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EXHIBIT 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
MAY 31, 1997
ARTICLE I
NAME
----
The name of the corporation (which is hereinafter referred to as the
"Corporation") is:
Morgan Stanley, Dean Witter, Discover & Co.
ARTICLE II
ADDRESS
-------
The address of the Corporation's registered office in the State of Delaware is
The Corporation Trust Center, 1209 Orange Street in the City of Wilmington,
County of New Castle. The name of the Corporation's registered agent at such
address is The Corporation Trust Company.
ARTICLE III
PURPOSE
-------
The purpose of the Corporation shall be to engage in any lawful act or
activity for which corporations may be organized and incorporated under the
General Corporation Law of the State of Delaware.
ARTICLE IV
CAPITALIZATION
--------------
The total number of shares of stock which the Corporation shall have authority
to issue is one billion seven hundred eighty million (1,780,000,000), consisting
of thirty million (30,000,000) shares of Preferred Stock, par value $0.01 per
share (hereinafter referred to as "Preferred Stock"), and one billion seven
hundred fifty million (1,750,000,000) shares of Common Stock, par value $0.01
per share (hereinafter referred to as "Common Stock").
The Preferred Stock may be issued from time to time in one or more series.
The Board of Directors is hereby authorized to provide for the issuance of
shares of Preferred Stock in series and, by filing a certificate pursuant to the
applicable law of the State of Delaware (hereinafter referred to as a "Preferred
Stock Designation"), to establish from time to time the number of shares to be
included in each such series, and to fix the designation, powers,
preferences and rights of the shares of each such series and the qualifications,
limitations and restrictions thereof. The authority of the Board of Directors
with respect to each series shall include, but not be limited to, determination
of the following:
(1) The designation of the series, which may be by distinguishing number,
letter or title.
(2) The number of shares of the series, which number the Board of Directors
may thereafter (except where otherwise provided in the Preferred Stock
Designation) increase or decrease (but not below the number of shares thereof
then outstanding).
(3) The amounts payable on, and the preferences, if any, of shares of the
series in respect of dividends, and whether such dividends, if any, shall be
cumulative or noncumulative.
(4) Dates at which dividends, if any, shall be payable.
(5) The redemption rights and price or prices, if any, for shares of the
series.
(6) The terms and amount of any sinking fund provided for the purchase or
redemption of shares of the series.
(7) The amounts payable on, and the preferences, if any, of shares of the
series in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Corporation.
(8) Whether the shares of the series shall be convertible into or
exchangeable for shares of any other class or series, or any other security,
of the Corporation or any other corporation, and, if so, the specification of
such other class or series of such other security, the conversion or exchange
price or prices or rate or rates, any adjustments thereof, the date or dates
at which such shares shall be convertible or exchangeable and all other terms
and conditions upon which such conversion or exchange may be made.
(9) Restrictions on the issuance of shares of the same series or of any
other class or series.
(10) The voting rights, if any, of the holders of shares of the series.
The Common Stock shall be subject to the express terms of the Preferred Stock
and any series thereof. Except as may be provided in this Certificate of
Incorporation or in a Preferred Stock Designation or by applicable law, the
holders of shares of Common Stock shall be entitled to one vote for each such
share upon all questions presented to the stockholders, the Common Stock shall
have the exclusive right to vote for the election of directors and for all other
purposes, and holders of Preferred Stock shall not be entitled to receive notice
of any meeting of stockholders at which they are not entitled to vote. The
holders of the shares of Common Stock shall at all times, except as otherwise
provided in this Certificate of Incorporation or as required by law, vote as one
class, together with the holders of any other class or series of stock of the
Corporation accorded such general voting rights.
The Corporation shall be entitled to treat the person in whose name any share
of its stock is registered as the owner thereof for all purposes and shall not
be bound to recognize any
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equitable or other claim to, or interest in, such share on the part of any other
person, whether or not the Corporation shall have notice thereof, except as
expressly provided by applicable law.
ARTICLE V
BY-LAWS
-------
In furtherance of, and not in limitation of, the powers conferred by law, the
Board of Directors is expressly authorized and empowered:
(1) to adopt, amend or repeal the Bylaws of the Corporation; provided,
however, that the Bylaws adopted by the Board of Directors under the powers
hereby conferred may be amended or repealed by the Board of Directors or by
the stockholders having voting power with respect thereto, provided further
that, in the case of amendments by stockholders, the affirmative vote of the
holders of at least 80 percent of the voting power of the then outstanding
Voting Stock, voting together as a single class, shall be required in order
for the stockholders to alter, amend or repeal any provision of the Bylaws or
to adopt any additional Bylaw; and
(2) from time to time to determine whether and to what extent, and at what
times and places, and under what conditions and regulations, the accounts and
books of the Corporation, or any of them, shall be open to inspection of
stockholders; and, except as so determined or as expressly provided in this
Certificate of Incorporation or in any Preferred Stock Designation, no
stockholder shall have any right to inspect any account, book or document of
the Corporation other than such rights as may be conferred by applicable law.
The Corporation may in its Bylaws confer powers upon the Board of Directors in
addition to the foregoing and in addition to the powers and authorities
expressly conferred upon the Board of Directors by applicable law.
ARTICLE VI
ACTION OF STOCKHOLDERS
----------------------
Subject to the rights of the holders of any series of Preferred Stock or any
other series or class of stock as set forth in this Certificate of
Incorporation, any action required or permitted to be taken by the stockholders
of the Corporation must be effected at a duly called annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing in lieu of a meeting of such stockholders.
ARTICLE VII
BOARD OF DIRECTORS
------------------
Subject to the rights of the holders of any series of Preferred Stock, or any
other series or class of stock as set forth in this Certificate of
Incorporation, to elect additional directors under specified circumstances, the
number of directors of the Corporation shall be fixed in
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such manner as prescribed by the Bylaws of the Corporation and may be increased
or decreased from time to time in such manner as prescribed by the Bylaws.
Unless and except to the extent that the Bylaws of the Corporation shall so
require, the election of directors of the Corporation need not be by written
ballot.
The directors, other than those who may be elected by the holders of any
series of Preferred Stock or any other series or class of stock as set forth in
this Certificate of Incorporation, shall be divided into three classes,
initially consisting of 6, 4 and 4 directors. One class of directors initially
consisting of 4 directors shall be initially elected for a term expiring at the
annual meeting of stockholders to be held in 1998, another class initially
consisting of 4 directors shall be initially elected for a term expiring at the
annual meeting of stockholders to be held in 1999, and another class initially
consisting of 6 directors shall be initially elected for a term expiring at the
annual meeting of stockholders to be held in 2000. Members of each class shall
hold office until their successors are elected and qualified. At each annual
meeting of the stockholders of the Corporation commencing with the 1998 annual
meeting, directors elected to succeed those directors whose terms then expire
shall be elected by a plurality vote of all votes cast at such meeting to hold
office for a term expiring at the third succeeding annual meeting of
stockholders after their election, with each director to hold office until his
or her successor shall have been duly elected and qualified.
Subject to the rights of the holders of any series of Preferred Stock, or any
other series or class of stock as set forth in this Certificate of
Incorporation, to elect additional directors under specified circumstances,
vacancies resulting from death, resignation, retirement, disqualification,
removal from office or other cause, and newly created directorships resulting
from any increase in the authorized number of directors, may be filled only by
the affirmative vote of a majority of the remaining directors, though less than
a quorum of the Board of Directors, and directors so chosen shall hold office
for a term expiring at the annual meeting of stockholders at which the term of
office of the class to which they have been elected expires and until such
director's successor shall have been duly elected and qualified. No decrease in
the number of authorized directors constituting the Board of Directors shall
shorten the term of any incumbent director.
Subject to the rights of the holders of any series of Preferred Stock, or any
other series or class of stock as set forth in this Certificate of
Incorporation, to elect additional directors under specified circumstances, any
director may be removed from office at any time, but only for cause and by the
affirmative vote of the holders of at least 80 percent of the voting power of
the then outstanding Voting Stock, voting together as a single class.
ARTICLE VIII
INDEMNIFICATION
---------------
Each person who is or was a director or officer of the Corporation shall be
indemnified by the Corporation to the fullest 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, if permitted by applicable law, 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. The Corporation may, by action of the
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Board of Directors, provide indemnification to employees and agents (other than
a director or officer) of the Corporation, to directors, officers, employees or
agents of a subsidiary, and to each person serving as a director, officer,
partner, member, employee or agent of another corporation, partnership, limited
liability company, joint venture, trust or other enterprise, at the request of
the Corporation, with the same scope and effect as the foregoing indemnification
of directors and officers of the Corporation. The Corporation shall be required
to indemnify any person seeking indemnification in connection with a proceeding
(or part thereof) initiated by such person only if such proceeding (or part
thereof) was authorized by the Board of Directors or is a proceeding to enforce
such person's claim to indemnification pursuant to the rights granted by this
Certificate of Incorporation or otherwise by the Corporation. 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 VIII. Any amendment or repeal
of this Article VIII shall not adversely affect any right or protection existing
hereunder in respect of any act or omission occurring prior to such amendment or
repeal.
ARTICLE IX
DIRECTORS' LIABILITY
--------------------
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (1) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (2) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (3) under Section 174 of the General Corporation Law of the
State of Delaware, or (4) for any transaction from which the director derived an
improper personal benefit. Any amendment or repeal of this Article IX shall not
adversely affect any right or protection of a director of the Corporation
existing hereunder in respect of any act or omission occurring prior to such
amendment or repeal.
If the General Corporation Law of the State of Delaware shall be amended, to
authorize corporate action further eliminating or limiting the liability of
directors, then a director of the Corporation, in addition to the circumstances
in which he is not liable immediately prior to such amendment, shall be free of
liability to the fullest extent permitted by the General Corporation Law of the
State of Delaware, as so amended.
ARTICLE X
AMENDMENTS
----------
Except as may be expressly provided in this Certificate of Incorporation, the
Corporation reserves the right at any time and from time to time to amend,
alter, change or repeal any provision contained in this Certificate of
Incorporation or a Preferred Stock Designation, and any other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted, in the manner now or hereafter prescribed herein or by
applicable law, and all rights, preferences and privileges of whatsoever nature
conferred upon stockholders, directors or any other persons whomsoever by and
pursuant to this Certificate of Incorporation in its present form or as
hereafter amended are granted subject to the right reserved in this Article X;
provided, however, that any amendment or repeal of Article VIII or Article IX of
this Certificate of Incorporation shall not adversely affect any right or
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protection existing thereunder in respect of any act or omission occurring prior
to such amendment or repeal, and provided further that no Preferred Stock
Designation shall be amended after the issuance of any shares of the series of
Preferred Stock created thereby, except in accordance with the terms of such
Preferred Stock Designation and the requirements of applicable law.
Notwithstanding anything contained in this Certificate of Incorporation to the
contrary, and in addition to approval by the Board of Directors, the affirmative
vote of the holders of at least 80 percent of the voting power of the then
outstanding Voting Stock, voting together as a single class, shall be required
to amend, repeal or adopt any provision inconsistent with paragraph (1) of
Article V, Article VI, Article VII or this second paragraph of this Article X.
For the purposes of this Certificate of Incorporation, "Voting Stock" shall mean
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors.
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CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
ESOP CONVERTIBLE PREFERRED STOCK
OF
DEAN WITTER, DISCOVER & CO.
------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of
Directors (the "Board") of Dean Witter, Discover & Co., a Delaware corporation
(hereinafter called the "Corporation"), by unanimous vote thereof at a meeting
on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted to and vested in the
Board by provisions of the Amended and Restated Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), which
shall consist of 3,902,438 of the shares of Preferred Stock which the
Corporation has authority to issue, is authorized, and the Board hereby fixes
the powers, designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or restrictions
thereof, of the shares of such series (in addition to the powers, designations,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the Preferred Stock) as
follows:
1. Designation and Issuance.
-------------------------
(A) The shares of such series shall be designated ESOP CONVERTIBLE
PREFERRED STOCK (hereinafter referred to as the "ESOP Preferred Stock") and such
series shall consist of
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3,902,438 shares. Such number of shares may be increased or decreased from time
to time by resolution of the Committee (as hereinafter defined), but no such
increase shall result in such series consisting of more than 4,000,000 shares,
and no decrease shall reduce the number of shares of ESOP Preferred Stock to a
number less than that of shares of ESOP Preferred Stock then outstanding plus
the number of shares issuable upon exercise of any rights, options or warrants
or upon conversion of outstanding securities issued by the Corporation relating
to such shares. Notwithstanding the preceding sentence, the Board may increase
the number of shares of ESOP Preferred Stock to a number greater than 4,000,000
shares, or may decrease the number of such shares, subject only to any
limitations imposed by applicable law or the Certificate of Incorporation. Any
shares of ESOP Preferred Stock redeemed or purchased by the Corporation shall
remain issued and outstanding for all purposes (except that as long as such
shares are held by the Corporation or its nominee, no dividends shall be paid on
such shares and they shall neither be entitled to vote nor counted for quorum
purposes) and may thereafter be transferred by the Corporation from time to time
to a trustee or trustees referred to in paragraph (B) of this Section 1
(whereupon the voting and dividend rights of such shares shall be restored);
provided that the Corporation may provide at the time of or at any time after
such redemption or purchase that any such shares then held by the Corporation or
its nominee shall be retired, and such shares shall then be restored to the
status of authorized but unissued shares of Preferred Stock of the Corporation.
For the purposes of this Certificate of Designation, the "Committee" shall mean
any committee of the Board to whom the Board, pursuant to Section 141(c) of the
General Corporation Law of the State of Delaware, delegates authority to perform
the functions of the Board set forth in this Certificate of Designation.
(B) Shares of ESOP Preferred Stock shall be issued only to a trustee
or trustees acting on behalf of an employee stock ownership trust or plan or
other employee benefit plan (a "Plan") of the Corporation. In the event of any
sale, transfer or other disposition (hereinafter a "transfer") of shares of ESOP
Preferred Stock to any person (including, without limitation, any participant in
the Plan) other than (x) any trustee or trustees of the Plan, (y) any pledgee of
such shares acquiring such shares as security for any loan or loans made to the
Plan or to any trustee or trustees acting on behalf of the Plan or (z) the
Corporation, the shares of ESOP Preferred Stock so transferred, upon such
transfer and without any further
8
action by the Corporation or the holder, shall be automatically converted into
shares of Common Stock at the Conversion Price (as hereinafter defined) and on
the terms otherwise provided for the conversion of shares of ESOP Preferred
Stock into shares of Common Stock pursuant to Section 5 hereof and no such
transferee shall have any of the voting powers, preferences and relative,
participating, optional or special rights ascribed to shares of ESOP Preferred
Stock hereunder, but, rather, only the powers and rights pertaining to the
Common Stock into which such shares of ESOP Preferred Stock shall be so
converted; provided, however, that in the event of a foreclosure or other
realization upon shares of ESOP Preferred Stock pledged as security for any loan
or loans made to the Plan or to the trustee or the trustees acting on behalf of
the Plan, the pledged shares so foreclosed or otherwise realized upon shall be
converted automatically into shares of Common Stock at the Conversion Price and
on the terms otherwise provided for conversions of shares of ESOP Preferred
Stock into shares of Common Stock pursuant to Section 5 hereof. In the event of
such a conversion, such transferee shall be treated for all purposes as the
record holder of the shares of Common Stock into which the ESOP Preferred Stock
shall have been converted as of the date of such conversion. Certificates
representing shares of ESOP Preferred Stock shall be legended to reflect such
restrictions on transfer. Notwithstanding the foregoing Provisions of this
Section 1, shares of ESOP Preferred Stock (i) may be converted into shares of
Common Stock as provided by Section 5 hereof and the shares of Common Stock
issued upon such conversion may be transferred by the holder thereof as
permitted by law and (ii) be redeemable by the Corporation upon the terms and
conditions provided by Sections 6, 7 and 8 hereof.
2. Dividends and Distributions.
----------------------------
(A) (1) Subject to the provisions for adjustment hereinafter set
forth, the holders of shares of ESOP Preferred Stock (other than the Corporation
or its nominee) shall be entitled to receive, when and as declared by the Board
out of funds legally available therefor, cash dividends ("Preferred Dividends")
payable in accordance with either of the following elections, as the Board shall
elect from time to time in its absolute discretion:
(i) in an amount per share initially equal to $2.78 per share per
annum, and no more (such amount, as adjusted from time to time pursuant to
the terms hereof, including during any period in which a
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Semiannual Payment Election (as defined below) shall be in effect, the
"Annual Dividend Rate"), payable annually in arrears on December 31 (or
such later date not more than four business days thereafter as the Board
may from time to time elect in its absolute discretion; such date, the
"Annual Payment Date") of each year (such election, the "Annual Payment
Election") beginning on the Annual Payment Date occurring immediately after
the effective date of such Annual Payment Election; or
(ii) in an amount per share initially equal to $2.78 per share per
annum, and no more (such amount, as adjusted from time to time pursuant to
the terms hereof, including during any period in which an Annual Payment
Election is in effect, the "Semiannual Dividend Rate"; and the Semiannual
Dividend Rate and the Annual Dividend Rate, as in effect at any time, are
each hereinafter referred to as the "Preferred Dividend Rate"),
semiannually in arrears, one-half on each June 30 and December 31 (or, in
either case, such later date not more than four business days after either
of such dates as the Board may from time to time elect in its absolute
discretion; such dates, the "Semiannual Payment Dates") of each year (such
election, the "Semiannual Payment Election"), beginning on the Semiannual
Payment Date occurring immediately after the effective date of such
Semiannual Payment Election;
provided that any Semiannual Payment Election shall be made effective only
during the period beginning on January 5 and ending on June 29 in each year.
The Board shall give prompt notice to the holders of the ESOP Preferred Stock of
any Semiannual Payment Election or Annual Payment Election and any election to
alter any Dividend Payment Date pursuant to this Section 2(A)(1). Each Annual
Payment Date or Semiannual Payment Date, as applicable, is hereinafter referred
to as a "Dividend Payment Date", and each payment of a Preferred Dividend shall
be made to holders of record at the opening of business on such Dividend Payment
Date.
(2) Preferred Dividends shall begin to accrue on outstanding shares
of ESOP Preferred Stock from the date of issuance of such shares, except that
with respect to any shares of ESOP Preferred Stock redeemed or purchased by the
Corporation and then reissued, Preferred Dividends shall accrue on such shares
from their date of reissuance. Preferred Dividends shall accrue on a daily
basis, whether or not the Corporation shall then have earnings or surplus
10
(computed on the basis of a 360-day year of twelve 30-day months in case of any
period less than one year) based on the Preferred Dividend Rate in effect on
such date; provided however, that if a Semiannual Payment Election or an Annual
Payment Election becomes effective on or after such date and before the
immediately succeeding Dividend Payment Date, payments in respect of dividends
on the ESOP Preferred Stock made on or after the effective date of such
Semiannual Payment Election or Annual Payment Election and on or before such
Dividend Payment Date shall be computed using the Preferred Dividend Rate in
effect on the date of such payment; provided further, the dividends payable on
the first Dividend Payment Date following the issuance of the ESOP Preferred
Stock shall be in an amount equal to the Annual Dividend Rate for a full annum
or the Semiannual Dividend Rate for a full semiannum, as applicable. Accrued
but unpaid Preferred Dividends shall cumulate as of the Dividend Payment Date on
which they first become payable, but no interest shall accrue on accumulated but
unpaid Preferred Dividends.
(B) So long as any shares of ESOP Preferred Stock shall be
outstanding, no dividend shall be declared or paid or set apart for payment on
any other series of stock ranking on a parity with the ESOP Preferred Stock as
to dividends, unless there shall also be or have been declared and paid or set
apart for payment on the ESOP Preferred Stock, like dividends for all dividend
payment periods of the ESOP Preferred Stock ending on or before the dividend
payment date of such parity stock, ratably in proportion to the respective
amounts of dividends (1) accumulated and unpaid or payable on such parity stock,
on the one hand, and (2) accumulated and unpaid through the dividend payment
period or periods of the ESOP Preferred Stock next preceding such dividend
payment date, on the other hand. If full cumulative dividends on the ESOP
Preferred Stock have not been declared and paid or set apart for payment when
due, the Corporation shall not declare or pay or set apart for payment any
dividends or make any other distributions on, or make any payment on account of
the purchase, redemption or other retirement of, any other class of stock or
series thereof of the Corporation ranking, as to dividends or upon dissolution,
junior to the ESOP Preferred Stock until full cumulative dividends on the ESOP
Preferred Stock shall have been paid or declared and set apart; provided,
however, that the foregoing shall not apply to (i) any dividend or distribution
payable solely in any shares of, or options, warrants or rights to subscribe for
or purchase shares of, any stock ranking, as to dividends and upon dissolution,
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junior to the ESOP Preferred Stock or (ii) the acquisition of shares of any
stock ranking, as to dividends and upon dissolution, junior to the ESOP
Preferred Stock in exchange solely for or by conversion solely into shares of
any other stock ranking junior to the ESOP Preferred Stock as to dividends and
upon dissolution.
(C) Any dividend payment made on shares of ESOP Preferred Stock shall
first be credited against the earliest accumulated but unpaid dividend due with
respect to such shares.
3. Liquidation Preference.
-----------------------
(A) In the event of any dissolution or liquidation of the
Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for the holders of any series or class or classes of
stock of the Corporation ranking junior to ESOP Preferred Stock upon dissolution
or liquidation, the holders of ESOP Preferred Stock (other than the Corporation
or its nominee) shall be entitled to receive the Liquidation Price (as
hereinafter defined) per share in effect at the time of dissolution or
liquidation plus an amount equal to all dividends accrued (whether or not
accumulated) and unpaid on the ESOP Preferred Stock to the date of final
distribution to such holders; but such holders shall not be entitled to and
shall not otherwise receive any further payments. The Liquidation Price per
share that holders of ESOP Preferred Stock shall receive upon dissolution or
liquidation shall be $35.875, subject to adjustment as hereinafter provided.
If, upon any dissolution or liquidation of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of ESOP
Preferred Stock shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other shares ranking, as to
dissolution or liquidation, on a parity with ESOP Preferred Stock, then such
assets, or the proceeds thereof, shall be distributed among the holders of ESOP
Preferred Stock and any such other shares ratably in accordance with the
respective amounts that would be payable on such shares of ESOP Preferred Stock
and any such other shares if all amounts payable thereon were paid in full. For
the purposes of this Section 3, neither a consolidation or merger of the
Corporation with or into one or more corporations, nor the sale, transfer, lease
or exchange (for cash, shares of equity stock, securities or other
consideration) of all or substantially all of the
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assets of the Corporation, nor the distribution to the stockholders of the
Corporation of all or substantially all of the consideration for such sale,
unless such consideration (apart from assumption of liabilities) or the net
proceeds thereof consists substantially entirely of cash, shall be deemed to be
a dissolution or liquidation, voluntary or involuntary.
(B) Subject to the rights of the holders of shares of any series or
class or classes of stock ranking on a parity with or senior to ESOP Preferred
Stock upon dissolution or liquidation, upon any dissolution or liquidation of
the Corporation, after payment shall have been made in full to the holders of
ESOP Preferred Stock as provided in this Section 3, but not prior thereto, any
other series or class or classes of stock ranking junior to ESOP Preferred Stock
upon dissolution or liquidation shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all assets
of the Corporation remaining to be paid or distributed, and the holders of ESOP
Preferred Stock shall not be entitled to share therein.
4. Ranking and Voting of Shares.
-----------------------------
(A) Each of (i) the Corporation's 7-3/8% Cumulative Preferred Stock,
with a liquidation value of $200.00 per share, (ii) the Corporation's 7-3/4%
Cumulative Preferred Stock, with a liquidation value of $200.00 per share, (iii)
the Corporation's Series A Fixed/Adjustable Rate Preferred Stock, with a
liquidation value of $200.00 per share, (iv) if issued, the Corporation's 7.82%
Cumulative Preferred Stock, with a liquidation value of $200.00 per share, (v)
if issued, the Corporation's 7.80% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vi) if issued, the Corporation's 9.00%
Cumulative Preferred Stock, with a liquidation value of $200.00 per share, (vii)
if issued, the Corporation's 8.40% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (viii) if issued, the Corporation's
8.20% Cumulative Preferred Stock, with a liquidation value of $200.00 per share
and (ix) if issued, the Corporation's 8.03% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, shall rank on a parity with ESOP
Preferred Stock as to dividends and as to distribution of assets upon
dissolution or liquidation.
Unless otherwise provided in the Certificate of Incorporation of the
Corporation, as the same may be
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amended, or in a Certificate of Designation of Rights and Preferences relating
to any subsequent series of Preferred Stock, the ESOP Preferred Stock shall rank
on a parity with all series of the Corporation's Preferred Stock, other than the
Corporation's Series A Junior Participating Preferred Stock to which the ESOP
Preferred Stock shall rank senior, as to dividends and as to the distribution of
assets upon dissolution or liquidation.
(B) The holders of shares of ESOP Preferred Stock (other than the
Corporation or its nominee) shall have the following voting rights:
(1) The holders of ESOP Preferred Stock shall be entitled to vote on
all matters submitted to a vote of the stockholders of the Corporation, voting
together with the holders of Common Stock as one class. The holder of each
share of ESOP Preferred Stock shall be entitled to a number of votes equal to
1.35 times the number of shares of Common Stock into which such share of ESOP
Preferred Stock could be converted on the record date for determining the stock
holders entitled to vote; it being understood that whenever the "Conversion
Price" (as defined in Section 5 hereof) is adjusted as provided in Section 9
hereof, the number of votes of the ESOP Preferred Stock shall also be corres
pondingly adjusted. Notwithstanding the immediately preceding sentence, if the
governing body of the New York Stock Exchange or any other securities listing
service or exchange (each, an "Exchange") or any relevant governmental or
regulatory entity (each such entity, and each governing body of an Exchange, a
"Regulating Entity") shall have disapproved of such voting power or taken or
threatened any action against the Corporation or in respect of any of its
securities in accordance with Rule 19c-4 promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act"), or any other rule or listing standard
of any Regulating Entity regarding the voting power of securities, or if the
Board of Directors determines in its sole judgment that any Regulating Entity
may so disapprove or take or threaten any such action, the holder of each share
of ESOP Preferred Stock shall be entitled to a maximum number of votes
permissible (consistent with continued listing of the Corporation's securities
on any such Exchange) in accordance with the interpretations of any such rule or
listing standard by such Regulating Entity, as determined by the Board.
(2) Except as otherwise required by law or set forth herein, holders
of ESOP Preferred Stock shall have no
14
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for the taking of any corporate action, including the issuance of any
Preferred Stock now or hereafter authorized; provided, however, that the vote of
at least 66-2/3% of the outstanding shares of ESOP Preferred Stock, voting
separately as a series, shall be necessary to approve any alteration, amendment
or repeal of any provision of the Certificate of Incorporation or any
alteration, amendment or repeal of any provision of the resolutions relating to
the designation, preferences and rights of ESOP Preferred Stock (including any
such alteration, amendment or repeal effected by any merger or consolidation in
which the Corporation is the surviving or resulting corporation, but not
including any alteration or amendment of rights expressly provided for in
Section (B)(1) above or in Section 2(A)(1)), if such amendment, alteration or
repeal would alter or change the powers, preferences, or special rights of the
ESOP Preferred Stock so as to affect them adversely.
5. Conversion into Common Stock.
-----------------------------
(A) A holder of shares of ESOP Preferred Stock shall be entitled, at
any time prior to the close of business on the date fixed for redemption of such
shares pursuant to Section 6, 7 or 8 hereof, to cause any or all of such shares
to be converted into shares of Common Stock. The number of shares of Common
Stock into which each share of the ESOP Preferred Stock may be converted shall
be determined by dividing the Liquidation Price in effect at the time of
conversion by the Conversion Price (as hereinafter defined) in effect at the
time of conversion. The initial Conversion Price per share at which shares of
Common Stock shall be issuable upon conversion of any shares of ESOP Preferred
Stock shall be $10.871, subject to adjustment as hereinafter provided; that is,
a conversion rate initially equivalent to three and three-tenths (3-3/10) shares
of Common Stock for each share of ESOP Preferred Stock, which is subject to
adjustment as hereinafter provided.
(B) Any holder of shares of ESOP Preferred Stock desiring to convert
such shares into shares of Common Stock shall surrender, if certificated, the
certificate or certificates representing the shares of ESOP Preferred Stock
being converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock
15
powers relating thereto), or if uncertificated, a duly executed stock power
relating thereto, at the principal executive office of the Corporation or the
offices of the transfer agent for the ESOP Preferred Stock or such office or
offices in the continental United States of an agent for conversion as may from
time to time be designated by notice to the holders of the ESOP Preferred Stock
by the Corporation or the transfer agent for the ESOP Preferred Stock,
accompanied by written notice of conversion. Such notice of conversion shall
specify (i) the number of shares of ESOP Preferred Stock to be converted and the
name or names in which such holder wishes the Common Stock and any shares of
ESOP Preferred Stock not to be so converted to be issued, and (ii) the address
to which such holder wishes delivery to be made of a confirmation of such
conversion, if uncertificated, or any new certificates which may be issued upon
such conversion, if certificated.
(C) Upon surrender, if certificated, of a certificate representing a
share or shares of ESOP Preferred Stock for conversion, or if uncertificated, of
a duly executed stock power relating thereto, the Corporation shall issue and
send by hand delivery (with receipt to be acknowledged) or by first class mail,
postage prepaid, to the holder thereof or to such holder's designee, at the
address designated by such holder, if certificated, a certificate or
certificates for, or if uncertificated, confirmation of, the number of shares of
Common Stock to which such holder shall be entitled upon conversion. If there
shall have been surrendered shares of ESOP Preferred Stock only part of which
are to be converted, the Corporation shall issue and deliver to such holder or
such holder's designee, if certificated, a new certificate or certificates
representing the number of shares of ESOP Preferred Stock that shall not have
been converted, or if uncertificated, confirmation of the number of shares of
ESOP Preferred Stock that shall not have been converted.
(D) The issuance by the Corporation of shares of Common Stock upon a
conversion of shares of ESOP Preferred Stock into shares of Common Stock made at
the option of the holder thereof shall be effective as of the earlier of (i) the
delivery to such holder or such holder's designee of the certificates
representing the shares of Common Stock issued upon conversion thereof, if
certificated, or confirmation, if uncertificated, and (ii) the commencement of
business on the second business day after the surrender of the certificate or
certificates, if certificated, or a duly executed stock power, if
uncertificated, for the shares of
16
ESOP Preferred Stock to be converted. On and after the effective date of
conversion, the person or persons entitled to receive Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock, and no allowance or adjust ment shall be
made in respect of dividends payable to holders of Common Stock of record on any
date prior to such effective date. The Corporation shall not be obligated to
pay any dividend that may have accrued or have been declared but that is not
payable to holders of shares of ESOP Preferred Stock if the Dividend Payment
Date for such dividend is on or subsequent to the effective date of conversion
of such shares.
(E) The Corporation shall not be obligated to deliver to holders of
ESOP Preferred Stock any fractional share or shares of Common Stock issuable
upon any conversion of such shares of ESOP Preferred Stock, but in lieu thereof
may make a cash payment in respect thereof in any manner permitted by law.
(F) The Corporation shall at all times reserve and keep available out
of its authorized and unissued Common Stock or treasury Common Stock, solely for
issuance upon the conversion of shares of ESOP Preferred Stock as herein
provided, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the shares of ESOP Preferred Stock then
outstanding.
6. Redemption at the Option of the Corporation.
--------------------------------------------
(A) The ESOP Preferred Stock shall be redeemable, in whole or in
part, at the option of the Corporation at any time after September 19, 2000, out
of funds legally available therefor, at a redemption price per share equal to
100% of the Liquidation Price plus an amount equal to all accrued (whether or
not accumulated) and unpaid dividends thereon to the date fixed for redemption.
Payment of the redemption price shall be made by the Corporation in cash or
shares of Common Stock, or a combination thereof, as permitted by paragraph (E)
of this Section 6. From and after the date fixed for redemption, dividends on
shares of ESOP Preferred Stock called for redemption will cease to accrue and
all rights of the holder in respect of such shares shall cease, except the right
to receive the redemption price. Upon payment of the redemption price, such
shares shall be deemed to have been transferred to the Corporation, to be held
as treasurer shares or to be retired, in either case as provided in Sec-
tion 1(A). If less than all of the
17
outstanding shares of ESOP Preferred Stock are to be redeemed, the Corporation
shall either redeem a portion of the shares of each holder determined pro rata
based on the number of shares held by each holder or shall select the shares to
be redeemed by lot, as may be determined by the Board.
(B) Notice of redemption will be sent to the holders of ESOP
Preferred Stock at the address on the books of the Corporation or any transfer
agent for ESOP Preferred Stock by first class mail, postage prepaid, mailed not
less than twenty (20) days nor more than sixty (60) days prior to the redemption
date or in any other manner provided by law. Each notice shall state: (i) the
redemption date; (ii) the total number of shares of ESOP Preferred Stock to be
redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (iii) the redemption price; (iv) the place or places where certificates,
if certificated, for such shares are to be surrendered for payment of the
redemption price; (v) that dividends on the shares to be redeemed will cease to
accrue on such redemption date; (vi) whether such redemption price should be
paid in cash or in shares of Common Stock; and (vii) the conversion rights of
the shares to be redeemed, the period within which conversion rights may be
exercised and the Conversion Price and number of shares of Common Stock issuable
upon conversion of a share of ESOP Preferred Stock at the time. Upon surrender
of the certificates, if certificated, for any shares so called for redemption,
or upon the date fixed for redemption, if uncertificated, such shares, if not
previously converted, shall be redeemed by the Corporation as of the close of
business on the date fixed for redemption and at the redemption price set forth
in this Section 6.
(C) The Corporation may, in its sole discretion and notwithstanding
anything to the contrary in paragraph (A) of this Section 6, at any time within
one year after either of the following events:
(i) there shall be a change in the federal tax law or regulations of
the United States of America or of an interpretation or application of such
law or regulations or of a determination by a court of competent
jurisdiction that in any case has the effect of precluding the Corporation
from claiming (other than for purposes of calculating any alternative
minimum tax) any of the tax deductions for dividends paid on
18
the ESOP Preferred Stock when such dividends are used as provided under
Section 404(k)(2) of the Internal Revenue Code of 1986, as amended (the
"Code"), as in effect on December 31, 1995.
(ii) the Corporation shall certify to the holders of the ESOP
Preferred Stock that the Corporation has determined in good faith that the
Plan either is not qualified as a "stock bonus plan" within the meaning of
Section 401(a) of the Code or is not an "employee stock ownership plan"
within the meaning of Section 4975(e)(7) of the Code,
elect either to (a) redeem, out of funds legally available therefor, any or all
of such ESOP Preferred Stock for cash or, if the Corporation so elects, in
shares of Common Stock, or a combination of such shares of Common Stock and
cash, as permitted by paragraph (E) of this Section 6, at a redemption price
equal to (x) if the relevant event is as provided in clause (i) above, the
Liquidation Price per share on the date fixed for redemption, plus an amount
equal to accrued (whether or not accumulated) and unpaid dividends thereon to
the date fixed for redemption or (y) if the relevant event is as provided in
clause (ii) above, an amount calculated on the basis of the redemption prices
provided in paragraph (D) of this Section 6 on the date fixed for redemption or
(b) exchange any or all of such shares of ESOP Preferred Stock for securities of
at least equal value (as determined by an independent appraiser) that constitute
"qualifying employer securities" with respect to a holder of ESOP Preferred
Stock within the meaning of Section 409(l) of the Code and Section 407(d)(5) of
the Employment Retirement Income Security Act of 1974, as amended ("ERISA"), or
any successor provisions of law. If the Corporation elects to redeem any or all
of the ESOP Preferred Stock pursuant to clause (a) of the preceding sentence,
notice of such redemption shall be given as required in paragraph (B) of this
Section 6, and if the Corporation elects to exchange any or all of the ESOP
Preferred Stock for securities of at least equal value pursuant to clause (b) of
the preceding sentence, it will cause notice of such election to be sent to the
holders of ESOP Preferred Stock at the address shown on the books of the
Corporation or any transfer agent for ESOP Preferred Stock by first class mail,
postage prepaid, mailed not less than twenty (20) days nor more than sixty (60)
days prior to the date of exchange or in any other manner required by law. Each
notice shall state: (i) the exchange date; (ii) the total number of shares of
ESOP Preferred Stock to be
19
exchanged and, if fewer than all the shares held by such holder are to be
exchanged, the number of shares held by such holder to be exchanged; (iii) the
exchange rate; (iv) the place or places where certificates, if certificated, for
such shares are to be surrendered for exchange; and (v) that dividends on the
shares to be exchanged will cease to accrue an such exchange date.
(D) Notwithstanding anything to the contrary in paragraph (A) of this
Section 6, in the event that the Plan is, or contributions thereto are,
terminated, the Corporation may, in its sole discretion, call for redemption any
or all of the then outstanding ESOP Preferred Stock, upon notice as required in
paragraph (B) of this Section 6, out of funds legally available therefor, at a
redemption price per share equal to the following percentages of the Liquidation
Price in effect on the date fixed for redemption:
During the Twelve-
Month Period Percentage of
Beginning September 19, Liquidation Price
------------------------- -----------------
1996 103.10
1997 102.33
1998 101.55
1999 100.78
2000 100.00
and thereafter at 100%, plus, in each case, an amount equal to all accrued
(whether or not accumulated) and unpaid dividends thereon to the date fixed for
redemption. Payment of the redemption price shall be made by the Corporation in
cash or shares of Common Stock, or a combination thereof, as permitted by
paragraph (E) of this Section 6. From and after the date fixed for redemption,
dividends on shares of ESOP Preferred Stock called for redemption will cease to
accrue and all rights of the holder in respect of such shares shall cease,
except the right to receive the redemption price. Upon payment of the
redemption price, such shares shall be deemed to have been transferred to the
Corporation, to be held as treasury shares or to be retired, in either case as
provided in Section 1(A).
(E) The Corporation, at its option, may make payment of the
redemption price required upon redemption of shares of ESOP Preferred Stock in
cash or in shares of Common Stock, or in a combination of such shares and cash,
any such shares of Common Stock to be valued for such purpose at their Fair
Market Value (as defined in paragraph 9(H)(2)); provided, however, that in
calculating
20
their Fair Market Value the Adjustment Period (as defined in paragraph 9(H)(2))
shall be deemed to be the five (5) consecutive trading days preceding the date
of redemption.
7. Redemption at the Option of the Holder.
---------------------------------------
(A) Unless otherwise provided by law, shares of ESOP Preferred Stock
shall be redeemed by the Corporation at the option of the holder, at any time
and from time to time upon notice to the Corporation given not less than five
business days prior to the date fixed by the holder in such notice, when and to
the extent necessary for such holder to provide for distributions required to be
made under, or to satisfy an investment election provided to participants in
accordance with, the Plan or any successor plan or when the holder elects to
redeem shares of ESOP Preferred Stock in connection with any Preferred Dividend
(a "Dividend Redemption"), in shares of Common Stock legally available therefor,
at a redemption price equal to the higher of (x) the Liquidation Price per share
on the date fixed for redemption and (y) the Fair Market Value (as defined in
paragraph 9(H)(2)) of the number of shares of Common Stock into which each share
of ESOP Preferred Stock is convertible at the time the notice of such redemption
is given, plus in either case an amount equal to accrued (whether or not
accumulated) and unpaid dividends thereon to the date fixed for redemption (such
higher price on any date, together with such accrued and unpaid dividends, the
"Special Redemption Price"). At the election of the Corporation, such redemp-
tion may instead be made out of funds legally available therefor in cash or a
combination of Common Stock and cash. Any shares of Common Stock shall be valued
for the purposes of redemption pursuant to this paragraph (A) as provided by
paragraph (E) of Section 6. In the case of any Dividend Redemption, such holder
shall give the notice specified above on the fifth business day after the
related Dividend Payment Date and such redemption shall be effective as to such
number of shares of ESOP Preferred Stock as shall equal (x) the aggregate amount
of such Preferred Dividends paid with respect to shares of ESOP Preferred Stock
allocated or credited to the accounts of participants in the Plan or any
successor plan that are used to repay any loan associated with such allocated or
credited shares divided by (y) the Special Redemption Price specified above in
this paragraph (A).
(B) Unless otherwise provided by law, shares of ESOP Preferred
Stock shall be redeemed by the Corporation at the option of the holder, at any
time and from time to
21
time upon notice to the Corporation given not less than five business days prior
to the date fixed by the holder in such notice, upon certification by such
holder to the Corporation of the following events: (i) when and to the extent
necessary for such holder to make any payments of principal, interest or premium
due and payable (whether voluntary, scheduled, upon acceleration or otherwise)
upon any obligations of the trust established under the Plan in connection with
the acquisition of ESOP Preferred Stock or any indebtedness, expenses or costs
incurred by the holder for the benefit of the Plan; or (ii) when and if it shall
be established to the satisfaction of the holder that the Plan has not initially
been determined by the Internal Revenue Service to be qualified as a "stock
bonus plan" and an "employee stock ownership plan" within the meaning of Section
401(a) or 4975(e)(7) of the Code, respectively, in shares of Common Stock
legally available therefor, at a redemption price equal to the Liquidation Price
plus an amount equal to accrued and unpaid dividends thereon to the date fixed
for redemption. At the election of the Corporation, such redemption may instead
be made out of funds legally available therefor in cash or a combination of
Common Stock and cash. Any shares of Common Stock shall be valued for the
purposes of redemption pursuant to this paragraph (B) as provided by paragraph
(E) of Section 6.
8. Consolidation, Merger, etc.
---------------------------
(A) If the Corporation shall consummate any consolidation or merger
or similar transaction, however named, pursuant to which the outstanding shares
of Common Stock are by operation of law exchanged solely for or changed,
reclassified or converted solely into securities of any successor or resulting
company (including the Corpora tion) that constitute "qualifying employer
securities" with respect to a holder of ESOP Preferred Stock within the meanings
of Section 409(l) of the Code and Section 407(d)(5) of ERISA, or any successor
provision of law, and, if applicable, for a cash payment in lieu of fractional
shares, if any, then, in such event, the terms of such consolidation or merger
or similar transaction shall provide that the shares of ESOP Preferred Stock of
such holder shall be converted into or exchanged for and shall become preferred
securities of such successor or resulting company, having in respect of such
company insofar as possible (taking into account, without limitation, any
requirements relating to the listing of such preferred securities on any
national securities exchange or the qualification of such preferred securities
for trading in any over-the-counter market) the
22
same powers, preferences and relative, participating, optional or other special
rights (including the redemption rights provided by Sections 6, 7 and 8 hereof),
and the qualifications, limitations or restrictions thereon, that the ESOP
Preferred Stock had immediately prior to such transaction; provided, however,
that after such transaction each security into which the ESOP Preferred Stock is
so converted or for which it is exchanged shall be convertible, pursuant to the
terms and conditions provided by Section 5 hereof, into the number and kind of
qualifying employer securities receivable by a holder equivalent to the number
of shares of Common Stock into which such shares of ESOP Preferred Stock could
have been converted pursuant to Section 5 hereof immediately prior to such
transaction and provided further that if by virtue of the structure of such
transaction, a holder of Common Stock is required to make an election with
respect to the nature and kind of considera tion to be received in such
transaction, which election cannot practicably be made by the holders of the
ESOP Preferred Stock, then such election shall be deemed to be solely for
"qualifying employer securities" (together, if applicable, with a cash payment
in lieu of fractional shares) with the effect provided above on the basis of the
number and kind of qualifying employer securities receivable by a holder of the
number of shares of Common Stock into which the shares of ESOP Preferred Stock
could have been converted pursuant to Section 5 hereof immediately prior to such
transaction (it being understood that if the kind or amount of qualifying
employer securities receivable in respect of each share of Common Stock upon
such transaction is not the same for each such share, then the kind and amount
of qualifying employer securities deemed to be receivable in respect of each
share of Common Stock for purposes of this proviso shall be the kind and amount
so receivable per share of Common Stock by a plurality of such shares). The
rights of the ESOP Preferred Stock as preferred equity of such successor or
resulting company shall successively be subject to adjustments pursuant to
Section 9 hereof after any such transaction as nearly equivalent as practicable
to the adjustments provided for by such Section prior to such transaction. The
Corporation shall not consummate any such merger, consolidation or similar
transaction unless all the terms of this paragraph (A) are complied with.
(B) If the Corporation shall consummate any consolidation or merger
or similar transaction, however named, pursuant to which the outstanding shares
of Common Stock are by operation of law exchanged for or changed,
23
reclassified or converted into other shares or securities or cash or any other
property, or any combination thereof, other than any such consideration which is
constituted solely of qualifying employer securities that are common stock or
common equity (as referred to in paragraph (A) of this Section 8) and cash
payments, if applicable, in lieu of fractional shares or other interests,
outstanding shares of ESOP Preferred Stock shall, without any action on the part
of the Corporation or any holder thereof (but subject to paragraph (C) of this
Section 8), be automatically converted immediately prior to the consummation of
such merger, consolidation or similar transaction into shares of Common Stock at
the Conversion Price then in effect.
(C) If the Corporation shall enter into any agreement providing for
any consolidation or merger or similar transaction described in paragraph (B) of
this Section 8, then the Corporation shall as soon as practicable thereafter
(and in any event at least ten (10) business days before consummation of such
transaction) give notice of such agreement and the material terms thereof to
each holder of ESOP Preferred Stock and each such holder shall have the right to
elect, by written notice to the Corporation, to receive, upon consummation of
such transaction (if and when such transaction is consummated), out of funds
legally available therefor, from the Corporation or the successor of the
Corporation, in redemption of such ESOP Preferred Stock, in lieu of any cash or
other securities which such holder would otherwise be entitled to receive under
paragraph (B) of this Section 8, a cash payment equal to the Liquidation Price
per share on the date fixed for such transaction, plus an amount equal to
accrued (whether or not accumulated) and unpaid dividends thereon to the date
fixed for such transaction. No such notice of redemption shall be effective
unless given to the Corporation prior to the close of business of the fifth
business day prior to consummation of such transaction, unless the Corporation
or the successor of the Corporation shall waive such prior notice, but any
notice or redemption so given prior to such time may be withdrawn by notice of
withdrawal given to the Corporation prior to the close of business on the fifth
business day prior to consummation of such transaction.
9. Anti-dilution Adjustments.
--------------------------
(A)(1) In the event the Corporation shall, at any time or from time
to time while any of the shares of the ESOP Preferred Stock are outstanding, (i)
pay a dividend or make a distribution in respect of the Common Stock in shares
24
of Common Stock or (ii) subdivide the outstanding shares of Common Stock into a
greater number of shares, in each case whether by reclassification of shares,
recapitalization of the Corporation (excluding a recapitalization or reclass-
ification effected by a merger or consolidation to which Section 8 applies) or
otherwise, then, in such event, the Conversion Price shall, subject to the
provisions of paragraphs (E) and (F) of this Section 9, automatically be
adjusted by dividing such Conversion Price by a fraction (the "Section 9(A)
Fraction"), the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock outstanding immediately before such event.
Such adjustment to the Conversion Price shall be effective, upon payment of such
dividend or distribution in respect of the Common Stock, as of the record date
for the determination of stockholders entitled to receive such dividend or
distribution (on a retroactive basis), and in the case of a subdivision shall
become effective immediately as of the effective date thereof. An adjustment to
the Conversion Price pursuant to this Section 9(A)(1) shall have no effect on
the Liquidation Price or the Preferred Dividend Rate of the ESOP Preferred
Stock.
(2) In the event the Corporation shall, at any time or from time to
time while any of the shares of the ESOP Preferred Stock are outstanding,
combine the outstanding shares of Common Stock into a lesser number of
shares, whether by reclassification of shares, recapitalization of the
Corporation (excluding a recapitalization or reclassification effected by a
merger, consolidation or other transaction to which Section 8 applies) or
otherwise, then, in such event, the Conversion Price shall, subject to the
provisions of paragraph (F) of this Section 9, automatically be adjusted by
dividing the Conversion Price in effect immediately before such event by the
Section 9(A) Fraction. An adjustment to the Conversion Price made pursuant
to this paragraph 9(A)(2) shall be given effect immediately as of the
effective date of such combination and shall have no effect on the
Liquidation Price or the Preferred Dividend Rate of the ESOP Preferred
Stock.
(B) In the event the Corporation shall, at any time or from time to
time while any of the shares of ESOP Preferred Stock are outstanding, issue
to holders of shares of Common Stock as a dividend or distribu tion,
including by way of a reclassification of shares
25
or a recapitalization of the Corporation, any right or warrant to purchase
shares of Common Stock (but not including as a right or warrant for this
purpose any security convertible into or exchangeable for shares of Common
Stock) for a consideration having a Fair Market Value (as hereinafter
defined) per share less than the Fair Market Value of a share of Common
Stock on the date of issuance of such right or warrant (other than pursuant
to any employee or director incentive, compensation or benefit plan or
arrangement of the Corporation or any subsidiary of the Corporation
heretofore or hereafter adopted), then, in such event, the Conversion Price
shall, subject to the provisions of paragraphs (E) and (F) of this Sec-
tion 9, automatically be adjusted by dividing such Conversion Price by a
fraction (the "Section 9(B) Fraction"), the numerator of which is the number
of shares of Common Stock outstanding immediately before such issuance of
rights or warrants plus the maximum number of shares of Common Stock that
could be acquired upon exercise in full of all such rights and warrants and
the denominator of which is the number of shares of Common Stock
outstanding immediately before such issuance of warrants or rights plus the
number of shares of Common Stock that could be purchased at the Fair Market
Value of a share of Common Stock at the time of such issuance for the
maximum aggregate consideration payable upon exercise in full of all such
rights and warrants. Such adjustment to the Conversion Price shall be
effective upon such issuance of rights or warrants. An adjustment to the
Conversion Price pursuant to this Section 9(B) shall have no effect on the
Liquidation Price or the Preferred Dividend Rate of the ESOP Preferred
Stock.
(C)(1) In the event the Corporation shall, at any time or from time
to time while any of the shares of ESOP Preferred Stock are outstanding,
issue, sell or exchange shares of Common Stock (other than pursuant to (x)
any right or warrant to purchase or acquire shares of Common Stock
(including as such a right or warrant for this purpose any security
convertible into or exchangeable for shares of Common Stock) or (y) any
employee or director incentive, compensation or benefit plan or arrangement
of the Corporation or any subsidiary of the Corporation heretofore or
hereafter adopted) at a purchase price per share less than the Fair Market
Value of a share of Common Stock on the date of such issuance, sale or
exchange, then, in such
26
event, the Conversion Price shall, subject to the provisions of paragraphs
(E) and (F) of this Section 9, automatically be adjusted by dividing such
Conversion Price by a fraction (the "Section 9(C)(1) Fraction"), the
numerator of which is the number of shares of Common Stock outstanding
immediately before such issuance, sale or exchange plus the number of shares
of Common Stock so issued, sold or exchanged and the denominator of which is
the number of shares of Common Stock outstanding immediately before such
issuance, sale or exchange plus the number of shares of Common Stock that
could be purchased at the Fair Market Value of a share of Common Stock at
the time of such issuance, sale or exchange for the maximum aggregate
consideration paid therefor.
(2) In the event that the Corporation shall, at any time or from time
to time while any ESOP Preferred Stock is outstanding, issue, sell or
exchange any right or warrant to purchase or acquire shares of Common Stock
(including as such a right or warrant for this purpose any security
convertible into or exchangeable for shares of Common Stock other than
pursuant to any employee or director incentive, compensation or benefit plan
or arrangement of the Corporation or any subsidiary of the Corporation
heretofore or hereafter adopted) for a consideration having a Fair Market
Value, on the date of such issuance, sale or exchange, less than the Non-
Dilutive Amount (as hereinafter defined), then, in such event, the
Conversion Price shall, subject to the provisions of paragraphs (E) and (F)
of this Section 9, automatically be adjusted by dividing such Conversion
Price by a fraction (the "Section 9(C)(2) Fraction"), the numerator of which
is the number of shares of Common Stock outstanding immediately before such
issuance of rights or warrants plus the maximum number of shares of Common
Stock that could be acquired upon exercise in full of all such rights and
warrants and the denominator of which is the number of shares of Common
Stock outstanding immediately before such issuance of rights or warrants
plus the number of shares of Common Stock that could be purchased at the
Fair Market Value of a share of Common Stock at the time of such issuance
for the total of (x) the maximum aggregate consideration payable at the time
of the issuance, sale or exchange of such right or warrant and (y) the
maximum aggregate consideration payable upon exercise in full of all such
rights or warrants.
27
(3) An adjustment to the Conversion Price pursuant to this Section
9(C) shall be effective upon the effective date of any issuance, sale or
exchange described in paragraph (1) or (2) above. Any such adjustment shall
have no effect on the Liquidation Price or the Preferred Dividend Rate of
the ESOP Preferred Stock.
(D) In the event the Corporation shall, at any time or from time to
time while any of the shares of ESOP Preferred Stock are outstanding, make
an Extraordinary Distribution (as hereinafter defined) in respect of the
Common Stock, whether by dividend, distribution, reclassification of shares
or recapitalization of the Corporation (including capitalization or
reclassification effected by a merger or consolidation to which Section 8
does not apply) or effect a Pro Rata Repurchase (as hereinafter defined) of
Common Stock, then, in such event, the Conversion Price shall, subject to
the provisions of paragraphs (E) and (F) of this Section 9, automatically be
adjusted by dividing such Conversion Price by a fraction (the "Section 9(D)
Fraction"), the numerator of which is the product of (a) the number of
shares of Common Stock outstanding immediately before such Extraordinary
Distribution or Pro Rata Repurchase minus, in the case of a Pro Rata
Repurchase, the number of shares of Common Stock repurchased by the
Corporation multiplied by (b) the Fair Market Value of a share of Common
Stock on the day before the ex-dividend date with respect to an Extra-
ordinary Distribution that is paid in cash and on the distribution date with
respect to an Extraordinary Distribution that is paid other than in cash, or
on the applicable expiration date (including all extensions thereof) of any
tender offer that is a Pro Rata Repurchase or on the date of purchase with
respect to any Pro Rata Repurchase that is not a tender offer, as the case
may be, and the denominator of which is (i) the product of (x) the number of
shares of Common Stock outstanding immediately before such Extraordinary
Distribution or Pro Rata Repurchase multiplied by (y) the Fair Market Value
of a share of Common Stock on the day before the ex-dividend date with
respect to an Extraordinary Distribution that is paid in cash and on the
distribution date with respect to an Extraordinary Distribution that is paid
other than in cash, or on the applicable expiration date (including all
extensions thereof) of any tender offer that is a Pro Rata Repurchase, or on
the date of purchase with respect to
28
any Pro Rata Repurchase that is not a tender offer, as the case may be,
minus (ii) the Fair Market Value of the Extraordinary Distribution or the
aggregate purchase price of the Pro Rata Repurchase, as the case may be. The
Corporation shall send each holder of ESOP Preferred Stock (i) notice of its
intent to make any Extraordinary Distribution and (ii) notice of any offer
by the Corporation to make a Pro Rata Repurchase, in each case at the same
time as, or as soon as practicable after, such offer is first communicated
to holders of Common Stock or, in the case of an Extraordinary
Distribution, the announcement of a record date in accordance with the rules
of any stock exchange on which the Common Stock is listed or admitted to
trading. Such notice shall indicate the intended record date and the amount
and nature of such dividend or distribution, or the number of shares subject
to such offer for a Pro Rata Repurchase and the purchase price payable by
the Corporation pursuant to such offer, as well as the Conversion Price and
the number of shares of Common Stock into which a share of ESOP Preferred
Stock may be converted at such time. An adjustment to the Conversion Price
pursuant to this Section 9(D) shall be effective (i) in the case of an
Extraordinary Dividend as of the record date for the determination of
holders entitled to receive such Extraordinary Dividend (on a retroactive
basis) and (ii) in the case of a Pro Rata Repurchase upon the expiration
date thereof (if such Pro Rata Repurchase is a tender offer) or the
effective date thereof (if such Pro Rata Repurchase is not a tender offer).
Any such adjustment shall have no effect on the Liquidation Price or the
Preferred Dividend Rate of the ESOP Preferred Stock.
(E) The Board shall have the authority to determine that any
adjustment to the Conversion Price provided for in paragraph (A)(1), (B),
(C) or (D) of this Section 9 shall not be made (or if already made, to
determine that such adjustment shall be cancelled prospectively), and in
lieu thereof to declare a dividend in respect of the ESOP Preferred Stock in
shares of ESOP Preferred Stock (a "Special Dividend") in such a manner that
a holder of ESOP Preferred Stock will become a holder of that number of
shares of ESOP Preferred Stock equal to the product of the number of such
shares held prior to such event times the Section 9(A), Section 9(B),
Section 9(C)(1), Section 9(C)(2) or Section 9(D) Fraction, as appli-
29
cable. The declaration of such a Special Dividend shall be authorized, if at
all, by the Board no later than 30 calendar days following the authorization
by the Board (or by a committee duly authorized by the Board) of the
transaction or other event described in any of the foregoing paragraphs
(A)(1), (B), (C) or (D) that would otherwise result in an adjustment to the
Conversion Price being made pursuant to any such paragraphs, and if the
Board does not authorize the declaration of a Special Dividend by the end of
such 30-day period, then no such Special Dividend shall be declared and the
adjustment to the Conversion Price provided for in paragraph (A)(1), (B),
(C) or (D) of this Section 9 shall become final and binding on the
Corporation and all stockholders of the Corporation. Concurrently with the
declaration of any Special Dividend pursuant to this paragraph (E), the
Conversion Price, the Liquidation Price and the Preferred Dividend Rate of
all shares of ESOP Preferred Stock shall be adjusted by dividing the
Conversion Price, the Liquidation Price and the Preferred Dividend Rate,
respectively, in effect immediately before such event by the Section 9(A),
Section 9(B), Section 9(C)(1), Section 9(C)(2) or Section 9(D) Fraction, as
appli cable.
(F) Unless the Board determines otherwise, and notwithstanding any
other provision of this Section 9, any adjustment to the Conversion Price
provided for in any of paragraphs (A), (B), (C) or (D) of this Section 9
shall not be made unless such adjustment would require an increase or
decrease of at least one percent (1%) in the Conversion Price and,
similarly, the Board shall not declare any Special Dividend pursuant to
paragraph (E) of this Section 9 unless such Special Dividend or adjustment
would require an increase or decrease of at least one percent (1%) in the
number of shares of ESOP Preferred Stock outstanding. Any lesser adjustment
to the Conversion Price or Special Dividend shall be carried forward and
shall be made no later than the time of, and together with, the next
subsequent adjustment to the Conversion Price or Special Dividend which,
together with any adjustment or adjustments or Special Dividend or Dividends
so carried forward, shall amount to an increase or decrease of at least one
percent (1%) of the Conversion Price or an increase or decrease of at least
one percent (1%) in the number of shares of ESOP Preferred Stock
outstanding, whichever the case be.
30
(G) If the Corporation shall make any dividend or distribution on the
Common Stock or issue any Common Stock, other capital stock or other
security of the Corporation or any rights or warrants to purchase or acquire
any such security, which transaction does not result in an adjustment to the
Conversion Price or to the number of shares of ESOP Preferred Stock out-
standing pursuant to the foregoing provisions of this Section 9, the Board
may, in its sole discretion, consider whether such action is of such a
nature that some type of equitable adjustment should be made in respect of
such transaction. If in such case the Board determines that some type of
adjustment should be made, an adjustment shall be made effective as of such
date as determined by the Board. The determination of the Board as to
whether some type of adjustment should be made pursuant to the foregoing
provisions of this Section 9(G), and, if so, as to what adjustment should be
made and when, shall be final and binding on the Corporation and all
stockholders of the Corporation. The Corporation shall be entitled, but not
required, to make such additional adjustments, in addition to those required
by the foregoing provisions of this Section 9, as shall be necessary in
order that any dividend or distribution in shares of capital stock of the
Corporation, subdivision, reclassification or combination of shares of the
Corporation or any reclassification of the Corporation shall not be taxable
to holders of the Common Stock.
(H) For purposes hereof, the following definitions shall apply:
(1) "Extraordinary Distribution" shall mean any dividend or other
distribution to holders of Common Stock (effected while any of the shares of
ESOP Preferred Stock are outstanding) of (i) cash or (ii) any shares of capital
stock of the Corporation (other than shares of Common Stock), other securities
of the Corporation (other than securities of the type referred to in paragraph
(B) of this Section 9), evidences of indebtedness of the Corporation or any
other person or any other property (including shares of any subsidiary of the
Corporation), or any combination of the foregoing, where the aggregate amount of
such cash dividend or other distribution together with the amount of all cash
dividends and other distributions made during the preceding period of twelve
months, when combined with the aggregate amount of all Pro Rata Repurchases (for
this purpose, including only that portion of the aggregate
31
purchase price of such Pro Rata Repurchase that is in excess of the Fair Market
Value of the Common Stock repurchased as determined on the applicable expiration
date (including all extensions thereof) of any tender offer or exchange offer
that is a Pro Rata Repurchase, or the date of purchase with respect to any other
Pro Rata Repurchase that is not a tender offer or exchange offer) made during
such period, exceeds twelve and one-half percent (12-1/2%) of the aggregate Fair
Market Value of all shares of Common Stock outstanding on the day before the ex-
dividend date with respect to such Extraordinary Distribution that is paid in
cash and on the distribution date with respect to an Extraordinary Distribution
that is paid other than in cash. The Fair Market Value of an Extraordinary
Distribution for purposes of paragraph (D) of this Section 9 shall be the sum of
the Fair Market Value of such Extraordinary Distribution plus the aggregate
amount of any cash dividends or other distributions that are not Extraordinary
Distributions made during such twelve-month period and not previously included
in the calculation of an adjustment pursuant to paragraph (D) of this Sec-
tion 9, but shall exclude the aggregate amount of regular quarterly dividends
declared by the Board and paid by the Corporation in such twelve-month period.
(2) "Fair Market Value" shall mean, as to shares of Common Stock or
any other class of capital stock or securities of the Corporation or any other
issuer that are publicly traded, the average of the Current Market Prices (as
hereinafter defined) of such shares or securities for each day of the Adjustment
Period (as hereinafter defined). "Current Market Price" of publicly traded
shares of Common Stock or any other class of capital stock or other security of
the Corporation or any other issuer for a day shall mean the last reported sales
price, regular way, or, in case no sale takes place on such day, the average of
the reported closing bid and asked prices, regular way, in either case as
reported on the New York Stock Exchange Composite Tape or, if such security is
not listed or admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which such security is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") National Market System or, if such security is not
quoted on such National Market System, the average of the closing bid and asked
prices on such day in the over-the-counter market as reported by NASDAQ or, if
bid and asked prices for such security on such day shall not have been reported
through NASDAQ, the average of the bid and
32
asked prices for such day as furnished by any New York Stock Exchange member
firm regularly making a market in such security selected for such purpose by the
Board. "Adjustment Period" shall mean the period of five consecutive trading
days, selected by the Board during the twenty (20) trading days preceding, and
including, the date as of which the Fair Market Value of a security is to be
determined. The "Fair Market Value" of any security that is not publicly traded
or of any other property shall mean the fair value thereof as determined by an
independent investment banking or appraisal firm experienced in the valuation of
such securities or property selected in good faith by the Board, or, if no such
investment banking or appraisal firm is in the good faith judgment of the Board
available to make such determination, as determined in good faith by the Board.
(3) "Non-Dilutive Amount" in respect of an issuance, sale or exchange
by the Corporation of any right or warrant to purchase, or acquire shares of
Common Stock (including any security convertible into or exchangeable for shares
of Common Stock) shall mean the difference between (i) the product of the Fair
Market Value of a share of Common Stock on the day preceding the first public
announcement of such issuance, sale or exchange multiplied by the maximum number
of shares of Common Stock that could be acquired on such date upon the exercise
in full of such rights or warrants (including upon the conversion or exchange of
all such convertible or exchangeable securities), whether or not exercisable (or
convertible or exchangeable) at such date, and (ii) the aggregate amount payable
pursuant to such right or warrant to purchase or acquire such maximum number of
shares of Common Stock; provided, however, that in no event shall the Non-
Dilutive Amount be less than zero. For purposes of the foregoing sentence, in
the case of a security convertible into or exchangeable for shares of Common
Stock, the amount payable pursuant to a right or warrant to purchase or acquire
shares of Common Stock shall be the Fair Market Value of such security on the
date of the issuance, sale or exchange of such security by the Corporation.
(4) "Pro Rata Repurchase" shall mean any purchase of shares or Common
Stock by the Corporation or any subsidiary thereof, whether for cash, shares of
capital stock of the Corporation, other securities of the Corporation,
evidences of indebtedness of the Corporation or any other person or any other
property (including shares of a subsidiary of the Corporation), or any
combination thereof,
33
effected while any of the shares of ESOP Preferred Stock are outstanding,
pursuant to any tender offer or exchange offer subject to Section 13(e) of the
Exchange Act, or any successor provision of law, or pursuant to any other offer
available to substantially all holders of Common Stock; provided, however, that
no purchase of shares by the Corporation or any subsidiary thereof made in open
market transactions shall be deemed a Pro Rata Repurchase. For purposes of this
Section 9(H), shares shall be deemed to have been purchased by the Corporation
or any subsidiary thereof "in open market transactions" if they have been
purchased substantially in accordance with the requirements of Rule 10b-18 as in
effect under the Exchange Act on the date shares of ESOP Preferred Stock are
initially issued by the Corporation or on such other terms and conditions as the
Board shall have determined are reasonably designed to prevent such purchases
from having a material effect on the trading market for the Common Stock.
(I) Whenever an adjustment to the Conversion Price of the ESOP
Preferred Stock is required pursuant to this Section 9, the Corporation shall
forthwith place on file with the transfer agent for the Common Stock and the
ESOP Preferred Stock, if there be one, and with the Treasurer of the
Corporation, a statement signed by the Treasurer or any Assistant Treasurer of
the Corporation stating the adjusted Conversion Price determined as provided
herein. In addition, whenever a Special Dividend is declared pursuant to
paragraph (E) of this Section 9, (i) the maximum number of shares of ESOP
Preferred Stock shall be adjusted by multiplying 3,902,438 (or such other number
as shall be the maximum number of shares of ESOP Preferred Stock in effect prior
to the authorization of such Special Dividend) by the Section 9(A), Section
9(B), Section 9(C)(1), Section 9(C)(2) or Section 9(D) Fraction, as the case may
be, (ii) the Board shall take action as is necessary so that a sufficient number
of shares of ESOP Preferred Stock are designated with respect to any increase in
the number of shares of ESOP Preferred Stock to be outstanding as a result of
such Special Dividend and (iii) the Corporation shall forthwith place on file
with the transfer agent for the Common Stock and the ESOP Preferred Stock, if
there be one, and with the Treasurer of the Corporation, a statement signed by
the Treasurer or any Assistant Treasurer of the Corporation stating the adjusted
maximum number of shares of ESOP Preferred Stock, Conversion Price, Liquidation
Price and Preferred Dividend Rate determined as provided herein. The statement
required by either of the two preceding sentences shall set forth in
34
reasonable detail such facts as shall be necessary to show the reason and the
manner of computing such adjustments, including any determination of Fair Market
Value involved in such computation. Promptly after each adjustment to the
maximum number of shares of ESOP Preferred Stock, Conversion Price, the
Liquidation Price, the Preferred Dividend Rate, or the number of shares of ESOP
Preferred Stock outstanding, the Corporation shall mail a notice thereof and of
the then prevailing maximum number of shares of ESOP Preferred Stock, Conversion
Price, Liquidation Price, Preferred Dividend Rate and number of shares of ESOP
Preferred Stock outstanding to each holder of shares of ESOP Preferred Stock.
10. Miscellaneous.
--------------
(A) All notices referred to herein shall be in writing, and all
notices hereunder shall be deemed to have given upon the earlier of receipt
thereof of three (3) business days after the mailing thereof if sent by
registered mail (unless first-class mail shall be specifically permitted for
such notice under the terms hereof) with postage prepaid, addressed: (i) if to
the Corporation, to its office at Two World Trade Center, New York, New York
10048 (Attention: Secretary) or to the transfer agent for the ESOP Preferred
Stock, or other agent of the Corporation designated as permitted hereof or (ii)
if to any holder of the ESOP Preferred Stock or Common Stock, as the case may
be, to such holder at the address of such holder as listed in the stock record
books of the Corporation (which may include the records of any transfer agent
for Common Stock) or (iii) to such other address as the Corporation or any such
holder, as the case may be, shall have designated by notice similarly given.
(B) The term "Common Stock" as used herein means the Corporation's
Common Stock, par value $0.01 per share, as the same exists at the date of
filing of this Certificate of Designation pursuant to Section 151 of the General
Corporation Law of the State of Delaware, or any other class of stock resulting
from successive changes or reclassifications of such Common Stock consisting
solely of changes in par value, or par value to without par value, or from
without par value to par value. In the event that, at any time as a result of
an adjustment made pursuant to Section 9 hereof, the holder of any shares of the
ESOP Preferred Stock upon thereafter surrendering such shares for conversion
shall become entitled to receive any shares or other securities of the
Corporation other than shares of Common Stock, the anti-dilution provisions
contained in Section 9
35
hereof shall apply in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to Common Stock, and the provisions of Sections 1
through 8 and 10 hereof respect to the Common Stock shall apply on like or
similar terms to any such other shares or securities.
(C) The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance or
delivery of shares of ESOP Preferred Stock or shares of Common Stock or other
securities issued on account of ESOP Preferred Stock pursuant thereto or
certificates representing such shares or securities. The Corporation shall not,
however, be required to pay any such tax which may be payable in respect of any
transfer involved in the issuance or delivery of shares of ESOP Preferred Stock
or Common Stock or other securities in a name other than that in which the
shares of ESOP Preferred Stock with respect to which such shares or other
securities are issued or delivered were registered, or in respect of any payment
to any person with respect to any shares or securities other than a payment to
the registered holder thereof, and shall not be required to make any such
issuance, delivery or payment unless and until the person otherwise entitled to
such issuance, delivery or payment has paid to the Corporation the amount of any
such tax or has established, to the satisfaction of the Corporation, that such
tax has been paid or is not payable.
(D) In the event that a holder of shares of ESOP Preferred Stock
shall not by written notice designate the name in which shares of Common Stock
to be issued upon conversion or exchange of such shares should be registered or
to whom payment upon redemption of shares of ESOP Preferred Stock should be made
or the address to which the certificate or certificates representing such
shares, or such payment, should be sent, the Corporation shall be entitled to
register such shares, and make such payment, in the name of the holder of such
ESOP Preferred Stock as shown on the records of the Corporation and to send the
certificate or certificates or other documentation repre senting such shares, or
such payment, to the address of such other holder shown on the records of the
Corporation.
(E) The Corporation may appoint, and from time to time discharge and
change, a transfer agent for the ESOP Preferred Stock. Upon any such
appointment or discharge of a transfer agent, the Corporation, shall send notice
thereof by first-class mail, postage prepaid, to each holder of record of ESOP
Preferred Stock.
36
B. This Certificate of Designation shall not become effective until,
and shall become effective at, 12:01 a.m. on May 31, 1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused this
Certificate of Designation to be signed by Christine A. Edwards, its Executive
Vice President, General Counsel and Secretary, this 30th day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By: /s/ Christine A. Edwards
---------------------------
Name: Christine A. Edwards
Title: Executive Vice President,
General Counsel & Secretary
37
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
7-3/8% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
DEAN WITTER, DISCOVER & CO.
______________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
______________________________
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of Directors
(the "Board") of Dean Witter, Discover & Co., a Delaware corporation
(hereinafter called the "Corporation"), by unanimous vote thereof at a meeting
on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted to and vested in the
Board by provisions of the Amended and Restated Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), which
shall consist of 1,000,000 of the shares of Preferred Stock which the
Corporation has authority to issue, is authorized, and the Board hereby fixes
the powers, designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or restrictions
thereof, of the shares of such series (in addition to the powers, designations,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the Preferred Stock) as
follows:
1. Designation and Amount; Fractional Shares. The designation for such
------------------------------------------
series of the Preferred Stock authorized by this resolution shall be the
7-3/8%
38
Cumulative Preferred Stock, par value $0.01 per share, with a stated value of
$200.00 per share (the "Cumulative Preferred Stock"). The stated value per
share of Cumulative Preferred Stock shall not for any purpose be considered to
be a determination by the Board with respect to the capital and surplus of the
Corporation. The number of shares of Cumulative Preferred Stock shall be
1,000,000. The Cumulative Preferred Stock is issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative Preferred Stock will be
----------
entitled to receive, when, as and if declared by the Board or the Committee (as
hereinafter defined) out of assets of the Corporation legally available for
payment, cash dividends payable quarterly at the rate of 7-3/8% per annum.
Dividends on the Cumulative Preferred Stock, calculated as a percentage of the
stated value, will be payable quarterly on February 28, May 30, August 30 and
November 30 (each a "dividend payment date"). Dividends on shares of the
Cumulative Preferred Stock will be cumulative from the date of initial issuance
of such shares of Cumulative Preferred Stock. Dividends will be payable, in
arrears, to holders of record as they appear on the stock books of the
Corporation on such record dates, not more than 60 days nor less than 10 days
preceding the payment dates thereof, as shall be fixed by the Board or the
Committee. The amount of dividends payable for the initial dividend period or
any period shorter than a full dividend period shall be calculated on the basis
of a 360-day year of twelve 30-day months. No dividends may be declared or paid
or set apart for payment on any Parity Preferred Stock (as defined in paragraph
9(b) below) with regard to the payment of dividends unless there shall also be
or have been declared and paid or set apart for payment on the Cumulative
Preferred Stock, like dividends for all dividend payment periods of the
Cumulative Preferred Stock ending on or before the dividend payment date of such
Parity Preferred Stock, ratably in proportion to the respective amounts of
dividends (x) accumulated and unpaid or payable on such Parity Preferred Stock,
on the one hand, and (y) accumulated and unpaid through the dividend payment
period or periods of the Cumulative Preferred Stock next preceding such dividend
payment date, on the other hand. For the purposes of this Certificate of
Designation, the "Committee" shall mean any committee of the Board to whom the
Board, pursuant to Section 141(c) of the General Corporation Law of the State of
Delaware, delegates authority to
39
perform the functions of the Board set forth in this Certificate of Designation.
Except as set forth in the preceding sentence, unless full cumulative
dividends on the Cumulative Preferred Stock have been paid, no dividends (other
than in Common Stock of the Corporation) may be paid or declared and set aside
for payment or other distribution made upon the Common Stock or on any other
stock of the Corporation ranking junior to or on a parity with the Cumulative
Preferred Stock as to dividends, nor may any Common Stock or any other stock of
the Corporation ranking junior to or on a parity with the Cumulative Preferred
Stock as to dividends be redeemed, purchased or otherwise acquired for any
consideration (or any payment be made to or available for a sinking fund for the
redemption of any shares of such stock; provided, however, that any moneys
theretofore deposited in any sinking fund with respect to any Preferred Stock of
the Corporation in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund, regardless of whether at the
time of such application full cumulative dividends upon shares of the Cumulative
Preferred Stock outstanding to the last dividend payment date shall have been
paid or declared and set apart for payment) by the Corporation; provided that
any such junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Corporation ranking junior to the Cumulative
Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Cumulative Preferred Stock shall
-----------------------
rank, as to liquidation, dissolution or winding up of the Corporation, prior to
the shares of Common Stock and any other class of stock of the Corporation
ranking junior to the Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up of the Corporation, so that in the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, the holders of the Cumulative Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings, before any distribution
is made to holders of shares of Common Stock or any other such junior stock, an
amount equal to $200.00 per share (the "Liquidation Preference" of a share of
Cumulative Preferred Stock)
40
plus an amount equal to all dividends (whether or not earned or declared)
accrued and accumulated and unpaid on the shares of Cumulative Preferred Stock
to the date of final distribution. The holders of the Cumulative Preferred
Stock will not be entitled to receive the Liquidation Preference until the
liquidation preference of any other class of stock of the Corporation ranking
senior to the Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set aside therefor
sufficient to provide for payment) in full. After payment of the full amount of
the Liquidation Preference and such dividends, the holders of shares of
Cumulative Preferred Stock will not be entitled to any further participation in
any distribution of assets by the Corporation. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of shares of Parity Preferred
Stock shall be insufficient to pay in full the preferential amount aforesaid,
then such assets, or the proceeds thereof, shall be distributable among such
holders ratably in accordance with the respective amounts which would be payable
on such shares if all amounts payable thereon were paid in full. For the
purposes hereof, neither a consolidation or merger of the Corporation with or
into any other corporation, nor a merger of any other corporation with or into
the Corporation, nor a sale or transfer of all or any part of the Corporation's
assets for cash or securities shall be considered a liquidation, dissolution or
winding up of the Corporation.
4. Conversion. The Cumulative Preferred Stock is not convertible into
-----------
shares of any other class or series of stock of the Corporation.
5. Voting Rights. The holders of shares of Cumulative Preferred Stock
--------------
shall have no voting rights whatsoever, except for any voting rights to which
they may be entitled under the laws of the State of Delaware, and except as
follows:
(a) Whenever, at any time or times, dividends payable on the shares of
Cumulative Preferred Stock or on any Parity Preferred Stock with respect to
payment of dividends, shall be in arrears for an aggregate number of days
equal to six calendar quarters or more, whether or not consecutive, the
holders of the outstanding shares
41
of Cumulative Preferred Stock shall have the right, with holders of shares of
any one or more other class or series of stock upon which like voting rights
have been conferred and are exercisable (voting together as a class), to elect
two of the authorized number of members of the Board at the Corporation's next
annual meeting of stockholders and at each subsequent annual meeting of
stockholders until such arrearages have been paid or set apart for payment, at
which time such right shall terminate, except as herein or by law expressly
provided, subject to revesting in the event of each and every subsequent default
of the character above mentioned. Upon any termination of the right of the
holders of shares of Cumulative Preferred Stock as a class to vote for directors
as herein provided, the term of office of all directors then in office elected
by the holders of shares of Cumulative Preferred Stock shall terminate
immediately.
Any director who shall have been so elected pursuant to this paragraph may be
removed at any time, either with or without cause. Any vacancy thereby created
may be filled only by the affirmative vote of the holders of shares of
Cumulative Preferred Stock voting separately as a class (together with the
holders of shares of any other class or series of stock upon which like voting
rights have been conferred and are exercisable). If the office of any director
elected by the holders of shares of Cumulative Preferred Stock voting as a class
becomes vacant for any reason other than removal from office as aforesaid, the
remaining director elected pursuant to this paragraph may choose a successor who
shall hold office for the unexpired term in respect of which such vacancy
occurred. At elections for such directors, each holder of shares of Cumulative
Preferred Stock shall be entitled to one vote for each share held (the holders
of shares of any other class or series of preferred stock having like voting
rights being entitled to such number of votes, if any, for each share of such
stock held as may be granted to them).
(b) So long as any shares of Cumulative Preferred Stock remain
outstanding, the consent of the holders of at least two-thirds of the shares of
Cumulative Preferred Stock outstanding at the
42
time and all other classes or series of stock upon which like voting rights have
been conferred and are exercisable (voting together as a class) given in person
or by proxy, either in writing or at any meeting called for the purpose, shall
be necessary to permit, effect or validate any one or more of the following:
(i) the issuance or increase of the authorized amount of any class or
series of shares ranking prior (as that term is defined in paragraph 9(a)
hereof) to the shares of the Cumulative Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by merger, consolidation
or otherwise, of any of the provisions of the Certificate of Incorporation
(including this resolution or any provision hereof) that would materially and
adversely affect any power, preference, or special right of the shares of
Cumulative Preferred Stock or of the holders thereof; provided, however, that
any increase in the amount of authorized Common Stock or authorized Preferred
Stock or any increase or decrease in the number of shares of any series of
Preferred Stock or the creation and issuance of other series of Common Stock
or Preferred Stock, in each case ranking on a parity with or junior to the
shares of Cumulative Preferred Stock with respect to the payment of dividends
and the distribution of assets upon liquidation, dissolution or winding up,
shall not be deemed to materially and adversely affect such powers,
preferences or special rights.
(c) The foregoing voting provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Cumulative Preferred Stock shall
have been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
6. Redemption. The shares of the Cumulative Preferred Stock may be
-----------
redeemed at the option of the Corporation, as a whole, or from time to time in
part, at any time, upon not less than 30 days'
43
prior notice mailed to the holders of the shares to be redeemed at their
addresses as shown on the stock books of the Corporation; provided, however,
that shares of the Cumulative Preferred Stock shall not be redeemable prior to
August 30, 1998. Subject to the foregoing, on or after such date, shares of the
Cumulative Preferred Stock are redeemable at $200.00 per share together with an
amount equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative Preferred Stock have not
been paid, the Cumulative Preferred Stock may not be redeemed in part and the
Corporation may not purchase or acquire any shares of the Cumulative Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of the Cumulative Preferred Stock. If fewer than all the
outstanding shares of Cumulative Preferred Stock are to be redeemed, the
Corporation will select those to be redeemed by lot or a substantially
equivalent method.
If a notice of redemption has been given pursuant to this paragraph 6 and
if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
of Cumulative Preferred Stock so called for redemption, then, notwithstanding
that any certificates for such shares have not been surrendered for cancelation,
on the redemption date dividends shall cease to accrue on the shares to be
redeemed, and at the close of business on the redemption date the holders of
such shares shall cease to be stockholders with respect to such shares and shall
have no interest in or claims against the Corporation by virtue thereof and
shall have no voting or other rights with respect to such shares, except the
right to receive the moneys payable upon surrender (and endorsement, if required
by the Corporation) of their certificates, and the shares evidenced thereby
shall no longer be outstanding. Subject to applicable escheat laws, any moneys
so set aside
44
by the Corporation and unclaimed at the end of two years from the redemption
date shall revert to the general funds of the Corporation, after which reversion
the holders of such shares so called for redemption shall look only to the
general funds of the Corporation for the payment of the amounts payable upon
such redemption. Any interest accrued on funds so deposited shall be paid to
the Corporation from time to time.
7. Authorization and Issuance of Other Securities. No consent of the
-----------------------------------------------
holders of the Cumulative Preferred Stock shall be required for (a) the creation
of any indebtedness of any kind of the Corporation, (b) the creation, or
increase or decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon liquidation, dissolution
or winding up to the Cumulative Preferred Stock or (c) any increase or decrease
in the amount of authorized Common Stock or any increase, decrease or change in
the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the Committee each reserves the
------------------------
right by subsequent amendment of this resolution from time to time to increase
or decrease the number of shares that constitute the Cumulative Preferred Stock
(but not below the number of shares thereof then outstanding) and in other
respects to amend this resolution within the limitations provided by law, this
resolution and the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock of any class or
-----
classes of the Corporation shall be deemed to rank:
(a) prior to shares of the Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if the
holders of stock of such class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of shares of the Cumulative Preferred Stock;
45
(b) on a parity with shares of the Cumulative Preferred Stock,
either as to dividends or upon liquidation, dissolution or winding up,
or both, whether or not the dividend rates, dividend payment dates, or
redemption or liquidation prices per share thereof be different from
those of the Cumulative Preferred Stock, if the holders of stock of such
class or classes shall be entitled by the terms thereof to the receipt
of dividends or of amounts distributed upon liquidation, dissolution or
winding up, as the case may be, in proportion to their respective
dividend rates or liquidation prices, without preference or priority of
one over the other as between the holders of such stock and the holders
of shares of Cumulative Preferred Stock (the term "Parity Preferred
Stock" being used to refer to any stock on a parity with the shares of
Cumulative Preferred Stock, either as to dividends or upon liquidation,
dissolution or winding up, or both, as the context may require); and
(c) junior to shares of the Cumulative Preferred Stock, either
as to dividends or upon liquidation, dissolution or winding up, or both,
if such class shall be Common Stock or if the holders of the Cumulative
Preferred Stock shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as
the case may be, in preference or priority to the holders of stock of
such class or classes.
The Cumulative Preferred Stock shall rank prior, as to dividends and upon
liquidation, dissolution or winding up, to the Common Stock and the
Corporation's Series A Junior Participating Preferred Stock, and on a parity
with (i) the Corporation's ESOP Convertible Preferred Stock, with a
liquidation value of $35.88 per share, (ii) the Corporation's 7-3/4%
Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(iii) the Corporation's Series A Fixed/Adjustable Rate Preferred Stock, with a
liquidation value of $200.00 per share,(iv) if issued, the Corporation's 7.82%
Cumulative Preferred Stock, with a liquidation value of
46
$200.00 per share, (v) if issued, the Corporation's 7.80% Cumulative
Preferred Stock, with a liquidation value of $200.00 per share, (vi) if
issued, the Corporation's 9.00% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vii) if issued, the Corporation's
8.40% Cumulative Preferred Stock, with a liquidation value of $200.00 per
share, (viii) if issued, the Corporation's 8.20% Cumulative Preferred
Stock, with a liquidation value of $200.00 per share and (ix) if issued,
the Corporation's 8.03% Cumulative Preferred Stock, with a liquidation
value of $200.00 per share.
47
B. This Certificate of Designation shall not become effective until, and
shall become effective at, 12:01 a.m. on May 31, 1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused this Certificate
of Designation to be signed by Christine A. Edwards, its Executive Vice
President, General Counsel and Secretary, this 30th day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By: /s/ Christine A. Edwards
----------------------------
Name: Christine A. Edwards
Title: Executive Vice President,
General Counsel & Secretary
48
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
7.82% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
DEAN WITTER, DISCOVER & CO.
------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of Directors
(the "Board") of Dean Witter, Discover & Co., a Delaware corporation
(hereinafter called the "Corporation"), by unanimous vote thereof at a meeting
on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted to and vested in the
Board by provisions of the Amended and Restated Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), which
shall consist of 611,238 of the shares of Preferred Stock which the Corporation
has authority to issue, is authorized, and the Board hereby fixes the powers,
designations, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the
shares of such series (in addition to the powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the Preferred Stock) as
follows:
1. Designation and Amount; Fractional Shares. The designation for such
------------------------------------------
series of the Preferred Stock authorized by this resolution shall be the
7.82% Cumulative Preferred Stock, par value $0.01 per share, with a stated
value of $200.00 per share (the
49
"Cumulative Preferred Stock"). The stated value per share of Cumulative
Preferred Stock shall not for any purpose be considered to be a determination by
the Board with respect to the capital and surplus of the Corporation. The
maximum number of shares of Cumulative Preferred Stock shall be 611,238. The
Cumulative Preferred Stock is issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative Preferred Stock will be
----------
entitled to receive, when, as and if declared by the Board or the Committee (as
hereinafter defined) out of assets of the Corporation legally available for
payment, cash dividends payable quarterly at the rate of 7.82% per annum.
Dividends on the Cumulative Preferred Stock will be payable quarterly on
February 28, May 30, August 30 and November 30 (each a "dividend payment date").
Dividends on shares of the Cumulative Preferred Stock will be cumulative from
the date of initial issuance of such shares of Cumulative Preferred Stock.
Dividends will be payable, in arrears, to holders of record as they appear on
the stock books of the Corporation on such record dates, not more than 60 days
nor less than 10 days preceding the payment dates thereof, as shall be fixed by
the Board or the Committee. The amount of dividends payable for the initial
dividend period or any period shorter than a full dividend period shall be
calculated on the basis of a 360-day year of twelve 30-day months. No dividends
may be declared or paid or set apart for payment on any Parity Preferred Stock
(as defined in paragraph 9(b) below) with regard to the payment of dividends
unless there shall also be or have been declared and paid or set apart for
payment on the Cumulative Preferred Stock, like dividends for all dividend
payment periods of the Cumulative Preferred Stock ending on or before the
dividend payment date of such Parity Preferred Stock, ratably in proportion to
the respective amounts of dividends (x) accumulated and unpaid or payable on
such Parity Preferred Stock, on the one hand, and (y) accumulated and unpaid
through the dividend payment period or periods of the Cumulative Preferred Stock
next preceding such dividend payment date, on the other hand. For the purposes
of this Certificate of Designation, the "Committee" shall mean any committee of
the Board to whom the Board, pursuant to Section 141(c) of the General
Corporation Law of the State of Delaware, delegates authority to perform the
functions of the Board set forth in this Certificate of Designation.
50
Except as set forth in the preceding sentence, unless full cumulative
dividends on the Cumulative Preferred Stock have been paid, no dividends (other
than in Common Stock of the Corporation) may be paid or declared and set aside
for payment or other distribution made upon the Common Stock or on any other
stock of the Corporation ranking junior to or on a parity with the Cumulative
Preferred Stock as to dividends, nor may any Common Stock or any other stock of
the Corporation ranking junior to or on a parity with the Cumulative Preferred
Stock as to dividends be redeemed, purchased or otherwise acquired for any
consideration (or any payment be made to or available for a sinking fund for the
redemption of any shares of such stock; provided, however, that any moneys
theretofore deposited in any sinking fund with respect to any Preferred Stock of
the Corporation in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund, regardless of whether at the
time of such application full cumulative dividends upon shares of the Cumulative
Preferred Stock outstanding to the last dividend payment date shall have been
paid or declared and set apart for payment) by the Corporation; provided, that
any such junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Corporation ranking junior to the Cumulative
Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Cumulative Preferred Stock shall
-----------------------
rank, as to liquidation, dissolution or winding up of the Corporation, prior to
the shares of Common Stock and any other class of stock of the Corporation
ranking junior to the Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up of the Corporation, so that in the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary of
involuntary, the holders of the Cumulative Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings, before any distribution
is made to holders of shares of Common Stock or any other such junior stock, an
amount equal to $200.00 per share (the "Liquidation Preference" of a share of
Cumulative Preferred Stock) plus an amount equal to all dividends (whether or
not earned or declared) accrued and accumulated and unpaid on the shares of
Cumulative Preferred Stock to the date
51
of final distribution. The holders of the Cumulative Preferred Stock will not
be entitled to receive the Liquidation Preference until the liquidation
preference of any other class of stock of the Corporation ranking senior to the
Cumulative Preferred Stock as to rights upon liquidation, dissolution or winding
up shall have been paid (or a sum set aside therefor sufficient to provide for
payment) in full. After payment of the full amount of the Liquidation
Preference and such dividends, the holders of shares of Cumulative Preferred
Stock will not be entitled to any further participation in any distribution of
assets by the Corporation. If, upon any liquidation, dissolution or winding up
of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of shares of Parity Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid, then such assets,
or the proceeds thereof, shall be distributable among such holders ratably in
accordance with the respective amounts which would be payable on such shares if
all amounts payable thereon were paid in full. For the purposes hereof, neither
a consolidation or merger of the Corporation with or into any other corporation,
nor a merger of any other corporation with or into the Corporation, nor a sale
or transfer of all or any part of the Corporation's assets for cash or
securities shall be considered a liquidation, dissolution or winding up of the
Corporation.
4. Conversion. The Cumulative Preferred Stock is not convertible into
-----------
shares of any other class or series of stock of the Corporation.
5. Voting Rights. The holders of shares of Cumulative Preferred Stock
--------------
shall have no voting rights whatsoever, except for any voting rights to which
they may be entitled under the laws of the State of Delaware, and except as
follows:
(a) Whenever, at any time or times, dividends payable on the
shares of Cumulative Preferred Stock or on any Parity Preferred Stock
with respect to payment of dividends, shall be in arrears for an
aggregate number of days equal to six calendar quarters or more, whether
or not consecutive, the holders of the outstanding shares of Cumulative
Preferred Stock shall have the right, with holders of shares of any one
or more other class or series of stock upon which like
52
voting rights have been conferred and are exercisable (voting together as a
class), to elect two of the authorized number of members of the Board at the
Corporation's next annual meeting of stockholders and at each subsequent annual
meeting of stockholders until such arrearages have been paid or set apart for
payment, at which time such right shall terminate, except as herein or by law
expressly provided, subject to revesting in the event of each and every
subsequent default of the character above mentioned. Upon any termination of
the right of the holders of shares of Cumulative Preferred Stock as a class to
vote for directors as herein provided, the term of office of all directors then
in office elected by the holders of shares of Cumulative Preferred Stock shall
terminate immediately.
Any director who shall have been so elected pursuant to this paragraph may
be removed at any time, either with or without cause. Any vacancy thereby
created may be filled only by the affirmative vote of the holders of shares of
Cumulative Preferred Stock voting separately as a class (together with the
holders of shares of any other class or series of stock upon which like voting
rights have been conferred and are exercisable). If the office of any director
elected by the holders of shares of Cumulative Preferred Stock voting as a class
becomes vacant for any reason other than removal from office as aforesaid, the
remaining director elected pursuant to this paragraph may choose a successor who
shall hold office for the unexpired term in respect of which such vacancy
occurred. At elections for such directors, each holder of shares of Cumulative
Preferred Stock shall be entitled to one vote for each share held (the holders
of shares of any other class or series of preferred stock having like voting
rights being entitled to such number of votes, if any, for each share of such
stock held as may be granted to them).
(b) So long as any shares of Cumulative Preferred Stock remain
outstanding, the consent of the holders of at least two-thirds of the shares of
Cumulative Preferred Stock outstanding at the time and all other classes or
series of stock upon which like voting rights have been conferred and are
exercisable (voting together as a class) given
53
in person or by proxy, either in writing or at any meeting called for the
purpose, shall be necessary to permit, effect or validate any one or more of the
following:
(i) the issuance or increase of the authorized amount of any
class or series of shares ranking prior (as that term is defined in
paragraph 9(a) hereof) to the shares of the Cumulative Preferred Stock;
or
(ii) the amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the Certificate
of Incorporation (including this resolution or any provision hereof)
that would materially and adversely affect any power, preference, or
special right of the shares of Cumulative Preferred Stock or of the
holders thereof; provided, however, that any increase in the amount of
authorized Common Stock or authorized Preferred Stock or any increase or
decrease in the number of shares of any series of Preferred Stock or the
creation and issuance of other series of Common Stock or Preferred
Stock, in each case ranking on a parity with or junior to the shares of
Cumulative Preferred Stock with respect to the payment of dividends and
the distribution of assets upon liquidation, dissolution or winding up,
shall not be deemed to materially and adversely affect such powers,
preferences or special rights.
(c) The foregoing voting provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Cumulative Preferred Stock shall
have been redeemed or called for redemption and sufficient funds shall have
been deposited in trust to effect such redemption.
6. Redemption. The shares of the Cumulative Preferred Stock may be
-----------
redeemed at the option of the Corporation, as a whole, or from time to time in
part, at any time, upon not less than 30 days' prior notice mailed to the
holders of the shares to be redeemed at their addresses as shown on the stock
books of the Corporation; provided, however, that shares of the
54
Cumulative Preferred Stock shall not be redeemable prior to November 30, 1998.
Subject to the foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $200.00 per share together with an amount
equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative Preferred Stock have not
been paid, the Cumulative Preferred Stock may not redeemed in part and the
Corporation may not purchase or acquire any shares of the Cumulative Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of the Cumulative Preferred Stock. If fewer than all the
outstanding shares of Cumulative Preferred Stock are to be redeemed, the
Corporation will select those to be redeemed by lot or a substantially
equivalent method.
If a notice of redemption has been given pursuant to this paragraph 6 and
if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
of Cumulative Preferred Stock so called for redemption, then, notwithstanding
that any certificates for such shares have not been surrendered for cancelation,
on the redemption date dividends shall cease to accrue on the shares to be
redeemed, and at the close of business on the redemption date the holders of
such shares shall cease to be stockholders with respect to such shares and shall
have no interest in or claims against the Corporation by virtue thereof and
shall have no voting or other rights with respect to such shares, except the
right to receive the moneys payable upon surrender (and endorsement, if required
by the Corporation) of their certificates, and the shares evidenced thereby
shall no longer be outstanding. Subject to applicable escheat laws, any moneys
so set aside by the Corporation and unclaimed at the end of two years from the
redemption date shall revert to the general funds of the Corporation, after
which reversion the holders of such shares so called for redemption shall look
only to the general funds of the Corporation for the payment of the amounts
payable upon such redemption. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
55
7. Authorization and Issuance of Other Securities. No consent of the
-----------------------------------------------
holders of the Cumulative Preferred Stock shall be required for (a) the creation
of any indebtedness of any kind of the Corporation, (b) the creation, or
increase or decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon liquidation, dissolution
or winding up to the Cumulative Preferred Stock or (c) any increase or decrease
in the amount of authorized Common Stock or any increase, decrease or change in
the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the Committee each reserves the
------------------------
right by subsequent amendment of this resolution from time to time to increase
or decrease the number of shares that constitute the Cumulative Preferred Stock
(but not below the number of shares thereof then outstanding) and in other
respects to amend this resolution within the limitations provided by law, this
resolution and the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock of any class or
-----
classes of the Corporation shall be deemed to rank:
(a) prior to shares of the Cumulative Preferred Stock, either as
to dividends or upon liquidation, dissolution or winding up, or both, if
the holders of stock of such class or classes shall be entitled by the
terms thereof to the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of shares of the Cumulative
Preferred Stock;
(b) on a parity with shares of the Cumulative Preferred Stock,
either as to dividends or upon liquidation, dissolution or winding up,
or both, whether or not the dividend rates, dividend payment dates, or
redemption or liquidation prices per share thereof be different from
those of the Cumulative Preferred Stock, if the holders of stock of such
class or classes shall be entitled by the terms thereof to the receipt
of dividends or of amounts distributed upon liquidation, dissolution or
winding up, as the case may be, in proportion to their respective
dividend rates or
56
liquidation prices, without preference or priority of one over the other
as between the holders of such stock and the holders of shares of
Cumulative Preferred Stock (the term "Parity Preferred Stock" being used
to refer to any stock on a parity with the shares of Cumulative
Preferred Stock, either as to dividends or upon liquidation, dissolution
or winding up, or both, as the context may require); and
(c) junior to shares of the Cumulative Preferred Stock, either
as to dividends or upon liquidation, dissolution or winding up, or both,
if such class shall be Common Stock or if the holders of the Cumulative
Preferred Stock shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as
the case may be, in preference or priority to the holders of stock of
such class or classes.
The Cumulative Preferred Stock shall rank prior, as to dividends and upon
liquidation, dissolution or winding up, to the Common Stock and the
Corporation's Series A Junior Participating Preferred Stock, and on a parity
with (i) the Corporation's ESOP Convertible Preferred Stock, with a liquidation
value of $35.88 per share, (ii) the Corporation's 7-3/8% Cumulative Preferred
Stock, with a liquidation value of $200.00 per share, (iii) the Corporation's
7-3/4% Cumulative Preferred Stock, with a liquidation value of $200.00 per
share, (iv) the Corporation's Series A Fixed/Adjustable Rate Preferred Stock,
with a liquidation value of $200.00 per share, (v) if issued, the Corporation's
7.80% Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(vi) if issued, the Corporation's 9.00% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vii) if issued, the Corporation's 8.40%
Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(viii) if issued, the Corporation's 8.20% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share and (ix) if issued, the Corporation's
8.03% Cumulative Preferred Stock, with a liquidation value of $200.00 per share.
57
B. This Certificate of Designation shall not become effective until, and
shall become effective at, 12:01 a.m. on May 31, 1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused this Certificate
of Designation to be signed by Christine A. Edwards, its Executive Vice
President, General Counsel and Secretary, this 30th day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By:/s/ Christine A. Edwards
----------------------------
Name: Christine A. Edwards
Title: Executive Vice President,
General Counsel & Secretary
58
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
7.80% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
DEAN WITTER, DISCOVER & CO.
---------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
---------------------------
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of Directors
(the "Board") of Dean Witter, Discover & Co., a Delaware corporation
(hereinafter called the "Corporation"), by unanimous vote thereof at a meeting
on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted to and vested in the
Board by provisions of the Amended and Restated Certificate of Incorporation
(the "Certificate of Incorporation"), the issuance of a series of Preferred
Stock, par value $0.01 per share (the "Preferred Stock"), which shall consist of
1,150,000 of the shares of Preferred Stock which the Corporation has authority
to issue, is authorized, and the Board hereby fixes the powers, designations,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, of the shares of such
series (in addition to the powers, designations, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, set forth in the Certificate of
Incorporation which may be applicable to the Preferred Stock) as follows:
1. Designation and Amount; Fractional Shares. The designation for such
------------------------------------------
series of the Preferred Stock authorized by this resolution shall be the 7.80%
Cumulative Preferred Stock, par value $0.01 per share, with a stated value of
$200.00 per share (the "Cumulative Preferred Stock"). The stated value per
59
share of Cumulative Preferred Stock shall not for any purpose be considered to
be a determination by the Board with respect to the capital and surplus of the
Corporation. The maximum number of shares of Cumulative Preferred Stock shall
be 1,150,000. The Cumulative Preferred Stock is issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative Preferred Stock will be
----------
entitled to receive, when, as and if declared by the Board or the Committee (as
hereinafter defined) out of assets of the Corporation legally available for
payment, cash dividends payable quarterly at the rate of 7.80% per annum.
Dividends on the Cumulative Preferred Stock will be payable quarterly on
February 28, May 30, August 30 and November 30 (each a "dividend payment date").
Dividends on shares of the Cumulative Preferred Stock will be cumulative from
the date of initial issuance of such shares of Cumulative Preferred Stock.
Dividends will be payable, in arrears, to holders of record as they appear on
the stock books of the Corporation on such record dates, not more than 60 days
nor less than 10 days preceding the payment dates thereof, as shall be fixed by
the Board or the Committee. The amount of dividends payable for the initial
dividend period or any period shorter than a full dividend period shall be
calculated on the basis of a 360-day year of twelve 30-day months. No dividends
may be declared or paid or set apart for payment on any Parity Preferred Stock
(as defined in paragraph 9(b) below) with regard to the payment of dividends
unless there shall also be or have been declared and paid or set apart for
payment on the Cumulative Preferred Stock, like dividends for all dividend
payment periods of the Cumulative Preferred Stock ending on or before the
dividend payment date of such Parity Preferred Stock, ratably in proportion to
the respective amounts of dividends (x) accumulated and unpaid or payable on
such Parity Preferred Stock, on the one hand, and (y) accumulated and unpaid
through the dividend payment period or periods of the Cumulative Preferred Stock
next preceding such dividend payment date, on the other hand. For the purposes
of this Certificate of Designation, the "Committee" shall mean any committee of
the Board to whom the Board, pursuant to Section 141(c) of the General
Corporation Law of the State of Delaware, delegates authority to perform the
functions of the Board forth in this Certificate of Designation.
60
Except as set forth in the preceding sentence, unless full cumulative
dividends on the Cumulative Preferred Stock have been paid, no dividends (other
than in Common Stock of the Corporation) may be paid or declared and set aside
for payment or other distribution made upon the Common Stock or on any other
stock of the Corporation ranking junior to or on a parity with the Cumulative
Preferred Stock as to dividends, nor may any Common Stock or any other stock of
the Corporation ranking junior to or on a parity with the Cumulative Preferred
Stock as to dividends be redeemed, purchased or otherwise acquired for any
consideration (or any payment be made to or available for a sinking fund for the
redemption of any shares of such stock; provided, however, that any moneys
theretofore deposited in any sinking fund with respect to any Preferred Stock of
the Corporation in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund, regardless of whether at the
time of such application full cumulative dividends upon shares of the Cumulative
Preferred Stock outstanding to the last dividend payment date shall have been
paid or declared and set apart for payment) by the Corporation; provided that
any such junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Corporation ranking junior to the Cumulative
Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Cumulative Preferred Stock
-----------------------
shall rank, as to liquidation, dissolution or winding up of the Corporation,
prior to the shares of Common Stock and any other class of stock of the
Corporation ranking junior to the Cumulative Preferred Stock as to rights upon
liquidation, dissolution or winding up of the Corporation, so that in the event
of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the Cumulative Preferred Stock shall be
entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of Common Stock or any
other such junior stock, an amount equal to $200.00 per share (the "Liquidation
Preference" of a share of Cumulative Preferred Stock) plus an amount equal to
all dividends (whether or not earned or declared) accrued and accumulated and
unpaid on the shares of Cumulative Preferred Stock to the date
61
of final distribution. The holders of the Cumulative Preferred Stock will not
be entitled to receive the Liquidation Preference until the liquidation
preference of any other class of stock of the Corporation ranking senior to the
Cumulative Preferred Stock as to rights upon liquidation, dissolution or winding
up shall have been paid (or a sum set aside therefor sufficient to provide for
payment) in full. After payment of the full amount of the Liquidation
Preference and such dividends, the holders of shares of Cumulative Preferred
Stock will not be entitled to any further participation in any distribution of
assets by the Corporation. If, upon any liquidation, dissolution or winding up
of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of shares of Parity Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid, then such assets,
or the proceeds thereof, shall be distributable among such holders ratably in
accordance with the respective amounts which would be payable on such shares if
all amounts payable thereon were paid in full. For the purposes hereof, neither
a consolidation or merger of the Corporation with or into any other corporation,
nor a merger of any other corporation with or into the Corporation, nor a sale
or transfer of all or any part of the Corporation's assets for cash or
securities shall be considered a liquidation, dissolution or winding up of the
Corporation.
4. Conversion. The Cumulative Preferred Stock is not convertible into
-----------
shares of any other class or series of stock of the Corporation.
5. Voting Rights. The holders of shares of Cumulative Preferred Stock
--------------
shall have no voting rights whatsoever, except for any voting rights to which
they may be entitled under the laws of the State of Delaware, and except as
follows:
(a) Whenever, at any time or times, dividends payable on the shares of
Cumulative Preferred Stock or on any Parity Preferred Stock with respect to
payment of dividends, shall be in arrears for an aggregate number of days
equal to six calendar quarters or more, whether or not consecutive, the
holders of the outstanding shares of Cumulative Preferred Stock shall have
the right, with holders of shares of any one or more other class or series of
stock upon which like
62
voting rights have been conferred and are exercisable (voting together as a
class), to elect two of the authorized number of members of the Board at the
Corporation's next annual meeting of stockholders and at each subsequent annual
meeting of stockholders until such arrearages have been paid or set apart for
payment, at which time such right shall terminate, except as herein or by law
expressly provided, subject to revesting in the event of each and every
subsequent default of the character above mentioned. Upon any termination of
the right of the holders of shares of Cumulative Preferred Stock as a class to
vote for directors as herein provided, the term of office of all directors then
in office elected by the holders of shares of Cumulative Preferred Stock shall
terminate immediately.
Any director who shall have been so elected pursuant to this paragraph may be
removed at any time, either with or without cause. Any vacancy thereby created
may be filled only by the affirmative vote of the holders of shares of
Cumulative Preferred Stock voting separately as a class (together with the
holders of shares of any other class or series of stock upon which like voting
rights have been conferred and are exercisable). If the office of any director
elected by the holders of shares of Cumulative Preferred Stock voting as a class
becomes vacant for any reason other than removal from office as aforesaid, the
remaining director elected pursuant to this paragraph may choose a successor who
shall hold office for the unexpired term in respect of which such vacancy
occurred. At elections for such directors, each holder of shares of Cumulative
Preferred Stock shall be entitled to one vote for each share held (the holders
of shares of any other class or series of preferred stock having like voting
rights being entitled to such number of votes, if any, for each share of such
stock held as may be granted to them).
(b) So long as any shares of Cumulative Preferred Stock remain
outstanding, the consent of the holders of at least two-thirds of the shares of
the Cumulative Preferred Stock outstanding at the time and all other classes or
series of stock upon which like voting rights have been conferred and are
exercisable (voting together as a class)
63
given in person or by proxy, either in writing or at any meeting called for the
purpose, shall be necessary to permit, effect or validate any one or more of the
following:
(i) the issuance or increase of the authorized amount of any class or
series of shares ranking prior (as that term is defined in paragraph 9(a)
hereof) to the shares of the Cumulative Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the Certificate of
Incorporation (including this resolution or any provision hereof) that would
materially and adversely affect any power, preference, or special right of
the shares of Cumulative Preferred Stock or of the holders thereof; provided,
however, that any increase in the amount of authorized Common Stock or
authorized Preferred Stock or any increase or decrease in the number of
shares of any series of Preferred Stock or the creation and issuance of other
series of Common Stock or Preferred Stock, in each case ranking on a parity
with or junior to the shares of Cumulative Preferred Stock with respect to
the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and adversely
affect such powers, preferences or special rights.
(c) The foregoing voting provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Cumulative Preferred Stock shall
have been redeemed or called for redemption and sufficient funds shall have
been deposited in trust to effect such redemption.
6. Redemption. The shares of the Cumulative Preferred Stock may be
-----------
redeemed at the option of the Corporation, as a whole, or from time to time in
part, at any time, upon not less than 30 days' prior notice mailed to the
holders of the shares to be redeemed at their addresses as shown on the stocks
books of the Corporation; provided, however, that shares of the
64
Cumulative Preferred Stock shall not be redeemable prior to February 28, 1999.
Subject to the foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $200.00 per share together with an amount
equal to all dividends (whether or not earned or declined) accrued and
accumulated and unpaid to, but excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative Preferred Stock have not
been paid, the Cumulative Preferred Stock may not be redeemed in part and the
Corporation may not purchase or acquire any shares of the Cumulative Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of the Cumulative Preferred Stock. If fewer than all the
outstanding shares of Cumulative Preferred Stock are to be redeemed, the
Corporation will select those to be redeemed by lot or a substantially
equivalent method.
If a notice of redemption has been given pursuant to this paragraph 6 and
if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
of Cumulative Preferred Stock so called for redemption, then, notwithstanding
that any certificates for such shares have not been surrendered for cancelation,
on the redemption date dividends shall cease to accrue on the shares to be
redeemed, and at the close of business on the redemption date the holders of
such shares shall cease to be stockholders with respect to such shares and shall
have no interest in or claims against the Corporation by virtue thereof and
shall have no voting or other rights with respect to such shares, except the
right to receive the moneys payable upon surrender (and endorsement, if required
by the Corporation) of their certificates, and the shares evidenced thereby
shall no longer be outstanding. Subject to applicable escheat laws, any moneys
so set aside by the Corporation and unclaimed at the end of two years from the
redemption date shall revert to the general funds of the Corporation, after
which reversion the holders of such shares so called for redemption shall look
only to the general funds of the Corporation for the payment of the amounts
payable upon such redemption. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
65
7. Authorization and Issuance of Other Securities. No consent of the
-----------------------------------------------
holders of the Cumulative Preferred Stock shall be required for (a) the creation
of any indebtedness of any kind of the Corporation, (b) the creation, or
increase or decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon liquidation, dissolution
or winding up to the Cumulative Preferred Stock or (c) any increase or decrease
in the amount of authorized Common Stock or any increase or decrease or change
in the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the Committee each reserves the
------------------------
right by subsequent amendment of this resolution from time to time to increase
or decrease the number of shares that constitute the Cumulative Preferred Stock
(but not below the number of shares thereof then outstanding) and in other
respects to amend this resolution within the limitations provided by law, this
resolution and the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock of any class or
-----
classes of the Corporation shall be deemed to rank:
(a) prior to shares of the Cumulative Preferred Stock, either as
to dividends or upon liquidation, dissolution or winding up, or both, if
the holders of stock of such class or classes shall be entitled by the
terms thereof to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of shares of the Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative Preferred Stock,
either as to dividends or upon liquidation, dissolution or winding up, or
both, whether or not the dividend rates, dividend payment dates, or
redemption or liquidation prices per share thereof be different from those
of the Cumulative Preferred Stock, if the holders of stock of such class or
classes shall be entitled by the terms thereof to the receipt of dividends
or of amounts distributed upon liquidation, dissolution or winding up, as
the case may be, in proportion to their respective dividend rates or
66
liquidation prices, without preference or priority of one over the other
as between the holders of such stock and the holders of shares of
Cumulative Preferred Stock (the term "Parity Preferred Stock" being used
to refer to any stock on a parity with the shares of Cumulative
Preferred Stock, either as to dividends or upon liquidation, dissolution
or winding up, or both, as the context may require); and
(c) junior to shares of the Cumulative Preferred Stock, either as
to dividends or upon liquidation, dissolution or winding up, or both, if
such class shall be Common Stock or if the holders of the Cumulative
Preferred Stock shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as
the case may be, in preference or priority to the holders of stock in
such class or classes.
The Cumulative Preferred Stock shall rank prior, as to dividends and upon
liquidation, dissolution or winding up, to the Common Stock and the
Corporation's Series A Junior Participating Preferred Stock, and on a parity
with (i) the Corporation's ESOP Convertible Preferred Stock, with a liquidation
value of $35.88 per share, (ii) the Corporation's 7-3/8% Cumulative Preferred
Stock, with a liquidation value of $200.00 per share, (iii) the Corporation's
7-3/4% Cumulative Preferred Stock, with a liquidation value of $200.00 per
share, (iv) the Corporation's Series A Fixed/Adjustable Rate Preferred Stock,
with a liquidation value of $200.00 per share, (v) if issued, the Corporation's
7.82% Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(vi) if issued, the Corporation's 9.00% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vii) if issued, the Corporation's 8.40%
Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(viii) if issued, the Corporation's 8.20% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share and (ix) if issued, the Corporation's
8.03% Cumulative Preferred Stock, with a liquidation value of $200.00 per share.
67
B. This Certificate of Designation shall not become effective until, and
shall become effective at, 12:01 a.m. on May 31, 1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused this Certificate
of Designation to be signed by Christine A. Edwards, its Executive Vice
President, General Counsel and Secretary, this 30th day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By: /s/ Christine A. Edwards
----------------------------
Name: Christine A. Edwards
Title: Executive Vice President,
General Counsel & Secretary
68
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
9.00% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
DEAN WITTER, DISCOVER & CO.
__________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
__________________________
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of Directors
(the "Board") of Dean Witter, Discover & Co., a Delaware corporation
(hereinafter called the "Corporation"), by unanimous vote thereof at a meeting
on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted to and vested in the
Board by provisions of the Amended and Restated Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), which
shall consist of 720,900 of the shares of Preferred Stock which the Corporation
has authority to issue, is authorized, and the Board hereby fixes the powers,
designations, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the
shares of such series (in addition to the powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the Preferred Stock) as
follows:
1. Designation and Amount; Fractional Shares. The designation for such
------------------------------------------
series of the Preferred Stock authorized by this resolution shall be the
9.00% Cumulative Preferred Stock, par value $0.01 per share, with a stated
value of $200.00 per share (the "Cumulative Preferred Stock"). The stated
value per share of Cumulative Preferred Stock shall not for any
69
purpose be considered to be a determination by the Board with respect to the
capital and surplus of the Corporation. The maximum number of shares of
Cumulative Preferred Stock shall be 720,900. The Cumulative Preferred Stock is
issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative Preferred Stock will be
----------
entitled to receive, when, as and if declared by the Board or the Committee (as
hereinafter defined) out of assets of the Corporation legally available for
payment, cash dividends payable quarterly at the rate of 9.00% per annum.
Dividends on the Cumulative Preferred Stock will be payable quarterly on
February 28, May 30, August 30 and November 30 (each a "dividend payment date").
Dividends on shares of the Cumulative Preferred Stock will be cumulative from
the date of initial issuance of such shares of Cumulative Preferred Stock.
Dividends will be payable, in arrears, to holders of record as they appear on
the stock books of the Corporation on such record dates, not more than 60 days
nor less than 10 days preceding the payment dates thereof, as shall be fixed by
the Board or the Committee. The amount of dividends payable for the initial
dividend period or any period shorter than a full dividend period shall be
calculated on the basis of a 360-day year of twelve 30-day months. No dividends
may be declared or paid or set apart for payment on any Parity Preferred Stock
(as defined in paragraph 9(b) below) with regard to the payment of dividends
unless there shall also be or have been declared and paid or set apart for
payment on the Cumulative Preferred Stock, like dividends for all dividend
payment periods of the Cumulative Preferred Stock ending on or before the
dividend payment date of such Parity Preferred Stock, ratably in proportion to
the respective amounts of dividends (x) accumulated and unpaid or payable on
such Parity Preferred Stock, on the one hand, and (y) accumulated and unpaid
through the dividend payment period or periods of the Cumulative Preferred Stock
next preceding such dividend payment date, on the other hand. For the purposes
of this Certificate of Designation, the "Committee" shall mean any committee of
the Board to whom the Board, pursuant to Section 141(c) of the General
Corporation Law of the State of Delaware, delegates authority to perform the
functions of the Board set forth in this Certificate of Designation.
70
Except as set forth in the preceding sentence, unless full cumulative
dividends on the Cumulative Preferred Stock have been paid, no dividends (other
than in Common Stock of the Corporation) may be paid or declared and set aside
for payment or other distribution made upon the Common Stock or on any other
stock of the Corporation ranking junior to or on a parity with the Cumulative
Preferred Stock as to dividends, nor may any Common Stock or any other stock of
the Corporation ranking junior to or on a parity with the Cumulative Preferred
Stock as to dividends be redeemed, purchased or otherwise acquired for any
consideration (or any payment be made to or available for a sinking fund for the
redemption of any shares of such stock; provided, however, that any moneys
theretofore deposited in any sinking fund with respect to any Preferred Stock of
the Corporation in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund, regardless of whether at the
time of such application full cumulative dividends upon shares of the Cumulative
Preferred Stock outstanding to the last dividend payment date shall have been
paid or declared and set apart for payment) by the Corporation; provided that
any such junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Corporation ranking junior to the Cumulative
Preferred Stock as to dividends.
3. Liquidation Preference. The Shares of Cumulative Preferred Stock shall
-----------------------
rank, as to liquidation, dissolution or winding up of the Corporation, prior to
the shares of Common Stock and any other class of stock of the Corporation
ranking junior to the Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up of the Corporation, so that in the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, the holders of the Cumulative Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings, before any distribution
is made to holders of shares of Common Stock or any other such junior stock, an
amount equal to $200.00 per share (the "Liquidation Preference" of a share of
Cumulative Preferred Stock) plus an amount equal to all dividends (whether or
not earned or declared) accrued and accumulated and unpaid on the shares of
Cumulative Preferred Stock to the date
71
of final distribution. The holders of the Cumulative Preferred Stock will not
be entitled to receive the Liquidation Preference until the liquidation
preference of any other class of stock of the Corporation ranking senior to the
Cumulative Preferred Stock as to rights upon liquidation, dissolution or winding
up shall have been paid (or a sum set aside therefor sufficient to provide for
payment) in full. After payment of the full amount of the Liquidation
Preference and such dividends, the holders of shares of Cumulative Preferred
Stock will not be entitled to any further participation in any distribution of
assets by the Corporation. If, upon any liquidation, dissolution or winding up
of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of shares of Parity Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid, then such assets,
or the proceeds thereof, shall be distributable among such holders ratably in
accordance with the respective amounts which would be payable on such shares if
all amounts payable thereon were paid in full. For the purposes hereof, neither
a consolidation or merger of the Corporation with or into any other corporation,
nor a merger of any other corporation with or into the Corporation, nor a sale
or transfer of all or any part of the Corporation's assets for cash or
securities shall be considered a liquidation, dissolution or winding up of the
Corporation.
4. Conversion. The Cumulative Preferred Stock is not convertible into
-----------
shares of any other class or series of stock of the Corporation.
5. Voting Rights. The holders of shares of Cumulative Preferred Stock
--------------
shall have no voting rights whatsoever, except for any voting rights to which
they may be entitled under the laws of the State of Delaware, and except as
follows:
(a) Whenever, at any time or times, dividends payable on the shares of
Cumulative Preferred Stock or on any Parity Preferred Stock with respect to
payment of dividends, shall be in arrears for an aggregate number of days equal
to six calendar quarters or more, whether or not consecutive, the holders of the
outstanding shares of Cumulative Preferred Stock shall have the right, with
holders of shares of any one or more other class or series of stock upon which
like
72
voting rights have been conferred and are exercisable (voting together as a
class), to elect two of the authorized number of members of the Board at the
Corporation's next annual meeting of stockholders and at each subsequent annual
meeting of stockholders until such arrearages have been paid or set apart for
payment, at which time such right shall terminate, except as herein or by law
expressly provided, subject to revesting in the event of each and every
subsequent default of the character above mentioned. Upon any termination of
the right of the holders of shares of Cumulative Preferred Stock as a class to
vote for directors as herein provided, the term of office of all directors then
in office elected by the holders of shares of Cumulative Preferred Stock shall
terminate immediately.
Any director who shall have been so elected pursuant to this paragraph may
be removed at any time, either with or without cause. Any vacancy thereby
created may be filled only by the affirmative vote of the holders of shares of
Cumulative Preferred Stock voting separately as a class (together with the
holders of shares of any other class or series of stock upon which like voting
rights have been conferred and are exercisable). If the office of any director
elected by the holders of shares of Cumulative Preferred Stock voting as a class
becomes vacant for any reason other than removal from office as aforesaid, the
remaining director elected pursuant to this paragraph may choose a successor who
shall hold office for the unexpired term in respect of which such vacancy
occurred. At elections for such directors, each holder of shares of Cumulative
Preferred Stock shall be entitled to one vote for each share held (the holders
of shares of any other class or series of preferred stock having like voting
rights being entitled to such number of votes, if any, for each share of such
stock held as may be granted to them).
(b) So long as any shares of Cumulative Preferred Stock remain
outstanding, the consent of the holders of at least two-thirds of the shares of
Cumulative Preferred Stock outstanding at the time and all other classes or
series of stock upon which like voting rights have been conferred and are
exercisable (voting together as a class) given
73
in person or by proxy, either in writing or at any meeting called for the
purpose, shall be necessary to permit, effect or validate any one or more of the
following:
(i) the issuance or increase of the authorized amount of any class or
series of shares ranking prior (as that term is defined in paragraph 9(a)
hereof) to the shares of the Cumulative Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by merger, consolidation
or otherwise, of any of the provisions of the Certificate of Incorporation
(including this resolution or any provision hereof) that would materially and
adversely affect any power, preference, or special right of the shares of
Cumulative Preferred Stock or of the holders thereof; provided, however, that
any increase in the amount of authorized Common Stock or authorized Preferred
Stock or any increase or decrease in the number of shares of any series of
Preferred Stock or the creation and issuance of other series of Common Stock
or Preferred Stock, in each case ranking on a parity with or junior to the
shares of Cumulative Preferred Stock with respect to the payment of dividends
and the distribution of assets upon liquidation, dissolution or winding up,
shall not be deemed to materially and adversely affect such powers,
preferences or special rights.
(c) The foregoing voting provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Cumulative Preferred Stock shall
have been redeemed or called for redemption and sufficient funds shall have
been deposited in trust to effect such redemption.
6. Redemption. The shares of the Cumulative Preferred Stock may be
-----------
redeemed at the option of the Corporation, as a whole, or from time to time, in
part, at any time, upon not less than 30 days' prior notice mailed to the
holders of the shares to be redeemed at their addresses as shown on the stock
books of the Corporation; provided, however, that shares of the
74
Cumulative Preferred Stock shall not be redeemable prior to February 28, 2000.
Subject to the foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $200.00 per share together with an amount
equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative Preferred Stock have not
been paid, the Cumulative Preferred Stock may not be redeemed in part and the
Corporation may not purchase or acquire any shares of the Cumulative Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of the Cumulative Preferred Stock. If fewer than all the
outstanding shares of Cumulative Preferred Stock are to be redeemed, the
Corporation will select those to be redeemed by lot or a substantially
equivalent method.
If a notice of redemption has been given pursuant to this paragraph 6 and
if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
of Cumulative Preferred Stock so called for redemption, then, notwithstanding
that any certificates for such shares have not been surrendered for cancelation,
on the redemption date dividends shall cease to accrue on the shares to be
redeemed, and at the close of business on the redemption date the holders of
such shares shall cease to be stockholders with respect to such shares and shall
have no interest in or claims against the Corporation by virtue thereof and
shall have no voting or other rights with respect to such shares, except the
right to receive the moneys payable upon surrender (and endorsement, if required
by the Corporation) of their certificates, and the shares evidenced thereby
shall no longer be outstanding. Subject to applicable escheat laws, any moneys
so set aside by the Corporation and unclaimed at the end of two years from the
redemption date shall revert to the general funds of the Corporation, after
which reversion the holders of such shares so called for redemption shall look
only to the general funds of the Corporation for the payment of the amounts
payable upon such redemption. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
75
7. Authorization and Issuance of Other Securities. No consent of the
-----------------------------------------------
holders of the Cumulative Preferred Stock shall be required for (a) the creation
of any indebtedness of any kind of the Corporation, (b) the creation, or
increase or decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon liquidation, dissolution
or winding up to the Cumulative Preferred Stock or (c) any increase or decrease
in the amount of authorized Common Stock or any increase, decrease or change in
the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the Committee each reserves the
------------------------
right by subsequent amendment of this resolution from time to time to increase
or decrease the number of shares that constitute the Cumulative Preferred Stock
(but not below the number of shares thereof then outstanding) and in other
respects to amend this resolution within the limitation provided by law, this
resolution and the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock of any class or
-----
classes of the Corporation shall be deemed to rank:
(a) prior to shares of the Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if the
holders of stock of such class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of shares of the Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, whether or
not the dividend rates, dividend payment dates, or redemption or liquidation
prices per share thereof be different from those of the Cumulative Preferred
Stock, if the holders of stock of such class or classes shall be entitled by
the terms thereof to the receipt of dividends or of amounts distributed upon
liquidation, dissolution or winding up, as the case may be, in proportion to
their respective dividend rates or
76
liquidation prices, without preference or priority of one over the other as
between the holders of such stock and the holders of shares of Cumulative
Preferred Stock (the term "Parity Preferred Stock" being used to refer to any
stock on a parity with the shares of Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, as the
context may require); and
(c) junior to shares of the Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if such
class shall be Common Stock or if the holders of the Cumulative Preferred
Stock shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of stock of such class or classes.
The Cumulative Preferred Stock shall rank prior, as to dividends and upon
liquidation, dissolution or winding up, to the Common Stock and the
Corporation's Series A Junior Participating Preferred Stock, and on a parity
with (i) the Corporation's ESOP Convertible Preferred Stock, with a liquidation
value of $35.88 per share, (ii) the Corporation's 7-3/8% Cumulative Preferred
Stock, with a liquidation value of $200.00 per share, (iii) the Corporation's
7-3/4% Cumulative Preferred Stock, with a liquidation value of $200.00 per
share, (iv) the Corporation's Series A Fixed/ Adjustable Rate Preferred Stock,
with a liquidation value of $200.00 per share, (v) if issued, the Corporation's
7.82% Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(vi) if issued, the Corporation's 7.80% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vii) if issued, the Corporation's 8.40%
Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(viii) if issued, the Corporation's 8.20% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share and (ix) if issued, the Corporation's
8.03% Cumulative Preferred Stock, with a liquidation value of $200.00 per share.
77
B. This Certificate of Designation shall not become effective until, and
shall become effective at, 12:01 a.m. on May 31, 1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused this Certificate
of Designation to be signed by Christine A. Edwards, its Executive Vice
President, General Counsel and Secretary, this 30th day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By: /s/ Christine A. Edwards
----------------------------
Name: Christine A. Edwards
Title: Executive Vice President,
General Counsel & Secretary
78
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
8.40% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
DEAN WITTER, DISCOVER & CO.
________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
________________________
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of
Directors (the "Board") of Dean Witter, Discover & Co., a Delaware corporation
(hereinafter called the "Corporation"), by unanimous vote thereof at a meeting
on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted to and vested in the
Board by provisions of the Amended and Restated Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), which
shall consist of 996,776 of the shares of Preferred Stock which the Corporation
has authority to issue, is authorized, and the Board hereby fixes the powers,
designations, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the
shares of such series (in addition to the powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the Preferred Stock) as
follows:
1. Designation and Amount; Fractional Shares. The designation for such
------------------------------------------
series of the Preferred Stock authorized by this resolution shall be the
8.40% Cumulative Preferred Stock, par value $0.01 per share, with a stated
value of $200.00 per share (the "Cumulative Preferred Stock"). The stated
value per share of Cumulative Preferred Stock shall not for any purpose be
considered to be a determination by the
79
Board with respect to the capital and surplus of the Corporation. The total
number of shares of Cumulative Preferred Stock shall be 996,776. The Cumulative
Preferred Stock is issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative Preferred Stock will be
----------
entitled to receive, when, as and if declared by the Board or the Committee (as
hereinafter defined) out of assets of the Corporation legally available for
payment, cash dividends payable quarterly at the rate of 8.40% per annum.
Dividends on the Cumulative Preferred Stock will be payable quarterly on
February 28, May 30, August 30 and November 30 (each a "dividend payment date").
Dividends on shares of the Cumulative Preferred Stock will be cumulative from
the date of initial issuance of such shares of Cumulative Preferred Stock.
Dividends will be payable, in arrears, to holders of record as they appear on
the stock books of the Corporation on such record dates, not more than 60 days
nor less than 10 days preceding the payment dates thereof, as shall be fixed by
the Board or the Committee. The amount of dividends payable for the initial
dividend period or any period shorter than a full dividend period shall be
calculated on the basis of a 360-day year of twelve 30-day months. No dividends
may be declared or paid or set apart for payment on any Parity Preferred Stock
(as defined in paragraph 9(b) below) with regard to the payment of dividends
unless there shall also be or have been declared and paid or set apart for
payment on the Cumulative Preferred Stock, like dividends for all dividend
payment periods of the Cumulative Preferred Stock ending on or before the
dividend payment date of such Parity Preferred Stock, ratably in proportion to
the respective amounts of dividends (x) accumulated and unpaid or payable on
such Parity Preferred Stock, on the one hand, and (y) accumulated and unpaid
through the dividend payment period or periods of the Cumulative Preferred Stock
next preceding such dividend payment date, on the other hand. For the purposes
of this Certificate of Designation, the "Committee" shall mean any committee of
the Board to whom the Board, pursuant to Section 141(c) of the General
Corporation Law of the State of Delaware, delegates authority to perform the
functions of the Board set forth in this Certificate of Designation.
Except as set forth in the preceding sentence, unless full cumulative
dividends on the Cumulative Preferred Stock have been paid, no dividends (other
than in Common Stock of the Corporation) may be paid or
80
declared and set aside for payment or other distribution made upon the Common
Stock or on any other stock of the Corporation ranking junior to or on a parity
with the Cumulative Preferred Stock as to dividends, nor may any Common Stock or
any other stock of the Corporation ranking junior to or on a parity with the
Cumulative Preferred Stock as to dividends be redeemed, purchased or otherwise
acquired for any consideration (or any payment be made to or available for a
sinking fund for the redemption of any shares of such stock; provided, however,
that any moneys theretofore deposited in any sinking fund with respect to any
Preferred Stock of the Corporation in compliance with the provisions of such
sinking fund may thereafter be applied to the purchase or redemption of such
Preferred Stock in accordance with the terms of such sinking fund, regardless of
whether at the time of such application full cumulative dividends upon shares of
the Cumulative Preferred Stock outstanding to the last dividend payment date
shall have been paid or declared and set apart for payment) by the Corporation;
provided that any such junior or parity Preferred Stock or Common Stock may be
converted into or exchanged for stock of the Corporation ranking junior to the
Cumulative Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Cumulative Preferred Stock shall
-----------------------
rank, as to liquidation, dissolution or winding up of the Corporation, prior to
the shares of Common Stock and any other class of stock of the Corporation
ranking junior to the Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up of the Corporation, so that in the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, the holders of the Cumulative Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings, before any distribution
is made to holders of shares of Common Stock or any other such junior stock, an
amount equal to $200.00 per share (the "Liquidation Preference" of a share of
Cumulative Preferred Stock) plus an amount equal to all dividends (whether or
not earned or declared) accrued and accumulated and unpaid on the shares of
Cumulative Preferred Stock to the date of final distribution. The holders of
the Cumulative Preferred Stock will not be entitled to receive the Liquidation
Preference until the liquidation preference of any other class of stock of the
Corporation ranking senior to the Cumulative Preferred Stock as to rights
81
upon liquidation, dissolution or winding up shall have been paid (or a sum set
aside therefor sufficient to provide for payment) in full. After payment of the
full amount of the Liquidation Preference and such dividends, the holders of
shares of Cumulative Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Corporation. If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of shares of
Parity Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid, then such assets, or the proceeds thereof, shall be
distributable among such holders ratably in accordance with the respective
amounts which would be payable on such shares if all amounts payable thereon
were paid in full. For the purposes hereof, neither a consolidation or merger
of the Corporation with or into any other corporation, nor a merger of any other
corporation with or into the Corporation, nor a sale or transfer of all or any
part of the Corporation's assets for cash or securities shall be considered a
liquidation, dissolution or winding up of the Corporation.
4. Conversion. The Cumulative Preferred Stock is not convertible into
-----------
shares of any other class or series of stock of the Corporation.
5. Voting Rights. The holders of shares of Cumulative Preferred Stock
--------------
shall have no voting rights whatsoever, except for any voting rights to which
they may be entitled under the laws of the State of Delaware, and except as
follows:
(a) Whenever, at any time or times, dividends payable on the shares
of Cumulative Preferred Stock or on any Parity Preferred Stock with respect
to payment of dividends, shall be in arrears for an aggregate number of days
equal to six calendar quarters or more, whether or not consecutive, the
holders of the outstanding shares of Cumulative Preferred Stock shall have
the right, with holders of shares of any one or more other class or series of
stock upon which like voting rights have been conferred and are exercisable
(voting together as a class), to elect two of the authorized number of
members of the Board at the Corporation's next annual meeting of stockholders
and at each subsequent annual meeting of stockholders until such arrearages
have been
82
paid or set apart for payment, at which time such right shall terminate, except
as herein or by law expressly provided, subject to revesting in the event of
each and every subsequent default of the character above mentioned. Upon any
termination of the right of the holders of shares of Cumulative Preferred Stock
as a class to vote for directors as herein provided, the term of office of all
directors then in office elected by the holders of shares of Cumulative
Preferred Stock shall terminate immediately.
Any director who shall have been so elected pursuant to this paragraph may be
removed at any time, either with or without cause. Any vacancy thereby created
may be filled only by the affirmative vote of the holders of shares of
Cumulative Preferred Stock voting separately as a class (together with the
holders of shares of any other class or series of stock upon which like voting
rights have been conferred and are exercisable). If the office of any director
elected by the holders of shares of Cumulative Preferred Stock voting as a class
becomes vacant for any reason other than removal from office as aforesaid, the
remaining director elected pursuant to this paragraph may choose a successor who
shall hold office for the unexpired term in respect of which such vacancy
occurred. At elections for such directors, each holder of shares of Cumulative
Preferred Stock shall be entitled to one vote for each share held (the holders
of shares of any other class or series of preferred stock having like voting
rights being entitled to such number of votes, if any, for each share of such
stock held as may be granted to them).
(b) So long as any shares of Cumulative Preferred Stock remain
outstanding, the consent of the holders of at least two-thirds of the shares of
Cumulative Preferred Stock outstanding at the time and all other classes or
series of stock upon which like voting rights have been conferred and are
exercisable (voting together as a class) given in person or by proxy, either in
writing or at any meeting called for the purpose, shall be necessary to permit,
effect or validate any one or more of the following:
(i) the issuance or increase of the authorized amount of any
class or series of
83
shares ranking prior (as that term is defined in paragraph 9(a) hereof) to
the shares of the Cumulative Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the Certificate of
Incorporation (including this resolution or any provision hereof) that
would materially and adversely affect any power, preference, or special
right of the shares of Cumulative Preferred Stock or of the holders
thereof; provided, however, that any increase in the amount of authorized
Common Stock or authorized Preferred Stock or any increase or decrease in
the number of shares of any series of Preferred Stock or the creation and
issuance of other series of Common Stock or Preferred Stock, in each case
ranking on a parity with or junior to the shares of Cumulative Preferred
Stock with respect to the payment of dividends and the distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such powers, preferences or special
rights.
(c) The foregoing voting provisions shall not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of Cumulative Preferred
Stock shall have been redeemed or called for redemption and sufficient funds
shall have been deposited in trust to effect such redemption.
6. Redemption. The shares of the Cumulative Preferred Stock may be
-----------
redeemed at the option of the Corporation, as a whole, or from time to time in
part, at any time, upon not less than 30 days' prior notice mailed to the
holders of the shares to be redeemed at their addresses as shown on the stock
books of the Corporation; provided, however, that shares of the Cumulative
Preferred Stock shall not be redeemable prior to August 30, 2000. Subject to
the foregoing, on or after such date, shares of the Cumulative Preferred Stock
are redeemable at $200.00 per share together with an amount equal to all
dividends (whether or not earned or declared) accrued and accumulated and unpaid
to, but excluding, the date fixed for redemption.
84
If full cumulative dividends on the Cumulative Preferred Stock have not
been paid, the Cumulative Preferred Stock may not be redeemed in part and the
Corporation may not purchase or acquire any shares of the Cumulative Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of the Cumulative Preferred Stock. If fewer than all the
outstanding shares of Cumulative Preferred Stock are to be redeemed, the
Corporation will select those to be redeemed by lot or a substantially
equivalent method.
If a notice of redemption has been given pursuant to this paragraph 6 and
if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
of Cumulative Preferred Stock so called for redemption, then, notwithstanding
that any certificates for such shares have not been surrendered for cancelation,
on the redemption date dividends shall cease to accrue on the shares to be
redeemed, and at the close of business on the redemption date the holders of
such shares shall cease to be stockholders with respect to such shares and shall
have no interest in or claims against the Corporation by virtue thereof and
shall have no voting or other rights with respect to such shares, except the
right to receive the moneys payable upon surrender (and endorsement, if required
by the Corporation) of their certificates, and the shares evidenced thereby
shall no longer be outstanding. Subject to applicable escheat laws, any moneys
so set aside by the Corporation and unclaimed at the end of two years from the
redemption date shall revert to the general funds of the Corporation, after
which reversion the holders of such shares so called for redemption shall look
only to the general funds of the Corporation for the payment of the amounts
payable upon such redemption. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
7. Authorization and Issuance of Other Securities. No consent of the
-----------------------------------------------
holders of the Cumulative Preferred Stock shall be required for (a) the creation
of any indebtedness of any kind of the Corporation, (b) the creation, or
increase or decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon liquidation, dissolution
or winding up to the Cumulative Preferred Stock or (c) any increase or
85
decrease in the amount of authorized Common Stock or any increase, decrease or
change in the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the Committee each reserves the
------------------------
right by subsequent amendment of this resolution from time to time to increase
or decrease the number of shares that constitute the Cumulative Preferred Stock
(but not below the number of shares thereof then outstanding) and in other
respects to amend this resolution within the limitations provided by law, this
resolution and the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock of any class or
-----
classes of the Corporation shall be deemed to rank:
(a) prior to shares of the Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if the
holders of stock of such class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of shares of the Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative Preferred Stock,
either as to dividends or upon liquidation, dissolution or winding up, or
both, whether or not the dividend rates, dividend payment dates, or
redemption or liquidation prices per share thereof be different from those
of the Cumulative Preferred Stock, if the holders of stock of such class or
classes shall be entitled by the terms thereof to the receipt of dividends
or of amounts distributed upon liquidation, dissolution or winding up, as
the case may be, in proportion to their respective dividend rates or
liquidation prices, without preference or priority of one over the other as
between the holders of such stock and the holders of shares of Cumulative
Preferred Stock (the term "Parity Preferred Stock" being used to refer to
any stock on a parity with the shares of Cumulative Preferred Stock, either
as to dividends or upon liquidation, dissolution or winding up, or both, as
the context may require); and
86
(c) junior to shares of the Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if such
class shall be Common Stock or if the holders of the Cumulative Preferred
Stock shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may
be, in preference or priority to the holders of stock of such class or
classes.
The Cumulative Preferred Stock shall rank prior, as to dividends and upon
liquidation, dissolution or winding up, to the Common Stock and the
Corporation's Series A Junior Participating Preferred Stock, and on a parity
with (i) the Corporation's ESOP Convertible Preferred Stock, with a liquidation
value of $35.88 per share, (ii) the Corporation's 7-3/8% Cumulative Preferred
Stock, with a liquidation value of $200.00 per share, (iii) the Corporation's
7-3/4% Cumulative Preferred Stock, with a liquidation value of $200.00 per
share, (iv) the Corporation's Series A Fixed/ Adjustable Rate Preferred Stock,
with a liquidation value of $200.00 per share, (v) if issued, the Corporation's
7.82% Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(vi) if issued, the Corporation's 7.80% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vii) if issued, the Corporation's 9.00%
Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(viii) if issued, the Corporation's 8.20% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share and (ix) if issued, the Corporation's
8.03% Cumulative Preferred Stock, with a liquidation value of $200.00 per share.
87
B. This Certificate of Designation shall not become effective until,
and shall become effective at, 12:01 a.m. on May 31, 1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused this
Certificate of Designation to be signed by Christine A. Edwards, its Executive
Vice President, General Counsel and Secretary, this 30th day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By:/s/ Christine A. Edwards
----------------------------
Name: Christine A. Edwards
Title: Executive Vice President,
General Counsel & Secretary
88
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
8.20% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
DEAN WITTER, DISCOVER & CO.
______________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
______________________________
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of Directors
(the "Board") of Dean Witter, Discover & Co., a Delaware corporation
(hereinafter called the "Corporation"), by unanimous vote thereof at a meeting
on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted to and vested in the
Board by provisions of the Amended and Restated Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), which
shall consist of 847,500 of the shares of Preferred Stock which the Corporation
has authority to issue, is authorized, and the Board hereby fixes the powers,
designations, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the
shares of such series (in addition to the powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the Preferred Stock) as
follows:
1. Designation and Amount; Fractional Shares. The designation for such
------------------------------------------
series of the Preferred Stock authorized by this resolution shall
be the 8.20% Cumulative Preferred Stock, par value $0.01 per share,
89
with a stated value of $200.00 per share (the "Cumulative Preferred Stock").
The stated value per share of Cumulative Preferred Stock shall not for any
purpose be considered to be a determination by the Board with respect to the
capital and surplus of the Corporation. The total number of shares of
Cumulative Preferred Stock shall be 847,500. The Cumulative Preferred Stock is
issuable in whole shares only.
2. Dividends. Holders of shares of Cumulative Preferred Stock will be
----------
entitled to receive, when, as and if declared by the Board or the Committee (as
hereinafter defined) out of assets of the Corporation legally available for
payment, cash dividends payable quarterly at the rate of 8.20% per annum.
Dividends on the Cumulative Preferred Stock will be payable quarterly on
February 28, May 30, August 30 and November 30 (each a "dividend payment
date"). Dividends on shares of the Cumulative Preferred Stock will be cumulative
from the date of initial issuance of such shares of Cumulative Preferred Stock.
Dividends will be payable, in arrears, to holders of record as they appear on
the stock books of the Corporation on such record dates, not more than 60 days
nor less than 10 days preceding the payment dates thereof, as shall be fixed by
the Board or the Committee. The amount of dividends payable for the initial
dividend period or any period shorter than a full dividend period shall be
calculated on the basis of a 360-day year of twelve 30-day months. No dividends
may be declared or paid or set apart for payment on any Parity Preferred Stock
(as defined in paragraph 9(b) below) with regard to the payment of dividends
unless there shall also be or have been declared and paid or set apart for
payment on the Cumulative Preferred Stock, like dividends for all dividend
payment periods of the Cumulative Preferred Stock ending on or before the
dividend payment date of such Parity Preferred Stock, ratably in proportion to
the respective amounts of dividends (x) accumulated and unpaid or payable on
such Parity Preferred Stock, on the one hand, and (y) accumulated and unpaid
through the dividend payment period or periods of the Cumulative Preferred Stock
next preceding such dividend payment date, on the other hand. For the purposes
of this Certificate of Designation, the "Committee" shall mean any committee of
the Board to whom the Board, pursuant to Section 141(c) of the General
Corporation Law of the State of Delaware, delegates authority to perform the
functions of the Board set forth in this Certificate of Designation.
90
Except as set forth in the preceding sentence, unless full cumulative
dividends on the Cumulative Preferred stock have been paid, no dividends (other
than in Common Stock of the Corporation) may be paid or declared and set aside
for payment or other distribution made upon the Common Stock or on any other
stock of the Corporation ranking junior to or on a parity with the Cumulative
Preferred Stock as to dividends, nor may any Common Stock or any other stock of
the Corporation ranking junior to or on a parity with the Cumulative Preferred
Stock as to dividends be redeemed, purchased or otherwise acquired for any
consideration (or any payment be made to or available for a sinking fund for the
redemption of any shares of such stock; provided, however, that any moneys
theretofore deposited in any sinking fund with respect to any Preferred Stock of
the Corporation in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund, regardless of whether at the
time of such application full cumulative dividends upon shares of the Cumulative
Preferred Stock outstanding to the last dividend payment date shall have been
paid or declared and set apart for payment) by the Corporation; provided that
any such junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Corporation ranking junior to the Cumulative
Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Cumulative Preferred Stock shall
-----------------------
rank, as to liquidation, dissolution or winding up of the Corporation, prior to
the shares of Common Stock and any other class of stock of the Corporation
ranking junior to the Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up of the Corporation, so that in the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, the holders of the Cumulative Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings, before any distribution
is made to holders of shares of Common Stock or any other such junior stock, an
amount equal to $200.00 per share (the "Liquidation Preference" of a share of
Cumulative Preferred Stock) plus an amount equal to all dividends (whether or
not earned or declared) accrued and accumulated and unpaid on the shares of
Cumulative Preferred Stock to the date
91
of final distribution. The holders of the Cumulative Preferred Stock will not
be entitled to receive the Liquidation Preference until the liquidation
preference of any other class of stock of the Corporation ranking senior to the
Cumulative Preferred Stock as to rights upon liquidation, dissolution or winding
up shall have been paid (or a sum set aside therefor sufficient to provide for
payment) in full. After payment of the full amount of the Liquidation
Preference and such dividends, the holders of shares of Cumulative Preferred
Stock will not be entitled to any further participation in any distribution of
assets by the Corporation. If, upon any liquidation, dissolution or winding up
of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of shares of Parity Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid, then such assets,
or the proceeds thereof, shall be distributable among such holders ratably in
accordance with the respective amounts which would be payable on such shares if
all amounts payable thereon were paid in full. For the purposes hereof, neither
a consolidation or merger of the Corporation with or into any other corporation,
nor a merger of any other corporation with or into the Corporation, nor a sale
or transfer of all or any part of the Corporation's assets for cash or
securities shall be considered a liquidation, dissolution or winding up of the
Corporation.
4. Conversion. The Cumulative Preferred Stock is not convertible into
-----------
shares of any other class or series of stock of the Corporation.
5. Voting Rights. The holders of shares of Cumulative Preferred Stock
--------------
shall have no voting rights whatsoever, except for any voting rights to which
they may be entitled under the laws of the State of Delaware, and except as
follows:
(a) Whenever, at any time or times, dividends payable on the shares of
Cumulative Preferred Stock or on any Parity Preferred Stock with respect to
payment of dividends, shall be in arrears for an aggregate number of days
equal to six calendar quarters or more, whether or not consecutive, the
holders of the outstanding shares of Cumulative Preferred Stock shall have
the right, with holders of shares of any one or more other class or series
of stock upon which like
92
voting rights have been conferred and are exercisable (voting together as a
class), to elect two of the authorized number of members of the Board at the
Corporation's next annual meeting of stockholders and at each subsequent annual
meeting of stockholders until such arrearages have been paid or set apart for
payment, at which time such right shall terminate, except as herein or by law
expressly provided, subject to revesting in the event of each and every
subsequent default of the character above mentioned. Upon any termination of
the right of the holders of shares of Cumulative Preferred Stock as a class to
vote for directors as herein provided, the term of office of all directors then
in office elected by the holders of shares of Cumulative Preferred Stock shall
terminate immediately.
Any director who shall have been so elected pursuant to this paragraph may
be removed at any time, either with or without cause. Any vacancy thereby
created may be filled only by the affirmative vote of the holders of shares of
Cumulative Preferred Stock voting separately as a class (together with the
holders of shares of any other class or series of stock upon which like voting
rights have been conferred and are exercisable). If the office of any director
elected by the holders of shares of Cumulative Preferred Stock voting as a class
becomes vacant for any reason other than removal from office as aforesaid, the
remaining director elected pursuant to this paragraph may choose a successor who
shall hold office for the unexpired term in respect of which such vacancy
occurred. At elections for such directors, each holder of shares of Cumulative
Preferred Stock shall be entitled to one vote for each share held (the holders
of shares of any other class or series of preferred stock having like voting
rights being entitled to such number of votes, if any, for each share of such
stock held as may be granted to them).
(b) So long as any shares of Cumulative Preferred Stock remain
outstanding, the consent of the holders of at least two-thirds of the shares of
Cumulative Preferred Stock outstanding at the time and all other classes or
series of stock upon which like voting rights have been conferred and are
exercisable (voting together as a class) given
93
in person or by proxy, either in writing or at any meeting called for the
purpose, shall be necessary to permit, effect or validate any one or more of the
following:
(i) the issuance or increase of the authorized amount of any class or
series of shares ranking prior (as that term is defined in paragraph 9(a)
hereof) to the shares of the Cumulative Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the Certificate of
Incorporation (including this resolution or any provision hereof) that would
materially and adversely affect any power, preference, or special right of
the shares of Cumulative Preferred Stock or of the holders thereof;
provided, however, that any increase in the amount of authorized Common
Stock or authorized Preferred Stock or any increase or decrease in the
number of shares of any series of Preferred Stock or the creation and
issuance of other series of Common Stock or Preferred Stock, in each case
ranking on a parity with or junior to the shares of Cumulative Preferred
Stock with respect to the payment of dividends and the distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such powers, preferences or special rights.
(c) The foregoing voting provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Cumulative Preferred Stock shall
have been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
6. Redemption. The shares of the Cumulative Preferred Stock may be
-----------
redeemed at the option of the Corporation, as a whole, or from time to time in
part, at any time, upon not less than 30 days' prior notice mailed to the
holders of the shares to be redeemed at their addresses as shown on the stock
books of the Corporation; provided, however, that shares of the
94
Cumulative Preferred Stock shall not be redeemable prior to November 30, 2000.
Subject to the foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $200.00 per share together with an amount
equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative Preferred Stock have not
been paid, the Cumulative Preferred Stock may not be redeemed in part and the
Corporation may not purchase or acquire any shares of the Cumulative Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of the Cumulative Preferred Stock. If fewer than all the
outstanding shares of Cumulative Preferred Stock are to be redeemed, the
Corporation will select those to be redeemed by lot or a substantially
equivalent method.
If a notice of redemption has been given pursuant to this paragraph 6 and
if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
of Cumulative Preferred Stock so called for redemption, then, notwithstanding
that any certificates for such shares have not been surrendered for cancelation,
on the redemption date dividends shall cease to accrue on the shares to be
redeemed, and at the close of business on the redemption date the holders of
such shares shall cease to be stockholders with respect to such shares and shall
have no interest in or claims against the Corporation by virtue thereof and
shall have no voting or other rights with respect to such shares, except the
right to receive the moneys payable upon surrender (and endorsement, if required
by the Corporation) of their certificates, and the shares evidenced thereby
shall no longer be outstanding. Subject to applicable escheat laws, any moneys
so set aside by the Corporation and unclaimed at the end of two years from the
redemption date shall revert to the general funds of the Corporation, after
which reversion the holders of such shares so called for redemption shall look
only to the general funds of the Corporation for the payment of the amounts
payable upon such redemption. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
95
7. Authorization and Issuance of Other Securities. No consent of the
-----------------------------------------------
holders of the Cumulative Preferred Stock shall be required for (a) the creation
of any indebtedness of any kind of the Corporation, (b) the creation, or
increase or decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon liquidation, dissolution
or winding up to the Cumulative Preferred Stock or (c) any increase or decrease
in the amount of authorized Common Stock or any increase, decrease or change in
the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the Committee each reserves the
------------------------
right by subsequent amendment of this resolution from time to time to increase
or decrease the number of shares that constitute the Cumulative Preferred Stock
(but not below the number of shares thereof then outstanding) and in other
respects to amend this resolution within the limitations provided by law, this
resolution and the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock of any class or
-----
classes of the Corporation shall be deemed to rank:
(a) prior to shares of the Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if the
holders of stock of such class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of shares of the Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative Preferred Stock, either as
to dividends or upon liquidation, dissolution or winding up, or both whether
or not the dividend rates, dividend payment dates, or redemption or
liquidation prices per share thereof be different from those of the
Cumulative Preferred Stock, if the holders of stock of such class or classes
shall be entitled by the terms thereof to the receipt of dividends or of
amounts distributed upon liquidation, dissolution or winding up, as the case
may be, in proportion to their respective dividend rates or
96
liquidation prices, without preference or priority of one over the other as
between the holders of such stock and the holders of shares of Cumulative
Preferred Stock (the term "Parity Preferred Stock" being used to refer to
any stock on a parity with the shares of Cumulative Preferred Stock, either
as to dividends or upon liquidation, dissolution or winding up, or both, as
the context may require); and
(c) junior to shares of the Cumulative Preferred stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if such
class shall be Common Stock or if the holders of the Cumulative Preferred
Stock shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may
be, in preference or priority to the holders of stock of such class or
classes.
The Cumulative Preferred Stock shall rank prior, as to dividends and upon
liquidation, dissolution or winding up, to the Common Stock and the
Corporation's Series A Junior Participating Preferred Stock, and on a parity
with (i) the Corporation's ESOP Convertible Preferred Stock, with a liquidation
value of $35.88 per share, (ii) the Corporation's 7-3/8% Cumulative Preferred
Stock, with a liquidation value of $200.00 per share, (iii) the Corporation's
7-3/4% Cumulative Preferred Stock, with a liquidation value of $200.00 per
share, (iv) the Corporation's Series A Fixed/Adjustable Rate Preferred Stock,
with a liquidation value of $200.00 per share, (v) if issued, the Corporation's
7.82% Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(vi) if issued, the Corporation's 7.80% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vii) if issued, the Corporation's 9.00%
Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(viii) if issued, the Corporation's 8.40% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share and (ix) if issued, the Corporation's
8.03% Cumulative Preferred Stock, with a liquidation value of $200.00 per share.
97
B. This Certificate of Designation shall not become effective until, and
shall become effective at, 12:01 a.m. on May 31, 1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused this Certificate
of Designation to be signed by Christine A. Edwards, its Executive Vice
President, General Counsel and Secretary, this 30th day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By: /s/ Christine A. Edwards
----------------------------
Name: Christine A. Edwards
Title: Executive Vice President,
General Counsel & Secretary
98
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
7-3/4% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
DEAN WITTER, DISCOVER & CO.
---------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
---------------------------
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of Directors
(the "Board") of Dean Witter, Discover & Co., a Delaware corporation
(hereinafter called the "Corporation"), by unanimous vote thereof at a meeting
on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted to and vested in the
Board by provisions of the Amended and Restated Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), which
shall consist of 1,000,000 of the shares of Preferred Stock which the
Corporation has authority to issue, is authorized, and the Board hereby fixes
the powers, designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or restrictions
thereof, of the shares of such series (in addition to the powers, designations,
preferences and relative participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the Preferred Stock) as
follows:
1. Designation and Amount; Fractional Shares. The designation for such
-----------------------------------------
series of the Preferred Stock authorized by this resolution shall be the
7-3/4% Cumulative Preferred Stock, par value $0.01 per share, with a stated
value of $200.00 per share (the
99
"Cumulative Preferred Stock"). The stated value per share of Cumulative
Preferred Stock shall not for any purpose be considered to be a determination by
the Board with respect to the capital and surplus of the Corporation. The
number of shares of Cumulative Preferred Stock shall be 1,000,000. The
Cumulative Preferred Stock is issuable in whole shares only.
2. Dividends. (a) Holders of shares of Cumulative Preferred Stock will
---------
be entitled to receive, when, as and if declared by the Board or the Committee
(as hereinafter defined) out of assets of the Corporation legally available for
payment, cash dividends payable quarterly at the rate of 7-3/4% per annum.
Dividends on the Cumulative Preferred Stock, calculated as a percentage of the
stated value, will be payable quarterly on February 28, May 30, August 30 and
November 30 (each a "dividend payment date"). Dividends on shares of the
Cumulative Preferred Stock will be cumulative from the date of initial issuance
of such shares of Cumulative Preferred Stock. Dividends will be payable, in
arrears, to holders of record as they appear on the stock books of the
Corporation on such record dates, not more than 60 days nor less than 10 days
preceding the payment dates thereof, as shall be fixed by the Board or the
Committee. The amount of dividends payable for the initial dividend period or
any period shorter than a full dividend period shall be calculated on the basis
of a 360-day year of twelve 30-day months. No dividends may be declared or paid
or set apart for payment on any Parity Preferred Stock (as such term is defined
in paragraph 9(b) below) with regard to the payment of dividends unless there
shall also be or have been declared and paid or set apart for payment on the
Cumulative Preferred Stock, like dividends for all dividend payment periods of
the Cumulative Preferred Stock ending on or before the dividend payment date of
such Parity Preferred Stock, ratably in proportion to the respective amounts of
dividends (x) accumulated and unpaid or payable on such Parity Preferred Stock,
on the one hand, and (y) accumulated and unpaid through the dividend payment
period or periods of the Cumulative Preferred Stock next preceding such dividend
payment date, on the other hand. For the purposes of this Certificate of
Designation, the "Committee" shall mean any committee of the Board to whom the
Board, pursuant to Section 141(c) of the General Corporation Law of the State of
Delaware, delegates authority to perform the
100
functions of the Board set forth in this Certificate of Designation.
Except as set forth in the preceding sentence, unless full cumulative
dividends on the Cumulative Preferred Stock have been paid, no dividends (other
than in Common Stock of the Corporation) may be paid or declared and set aside
for payment or other distribution made upon the Common Stock or on any other
stock of the Corporation ranking junior to or on a parity with the Cumulative
Preferred Stock as to dividends, nor may any Common Stock or any other stock of
the Corporation ranking junior to or on a parity with the Cumulative Preferred
Stock as to dividends be redeemed, purchased or otherwise acquired for any
consideration (or any payment be made to or available for a sinking fund for the
redemption of any shares of such stock; provided, however, that any moneys
theretofore deposited in any sinking fund with respect to any Preferred Stock of
the Corporation in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund, regardless of whether at the
time of such application full cumulative dividends upon shares of the Cumulative
Preferred Stock outstanding to the last dividend payment date shall have been
paid or declared and set apart for payment) by the Corporation; provided that
any such junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Corporation ranking junior to the Cumulative
Preferred Stock as to dividends.
(b) If one or more amendments to the Internal Revenue Code of 1986, as
amended (the "Code"), are enacted that reduce the percentage of the dividends
received deduction as specified in Section 243(a)(1) of the Code or any
successor provision (the "Dividends Received Percentage") to below 70%, the
amount of each dividend payable per share of the Cumulative Preferred Stock for
dividend payments made on or after the date of enactment of such change will be
adjusted by multiplying the amount of the dividend payable determined as
described above (before adjustment) by a factor, which will be the number
determined in accordance with the following formula (the "DRD Formula"), and
rounding the result to the nearest cent:
1 - (.35(1 - .70))
------------------
1 - (.35(1 - DRP))
101
For the purposes of the DRD Formula, "DRP" means the Dividends Received
Percentage applicable to the dividend in question. No amendment to the Code,
other than a change in the percentage of the dividends received deduction set
forth in Section 243(a)(1) of the Code or any successor provision, will give
rise to an adjustment. Notwithstanding the foregoing provisions, in the event
that, with respect to any such amendment, the Corporation will receive either an
unqualified opinion of nationally recognized independent tax counsel selected by
the Corporation or a private letter ruling or similar form of authorization from
the Internal Revenue Service to the effect that such an amendment would not
apply to dividends payable on the Cumulative Preferred Stock, then any such
amendment will not result in the adjustment provided for pursuant to the DRD
Formula. The opinion referenced in the previous sentence will be based upon a
specific exception in the legislation amending the DRP or upon a published
pronouncement of the Internal Revenue Service addressing such legislation.
Unless the context otherwise requires, references to dividends in this
Certificate of Designation will mean dividends as adjusted by the DRD Formula.
The Corporation's calculation of the dividends payable, as so adjusted and as
certified accurate as to calculation and reasonable as to method by the
independent certified public accountants then regularly engaged by the
Corporation, will be final and not subject to review absent manifest error.
If any amendment to the Code which reduces the Dividends Received
Percentage to below 70% is enacted after a dividend payable on a dividend
payment date has been declared, the amount of dividend payable on such dividend
payment date will not be increased. Instead, an amount, equal to the excess of
(x) the product of the dividends paid by the Corporation on such dividend
payment date and the DRD Formula (where the DRP used in the DRD Formula would be
equal to the reduced Dividends Received Percentage) over (y) the dividends paid
by the Corporation on such dividend payment date, will be payable to holders of
record on the next succeeding dividend payment date in addition to any other
amounts payable on such date.
In the event that the amount of dividends payable per share of the
Cumulative Preferred Stock will be adjusted pursuant to the DRD Formula, the
Corporation will cause notice of each such adjustment to be sent to
102
the holders of record as they appear on the stock books of the Corporation on
such record dates, not more than 60 days nor less than 10 days preceding the
payment dates thereof as shall be fixed by the Board or the Committee.
In the event that the Dividends Received Percentage is reduced to 40% or
less, the Corporation may, at its option, redeem the Cumulative Preferred Stock,
in whole but not in part, as described in paragraph 6 hereof.
3. Liquidation Preference. The shares of Cumulative Preferred Stock shall
----------------------
rank, as to liquidation, dissolution or winding up of the Corporation, prior to
the shares of Common Stock and any other class of stock of the Corporation
ranking junior to the Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up of the Corporation, so that in the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, the holders of the Cumulative Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings, before any distribution
is made to holders of shares of Common Stock or any other such junior stock, an
amount equal to $200.00 per share (the "Liquidation Preference" of a share of
Cumulative Preferred Stock) plus an amount equal to all dividends (whether or
not earned or declared) accrued and accumulated and unpaid on the shares of
Cumulative Preferred Stock to the date of final distribution. The holders of
the Cumulative Preferred Stock will not be entitled to receive the Liquidation
Preference until the liquidation preference of any other class of stock of the
Corporation ranking senior to the Cumulative Preferred Stock as to rights upon
liquidation, dissolution or winding up shall have been paid (or a sum set aside
therefor sufficient to provide for payment) in full. After payment of the full
amount of the Liquidation Preference and such dividends, the holders of shares
of Cumulative Preferred Stock will not be entitled to any further participation
in any distribution of assets by the Corporation. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of shares of Parity Preferred
Stock shall be insufficient to pay in full the preferential amount aforesaid,
then such assets, or the proceeds thereof,
103
shall be distributable among such holders ratably in accordance with the
respective amounts which would be payable on such shares if all amounts payable
thereon were paid in full. For the purposes hereof, neither a consolidation or
merger of the Corporation with or into any other corporation, nor a merger of
any other corporation with or into the Corporation, nor a sale or transfer of
all or any part of the Corporation's assets for cash or securities shall be
considered a liquidation, dissolution or winding up of the Corporation.
4. Conversion. The Cumulative Preferred Stock is not convertible into
----------
shares of any other class or series of stock of the Corporation.
5. Voting Rights. The holders of Shares of Cumulative Preferred Stock
-------------
shall have no voting rights whatsoever, except for any voting rights to which
they may be entitled under the laws of the State of Delaware, and except as
follows:
(a) Whenever, at any time or times, dividends payable on the shares of
Cumulative Preferred Stock or on any Parity Preferred Stock with respect to
payment of dividends, shall be in arrears for an aggregate number of days
equal to six calendar quarters or more, whether or not consecutive, the
holders of the outstanding shares of Cumulative Preferred Stock shall have
the right, with holders of shares of any one or more other class or series
of stock upon which like voting rights have been conferred and are
exercisable (voting together as a class), to elect two of the authorized
number of members of the Board at the Corporation's next annual meeting of
stockholders and at each subsequent annual meeting of stockholders until
such arrearages have been paid or set apart for payment, at which time such
right shall terminate, except as herein or by law expressly provided,
subject to revesting in the event of each and every subsequent default of
the character above mentioned. Upon any termination of the right of the
holders of shares of Cumulative Preferred Stock as a class to vote for
directors as herein provided, the term of office of all directors then in
office elected by the holders of shares of Cumulative Preferred Stock shall
terminate immediately.
104
Any director who shall have been so elected pursuant to this paragraph may
be removed at any time, either with or without cause. Any vacancy thereby
created may be filled only by the affirmative vote of the holders of shares of
Cumulative Preferred Stock voting separately as a class (together with the
holders of shares of any other class or series of stock upon which like voting
rights have been conferred and are exercisable). If the office of any director
elected by the holders of shares of Cumulative Preferred Stock voting as a class
becomes vacant for any reason other than removal from office as aforesaid, the
remaining director elected pursuant to this paragraph may choose a successor who
shall hold office for the unexpired term in respect of which such vacancy
occurred. At elections for such directors, each holder of shares of Cumulative
Preferred Stock shall be entitled to one vote for each share held (the holders
of shares of any other class or series of preferred stock having like voting
rights being entitled to such number of votes, if any, for each share of such
stock held as may be granted to them).
(b) So long as any shares of Cumulative Preferred Stock remain
outstanding, the consent of the holders of at least two-thirds of the shares of
Cumulative Preferred Stock outstanding at the time and all other classes or
series of stock upon which like voting rights have been conferred and are
exercisable (voting together as a class) given in person or by proxy, either in
writing or at any meeting called for the purpose, shall be necessary to permit,
effect or validate any one or more of the following:
(i) the issuance or increase of the authorized amount of any
class or series of shares ranking prior (as that term is defined in
paragraph 9(a) hereof) to the shares of the Cumulative Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by merger,
consolidation or otherwise of any of the provisions of the Certificate of
Incorporation (including this resolution or any provision hereof) that
would materially and adversely affect any power, preference, or special
right of the shares of
105
Cumulative Preferred Stock or of the holders thereof; provided,
however, that any increase in the amount of authorized Common
Stock or authorized Preferred Stock or any increase or decrease
in the number of shares of any series of Preferred Stock or the
creation and issuance of other series of Common Stock or
Preferred Stock, in each case ranking on a parity with or junior
to the shares of Cumulative Preferred Stock with respect to the
payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such powers, preferences or
special rights.
(c) The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such vote would
otherwise be required shall be effected, all outstanding shares of
Cumulative Preferred Stock shall have been redeemed or called for
redemption and sufficient funds shall have been deposited in trust to
effect such redemption.
6. Redemption. The shares of the Cumulative Preferred Stock may be
----------
redeemed at the option of the Corporation, as a whole, or from time to time in
part, at any time, upon not less than 30 days' prior notice mailed to the
holders of the shares to be redeemed at their addresses as shown on the stock
books of the Corporation; provided, however, that shares of the Cumulative
Preferred Stock shall not be redeemable prior to August 30, 2001, except as
stated below. Subject to the foregoing, on or after such date, shares of the
Cumulative Preferred Stock are redeemable at $200.00 per share together with an
amount equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for redemption.
If full cumulative dividends on the Cumulative Preferred Stock have not
been paid, the Cumulative Preferred Stock may not be redeemed in part and the
Corporation may not purchase or acquire any shares of the Cumulative Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of the Cumulative Preferred Stock. If fewer than all the
outstanding shares of Cumulative Preferred Stock are to be redeemed, the
Corporation
106
will select those to be redeemed by lot or a substantially equivalent method.
If a notice of redemption has been given pursuant to this paragraph 6 and
if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
of Cumulative Preferred Stock so called for redemption, then, notwithstanding
that any certificates for such shares have not been surrendered for
cancellation, on the redemption date dividends shall cease to accrue on the
shares to be redeemed, and at the close of business on the redemption date the
holders of such shares shall cease to be stockholders with respect to such
shares and shall have no interest in or claims against the Corporation by virtue
thereof and shall have no voting or other rights with respect to such shares,
except the right to receive the moneys payable upon surrender (and endorsement,
if required by the Corporation) of their certificates, and the shares evidenced
thereby shall no longer be outstanding. Subject to applicable escheat laws, any
moneys so set aside by the Corporation and unclaimed at the end of two years
from the redemption date shall revert to the general funds of the Corporation,
after which reversion the holders of such shares so called for redemption shall
look only to the general funds of the Corporation for the payment of the amounts
payable upon such redemption. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
Notwithstanding the foregoing provisions, if the Dividends Received
Percentage is equal to or less than 40% and, as a result, the amount of
dividends on the Cumulative Preferred Stock payable on any dividend payment date
will be or is adjusted upwards as described in paragraph 2(b) hereof, the
Corporation, at its option, may redeem all, but not less than all, of the
outstanding shares of the Cumulative Preferred Stock (and the Depositary Shares)
(a "Dividends Received Deduction Redemption"); provided that within sixty days
of the date on which an amendment to the Code is enacted which reduces the
Dividends Received Percentage to 40% or less, the Corporation sends notice to
holders of the Cumulative Preferred Stock relating to any Dividends Received
Deduction Redemption of such redemption. A redemption of the Cumulative
Preferred Stock will take place on the date specified in the
107
notice, which shall be not less than thirty nor more than sixty days from the
date such notice is sent to holders of the Cumulative Preferred Stock. A
Dividends Received Deduction Redemption shall be at the applicable redemption
price set forth in the following table, in each case plus accrued and unpaid
dividends (whether or not declared) thereon to but excluding the date fixed for
redemption, including any changes in dividends payable due to changes in the
Dividends Received Percentage, if any:
Redemption Price
----------------
Per
Depositary
Redemption Period Per Share Share
- ------------------ --------- ---------
May 31, 1997 to August 29, 1997..... $210.00 $52.50
August 30, 1997 to August 29, 1998.. 208.00 52.00
August 30, 1998 to August 29, 1999.. 206.00 51.50
August 30, 1999 to August 29, 2000.. 204.00 51.00
August 30, 2000 to August 29, 2001.. 202.00 50.50
On or after August 30, 2001......... 200.00 50.00
7. Authorization and Issuance of Other Securities. No consent of the
----------------------------------------------
holders of the Cumulative Preferred Stock shall be required for (a) the creation
of any indebtedness of any kind of the Corporation, (b) the creation, or
increase or decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon liquidation, dissolution
or winding up to the Cumulative Preferred Stock or (c) any increase or decrease
in the amount of authorized Common Stock or any increase, decrease or change in
the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the Committee each reserves the
-----------------------
right by subsequent amendment of this resolution from time to time to increase
or decrease the number of shares that constitute the Cumulative Preferred Stock
(but not below the number of shares thereof then outstanding) and in other
respects to amend this resolution within the limitations provided by law, this
resolution and the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock of any class or
----
classes of the Corporation shall be deemed to rank:
(a) prior to shares of the Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both,
108
if the holders of stock of such class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of shares of the Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, whether or
not the dividend rates, dividend payment dates, or redemption or liquidation
prices per share thereof be different from those of the Cumulative Preferred
Stock, if the holders of stock of such class or classes shall be entitled by the
terms thereof to the receipt of dividends or of amounts distributed upon
liquidation, dissolution or winding up, as the case may be, in proportion to
their respective dividend rates or liquidation prices, without preference or
priority of one over the other as between the holders of such stock and the
holders of shares of Cumulative Preferred Stock (the term "Parity Preferred
Stock" being used to refer to any stock on a parity with the shares of
Cumulative Preferred Stock, either as to dividends or upon liquidation,
dissolution or winding up, or both, as the context may require); and
(c) junior to shares of the Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if such class
shall be Common Stock or if the holders of the Cumulative Preferred Stock shall
be entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of stock of such class or classes.
The Cumulative Preferred Stock shall rank prior, as to dividends and upon
liquidation, dissolution or winding up, to the Common Stock and the
Corporation's Series A Junior Participating Preferred Stock, and on a parity
with (i) the Corporation's ESOP Convertible Preferred Stock, with a liquidation
value of $35.88 per share, (ii) the Corporation's 7-3/8% Cumulative Preferred
Stock, with a liquidation value of $200.00 per
109
share, (iii) the Corporation's Series A Fixed/Adjustable Rate Preferred
Stock, with a liquidation value of $200.00 per share, (iv) if issued, the
Corporation's 7.82% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share, (v) if issued, the Corporation's 7.80% Cumulative
Preferred Stock, with a liquidation value of $200.00 per share, (vi) if
issued, the Corporation's 9.00% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vii) if issued, the Corporation's
8.40% Cumulative Preferred Stock, with a liquidation value of $200.00 per
share, (viii) if issued, the Corporation's 8.20% Cumulative Preferred Stock,
with a liquidation value of $200.00 per share and (ix) if issued, the
Corporation's 8.03% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share.
110
B. This Certificate of Designation shall not become effective until,
and shall become effective at, 12:01 a.m. on May 31, 1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused this
Certificate of Designation to be signed by Christine A. Edwards, its Executive
Vice President, General Counsel and Secretary, this 30th day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By: /s/ Christine A. Edwards
--------------------------------
Name: Christine A. Edwards
Title: Executive Vice President,
General Counsel & Secretary
111
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
SERIES A FIXED/ADJUSTABLE RATE PREFERRED STOCK
($200.00 Stated Value)
OF
DEAN WITTER, DISCOVER & CO.
---------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
---------------------------
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of
Directors (the "Board") of Dean Witter, Discover & Co., a Delaware corporation
(hereinafter called the "Corporation"), by unanimous vote thereof at a meeting
on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted to and vested in the
Board by provisions of the Amended and Restated Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), which
shall consist of 1,725,000 of the shares of Preferred Stock which the
Corporation has authority to issue, is authorized, and the Board hereby fixes
the powers, designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or restrictions
thereof, of the shares of such series (in addition to the powers, designations,
preferences and relative participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the Preferred Stock) as
follows:
1. Designation and Amount; Fractional Shares. The designation for such
------------------------------------------
series of the Preferred Stock authorized by this resolution
112
shall be the Series A Fixed/Adjustable Rate Cumulative Preferred Stock, par
value $0.01 per share, with a stated value of $200.00 per share (the "Series A
Fixed/Adjustable Rate Preferred Stock"). The stated value per share of Series A
Fixed/Adjustable Rate Preferred Stock shall not for any purpose be considered to
be a determination by the Board with respect to the capital and surplus of the
Corporation. The number of shares of Series A Fixed/Adjustable Rate Preferred
Stock shall be 1,725,000. The Series A Fixed/Adjustable Rate Preferred Stock is
issuable in whole shares only.
2. Dividends. (a) Holders of shares of Series A Fixed/Adjustable Rate
----------
Preferred Stock will be entitled to receive cash dividends, when, as and if
declared by the Board or the Committee (as hereinafter defined) out of assets of
the Corporation legally available for payment. Dividends on the Series A
Fixed/Adjustable Rate Preferred Stock, calculated as a percentage of the stated
value, will be payable quarterly on February 28, May 30, August 30 and November
30 (each a "dividend payment date"). From the date of issuance of the Series A
Fixed/Adjustable Rate Preferred Stock and continuing through November 30, 2001,
the rate of such dividend will be 5.91% per annum. For the purposes of this
Certificate of Designation, the "Committee" shall mean any committee of the
Board to whom the Board, pursuant to Section 141(c) of the General Corporation
Law of the State of Delaware, delegates authority to perform the functions of
the Board set forth in this Certificate of Designation.
After November 30, 2001, dividends on the Series A Fixed/Adjustable Rate
Preferred Stock will be payable quarterly on each dividend payment date at the
Applicable Rate (as defined in paragraph 3) from time to time in effect. The
Applicable Rate per annum for any dividend period beginning on or after November
30, 2001 will be equal to .37% plus the highest of the Treasury Bill Rate, the
Ten-Year Constant Maturity Rate and the Thirty-Year
113
Constant Maturity Rate (each as defined in paragraph 3), as determined in
advance of such dividend period. The Applicable Rate per annum for any dividend
period beginning on or after November 30, 2001, will not be less then 6.41% nor
greater then 12.41% (without taking into account any adjustments set forth in
paragraph 2(b)).
Dividends on shares of the Series A Fixed/Adjustable Rate Preferred Stock
will be cumulative from the date of initial issuance of such shares of Series A
Fixed/Adjustable Rate Preferred Stock. Dividends will be payable, in arrears,
to holders of record as they appear on the stock books of the Corporation on
such record dates, not more than 60 days nor less than 10 days preceding the
payment dates thereof, as shall be fixed by the Board or the Committee. The
amount of dividends payable for the initial dividend period or any period
shorter than a full dividend period shall be calculated on the basis of a 360-
day year of twelve 30-day months. No dividends may be declared or paid or set
apart for payment on any Parity Preferred Stock (as defined in paragraph 10(b))
with regard to the payment of dividends unless there shall also be or have been
declared and paid or set apart for payment on the Series A Fixed/Adjustable Rate
Preferred Stock, like dividends for all dividend payment periods of the Series A
Fixed/Adjustable Rate Preferred Stock ending on or before the dividend payment
date of such Parity Preferred Stock ratably in proportion to the respective
amounts of dividends (x) accumulated and unpaid or payable on such Parity
Preferred Stock, on the one hand, and (y) accumulated and unpaid through the
dividend payment period or periods of the Series A Fixed/Adjustable Rate
Preferred Stock next preceding such dividend payment date, on the other hand.
Except as set forth in the preceding sentence, unless full cumulative
dividends on the Series A Fixed/Adjustable Rate Preferred Stock have been paid,
no dividends (other than in Common Stock of the Corporation) may be paid or
declared
114
and set aside for payment or other distribution made upon the Common Stock or on
any other stock of the Corporation ranking junior to or on a parity with the
Series A Fixed/Adjustable Rate Preferred Stock as to dividends, nor may any
Common Stock or any other stock of the Corporation ranking junior to or on a
parity with the Series A Fixed/Adjustable Rate Preferred Stock as to dividends
be redeemed, purchased or otherwise acquired for any consideration (or any
payment be made to or available for a sinking fund for the redemption of any
shares of such stock; provided, however, that any moneys theretofore deposited
in any sinking fund with respect to any preferred stock of the Corporation in
compliance with the provisions of such sinking fund may thereafter be applied to
the purchase or redemption of such preferred stock in accordance with the terms
of such sinking fund, regardless of whether at the time of such application full
cumulative dividends upon shares of the Series A Fixed/Adjustable Rate Preferred
Stock outstanding to the last dividend payment date shall have been paid or
declared and set apart for payment) by the Corporation; provided that any such
junior or parity Preferred Stock or Common Stock may be converted into or
exchanged for stock of the Corporation ranking junior to the Series A
Fixed/Adjustable Rate Preferred Stock as to dividends.
(b) If one or more amendments to the Internal Revenue Code of 1986, as
amended (the "Code"), are enacted that reduce the percentage of the dividends
received deduction as specified in Section 243(a)(1) of the Code or any
successor provision (the "Dividends Received Percentage") to below 70%, the
amount of each dividend payable per share of the Series A Fixed/Adjustable Rate
Preferred Stock for dividend payments made on or after the date of enactment of
such change will be adjusted by multiplying the amount of the dividend payable
determined as described above (before adjustment) by a factor, which will be the
number determined in accordance with the following
115
formula (the "DRD Formula"), and rounding the result to the nearest cent:
1 - (.35 (1 - .70))
-------------------
1 - (.35 (1 - DRP))
For the purposes of the DRD Formula, "DRP" means the Dividends Received
Percentage applicable to the dividend in question. No amendment to the Code,
other than a change in the percentage of the dividends received deduction set
forth in Section 243(a)(1) of the Code or any successor provision, will give
rise to an adjustment. Notwithstanding the foregoing provisions, in the event
that, with respect to any such amendment, the Corporation will receive either an
unqualified opinion of nationally recognized independent tax counsel selected by
the Corporation or a private letter ruling or similar form of authorization from
the Internal Revenue Service to the effect that such an amendment would not
apply to dividends payable on the Series A Fixed/Adjustable Rate Preferred
Stock, then any such amendment will not result in the adjustment provided for
pursuant to the DRD Formula. The opinion referenced in the previous sentence
will be based upon a specific exception in the legislation amending the DRP or
upon a published pronouncement of the Internal Revenue Service addressing such
legislation. Unless the context otherwise requires, references to dividends in
this Certificate of Designation will mean dividends as adjusted by the DRD
Formula. The Corporation's calculation of the dividends payable, as so adjusted
and as certified accurate as to calculation and reasonable as to method by the
independent certified public accountants then regularly engaged by the
Corporation, will be final and not subject to review absent manifest error.
If any amendment to the Code which reduces the Dividends Received
Percentage to below 70% is enacted after a dividend payable on a dividend
payment date has been declared, the amount of dividend payable on such dividend
payment date
116
will not be increased. Instead, an amount, equal to the excess of (x) the
product of the dividends paid by the Corporation on such dividend payment date
and the DRD Formula (where the DRP used in the DRD Formula would be equal to the
reduced Dividends Received Percentage) over (y) the dividends paid by the
Corporation on such dividend payment date, will be payable on the next
succeeding dividend payment date to holders of record in addition to any other
amounts payable on such date.
In addition, if prior to May 31, 1997, an amendment to the Code is enacted
that reduces the Dividends Received Percentage to below 70% and such reduction
retroactively applies to a dividend payment date of the Series A
Fixed/Adjustable Rate Cumulative Preferred Stock, no par value, with a stated
value of $200.00 per share ("Morgan Stanley Series A Fixed/Adjustable Rate
Preferred Stock") of Morgan Stanley Group Inc. ("Morgan Stanley") as to which
Morgan Stanley previously paid dividends on the Morgan Stanley Series A
Fixed/Adjustable Rate Preferred Stock (each an "Affected Dividend Payment
Date"), holders of the Series A Fixed/Adjustable Rate Preferred Stock shall be
entitled to receive when, as and if declared by the Board out of assets of the
corporation legally available for payment, additional dividends (the "Additional
Dividends") on the next succeeding dividend payment date (or if such amendment
is enacted after the dividend payable on such dividend payment date has been
declared and on or before such dividend is paid, on the second succeeding
dividend payment date following the date of enactment) payable on such
succeeding dividend payment date to holders of record in an amount equal to the
excess of (x) the product of the dividends paid by Morgan Stanley on each
Affected Dividend Payment Date and the DRD Formula (where the DRP used in the
DRD Formula would be equal to the reduced Dividends Received Percentage applied
to each Affected Dividend Payment Date) over (y) the dividends paid by Morgan
Stanley on each Affected Dividend Payment Date.
117
Additional Dividends will not be paid in respect of the enactment of
any amendment to the Code on or after May 31, 1997 which retroactively reduces
the Dividends Received Percentage to below 70%, or if prior to May 31, 1997,
such amendment would not result in an adjustment due to the Corporation having
received either an opinion of counsel or tax ruling referred to in the third
preceding paragraph. The Corporation will only make one payment of Additional
Dividends.
In the event that the amount of dividends payable per share of the Series A
Fixed/Adjustable Rate Preferred Stock will be adjusted pursuant to the DRD
Formula and/or Additional Dividends are to be paid, the Corporation will cause
notice of each such adjustment and, if applicable, any Additional Dividends, to
be sent to the holders of record as they appear on the stock books of the
Corporation on such record date, not more than 60 days nor less than 10 days
preceding the payment date thereof as shall be fixed by the Board or the
Committee.
In the event that the Dividends Received Percentage is reduced to 50% or
less, the Corporation may, at its option, redeem the Series A Fixed/Adjustable
Rate Preferred Stock, in whole but not in part, as described in paragraph 7
hereof.
3. Applicable Rate. Except as provided above in paragraph 2, the
----------------
"Applicable Rate" per annum for any dividend period beginning on or after
November 30, 2001 will be equal to .37% plus the Effective Rate (as defined
herein), but not less than 6.41% nor greater than 12.41% (without taking into
account any adjustments as described in paragraph 2(b)). The "Effective Rate"
for any dividend period beginning on or after November 30, 2001 will be equal to
the highest of the Treasury Bill Rate, the Ten-Year Constant Maturity Rate and
the Thirty-Year Constant Maturity Rate (each as defined herein) for such
dividend period. If the Corporation determines in good faith that for any
reason: (i) any one of the Treasury Bill Rate, the
118
Ten-Year Constant Maturity Rate or the Thirty-Year Constant Maturity Rate cannot
be determined for any dividend period beginning on or after November 30, 2001,
then the Effective Rate for such dividend period will be equal to the higher of
whichever two of such rates can be so determined; (ii) only one of the Treasury
Bill Rate, the Ten-Year Constant Maturity Rate or the Thirty-Year Constant
Maturity Rate can be determined for any dividend period beginning on or after
November 30, 2001, then the Effective Rate for such dividend period will be
equal to whichever such rate can be so determined; or (iii) none of the Treasury
Bill Rate, the Ten-Year Constant Maturity Rate or the Thirty-Year Constant
Maturity Rate can be determined for any dividend period beginning on or after
November 30, 2001, then the Effective Rate for the preceding dividend period
will be continued for such dividend period.
The "Treasury Bill Rate" for each dividend period will be the arithmetic
average of the two most recent weekly per annum market discount rates (or the
one weekly per annum market discount rate, if only one such rate is published
during the relevant Calendar Period (as defined herein) for three-month U.S.
Treasury bills, as published weekly by the Federal Reserve Board (as defined
herein) during the Calendar Period immediately preceding the tenth calendar day
preceding the dividend period for which the dividend rate on the Series A
Fixed/Adjustable Rate Preferred Stock is being determined.
The "Ten-Year Constant Maturity Rate" for each dividend period will be the
arithmetic average of the two most recent weekly per annum Ten-Year Average
Yields (as defined herein) (or the one weekly per annum Ten-Year Average Yield,
if only one such yield is published during the relevant Calendar Period), as
published weekly by the Federal Reserve Board during the Calendar Period
immediately preceding the tenth calendar day preceding the dividend period for
which the dividend rate on the Series A Fixed/Adjustable Rate Preferred Stock is
being determined.
119
The "Thirty-Year Constant Maturity Rate" for each dividend period will be
the arithmetic average of the two most recent weekly per annum Thirty-Year
Average Yields (as defined herein) the one weekly per annum Thirty-Year Average
Yield, if only one such yield is published during the relevant Calendar Period),
as published weekly by the Federal Reserve Board during the Calendar Period
immediately preceding the tenth calendar day preceding the dividend period for
which the dividend rate on the Series A Fixed/Adjustable Rate Preferred Stock is
being determined.
If the Federal Reserve Board does not publish a weekly per annum market
discount rate, Ten-Year Average Yield or Thirty-Year Average Yield during any
applicable Calendar Period, then the Treasury Bill Rate, Ten-Year Constant
Maturity Rate or Thirty-Year Constant Maturity Rate, as the case may be, for
such dividend period will be the arithmetic average of the two most recent
weekly per annum market discount rates for three-month U.S. Treasury bills, Ten-
Year Average Yields or Thirty-Year Average Yields, as the case may be (or the
one weekly per annum rate, if only one such rate is published during the
relevant Calendar Period), as published weekly during such Calendar Period by
any Federal Reserve Bank or by any U.S. Government department or agency selected
by the Corporation. If any such rate is not published by the Federal Reserve
Board or by any Federal Reserve Bank or by any U.S. Government department or
agency during such Calendar Period, then the Treasury Bill Rate, Ten-Year
Constant Maturity Rate or Thirty-Year Constant Maturity Rate for such dividend
period will be the arithmetic average of the two most recent weekly per annum
(i) in the case of the Treasury Bill Rate, market discount rates (or the one
weekly per annum market discount rate, if only one such rate is published during
the relevant Calendar Period) for all of the U.S. Treasury bills then having
remaining maturities of not less than 80 nor more than 100 days, and (ii) in the
case of the Ten-Year Constant Maturity Rate, average yields to maturity (or the
one weekly per annum average yield to
120
maturity, if only one such yield is published during the relevant Calendar
Period) for all of the actively traded marketable U.S. Treasury fixed interest
rate securities (other then Special Securities (as defined herein)) then having
remaining maturities of not less than eight nor more than twelve years, and
(iii) in the case of the Thirty-Year Constant Maturity Rate, average yields to
maturity (or the one weekly per annum average yield to maturity, if only one
such yield is published during the relevant Calendar Period) for all of the
actively traded marketable U.S. Treasury fixed interest rate securities (other
than Special Securities) then having remaining maturities of not less than
twenty-eight nor more than thirty years, in each case as published during such
Calendar Period by the Federal Reserve Board or, if the Federal Reserve Board
does not publish such rates, by any Federal Reserve Bank or by any U.S.
Government department or agency selected by the Corporation. If the Corporation
determines in good faith that for any reason (i) no such U.S. Treasury bill
rates are published as provided above during such Calendar Period or (ii) the
Corporation cannot determine the Treasury Bill Rate for any dividend period;
then the Treasury Bill Rate for such dividend period will be the arithmetic
average of the per annum market discount rates based upon the closing bids
during such Calendar Period for each of the issues of marketable non-interest-
bearing U.S. Treasury securities with a remaining maturity of not less than 80
nor more than 100 days from the date of each such quotation, as chosen and
quoted daily for each business day in New York City (or less frequently if daily
quotations are not generally available) to the Corporation by at least three
recognized dealers in U.S. Government securities selected by the Corporation.
If the Corporation determines in good faith that for any reason the Corporation
cannot determine the Ten-Year Constant Maturity Rate or Thirty-Year Constant
Maturity Rate for any dividend period as provided above, then the applicable
rate for such dividend period will be the arithmetic average of the per annum
average yields to maturity based upon the closing
121
bids during such Calendar Period for each of the issues of actively traded
marketable U.S. Treasury fixed interest rate securities (other then Special
Securities) with a final maturity date (i) in the case of the Ten-Year Constant
Maturity Rate, not less than eight nor more then twelve years from the date of
each such quotation, and (ii) in the case of the Thirty-Year Constant Maturity
Rate, no less than twenty-eight nor more than thirty years from the date of each
such quotation, in each case as chosen and quoted daily for each business day in
New York City (or less frequently if daily quotations are not generally
available) to the Corporation by at least three recognized dealers in the United
States.
The Treasury Bill Rate, the Ten-Year Constant Maturity Rate and the Thirty-
Year Constant Maturity Rate will each be rounded to the nearest five hundredths
of a percent, with .025% being rounded upward.
The Applicable Rate with respect to each dividend period beginning on or
after November 30, 2001 will be calculated as promptly as practicable by the
Corporation according to the appropriate method described above. The
Corporation will cause notice of each Applicable Rate to be given to the holders
of Series A Fixed/Adjustable Rate Preferred Stock when payment is made of the
dividend for the immediately preceding dividend period.
As used in this paragraph 3, the term "Calendar Period" means a period of
fourteen calendar days; the term "Federal Reserve Board" means the Board of
Governors of the Federal Reserve System; the term "Special Securities" means
securities which can, at the option of the holder, be surrendered at face value
in payment of any Federal estate tax or which provide tax benefits to the holder
and are priced to reflect such tax benefits or which were originally issued at a
deep or substantial discount; the term "Ten-Year Average Yield" means the
average yield to maturity for actively traded marketable U.S.
122
Treasury fixed interest rate securities (adjusted to constant maturities of ten
years); and the term "Thirty-Year Average Yield" means the average yield to
maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of thirty years).
4. Liquidation Preference. The shares of Series A Fixed/Adjustable Rate
-----------------------
Preferred Stock shall rank, as to liquidation, dissolution or winding up of the
Corporation, prior to the shares of Common Stock and any other class of stock of
the Corporation ranking junior to the Series A Fixed/Adjustable Rate Preferred
Stock as to rights upon liquidation, dissolution or winding up of the
Corporation, so that in the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the holders of the Series
A Fixed/Adjustable Rate Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution to its stockholders,
whether from capital, surplus or earnings, before any distribution is made to
holders of shares of Common Stock or any other such junior stock, an amount
equal to $200.00 per share (the "Liquidation Preference" of a share of Series A
Fixed/Adjustable Rate Preferred Stock) plus an amount equal to all dividends
(whether or not earned or declared) accrued and accumulated and unpaid on the
shares of Series A Fixed/Adjustable Rate Preferred Stock to the date of final
distribution. The holders of the Series A Fixed/Adjustable Rate Preferred Stock
will not be entitled to receive the Liquidation Preference until the liquidation
preference of any other class of stock of the Corporation ranking senior to the
Series A Fixed/Adjustable Rate Preferred Stock as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set aside therefor
sufficient to provide for payment) in full. After payment of the full amount of
the Liquidation Preference and such dividends, the holders of shares of Series A
Fixed/Adjustable Rate Preferred Stock will not be entitled to any further
participation in any distribution of
123
assets by the Corporation. If, upon any liquidation, dissolution or winding up
of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of shares of Parity Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid, then such assets,
or the proceeds thereof, shall be distributable among such holders ratably in
accordance with the respective amounts which would be payable on such shares if
all amounts payable thereon were paid in full. For the purposes hereof, neither
a consolidation or merger of the Corporation with or into any other corporation,
nor a merger of any other corporation with or into the Corporation, nor a sale
or transfer of all or any part of the Corporation's assets for cash or
securities shall be considered a liquidation, dissolution or winding up of the
Corporation.
5. Conversion. The Series A Fixed/Adjustable Rate Preferred Stock is not
-----------
convertible into shares of any other class or series of stock of the
Corporation.
6. Voting Rights. The holders of shares of Series A Fixed/Adjustable Rate
--------------
Preferred Stock shall have no voting rights whatsoever, except for any voting
rights to which they may be entitled under the laws of the State of Delaware,
and except as follows:
(a) Whenever, at any time or times, dividends payable on the
shares of Series A Fixed/Adjustable Rate Preferred Stock or on any
Parity Preferred Stock with respect to payment of dividends, shall be in
arrears for an aggregate number of days equal to six calendar quarters
or more, whether or not consecutive, the holders of the outstanding
shares of Series A Fixed/Adjustable Rate Preferred Stock shall have the
right, with holders of shares of any one or more other class or series
of stock upon which like voting rights have been conferred and are
exercisable (voting together as a class), to
124
elect two of the authorized number of members of the Board at the
Corporation's next annual meeting of stockholders and at each subsequent
annual meeting of stockholders until such arrearages have been paid or
set apart for payment, at which time such right shall terminate, except
as herein or by law expressly provided, subject to revesting in the
event of each and every subsequent default of the character above
mentioned. Upon any termination of the right of the holders of shares of
Series A Fixed/Adjustable Rate Preferred Stock as a class to vote for
directors as herein provided, the term of office of all directors then
in office elected by the holders of shares of Series A Fixed/Adjustable
Rate Preferred Stock shall terminate immediately.
Any director who shall have been so elected pursuant to this
paragraph may be removed at any time, either with or without cause. Any
vacancy thereby created may be filled only by the affirmative vote of
the holders of shares of Series A Fixed/Adjustable Rate Preferred Stock
voting separately as a class (together with the holders of shares of any
other class or series of stock upon which like voting rights have been
conferred and are exercisable). If the office of any director elected by
the holders of shares of Series A Fixed/Adjustable Rate Preferred Stock
voting as a class becomes vacant for any reason other than removal from
office as aforesaid, the remaining director elected pursuant to this
paragraph may choose a successor who shall hold office for the unexpired
term in respect of which such vacancy occurred. At elections for such
directors, each holder of shares of Series A Fixed/Adjustable Rate
Preferred Stock shall be entitled to one vote for each share held (the
holders of shares of any other class or series of Preferred Stock having
like voting rights being entitled to such number of votes, if any, for
each share
125
of such stock held as may be granted to them).
(b) So long as any shares of Series A Fixed/Adjustable Rate Preferred
Stock remain outstanding, the consent of the holders of at least two-thirds of
the shares of Series A Fixed/Adjustable Rate Preferred Stock outstanding at the
time and all other classes or series of stock upon which like voting rights have
been conferred and are exercisable (voting together as a class) given in person
or by proxy, either in writing or at any meeting called for the purpose, shall
be necessary to permit, effect or validate any one or more of the following:
(i) the issuance or increase of the authorized amount of any
class or series of shares ranking prior (as that term is defined in
paragraph 10(a) hereof) to the shares of the Series A Fixed/Adjustable
Rate Preferred Stock; or
(ii) the amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the Certificate
of Incorporation (including this resolution or any provision hereof)
that would materially and adversely affect any power, preference, or
special right of the shares of Series A Fixed/Adjustable Rate Preferred
Stock or of the holders thereof; provided, however, that any increase in
the amount of authorized Common Stock or authorized Preferred Stock or
any increase or decrease in the number of shares of any series of
Preferred Stock or the creation and issuance of other series of Common
Stock or Preferred Stock, in each case ranking on a parity with or
junior to the shares of Series A Fixed/Adjustable Rate Preferred Stock
with respect to the
126
payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and
adversely affect such powers, preferences or special rights.
(c) The foregoing voting provisions shall not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of Series A
Fixed/Adjustable Rate Preferred Stock shall have been redeemed or called
for redemption and sufficient funds shall have been deposited in trust to
effect such redemption.
7. Redemption. The shares of the Series A Fixed/Adjustable Rate Preferred
-----------
Stock may be redeemed at the option of the Corporation, as a whole, or from time
to time in part, at any time, upon not less than 30 days' prior notice mailed to
the holders of the shares to be redeemed at their addresses as shown on the
stock books of the Corporation; provided, however, that shares of the Series A
Fixed/Adjustable Rate Preferred Stock shall not be redeemable prior to November
30, 2001, except as stated below. Subject to the foregoing, on or after such
date, shares of the Series A Fixed/Adjustable Rate Preferred Stock are
redeemable at $200.00 per share together with an amount equal to all dividends
(whether or not earned or declared) accrued and accumulated and unpaid to, but
excluding, the date fixed for redemption.
If full cumulative dividends on the Series A Fixed/Adjustable Rate
Preferred Stock have not been paid, the Series A Fixed/Adjustable Rate Preferred
Stock may not be redeemed in part and the Corporation may not purchase or
acquire any shares of the Series A Fixed/Adjustable Rate Preferred Stock
otherwise than pursuant to a purchase or exchange offer made on the same terms
to all holders of the Series A Fixed/Adjustable Rate Preferred Stock. If fewer
than all the
127
outstanding shares of Series A Fixed/Adjustable Rate Preferred Stock are to be
redeemed, the Corporation will select those to be redeemed by lot or a
substantially equivalent method.
If a notice of redemption has been given pursuant to this paragraph 7 and
if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
of Series A Fixed/Adjustable Rate Preferred Stock so called for redemption,
then, notwithstanding that any certificates for such shares have not been
surrendered for cancellation, on the redemption date dividends shall cease to
accrue on the shares to be redeemed, and at the close of business on the
redemption date the holders of such shares shall cease to be stockholders with
respect to such shares and shall have no interest in or claims against the
Corporation by virtue thereof and shall have no voting or other rights with
respect to such shares, except the right to receive the moneys payable upon
surrender (and endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no longer be outstanding.
Subject to applicable escheat laws, any moneys so set aside by the Corporation
and unclaimed at the end of two years from the redemption date shall revert to
the general funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such redemption. Any
interest accrued on funds so deposited shall be paid to the Corporation from
time to time.
Notwithstanding the foregoing provisions, if the Dividends Received
Percentage is equal to or less than 50% and, as a result, the amount of
dividends on the Series A Fixed/Adjustable Rate Preferred Stock payable on any
dividend payment date will be or is adjusted upwards as described in paragraph
2(b) hereof, the Corporation, at its
128
option, may redeem all, but not less than all, of the outstanding shares of the
Series A Fixed/Adjustable Rate Preferred Stock (the Depositary Shares) (a
"Dividends Received Deduction Redemption") provided that within sixty days of
the date on which an amendment to the Code is enacted which reduces the
Dividends Received Percentage to 50% or less, the Corporation sends notice to
holders of the Series A Fixed/Adjustable Rate Preferred Stock of such
redemption. A Dividends Received Deduction Redemption, in accordance with this
paragraph, will take place on the date specified in the notice, which shall be
not less than thirty nor more then sixty days from the date such notice is sent
to holders of the Series A Fixed/Adjustable Rate Preferred Stock. A Dividends
Received Deduction Redemption shall be at the applicable redemption price set
forth in the following table, in each case plus accrued and unpaid dividends
(whether or not declared) thereon to but excluding the date fixed for
redemption, including any changes in dividends payable due to changes in the
Dividends Received Percentage and Additional Dividends, if any:
Redeemable Price
----------------------
Per
Depositary
Redemption Period Per Share Share
- ----------------- --------- -----------
May 31, 1997 to November 29, 1997....... $210.00 $52.50
November 30, 1997 to November 29, 1998.. 208.00 52.00
November 30, 1998 to November 29, 1999.. 206.00 51.50
November 30, 1999 to November 29, 2000.. 204.00 51.00
November 30, 2000 to November 29, 2001.. 202.00 50.50
On or after November 30, 2001........... 200.00 50.00
8. Authorization and Issuance of Other Securities. No consent of the holders
-----------------------------------------------
of the Series A Fixed/Adjustable Rate Preferred Stock shall be required for (a)
the creation of any indebtedness of any kind of the Corporation,
129
(b) the creation, or increase or decrease in the amount, of any class or series
of stock of the Corporation not ranking prior as to dividends or upon
liquidation, dissolution or winding up to the Series A Fixed/Adjustable Rate
Preferred Stock or (c) any increase or decrease in the amount of authorized
Common Stock or any increase, decrease or change in the par value thereof or in
any other terms thereof.
9. Amendment of Resolution. The Board and the Committee each reserves the
------------------------
right by subsequent amendment of this resolution from time to time to increase
or decrease the number of shares that constitute the Series A Fixed/Adjustable
Rate Preferred Stock (but not below the number of shares thereof then
outstanding) and in other respects to amend this resolution within the
limitations provided by law, this resolution and the Certificate of
Incorporation.
10. Rank. For the purposes of this resolution, any stock of any class or
-----
classes of the Corporation shall be deemed to rank:
(a) prior to shares of the Series A Fixed/Adjustable Rate Preferred
Stock, either as to dividends or upon liquidation, dissolution or winding up,
or both, if the holders of stock of such class or classes shall be entitled by
the terms thereof to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of shares of the Series A Fixed/Adjustable Rate
Preferred Stock;
(b) on a parity with shares of the Series A Fixed/Adjustable Rate
Preferred Stock, either as to dividends or upon liquidation, dissolution or
winding up, or both, whether or not the dividend rates, dividend payment
dates, or redemption or liquidation prices per share thereof be
130
different from those of the Series A Fixed/Adjustable Rate Preferred Stock, if
the holders of stock of such class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts distributed upon
liquidation, dissolution or winding up, as the case may be, in proportion to
their respective dividend rates or liquidation prices, without preference or
priority of one over the other as between the holders of such stock and the
holders of shares of Series A Fixed/Adjustable Rate Preferred Stock (the term
"Parity Preferred Stock" being used to refer to any stock on a parity with the
shares of Series A Fixed/Adjustable Preferred Stock, either as to dividends or
upon liquidation, dissolution or winding up, or both, as the context may
require); and
(c) junior to shares of the Series A Fixed/Adjustable Rate Preferred
Stock, either as to dividends or upon liquidation, dissolution or winding up,
or both, if such class shall be Common Stock or if the holders of the Series A
Fixed/Adjustable Rate Preferred Stock shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to the holders of stock of
such class or classes.
The Series A Fixed/Adjustable Rate Preferred Stock shall rank prior, as to
dividends and upon liquidation, dissolution or winding up, to the Common Stock
and the Corporation's Series A Junior Participating Preferred Stock, and on a
parity with (i) the Corporation's ESOP Convertible Preferred Stock, with a
liquidation value of $35.88 per share, (ii) the Corporation's 7-3/8% Cumulative
Preferred Stock, with a liquidation value of $200.00 per share, (iii) the
Corporation's 7-3/4% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share, (iv) if issued, the Corporation's 7.82% Cumulative
131
Preferred Stock, with a liquidation value of $200.00 per share, (v) if
issued, the Corporation's 7.80% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vi) if issued, the
Corporation's 9.00% Cumulative Preferred Stock, with a liquidation value
of $200.00 per share, (vii) if issued, the Corporation's 8.40%
Cumulative Preferred Stock, with a liquidation value of $200.00 per
share, (viii) if issued, the Corporation's 8.20% Cumulative Preferred
Stock, with a liquidation value of $200.00 per share and (ix) if issued,
the Corporation's 8.03% Cumulative Preferred Stock, with a liquidation
value of $200.00 per share.
132
B. This Certificate of Designation shall not become effective until,
and shall become effective at, 12:01 a.m. on May 31, 1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused this
Certificate of Designation to be signed by Christine A. Edwards, its Executive
Vice President, General Counsel and Secretary, this 30th day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By: /s/ Christine A. Edwards
----------------------------
Name: Christine A. Edwards
Title: Executive Vice President,
General Counsel & Secretary
133
CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
OF THE
8.03% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF
DEAN WITTER, DISCOVER & CO.
___________________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
___________________________________
The undersigned DOES HEREBY CERTIFY:
A. The following resolution was duly adopted by the Board of Directors
(the "Board") of Dean Witter, Discover & Co., a Delaware corporation
(hereinafter called the "Corporation"), by unanimous vote thereof at a meeting
on May 28, 1997:
RESOLVED that, pursuant to authority expressly granted to and vested in the
Board by provisions of the Amended and Restated Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), the issuance of a series
of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), which
shall consist of 670,000 of the shares of Preferred Stock which the Corporation
has authority to issue, is authorized, and the Board hereby fixes the powers,
designations, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the
shares of such series (in addition to the powers, designations, preferences and
relative participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the Preferred Stock) as
follows:
1. Designation and Amount; Fractional Shares. The designation for such
-----------------------------------------
series of the Preferred Stock authorized by this resolution shall be the 8.03%
134
Cumulative Preferred Stock, par value $0.01 per share, with a stated value of
$200.00 per share (the "Cumulative Preferred Stock"). The stated value per
share of the Cumulative Preferred Stock shall not for any purpose be considered
to be a determination by the Board with respect to the capital and surplus of
the Corporation. The number of shares of the Cumulative Preferred Stock shall
be 670,000. The Cumulative Preferred Stock is issuable in whole shares only.
2. Dividends. (a) Holders of shares of the Cumulative Preferred Stock
---------
will be entitled to receive, when, as and if declared by the Board or the
Committee (as hereinafter defined) out of assets of the Corporation legally
available for payment cash dividends at the rate of 8.03% per annum. Dividends
on the Cumulative Preferred Stock will be payable quarterly on February 28, May
30, August 30 and November 30 of each year (each a "dividend payment date").
Dividends on shares of the Cumulative Preferred Stock will be cumulative from
the date of initial issuance of such shares of the Cumulative Preferred Stock.
Dividends will be payable, in arrears, to holders of record as they appear on
the stock books of the Corporation on such record dates, not more than 60 days
nor less than 10 days preceding the payment dates thereof, as shall be fixed by
the Board or the Committee. The amount of dividends payable for the initial
dividend period or any period shorter than a full dividend period shall be
calculated on the basis of a 360-day year of twelve 30-day months. No dividends
may be declared or paid or set apart for payment on any Parity Preferred Stock
(as defined in paragraph 9(b) below) with regard to the payment of dividends
unless there shall also be or have been declared and paid or set apart for
payment on the Cumulative Preferred Stock, like dividends for all dividend
payment periods of the Cumulative Preferred Stock ending on or before the
dividend payment date of such Parity Preferred Stock ratably in proportion to
the respective amounts of dividends (x) accumulated and unpaid or payable on
such Parity Preferred Stock, on the one hand, and (y) accumulated and unpaid
through the dividend payment period or periods of the Cumulative Preferred Stock
next preceding such dividend payment date, on the other hand. For the purposes
of this Certificate of Designation, the "Committee" shall mean any committee of
the Board to whom the Board, pursuant to Section 141(c) of the General
Corporation Law of the State of Delaware, delegates authority to
135
perform the functions of the Board set forth in this Certificate of Designation.
Except as set forth in the preceding sentence, unless full cumulative
dividends on the Cumulative Preferred Stock have been paid, no dividends (other
than in Common Stock of the Corporation) may be paid or declared and set aside
for payment or other distribution made upon the Common Stock or on any other
stock of the Corporation ranking junior to or on a parity with the Cumulative
Preferred Stock as to dividends, nor may any Common Stock or any other stock of
the Corporation ranking junior to or on a parity with the Cumulative Preferred
Stock as to dividends be redeemed, purchased or otherwise acquired for any
consideration (or any payment be made to or available for a sinking fund for the
redemption of any shares of such stock; provided, however, that any moneys
theretofore deposited in any sinking fund with respect to any Preferred Stock of
the Corporation in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund, regardless of whether at the
time of such application full cumulative dividends upon shares of the Cumulative
Preferred Stock outstanding to the last dividend payment date shall have been
paid or declared and set apart for payment) by the Corporation; provided that
any such junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Corporation ranking junior to the Cumulative
Preferred Stock as to dividends.
(b) If one or more amendments to the Internal Revenue Code of 1986, as
amended (the "Code"), are enacted that reduce the percentage of the dividends
received deduction as specified in Section 243(a)(1) of the Code or any
successor provision (the "Dividends Received Percentage") to below 70%, the
amount of each dividend payable per share of the Cumulative Preferred Stock for
dividend payments made on or after the date of enactment of such change, and so
long as the Dividends Received Percentage remains below 70%, will be adjusted by
multiplying the amount of the dividend payable determined as described above
(before adjustment) by a factor, which will be the number determined in
accordance with the following formula
136
(the "DRD Formula"), and rounding the result to the nearest cent:
1 - (.35 (1 - .70))
-------------------
1- (.35 (1 - DRP))
For the purposes of the DRD Formula, "DRP" means the Dividends Received
Percentage applicable to the dividend in question. No amendment to the Code,
other than a change in the percentage of the dividends received deduction set
forth in Section 243(a)(1) of the Code or any successor provision, will give
rise to an adjustment. Notwithstanding the foregoing provisions, in the event
that, with respect to any such amendment, the Corporation will receive either an
unqualified opinion of nationally recognized independent tax counsel selected by
the Corporation or a private letter ruling or similar form of authorization from
the Internal Revenue Service to the effect that such an amendment would not
apply to dividends payable on the Cumulative Preferred Stock, then any such
amendment will not result in the adjustment provided for pursuant to the DRD
Formula. The opinion referenced in the previous sentence will be based upon a
specific exception in the legislation amending the DRP or upon a published
pronouncement of the Internal Revenue Service addressing such legislation.
Unless the context otherwise requires, references to dividends in this
Certificate of Designation will mean dividends as adjusted by the DRD Formula.
The Corporation's calculation of the dividends payable, as so adjusted and as
certified accurate as to calculation and reasonable as to method by the
independent certified public accountants then regularly engaged by the
Corporation, will be final and not subject to review absent manifest error.
If any amendment to the Code which reduces the Dividends Received
Percentage to below 70% is enacted after a dividend payable on a dividend
payment date has been declared and on or before such dividend is paid, the
amount of dividend payable on such dividend payment date will not be increased.
Instead, an amount, equal to the excess of (x) the product of the dividends paid
by the Corporation on such dividend payment date and the DRD Formula (where the
DRP used in the DRD Formula would be equal to the reduced Dividends Received
Percentage) over (y) the dividends paid by the Corporation on such dividend
payment date, will be payable on the next succeeding dividend payment date to
137
holders of record on the record date for such next succeeding dividend payment
in addition to any other amounts payable on such date.
In the event that the amount of dividends payable per share of the
Cumulative Preferred Stock will be adjusted pursuant to the DRD Formula, the
Corporation will cause notice of each such adjustment to be sent to the holders
of record as they appear on the stock books of the Corporation on such record
date, not more than 60 days nor less than 10 days preceding the payment date
thereof as shall be fixed by the Board or the Committee.
In the event that the Dividends Received Percentage is reduced to 50% or
less, the Corporation may, at its option, redeem the Cumulative Preferred Stock,
in whole but not in part, as described in paragraph 6 hereof.
3. Liquidation Preference. The shares of the Cumulative Preferred Stock
----------------------
shall rank, as to liquidation, dissolution or winding up of the Corporation,
prior to the shares of Common Stock and any other class of stock of the
Corporation ranking junior to the Cumulative Preferred Stock as to rights upon
liquidation, dissolution or winding up of the Corporation, so that in the event
of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the Cumulative Preferred Stock shall be
entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of Common Stock or any
other such junior stock, an amount equal to $200.00 per share (the "Liquidation
Preference" of a share of the Cumulative Preferred Stock) plus an amount equal
to all dividends (whether or not earned or declared) accrued and accumulated and
unpaid on the shares of the Cumulative Preferred Stock to the date of final
distribution. The holders of the Cumulative Preferred Stock will not be
entitled to receive the Liquidation Preference until the liquidation preference
of any other class of stock of the Corporation ranking senior to the Cumulative
Preferred Stock as to rights upon liquidation, dissolution or winding up shall
have been paid (or a sum set aside therefor sufficient to provide for payment)
in full. After payment of the full amount of the Liquidation Preference and
such dividends, the
138
holders of shares of the Cumulative Preferred Stock will not be entitled to any
further participation in any distribution of assets by the Corporation. If,
upon any liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation, or proceeds thereof, distributable among the holders of
shares of Parity Preferred Stock shall be insufficient to pay in full the
preferential amount aforesaid, then such assets, or the proceeds thereof, shall
be distributable among such holders ratably in accordance with the respective
amounts which would be payable on such shares if all amounts payable thereon
were paid in full. For the purposes hereof, neither a consolidation or merger
of the Corporation with or into any other corporation, nor a merger of any other
corporation with or into the Corporation, nor a sale or transfer of all or any
part of the Corporation's assets for cash or securities shall be considered a
liquidation, dissolution or winding up of the Corporation.
4. Conversion. The Cumulative Preferred Stock is not convertible into
----------
shares of any other class or series of stock of the Corporation.
5. Voting Rights. The holders of shares of the Cumulative Preferred Stock
-------------
shall have no voting rights whatsoever, except for any voting rights to which
they may be entitled under the laws of the State of Delaware, and except as
follows:
(a) Whenever, at any time or times, dividends payable on the shares of
Cumulative Preferred Stock or on any Parity Preferred Stock with respect to
payment of dividends, shall be in arrears for an aggregate number of days
equal to six calendar quarters or more, whether or not consecutive, the
holders of the outstanding shares of the Cumulative Preferred Stock shall
have the right, with holders of shares of any one or more other class or
series of stock upon which like voting rights have been conferred and are
exercisable (voting together a class), to elect two of the authorized
number of members of the Board at the Corporation's next annual meeting of
stockholders and at each subsequent annual meeting of stockholders until
such arrearages have been paid or set apart for payment, at which time such
right shall terminate, except as herein or by law expressly provided,
subject to revesting in the
139
event of each and every subsequent default of the character above
mentioned. Upon any termination of the right of the holders of shares of
the Cumulative Preferred Stock as a class to vote for directors as herein
provided, the term of office of all directors then in office elected by the
holders of shares of the Cumulative Preferred Stock shall terminate
immediately.
Any director who shall have been so elected pursuant to this paragraph may
be removed at any time, either with or without cause. Any vacancy thereby
created may be filled only by the affirmative vote of the holders of shares
of the Cumulative Preferred Stock voting separately as a class (together
with the holders of shares of any other class or series of stock upon which
like voting rights have been conferred and are exercisable). If the office
of any director elected by the holders of shares of the Cumulative
Preferred Stock voting as a class becomes vacant for any reason other than
removal from office as aforesaid, the remaining director elected pursuant
to this paragraph may choose a successor who shall hold office for the
unexpired term in respect of which such vacancy occurred. At elections for
such directors, each holder of shares of the Cumulative Preferred Stock
shall be entitled to one vote for each share held (the holders of shares of
any other class or series of preferred stock having like voting rights
being entitled to such number of votes, if any, for each share of such
stock held as may be granted to them).
(b) So long as any shares of the Cumulative Preferred Stock remain
outstanding, the consent of the holders of at least two-thirds of the
shares of the Cumulative Preferred Stock outstanding at the time and all
other classes or series of stock upon which like voting rights have been
conferred and are exercisable (voting together as a class) given in person
or by proxy, either in writing or at any meeting called for the purpose,
shall be necessary to permit, effect or validate any one or more of the
following:
(i) the issuance or increase of the authorized amount of any
class or series of shares ranking prior (as that term is defined
140
in paragraph 9(a) hereof) to the shares of the Cumulative Preferred
Stock; or
(ii) the amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of the Certificate
of Incorporation (including this resolution or any provision hereof)
that would materially and adversely affect any power, preference, or
special right of the shares of the Cumulative Preferred Stock or of the
holders thereof; provided, however, that any increase in the amount of
authorized Common Stock or authorized Preferred Stock or any increase
or decrease in the number of shares of any series of Preferred Stock or
the creation and issuance of other series of Common Stock or Preferred
Stock, in each case ranking on a parity with or junior to the shares of
the Cumulative Preferred Stock with respect to the payment of dividends
and the distribution of assets upon liquidation, dissolution or winding
up, shall not be deemed to materially and adversely affect such powers,
preferences or special rights.
(c) The foregoing voting provisions shall not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of the Cumulative
Preferred Stock shall have been redeemed or called for redemption and
sufficient funds shall have been deposited in trust to effect such
redemption.
6. Redemption. The shares of the Cumulative Preferred Stock may be
----------
redeemed at the option of the Corporation, as a whole, or from time to time in
part, at any time, upon not less than 30 days' prior notice mailed to the
holders of the shares to be redeemed at their addresses as shown on the stock
books of the Corporation; provided, however, that shares of the Cumulative
Preferred Stock shall not be redeemable prior to February 28, 2007, except as
stated below. Subject to the foregoing, on or after such date, shares of the
Cumulative Preferred Stock are redeemable at the option of the Corporation, in
whole or in part, upon not less than 30 days' notice at the redemption prices
set forth below, plus accrued and accumulated but unpaid dividends to but
excluding the date fixed for
141
redemption, if redeemed during the twelve-month period beginning on February 28
of the years indicated below:
Year Redemption Price Per Share
- ---- --------------------------
2007................... $205.354
2008................... 204.282
2009................... 203.212
2010................... 202.142
2011................... 201.070
On or after 2012....... 200.000
If full cumulative dividends on the Cumulative Preferred Stock have
not been paid, the Cumulative Preferred Stock may not be redeemed in part and
the Corporation may not purchase or acquire any share of the Cumulative
Preferred Stock otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of the Cumulative Preferred Stock. If fewer than
all the outstanding shares of the Cumulative Preferred Stock are to be redeemed,
the Corporation will select those to be redeemed by lot or a substantially
equivalent method.
Notwithstanding the foregoing provisions, if the Dividends Received
Percentage is equal to or less than 50% and, as a result, the amount of
dividends on the Cumulative Preferred Stock payable on any dividend payment date
will be or is adjusted upwards as described in paragraph 2(b) hereof, the
Corporation, at its option, may redeem all, but not less than all, of the
outstanding shares of the Cumulative Preferred Stock (a "Dividends Received
Deduction Redemption"); provided that within sixty days of the date of the date
on which an amendment to the Code is enacted which reduces the Dividends
Received Percentage to 50% or less and the date on which notice of issuance of
the Cumulative Preferred Stock is given, the Corporation sends notice to holders
of the Cumulative Preferred Stock of such redemption. A Dividends Received
Deduction Redemption, in accordance with this paragraph, will take place on the
date specified in the notice, which shall be not less than thirty nor more than
sixty days from the date such notice is sent to holders of the Cumulative
Preferred Stock. A Dividends Received Deduction Redemption shall be at the
applicable redemption price set forth in the following table, in each case plus
accrued and accumulated but unpaid dividends thereon to but excluding the date
fixed for redemption, including any changes in
142
dividends payable due to changes in the Dividends Received Percentage and
Additional Dividends, if any:
Redemption period Redemption price per share
- ----------------- --------------------------
February 28, 1998 to February 27, 1999 $210.000
February 28, 1999 to February 27, 2000 208.889
February 28, 2000 to February 27, 2001 207.778
February 28, 2001 to February 27, 2002 206.667
February 28, 2002 to February 27, 2003 205.556
February 28, 2003 to February 27, 2004 204.444
February 28, 2004 to February 27, 2005 203.333
February 28, 2005 to February 27, 2006 202.222
February 28, 2006 to February 27, 2007 201.111
If a Dividends Received Deduction Redemption occurs on or after February 28,
2007, the redemption prices shall be as set forth in the first paragraph of this
paragraph 6.
If a notice of redemption has been given pursuant to this paragraph 6 and
if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
of the Cumulative Preferred Stock so called for redemption, then,
notwithstanding that any certificates for such shares have not been surrendered
for cancellation, on the redemption date dividends shall cease to accrue on the
shares to be redeemed, and at the close of business on the redemption date the
holders of such shares shall cease to be stockholders with respect to such
shares and shall have no interest in or claims against the Corporation by virtue
thereof and shall have no voting or other rights with respect to such shares,
except the right to receive the moneys payable upon surrender (and endorsement,
if required by the Corporation) of their certificates, and the shares evidenced
thereby shall no longer be outstanding. Subject to applicable escheat laws, any
moneys so set aside by the Corporation and unclaimed at the end of two years
from the redemption date shall revert to the general funds of the Corporation,
after which reversion the holders of such shares so called for redemption shall
look only to the general funds of the Corporation for the payment of the amounts
payable upon such redemption. Any interest accrued on funds so deposited shall
be paid to the Corporation from time to time.
143
7. Authorization and Issuance of Other Securities. No consent of the
----------------------------------------------
holders of the Cumulative Preferred Stock shall be required for (a) the creation
of any indebtedness of any kind of the Corporation, (b) the creation, or
increase or decrease in the amount, of any class or series of stock of the
Corporation not ranking prior as to dividends or upon liquidation, dissolution
or winding up to the Cumulative Preferred Stock or (c) any increase or decrease
in the amount of authorized Common Stock or any increase, decrease or change in
the par value thereof or in any other terms thereof.
8. Amendment of Resolution. The Board and the Committee each reserves
-----------------------
the right by subsequent amendment of this resolution from time to time to
increase or decrease the number of shares that constitute the Cumulative
Preferred Stock (but not below the number of shares thereof then outstanding)
and in other respects to amend this resolution within the limitations provided
by law, this resolution and the Certificate of Incorporation.
9. Rank. For the purposes of this resolution, any stock of any class or
----
classes of the Corporation shall be deemed to rank:
(a) prior to shares of the Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if the
holders of stock of such class or classes shall be entitled by the terms
thereof to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference
or priority to the holders of shares of the Cumulative Preferred Stock;
(b) on a parity with shares of the Cumulative Preferred Stock, either
as to dividends or upon liquidation, dissolution or winding up, or both,
whether or not the dividend rates, dividend payment dates, or redemption or
liquidation prices per share thereof be different from those of the
Cumulative Preferred Stock, if the holders of stock of such class or
classes shall be entitled by the terms thereof to the receipt of dividends
or of amounts distributed upon liquidation, dissolution or winding up, as
the case may be, in proportion to their respective dividend rates or
144
liquidation prices, without preference or priority of one over the other as
between the holders of such stock and the holders of shares of the
Cumulative Preferred Stock (the term "Parity Preferred Stock" being used to
refer to any stock on a parity with the shares of the Cumulative Preferred
Stock, either as to dividends or upon liquidation, dissolution or winding
up, or both, as the context may require); and
(c) junior to shares of the Cumulative Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if such
class shall be Common Stock or if the holders of the Cumulative Preferred
Stock shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may
be, in preference or priority to the holders of stock of such class or
classes.
The Cumulative Preferred Stock shall rank prior, as to dividends and
upon liquidation, dissolution or winding up, to the Common Stock and the
Corporation's Series A Junior Participating Preferred Stock, and on a parity
with (i) the Corporation's ESOP Convertible Preferred Stock, with a liquidation
value of $35.88 per share, (ii) the Corporation's 7-3/8% Cumulative Preferred
Stock, with a liquidation value of $200.00 per share, (iii) the Corporation's
7-3/4% Cumulative Preferred Stock, with a liquidation value of $200.00 per
share, (iv) the Corporation's Series A Fixed/Adjustable Rate Preferred Stock,
with a liquidation value of $200.00 per share, (v) if issued, the Corporation's
7.82% Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(vi) if issued, the Corporation's 7.80% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share, (vii) if issued, the Corporation's 9.00%
Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
(viii) if issued, the Corporation's 8.40% Cumulative Preferred Stock, with a
liquidation value of $200.00 per share and (ix) if issued, the Corporation's
8.20% Cumulative Preferred Stock, with a liquidation value of $200.00 per share.
145
B. This Certificate of Designation shall not become effective until,
and shall become effective at, 12:01 a.m. on May 31, 1997.
IN WITNESS WHEREOF, Dean Witter, Discover & Co. has caused this
Certificate of Designation to be signed by Christine A. Edwards, its Executive
Vice President, General Counsel and Secretary, this 30th day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By: /s/ Christine A. Edwards
----------------------------
Name: Christine A. Edwards
Title: Executive Vice President,
General Counsel & Secretary
146
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK
of
DEAN WITTER, DISCOVER & CO.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned officer of Dean Witter, Discover & Co., a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 103 thereof, DOES HEREBY
CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Amended and Restated Certificate of Incorporation of the said Corporation, the
said Board of Directors on April 21, 1995 adopted the following resolution
creating a series of 220,000 shares of Preferred Stock designated as Series A
Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Amended and
Restated Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
----------------------
designated as "SERIES A JUNIOR PARTICIPATING PREFERRED STOCK" and the number of
shares constituting such series shall be 220,000.
Section 2. Dividends and Distributions.
---------------------------
(A) The holders of shares of Series A Junior Participating Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
147
Directors out of funds legally available for the purposes, quarterly
dividends payable in cash on the last day of March, June, September and
December in each year (each such date being referred to herein as a
"QUARTERLY DIVIDEND PAYMENT DATE"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 or
(b) subject to the provision for adjustment hereinafter set forth, 1,000
times the aggregate per share amount of all cash dividends, and 1,000 times
the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, par value
$0.01 per share, of the Corporation (the "COMMON STOCK") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Junior Participating Preferred
Stock. In the event the Corporation shall at any time after April 21, 1995
(the "RIGHTS DECLARATION DATE") (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii subdivide the outstanding Common
Stock, or (ii combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares of
Series A Junior Participating Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series A
Junior Participating Preferred Stock as provided in Paragraph (A) above
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$0.01 per share on the Series A Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of
Series A Junior Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Junior Participating Preferred Stock, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue form the
date of issue of such
148
shares, or unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders of shares
of Series A Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Junior Participating Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such shares
at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to
the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior
-------------
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Junior Participating Preferred Stock shall entitle the holder
thereof to 1,000 votes on all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of shares of
Series A Junior Participating Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of shares
of Series A Junior Participating Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior Participating
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the beginning
of a period (herein called a "DEFAULT PERIOD") which shall extend until such
time when all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of Series A
Junior Participating
149
Preferred Stock then outstanding shall have been declared and paid or set apart
for payment. During each default period, all holders of Preferred Stock
(including holders of the Series A Junior participating Preferred Stock) with
dividends in arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to elect two (2)
directors.
(ii) During any default period, such voting right of the holders of Series
A Junior Participating Preferred Stock may be exercised initially at a special
meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any
annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that such voting right shall not be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Preferred Stock
of such voting right. At any meeting at which the holders of Preferred Stock
shall exercise such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
directors or, if such right is exercised at an annual meeting, to elect two (2)
directors. If the number which may be so elected at any special meeting does
not amount to the required number, the holders of the Preferred Stock shall have
the right to make such increase in the number of directors as shall be necessary
to permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect directors in any
default period and during the continuance of such period, the number of
directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Junior
---- -----
Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect directors, the
Board of Directors may order, or any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling of
special meeting of the holders of Preferred Stock, which meeting shall thereupon
be called by the President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders
of Preferred Stock are entitled to vote pursuant to this Paragraph (C)(iii)
shall be given to each holder of record of Preferred Stock by mailing a copy of
such notice to him or her at his or her last address as the same appears on the
books of the Corporation. Such
150
meeting shall be called for a time not earlier than 20 days and not later than
60 days after such order or request or in default of the calling of such meeting
within 60 days after such order or request, such meeting may be called on
similar notice by any stockholder or stockholders owning in the aggregate not
less than ten percent (10%) of the total number of shares of Preferred Stock
outstanding. Notwithstanding the provisions of this Paragraph (C)(iii), no such
special meeting shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and other classes
of stock of the Corporation if applicable, shall continue to be entitled to
elect the whole number of directors until the holders of Preferred Stock shall
have exercised their right to elect two (2) directors voting as a class, after
the exercise of which right (x) the directors so elected by the holders of
Preferred Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in Paragraph
(C)(ii) of this Section 3) be filled by vote of a majority of the remaining
directors theretofore elected by the holders of the class of stock which elected
the director whose office shall have become vacant. References in this
Paragraph (C) to directors elected by the holders of a particular class of stock
shall include directors elected by such directors to fill vacancies as provided
in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right of
the holders of Preferred Stock as a class to elect directors shall cease, (y)
the term of any directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of directors shall be such number as may be
provided for in the certificate of incorporation or by-laws irrespective of any
increase made pursuant to the provisions of Paragraph (C)(ii) of this Section 3
(such number being subject, however, to change thereafter in any manner provided
by law or in the certificate of incorporation or by-laws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining directors.
(D) Except as set forth herein, holders of Series A Junior Participating
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
151
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Participating Preferred
Stock, except dividends paid ratably on the Series A Junior Participating
Preferred Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of
any stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Participating Preferred
Stock, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of any
stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series a Junior Participating
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of Series
A Junior Participating Preferred Stock, or any shares of stock ranking on a
parity with the Series A Junior Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
152
Corporation unless the Corporation could, under Paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior Participating
-----------------
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding up. (A) Upon any
--------------------------------------
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received an amount equal to 1,000 times the Exercise Price, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of he Series A
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have received an amount per
share (the "Common Adjustment") equal to the quotient obtained by dividing (i)
the Series A Liquidation Preference by (ii) 1,000 (as appropriately adjusted as
set forth in subparagraph (C) below to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock) (such
number in clause (ii), the "Adjustment Number"). following the payment of the
full amount of the Series A Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in the
ratio of the Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of preferred stock, if any, which
rank on a parity with the Series A Junior Participating Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event,
however, that there are not
153
sufficient assets available to permit payment in full of the Common Adjustment,
then such remaining assets shall be distributed ratably to the holders of Common
Stock.
(C) In the event the Corporation shall at any time after the rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, Etc. In case the Corporation shall
--------------------------
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior Participating
-------------
Preferred Stock shall not be redeemable.
Section 9. Amendment. The Amended and Restated Certificate of
---------
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special rights
of the Series A Junior Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority or more of
the outstanding
154
shares of Series A Junior Participating Preferred Stock, voting separately as a
class.
Section 10. Fractional Shares. Series A Junior Participating Preferred
-----------------
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holders fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury this 25th day of
April, 1995.
DEAN WITTER, DISCOVER & CO.
/s/ Ronald T. Carman
------------------------------------------------
Name: Ronald T. Carman
Title: Senior vice President and
Associate General Counsel
155
CERTIFICATE OF INCREASE
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
DEAN WITTER, DISCOVER & CO.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Dean Witter, Discover & Co. (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with Section 103 thereof, does hereby certify:
1. Pursuant to a Certificate of Designation, Preferences and Rights
of Series A Junior Participating Preferred Stock filed in the office of the
Secretary of State of Delaware on April 26, 1995, the Board of Directors of the
Corporation created a series of 220,000 shares of Series A Junior Participating
Preferred Stock, and as of the date hereof no shares of such series have been
issued.
2. The Board of Directors, on April 18, 1997, adopted the following
resolution authorizing an increase in the authorized number of shares of Series
A Junior Participating Preferred Stock from 220,000 to 450,000:
RESOLVED, that the number of shares constituting the series of the
Corporation's Series A Junior Participating Preferred Stock be increased to
450,000.
156
3. This Certificate of Increase and the increase in the authorized
number of shares of Series A Junior Participating Preferred Stock provided for
herein shall not become effective until, and shall become effective at,
12:01 a.m. on May 31, 1997.
IN WITNESS WHEREOF, the undersigned has executed and subscribed this
Certificate of Increase this 30th day of May, 1997.
DEAN WITTER, DISCOVER & CO.
By: /s/ Christine A. Edwards
---------------------------------
Name: Christine A. Edwards
Title: Executive Vice President,
General Counsel & Secretary
157
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 03:00 PM 03/24/1998
981113145 - 0923632
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
Pursuant to Section 242 of the
General Corporation Law of
the State of Delaware
Morgan Stanley, Dean Witter, Discover & Co. (the "Corporation"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware, does hereby certify that:
FIRST: The Board of Directors of the Corporation, by unanimous
written consent pursuant to Section 141 of the General Corporation Law of the
State of Delaware, duly adopted resolutions setting forth a proposed amendment
to the Amended and Restated Certificate of Incorporation of the Corporation,
declaring said amendment to be advisable and authorizing the officers of the
Corporation to submit such amendment to the stockholders of the Corporation for
approval at the Corporation's 1998 annual meeting of stockholders. The
resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Board of Directors declares it advisable that
Article I of the Corporation's Amended and Restated Certificate of Incorporation
be amended to read in its entirety as follows:
ARTICLE I
NAME
----
The name of the corporation (which is hereinafter referred to as the
"Corporation") is:
Morgan Stanley Dean Witter & Co.
SECOND: Thereafter, pursuant to resolution of its Board of Directors,
the 1998 annual meeting of stockholders of the Corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware, at which meeting the necessary number of shares as
required by the Corporation's Amended and Restated Certificate of Incorporation
were voted in favor of the amendment.
THIRD: Said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
158
FOURTH: This Certificate of Amendment shall not become effective until,
and shall become effective at, 5:00 p.m. on March 24, 1998.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Ronald T. Carman, its Assistant Secretary, this 24th day of March,
1998.
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
BY: /s/ Ronald T. Carman
---------------------------------------
Ronald T. Carman, Assistant Secretary
159
CERTIFICATE OF ELIMINATION
OF PREFERRED STOCK
OF MORGAN STANLEY DEAN WITTER & CO.
(Pursuant to Section 151(g) of the General
Corporation Law of the State of Delaware)
Morgan Stanley Dean Witter & Co., a corporation duly organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), certifies as follows:
FIRST: The Corporation's Amended and Restated Certificate of
Incorporation authorizes the issuance of 1,000,000 shares of a series of
Preferred Stock designated 7-3/8% Cumulative Preferred Stock, par value $0.01
per share, with a stated value of $200.00 per share (the "7-3/8% Preferred
Stock").
SECOND: The Preferred Stock Financing Committee of the Board of
Directors of the Corporation (the "Preferred Stock Financing Committee")
redeemed and retired all issued and outstanding shares of the 7-3/8% Preferred
Stock, which constituted all authorized shares of the 7-3/8% Preferred Stock.
THIRD: Pursuant to the provisions of Section 151(g) of the
General Corporation Law of the State of Delaware (the "GCL"), the Preferred
Stock Financing Committee adopted the following resolutions:
RESOLVED FURTHER, that upon redemption of the 7-3/8% Preferred Stock and
corresponding Depositary Shares, all of the shares of 7-3/8% Preferred
Stock so redeemed shall be retired; and
RESOLVED FURTHER, that upon redemption and retirement of the 7-3/8%
Preferred Stock in accordance with the foregoing resolutions, none of the
authorized shares of such series of Preferred Stock will be outstanding and
no shares of such series thereafter will be issued; and
RESOLVED FURTHER, that any officer of the Corporation is authorized and
directed to execute a Certificate of Elimination as provided by Section
151(g) of the GCL in accordance with Section 103 of the GCL, substantially
in the form attached as Exhibit A, with such changes therein as the officer
executing the same may approve and as are permitted by the GCL to be made
by such officer, such approval to be conclusively evidenced by such
officer's execution of such Certificate of Elimination, and to file the
same forthwith in the Office of the Secretary of State of the State of
Delaware, and when such Certificate of Elimination becomes
160
effective, all references to the 7-3/8% Preferred Stock in the Amended and
Restated Certificate of Incorporation of the Corporation shall be
eliminated and the shares of 7-3/8% Preferred Stock so redeemed and retired
shall resume the status of authorized and unissued shares of Preferred
Stock of the Corporation, without designation as to series.
FOURTH: Pursuant to the provisions of Section 151(g) of the GCL, all
references to 7-3/8% Preferred Stock in the Amended and Restated Certificate of
Incorporation of the Corporation hereby are eliminated, and the shares that were
designated to such series hereby are returned to the status of authorized but
unissued shares of the Preferred Stock of the Corporation, without designation
as to series.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Martin M. Cohen, its Assistant Secretary, this 21 day of October,
1998.
MORGAN STANLEY DEAN WITTER & CO.
By: /s/ Martin M. Cohen
----------------------------
Title: Assistant Secretary
161
CERTIFICATE OF ELIMINATION
OF THE
7.80% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF MORGAN STANLEY DEAN WITTER & CO.
(Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware)
Morgan Stanley Dean Witter & Co., a corporation duly organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
certifies as follows:
FIRST: The Corporation's Amended and Restated Certificate of Corporation
authorizes the issuance of 1,150,000 shares of a series of Preferred Stock
designated 7.80% Cumulative Preferred Stock, par value $0.01 per share, with a
stated value of $200.00 per share (the "7.80% Preferred Stock").
SECOND: Pursuant to the provisions of Section 151(g) of the General
Corporation Law of the State of Delaware (the "DGCL"), the Preferred Stock
Financing Committee of the Board of Directors of the Corporation adopted the
following resolutions:
RESOLVED FURTHER, that none of the authorized shares of the 7.80%
Preferred Stock are outstanding and none of the authorized shares of
such series of Preferred Stock will be issued; and
RESOLVED FURTHER, that any officer of the Corporation is authorized
and directed to execute a Certificate of Elimination as provided by
Section 151(g) of the DGCL in accordance with Section 103 of the DGCL,
substantially in the form attached as Exhibit A, with such changes
therein as the officer executing the same may approve and as are
permitted by the DGCL to be made by such officer, such approval to be
conclusively evidenced by such officer's execution of such Certificate
of Elimination, and to file the same forthwith in the Office of the
Secretary of State of the State of Delaware, and when such Certificate
of Elimination becomes effective, all references to the 7.80%
Preferred Stock in the Amended and Restated Certificate of
Incorporation of the Corporation shall be eliminated and the shares of
7.80% Preferred Stock shall resume the status of authorized and
unissued shares of Preferred Stock of the Corporation, without
designation as to series.
THIRD: Pursuant to the provisions of Section 151(g) of the DGCL, all
references to 7.80% Preferred Stock in the Amended and Restated Certificate of
Incorporation of the Corporation hereby are eliminated, and the shares that were
designated to such series hereby are
162
returned to the status of authorized but unissued shares of the Preferred Stock
of the Corporation, without designation as to series.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Martin M. Cohen, its assistant Secretary, this 2nd day of March, 1999.
MORGAN STANLEY DEAN WITTER & CO.
By /s/ Martin M. Cohen
-------------------
Name: Martin M. Cohen
Title: Assistant Secretary
163
CERTIFICATE OF ELIMINATION
OF THE
7.82% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF MORGAN STANLEY DEAN WITTER & CO.
(Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware)
Morgan Stanley Dean Witter & Co., a corporation duly organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
certifies as follows:
FIRST: The Corporation's Amended and Restated Certificate of Corporation
authorizes the issuance of 611,238 shares of a series of Preferred Stock
designated 7.82% Cumulative Preferred Stock, par value $0.01 per share, with a
stated value of $200.00 per share (the "7.82% Preferred Stock").
SECOND: Pursuant to the provisions of Section 151(g) of the General
Corporation Law of the State of Delaware (the "DGCL"), the Preferred Stock
Financing Committee of the Board of Directors of the Corporation adopted the
following resolutions:
RESOLVED FURTHER, that none of the authorized shares of the 7.82%
Preferred Stock are outstanding and none of the authorized shares of
such series of Preferred Stock will be issued; and
RESOLVED FURTHER, that any officer of the Corporation is authorized
and directed to execute a Certificate of Elimination as provided by
Section 151(g) of the DGCL in accordance with Section 103 of the DGCL,
substantially in the form attached as Exhibit A, with such changes
therein as the officer executing the same may approve and as are
permitted by the DGCL to be made by such officer, such approval to be
conclusively evidenced by such officer's execution of such Certificate
of Elimination, and to file the same forthwith in the Office of the
Secretary of State of the State of Delaware, and when such Certificate
of Elimination becomes effective, all references to the 7.82%
Preferred Stock in the Amended and Restated Certificate of
Incorporation of the Corporation shall be eliminated and the shares of
7.82% Preferred Stock shall resume the status of authorized and
unissued shares of Preferred Stock of the Corporation, without
designation as to series.
THIRD: Pursuant to the provisions of Section 151(g) of the DGCL, all
references to 7.82% Preferred Stock in the Amended and Restated Certificate of
Incorporation of the Corporation hereby are eliminated, and the shares that were
designated to such series hereby are
164
returned to the status of authorized but unissued shares of the Preferred Stock
of the Corporation, without designation as to series.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Martin M. Cohen, its assistant Secretary, this 2nd day of March, 1999.
MORGAN STANLEY DEAN WITTER & CO.
By /s/ Martin M. Cohen
--------------------
Name: Martin M. Cohen
Title: Assistant Secretary
165
Certificate of Amendment
to
Amended and Restated Certificate of Incorporation
of
Morgan Stanley Dean Witter & Co.
Pursuant to Section 242 of the
General Corporation Law of
the State of Delaware
Morgan Stanley Dean Witter & Co. (the "Company"), a corporation organized
and existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify that:
FIRST: The Board of Directors of the Company, at a duly convened
telephonic meeting of the Board of Directors held on December 20, 1999, duly
adopted resolutions setting forth a proposed amendment to the Amended and
Restated Certificate of Incorporation of the Company, declaring said amendment
to be advisable and authorizing the officers of the Company to submit such
amendment to the stockholders of the Company for approval at the Company's 2000
annual meeting of stockholders. The resolution setting forth the proposed
amendment is as follows:
"RESOLVED, that the Board of Directors declares it advisable that the first
sentence of Article IV of the Company's Amended and Restated Certificate of
Incorporation in effect on the date hereof be amended to read in its entirety as
follows:
The total number of shares of stock which the Corporation shall the
authority to issue is three billion five hundred thirty million
(3,530,000,000), consisting of thirty million (30,000,000) shares of
Preferred Stock, par value $0.01 per share (hereinafter referred to as
"Preferred Stock"), and three billion five hundred million (3,500,000,000)
shares of Common Stock, par value $0.01 per share (hereinafter referred to
as "Common Stock")."
SECOND: Thereafter, pursuant to resolution of its Board of Directors, the
2000 annual meeting of stockholders of the Company was duly called and held,
upon notice in accordance with Section 222 of the General Corporation Law of the
State of Delaware, at which meeting the necessary number of shares as required
by Section 242 of the General Corporation Law of the State of Delaware were
voted in favor of the amendment.
THIRD: Said amendment 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 Company has caused this Certificate to be signed by
Ronald T. Carman, its Assistant Secretary this 11th day of April, 2000.
MORGAN STANLEY DEAN WITTER & CO.
By: /s/ Ronald T. Carman
---------------------
Ronald T. Carman, Assistant Secretary
166
CERTIFICATE OF ELIMINATION
OF THE
9.00% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF MORGAN STANLEY DEAN WITTER & CO.
(Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware)
Morgan Stanley Dean Witter & Co., a corporation duly organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
certifies as follows:
FIRST: The Corporation's Amended and Restated Certificate of Incorporation
authorizes the issuance of 720,900 shares of a series of Preferred Stock
designated 9.00% Cumulative Preferred Stock, par value $0.01 per share, with a
stated value of $200.00 per share (the "9.00% Preferred Stock").
SECOND: Pursuant to the provisions of Section 151(g) of the General
Corporation Law of the State of Delaware (the "DGCL"), the Preferred Stock
Financing Committee of the Board of Directors of the Corporation adopted the
following resolutions:
RESOLVED, that none of the authorized shares of the 9.00% Preferred
Stock are outstanding and none of the authorized shares of such series
of Preferred Stock will be issued; and
RESOLVED FURTHER, that any officer of the Corporation is authorized
and directed to execute a Certificate of Elimination as provided by
Section 151(g) of the DGCL in accordance with Section 103 of the DGCL,
substantially in the form attached as Exhibit A, with such changes
therein as the officer executing the same may approve and as are
permitted by the DGCL to be made by such officer, such approval to be
conclusively evidenced by such officer's execution of such Certificate
of Elimination, and to file the same forthwith in the Office of the
Secretary of State of the State of Delaware, and when such Certificate
of Elimination becomes effective, all references to the 9.00%
Preferred Stock in the Amended and Restated Certificate of
Incorporation of the Corporation shall be eliminated and the shares of
9.00% Preferred Stock shall resume the status of authorized and
unissued shares of Preferred Stock of the Corporation, without
designation as to series.
THIRD: Pursuant to the provisions of Section 151(g) of the DGCL, all
references to 9.00% Preferred Stock in the Amended and Restated Certificate of
Incorporation of the Corporation hereby are eliminated, and the shares that were
designated to such series hereby are returned to the status of authorized but
unissued shares of the Preferred Stock of the Corporation, without designation
as to series.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Martin M. Cohen, its Assistant Secretary, this 30th day of January,
2001.
MORGAN STANLEY DEAN WITTER & CO.
By /s/ Martin M. Cohen
-------------------
Name: Martin M. Cohen
Title: Assistant Secretary
CERTIFICATE OF ELIMINATION
OF THE
ESOP CONVERTIBLE PREFERRED STOCK
OF MORGAN STANLEY DEAN WITTER & CO.
(Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware)
Morgan Stanley Dean Witter & Co., a corporation duly organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
certifies as follows:
FIRST: The Corporation's Amended and Restated Certificate of Incorporation
authorizes the issuance of 3,902,438 shares of a series of Preferred Stock
designated ESOP Convertible Preferred Stock, par value $0.01 per share (the
"ESOP Preferred Stock").
SECOND: Pursuant to the provisions of Section 151(g) of the General
Corporation Law of the State of Delaware (the "DGCL"), the Preferred Stock
Financing Committee of the Board of Directors of the Corporation adopted the
following resolutions:
RESOLVED FURTHER, that none of the authorized shares of the ESOP
Preferred Stock are outstanding and none of the authorized shares of
such series of Preferred Stock will be issued; and
RESOLVED FURTHER, that any officer of the Corporation is authorized
and directed to execute a Certificate of Elimination as provided by
Section 151(g) of the DGCL in accordance with Section 103 of the DGCL,
substantially in the form attached as Exhibit B, with such changes
therein as the officer executing the same may approve and as are
permitted by the DGCL to be made by such officer, such approval to be
conclusively evidenced by such officer's execution of such Certificate
of Elimination, and to file the same forthwith in the Office of the
Secretary of State of the State of Delaware, and when such Certificate
of Elimination becomes effective, all references to the ESOP Preferred
Stock in the Amended and Restated Certificate of Incorporation of the
Corporation shall be eliminated and the shares of the ESOP Preferred
Stock shall resume the status of authorized and unissued shares of
Preferred Stock of the Corporation, without designation as to series.
THIRD: Pursuant to the provisions of Section 151(g) of the DGCL, all
references to the ESOP Preferred Stock in the Amended and Restated Certificate
of Incorporation of the Corporation hereby are eliminated, and the shares that
were designated to such series hereby are returned to the status of authorized
but unissued shares of the Preferred Stock of the Corporation, without
designation as to series.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Martin M. Cohen, its Assistant Secretary, this 30th day of January,
2001.
MORGAN STANLEY DEAN WITTER & CO.
By /s/ Martin M. Cohen
--------------------
Name: Martin M. Cohen
Title: Assistant Secretary
CERTIFICATE OF ELIMINATION
OF THE
8.20% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF MORGAN STANLEY DEAN WITTER & CO.
(Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware)
Morgan Stanley Dean Witter & Co., a corporation duly organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
certifies as follows:
FIRST: The Corporation's Amended and Restated Certificate of Incorporation
authorizes the issuance of 847,500 shares of a series of Preferred Stock
designated 8.20% Cumulative Preferred Stock, par value $0.01 per share, with a
stated value of $200.00 per share (the "8.20% Preferred Stock").
SECOND: Pursuant to the provisions of Section 151(g) of the General
Corporation Law of the State of Delaware (the "DGCL"), the Preferred Stock
Financing Committee of the Board of Directors of the Corporation adopted the
following resolutions:
RESOLVED FURTHER, that none of the authorized shares of the 8.20%
Preferred Stock are outstanding and none of the authorized shares of
such series of Preferred Stock will be issued; and
RESOLVED FURTHER, that any officer of the Corporation is authorized
and directed to execute a Certificate of Elimination as provided by
Section 151(g) of the DGCL in accordance with Section 103 of the DGCL,
substantially in the form attached as Exhibit C, with such changes
therein as the officer executing the same may approve and as are
permitted by the DGCL to be made by such officer, such approval to be
conclusively evidenced by such officer's execution of such Certificate
of Elimination, and to file the same forthwith in the Office of the
Secretary of State of the State of Delaware, and when such Certificate
of Elimination becomes effective, all references to the 8.20%
Preferred Stock in the Amended and Restated Certificate of
Incorporation of the Corporation shall be eliminated and the shares of
the 8.20% Preferred Stock shall resume the status of authorized and
unissued shares of Preferred Stock of the Corporation, without
designation as to series.
THIRD: Pursuant to the provisions of Section 151(g) of the DGCL, all
references to the 8.20% Preferred Stock in the Amended and Restated Certificate
of Incorporation of the Corporation hereby are eliminated, and the shares that
were designated to such series hereby are returned to the status of authorized
but unissued shares of the Preferred Stock of the Corporation, without
designation as to series.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Martin M. Cohen, its Assistant Secretary, this 30th day of January,
2001.
MORGAN STANLEY DEAN WITTER & CO.
By /s/ Martin M. Cohen
-------------------
Name: Martin M. Cohen
Title: Assistant Secretary
CERTIFICATE OF ELIMINATION
OF THE
8.40% CUMULATIVE PREFERRED STOCK
($200.00 Stated Value)
OF MORGAN STANLEY DEAN WITTER & CO.
(Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware)
Morgan Stanley Dean Witter & Co., a corporation duly organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
certifies as follows:
FIRST: The Corporation's Amended and Restated Certificate of Incorporation
authorizes the issuance of 996,776 shares of a series of Preferred Stock
designated 8.40% Cumulative Preferred Stock, par value $0.01 per share, with a
stated value of $200.00 per share (the "8.40% Preferred Stock").
SECOND: Pursuant to the provisions of Section 151(g) of the General
Corporation Law of the State of Delaware (the "DGCL"), the Preferred Stock
Financing Committee of the Board of Directors of the Corporation adopted the
following resolutions:
RESOLVED FURTHER, that none of the authorized shares of the 8.40%
Preferred Stock are outstanding and none of the authorized shares of
such series of Preferred Stock will be issued; and
RESOLVED FURTHER, that any officer of the Corporation is authorized
and directed to execute a Certificate of Elimination as provided by
Section 151(g) of the DGCL in accordance with Section 103 of the DGCL,
substantially in the form attached as Exhibit D, with such changes
therein as the officer executing the same may approve and as are
permitted by the DGCL to be made by such officer, such approval to be
conclusively evidenced by such officer's execution of such Certificate
of Elimination, and to file the same forthwith in the Office of the
Secretary of State of the State of Delaware, and when such Certificate
of Elimination becomes effective, all references to the 8.40%
Preferred Stock in the Amended and Restated Certificate of
Incorporation of the Corporation shall be eliminated and the shares of
8.40% Preferred Stock shall resume the status of authorized and
unissued shares of Preferred Stock of the Corporation, without
designation as to series.
THIRD: Pursuant to the provisions of Section 151(g) of the DGCL, all
references to 8.40% Preferred Stock in the Amended and Restated Certificate of
Incorporation of the Corporation hereby are eliminated, and the shares that were
designated to such series hereby are returned to the status of authorized but
unissued shares of the Preferred Stock of the Corporation, without designation
as to series.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Martin M. Cohen, its Assistant Secretary, this 30th day of January,
2001.
MORGAN STANLEY DEAN WITTER & CO.
By /s/ Martin M. Cohen
-------------------
Name: Martin M. Cohen
Title: Assistant Secretary