of Common Stock under any such plan shall not be deemed to constitute an issuance of Common Stock or rights or 25 warrants by the Corporation to which any of the provisions of this Section 5(f) applies. (g) Whenever the Conversion Price shall be adjusted as provided in Section 5(f), the Corporation shall forthwith give written notice to the holders of shares of Cumulative Convertible Preferred Stock by first class mail, to such holders' respective addresses as shown on the stock books of the Corporation setting forth the Conversion Price that shall be in effect after such adjustment. Where appropriate, such notice may be given in advance and may be included as part of a notice required to be given under the provisions of Section 5(h). The Corporation shall also file with any transfer agent designated by the Corporation pursuant to Section 5(c) a notice stating the adjusted Conversion Price and setting forth a brief statement of the facts upon which such adjustment is based. (h) In the event the Corporation shall propose to take any action of the type described in clause (i), (ii), (iii) or (iv) of Section 5(f), the Corporation shall give written notice to the holders of shares of Cumulative Convertible Preferred Stock, by first class mail to such holders' respective addresses as shown on the stock books of the Corporation which notice shall specify the date fixed for the determination of stockholders to be affected, if any, by such action and the approximate date on which such action is to take place. Such notice shall also set forth the number, kind or class of shares or other securities or property which shall be deliverable or purchasable upon the occurrence of such action or deliverable upon conversion of the shares of Cumulative Convertible Preferred Stock. In the case of any action which would require the fixing of such date of determination, such notice shall be given at least 10 days prior to the date so fixed, and, in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action. The failure to give the notice required by this Section 5(h), or any defect 26 therein, shall not affect the legality or validity of any action of the type described in clause (i), (ii), (iii) or (iv) of Section 5(f) or any vote authorizing such action. (i) The Corporation shall pay all documentary, stamp, transfer or other transactional taxes attributable to the issuance or delivery of shares of Common Stock upon conversion of the shares of Cumulative Convertible Preferred Stock; provided that the Corporation shall not be required to pay any taxes payable in respect of any transfer involved in the issuance or delivery of any certificates representing such shares of Common Stock in a name other than that of the holder of the shares of Cumulative Convertible Preferred Stock in respect of which such certificates are being issued and no such issuance or delivery shall be made unless and until the holder requesting such issuance has paid to the Corporation the amount of any such tax or has established to the reasonable satisfaction of the Corporation that such tax is not required to be paid. (j) So long as any Cumulative Convertible Preferred Stock remains outstanding, the Corporation shall reserve at all times, free from preemptive rights, out of its authorized but unissued shares of Common Stock or Common Stock held in treasury, solely for the purpose of effecting the conversion of the Cumulative Convertible Preferred Stock, sufficient shares of Common Stock to provide for the conversion of all outstanding shares of Cumulative Convertible Preferred Stock. (k) If, and so long as, any shares of Common Stock into which the shares of Cumulative Convertible Preferred Stock are then convertible are listed on any national securities exchange, the Corporation will, if permitted by the rules of such exchange, list and keep on such exchange, upon official notice of issuance, all shares of Common Stock issuable upon conversion. 27 (l) All shares of Common Stock which may be issued and delivered upon conversion of the shares of Cumulative Convertible Preferred Stock will upon issuance by the Corporation and delivery be duly and validly issued, fully paid and nonassessable and the Corporation shall not take any action which would cause the Conversion Price to be less than the par value of the Common Stock. (m) In any case in which Section 5(f) provides that an adjustment shall become effective on, or on the day following, the record date for any event, the Corporation may defer until the occurrence of such event (i) issuing to the holder of any share of Cumulative Convertible Preferred Stock converted after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (ii) paying to such holder any amount in cash in lieu of any fractional share pursuant to Section 5(e). (n) For purposes of this Section 5: (i) "Affiliate" has the meaning given to such term in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. (ii) "Closing Price" means, for any Trading Day, the last reported sales price, regular way, per share of Common Stock or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, regular way, per share of Common Stock, in either case as reported on the New York Stock Exchange Composite Transactions Tape or, if the Common Stock is not then listed or admitted to trading on such exchange, on the principal national securities exchange on which the Common Stock is then listed or admitted to trading or, if the Common Stock is not then listed or 28 admitted to trading on any national securities exchange, as quoted through the National Association of Securities Dealers Automated Quotations National Market System or, if the Common Stock is not then listed or admitted to trading on any national securities exchange or quoted through such National Market System, the average of the closing bid and asked prices per share of Common Stock in the over-the-counter market as furnished by any New York Stock Exchange member firm that makes a market in the Common Stock selected from time to time by the Corporation for that purpose. (iii) "Current Market Price" means, as of any date, the average of the Closing Prices for the 30 consecutive Trading Days ending on the Trading Day prior to such date. (iv) "Person" means any individual, corporation, partnership, firm, joint venture, association, joint stock company, trust, unincorporated organization, governmental or regulatory authority or other entity. (v) "Subsidiary" means any corporation, association or other business entity more than 50% of the shares of stock of any class or classes (or equivalent interests) of which is at the time owned by the Corporation or by one or more Subsidiaries of the Corporation or by the Corporation and one or more Subsidiaries of the Corporation, if the holders of the stock of such class or classes (or equivalent interests) are ordinarily, in the absence of contingencies, entitled to vote for the election of a majority of the directors (or Persons performing similar functions) of such business entity. (vi) "Trading Day" means any day the New York Stock Exchange is open for regular trading. 29 SECTION 6. Shares to be Retired. All shares of Cumulative Convertible Preferred Stock purchased or redeemed by the Corporation (excluding, until the Corporation elects to retire them, shares that are held as treasury shares) or converted shall be retired and cancelled and shall be restored to the status of authorized but unissued shares of Preferred Stock, without designation as to series. SECTION 7. Liquidation. (a) The shares of Cumulative Convertible Preferred Stock shall rank prior to the shares of Junior Securities upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (a "Liquidation Transaction"), so that in the event of any Liquidation Transaction, the holders of shares of Cumulative Convertible Preferred Stock then outstanding shall be entitled to receive out of the assets or surplus funds of the Corporation available for distribution to its stockholders, or proceeds thereof, whether from capital, surplus or earnings, before any distribution is made to holders of any Junior Securities, a liquidation preference in an amount per share of Cumulative Convertible Preferred Stock equal to the Liquidation Preference, plus an amount equal to all dividends (whether or not earned or declared) accumulated and unpaid on the shares of Cumulative Convertible Preferred Stock to the date of final distribution. (b) If, upon any Liquidation Transaction, the assets or surplus funds of the Corporation, or proceeds thereof, whether from capital, surplus or earnings, distributable among the holders of shares of Cumulative Convertible Preferred Stock and any Parity Securities then outstanding are insufficient to pay in full the preferential liquidation payments due to such holders, such assets, surplus funds or proceeds shall be distributable among such holders ratably in accordance with the amounts that would be payable on such shares of Cumulative Convertible Preferred Stock and Parity Securities if all amounts payable thereon were payable in full. 30 (c) Neither the consolidation, merger or other business combination of the Corporation with or into any other Person or Persons nor the sale or transfer of all or substantially all the assets of the Corporation shall be deemed to be a Liquidation Transaction. SECTION 8. Voting Rights. (a) The holders of shares of Cumulative Convertible Preferred Stock shall not be entitled to any voting rights except as provided in this Section 8, the Restated Certificate of Incorporation of the Corporation or as otherwise required by law. (b) (i) If at any time or times six quarterly dividends (whether or not consecutive) payable on the Cumulative Convertible Preferred Stock shall be in arrears and unpaid, in whole or in part, or shall not have been declared and a sum sufficient for the payment thereof in full shall not have been set apart for payment, then the number of directors constituting the Board, without further action, shall be increased by two and the holders of the Cumulative Convertible Preferred Stock, together with the holders of shares of every other series of Preferred Stock upon which rights to vote for the election of two additional directors have been conferred and are then exercisable (any such other series, the "Parity Voting Preferred Stock"), shall have the exclusive right, voting separately as a class, to elect the two directors of the Corporation to fill such newly created directorships. The remaining directors constituting the Board shall continue to be elected by the other class or classes (or series thereof) of stock entitled to vote therefor. (ii) Whenever such voting right shall have vested, such right may be exercised at a special meeting of the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock, at any annual or special meeting of stockholders held for the purpose of electing directors. Each director elected pursuant to such right shall be elect- 31 ed by a majority of the votes cast. The voting right of the holders of Cumulative Convertible Preferred Stock shall continue until such time as all cumulative dividends accumulated on the Cumulative Convertible Preferred Stock shall have been paid in full, at which time such voting right of the holders of Cumulative Convertible Preferred Stock shall terminate and, subject to the voting right of the holders of Parity Voting Preferred Stock, the authorized number of members of the Board shall automatically be reduced by two, but such voting right shall again vest in the event of each and every subsequent failure of the Corporation to pay or declare and set apart for payment dividends for the requisite number of periods. (iii) At any time when such voting right shall have vested in the holders of Cumulative Convertible Preferred Stock, a proper officer of the Corporation shall, upon the written request of holders of record of 10% of the shares of Cumulative Convertible Preferred Stock then outstanding, call a special meeting of holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock for the purpose of electing the two directors to be elected by such holders or removing any director previously elected. Such meeting shall be held at the earliest practicable date upon not less than 10 days' notice to such holders. If such meeting shall not be called within 30 days after receipt of such written request, then the holders of record of 10% of the shares of Cumulative Convertible Preferred Stock then outstanding may designate in writing one of their number to call such meeting at the expense of the Corporation, and such meeting may be called by such Person so designated upon not less than 10 days' notice to such holders. Any holder of Cumulative Convertible Preferred Stock shall have access to the stock books of the Corporation for the purpose of causing a meeting of stockholders to be so called. 32 (iv) At any meeting at which the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall have the right to elect directors, the presence in person or by proxy of the holders of at least a majority of the votes entitled to be cast by the then outstanding shares of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall be required and be sufficient to constitute a quorum. At any such meeting or adjournment thereof, the absence of a quorum of the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall not prevent the election of directors other than those to be elected by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock and the absence of a quorum or quorums of the holders of capital stock entitled to elect such other directors shall not prevent the election of the directors to be elected by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock. (v) Each director elected by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall serve until the earlier of (i) the election by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock and qualification of such director's successor and (ii) the time at which the holders of the Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock no longer have the right to elect such director. Upon any termination of such voting rights, the term of office of each director elected by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall terminate immediately. Other than as provided in the two preceding sentences, the directors elected by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock may be removed only by the holders of the Cumulative Convertible Preferred Stock and the Parity Voting Preferred Stock. 33 (vi) If a director so elected by the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock shall cease to serve as director before such director's term shall expire, the holders of Cumulative Convertible Preferred Stock and Parity Voting Preferred Stock then outstanding may, in the manner provided above, elect a successor to hold office for the unexpired term of the director whose place shall be vacant. (c) So long as any shares of Cumulative Convertible Preferred Stock are outstanding, unless the vote or consent of the holders of a greater number of shares shall be required by law or by the Restated Certificate of Incorporation, the affirmative vote of at least 66 2/3% of the votes entitled to be cast by the holders of the shares of Cumulative Convertible Preferred Stock given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating: (i) any amendment, alteration or repeal of any of the provisions of the Restated Certificate of Incorporation that materially adversely affects the voting powers, rights or preferences of the holders of the Cumulative Convertible Preferred Stock; provided, however, that the amendment of the provisions of the Restated Certificate of Incorporation so as to authorize or create, or to increase the authorized amount of, any shares of any Junior Securities or any shares of any class of Parity Securities shall not be deemed to have a material adverse effect on the voting powers, rights or preferences of the holders of Cumulative Convertible Preferred Stock; or (ii) the authorization or creation of, or the increase in the authorized amount of, any shares of (x) any class or series of a class of capital stock of the Corporation the terms of which expressly provide 34 that the shares thereof rank senior as to the payment of dividends or the distribution of assets upon the liquidation, dissolution or winding up of the Corporation to the shares of the Cumulative Convertible Preferred Stock (the "Senior Securities") or (y) any security convertible into, or exchangeable or exercisable for, shares of any Senior Securities; provided, however, that no such vote of the holders of Cumulative Convertible Preferred Stock shall be required if, at or prior to the time when such amendment, alteration or repeal is to take effect, or when the issuance of any such Senior Securities or security convertible into, or exchangeable or exercisable for, Senior Securities is to be made, as the case may be, all shares of Cumulative Convertible Preferred Stock at the time outstanding shall have been called for redemption by the Corporation pursuant to Section 4 and such shares of Common Stock and/or cash necessary for such redemption shall have been irrevocably deposited as provided in clause (ii) of Section 4(f). For purposes of the foregoing provisions of this Section 8, each share of Cumulative Convertible Preferred Stock shall have one vote per share, except that when any other series of Preferred Stock shall have the right to vote with the Cumulative Convertible Preferred Stock as a single class on any matter, then the Cumulative Convertible Preferred Stock and such other series shall have with respect to such matters one vote per $50.00 of stated liquidation preference. Except as otherwise required by applicable law or as set forth herein, the shares of Cumulative Convertible Preferred Stock shall not have any relative, participating, optional or other special voting rights and powers and the consent of the holders thereof shall not be required for the taking of any corporate action. * * * 35 The following resolution has been duly adopted by the Transaction Committee of the Board (the "Transaction Committee"), pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware and pursuant to the authority granted to the Transaction Committee by the Board, which resolution remains in full force and effect as of the date hereof: RESOLVED, That, pursuant to the authority expressly granted to the Transaction Committee of the Board of Directors by the Board of Directors of the Company at a meeting held on September 27, 1994, at which meeting the Board of Directors adopted resolutions authorizing the creation of the Series E Convertible Preferred Stock, the following term of the Series E Convertible Preferred Stock is hereby approved by this Committee: (a) the dividend rate for the Series E Convertible Preferred Stock from the issue date of the Series E Convertible Preferred Stock shall be 6-1/8% per share per annum. 37 IN WITNESS WHEREOF, The Equitable Companies Incorporated has caused this Certificate of Designations, Preferences and Relative, Participating, Optional and other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of its Cumulative Convertible Preferred Stock, Series E, to be duly executed by its Treasurer and Vice President and attested to by its Secretary and has caused its corporate seal to be affixed hereto, as of this 19th day of December, 1994. /s/ Kevin R. Byrne ------------------------------------------ Name: Kevin R. Byrne Title: Treasurer and Vice President [Corporate Seal] ATTEST: /s/ Molly K. Heines - ----------------------------------- Name: Molly K. Heines Title: Vice President and Secretary 38 EX-4.01(G) 8 EXHIBIT 4.01(G) AMEND TO RESTATED CERT. OF INC. EXHIBIT 4.01(G) AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION OF THE EQUITABLE COMPANIES INCORPORATED Pursuant to Section 242 of the General Corporation Law of the State of Delaware THE EQUITABLE COMPANIES INCORPORATED, a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), certifies as follows: 1. The text of Clause (e) of ARTICLE FIFTH of the Restated Certificate of Incorporation of the Corporation is hereby amended to read in its entirety as follows: "(e) The Board of Directors shall have the express power, without a vote of stockholders, to adopt any By-Law, and to amend, alter or repeal the By-Laws of the Corporation, except to the extent that the By-Laws or this Restated Certificate of Incorporation otherwise expressly provide. The Board of Directors may exercise such power upon the affirmative vote of a majority of the entire Board of Directors. Stockholders may adopt any By-Law, or amend, alter or repeal the By-Laws of the Corporation, upon the affirmative vote of the holders of shares having at least a majority of the voting power of the then outstanding shares of capital stock of the Corporation entitled (at all times and without regard to the occurrence of a contingency) to vote generally on the election of Directors and other matters submitted for stockholder approval, voting together as a single class." 2. This Amendment to the Restated Certificate of Incorporation was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, THE EQUITABLE COMPANIES INCORPORATED has caused this certificate to be signed by Joseph J. Melone, its President and Chief Executive Officer, and attested by Pauline Sherman, its Vice President and Secretary, this 15th day of May 1997. THE EQUITABLE COMPANIES INCORPORATED By /s/ JOSEPH J. MELONE ------------------------------------------ President and Chief Executive Officer ATTEST: By /s/ PAULINE SHERMAN --------------------------------------- Vice President and Secretary
EX-4.02 9 EXH 4.02-BY-LAWS-COVER Exhibit 4.02 ================================================================================ THE EQUITABLE COMPANIES INCORPORATED BY-LAWS ------- As Amended Effective May 15, 1997 ================================================================================ THE EQUITABLE COMPANIES INCORPORATED BY-LAWS ------- TABLE OF CONTENTS SECTION PAGE - ------- ---- ARTICLE I STOCKHOLDERS 1 Section 1.01. Annual Meetings.................................................1 Section 1.02. Special Meetings................................................3 Section 1.03. Notice of Meetings; Waiver......................................5 Section 1.04. Quorum..........................................................5 Section 1.05. Voting..........................................................6 Section 1.06. Voting by Ballot................................................6 Section 1.07. Adjournment.....................................................6 Section 1.08. Proxies.........................................................7 Section 1.09. Organization; Procedure.........................................7 ARTICLE II BOARD OF DIRECTORS 9 Section 2.01. General Powers..................................................8 Section 2.02. Number and Term of Office.......................................8 Section 2.03. Nomination and Election of Directors............................8 Section 2.04. Annual and Regular Meetings....................................12 Section 2.05. Special Meetings; Notice.......................................12 Section 2.06. Quorum; Voting.................................................13 Section 2.07. Adjournment....................................................13 Section 2.08. Action Without a Meeting.......................................14 Section 2.09. Regulations; Manner of Acting..................................14 i PAGE ---- Section 2.10. Action by Telephonic Communications............................14 Section 2.11. Resignations...................................................14 Section 2.12. Vacancies and Newly Created Directorships......................14 Section 2.13. Compensation...................................................15 Section 2.14. Reliance on Accounts and Reports, etc..........................15 ARTICLE III EXECUTIVE COMMITTEE AND OTHER COMMITTEES 16 Section 3.01. How Constituted................................................15 Section 3.02. Powers.........................................................16 Section 3.03. Proceedings....................................................17 Section 3.04. Quorum and Manner of Acting....................................17 Section 3.05. Action by Telephonic Communications............................17 Section 3.06. Resignations...................................................18 Section 3.07. Removal........................................................18 Section 3.08. Vacancies......................................................18 ARTICLE IV OFFICERS 19 Section 4.01. Number.........................................................18 Section 4.02. Election.......................................................19 Section 4.03. Removal and Resignation; Vacancies.............................19 Section 4.04. Authority and Duties of Officers...............................19 ii PAGE ---- Section 4.05. Chairman of the Board..........................................19 Section 4.06. Vice-Chairmen of the Board.....................................20 Section 4.07. President......................................................20 Section 4.08. Chief Executive Officer........................................20 Section 4.09. The Secretary..................................................21 Section 4.10. The Treasurer..................................................22 Section 4.11. Additional Officers............................................23 Section 4.12. Security.......................................................23 ARTICLE V CAPITAL STOCK 25 Section 5.01. Certificates of Stock, Uncertificated Shares..........................................24 Section 5.02. Signatures; Facsimile..........................................24 Section 5.03. Lost, Stolen or Destroyed Certificates.........................24 Section 5.04. Transfer of Stock..............................................25 Section 5.05. Record Date....................................................25 Section 5.06. Registered Stockholders........................................26 Section 5.07. Transfer Agent and Registrar...................................26 ARTICLE VI INDEMNIFICATION Section 6.01. Nature of Indemnity............................................27 Section 6.02. Successful Defense.............................................28 iii Section 6.03. Determination That Indemnification Is Proper......................................28 Section 6.04. Advance Payment of Expenses....................................29 Section 6.05. Procedure for Indemnification of Directors and Officers........29 Section 6.06. Survival; Preservation of Other Rights.........................31 Section 6.07. Insurance......................................................31 Section 6.08. Severability...................................................32 ARTICLE VII OFFICES Section 7.01. Registered Office..............................................32 Section 7.02. Other Offices..................................................32 ARTICLE VIII GENERAL PROVISIONS Section 8.01. Dividends......................................................33 Section 8.02. Reserves.......................................................33 Section 8.03. Execution of Instruments.......................................33 Section 8.04. Corporate Indebtedness.........................................34 Section 8.05. Deposits.......................................................34 Section 8.06. Checks.........................................................35 Section 8.07. Sale, Transfer, etc. of Securities.............................35 Section 8.08. Voting as Stockholder..........................................35 Section 8.09. Fiscal Year....................................................36 iv Section 8.10. Seal...........................................................36 Section 8.11. Books and Records..............................................36 ARTICLE IX AMENDMENT OF BY-LAWS Section 9.01. Amendment......................................................36 ARTICLE X CONSTRUCTION Section 10.01. Construction..................................................37 ARTICLE XI INVESTOR ACQUISITIONS OF VOTING SECURITIES 38 Section 11.01. Limitation on Acquisitions....................................37 Section 11.02. Certain Definitions...........................................38 v THE EQUITABLE COMPANIES INCORPORATED BY-LAWS ------- ARTICLE I STOCKHOLDERS Section 1.01. Annual Meetings. The annual meeting of the stockholders of the Corporation for the election of Directors and for the transaction of such other business as properly may come, as hereinafter provided, before such meeting shall be held at such place, either within or without the State of Delaware, and at 11:00 a.m., local time, on the third Wednesday of May in each year (or, if such day is a legal holiday, then on the next succeeding business day), or at such other earlier or later date and hour, as may be fixed from time to time by resolution of the Board of Directors and set forth in the notice or waiver of notice of the meeting. [Sections 211(a), (b).](*) Subject to the final paragraph of this Section 1.01, to be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Section 1.01, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 1.01. For business to be properly brought before an annual meeting by a stockholder, if such business is related to the election of Directors of the Corporation, the procedures in Section 2.03 of these By-Laws must be complied with. If such business relates to any other matter, the stockholder must have given timely notice - ---------------------------------- (*) Citations are to the General Corporation Law of the State of Delaware as in effect on May 1, 1997, and are inserted for reference only, and do not constitute a part of the By-Laws. thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to and received at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year's annual meeting; provided that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the stockholder to be timely must be so delivered and received not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting and the 10th day following the day on which public announcement of the date of such meeting is first made. Such stockholder's notice shall set forth in writing as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting, and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (ii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (A) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner and (B) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner. Notwithstanding anything in these By-Laws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 1.01. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 1.01, and if he should so determine, the Chairman shall declare to the meeting that any such business not properly brought before the meeting shall not be transacted. For purposes of this Section 1.01 and Section 2.03, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News 2 Service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition to the provisions of this Section 1.01, a stockholder desiring to bring business before an annual meeting shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein, and any other applicable laws or rules or regulations of any governmental authority or of any national securities exchange or similar body overseeing any trading market on which shares of the Corporation are traded. Nothing in these By-Laws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act. The provisions of this Section 1.01 requiring prior notice for a stockholder to bring business before a meeting of stockholders shall not be applicable to any stockholder that beneficially owns, under Rule 13d-3 of the General Rules and Regulations under the Exchange Act (excluding, however, securities acquired solely due to Rule 13d-5 of such General Rules and Regulations), shares representing at least 25% of the voting power of the then outstanding voting shares of the Corporation (a "Major Stockholder"). As used in these By-Laws, "voting shares of the Corporation" are those shares of capital stock of the Corporation entitled (at all times and without regard to the occurrence of a contingency) to vote generally on the election of directors and other matters required to be submitted for stockholder approval. Subject to compliance with applicable law, a Major Stockholder may bring before any meeting of stockholders any business, without the need to give any advance notice of such business. [Section 109(b).] Section 1.02. Special Meetings. Special meetings of the stockholders may be called at any time by the Chairman of the Board, the President or the Board of 3 Directors pursuant to a written request signed by not less than one-third of the total number of Directors then in office. A special meeting shall be called by the President (or, in the event of his absence or disability, by any Vice President), or by the Secretary, in the event a vacancy exists on the Board of Directors due to removal of a Director by vote of the stockholders of the Corporation or upon receipt of a written request therefor by a stockholder or stockholders holding in the aggregate not less than 25% of the outstanding shares of the Corporation at the time entitled to vote on the particular matter or matters for which the meeting is called. Such written request by a stockholder or stockholders shall set forth the purpose or purposes for which such meeting is called. If such officers or the Board of Directors shall fail to call such meeting within 20 days after creation of such vacancy or receipt of such request or shall schedule such meeting to occur later than 65 days after such creation or receipt, any stockholder executing such request may call such meeting. Such special meetings of the stockholders shall be held at such places, within or without the State of Delaware, as shall be specified in the respective notices or waivers of notice thereof. [Section 211(d).] The purpose or purposes of any special meeting of stockholders shall be set forth in the notice of meeting (which notice for a meeting called at the request of stockholders shall include all business specified in the request of the stockholder or stockholders for the meeting), and, except as otherwise required by law or by the Restated Certificate of Incorporation, no business shall be transacted at any special meeting of stockholders other than the items of business stated in the notice of meeting. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 1.02, and if he or she should so determine, the Chairman shall declare to the meeting that any such business not properly brought before the meeting shall not be transacted. [Section 109(b).] 4 Section 1.03. Notice of Meetings; Waiver. The Secretary or any Assistant Secretary shall cause written notice of the place, date and hour of each meeting of the stockholders, and, in the case of a special meeting, the purpose or purposes for which such meeting is called, to be given personally or by mail, not less than 10 nor more than 60 days prior to the meeting, to each stockholder of record entitled to vote at such meeting. If such notice is mailed, it shall be deemed to have been given to a stockholder when deposited in the United States mail, postage prepaid, or delivered to a nationally recognized overnight delivery service for overnight delivery, in each case directed to the stockholder at his or her address as it appears on the record of stockholders of the Corporation, or, if he or she shall have filed with the Secretary of the Corporation a written request that notices to him or her be mailed to some other address, then directed to him or her at such other address. Such further notice shall be given as may be required by law. No notice of any meeting of stockholders need be given to any stockholder who submits a signed waiver of notice, whether before or after the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in a written waiver of notice. The attendance of any stockholder at a meeting of stockholders in person or by proxy shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened. [Sections 222, 229.] Section 1.04. Quorum. Except as otherwise required by law or by the Restated Certificate of Incorporation, the presence in person or by proxy of the holders of record of a majority of the shares entitled to vote at a meeting of stockholders shall constitute a quorum for the transaction of business at such meeting. [Section 216.] 5 Section 1.05. Voting. If, pursuant to Section 5.05 of these By-Laws, a record date has been fixed, every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote for each share outstanding in his or her name on the books of the Corporation at the close of business on such record date. If no record date has been fixed, then every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote for each share of stock standing in his or her name on the books of the Corporation at the close of business on the day next preceding the day on which notice of the meeting is given. Except as otherwise required by law or by the Restated Certificate of Incorporation or these By-Laws, the vote of a majority of the shares represented in person or by proxy at any meeting at which a quorum is present shall be sufficient for the transaction of any business at such meeting. [Sections 212(a), 216.] Section 1.06. Voting by Ballot. No vote of the stockholders need be taken by written ballot, unless otherwise required by law. Any vote which need not be taken by ballot may be conducted in any manner approved by the meeting. Section 1.07. Adjournment. Notice of any adjourned meeting of the stockholders of the Corporation need not be given if the place, date and hour thereof are announced at the meeting at which the adjournment is taken, provided that if the adjournment is for more than thirty days, or if after the adjournment a new record date for the adjourned meeting is fixed pursuant to Section 5.05 of these By-Laws, a notice of the adjourned meeting, conforming to the requirements of Section 1.03 hereof, shall be given to each stockholder of record entitled to vote at such meeting. At any adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted on the original date of the meeting. [Section 222(c).] 6 Section 1.08. Proxies. Any stockholder entitled to vote at any meeting of the stockholders may, by (a) a written instrument signed by such stockholder or his attorney-in-fact, or (b) transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission (which may include telephone, datagram, or communication through the internet) to the person who will be the holder of the proxy or to an agent duly authorized by the person who will be the holder of the proxy, together with authenticating information deemed appropriate by the inspectors or other persons determining that such transmission was authorized by the stockholder, authorize another person or persons to vote at any such meeting for him by proxy. No such proxy shall be voted after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy shall be revocable at the pleasure of the stockholder executing it, except in those cases where applicable law provides that a proxy shall be irrevocable. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the Secretary. [Section 212(b), (c), (e).] Section 1.09. Organization; Procedure. At every meeting of stockholders the presiding officer shall be the Chairman of the Board or, in the event of his or her absence or disability, a presiding officer chosen by a majority of the stockholders present in person or by proxy. The Secretary, or in the event of his or her absence or disability, the Assistant Secretary, if any, or if there be no Assistant Secretary, in the absence of the Secretary, an appointee of the presiding officer, shall act as Secretary of the meeting. The order of business and all other matters of procedure at every meeting of stockholders may be determined by such presiding officer. 7 ARTICLE II BOARD OF DIRECTORS Section 2.01. General Powers. Except as may otherwise be provided by law, by the Restated Certificate of Incorporation or by these By-Laws, the property, affairs and business of the Corporation shall be managed by or under the direction of the Board of Directors and the Board of Directors may exercise all the powers of the Corporation. [Section 141(a).] Section 2.02. Number and Term of Office. The Board of Directors shall consist of not less than thirteen nor more than thirty-six Directors. The exact number of Directors shall be determined from time to time by a resolution or resolutions adopted by the affirmative vote of a majority of the total number of Directors which the Corporation would have if there were no vacancies (the "entire Board of Directors"). A Director shall hold office until the annual meeting next following his or her election and until his or her successor shall be elected and shall qualify, subject, however, to the Director's prior death, resignation, disqualification or removal from office. [Section 141(b).] Section 2.03. Nomination and Election of Directors. Subject to the final paragraph of this Section 2.03, only persons who are nominated in accordance with the procedures set forth in this Section 2.03 shall be eligible for election as Directors of the Corporation. Nominations of persons for election to the Board of Directors of the Corporation may be made at any annual meeting of stockholders by or at the direction of the Board of Directors or by any stockholder of the Corporation entitled to vote for the election of Directors at the meeting who was a stockholder of record at the time of giving of notice provided for in this Section 2.03 and who 8 complies with the notice procedures set forth in this Section 2.03. Any such nomination by a stockholder shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely notice for an annual meeting, a stockholder's notice shall be delivered to and received by the Secretary of the Corporation at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year's annual meeting; provided that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the stockholder to be timely must be so delivered and received not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting and the 10th day following the day on which public announcement (as defined in Section 1.01) of the date of such meeting is first made. Notwithstanding anything in the foregoing sentence to the contrary, in the event that the number of Directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for Director or specifying the size of the increased Board of Directors made by the Corporation at least 70 days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this Section 2.03 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation. Nominations of persons for election to the Board of Directors of the Corporation may be made at a special meeting of stockholders at which Directors are to be elected pursuant to the Corporation's notice of meeting (i) by or at the direction of the Board of Directors or (ii) subject to the final paragraph of this Section 2.03, by any stockholder of the Corporation who is a stockholder of record at the 9 time of giving of notice provided for in this Section 2.03, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.03. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more Directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation's notice of meeting, if the stockholder's notice shall be delivered to and received by the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the 90th day prior to such special meeting and not later than the close of business on the later of the 60th day prior to such special meeting and the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. Any stockholder's notice delivered pursuant to this Section 2.03 shall set forth in writing (i) as to each person whom the stockholder proposes to nominate for election or re-election as a Director (A) the name, age, business address and residence address of such person, (B) the principal occupation or employment of such person, (C) the number of shares of stock of the Corporation which are beneficially owned by such person, and (D) any other information relating to such person that is required to be disclosed in connection with the solicitation of proxies for election of Directors, or as otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including, without limitation, such person's written consent to being named in a proxy statement as a nominee and to serving as a Director if elected), and any other applicable laws or rules or regulations of any governmental authority or of any national securities exchange or similar body overseeing any trading market on which shares of the Corporation are traded; and (ii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made (A) the name and address of 10 such stockholder, as they appear on the Corporation's books, and of such beneficial owner and (B) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a Director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a Director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.03. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these By-Laws and in that event the defective nomination shall be disregarded. In addition to the provisions of this Section 2.03, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder, and any other applicable laws or rules or regulations of any governmental authority or any national securities exchange or similar body overseeing any trading market on which shares of the Corporation are traded, with respect to the matters set forth herein. [Section 109(b).] At each meeting of the stockholders for the election of Directors, provided a quorum is present, the Directors nominated in accordance with this Section 2.03 for election at such meeting shall be elected by a plurality of the votes validly cast in such election. [Sections 211(b), (c), 216.] The provisions of this Section 2.03 requiring prior notice for a stockholder to nominate Directors shall not be applicable to any Major Stockholder, and, subject to compliance with applicable law, a Major Stockholder may nominate persons for election as Directors at any meeting 11 where any Director is to be elected, without the need to give any advance notice of such nominations. Section 2.04. Annual and Regular Meetings. The annual meeting of the Board of Directors for the purpose of electing officers and for the transaction of such other business as may come before the meeting shall be held as soon as possible following adjournment of the annual meeting of the stockholders at the place of such annual meeting of the stockholders. Notice of such annual meeting of the Board of Directors need not be given. The Board of Directors from time to time may by resolution provide for the holding of regular meetings and fix the place (which may be within or without the State of Delaware) and the date and hour of such meetings. Unless and until otherwise specified in a resolution or resolutions adopted by a majority of the entire Board of Directors, regular meetings of the Board of Directors shall be held at the principal office of the Corporation on the third Thursday of each month, except January and August. Notice of regular meetings need not be given, provided that if the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be given to each Director who shall not have been present at the meeting at which such action was taken at least ten days in advance thereof in writing and by telephone or telecopy. Any such notice not specifically required to be given by telephone or telecopy shall be deemed given to a Director when sent by mail, telegram, telex or other electronic means of transmission addressed to him or her at his or her address furnished to the Secretary. Notice of such action need not be given to any Director who attends such regular meeting without protesting the lack of notice to him or her, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting. [Section 141(g).] Section 2.05. Special Meetings; Notice. Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board or, in the event of his 12 or her absence or disability, by the President, or by not less than one-quarter of the Directors then in office, at such place (within or without the State of Delaware), date and hour as may be specified in the respective notices or waivers of notice of such meetings. Notice of each special meeting of the Board of Directors shall be given to each Director at least twenty-four hours in advance thereof in writing and by telephone or telecopy. Such notice shall state in general terms the purpose or purposes of the meeting. Any such notice for a special meeting not specifically required to be given by telephone or telecopy shall be deemed given to a Director when sent by mail, telegram, telex or other electronic means of transmission addressed to him or her at his or her address furnished to the Secretary. Notice of any special meeting need not be given to any Director who attends such meeting without protesting the lack of notice to him or her, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting. [Sections 141(g), 229.] Section 2.06. Quorum; Voting. At all meetings of the Board of Directors, the presence of not less than a majority of the entire Board of Directors shall constitute a quorum for the transaction of business. Except as otherwise required by law, the Restated Certificate of Incorporation or these By-Laws, the vote of a majority of the Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. [Section 141(b).] Section 2.07. Adjournment. A majority of the Directors present, whether or not a quorum is present, may adjourn any meeting of the Board of Directors to another time or place. No notice need be given of any adjourned meeting unless the time and place of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of Section 2.05 shall be given to each Director. 13 Section 2.08. Action Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto in writing, and such writing or writings are filed with the minutes of proceedings of the Board of Directors. [Section 141(f).] Section 2.09. Regulations; Manner of Acting. To the extent consistent with applicable law, the Restated Certificate of Incorporation and these By-Laws, the Board of Directors may adopt such rules and regulations for the conduct of meetings of the Board of Directors and for the management of the property, affairs and business of the Corporation as the Board of Directors may deem appropriate. The Directors shall act only as a Board, and the individual Directors shall have no power as such. Section 2.10. Action by Telephonic Communications. Members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. [Section 141(i).] Section 2.11. Resignations. Any Director may resign at any time by delivering a written notice of resignation, signed by such Director, to the President or the Secretary. Unless otherwise specified therein, such resignation shall take effect upon delivery. [Section 141(b).] Section 2.12. Vacancies and Newly Created Directorships. Subject to the rights of the holders of any series of Preferred Stock of the Corporation, any newly created Directorship and any other vacancy occurring on the Board of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by a 14 sole remaining Director, except that the stockholders shall fill any vacancy resulting from the removal of a Director by the stockholders. [Section 223.] Section 2.13. Compensation. The amount, if any, which each Director shall be entitled to receive as compensation for his services as such shall be fixed from time to time by resolution of the Board of Directors. [Section 141(h).] Section 2.14. Reliance on Accounts and Reports, etc. A Director, or a member of any Committee designated by the Board of Directors, shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the Corporation and upon information, opinions, reports or statements presented to the Corporation by any of the Corporation's officers or employees, or Committees designated by the Board of Directors, or by any other person as to the matters the member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation. [Section 141(e).] ARTICLE III EXECUTIVE COMMITTEE AND OTHER COMMITTEES Section 3.01. How Constituted. The Board of Directors may designate one or more Committees, each Committee to consist of one or more of the Directors of the Corporation, including an Executive Committee, and designate the Directors who are to serve as members of each such Committee. Any member of a Committee may designate in writing to the Board of Directors, and upon such designation the Board of Directors shall appoint, one or more other Directors as an alternative member of such Committee, who may replace such appointing Committee member at any meeting of such Committee where such appointing member is absent or disqualified. Each member (and each alternate member) of 15 any such Committee (whether designated at an annual meeting of the Board of Directors or to fill a vacancy or otherwise) shall hold office until his or her successor shall have been designated or until he or she shall cease to be a Director, or until his or her earlier death, resignation or removal. [Section 141(c).] Section 3.02. Powers. During the intervals between the meetings of the Board of Directors, the Executive Committee, except as otherwise provided in this section and subject to the Restated Certificate of Incorporation and these By-Laws, shall have and may exercise all the powers and authority of the Board of Directors in the day to day management of the property, affairs and business of the Corporation. Each such other Committee, except as otherwise provided in this section, shall have and may exercise such powers of the Board of Directors as may be provided by resolution or resolutions of the Board of Directors. Neither the Executive Committee nor any such other Committee shall have the power or authority: (a) to approve or adopt, or recommend to the stockholders, any action or matter expressly required by the General Corporation Law to be submitted to stockholders for approval, or 16 (b) to adopt, amend or repeal any of these By-Laws. The Executive Committee shall have, and any such other Committee may be granted by the Board of Directors, power to authorize the seal of the Corporation to be affixed to any or all papers which may require it. [Section 141(c).] Section 3.03. Proceedings. Each such Committee may fix its own rules of procedure consistent with these By-Laws and may meet at such place (within or without the State of Delaware), at such time and upon such notice, if any, as it shall determine from time to time. Each such Committee shall keep minutes of its proceedings and shall report such proceedings to the Board of Directors at the meeting of the Board of Directors next following any such proceedings. Section 3.04. Quorum and Manner of Acting. Except as may be otherwise provided in the resolution creating such Committee, at all meetings of any Committee the presence of members (or alternate members) constituting a majority of the total authorized membership of such Committee shall constitute a quorum for the transaction of business. The act of the majority of the members present at any meeting at which a quorum is present shall be the act of such Committee. Any action required or permitted to be taken at any meeting of any such Committee may be taken without a meeting, if all members of such Committee shall consent to such action in writing and such writing or writings are filed with the minutes of the proceedings of the Committee. The members of any such Committee shall act only as a Committee, and the individual members of such Committee shall have no power as such. [Section 141(c).] Section 3.05. Action by Telephonic Communications. Members of any Committee designated by the Board of Directors may participate in a meeting of such Committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting 17 pursuant to this provision shall constitute presence in person at such meeting. [Section 141(i).] Section 3.06. Resignations. Any member (and any alternate member) of any Committee may resign at any time by delivering a written notice of resignation, signed by such member, to the Chairman of the Board or the President. Unless otherwise specified therein, such resignation shall take effect upon delivery. Section 3.07. Removal. Any member (and any alternate member) of any Committee may be removed at any time, either for or without cause, by resolution adopted by a majority of the entire Board of Directors. Section 3.08. Vacancies. If any vacancy shall occur in any Committee, by reason of disqualification, death, resignation, removal or otherwise, the remaining members (and any alternate members) shall continue to act, and any such vacancy may be filled by the Board of Directors. ARTICLE IV OFFICERS Section 4.01. Number. The officers of the Corporation shall be chosen by the Board of Directors and may include a Chairman of the Board and Vice Chairmen of the Board (who shall be chosen from among the Directors) and shall include a President (who shall be chosen from among the Directors), a Secretary, a Treasurer and such other officers as the Board of Directors may determine. The Board of Directors also may elect one or more Assistant Secretaries and Assistant Treasurers in such numbers as the Board of Directors may determine. Any number of offices may be held by the same person. Except as otherwise provided in these By-Laws, no officer need be a Director of the Corporation. [Section 142(a), (b).] 18 Section 4.02. Election. Unless otherwise determined by the Board of Directors, the officers of the Corporation shall be elected by the Board of Directors at the annual meeting of the Board of Directors, and shall be elected to hold office until the next succeeding annual meeting of the Board of Directors. In the event of the failure to elect officers at such annual meeting, officers may be elected at any regular or special meeting of the Board of Directors. Each officer shall hold office until his or her successor has been elected and qualified, or until his or her earlier death, resignation or removal. [Section 142(b).] Section 4.03. Removal and Resignation; Vacancies. Any officer may be removed for or without cause at any time by the Board of Directors. Any officer may resign at any time by delivering a written notice of resignation, signed by such officer, to the Board of Directors or the President. Unless otherwise specified therein, such resignation shall take effect upon delivery. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, shall be filled by the Board of Directors. [Section 142(b), (e).] Section 4.04. Authority and Duties of Officers. The officers of the Corporation shall have such authority and shall exercise such powers and perform such duties as may be specified in these By-Laws, except that in any event each officer shall exercise such powers and perform such duties as may be required by law. [Section 142(a).] Section 4.05. Chairman of the Board. The Board of Directors may at a regular or special meeting elect from among their number a Chairman of the Board who shall hold office, at the pleasure of the Board of Directors, until the next annual meeting. The Chairman of the Board shall preside at all meetings of the Board of Directors and also shall exercise such powers and perform such duties as may be delegated or assigned to or required of him or her by these 19 By-Laws or by or pursuant to authorization of the Board of Directors. Section 4.06. Vice-Chairmen of the Board. The Board of Directors may at a regular or special meeting elect from among their number one or more Vice-Chairmen of the Board who shall hold office, at the pleasure of the Board of Directors, until the next annual meeting. The Vice-Chairmen of the Board shall exercise such powers and perform such duties as may be delegated or assigned to or required of him, her or them by these By-Laws or by or pursuant to authorization of the Board of Directors or by the Chairman of the Board. Section 4.07. President. The Board of Directors shall at a regular or special meeting elect from among their number a President who shall hold office, at the pleasure of the Board of Directors, until the next annual meeting and until the election of his or her successor. The President shall exercise such powers and perform such duties as may be delegated or assigned to or required of him or her by these By-Laws or by or pursuant to authorization of the Board of Directors or (if the President is not the chief executive officer) by the chief executive officer. Section 4.08. Chief Executive Officer. The Chairman of the Board or the President shall be the chief executive officer of the Corporation as the Board of Directors from time to time shall determine, and the Board of Directors from time to time may determine who shall act as chief executive officer in the absence or inability to act of the then incumbent. Subject to the control of the Board of Directors, and to the extent not otherwise prescribed by these By-Laws, the chief executive officer shall have plenary power over all departments, officers, employees, and agents of the Corporation, and shall be responsible for the general management and direction of all the business and affairs of the Corporation. 20 Section 4.09. The Secretary. The Secretary shall have the following powers and duties: (a) He or she shall keep or cause to be kept a record of all the proceedings of the meetings of the stockholders and of the Board of Directors in books provided for that purpose. (b) He or she shall cause all notices to be duly given in accordance with the provisions of these By-Laws and as required by law. (c) Whenever any Committee shall be appointed pursuant to a resolution or resolutions of the Board of Directors, he or she shall furnish a copy of such resolution or resolutions to the members of such Committee. (d) He or she shall be the custodian of the records and of the seal of the Corporation and cause such seal (or a facsimile thereof) to be affixed to all certificates representing shares of the Corporation prior to the issuance thereof and to all instruments the execution of which on behalf of the Corporation under its seal shall have been duly authorized in accordance with these By-Laws, and when so affixed he or she may attest the same. (e) He or she shall properly maintain and file all books, reports, statements, certificates and all other documents and records required by law, the Restated Certificate of Incorporation or these ByLaws. (f) He or she shall have charge of the stock books and ledgers of the Corporation and shall cause the stock and transfer books to be kept in such manner as to show at any time the number of shares of stock of the Corporation of each class issued and outstanding, the names (alphabetically arranged) and the addresses of the holders of record of such shares, the number of shares held by each holder and the date as of which each became such holder of record. 21 (g) He or she shall sign (unless the Treasurer, an Assistant Treasurer or Assistant Secretary shall have signed) certificates representing shares of the Corporation the issuance of which shall have been authorized by the Board of Directors. (h) He or she shall perform, in general, all duties incident to the office of secretary and such other duties as may be specified in these By-Laws or as may be assigned to him or her from time to time by the Board of Directors or the chief executive officer. Section 4.10. The Treasurer. The Treasurer shall have the following powers and duties: (a) He or she shall have charge and supervision over and be responsible for the moneys, securities, receipts and disbursements of the Corporation and shall keep or cause to be kept full and accurate records of all receipts of the Corporation. (b) He or she shall cause the moneys and other valuable effects of the Corporation to be deposited in the name and to the credit of the Corporation in such banks or trust companies or with such bankers or other depositaries as shall be selected in accordance with Section 8.05 of these By-Laws. (c) He or she shall cause the moneys of the Corporation to be disbursed by checks or drafts (signed as provided in Section 8.06 of these By-Laws) upon the authorized depositaries of the Corporation and cause to be taken and preserved proper vouchers for all moneys disbursed. (d) He or she shall render to the Board of Directors or the President, whenever requested, a statement of the financial condition of the Corporation and of all his or her transactions as Treasurer, and 22 render a full financial report at the annual meeting of the stockholders, if called upon to do so. (e) He or she shall be empowered from time to time to require from all officers or agents of the Corporation reports or statements giving such information as he or she may desire with respect to any and all financial transactions of the Corporation. (f) He or she may sign (unless an Assistant Treasurer or the Secretary or an Assistant Secretary shall have signed) certificates representing stock of the Corporation the issuance of which shall have been duly authorized by the Board of Directors. (g) He or she shall perform, in general, all duties incident to the office of treasurer and such other duties as may be specified in these By-Laws or as may be assigned to him or her from time to time by the Board of Directors or the chief executive officer. Section 4.11. Additional Officers. The Board of Directors may appoint such other officers and agents as it may deem appropriate, and such other officers and agents shall hold their offices for such terms and shall exercise such powers and perform such duties as may be determined from time to time by the Board of Directors. The Board of Directors from time to time may delegate to any officer or agent the power to appoint subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties. Any such officer or agent may remove any such subordinate officer or agent appointed by him or her, for or without cause. [Section 142(a), (b).] Section 4.12. Security. The Board of Directors may require any officer, agent or employee of the Corporation to provide security for the faithful performance of his or her duties, in such amount and of such character as may be determined from time to time by the Board of Directors. [Section 142(c).] 23 ARTICLE V CAPITAL STOCK Section 5.01. Certificates of Stock, Uncertificated Shares. The shares of the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the stock of the Corporation shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until each certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock in the Corporation represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation, by the Chairman of the Board or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, representing the number of shares registered in certificate form. Such certificate shall be in such form as the Board of Directors may determine, to the extent consistent with applicable law, the Restated Certificate of Incorporation and these By-Laws. [Section 158.] Section 5.02. Signatures; Facsimile. All of such signatures on the certificate may be a facsimile, engraved or printed, to the extent permitted by law. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue. [Section 158.] Section 5.03. Lost, Stolen or Destroyed Certificates. The Board of Directors may direct that a new 24 certificate be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon delivery to the Board of Directors of an affidavit of the owner or owners of such certificate, setting forth such allegation. The Board of Directors may require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate. [Section 167.] Section 5.04. Transfer of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares, duly endorsed or accompanied by appropriate evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Within a reasonable time after the transfer of uncertificated stock, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Sections 151, 156, 202(a) or 218(a) of the General Corporation Law of the State of Delaware. Subject to the provisions of the Restated Certificate of Incorporation and these By-Laws, the Board of Directors may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of shares of the Corporation. [Section 151.] Section 5.05. Record Date. In order to determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted by the Board of Directors, and which shall not be more than sixty nor less than ten days before the date of such meeting. A determination of stockholders of record entitled to notice 25 of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided that the Board of Directors may fix a new record date for the adjourned meeting. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights of the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. [Section 213.] Section 5.06. Registered Stockholders. Prior to due surrender of a certificate for registration of transfer, the Corporation may treat the registered owner as the person exclusively entitled to receive dividends and other distributions, to vote, to receive notice and otherwise to exercise all the rights and powers of the owner of the shares represented by such certificate, and the Corporation shall not be bound to recognize any equitable or legal claim to or interest in such shares on the part of any other person, whether or not the Corporation shall have notice of such claim or interests. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer or uncertificated shares are requested to be transferred, both the transferor and transferee request the Corporation to do so. [Section 159.] Section 5.07. Transfer Agent and Registrar. The Board of Directors may appoint one or more transfer agents 26 and one or more registrars, and may require all certificates representing shares to bear the signature of any such transfer agents or registrars. ARTICLE VI INDEMNIFICATION Section 6.01. Nature of Indemnity. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was or has agreed to become a Director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a Director or officer of another corporation (including, without limitation, The Equitable Life Assurance Society of the United States and its subsidiaries), partnership, joint venture, trust or other enterprise, including an employee benefit plan, or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify any person who was or is a party or is threatened to be made a party to such an action, suit or proceeding by reason of the fact that he or she is or was or has agreed to become an employee or agent of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of another corporation (including, without limitation, The Equitable Life Assurance Society of the United States and its subsidiaries), partnership, joint venture, trust or other enterprise, including an employee benefit plan, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such action, suit or proceeding and any appeal therefrom, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding had no reasonable cause 27 to believe his or her conduct was unlawful; except that in the case of an action or suit by or in the right of the Corporation to procure a judgment in its favor (i) such indemnification shall be limited to expenses (including attorneys' fees) actually and reasonably incurred by such person in the defense or settlement of such action or suit, and (ii) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. [Section 145(a), (b)] Section 6.02. Successful Defense. To the extent that a Director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 6.01 hereof or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith. Section 6.03. Determination That Indemnification Is Proper. Any indemnification of a Director or officer of the Corporation under Section 6.01 hereof (unless ordered by a court) shall be made by the Corporation unless a 28 determination is made that indemnification of the Director or officer is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in Section 6.01 hereof. Any indemnification of an employee or agent of the Corporation under Section 6.01 hereof (unless ordered by a court) may be made by the Corporation upon a determination that indemnification of the employee or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section 6.01 hereof. Any such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders. [Section 145(d), (f)] Section 6.04. Advance Payment of Expenses. Expenses (including attorneys' fees) incurred by a Director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the Director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Corporation as authorized in this Article VI. Such expenses (including attorneys' fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. The Board of Directors may authorize the Corporation's counsel to represent such Director, officer, employee or agent in any action, suit or proceeding, whether or not the Corporation is a party to such action, suit or proceeding. [Section 145(e)] Section 6.05. Procedure for Indemnification of Directors and Officers. Any indemnification of a Director or officer of the Corporation under Sections 6.01 and 6.02, or advance of costs, charges and expenses to a Director or 29 officer under Section 6.04 of this Article VI, shall be made promptly, and in any event within 30 days, upon the written request of the Director or officer. If a determination by the Corporation that the Director or officer is entitled to indemnification pursuant to this Article is required, and the Corporation fails to respond within sixty days to a written request for indemnity, the Corporation shall be deemed to have approved such request. If the Corporation denies a written request for indemnity or advancement of expenses, in whole or in part, or if payment in full pursuant to such request is not made within 30 days, the right to indemnification or advances as granted by this Article VI shall be enforceable by the Director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 6.04 of this Article VI where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Section 6.01 of this Article, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section 6.01 of this Article VI, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. 30 Section 6.06. Survival; Preservation of Other Rights. The foregoing indemnification provisions shall be deemed to be a contract between the Corporation and each Director, officer, employee and agent who serves in any such capacity at any time while these provisions as well as the relevant provisions of the General Corporation Law of the State of Delaware are in effect, and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a "contract right" may not be modified retroactively without the consent of such Director, officer, employee or agent. The indemnification provided by this Article VI shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested Directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a Director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. [Section 145(f)] Section 6.07. Insurance. The Corporation shall purchase and maintain insurance on behalf of any person who is or was or has agreed to become a Director or officer of the Corporation, or is or was serving at the request of the Corporation as a Director or officer of another corporation (including, without limitation, The Equitable Life Assurance Society of the United States and its subsidiaries), partnership, joint venture, trust or other enterprise, including an employee benefit plan, against any liability asserted against him or her and incurred by him or her or on his or her behalf in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such 31 liability under the provisions of this Article, provided that such insurance is available on acceptable terms, which determination shall be made by a vote of a majority of the entire Board of Directors. Section 6.08. Severability. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each Director or officer and may indemnify each employee or agent of the Corporation as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article VI that shall not have been invalidated and to the fullest extent permitted by applicable law. ARTICLE VII OFFICES Section 7.01. Registered Office. The registered office of the Corporation in the State of Delaware shall be located at Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle. Section 7.02. Other Offices. The Corporation may maintain offices or places of business at such other locations within or without the State of Delaware as the Board of Directors may from time to time determine or as the business of the Corporation may require. 32 ARTICLE VIII GENERAL PROVISIONS Section 8.01. Dividends. Subject to any applicable provisions of law and the Restated Certificate of Incorporation, dividends upon the shares of the Corporation may be declared by the Board of Directors at any regular or special meeting of the Board of Directors and any such dividend may be paid in cash, property, or shares of the Corporation's Capital Stock. A member of the Board of Directors shall be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or Committees of the Board of Directors, or by any other person as to matters the Director reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, as to the value and amount of the assets, liabilities and/or net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid. [Section 172, 173.] Section 8.02. Reserves. There may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, thinks proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall think conducive to the interest of the Corporation, and the Board of Directors may similarly modify or abolish any such reserve. [Section 171.] Section 8.03. Execution of Instruments. The Chairman of the Board, any Vice-Chairman of the Board, the 33 President, any Vice President, the Secretary or the Treasurer may in the ordinary course of business enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. The Board of Directors may authorize any officer or agent to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. Any such authorization may be general or limited to specific contracts or instruments. Section 8.04. Corporate Indebtedness. No loan shall be contracted on behalf of the Corporation, and no evidence of indebtedness shall be issued in its name, unless authorized by the Board of Directors, or, to the extent authorized by a resolution adopted by the Board of Directors, the chief executive officer. Such authorization may be general or confined to specific instances. Loans so authorized may be effected at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual. All bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation issued for such loans shall be made, executed and delivered as the Board of Directors or (to the extent so authorized) the chief executive officer shall authorize. When authorized by the Board of Directors, any part of or all the properties, including contract rights, assets, business or good will of the Corporation, whether then owned or thereafter acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in trust as security for the payment of such bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation, and of the interest thereon, by instruments executed and delivered in the name of the Corporation. Section 8.05. Deposits. Any funds of the Corporation may be deposited from time to time in such banks, trust companies or other depositaries as may be determined by the Board of Directors, the Chairman of the Board or the President, or by such officers or agents as may 34 be authorized by the Board of Directors, the Chairman of the Board or the President to make such determination. Section 8.06. Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such agent or agents of the Corporation, and in such manner, as the Board of Directors, the Chairman of the Board or the President from time to time may determine. Section 8.07. Sale, Transfer, etc. of Securities. To the extent authorized by the Board of Directors, by the Chairman of the Board or by the President, any Vice President, the Secretary or the Treasurer or any other officers designated by the Board of Directors, the Chairman of the Board or the President may sell, transfer, endorse, and assign, in each case in the ordinary course of business, any shares of stock (other than stock of a subsidiary if such transaction has not been approved by the Board of Directors), bonds or other securities owned by or held in the name of the Corporation, and may make, execute and deliver in the name of the Corporation, under its corporate seal, any instruments that may be appropriate to effect any such sale, transfer, endorsement or assignment. Section 8.08. Voting as Stockholder. Unless otherwise determined by resolution of the Board of Directors, the Chairman of the Board, the President or any Vice President shall have full power and authority on behalf of the Corporation to attend any meeting of stockholders of any corporation in which the Corporation may hold stock, and to act, vote (or execute proxies to vote) and exercise in person or by proxy all other rights, powers and privileges incident to the ownership of such stock. Such officers acting on behalf of the Corporation shall have full power and authority to execute any instrument expressing consent to or dissent from any action of any such corporation without a meeting. The Board of Directors may by resolution from time to time confer such power and authority upon any other person or persons. 35 Section 8.09. Fiscal Year. The fiscal year of the Corporation shall commence on the first day of January of each year (except for the Corporation's first fiscal year which shall commence on the date of incorporation) and shall terminate in each case on December 31. Section 8.10. Seal. The seal of the Corporation shall be circular in form and shall contain the name of the Corporation, the year of its incorporation and the words "Corporate Seal" and "Delaware". The form of such seal shall be subject to alteration by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or reproduced, or may be used in any other lawful manner. Section 8.11. Books and Records. Except to the extent otherwise required by law, the books and records of the Corporation shall be kept at such place or places within or without the State of Delaware as may be determined from time to time by the Board of Directors. ARTICLE IX AMENDMENT OF BY-LAWS Section 9.01. Amendment. The Board of Directors shall have the express power, without a vote of stockholders, to adopt any By-Law, and to amend, alter or repeal the By-Laws of the Corporation, except to the extent that the By-Laws or the Restated Certificate of Incorporation, including but not limited to the provisions of paragraph (e) of Article FIFTH thereof, otherwise provide. The Board of Directors may exercise such power upon the affirmative vote of a majority of the entire Board of Directors. Stockholders may adopt any By-Law, or amend, alter or repeal the By-Laws of the Corporation, upon the affirmative vote of the holders of at least a majority of the votes entitled to be cast by the holders of all then outstanding voting shares of the Corporation, voting together as a single class. 36 ARTICLE X CONSTRUCTION Section 10.01. Construction. In the event of any conflict between the provisions of these By-Laws as in effect from time to time and the provisions of the Restated Certificate of Incorporation of the Corporation as in effect from time to time, the provisions of such Restated Certificate of Incorporation shall be controlling. ARTICLE XI INVESTOR ACQUISITIONS OF VOTING SECURITIES Section 11.01. Limitation on Acquisitions. The Investor shall not, and shall cause each of the Investor Related Parties not to, acquire any Voting Securities if, immediately after such acquisition, the percentage of the Total Voting Power represented by the aggregate Voting Power of all Voting Securities then owned, directly or indirectly, by the Investor and the Investor Related Parties would exceed the percentage equal to 90% minus the percentage of the Total Voting Power represented by the aggregate Voting Power of all Voting Securities (x) acquired by the holders of the Other Debt Securities upon the exchange of the Other Debt Securities and (y) not subsequently sold or otherwise disposed of by such holders in a manner which effectuated a reasonably broad distribution, unless (i) the Investor or such Investor Related Party, as the case may be, substantially concurrently with such acquisition offers to purchase all shares of the Common Stock then outstanding (other than such shares then owned by the Investor and the Investor Related Parties) and (ii) a special committee of the Board of Directors of the Corporation (consisting of directors of the Corporation other than nominees of the Investor or officers of the Corporation or any of its Subsidiaries) is appointed to evaluate such offer. 37 Section 11.02. Certain Definitions. For purposes of this Article ELEVENTH: "Affiliate" means such term as it is defined in Rule 12b-2 under the Exchange Act. "Common Stock" means the Corporation's Common Stock, par value $.01 per share. "Investor" means AXA, a corporation organized under the laws of France. "Investor Related Parties" means, collectively, (i) all Subsidiaries of the Investor, (ii) Axa Assurances I.A.R.D. Mutuelle, Axa Assurances Vie Mutuelle, La Mutuelle Generale Assurances Risques Divers, Uni Europe Assurance Mutuelle, Alpha Assurances Vie Mutuelle, La Nouvelle Mutuelle Assurance, FINAXA, Midi Participations, A.N.F., and their respective Subsidiaries (other than the Investor), (iii) any other person of which the Investor is or becomes a Subsidiary and (iv) each person of which voting securities or other ownership interests representing 25% or more of the ordinary voting power are owned by the Investor or one or more Subsidiaries of the Investor or a combination thereof, which person is not a Subsidiary of the Investor but is actually controlled by the Investor. "Other Debt Securities" means the two series of Debt Securities the Corporation may sell under Section 4.11 of that certain Investment Agreement dated as of July 18, 1991, among The Equitable Life Assurance Society of the United States, the Corporation and the Investor. "Person" means any individual, corporation, partnership, firm, joint venture, association, joint stock company, trust, unincorporated organization, governmental or regulatory authority or other entity. "Subsidiary" means a second person of which securities or other ownership interests representing more 38 than 50% of the ordinary voting power are, at the time any determination is being made, owned or controlled by the first person or one or more Subsidiaries of such person or a combination thereof, except that in no event shall the Corporation or any of its Subsidiaries be considered a Subsidiary of the Investor or any of its Affiliates. "Total Voting Power" means, at any time, the total number of votes that may be cast in the election of Directors of the Corporation at any meeting of the holders of Voting Securities held at such time for such purpose, without regard to any voting limitation on any Voting Securities imposed by Section 7312(v) of the New York Insurance Law, if all then outstanding Voting Securities were present and voted at such meeting. "Voting Power" means, as to any Voting Security at any time, the number of votes such Voting Security is entitled to cast for Directors of the Corporation at any meeting of the holders of Voting Securities held at such time for such purpose, without regard to any voting limitation on any Voting Securities imposed by Section 7312(v) of the New York Insurance Law. "Voting Securities" means the Common Stock and any other securities issued by the Corporation having the power to vote in the election of Directors of the Corporation, including without limitation any securities having such power only upon the occurrence of a default or any other extraordinary contingency, but excluding any preferred stock issued by the Corporation having only such rights to elect up to two Directors as are required by the rules of the principal stock exchange on which such preferred stock is listed. 39 EX-10.02 10 EXHIBIT 10.02 1ST AMEND CO'S INC. STCK TRUST AGRMT Exhibit 10.02 This FIRST AMENDMENT TO THE EQUITABLE COMPANIES INCORPORATED STOCK TRUST AGREEMENT (the "Amendment") is dated as of September 19, 1996 and entered into between The Equitable Companies Incorporated, a Delaware corporation (the "Company"), and The Chase Manhattan Bank, a New York banking corporation (successor in interest to The Chase Manhattan Bank, N.A., a national banking corporation), as trustee (the "Trustee"), parties to The Equitable Companies Incorporated Stock Trust Agreement effective as of December 2, 1993 (the "Agreement"). Capitalized terms used herein without definition have the meanings specified in the Agreement. WHEREAS, it is in the best interests of the Plans and the Plan participants to facilitate the sale of the Company's common stock by the Trust through offerings registered pursuant to the Securities Act of 1933, as amended; and WHEREAS, in order to facilitate such offerings it is desirable to modify the definition of Trust Year in the Agreement; NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein, the parties hereto agree as follows: 1. The definition of "Trust Year" in Section 1.5 of the Agreement is hereby amended to read in its entirety as follows: TRUST YEAR. "Trust Year" means each 12-month period beginning on October 1 and ending on September 30 thereafter, PROVIDED that the initial Trust Year shall be the period beginning on the date hereof and ending on January 31, 1995, that the second Trust Year shall be the period beginning on February 1, 1995 and ending on January 31, 1996 and that the third Trust Year shall be the period beginning on February 1, 1996 and ending on September 30, 1997. 2. This Amendment shall be effective as of the date first set forth above upon execution by the parties hereto. 3. Except as specifically amended by this Amendment, the Agreement remains in full force and effect. 4. The laws of the State of New York shall be controlling law in all matters relating to this Amendment, without regard to conflicts of laws. IN WITNESS WHEREOF, the Company and the Trustee have caused this Amendment to be signed, and their seals affixed thereto, by their authorized officers all as of the date first above written. THE EQUITABLE COMPANIES THE CHASE MANHATTAN INCORPORATED BANK, AS TRUSTEE By: /s/ Kevin R. Byrne By: /s/ Mark J. Altschuler ---------------------- ------------------------- SCHEDULE B ---------- (Revised) CUMULATIVE MAXIMUM DISTRIBUTION IN DOLLARS ------------------------------------------ FROM THE TRUST -------------- Trust Year Ending January 31, 1995 $127,200,000* 1996 166,400,000 Trust Year Ending September 30, 1997 204,000,000 1998 240,000,000 1999 274,400,000 2000 307,200,000 2001 338,400,000 2002 368,000,000 2003 396,000,000 2004 422,400,000 2005 447,200,000 2006 470,400,000 2007 492,000,000 2008 and thereafter 100% of remaining amount of Trust Assets ________________________ * Dollar figures to be adjusted for inflation pursuant to Section 3.1. EX-23.1 11 EXHIBIT 23.01: CONSENT OF PRICE WATERHOUSE LLP EXHIBIT 23.01 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectus constituting part of this Registration Statement on Form S-3 of our report dated February 10, 1997 appearing on page F-1 of The Equitable Companies Incorporated's Annual Report on Form 10-K for the year ended December 31, 1996. We also consent to the incorporation by reference of our report on the Consolidated Financial Statement Schedules, which appears on page F-57 of such Annual Report on Form 10-K. We also consent to the references to us under the headings "Experts" and "Selected Consolidated Financial Data" in such Prospectus. However, it should be noted that Price Waterhouse LLP has not prepared or certified such "Selected Consolidated Financial Data." /s/ PRICE WATERHOUSE LLP - ------------------------ Price Waterhouse LLP New York, New York May 27, 1997 -----END PRIVACY-ENHANCED MESSAGE-----