General Statement of Beneficial Ownership — Schedule 13D
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13D Schedule 13D Aig/Alexander & Alexander 14 53K
2: EX-99.A Executive Officers and Directors 27 135K
3: EX-99.B Proxy Statement of the Company Dated 6/27/94 118 591K
4: EX-99.C Articles Supplementary 43 155K
5: EX-99.D Articles of Amendment of the Charter of the Co. 13 37K
6: EX-99.E Stock Purchase and Sales Agreement 93 183K
7: EX-99.F Registration Rights Agreement 32 111K
8: EX-99.G Amendment Number 2 to Rights Plan Dated 7/15/94 3 14K
9: EX-99.H Agreement of Joint Filing Dated as of 7/15/94 2 9K
EXHIBIT C
ARTICLES SUPPLEMENTARY
classifying
6,200,000 shares of Preferred Stock
as
8% SERIES B CUMULATIVE CONVERTIBLE PREFERRED STOCK
of
ALEXANDER & ALEXANDER SERVICES INC.
(Pursuant to Section 2-208 of the
Maryland General Corporation Law)
_________________________________
Alexander & Alexander Services Inc., a corporation
organized and existing under the laws of the State of Maryland
(hereinafter called the "Corporation"), and having its
principal office in this State at 10461 Mill Run Circle, Owings
Mills, Maryland 21117, hereby certifies to the State Department
of Assessments and Taxation of Maryland that:
FIRST: Pursuant to the authority granted to and
vested in the Board of Directors of the Corporation
(hereinafter called the "Board of Directors" or the "Board") in
accordance with the provisions of Article SIXTH of the Charter
of the Corporation (the "Charter"), the Board of Directors, at
a meeting duly convened and held on June 6, 1994, regarding the
sale and issuance by the Corporation of cumulative convertible
preferred stock (the "Securities"), adopted resolutions (the
"Resolutions") classifying 6,200,000 shares of Preferred Stock
of the Corporation into a single series to be designated as "8%
Series B Cumulative Convertible Preferred Stock" and setting
the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption of such shares as follows:
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8% Series B Cumulative Convertible Preferred Stock
1. Designation and Amount. There shall be a series
of Preferred Stock designated as "8% Series B Cumulative
Convertible Preferred Stock" and the number of shares
constituting such series shall be 6,200,000, of which 4,000,000
shall be issued initially (the date of such issuance, the
"Original Issue Date") and the remainder shall be reserved for
issuance as dividends pursuant to Section 3 below. Such series
is referred to herein as the "Series B Convertible Preferred
Stock." The number of shares designated as shares of Series B
Convertible Preferred Stock may be decreased (but not
increased) by the Board of Directors without a vote of
stockholders; provided, however, that such number may not be
decreased below the number of then currently outstanding shares
of Series B Convertible Preferred Stock plus the then maximum
number of such shares which could be issued pursuant to
Section 3 below assuming all dividends payable on or prior to
December 15, 1999 are paid in shares of Series B Convertible
Preferred Stock.
2. Defined Terms. All capitalized terms used
herein without definition shall have the respective meanings
assigned thereto in the Charter.
3. Dividends. The holders of shares of Series B
Convertible Preferred Stock shall be entitled to receive, when,
as and if authorized and declared by the Board of Directors out
of funds at the time legally available therefor, dividends at
the rate of 8% per annum per share, and no more, which shall be
fully cumulative, shall accrue without interest and shall be
payable quarterly in arrears on March 15, June 15, September 15
and December 15 of each year, commencing September 15, 1994
(except that if any such date is a Saturday, Sunday or legal
holiday, then such dividend shall be payable on the next day
that is not a Saturday, Sunday or legal holiday) to holders of
record as they appear upon the stock transfer books of the
Corporation on each March 1, June 1, September 1 and December 1
immediately preceding the payment dates, or such other dates as
shall be fixed at the time of the authorization and declaration
by the Board of Directors (or, to the extent permitted by
applicable law, a duly authorized committee thereof), which
date shall not be less than ten (10) nor more than sixty (60)
days preceding the relevant dividend payment date. For
purposes hereof, the term "legal holiday" shall mean any day on
which banking institutions are authorized to close in New York,
New York. Subject to the sixth succeeding paragraph of this
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Section 3, dividends on account of arrears for any past
dividend period may be declared and paid at any time, without
reference to any regular dividend payment date; provided,
however, that dividends on account of arrears for any past
dividends which were required to be made in shares of Series B
Convertible Preferred Stock shall be declared and paid in
shares of Series B Convertible Preferred Stock and shall
include such number of shares of Series B Convertible Preferred
Stock as any holder would have been entitled to receive had all
such dividends been declared and paid on a timely basis. The
amount of dividends payable per share of Series B Convertible
Preferred Stock for each quarterly dividend period shall be
computed by dividing the annual dividend amount by four and
shall include fractional shares. The amount of dividends
payable for the initial dividend period and any period shorter
than a full quarterly period shall be computed on the basis of
a 360-day year of twelve 30-day months and the actual number of
days elapsed in the period in which payable. No interest shall
be payable in respect of any dividend payment on the Series B
Convertible Preferred Stock or any other Parity Dividend Stock
(as hereinafter defined) or any Senior Dividend Stock (as
hereinafter defined) which may be in arrears.
Any dividend payments made on or prior to
December 15, 1996 shall be made in additional shares of
Series B Convertible Preferred Stock valued at the liquidation
preference of the Series B Convertible Preferred Stock. Any
dividend payments made after December 15, 1996 and on or prior
to December 15, 1999 may be made, in the sole discretion of the
Board of Directors, either in (i) cash or (ii) additional
shares of Series B Convertible Preferred Stock valued at the
liquidation preference of the Series B Convertible Preferred
Stock but not in any combination of cash and additional shares
of Series B Convertible Preferred Stock. On and after the
earlier of (i) December 16, 1999 or (ii) the first date the
Corporation pays any dividend in cash, dividends on the
Series B Convertible Preferred Stock shall be made only in
cash. All shares of Series B Convertible Preferred Stock
issued as a dividend with respect to the Series B Convertible
Preferred Stock shall thereupon be duly authorized, validly
issued, fully paid and nonassessable.
In the case of shares of Series B Convertible
Preferred Stock issued on the Original Issue Date, dividends
shall accrue and be cumulative from such date. In the case of
shares of Series B Convertible Preferred Stock issued as a
dividend on shares of Series B Convertible Preferred Stock,
dividends shall
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accrue and be cumulative from the dividend payment date in
respect of which such shares were issued as a dividend.
Each fractional share of Series B Convertible
Preferred Stock outstanding shall be entitled to a ratably
proportionate amount of all dividends accruing with respect to
each outstanding share of Series B Convertible Preferred Stock,
and all such dividends with respect to such outstanding
fractional shares shall be cumulative and shall accrue (whether
or not declared), and shall be payable in the same manner and
at such times as provided for above with respect to dividends
on each outstanding share of Series B Convertible Preferred
Stock. Each fractional share of Series B Convertible Preferred
Stock outstanding shall also be entitled to a ratably
proportionate amount of any other distributions made with
respect to each outstanding share of Series B Convertible
Preferred Stock, and all such distributions shall be payable in
the same manner and at the same time as distributions on each
outstanding share of Series B Convertible Preferred Stock.
No dividends or other distributions, other than
dividends payable solely in shares of Common Stock, Class A
Common Stock, Class C Common Stock or Class D Common Stock or
other stock of the Corporation ranking junior as to dividends
and as to liquidation rights to the Series B Convertible
Preferred Stock, shall be authorized, declared, paid or set
apart for payment on any shares of Common Stock, Class A Common
Stock, Class C Common Stock or Class D Common Stock or other
stock of the Corporation ranking junior as to dividends to the
Series B Convertible Preferred Stock, including the Series A
Junior Participating Preferred Stock, when and if issued
(collectively, the "Junior Dividend Stock"), unless and until
all accrued and unpaid dividends on the Series B Convertible
Preferred Stock for all dividend payment periods ending on or
prior to the date of payment of such dividends or other
distributions on Junior Dividend Stock shall have been
authorized, declared and paid or set apart in trust for payment
and all obligations of the Corporation to purchase shares of
Series B Convertible Preferred Stock tendered to it pursuant to
Section 7 and to make Extra Payments have been fully satisfied.
The Corporation shall not permit Reed Stenhouse
Companies Limited ("RSC") (in respect of RSC Class A Shares) or
Alexander & Alexander Services UK plc ("AAE") (in respect of
AAE Dividend Shares) to authorize, declare, pay or set apart
any dividends or other distributions, other than dividends
payable solely in Junior Dividend Stock, RSC Class A Shares or
AAE
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Dividend Shares or other stock of the Corporation, RSC or
AAE ranking junior as to dividends to the Series B Convertible
Preferred Stock, unless and until all accrued and unpaid
dividends on the Series B Convertible Preferred Stock for all
dividend payment periods ending on or prior to the date of
payment of such dividends or other distributions on RSC Class A
Shares or AAE Dividend Shares shall have been authorized,
declared and paid or set apart in trust for payment and all
obligations of the Corporation to purchase shares of Series B
Convertible Preferred Stock tendered to it pursuant to
Section 7 and to make Extra Payments have been fully satisfied.
If at any time any dividend on any stock of the
Corporation hereafter issued ranking senior as to dividends to
the Series B Convertible Preferred Stock (the "Senior Dividend
Stock") shall be in arrears, in whole or in part, then (except
to the extent allowed by the terms of such Senior Dividend
Stock) no dividend shall be authorized, declared, paid or set
apart for payment on the Series B Convertible Preferred Stock
(other than dividends payable in additional shares of Series B
Convertible Preferred Stock) unless and until all accrued and
unpaid dividends with respect to the Senior Dividend Stock for
all payment periods ending on or prior to the date of payment
of the current dividend on the Series B Convertible Preferred
Stock shall have been authorized, declared and paid or set
apart for payment. No full dividends shall be authorized,
declared, paid or set apart for payment on any class or series
of the Corporation's stock heretofore or hereafter issued
ranking, as to dividends, on a parity with the Series B
Convertible Preferred Stock (including the Series A Convertible
Preferred Stock) (collectively, the "Parity Dividend Stock")
for any period unless full cumulative dividends have been, or
contemporaneously are, authorized, declared and paid or set
apart in trust for such payment on the Series B Convertible
Preferred Stock for all dividend payment periods terminating on
or prior to the date of payment of such full cumulative
dividends. No full dividends (other than dividends payable in
additional shares of Series B Convertible Preferred Stock)
shall be authorized, declared, paid or set apart for payment on
the Series B Convertible Preferred Stock for any period unless
full cumulative dividends have been, or contemporaneously are,
authorized, declared and paid or set apart for payment on the
Parity Dividend Stock for all dividend periods terminating on
or prior to the date of payment of such full cumulative
dividends. When accrued dividends are not paid in full on the
Series B Convertible Preferred Stock and the Parity Dividend
Stock, all cash dividends authorized, declared and paid or set
apart for
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payment on the Series B Convertible Preferred Stock
and the Parity Dividend Stock shall be authorized, declared,
paid or set apart for payment pro rata so that the amount of
dividends authorized, declared, paid or set apart for payment
per share on the Series B Convertible Preferred Stock and the
Parity Dividend Stock shall in all cases bear to each other the
same ratio that accrued and unpaid dividends per share on the
Series B Convertible Preferred Stock and the Parity Dividend
Stock bear to each other.
Any reference to "distribution" contained in this
Section 3 shall not be deemed to include any distribution made
in connection with any liquidation, dissolution or winding up
of the Corporation, RSC or AAE, whether voluntary or
involuntary.
4. Liquidation Preference. Subject to the full
payment of the liquidation preferences of shares of stock of
the Corporation hereafter issued ranking senior as to
liquidation rights to the Series B Convertible Preferred Stock
(the "Senior Liquidation Stock"), in the event of a
liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of shares of
Series B Convertible Preferred Stock shall be entitled to
receive out of the assets of the Corporation, whether such
assets are stated capital or surplus of any nature, an amount
equal to the dividends accrued and unpaid on such shares on the
date of final distribution to such holders, whether or not
declared, without interest, plus a sum equal to $50.00 per
share, and no more, before any payment shall be made or any
assets distributed to the holders of shares of Common Stock,
Class A Common Stock, Class C Common Stock, Class D Common
Stock or any other class or series of the Corporation's stock
hereafter issued ranking junior as to liquidation rights to the
Series B Convertible Preferred Stock, including the Series A
Junior Participating Preferred Stock (collectively, the "Junior
Liquidation Stock").
Further, in the event of the liquidation, dissolution
or winding up of the Corporation, whether voluntary or
involuntary, (i) the Board of Directors shall determine (which
determination shall be conclusive) whether (1) there is some
likelihood that the holders of Series B Convertible Preferred
Stock will not receive, on such liquidation, dissolution or
winding up of the Corporation, the full amounts to which they
are entitled pursuant to this Section 4, and (2) there is some
likelihood that the holders of RSC Class A Shares will receive
out of the assets of RSC a distribution as the result of any
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liquidation, dissolution or winding up, or other action taken
or to be taken by RSC in connection or concurrently with the
liquidation, dissolution or winding up of the Corporation, in
an amount greater than the holders of Common Stock are likely
to receive on the liquidation, dissolution or winding up of the
Corporation, and (ii) if the Board determines that both
likelihoods exist, then, provided that paragraph 2 of the
Keepwell Agreement between the Corporation and RSC dated
July 31, 1985 does not apply, the Corporation shall take such
action as may be reasonably necessary to cause the transfer of
shares of Common Stock of the Corporation to the holders of RSC
Class A Shares in satisfaction of the obligations of RSC to the
holders of such shares; provided, however, that no director of
RSC shall be required to take any action which would cause such
director to breach any duties under applicable law as advised
by independent counsel.
The entire assets of the Corporation available for
distribution after the liquidation preferences of the Senior
Liquidation Stock are fully met shall be distributed ratably
among the holders of the Series A Convertible Preferred Stock,
the Series B Convertible Preferred Stock and any other class or
series of the Corporation's stock hereafter issued ranking on a
parity as to liquidation rights with the Series B Convertible
Preferred Stock in proportion to the respective preferential
amounts to which each is entitled (but only to the extent of
such preferential amounts). After payment in full of the
liquidation preferences of the shares of the Series B
Convertible Preferred Stock, the holders of such shares shall
not be entitled to any further participation in any
distribution of assets by the Corporation. Neither a
consolidation or merger of the Corporation with or into another
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, securities or other
property, will be considered a liquidation, dissolution or
winding up of the Corporation.
5. Limitation on Share Repurchase. If at any time
any dividends on the Series B Convertible Preferred Stock shall
be in arrears or the Corporation shall have failed to make any
purchase of shares of Series B Convertible Preferred Stock
tendered to it pursuant to Section 7, the Corporation shall
not, and the Corporation shall not permit RSC, AAE or any other
corporation or legal entity directly or indirectly controlled
by the Corporation (collectively, the "subsidiaries") to,
repurchase, redeem, retire or otherwise acquire any shares of Junior
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Dividend Stock, Junior Liquidation Stock, RSC Class A
Shares, AAE Dividend Shares or any warrants, rights, calls or
options exercisable for or convertible into any shares of
Junior Dividend Stock, Junior Liquidation Stock, RSC Class A
Shares or AAE Dividend Shares, except by conversion into or
exchange for shares of Junior Dividend Stock or Junior
Liquidation Stock and other than purchases, redemptions,
retirements or acquisitions made pursuant to and as required by
the terms of any employee incentive or benefit plan of the
Corporation or any subsidiary of the Corporation in effect on
June 1, 1994, or for consideration aggregating not more than
$100,000 in any calendar year.
If at any time any dividends on the Series B
Convertible Preferred Stock shall be in arrears or the
Corporation shall have failed to make any purchase of shares of
Series B Convertible Preferred Stock tendered to it pursuant to
Section 7, the Corporation shall not, and shall not permit any
subsidiary to, repurchase, redeem, retire or otherwise acquire
any shares of the Corporation's or any such subsidiary's stock
except (i) as permitted by the immediately preceding paragraph
and (ii) any subsidiary which is wholly owned by the
Corporation may repurchase, redeem, retire or otherwise acquire
shares of its stock.
6. Redemption at Option of the Corporation. The
Series B Convertible Preferred Stock may not be redeemed by the
Corporation prior to December 15, 1999. Thereafter, so long as
shares of Common Stock shall have traded on the New York Stock
Exchange on each trading day during a 30 consecutive trading
day period (each of which trading days shall be after
December 15, 1999) and had a Closing Price (as hereinafter
defined) on each such day in excess of 150% of the conversion
price then in effect for the Series B Convertible Preferred
Stock for each such trading day, the Series B Convertible
Preferred Stock may thereafter be redeemed by the Corporation,
at its option on any date set by the Board of Directors, in
whole or in part at any time, at a redemption price of $54.00
per share, plus an amount in cash equal to accrued and unpaid
dividends thereon, whether or not authorized or declared, to
but excluding the date fixed for redemption, if redeemed on or
prior to December 14, 2000, and at the following redemption
prices per share, if redeemed during the 12-month period
beginning December 15:
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[Download Table]
Year Redemption Price
---- ----------------
2000 $53.50
2001 53.00
2002 52.50
2003 52.00
2004 51.50
2005 51.00
2006 50.50
and thereafter at $50.00 per share, plus, in each case, an
amount in cash equal to all dividends on the Series B
Convertible Preferred Stock accrued and unpaid thereon, whether
or not authorized or declared, to but excluding the date fixed
for redemption, such sum being hereinafter referred to as the
"Redemption Price."
In case of the redemption of less than all of the
then outstanding shares of Series B Convertible Preferred
Stock, the Corporation shall effect such redemption pro rata.
Notwithstanding the foregoing, the Corporation shall not redeem
less than all of the shares of Series B Convertible Preferred
Stock at any time outstanding until all dividends accrued and
in arrears upon all shares of Series B Convertible Preferred
Stock then outstanding shall have been paid for all past
dividend periods.
Not more than sixty nor less than forty-five days
prior to the redemption date fixed by the Board of Directors,
notice by first class mail, postage prepaid, shall be given to
the holders of record of shares of the Series B Convertible
Preferred Stock to be redeemed, addressed to such holders at
their last addresses as shown upon the stock transfer books of
the Corporation. Each such notice of redemption shall specify
the date fixed for redemption, the Redemption Price, the place
or places of payment, that payment will be made upon
presentation and surrender of the shares of Series B
Convertible Preferred Stock, that on and after the redemption
date dividends will cease to accrue on such shares, the then
effective conversion price pursuant to Section 8 and that the
right of holders to convert shares of Series B Convertible
Preferred Stock shall terminate at the close of business on the
business day prior to the redemption date (unless the
Corporation defaults in the payment of the Redemption Price).
Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not
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the holder of shares of Series B Convertible Preferred Stock
receives such notice; and failure to give such notice by mail,
or any defect in such notice, to the holders of any shares
designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Series B
Convertible Preferred Stock. On or after the date fixed for
redemption as stated in such notice, each holder of the shares
called for redemption, subject to such holder's right to
convert shares of Series B Convertible Preferred Stock as
provided above, shall surrender the certificate representing
such shares to the Corporation at the place designated in such
notice and shall thereupon be entitled to receive payment of
the Redemption Price. If less than all the shares evidenced by
any such surrendered certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
Notice having been given as aforesaid, if, on the date fixed
for redemption, funds necessary for the redemption shall be
available therefor and shall have been irrevocably deposited or
set aside in trust for the holders of the shares of Series B
Convertible Preferred Stock, then, notwithstanding that the
certificates representing any shares so called for redemption
shall not have been surrendered, dividends with respect to the
shares so called shall cease to accrue after the date fixed for
redemption, such shares shall no longer be deemed outstanding,
the holders thereof shall cease to be stockholders of the
Corporation and all rights whatsoever with respect to the
shares so called for redemption (except the right of the
holders to receive the Redemption Price without interest upon
surrender of their certificates therefor) shall terminate. If
funds legally available for such purpose are not sufficient for
redemption of the shares of Series B Convertible Preferred
Stock to be redeemed, then the certificates representing such
shares shall be deemed not to be surrendered, such shares shall
remain outstanding and the rights of holders of shares of
Series B Convertible Preferred Stock thereafter shall continue
to be only those of a holder of shares of the Series B
Convertible Preferred Stock.
Except as provided in Section 7, the shares of Series
B Convertible Preferred Stock shall not be subject to the
operation of any mandatory purchase, retirement or sinking
fund.
7. Repurchase at Option of the Holder. If one or
more Special Events shall occur at any time or from time to
time on or after the Original Issue Date, each holder of shares
of the Series B Convertible Preferred Stock shall have the
right, at such holder's option exercisable at any time within
120 days after the happening of each such Special Event, to
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require the Corporation to purchase all or any part of the
shares of Series B Convertible Preferred Stock then held by
such holder as such holder may elect at $58.82 per share if the
Special Event occurs on or before six months after the Original
Issue Date, $66.18 per share if the Special Event occurs more
than six months after the Original Issue Date and on or before
twelve months after the Original Issue Date and $72.06 per
share if the Special Event occurs more than twelve months after
the Original Issue Date plus, in each case, an amount in cash
equal to the accrued and unpaid dividends thereon, whether or
not authorized or declared, to but excluding the date fixed for
redemption. Any shares of Series B Convertible Preferred Stock
which would have accrued but have not been paid on any shares
tendered for purchase shall be deemed to be tendered for
purchase. The Corporation shall, immediately upon becoming
aware of any facts or events that could reasonably be expected
to result in the occurrence of a Special Event, give a written
notice thereof by first class mail, postage prepaid, to the
holders of record of shares of the Series B Convertible
Preferred Stock, addressed to such holders at their last
address as shown upon the stock transfer books of the
Corporation.
A "Special Event" shall mean (v) the declaration or
payment on or after the Original Issue Date by the Corporation,
RSC or AAE of an Extraordinary Equity Payment (as hereinafter
defined), (w) the sale or other disposition, directly or
indirectly, by the Corporation or any of its subsidiaries in
one or a series of related transactions of assets representing
35% or more of the then book value of the Corporation's assets
on a consolidated basis or 35% or more of the Corporation's
gross revenues on a consolidated basis in either of the two
most recently ended fiscal years, (x) the merger or
consolidation of the Corporation or any of its Principal
Subsidiaries (as hereinafter defined) with or into any other
firm, corporation or other legal entity other than (i) a merger
or consolidation of one subsidiary of the Corporation into
another or the Corporation, or (ii) a merger or consolidation
in which the securities of the Corporation outstanding before
the merger or consolidation are not affected and in which the
Corporation issues equity securities having an aggregate market
value of less than 20% of the total market value of the
Corporation's equity securities outstanding prior to such
merger or consolidation, or (y) the occurrence of a Specified
Corporate Action on or after the Original Issue Date.
"Extraordinary Equity Payment" shall mean (a) the
declaration or payment on or after June 1, 1994 by the
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Corporation, RSC, AAE or any of their respective subsidiaries
of any dividend or distribution (except for any dividend or
distribution from one subsidiary of the Corporation to another
subsidiary of the Corporation or from a subsidiary of the
Corporation to the Corporation, RSC or AAE or any of their
respective wholly owned subsidiaries; provided that all of such
dividend paid or distribution made, net of applicable
withholding taxes, is received by the Corporation, RSC or AAE
or such recipient subsidiary) on any class or series of its
stock (other than regularly scheduled quarterly cash dividends
on the Series A Convertible Preferred Stock and Series B
Convertible Preferred Stock in accordance with the terms
thereof as in effect on the Original Issue Date) other than the
declaration and payment by the Corporation, RSC and AAE of
dividends on the Common Stock, the RSC Class A Shares and the
AAE Dividend Shares, respectively, which do not exceed (i) on
and after June 1, 1994 and on and prior to December 31, 1994,
more than $.075 per share, (ii) on and after January 1, 1995
and on and prior to December 31, 1996, in the aggregate more
than 25% of the Corporation's net income available for
distribution to common shareholders (after preferred dividends)
through the end of the last fiscal quarter prior to the date of
declaration of such dividend and (iii) on and after January 1,
1997, in the aggregate more than the sum of (A) 50% of the
Corporation's net income available for distribution to common
shareholders (after preferred dividends) on and after such date
and through the end of the last fiscal quarter prior to the
date of declaration of such dividend and (B) the excess, if
any, of (1) 25% of the Corporation's net income available for
distribution to common shareholders (after preferred dividends)
during the period ending on and after January 1, 1995 through
December 31, 1996 over (2) the aggregate amount of dividends
declared during the period from January 1, 1995 through
December 31, 1996 and (b) any repurchases, redemptions,
retirements or other acquisitions directly or indirectly by the
Corporation or any of its subsidiaries on or after June 1, 1994
of any stock of the Corporation or any of its subsidiaries
(other than a wholly-owned subsidiary) (other than redemptions
or repurchases of the Series B Convertible Preferred Stock in
accordance with Sections 6 and 7) in excess of net proceeds on
or after June 1, 1994 to the Corporation from sales of stock of
the Corporation (less amounts expended on redemptions or
repurchases of Series A Convertible Preferred Stock and
Series B Convertible Preferred Stock on or after June 1, 1994).
For purposes of Section 8 below, all amounts treated as an
Extraordinary Equity Payment shall be treated as having been
made by the Corporation.
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"Specified Corporate Action" shall mean such time as
(i) the Corporation shall consent or agree to the acquisition
of, or the commencement of a tender offer for, or the Board of
Directors of the Corporation shall recommend or, within 10
business days after the commencement of the tender offer, not
recommend that shareholders reject, a tender offer for,
"beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) by any "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended ("the Exchange Act")) other than American
International Group, Inc. ("AIG") and its affiliates or any
transferee thereof, of securities of the Corporation entitled
to vote generally in the election of directors, or securities
convertible into or exchangeable for such securities
(collectively, "Designated Securities"), representing, when
added to the Designated Securities already owned by such person
or group, thirty-five percent (35%) or more of such Designated
Securities; (ii) the Corporation shall amend, modify or
supplement, or waive the benefit of, the Rights Agreement
between Alexander & Alexander Services Inc. and First Chicago
Trust Company of New York, dated as of June 11, 1987, as
amended and restated on March 22, 1990, as amended on
August 21, 1992 and June 6, 1994 (the "Rights Agreement"), so
as to permit any acquisition of beneficial ownership of thirty-
five percent (35%) or more of the Designated Securities without
causing a person or group (other than AIG and its affiliates or
any transferee thereof) to become an Acquiring Person (as
defined in the Rights Agreement) or without causing the
Distribution Date or the Shares Acquisition Date (each as
defined in the Rights Agreement) to occur or without giving
rise to a Section 11(a)(ii) Event (as defined in the Rights
Agreement); (iii) the Corporation shall take any action under
Section 3-603(c) of the Maryland General Corporation Law to
exempt any transaction between the Corporation and any of its
subsidiaries, on the one hand, and any person or group (other
than AIG and its affiliates or any transferee thereof), or any
affiliates of any such person or group, on the other hand, who
(A) acquire, own or hold beneficial ownership of Designated
Securities representing thirty-five percent (35%) or more of
such Designated Securities from the provisions of Title 3,
Subtitle 6 of the Maryland General Corporation Law or
(B) acquire, own or hold beneficial ownership of Designated
Securities representing ten percent (10%) or more of such
Designated Securities unless such other person or group, or any
affiliate of such person or group, enters into a standstill
agreement with the Corporation limiting the acquisition of
Designated Securities by such other person or group, or any
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affiliates of such person or group, to less than 35% of the
Designated Securities and such standstill agreement remains in
full force and effect; (iv) the Corporation shall issue, sell
or transfer, in one or a series of related transactions,
Designated Securities to any person or group (other than AIG
and its affiliates or any transferee thereof) if after giving
effect thereto said person or group shall have, or shall have
the then contractual right to acquire through conversion,
exercise of warrants or otherwise, more than thirty-five
percent (35%) of the combined voting power to vote generally in
the election of directors of the Corporation; or (v) the
Corporation shall agree to merge or consolidate with or into
any person, firm, corporation or other legal entity (other than
AIG and its affiliates or any transferee thereof) or shall
agree to sell all or substantially all its assets to any such
person, firm, corporation or other legal entity other than (i)
a merger or consolidation of one subsidiary of the Corporation
into another or the Corporation, or (ii) a merger or
consolidation in which the securities of the Corporation
outstanding before the merger or consolidation are not affected
and in which the Corporation issues equity securities having an
aggregate market value of less than 20% of the total market
value of the Corporation's equity securities outstanding prior
to such merger or consolidation.
"Principal Subsidiary" means a subsidiary, including
its subsidiaries, which meets any of the following conditions:
(i) The Corporation's and its other subsidiaries'
investments in and advances to the subsidiary exceed ten
percent (10%) of the total assets of the Corporation and
its subsidiaries consolidated as of the end of the most
recently completed fiscal year of the Corporation; or
(ii) The Corporation's and its other subsidiaries'
proportionate share of the total assets (after
intercompany eliminations) of the subsidiary exceed ten
percent (10%) of the total assets of the Corporation and
its subsidiaries consolidated as of the end of the most
recently completed fiscal year of the Corporation; or
(iii) The Corporation's and its other subsidiaries'
equity in the income from continuing operations before
income taxes, extraordinary items and cumulative effect of
a change in accounting principles of the subsidiary
exceeds ten percent (10%) of such income of the
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Corporation and its subsidiaries consolidated for the most
recently completed fiscal year of the Corporation.
"Affiliate" means, when used with reference to any
person, any other person directly or indirectly controlling,
controlled by, or under direct or indirect common control with,
the referent person or such other person, as the case may be,
or any person who beneficially owns, directly or indirectly,
10% or more of the voting equity interests of such person or
warrants, options or other rights to acquire or hold more than
10% of any class of voting equity interests of such person.
For the purposes of this definition, "control" when used with
respect to any specified person means the power to direct or
cause the direction of management or policies of such person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
"affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
The date fixed for each such repurchase shall be the
121st day following the occurrence of the Special Event giving
rise thereto. The place of payment shall be at an office or
agency in the City of New York, New York fixed therefor by the
Corporation or, if not fixed, at the principal executive office
of the Corporation.
The Corporation shall, within 20 days of the
occurrence of a Special Event, give a written notice thereof by
first class mail, postage prepaid, to the holders of record of
shares of the Series B Convertible Preferred Stock, addressed
to such holders at their last addresses as shown upon the stock
transfer books of the Corporation. Each such notice shall
specify the Special Event which has occurred and the date of
such occurrence, the place or places of payment, the then
effective conversion price pursuant to Section 8, the then
effective repurchase price and the date the right of such
holder to require such repurchase shall terminate. Any notice
that is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of
shares of Series B Convertible Preferred Stock receives such
notice; and failure to give such notice by mail, or any defect
in such notice, to the holders of any shares shall not affect
the validity of the proceedings for the repurchase of any other
shares of Series B Convertible Preferred Stock.
On the date fixed for any such repurchase, each
holder of shares of Series B Convertible Preferred Stock who
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elects to have shares of Series B Convertible Preferred Stock
held by it purchased shall surrender the certificate
representing such shares to the Corporation at the place
designated in such notice together with an election to have
such purchase made and shall thereupon be entitled to receive
payment therefor provided in this Section 7. If less than all
the shares represented by any such surrendered certificate are
repurchased, a new certificate shall be issued representing the
unpurchased shares. Dividends with respect to the shares of
Series B Convertible Preferred Stock so purchased shall cease
to accrue after the date so purchased, such shares shall no
longer be deemed outstanding and the holders thereof shall
cease to be stockholders of the Corporation and all rights
whatsoever with respect to the shares so purchased shall
terminate. If the funds legally available for such purchase
are not sufficient to purchase all the shares of Series B
Convertible Preferred Stock tendered to the Corporation for
purchase, the Corporation shall purchase the greatest number of
whole shares for which such funds are so available on a pro
rata basis among all tendering holders based on the ratio of
the number of shares tendered by each of them to the aggregate
amount of all shares so tendered, and the certificates
representing the unpurchased shares shall be deemed not to be
surrendered for repurchase, such unpurchased shares shall
remain outstanding and the rights of the holders of shares of
Series B Convertible Preferred Stock thereafter shall continue
to be those of a holder of shares of the Series B Convertible
Preferred Stock; provided, however, the Corporation shall
thereafter be required to repurchase all such remaining shares
at the first date it has sufficient funds legally available for
such purpose at the price it would have paid at the date such
shares were actually tendered and the Corporation shall give
notice as aforesaid to each holder whose shares were not
repurchased for such reason and such holder shall thereafter
have the right to elect to have such shares repurchased, such
election to be made within 30 days of receipt of such notice.
8. Conversion.
(a) Right of Conversion. Each share of Series B
Convertible Preferred Stock shall be convertible at the option
of the holder thereof, at any time prior to the close of
business on the business day prior to the date fixed for
redemption of such share as herein provided, into fully paid
and nonassessable shares of Class D Common Stock and such other
securities and property as hereinafter provided, at the rate of
that number of shares of Class D Common Stock for each full
share of
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Series B Convertible Preferred Stock that is equal to
$50.00 divided by the conversion price applicable per share of
Class D Common Stock. For purposes of this resolution, the
"conversion price" applicable per share of Class D Common Stock
shall initially be equal to $17.00, and shall be adjusted from
time to time in accordance with the provisions of this Section
8.
For the purpose of this Section 8, the term "Common
Stock" shall mean the class designated as Common Stock, par
value $1.00 per share, of the Corporation as of June 1, 1994
and any other shares into which such shares may hereafter be
changed from time to time. For purposes of this Section 8, the
term "Class D Common Stock" shall mean the class designated as
Class D Common Stock, par value $1.00 per share, of the
Corporation as of the Original Issue Date and any other shares
into which such shares may hereafter be changed from time to
time.
(b) Conversion Procedures. Any holder of shares of
Series B Convertible Preferred Stock desiring to convert such
shares into Class D Common Stock shall surrender the
certificate or certificates representing such shares of Series
B Convertible Preferred Stock at the office of the transfer
agent for the Series B Convertible Preferred Stock, which
certificate or certificates, if the Corporation shall so
require, shall be duly endorsed to the Corporation or in blank,
or accompanied by proper instruments of transfer to the
Corporation or in blank, accompanied by irrevocable written
notice to the Corporation that the holder elects so to convert
such shares of Series B Convertible Preferred Stock and
specifying the name or names (with address or addresses) in
which a certificate or certificates evidencing shares of Class
D Common Stock are to be issued.
Subject to Section 8(1) hereof, no payments or
adjustments in respect of dividends on shares of Series B
Convertible Preferred Stock surrendered for conversion or on
account of any dividend on the Class D Common Stock issued upon
conversion shall be made upon the conversion of any shares of
Series B Convertible Preferred Stock.
The Corporation shall, as soon as practicable after
such deposit of certificates representing shares of Series B
Convertible Preferred Stock accompanied by the written notice
and compliance with any other conditions herein contained,
deliver at such office of the transfer agent to the person for
whose account such shares of Series B Convertible Preferred
Stock were so surrendered or to the nominee or nominees of such
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person certificates representing the number of full shares of
Class D Common Stock to which such person shall be entitled as
aforesaid, together with a cash adjustment in respect of any
fraction of a share of Class D Common Stock as hereinafter
provided. Subject to the following provisions of this para-
graph, such conversion shall be deemed to have been made as of
the date of such surrender of the shares of Series B Conver-
tible Preferred Stock to be converted, and the person or
persons entitled to receive the Class D Common Stock deliver-
able upon conversion of such Series B Convertible Preferred
Stock shall be treated for all purposes as the record holder or
holders of such Class D Common Stock on such date.
(c) Adjustment of Conversion Price. The conversion
price at which a share of Series B Convertible Preferred Stock
is convertible into Class D Common Stock shall be subject to
adjustment from time to time as follows:
(i) In case the Corporation shall pay or make a
dividend or other distribution on its Common Stock exclusively
in Common Stock or shall pay or make a dividend or other
distribution on any other class of stock of the Corporation
which dividend or distribution includes Common Stock or shall
exchange outstanding Rights (as defined in Section 8(k) hereof)
for shares of Common Stock, the conversion price in effect at
the opening of business on the day following the date fixed for
the determination of stockholders entitled to receive such
dividend or other distribution or to exchange such Rights shall
be reduced by multiplying such conversion price by a fraction
of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of
such number of shares and the total number of shares
constituting such dividend or other distribution or exchange,
such reduction to become effective immediately after the
opening of business on the day following the date fixed for
such determination.
In case the Corporation shall issue or otherwise sell
or distribute shares of Common Stock for a consideration per
share in cash or property less than the conversion price in
effect at the time of such issuance, the conversion price then
in effect shall be reduced by multiplying such conversion price
by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding immediately prior to such
issuance, sale or distribution plus the number of shares of
Common Stock which the aggregate consideration received by the
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Corporation for such issuance, sale or distribution (such
consideration, if other than cash, as determined by the Board
of Directors including a majority of the Directors who are not
officers or employees of the Corporation or any of its
subsidiaries, whose determination shall be conclusive and
described in a resolution of the Board of Directors) would
purchase at the conversion price per share and the denominator
shall be the number of shares of Common Stock outstanding
immediately after giving effect to such issuance, sale or
distribution.
(ii) In case the Corporation shall pay or make a
dividend or other distribution on its Common Stock consisting
exclusively of, or shall otherwise issue to all or
substantially all holders of its Common Stock, rights or
warrants entitling the holders thereof to subscribe for or
purchase shares of Common Stock at a price per share less than
the then current market price per share (determined as provided
in subparagraph (vii) of this Section 8(c)) of the Common Stock
on the date fixed for the determination of stockholders
entitled to receive such rights or warrants, the conversion
price in effect at the opening of business on the day following
the date fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which the
numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which
the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase
would purchase at such current market price and the denominator
shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination
plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective
immediately after the opening of business on the day following
the date fixed for such determination. In case any rights or
warrants referred to in this subparagraph (ii) in respect of
which an adjustment shall have been made shall expire
unexercised, the conversion price shall be readjusted at the
time of such expiration to the conversion price that would have
been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
For the purposes of this Section 8(c)(ii), if both a
Distribution Date and a Section 11(a)(ii) Event (as such terms
are defined in the Rights Agreement) shall have occurred, then
the later to occur of such events shall be deemed to constitute
an issuance of rights to purchase shares of Common Stock.
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(iii) In case outstanding shares of Common Stock shall
be subdivided into a greater number of shares of Common Stock,
the conversion price in effect at the opening of business on
the day following the day upon which such subdivision becomes
effective shall be proportionately reduced, and conversely, in
case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the conversion
price in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening
of business on the day following the day upon which such
subdivision or combination becomes effective.
(iv) Subject to the last sentence of this subpara-
graph (iv), in case the Corporation shall, by dividend or
otherwise, distribute to all or substantially all holders of
its Common Stock evidences of its indebtedness, shares of any
class of stock, cash or assets (including securities, but
excluding any rights or warrants referred to in subparagraph
(ii) of this Section 8(c), excluding any dividend or
distribution paid exclusively in cash (other than an
Extraordinary Equity Payment) and excluding any dividend or
distribution referred to in subparagraph (i) of this Section
8(c)) (for the purposes of this subparagraph (iv), such
evidence of indebtedness, shares of stock, cash and assets are
herein called "Securities"), the conversion price shall be
reduced so that the same shall equal the price determined by
multiplying the conversion price in effect immediately
following the close of business on the Determination Date (as
defined in Section 8(i)) by a fraction of which the numerator
shall be the current market price per share (determined as
provided in subparagraph (vii) of this Section 8(c)) of the
Common Stock on the Determination Date less the fair market
value (as determined by the Board of Directors including a
majority of the Directors who are not officers or employees of
the Corporation or any of its subsidiaries, whose determination
shall be conclusive and described in a resolution of the Board
of Directors), on the date of such effectiveness, of the
portion of the Securities so distributed applicable to one
share of Common Stock and the denominator shall be such current
market price per share of the Common Stock, such reduction to
become effective immediately prior to the opening of business
on the day following the Determination Date. If the Board of
Directors so determines as aforesaid the fair market value of
any distribution for purposes of this subparagraph (iv) by
reference to the actual or when issued trading market for any
Securities comprising such
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distribution, it must in doing so consider the prices in such
market over the same period used in computing the current market
price per share of Common Stock pursuant to subparagraph (vii) of
this Section 8(c). Notwithstanding the foregoing, if the holders of
the Series B Convertible Preferred Stock elect to cause the Corporation
to reserve the Securities to be distributed for distribution to
the holders of the Series B Convertible Preferred Stock upon
the conversion of the shares of Series B Convertible Preferred
Stock so that any such holder converting shares of Series B
Convertible Preferred Stock will receive upon such conversion,
in addition to the shares of the Class D Common Stock to which
such holder is entitled, the amount and kind of such Securities
which such holder would have received if such holder had,
immediately prior to the Determination Date for such
distribution of Securities, converted its shares of Series B
Convertible Preferred Stock into Class D Common Stock, the fair
market value of the Securities shall, for purposes of this
subparagraph (iv), be deemed to be zero.
For purposes of this subparagraph (iv), any dividend
or distribution that includes shares of Common Stock, rights or
warrants to subscribe for or purchase shares of Common Stock or
other securities convertible into or exchangeable for shares of
Common Stock shall be deemed instead to be (1) a dividend or
distribution of the evidences of indebtedness, cash, assets or
shares of stock other than such shares of Common Stock, such
rights or warrants or such other convertible or exchangeable
securities (making any conversion price reduction required by
this subparagraph (iv)) immediately followed by (2) in the case
of such shares of Common Stock or such rights or warrants, a
dividend or distribution thereof (making any further conversion
price reduction required by subparagraph (i) or (ii) of this
Section 8(c), except (A) the Determination Date of such
dividend or distribution shall be substituted as "the date
fixed for the determination of stockholders entitled to receive
such dividend or other distribution or to exchange such Rights"
and "the date fixed for such determination" within the meaning
of subparagraphs (i) and (ii) of this Section 8(c) and (B) any
shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the
meaning of subparagraph (i) of this Section 8(c)) or (3) in the
case of such other convertible or exchangeable securities, a
dividend or distribution of such number of shares of Common
Stock as would then be issuable upon the conversion or exchange
thereof, whether or not the conversion or exchange of such
securities is subject to any conditions (making any further
conversion price
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reduction required by subparagraph (i) of this Section 8(c),
except (A) the Determination Date of such dividend or
distribution shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such
dividend or other distribution or to exchange such Rights"
and "the date fixed for such determination" and (B) the shares
deemed to constitute such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed
for such determination," each within the meaning of
subparagraph (i) of this Section 8(c)).
(v) Subject to the last sentence of this subpara-
graph (v), in case the Corporation shall, by dividend or
otherwise, at any time distribute to all holders of its Common
Stock cash (excluding (1) any cash that is distributed as part
of a distribution referred to in subparagraph (iv) of this
Section 8(c) and constitutes an Extraordinary Equity Payment
and (2) any cash representing an amount per share of Common
Stock of any quarterly cash dividend on the Common Stock to the
extent such cash does not constitute an Extraordinary Equity
Payment), the conversion price shall be reduced so that the
same shall equal the price determined by multiplying the
conversion price in effect immediately prior to the effective-
ness of the conversion price reduction contemplated by this
subparagraph (v) by a fraction of which the numerator shall be
the current market price per share (determined as provided in
subparagraph (vii) of this Section 8(c)) of the Common Stock on
the Determination Date less the amount of cash so distributed
and not excluded as above provided applicable to one share of
Common Stock and the denominator shall be such current market
price per share of the Common Stock, such reduction to become
effective immediately prior to the opening of business on the
day following the Determination Date. Notwithstanding the
foregoing, if the Corporation elects to reserve the cash to be
distributed for distribution to the holders of the Series B
Convertible Preferred Stock upon the conversion of the shares
of Series B Convertible Preferred Stock so that any such holder
converting shares of Series B Convertible Preferred Stock will
receive upon such conversion, in addition to the shares of the
Class D Common Stock to which such holder is entitled, the
amount of cash which such holder would have received if such
holder had, immediately prior to the Determination Date for
such distribution of cash, converted its shares of Series B
Convertible Preferred Stock into Class D Common Stock, then the
conversion price shall not be so reduced.
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(vi) In case a tender or exchange offer made by the
Corporation or any subsidiary of the Corporation for all or any
portion of the Corporation's Common Stock shall expire and such
tender or exchange offer shall involve the payment by the
Corporation or such subsidiary of consideration per share of
Common Stock having a fair market value (as determined by the
Board of Directors, including a majority of the Directors who
are not officers or employees of the Corporation or any of its
subsidiaries, whose determination shall be conclusive and
described in a resolution of the Board of Directors) at the
last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it shall
have been amended) that exceeds the current market price per
share (determined as provided in subparagraph (vii) of this
Section 8(c)) of the Common Stock on the Trading Day next
succeeding the Expiration Time, the conversion price shall be
reduced so that the same shall equal the price determined by
multiplying the conversion price in effect immediately prior to
the Expiration Time by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding (including
any tendered or exchanged shares) on the Expiration Time
multiplied by the current market price per share (determined as
provided in subparagraph (vii) of this Section 8(c)) of the
Common Stock on the Trading Day next succeeding the Expiration
Time and the denominator shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the
"Purchased Shares") and (y) the product of the number of shares
of Common Stock outstanding (less any Purchased Shares) on the
Expiration Time and the current market price per share
(determined as provided in subparagraph (vii) of this Section
8(c)) of the Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day
following the Expiration Time.
(vii) For the purpose of any computation under this
subparagraph and subparagraphs (ii), (iv) and (v) of this
Section 8(c), the current market price per share of Common
Stock on any date shall be deemed to be the average of the
daily Closing Prices (as defined in Section 8(i)) on the five
consecutive Trading Days prior to and including the date in
question; provided, however, that (1) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or
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distribution requiring such computation) that requires an
adjustment to the conversion price pursuant to subparagraph
(i), (ii), (iii), (iv), (v) or (vi) above occurs on or after
the twentieth Trading Day prior to the day in question and
prior to the "ex" date for the issuance or distribution
requiring such computation, the Closing Price for each Trading
Day prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the same fraction
by which the conversion price is so required to be adjusted as
a result of such other event, (2) if the "ex" date for any
event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion
price pursuant to subparagraph (i), (ii), (iii), (iv), (v) or
(vi) above occurs on or after the "ex" date for the issuance or
distribution requiring such computation and on or prior to the
day in question, the Closing Price for each Trading Day on and
after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the
fraction by which the conversion price is so required to be
adjusted as a result of such other event, and (3) if the "ex"
date for the issuance or distribution requiring such
computation is on or prior to the date in question, after
taking into account any adjustment required pursuant to clause
(2) of this proviso, the Closing Price for each Trading Day on
or after such "ex" date shall be adjusted by adding thereto the
amount of any cash and the fair market value on the day in
question (as determined by the Board of Directors, including a
majority of the Directors who are not officers or employees of
the Corporation, in a manner consistent with any determination
of such value for purposes of paragraph (iv) or (v) of this
Section 8(c), whose determination shall be conclusive and
described in a resolution of the Board of Directors) of the
evidences of indebtedness, shares of stock or assets being
distributed applicable to one share of Common Stock as of the
close of business on the day before such "ex" date. For the
purpose of any computation under subparagraph (vi) of this
Section 8(c), the current market price per share of Common
Stock on any date shall be deemed to be the average of the
daily Closing Prices for such day and the next two succeeding
Trading Days; provided that, if the "ex" date for any event
(other than the tender or exchange offer requiring such
computation) that requires an adjustment to the conversion
price pursuant to subparagraph (i), (ii), (iii), (iv), (v) or
(vi) above occurs on or after the Expiration Time for the
tender or exchange offer requiring such computation and on or
prior to the day in question, the Closing Price for each
Trading Day on and after the "ex" date or such other event
shall be adjusted by multiplying such Closing Price by the
reciprocal of
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the fraction by which the conversion price is so required to
be adjusted as a result of such other event. For purposes
of this subparagraph (vii), the term "ex" date, (1) when
used with respect to any issuance or distribution, means the
first date on which the Common Stock trades regular way on the
relevant exchange or in the relevant market from which the
Closing Price was obtained without the right to receive such
issuance or distribution, (2) when used with respect to any
subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such
subdivision or combination becomes effective, and (3) when used
with respect to any tender or exchange offer, means the first
date on which the Common Stock trades regular way on such
exchange or in such market after the Expiration Time of such
offer.
(viii) The Corporation may make such reductions in the
conversion price, in addition to those required by subpara-
graphs (i), (ii), (iii), (iv), (v) and (vi) of this Section
8(c), as it considers to be advisable to avoid or diminish any
income tax to holders of Class D Common Stock or rights to
purchase Class D Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes. The Corporation
from time to time may reduce the conversion price by any amount
for any period of time if the period is at least thirty days,
the reduction is irrevocable during the period and the Board of
Directors shall have made a determination that such reduction
would be in the best interest of the Corporation, which
determination shall be conclusive. Whenever the conversion
price is reduced pursuant to the preceding sentence, the
Corporation shall mail to holders of record of the Series B
Convertible Preferred Stock a notice of the reduction at least
fifteen days prior to the date the reduced conversion price
takes effect, and such notice shall state the reduced
conversion price and the period it will be in effect.
(ix) No adjustment in the conversion price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the conversion price; provided,
however, that any adjustments which by reason of this
subparagraph (ix) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
(x) Notwithstanding any other provision of this
Section 8 and without implication that the contrary would
otherwise be true, no issuance, dividend or distribution
requiring
-26-
adjustment of the conversion price pursuant to Section 8(c)
hereof shall be deemed to have occurred in the event that,
upon, following or in connection with the redemption or
expiration of the Rights or the termination of the Rights
Agreement or otherwise, the Corporation enters into a new
agreement that is comparable in purpose and effect to the
Rights Agreement (as determined by the Board of Directors,
whose determination shall be conclusive) and distributes to the
holders of Common Stock and Class D Common Stock Preferred
Stock, Common Stock or other similar stock purchase rights
under such agreement that are attached to the Common Stock.
(xi) Whenever the conversion price is adjusted as
herein provided:
(1) the Corporation shall compute the adjusted
conversion price and shall prepare a certificate signed by
the Treasurer of the Corporation setting forth the
adjusted conversion price and showing in reasonable detail
the acts upon which such adjustment is based, and such
certificate shall forthwith be filed with the transfer
agent for the Series B Convertible Preferred Stock; and
(2) a notice stating the conversion price has been
adjusted and setting forth the adjusted conversion price
shall forthwith be required, and as soon as practicable
after it is required, such notice shall be mailed by the
Corporation to all record holders of shares of Series B
Convertible Preferred Stock at their last addresses as
they shall appear upon the stock transfer books of the
Corporation.
(xii) The occurrence of any correlative event with
respect to the Class A Common Stock or the Class C Common Stock
shall result in adjustments to the conversion price congruent
with those made with respect to the Common Stock.
(d) No Fractional Shares. No fractional shares or
scrip representing fractional shares of Class D Common Stock
shall be issued upon conversion of Series B Convertible
Preferred Stock. If more than one certificate representing
shares of Series B Convertible Preferred Stock shall be
surrendered for conversion at one time by the same holder, the
number of full shares issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of
Series B Convertible Preferred Stock so surrendered. Instead
of any fractional share of Class D Common Stock that would
otherwise be
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issuable upon conversion of any shares of Series B Convertible
Preferred Stock, the Corporation shall pay a cash adjustment
in respect of such fractional interest in an amount equal to
the same fraction of the market price per share of Common
Stock (as determined by the Board of Directors or in any
manner prescribed by the Board of Directors, which, so long as
the Common Stock is listed on the New York Stock Exchange,
shall be the reported last sale price regular way on the New
York Stock Exchange) at the close of business on the day of
conversion.
(e) Reclassification, Consolidation, Merger or Sale
of Assets. In the event that the Corporation shall be a party
to any transaction (including without limitation any
recapitalization or reclassification of the Common Stock (other
than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a
subdivision or combination of the Common Stock), any
consolidation of the Corporation with, or merger of the
Corporation into, any other person, any merger of any other
person into the Corporation (other than a merger which does not
result in a reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the
Corporation), any sale or transfer of all or substantially all
of the assets of the Corporation or any compulsory share
exchange pursuant to which the Common Stock is converted into
the right to receive other securities, cash or other property,
then lawful provision shall be made as part of the terms of
such transaction whereby the holder of each share of Series B
Convertible Preferred Stock then outstanding shall have the
right thereafter to convert such share only into (i) in the
case of any such transaction other than a Common Stock
Fundamental Change (as defined in Section 8(i)) and subject to
assets being legally available for such purpose under
applicable law at the time of such conversion, the kind and
amount of securities, cash and other property receivable upon
such recapitalization, reclassification, consolidation, merger,
sale, transfer or share exchange by a holder of the number of
shares of Common Stock of the Corporation into which such share
of Series B Convertible Preferred Stock might have been
converted immediately prior to such recapitalization,
reclassification, consolidation, merger, sale, transfer or
share exchange, after giving effect, in the case of any
Non-Stock Fundamental Change (as defined in Section 8(i)), to
any adjustment in the conversion price required by the
provisions of Section 8(h), and (ii) in the case of a Common
Stock Fundamental Change, into Common Stock of the kind
received by holders of Common Stock as a result of such Common
Stock Fundamental Change in an amount determined pursuant to
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the provisions of Section 8(h). The Corporation or the person
formed by such consolidation or resulting from such merger or
which acquires such assets or which acquires the Corporation's
shares, as the case may be, shall make provisions in its
certificate or articles of incorporation or other constituent
document to establish such right. Such certificate or articles
of incorporation or other constituent document shall provide
for adjustments which, for events subsequent to the effective
date of such certificate or articles of incorporation or other
constituent document, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 8.
The above provisions shall similarly apply to successive
recapitalizations, reclassifications, consolidations, mergers,
sales, transfers or share exchanges.
(f) Reservation of Shares; Transfer Taxes; Etc. The
Corporation shall at all times reserve and keep available, out
of its authorized and unissued stock, solely for the purpose of
effecting the conversion of the Series B Convertible Preferred
Stock, such number of shares of its Class D Common Stock or
Common Stock free of preemptive rights as shall from time to
time be sufficient to effect the conversion of all shares of
Series B Convertible Preferred Stock from time to time
outstanding. The Corporation shall from time to time, in
accordance with the laws of the State of Maryland, increase the
number of authorized shares of Class D Common Stock if at any
time the number of shares of authorized and unissued Class D
Common Stock shall not be sufficient to permit the conversion
of all the then outstanding shares of Series B Convertible
Preferred Stock. The Corporation shall at all times reserve
and keep available, out of its authorized and unissued stock,
solely for the purpose of effecting the exchange of shares of
Class D Common Stock or conversion of Series B Convertible
Preferred Stock, such number of shares of its Common Stock or
Class D Common Stock, as the case may be, free of preemptive
rights as shall from time to time be sufficient to effect the
exchange of all shares of Class D Common Stock or conversion of
Series B Convertible Preferred Stock from time to time.
If any shares of Class D Common Stock required to be
reserved for purposes of conversion of the Series B Convertible
Preferred Stock hereunder require registration with or approval
of any governmental authority under any Federal or State law
before such shares may be issued upon conversion, the
Corporation will in good faith and as expeditiously as possible
endeavor to cause such shares to be duly registered or
approved, as the case may be. If the Class D Common Stock is
-29-
listed on the New York Stock Exchange or any other national
securities exchange, the Corporation will, if permitted by the
rules of such exchange, list and keep listed on such exchange,
upon official notice of issuance, all shares of Class D Common
Stock issuable upon conversion of the shares of Series B
Convertible Preferred Stock.
The Corporation shall pay any and all issue or other
taxes that may be payable in respect of any issue or delivery
of shares of Class D Common Stock on conversion of the Series B
Convertible Preferred Stock. The Corporation shall not,
however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of
Class D Common Stock (or other securities or assets) in a name
other than that in which the shares of Series B Convertible
Preferred Stock so converted were registered, and no such issue
or delivery shall be made unless and until the person
requesting such issue has paid to the Corporation the amount of
such tax or has established, to the satisfaction of the
Corporation, that such tax has been paid.
(g) Prior Notice of Certain Events. In case:
(i) the Corporation shall (1) authorize and declare
any dividend (or any other distribution) on its Common
Stock, other than (A) a dividend payable in shares of
Common Stock or (B) a dividend payable in cash, other than
any regularly scheduled quarterly cash dividend which does
not constitute an Extraordinary Equity Payment, or
(2) declare or authorize a redemption or repurchase of in
excess of 10% of the then outstanding shares of Common
Stock; or
(ii) the Corporation shall authorize the granting to
all holders of Common Stock of rights or warrants to
subscribe for or purchase any shares of stock of any class
or of any other rights or warrants; or
(iii) of any reclassification of Common Stock (other
than a subdivision or combination of the outstanding
Common Stock, or a change in par value, or from par value
to no par value, or from no par value to par value), or of
any consolidation or merger to which the Corporation is a
party and for which approval of any stockholders of the
Corporation shall be required, or of the sale or transfer
of all or substantially all of the assets of the
Corporation or of any compulsory share exchange whereby the
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Common Stock is converted into other securities, cash
or other property; or
(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed with the transfer
agent for the Series B Convertible Preferred Stock, and shall
cause to be mailed to the holders of record of the Series B
Convertible Preferred Stock, at their last addresses as they
shall appear upon the stock transfer books of the Corporation,
at least fifteen days prior to the applicable record date
hereinafter specified, a notice stating, as the case may be,
(x) the record date (if any) for the purpose of such dividend,
distribution, redemption, repurchase or granting of rights or
warrants or, if no record date is to be set, the date as of
which the holders of Common Stock of record to be entitled to
such dividend, distribution, redemption, rights or warrants are
to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, share
exchange, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that
holders of shares of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities or
other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail
such notice or any defect therein or in the mailing thereof
shall affect the validity of the corporate action required to
be specified in such notice).
(h) Adjustments in Case of Fundamental Changes.
Notwithstanding any other provision in this Section 8 to the
contrary, if any Fundamental Change (as defined in
Section 8(i)) occurs, then the conversion price in effect will
be adjusted immediately after such Fundamental Change as
described below. In addition, in the event of a Common Stock
Fundamental Change (as defined in Section 8(i)), each share of
Series B Convertible Preferred Stock shall be convertible
solely into shares of common stock of the kind received by
holders of Common Stock as the result of such shares of Common
Stock Fundamental Change.
For purposes of calculating any adjustment to be made
pursuant to this Section 8(h) in the event of a Fundamental
Change, immediately after such Fundamental Change:
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(i) in the case of a Non-Stock Fundamental Change
(as defined in Section 8(i)), the conversion price of the
Series B Convertible Preferred Stock shall become the
lower of (A) the conversion price immediately prior to
such Non-Stock Fundamental Change, but after giving effect
to any other prior adjustments effected pursuant to this
Section 8, and (B) the result obtained by multiplying the
greater of the Applicable Price (as defined in Section
8(i)) or the then applicable Reference Market Price (as
defined in Section 8(i)) by a fraction the numerator of
which shall be $50.00 and the denominator of which shall
be $54.00 prior to September 15, 1999 and thereafter the
then current Redemption Price per share of Series B
Convertible Preferred Stock plus an amount equal to all
dividends accrued and unpaid thereon, whether or not
declared, to but excluding the date of such Non-Stock
Fundamental Change; and
(ii) in the case of a Common Stock Fundamental
Change, the conversion price shall be the conversion price
in effect immediately prior to such Common Stock
Fundamental Change, but after giving effect to any other
prior adjustments effected pursuant to this Section 8,
multiplied by a fraction, the numerator of which is the
Purchaser Stock Price (as defined in Section 8(i)) and the
denominator of which is the Applicable Price; provided,
however, that in the event of a Common Stock Fundamental
Change in which (A) 100% by value of the consideration
received by a holder of Common Stock is common stock of
the successor, acquiror or other third party (and cash, if
any, is paid with respect to any fractional interests in
such common stock resulting from such Common Stock
Fundamental Change) and (B) all of the Common Stock shall
have been exchanged for, converted into or acquired for
common stock (and cash with respect to fractional
interests) of the successor, acquiror or other third
party, the conversion price of the shares of Series B
Convertible Preferred Stock immediately following such
Common Stock Fundamental Change shall be the conversion
price in effect immediately prior to such Common Stock
Fundamental Change multiplied by a fraction, the numerator
of which is one (1) and the denominator of which is the
number of shares of common stock of the successor,
acquiror or other third party received by a holder of one
share of Common Stock as a result of such Common Stock
Fundamental Change.
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(i) Definitions. The following definitions shall
apply to terms used in this Section 8:
(1) "Applicable Price" shall mean (i) in the
event of a Non-Stock Fundamental Change in which the
holders of shares of Common Stock receive only cash, the
amount of cash received by the holder of one share of
Common Stock and (ii) in the event of any other Non-Stock
Fundamental Change or any Common Stock Fundamental Change,
the average of the last reported sale price for the Common
Stock during the ten Trading Days immediately prior to the
record date for the determination of the holders of Common
Stock entitled to receive cash, securities, property or
other assets in connection with such Non-Stock Fundamental
Change or Common Stock Fundamental Change, or, if there is
no such record date, the date upon which the holders of
the Common Stock shall have the right to receive such
cash, securities, property or other assets.
(2) "Closing Price" on any day shall mean the
closing sale price regular way on such day or, in case no
such sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in each
case on the New York Stock Exchange, or, if the Common
Stock is not listed or admitted to trading on such
Exchange, on the principal national securities exchange or
quotation system on which the Common Stock is quoted or
listed or admitted to trading, or, if not quoted or listed
or admitted to trading on any national securities exchange
or quotation system, the average of the closing bid and
asked prices of the Common Stock on the over-the-counter
market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similarly generally
accepted reporting service, or if not so available in such
manner, as furnished by any New York Stock Exchange member
firm selected from time to time by the Board of Directors
of the Corporation for that purpose.
(3) "Common Stock Fundamental Change" shall
mean any Fundamental Change in which more than 50% by
value (as determined in good faith by the Board of
Directors) of the consideration received by holders of
Common Stock consists of common stock that for the
consecutive ten Trading Days immediately prior to such
Fundamental Change has been admitted for listing or
admitted for listing subject to notice of issuance on a
national securities exchange or quoted on the National
Association of
-33-
Securities Dealers, Inc. ("NASDAQ") National Market System;
provided, however, that a Fundamental Change shall not be a
Common Stock Fundamental Change unless either (i) the
Corporation continues to exist after the occurrence of such
Fundamental Change and the outstanding shares of Series B
Convertible Preferred Stock continue to exist as outstanding
shares of Series B Convertible Preferred Stock, or (ii) not
later than the occurrence of such Fundamental Change, the
outstanding shares of Series B Convertible Preferred Stock are
converted into or exchanged for shares of convertible
preferred stock of a corporation succeeding to the
business of the Corporation, which convertible preferred
stock has powers, preferences and relative, participating,
optional or other rights, and qualifications, limitations
and restrictions, substantially similar to those of the
Series B Convertible Preferred Stock.
(4) "Determination Date" shall mean, with
respect to any dividend, distribution or other transaction
or event in which the holders of Common Stock have the
right to receive any cash, securities or other property or
assets or in which the Common Stock (or other applicable
security) is exchanged for or converted into any
combination of cash, securities or other property, the
date fixed for determination of stockholders entitled to
receive such cash, securities or other property or assets
(whether such date is fixed by the Board of Directors or
by statute, contract or otherwise).
(5) "Fundamental Change" shall mean the
occurrence of any transaction or event in connection with
a plan pursuant to which all or substantially all of the
shares of Common Stock shall be exchanged for, converted
into, acquired for or constitute solely the right to
receive cash, securities, property or other assets
(whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise);
provided, however, in the case of a plan involving more
than one such transaction or event, for purposes of
adjustment of the conversion price, such Fundamental
Change shall be deemed to have occurred when substantially
all of the shares of Common Stock of the Corporation shall
be exchanged for, converted into or acquired for or
constitute solely the right to receive cash, securities,
property or other assets, but the adjustment shall be
based upon the consideration which
-34-
the holders of Common Stock received in such transaction or
event as a result of which more than 50% of the shares of Common
Stock of the Corporation shall have been exchanged for, converted
into, or acquired for or constitute solely the right to receive
cash, securities, property or other assets; provided,
further, that such term does not include (i) any such
transaction or event in which the Corporation and/or any
of its subsidiaries are the issuers of all the cash,
securities, property or other assets exchanged, acquired
or otherwise issued in such transaction or event, or
(ii) any such transaction or event in which the holders of
Common Stock receive securities of an issuer other than
the Corporation if, immediately following such transaction
or event, such holders hold a majority of the securities
having the power to vote normally in the election of
directors of such other issuer outstanding immediately
following such transaction or other event.
(6) "Non-Stock Fundamental Change" shall mean
any Fundamental Change other than a Common Stock
Fundamental Change.
(7) "Purchaser Stock Price" shall mean, with
respect to any Common Stock Fundamental Change, the
average of the last reported sales price for the common
stock, on the principal national securities exchange or
the NASDAQ National Market System on which such common
stock is listed, received in such Common Stock Fundamental
Change during the ten Trading Days immediately prior to
the record date for the determination of the holders of
Common Stock entitled to receive such common stock or, if
there is no such record date, the date upon which the
holders of the Common Stock shall have the right to
receive such common stock; provided, however, if no such
last reported sales price for the common stock during the
last ten Trading Days prior to the record date exists,
then the Purchaser Stock Price shall be set at a price
determined in good faith by the Board of Directors.
(8) "Reference Market Price" shall initially
mean $11.33 and in the event of any adjustment to the
conversion price other than as a result of a Fundamental
Change, the Reference Market Price shall also be adjusted
so that the ratio of the Reference Market Price to the
conversion price after giving effect to any such
-35-
adjustment shall always be the same as the ratio of $11.33
to the initial conversion price set forth above.
(9) "Trading Day" shall mean a day on which the
national securities exchange or the NASDAQ National Market
System used to determine the Closing Price is open for the
transaction of business or the reporting of trades.
(j) Dividend or Interest Reinvestment Plans.
Notwithstanding the foregoing provisions, the issuance of any
shares of Common Stock pursuant to any plan providing for the
reinvestment of dividends or interest payable on securities of
the Corporation and the investment of additional optional
amounts in shares of Common Stock under any such plan, and the
issuance of any shares of Common Stock or options or rights to
purchase such shares pursuant to any employee benefit plan or
program of the Corporation or pursuant to any option, warrant,
right or exercisable, exchangeable or convertible security
outstanding as of the date the Series B Convertible Preferred
Stock was first designated (except as expressly provided in
Section 8(c)(i) or 8(c)(ii) with respect to certain events
under the Rights Agreement), and any issuance of Rights (as
hereinafter defined), shall not be deemed to constitute an
issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Corporation or any of its
subsidiaries to which any of the adjustment provisions
described above applies. There shall also be no adjustment of
the conversion price in case of the issuance of any stock (or
securities convertible into or exchangeable for stock) of the
Corporation except as specifically described in this Section 8.
If any action would require adjustment of the conversion price
pursuant to more than one of the provisions described above,
only one adjustment shall be made and such adjustment shall be
the amount of adjustment which has the highest absolute value
to the holders of Series B Convertible Preferred Stock.
(k) Preferred Share Purchase Rights. So long as
Preferred Share Purchase Rights, of the kind authorized and
declared on June 11, 1987 and distributed by the Corporation in
June 1987 as the same have been and may hereafter be amended
("Rights"), are attached to the outstanding shares of Class D
Common Stock of the Corporation, each share of Class D Common
Stock issued upon conversion of the shares of Series B
Convertible Preferred Stock prior to the earliest of any
Distribution Date (as defined in the Rights Agreement), the
date of redemption of the Rights or the date of expiration of
the Rights shall be issued with Rights in an amount equal to
the amount of
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Rights then attached to each such outstanding share of Class
D Common Stock, provided that, at the option of any holder
of shares of Class D Common Stock, any securities issued
upon exercise of such Rights shall be voting only to the
extent that the Class D Common Stock is voting.
(l) Certain Additional Rights. In case the
Corporation shall, by dividend or otherwise, authorize, declare
or make a distribution on its Common Stock referred to in
Section 8(c)(iv) or Section 8(c)(v), the holder of each share
of Series B Convertible Preferred Stock, upon the conversion
thereof subsequent to the close of business on the date fixed
for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the conversion
price adjustment in respect of such distribution pursuant to
Section 8(c)(iv) or Section 8(c)(v), shall also be entitled to
receive for each share of Class D Common Stock into which such
share of Series B Convertible Preferred Stock is converted, the
portion of the evidences of indebtedness, shares of stock, cash
and assets so distributed applicable to one share of Class D
Common Stock; provided, however, that, at the election of the
Corporation (whose election shall be evidenced by a resolution
of the Board of Directors) with respect to all holders so
converting, the Corporation may, in lieu of distributing to
such holder any portion of such distribution not consisting of
cash or securities of the Corporation, pay such holder an
amount in cash equal to the fair market value thereof (as
determined by the Board of Directors, including a majority of
the Directors who are not officers or employees of the
Corporation or any of its subsidiaries, whose determination
shall be conclusive and described in a resolution of the Board
of Directors). If any conversion of a share of Series B
Convertible Preferred Stock described in the immediately
preceding sentence occurs prior to the payment date for a
distribution to holders of Class D Common Stock which the
holder of the share of Series B Convertible Preferred Stock so
converted is entitled to receive in accordance with the
immediately preceding sentence, the Corporation may elect (such
election to be evidenced by a resolution of the Board of
Directors) to distribute to such holder a due bill for the
evidences of indebtedness, shares of stock, cash or assets to
which such holder is so entitled; provided that such due bill
(i) meets any applicable requirements of the principal national
securities exchange or other market on which the Class D Common
Stock is then traded and (ii) requires payment or delivery of
such evidences of indebtedness, shares of stock, cash or assets
no later than the date of payment or delivery
-37-
thereof to holders of Class D Common Stock receiving such distribution.
(m) Other. Notwithstanding any other provision in
this Section 8 to the contrary, if the Corporation shall, by
dividend or otherwise, authorize, declare or make a distribu-
tion on its Common Stock referred to in Section 8(c)(iv) and
such distribution shall include shares of stock of one or more
corporations that immediately prior to such distribution was or
would have been a subsidiary (a "Spin-Off"), the holder of each
share of Series B Convertible Preferred Stock shall be
entitled, if it so elects, in addition to any other adjustment
provided in respect thereof in this Section 8, to receive share
for share convertible preferred stock of each such corporation
which has powers, preferences and relative, participating,
optional and other rights, and qualifications, limitations and
restrictions with respect to such corporation, as are
substantially identical to those of the Series B Convertible
Preferred Stock (the "Additional Preferred Stock" and
collectively with the Series B Preferred Stock, the "Total
Preferred Stock"). The then effective conversion price of the
Additional Preferred Stock shall be such as shall preserve
fully the conversion rights of the Series B Convertible
Preferred Stock in such corporation. The shares of Series B
Convertible Stock and the Additional Preferred Stock shall each
thereafter remain outstanding; provided, however, that any
payment, redemption or retirement in respect of either the
Series B Convertible Preferred Stock or the Additional
Preferred Stock shall operate to reduce the remaining payment,
redemption or retirement rights in respect of both, so that
the holder shall be entitled to receive in the aggregate the
full benefits with respect to payments, redemption and
retirement rights of holding one half of the number of shares
of Total Preferred Stock held by such holder and the full
benefits with respect to all other rights of holding the total
number of shares of Total Preferred Stock held by such holder.
(n) Certain Special Events. Notwithstanding
anything in this Section 8 to the contrary, neither the
Corporation nor any of its subsidiaries shall declare, pay or
make any dividend or distribution or commence a tender or
exchange offer for any of the Corporation's securities that are
subordinate to or pari passu with the Series B Convertible
Preferred Stock as to liquidation preference or dividends or be
a party to any transaction (including without limitation any
recapitalization or reclassification of stock), any
consolidation of the Corporation or any such subsidiary with,
or merger of the
-38-
Corporation or any such subsidiary into, or share exchange with,
any other person, any merger of any other person into the
Corporation or any such subsidiary or any sale or transfer
of assets which, in any such case, would constitute a Special
Event unless after giving effect thereto the Corporation would
have the ability and the right (and the Board of Directors,
including a majority of the Directors who are not officers or
employees of the Corporation or any of its subsidiaries, shall
have adopted a resolution confirming such ability and right)
to purchase at the then applicable price specified in Section 7
all of the then issued and outstanding shares of Series B
Convertible Preferred Stock, assuming all such stock is
tendered to it for purchase pursuant to Section 7.
9. Voting Rights.
(a) General. The holders of shares of Series B
Convertible Preferred Stock will not have any voting rights
except as set forth below. In connection with such rights to
vote pursuant to Sections 9(b) and 9(c), each holder of
Series B Convertible Preferred Stock will have one vote for
each share held. Any shares of Series B Convertible Preferred
Stock held by the Corporation or any entity controlled by the
Corporation shall not have voting rights hereunder and shall
not be counted in determining the presence of a quorum.
(b) Default Voting Rights. Whenever dividends on
the Series B Convertible Preferred Stock or any other class or
series of Parity Dividend Stock shall be in arrears in an
aggregate amount equal to at least six quarterly dividends
(whether or not consecutive), (i) the number of members of the
Board of Directors shall be increased by two, effective as of
the time of election of such directors as hereinafter provided
and (ii) the holders of the Series B Convertible Preferred
Stock (voting separately as a class with all other affected
classes or series of the Parity Dividend Stock upon which like
voting rights have been conferred and are exercisable) will
have the exclusive right to vote for and elect such two
additional directors of the Corporation at each meeting of
stockholders of the Corporation at which directors are to be
elected held during the period such dividends remain in
arrears. The right of the holders of the Series B Convertible
Preferred Stock to vote for such two additional directors shall
terminate when all accrued and unpaid dividends on the Series B
Convertible Preferred Stock have been authorized, declared,
paid or set apart for payment. The term of office of all
directors so elected shall terminate immediately upon the
termination of the
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right of the holders of the Series B Convertible Preferred Stock and
such Parity Dividend Stock to vote for such two additional directors,
and the number of directors of the Board of Directors shall immediately
thereafter be reduced by two.
The foregoing right of the holders of the Series B
Convertible Preferred Stock with respect to the election of two
directors may be exercised at each annual meeting of
stockholders or at any special meeting of stockholders held for
such purpose. If the right to elect directors shall have
accrued to the holders of the Series B Convertible Preferred
Stock more than ninety days preceding the date established for
the next annual meeting of stockholders, the President of the
Corporation shall, within twenty days after the delivery to the
Corporation at its principal office of a written request for a
special meeting signed by the holders of at least 10% of all
outstanding shares of the Series B Convertible Preferred Stock,
call a special meeting of the holders of the Series B
Convertible Preferred Stock to be held within sixty days after
the delivery of such request for the purpose of electing such
additional directors.
The holders of the Series B Convertible Preferred
Stock and any Parity Dividend Stock referred to above voting as
a class shall have the right to remove with or without cause at
any time and replace any directors such holders shall have
elected pursuant to this Section 9 and the holders of each
other class of stock of the Corporation shall not have the
right to remove any such directors.
(c) Class Voting Rights. So long as any shares of
the Series B Convertible Preferred Stock are outstanding, the
Corporation shall not, directly or indirectly, without the
affirmative vote or consent of the holders of at least 66-2/3%
(unless a higher percentage shall then be required by
applicable law or the Corporation's charter) of all outstanding
shares of the Series B Convertible Preferred Stock voting
separately as a class (i) amend, alter or repeal any provision
of the charter or by the bylaws of the Corporation, if such
amendment, alteration or repeal would alter the contract
rights, as expressly set forth herein, of the Series B
Convertible Preferred Stock so as to adversely affect the
rights of the holders thereof or the holders of the Class D
Common Stock or the Common Stock or (ii) create, authorize or
issue, or reclassify shares of any authorized stock of the
Corporation into, or increase the authorized amount of, any
Senior Dividend Stock or Senior Liquidation Stock, or any
security convertible into such
-40-
Senior Dividend Stock or Senior Liquidation Stock. A class vote
on the part of the Series B Convertible Preferred Stock shall, without
limitation, specifically not be deemed to be required (except as
otherwise required by law or resolution of the Board of Directors) in
connection with (a) the authorization, issuance or increase in
the authorized amount of any shares of any other class or
series of stock which ranks junior to, or on a parity with, the
Series B Convertible Preferred Stock in respect of the payment
of dividends and distributions upon liquidation, dissolution or
winding up of the Corporation or (b) the authorization,
issuance or increase in the amount of any bonds, mortgages,
debentures or other obligations of the Corporation.
(d) Voting Rights after Occurrence of a Specified
Corporate Action. Following the occurrence of a Specified
Corporate Action, the holders of shares of Series B Convertible
Preferred Stock shall have the right to vote as a class with
the holders of Common Stock and Class D Common Stock on all
matters as to which the holders of Common Stock are entitled to
vote, whether by law or otherwise. In connection with such
rights to vote, each holder of Series B Convertible Preferred
Stock shall have the number of votes for each share held equal
to the number of shares of Common Stock then exchangeable for
the shares of Class D Common Stock into which such share is
then convertible.
10. Outstanding Shares. For purposes of these
Articles Supplementary, all shares of Series B Convertible
Preferred Stock issued by the Corporation shall be deemed
outstanding except (i) from the date fixed for redemption
pursuant to Section 6 hereof, all shares of Series B
Convertible Preferred Stock that have been so called for
redemption under Section 6, to the extent provided thereunder;
(ii) from the date of surrender of certificates representing
shares of Series B Convertible Preferred Stock, all shares of
Series B Convertible Preferred Stock converted into Class D
Common Stock or repurchased pursuant to Section 7 hereof; and
(iii) from the date of registration of transfer, all shares of
Series B Convertible Preferred Stock held of record by the
Corporation or any majority-owned subsidiary of the
Corporation.
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11. Transfer Restrictions.
(a) Legends on Series B Convertible Preferred Stock
and Common Stock. The certificates representing shares of
Series B Convertible Preferred Stock shall, unless otherwise
agreed by the Corporation and the holders of any such
certificates, bear a legend substantially to the following
effect:
"THE SHARES REPRESENTED BY THIS CERTIFICATE AND ANY
SECURITIES ISSUABLE UPON CONVERSION OR EXCHANGE HEREOF MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933,
OR (ii) AN APPLICABLE EXEMPTION FROM REGISTRATION
THEREUNDER. ANY SALE PURSUANT TO CLAUSE (ii) OF THE
PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO ALEXANDER & ALEXANDER
SERVICES INC. TO THE EFFECT THAT SUCH EXEMPTION FROM
REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH SALE.
IN ADDITION, THE VOTING, SALE, ASSIGNMENT, TRANSFER,
PLEDGE OR HYPOTHECATION OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS FURTHER SUBJECT TO RESTRICTIONS WHICH ARE
CONTAINED IN THE CHARTER OF ALEXANDER & ALEXANDER SERVICES
INC., IN THE ARTICLES SUPPLEMENTARY GOVERNING THESE SHARES
AND IN A STOCK PURCHASE AND SALE AGREEMENT DATED AS OF
JUNE 6, 1994, A COPY OF EACH OF WHICH IS ON FILE WITH
ALEXANDER & ALEXANDER SERVICES INC. AND WILL BE FURNISHED
BY THE CORPORATION TO THE STOCKHOLDER ON REQUEST AND
WITHOUT CHARGE."
(b) Transfer Agent Requirements. The transfer agent
for the Series B Convertible Preferred Stock shall not be
required to accept for registration of transfer any shares of
Series B Convertible Preferred Stock bearing the legend
contained in paragraph (a) above, except upon presentation of
satisfactory evidence that the restrictions on transfer of
shares of the Series B Convertible Preferred Stock referred to
in the legend in paragraph (a) have been complied with, all in
accordance with such reasonable regulations as the Corporation
may from time to time agree with the transfer agent for shares
of the Series B Convertible Preferred Stock.
12. Status of Acquired Shares. Shares of Series B
Convertible Preferred Stock redeemed or repurchased by the
Corporation, received upon conversion pursuant to Section 8 or
otherwise acquired by the Corporation will be restored to the
status of authorized but unissued shares of Preferred Stock,
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without designation as to class, and may thereafter be issued,
but not as shares of Series B Convertible Preferred Stock.
13. Special Covenants. The Corporation shall not on
or after June 1, 1994 issue or sell any shares of any Senior
Dividend Stock or Senior Liquidation Stock.
14. Permissible Distributions. In determining
whether a distribution (other than upon voluntary or
involuntary liquidation), by dividend, redemption or other
acquisition of shares or otherwise, is permitted under the
Maryland General Corporation Law, amounts that would be needed,
if the Corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon
dissolution of holders of Series B Convertible Preferred Stock
whose preferential rights upon dissolution are superior to
those receiving the distribution shall not be added to the
Corporation's total liabilities.
15. Preemptive Rights. Holders of shares of
Series B Convertible Preferred Stock are not entitled to any
preemptive or subscription rights in respect of any securities
of the Corporation.
16. Severability of Provisions. Whenever possible,
each provision hereof shall be interpreted in a manner as to be
effective and valid under applicable law, but if any provision
hereof is held to be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating or
otherwise adversely affecting the remaining provisions hereof.
If a court of competent jurisdiction should determine that a
provision hereof would be valid or enforceable if a period of
time were extended or shortened or a particular percentage were
increased or decreased, then such court may make such change as
shall be necessary to render the provision in question
effective and valid under applicable law.
SECOND: The Series B Convertible Preferred Stock has
been classified by the Board of Directors under a power
contained in the Charter.
THIRD: These Articles Supplementary have been
approved by the Board of Directors in the manner and by the
vote required by law.
FOURTH: The undersigned acknowledges these Articles
Supplementary to be the act of the Corporation and states as to
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all matters and facts required to be verified under oath that,
to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and such
statement is made under penalties for perjury.
IN WITNESS WHEREOF, these Articles Supplementary are
executed on behalf of the Corporation by its Vice President and
attested by its Assistant Secretary this 15th day of July,
1994.
ALEXANDER & ALEXANDER SERVICES INC.
By: /s/ R.A. Kershaw
Name: R.A. Kershaw
Vice President & Treasurer
Attest:
/s/ Alice L. Russell
Name: Alice L. Russell
Assistant Secretary
Dates Referenced Herein and Documents Incorporated by Reference
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