SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A/A
(Amendment No. 1)
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
STRATUS PROPERTIES INC.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware
(State of Incorporation or Organization)
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72-1211572
(I.R.S. Employer Identification No.)
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98 San Jacinto Blvd., Suite 220
Austin, Texas
(Address of Principal Executive Offices)
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78701
(Zip Code)
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Securities to be registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Name of Each Exchange on Which
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to be so Registered
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Each Class is to be Registered
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Common Stock, par value $0.01 per share
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The Nasdaq Global Market
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If this form relates to the registration of a class of securities pursuant to Section 12(b) of the Exchange Act and is effective pursuant to
General Instruction A.(c), please check the following box.
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If this form relates to the registration of a class of securities pursuant to Section 12(g) of the Exchange Act and is effective pursuant to
General Instruction A.(d), please check the following box.
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Securities Act registration statement file number to which this form relates:
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000-19989
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(If applicable)
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Securities to be registered pursuant to Section 12(g) of the Act: None
EXPLANATORY NOTE
This Amendment No. 1 amends and restates the Form 8-A filed on May 23, 2002 by Stratus
Properties Inc. (the “Company”) to update the Company’s “Description of Capital Stock” that was
included in the Company’s Registration Statement on
Form 10, Registration No. 000-19989, as filed
with the Securities and Exchange Commission on March 25, 1992. Any form of prospectus supplement
or prospectus or any amendment to the Registration Statement that includes such description and
that is subsequently filed by the Company is hereinafter incorporated by reference herein.
Item 1. Description of Registrant’s Securities to be Registered.
The following summary of the terms of our capital stock is not meant to be complete and is
qualified by reference to the relevant provisions of the Delaware General Corporation Law and our
amended and restated certificate of incorporation, as amended, which we refer to as our certificate
of incorporation, and our by-laws. Copies of our certificate of incorporation and by-laws are
incorporated herein by reference and will be sent to you at no charge upon request.
Authorized Capital Stock
Under our certificate of incorporation, our authorized capital stock consists of 150,000,000
shares of common stock, $0.01 par value per share, and 50,000,000 shares of preferred stock, $0.01
par value per share. As of June 30, 2010, there were issued and outstanding 7,470,117 shares of
common stock (not including 877,264 shares held in treasury) and associated preferred stock
purchase rights.
As of June 30, 2010, 88,937 shares were authorized for issuance upon exercise of stock options
(of which 70,187 were exercisable) and 64,750 shares were authorized for issuance upon the vesting
of restricted stock units.
Description of Common Stock
Common stock outstanding.
The issued and outstanding shares of common stock are, and the
shares of common stock that we may issue in the future will be, validly issued, fully paid and
nonassessable.
Voting rights.
Holders of common stock are entitled to elect all of the authorized number of
members of the class of directors whose term is expiring, subject to any rights of holders of
preferred stock, by a plurality vote. With respect to all other matters submitted to a vote of
stockholders, except as required by law, the holders of the common stock will approve such other
matters by a majority vote. Each share of common stock has one vote.
Other rights.
Shares of common stock are not redeemable and have no subscription, conversion
or preemptive rights.
Transfer agent.
The transfer agent and registrar for the common stock is BNY Mellon
Shareowner Services.
NASDAQ.
Our common stock is listed on The Nasdaq Global Market under the symbol “STRS.”
Certain Provisions of Our Certificate of Incorporation and By-laws
Classified Board.
Our board of directors has been divided into three classes, with each class
consisting, as nearly as possible, of one-third of the total number of the directors and serving a
three-year term. This classification of our board of directors may prevent our stockholders from
changing the membership of the entire board of directors in a relatively short period of time. At
least two annual meetings, instead of one, generally will be required to change the majority of
directors. The classified board provisions could have the effect of prolonging the time required
for one of our stockholders with significant voting power to gain majority representation on our
board of directors. Where approval by a majority of the directors is necessary for a transaction,
such as in the case of an interested stockholder business combination (as discussed below), the
inability to gain majority representation on the
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board of directors immediately could discourage takeovers and tender offers. In addition, our
stockholders are not entitled to cumulative voting rights in the election of directors.
Supermajority Voting/Fair Price Requirements
. Our certificate of incorporation provides that
the approval of the holders of not less than 85 percent of our outstanding common stock is required
for:
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Any merger or consolidation of our company or any of our subsidiaries with or into
any person or entity, or any affiliate of that person or entity, who was within the two
years prior to the transaction a beneficial owner of 20 percent or more of our
outstanding common stock, which we refer to as an interested party;
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any merger or consolidation of an interested party with or into our company or any
of our subsidiaries;
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any sale, lease, exchange, mortgage, pledge, transfer or other disposition of more
than 10 percent of the fair market value of the total assets of our company or any of
our subsidiaries in one or more transactions involving an interested party;
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the adoption of any plan or proposal for liquidation or dissolution of our company
proposed by or on behalf of any interested party;
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the issuance or transfer by us or any of our subsidiaries of securities of our
company having a fair market value of $1 million or more to any interested party in one
or more transactions; or
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any recapitalization, reclassification, merger or consolidation of our company or
any of our subsidiaries that would increase an interested party’s voting power in our
company or any of our subsidiaries.
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However, the 85 percent voting requirement is not applicable if:
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our board approves the transaction, or approves the acquisition of the common stock
that caused the interested person to become an interested person, and the vote includes
the affirmative vote of a majority of our directors who are not affiliates of the
interested party and who were members of our board prior to the time the interested
party became the interested party;
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the transaction is solely between us and any of our wholly owned subsidiaries or
between any of our wholly owned subsidiaries; or
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the transaction is a merger or consolidation and the consideration to be received by
our common stockholders is at least as high as the highest price per share paid by the
interested party for our common stock on the date the common stock was last acquired by
the interested party or during a period of two years prior.
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Effects of Authorized but Unissued Common Stock and Blank Check Preferred Stock.
One of the
effects of the existence of authorized but unissued common stock and undesignated preferred stock
may be to enable our board of directors to make more difficult or to discourage an attempt to
obtain control of our company by means of a merger, tender offer, proxy contest or otherwise, and
thereby to protect the continuity of management. If, in the due exercise of its fiduciary
obligations, the board of directors were to determine that a takeover proposal was not in our best
interest, such shares could be issued by the board of directors without stockholder approval in one
or more transactions that might prevent or render more difficult or costly the completion of the
takeover transaction by diluting the voting or other rights of the proposed acquirer or insurgent
stockholder group, by putting a substantial voting block in institutional or other hands that might
undertake to support the position of the incumbent board of directors, by effecting an acquisition
that might complicate or preclude the takeover, or otherwise.
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In addition, our certificate of incorporation grants our board of directors broad power to
establish the rights and preferences of authorized but unissued shares of preferred stock. The
issuance of shares of preferred stock could decrease the amount of earnings and assets available
for distribution to holders of shares of common stock. The issuance also may adversely affect the
rights and powers, including voting rights, of those holders and may have the effect of delaying,
deterring or preventing a change in control of our company.
Advance Notice of Intention to Nominate a Director
. Our by-laws permit a stockholder to
nominate a person for election as a director only if written notice of such stockholder’s intent to
make a nomination has been delivered to our Secretary not later than the close of business on the
120th day nor earlier than the close of business on the 210th day prior to the first anniversary of
the preceding year’s annual meeting. This provision also requires that the notice set forth, among
other things, such information regarding the nominee as would be required to be included in a proxy
statement filed pursuant to the proxy rules promulgated under the Securities Exchange Act of 1934,
as amended, had the nominee been nominated by our board. Any nomination that fails to comply with
these requirements may be disqualified.
Advance Notice of Stockholder Proposals.
Our by-laws permit a stockholder proposal to be
presented at a stockholders’ meeting only if prior written notice of the proposal is provided to us
within the time periods and in the manner specified in the by-laws.
No Ability of Stockholders to Call Special Meetings.
Our certificate of incorporation and
by-laws deny stockholders the right to call a special meeting of stockholders, except to the extent
that holders of preferred stock have the right to call a special meeting in some circumstances.
Our certificate of incorporation and by-laws provide that, except to that extent, only the board of
directors, the chairman of the board, or the president may call special meetings of the
stockholders.
No Ability of Stockholders to Act by Written Consent
. Our certificate of incorporation denies
our stockholders the right to take any action required or permitted to be taken at any annual or
special meeting of stockholders by written consent.
Removal of Directors; Filling Vacancies on Board of Directors
. Under the Delaware General
Corporation Law, a director on a classified board may be removed only for cause by a vote of the
shareholders. Our certificate of incorporation and by-laws provide that any vacancies on the board
of directors resulting by the death, resignation or removal of a director may be filled only by a
majority vote of the remaining directors, regardless of any quorum requirements.
Supermajority Voting Requirement
. The affirmative vote of at least 85 percent of our
outstanding capital stock is required to amend, alter, change or repeal the provisions in our
certificate of incorporation providing for the fair price requirements described above. In
addition, our certificate of incorporation and our by-laws require the affirmative vote of at least
85 percent of our outstanding capital stock to amend, alter, change or repeal the provisions
providing for the classified board structure, and the provisions prohibiting stockholders to act by
written consent, to call a special meeting or to fill a vacancy on the board of directors.
Amendment of By-laws
. Our certificate of incorporation and by-laws provide that the by-laws
may be altered, amended, changed or repealed by vote of the stockholders or at any meeting of the
board of directors by the vote of a majority of the directors present or as otherwise provided by
statute.
Limitation of Liability of Directors and Officers
. As permitted by the Delaware General
Corporation Law, our certificate of incorporation includes a provision that eliminates the personal
liability of our directors for monetary damages for breach of fiduciary duty as a director, except
for liability (1) for any breach of the director’s duty of loyalty to our company or its
stockholders, (2) for acts or omissions not in good faith or that involve intentional misconduct or
a knowing violation of law, (3) under section 174 of the Delaware General Corporation Law or (4)
for any transaction from which the director derived an improper personal benefit. The effect of
this provision is to eliminate our rights and our stockholder’s rights to recover monetary damages
against a director for breach of a fiduciary duty of care. The provision does not eliminate or
limit our right, or the right of a stockholder, to seek non-
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monetary relief, such as an injunction or rescission. The Securities and Exchange Commission
has taken the position that this provision will have no effect on claims arising under the federal
securities laws.
In addition, our certificate of incorporation provides for mandatory indemnification rights,
subject to limited exceptions, to any director or executive officer who (because of the fact that
he or she is our director or officer) is involved in a legal proceeding of any nature. These
indemnification rights include reimbursement for expenses incurred by the director or officer in
advance of the final disposition of a proceeding according to applicable law.
Description of Preferred Stock
Under the Rights Agreement, each outstanding share of common stock includes an associated
preferred stock purchase right. If the rights become exercisable, each right will entitle its
holder to purchase one one-hundredth (1/100) of a share of our Series C Participating Cumulative
Preferred Stock. We have reserved for issuance 300,000 shares of our Series C Participating
Cumulative Preferred Stock, and no such shares are currently outstanding. For additional
information relating to our Series C Participating Cumulative Preferred Stock, see “—The Rights
Agreement.”
We may issue shares of preferred stock in series and may, at the time of issuance, determine
the rights, preferences and limitations of each series. Satisfaction of any dividend preferences of
outstanding shares of preferred stock would reduce the amount of funds available for the payment of
dividends on shares of common stock. Holders of shares of preferred stock may be entitled to
receive a preference payment in the event of any liquidation, dissolution or winding-up of our
company before any payment is made to the holders of shares of common stock. In some circumstances,
the issuance of shares of preferred stock may render more difficult or tend to discourage a merger,
tender offer or proxy contest, the assumption of control by a holder of a large block of our
securities or the removal of incumbent management. Upon the affirmative vote of a majority of the
total number of directors then in office, our board of directors, without stockholder approval, may
issue shares of preferred stock with voting and conversion rights, which could adversely affect the
holders of shares of common stock. The issuance of any shares of preferred stock in the future
could adversely affect the rights of the holders of common stock.
The Rights Agreement
The Rights Agreement is designed to deter abusive takeover tactics and to encourage
prospective acquirors to negotiate with our board of directors rather than attempt to acquire us in
a manner or on terms that the board deems unacceptable. Under the Rights Agreement, each
outstanding share of common stock includes an associated preferred stock purchase right. If the
rights become exercisable, each right will entitle its holder to purchase one one-hundredth (1/100)
of a share of our Series C Participating Cumulative Preferred Stock at an exercise price of $40 per
unit, subject to adjustment. The rights trade with all outstanding shares of the common stock. The
rights will separate from the common stock and become exercisable upon the earlier of:
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the tenth day following a public announcement that a person or group of affiliated
or associated persons has acquired beneficial ownership of 25 percent or more of our
outstanding common stock, referred to as an acquiring person; or
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the tenth business day, or any later date as determined by the board of directors
prior to the time that any person or group becomes an acquiring person, following the
commencement of or announcement of an intention to make a tender offer or exchange
offer that, if consummated, would result in the person or group becoming an acquiring
person.
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Term of rights.
The rights will expire on May 29, 2012, unless we extend this date or redeem
or exchange the rights as described below.
Exercise after someone becomes an acquiring person.
After any person or group becomes an
acquiring person, each holder of a right will be entitled to receive upon exercise that number of
shares of the common stock
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having a market value of two times the exercise price of the right. However, this right will
not apply to an acquiring person, whose rights will be void.
Upon the occurrence of certain events after someone becomes an acquiring person, each holder
of a right, other than the acquiring person, will be entitled to receive, upon exercise of the
right, common stock of the acquiring company having a market value equal to two times the exercise
price of the right. These rights will arise only if after a person or group becomes an acquiring
person:
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we are acquired in a merger or other business combination; or
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we sell or otherwise transfer 50 percent or more of our assets or earning power.
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Adjustment.
The exercise price, the number of rights outstanding and the number of preferred
shares issuable upon exercise of the rights are subject to adjustment from time to time to prevent
certain types of dilution. We will not issue fractional preferred stock shares. Instead, we will
make a cash adjustment based on the market price of the preferred stock prior to the date of
exercise.
Rights, preferences and limitations of rights.
Preferred stock purchasable upon exercise of
the rights will not be redeemable. Each share of preferred stock will entitle the holder to
receive a preferential quarterly dividend payment of the greater of $1.00 or 100 times the dividend
declared per share of the common stock. In the event of liquidation, the holders of each share of
preferred stock will be entitled to a preferential liquidation payment of the greater of $0.01 per
share or 100 times the payment made per share of the common stock. Each share of preferred stock
will entitle the holder to 100 votes and will vote together with the common stock. Finally, in the
event of any merger, consolidation or other transaction in which the common stock is exchanged,
each share of the preferred stock will entitle the holder to receive 100 times the amount received
per share of the common stock. These rights are protected by customary antidilution provisions.
Because of the nature of our preferred stock’s dividend, liquidation and voting rights, the value
of each one one-hundredth interest in a share of preferred stock should approximate the value of
one share of the common stock.
Exchange and redemption.
After a person or group becomes an acquiring person, we may exchange
the rights, in whole or in part, at an exchange ratio, subject to adjustment, of one share of
common stock, or one one-hundredth of a share of preferred stock, per right. We generally may not
make an exchange after any person or group becomes the beneficial owner of 50 percent or more of
the common stock.
We may redeem the rights in whole, but not in part, at a price of $0.01 per right, subject to
adjustment, at any time prior to any person or group becoming an acquiring person. The redemption
of the rights may be made effective at such time, on such basis and with such conditions as the
board of directors in its sole discretion may establish. Once redeemed, the rights will terminate
immediately, and the only right of the rights holders will be to receive the cash redemption price.
Amendments.
We may amend the terms of the rights without the consent of the rights holders,
including an amendment to lower the thresholds described above. However, after any person or group
becomes an acquiring person, we may not amend the terms of the rights in any way that adversely
affects the interests of the rights holders.
Item 2. Exhibits.
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1.
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Composite Certificate of Incorporation of the Registrant.*
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2.
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By-Laws of the Registrant, as amended through November 6, 2007 (incorporated by
reference to Exhibit 3.4 to the Company’s Form 10-Q, filed with the SEC on August 11,
2008 (File No. 000-19989)).
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3.
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Specimen Common Stock Certificate.*
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4.
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Rights Agreement dated as of May 16, 2002, between Stratus Properties Inc. and
Mellon Investor Services LLC, as Rights Agent (incorporated by reference to Exhibit 4
to the Company’s Form 8-A, filed with the SEC on May 23, 2002 (File No. 000-19989)).
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5.
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Amendment No. 1 to Rights Agreement dated as of November 7, 2003, between
Stratus Properties Inc. and Mellon Investor Services LLC (incorporated by reference to
Exhibit 4 to the Company’s Form 8-K, filed with the SEC on November 14, 2003 (File No.
000-19989)).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the
Registrant has duly caused this registration statement to be signed on its behalf by the
undersigned, thereto duly authorized.
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Stratus Properties Inc.
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By:
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/s/ Erin D. Pickens
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Name:
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Erin D. Pickens
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Title:
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Senior Vice President and
Chief Financial Officer
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Date: August 26, 2010
Exhibit 1
Composite Certificate of Incorporation of
Stratus Properties Inc.
FIRST
: The name of the Corporation is Stratus Properties Inc.
SECOND
: The address of its registered office in the State of Delaware is 1209 Orange
Street, City of Wilmington, County of New Castle, Delaware 19801. The name of its registered agent
at such address is The Corporation Trust Company.
THIRD
: The purpose of the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the State of Delaware as
the same exists or may hereafter be amended (“Delaware Law”).
FOURTH
: (a) The total number of shares of capital stock which the Corporation shall
have authority to issue is 200,000,000 shares, of which 50,000,000 shares shall be Preferred Stock
with a par value of $.01 per share and 150,000,000 shares shall be Common Stock with a par value of
$.01 per share.
(b) The Preferred Stock may be issued from time to time in one or more series, each of such
series to have such voting powers, full or limited, or no voting powers, and such designations,
preferences and relative, participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue of such series adopted by the Board of Directors. If so
provided in such resolution or resolutions and as and to the extent permitted by law, the shares of
any series of the Preferred Stock may be made subject to redemption, or convertible into or
exchangeable for shares of any other class or series, by the Corporation at its option or at the
option of the holders or upon the happening of a specified event.
Subject to such special voting rights as holders of any shares of the Preferred Stock may be
entitled to exercise, each holder of Common Stock of the Corporation shall be entitled to one vote
for each share of such Common Stock standing in the name of such holder on the books of the
Corporation.
(c) No holder of shares of any class shall be entitled, as such, as matter of right, to
subscribe for or purchase any part of any new or additional issue of stock of any class or series
whatsoever, or of securities convertible into, or accompanied by rights to subscribe to, stock of
any class or series whatsoever, whether now or hereafter authorized, or whether issued for cash or
otherwise.
(d) At 5:00 p.m. (Eastern Time) on the effective date of the amendment amending and restating
this Article FOURTH (the “Effective Date”), each share of Common Stock held of record as of 5:00
p.m. (Eastern Time) on the Effective Date or held in the Corporation’s treasury as of such time
shall be automatically reclassified and converted, without further action on the part of the holder
thereof, into one-fiftieth (1/50) of one share of Common Stock (the “Reverse Stock Split”). No
fractional share of Common Stock shall be issued to any Fractional Holder (as defined below) as a
result of the Reverse Stock Split. From and after 5:00 p.m. (Eastern Time) on the Effective Date,
each Fractional Holder shall have no further interest as a stockholder in respect of any fractional
share resulting from the Reverse Stock Split and, in lieu of receiving such fractional share, shall
be entitled to receive, upon surrender of the certificate or certificates representing such
fractional share, the cash value of such fractional share based on the average daily closing price
per share of the Common Stock on Nasdaq for the 10 trading days immediately preceding the Effective
Date, without interest; provided, however, that if no shares of Common Stock have been traded on
any such trading day, the closing price per share of the Common Stock for such trading day shall be
the average of the highest bid and lowest asked prices for the Common Stock for such trading day as
reported by Nasdaq. As used herein, the term “Fractional Holder” shall mean a holder of record of
fewer than 50 shares of Common Stock as of 5:00 p.m. (Eastern Time) on the Effective Date who would
be entitled to less than one whole share of Common Stock in respect of such shares as a result of
the Reverse Stock Split.
At 5:01 p.m. (Eastern Time) on the Effective Date, each share of Common Stock, and any
fraction thereof (excluding any interest in the Corporation held by a Fractional Holder converted
into cash) held by a holder of record of one or more shares of Common Stock as of 5:01 p.m.
(Eastern Time) on the Effective Date, or held in the
Corporation’s treasury as of such time, shall be automatically reclassified and converted,
without further action on the part of the holder thereof, into shares of Common Stock on the basis
of 25 shares of Common Stock for each share of Common Stock then held (the “Forward Stock Split”).
Each stockholder who holds an odd number of shares of Common Stock in a record account immediately
prior to the Effective Date, in lieu of the fractional share in the account resulting from the
Forward Stock Split, shall be entitled to receive, upon surrender of the certificate or
certificates representing such fractional share, the cash value of such fractional share based on
the average daily closing price per share of the Common Stock on Nasdaq for the 10 trading days
immediately preceding the Effective Date, without interest; provided, however, that if no shares of
Common Stock have been traded on any such trading day, the closing price per share of the Common
Stock for such trading day shall be the average of the highest bid and lowest asked prices for the
Common Stock for such trading day as reported by Nasdaq.
FIFTH
: (a) Subject to such rights to elect additional directors under specified
circumstances as may be granted to holders of any shares of the Preferred Stock pursuant to the
provisions of Article FOURTH, the number of directors of the Corporation shall be fixed from time
to time by the Board of Directors but shall not be less than three. The directors, other than
those who may be elected by the holders of any class or series of Preferred Stock, shall be
classified, with respect to the time for which they severally hold office, into three classes,
designated Class I, Class II and Class III, as nearly equal in number as possible, as determined by
the Board of Directors, directors designated as Class I directors to hold office initially for a
term expiring at the annual meeting of stockholders to be held in 1993, directors designated as
Class II directors to hold office initially for a term expiring at the annual meeting of
stockholders to be held in 1994, and directors designated as Class III directors to hold office
initially for a term expiring at the annual meeting of stockholders to be held in 1995, with the
members of each class to hold office until their successors are elected and qualified. At each
annual meeting of stockholders, the successors of the class of directors whose term expires at that
meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders
held in the third year following the year of their election.
(b) Subject to such rights to elect directors under specified circumstances as may be granted
to holders of any shares of the Preferred Stock pursuant to the provisions of Article FOURTH, newly
created directorships resulting from any increase in the number of directors and any vacancies on
the Board of Directors resulting from death, resignation, disqualification, removal or other reason
shall be filled solely by the affirmative vote of a majority of the remaining directors then in
office, even though less than a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created or the vacancy occurred and until such
director’s successor shall have been elected and qualified. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provision of this Certificate of Incorporation or any provision
of law which might otherwise permit a lesser vote or no vote, the affirmative vote of the holders
of 85 per cent or more of the outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors shall be required to amend, alter, change or repeal
this Article FIFTH.
The names and mailing addresses of the persons who are to serve as directors until the first
annual meeting of stockholders or until their successors are elected and qualified are:
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Class I
Michael D. Madden
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16
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Floor
American Express Tower
New York, New York 10285
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Class II
Robert S. Folsom
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16475 Dallas Parkway
Suite 800
Dallas, Texas 75248
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Class III
Richard C. Adkerson
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Freeport-McMoRan Inc.
1615 Poydras Street
New Orleans, Louisiana 70112
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SIXTH
: In furtherance and not in limitation of the powers conferred by law, (a) the
Board of Directors is expressly authorized to adopt, amend or repeal the By-Laws of the Corporation
in any manner not inconsistent with Delaware Law or this Certificate of Incorporation, subject to
the power of the stockholders to adopt, amend or repeal the By-Laws or to limit or restrict the
power of the Board of Directors to adopt, amend or repeal the By-Laws, and (b) the Corporation may
in its By-Laws confer powers and authorities upon its Board of Directors in addition to those
conferred upon it by statute.
SEVENTH
: (a) Any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of such holders and may not
be effected by any consent in writing by such holders.
(b) Subject to such rights to call special meetings of stockholders under special
circumstances as may be granted to holders of any shares of the Preferred Stock pursuant to the
provisions of Article FOURTH, special meetings of the stockholders may be called only by the
Chairman of the Board or the President of the Corporation, or at the request in writing or by vote
of a majority of the Board of Directors, and not by any other persons. Any request for a special
meeting made by the Board of Directors shall state the purpose or purposes of the proposed meeting.
(c) Notwithstanding any other provision of this Certificate of Incorporation or any provision
of law which might otherwise permit a lesser vote or no vote, the affirmative vote of the holders
of 85 per cent or more of the outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors shall be required to amend, alter, change or repeal
this Article SEVENTH.
EIGHTH
: (a) A director of this Corporation shall not be liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director’s duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of the law, (iii) under Section 174 of the Delaware Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
(b) The Corporation shall indemnify any person who is a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise, to
the fullest extent permitted by applicable law. The determination as to whether such person has
met the standard required for indemnification shall be made in accordance with applicable law.
Expenses incurred by such a director, officer, employee or agent in defending a civil or
criminal action, suit or proceeding shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of
such person to repay such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article EIGHTH.
The foregoing indemnification shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any applicable law, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
(c) The provisions of this Article EIGHTH shall be deemed to be a contract between the
Corporation and each person who serves as such director, officer, employee or agent of the
Corporation in any such capacity at any time while this Article EIGHTH is in effect. No repeal or
modification of the foregoing provisions of this Article EIGHTH nor, to the fullest extent
permitted by law, any modification of law shall adversely affect any right or protection of a
director, officer, employee or agent of the Corporation existing at the time of such repeal or
modification.
NINTH
: The affirmative vote of the holders of not less than 85 per cent of the
outstanding shares of Common Stock of the Corporation shall be required for the approval or
authorization of any Business Combination; provided, however, that the 85 per cent voting
requirement shall not be applicable if:
(1) the Board of Directors of the Corporation by affirmative vote which shall include
not less than a majority of the entire number of Continuing Directors (a) has approved in
advance the acquisition of
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those outstanding shares of Common Stock of the Corporation which caused the Interested
Party to become an Interested Party or (b) has approved the Business Combination;
(2) the Business Combination is solely between the Corporation and one or more other
corporations all of the common stock of each of which other corporations is owned directly
or indirectly by the Corporation or between two or more of such other corporations; or
(3) the Business Combination is a merger or consolidation and the cash and/or fair
market value of the property, securities or other consideration to be received per share by
holders of Common Stock of the Corporation in the Business Combination is at least equal to
the highest price per share (after giving effect to appropriate adjustment for any
recapitalizations and for any stock splits, stock dividends and like distributions) paid by
the Interested Party in acquiring any shares of the Corporation’s Common Stock on the date
when last acquired or during a period of two years prior thereto.
For purposes of this Article NINTH:
(i) The terms “affiliate” and “associate” shall have the respective meanings
assigned to those terms in Rule 12b-2 under the Securities Exchange Act of 1934, as
such Rule was in effect at April 1, 1992.
(ii) A person shall be deemed to be a “beneficial owner” of any Common Stock:
(a) which such person or any of its affiliates or associates
beneficially owns, directly or indirectly; or
(b) which such person or any of its affiliates or associates has the
right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or has the right to vote pursuant to any
agreement, arrangement or understanding; or
(c) which are beneficially owned, directly or indirectly, by any other
person with which such person or any of its affiliates or associates has any
agreement, arrangement or understanding for any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of
any shares of Common Stock.
(iii) The term “Business Combination” shall mean (a) any merger or
consolidation of the Corporation or a subsidiary of the Corporation with or into an
Interested Party, (b) any merger or consolidation of an Interested Party with or
into the Corporation or a subsidiary of the Corporation, (c) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition (in one transaction or a
series of transactions) of all or any Substantial Part of the assets either of the
Corporation (including without limitation any voting securities of a subsidiary) or
of a subsidiary of the Corporation, in which an Interested Party is involved, (d)
the adoption of any plan or proposal for the liquidation of dissolution of the
Corporation proposed by or on behalf of any Interested Party, (e) the issuance or
transfer (in one transaction or a series of transactions) by the Corporation or a
subsidiary of the Corporation to an Interested Party of any securities of the
Corporation or such subsidiary, which securities have a fair market value of
$1,000,000 or more, or (f) any recapitalization, reclassification, merger or
consolidation involving the Corporation or a subsidiary of the Corporation that
would have the effect of increasing, directly or indirectly, the Interested Party’s
voting power in the Corporation or such subsidiary.
(iv) The term “Interested Party” shall mean and include (a) any individual,
corporation, partnership, trust or other person or entity which, together with its
affiliates and associates, is (or with respect to a Business Combination was within
two years prior thereto) a beneficial owner of shares aggregating 20 per cent or
more of the outstanding Common Stock of the Corporation, and (b) any affiliate or
associate of any such individual, corporation, partnership, trust or other person or
entity. For the purposes of determining whether a person is an Interested
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Party the number of shares deemed to be outstanding shall include shares deemed
beneficially owned through application of subclause (b) of the foregoing clause (ii)
but shall not include any other shares of Common Stock which may be issuable
pursuant to any agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.
(v) The term “Substantial Part” shall mean, with respect to the assets of any
corporation or other entity, assets having a fair market value equal to more than 10
per cent of the fair market value of the total assets of such corporation or other
entity.
(vi) The term “Continuing Director” shall mean a director who is not an
affiliate of an Interested Party and who was a member of the Board of Directors of
the Corporation immediately prior to the time that the Interested Party involved in
a Business Combination became an Interested Party, and any successor to a Continuing
Director who is not such an affiliate and who is nominated to succeed a Continuing
Director by a majority of the Continuing Directors in office at the time of such
nomination.
(vii) For the purposes of paragraph (3) of this Article NINTH, the term “other
consideration to be received” shall include without limitation Common Stock of the
Corporation retained by its existing public stockholders in the event of a Business
Combination in which the Corporation is the surviving corporation.
The provisions of this Article NINTH shall be construed liberally to the end that the
consideration paid to holders whose Common Stock is acquired by an Interested Party in connection
with a Business Combination to which paragraph (3) is applicable shall be not less favorable than
that paid by such Interested Party to holders of such Common Stock prior to such Business
Combination. Nothing contained in this Article NINTH shall be construed to relieve any Interested
Party from any fiduciary duties or obligations imposed by law, nor shall anything herein be deemed
to supersede any vote of holders of any class of stock other than Common Stock that shall be
required by law or by or pursuant to this Certificate of Incorporation or the Bylaws of the
Corporation.
Notwithstanding any other provision of this Certificate of Incorporation or the Bylaws of the
Corporation and notwithstanding the fact that a lesser percentage may be specified by law, this
Certificate of Incorporation or the By-Laws of the Corporation, the affirmative vote of the holders
of 85 per cent or more of the shares of the then outstanding Common Stock shall be required to
amend or repeal, or adopt any provisions inconsistent with, this Article NINTH.
TENTH
: The Corporation reserves the right to amend this Certificate of Incorporation
in any manner permitted by Delaware Law and, with the sole exception of those rights and powers
conferred under the above Article EIGHTH, all rights and powers conferred herein on stockholders,
directors and officers, if any, are subject to this reserved power.
5
EXHIBIT A
CERTIFICATE OF DESIGNATIONS
OF
SERIES C PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
STRATUS PROPERTIES INC.
Pursuant to Section 151 of the
General Corporation Law of the
State of Delaware
The undersigned, William H. Armstrong, III, President and Chief Executive Officer of Stratus
Properties Inc., a corporation organized and existing under the General Corporation Law of the
State of Delaware (“Delaware Law”), in accordance with the provisions thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Corporation, the Board of Directors, on May 16, 2002, duly adopted the
following resolution creating a series of Preferred Stock in the amount and having the
designations, voting powers, preferences and relative, participating, optional and other special
rights and qualifications, limitations and restrictions thereof as follows:
Section 1. Designation and Number of Shares.
The shares of such series shall be designated as
“Series C Participating Cumulative Preferred Stock” (the “Series C Preferred Stock”), and the
number of shares constituting such series shall be 300,000. Such number of shares of the Series C
Preferred Stock may be increased or decreased by resolution of the Board of Directors; provided
that no decrease shall reduce the number of shares of Series C Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares issuable upon exercise or
conversion of outstanding rights, options or other securities issued by the Corporation.
Section 2. Dividends and Distributions.
(a) The holders of shares of Series C Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable on March 31, June 30, September 30
and December 31 of each year (each such date being referred to herein as a “Quarterly Dividend
Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of
any share or fraction of a share of Series C Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (i) $1.00 and (ii) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends or
other distributions and 100 times the aggregate per share amount of all non-cash dividends or other
distributions (other than (A) a dividend payable in shares of Common Stock of the Corporation, par
value $0.01 per share (the “Common Stock”), or (B) a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise)), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a share of Series C
Preferred Stock. If the Corporation shall at any time after May 16, 2002 (the “Rights Declaration
Date”) pay any dividend on Common Stock payable in shares of Common Stock or effect a subdivision
or combination of the outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the amount to which
holders of shares of Series C Preferred Stock were entitled immediately prior to such event under
clause 2(a)(ii) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number
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of shares of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately prior to such
event.
(b) The Corporation shall declare a dividend or distribution on the Series C Preferred Stock
as provided in paragraph 2(a) above immediately after it declares a dividend or distribution on the
Common Stock (other than as described in clauses 2(a)(ii)(A) and 2(a)(ii)(B) above);
provided
that
if no dividend or distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date
(or, with respect to the first Quarterly Dividend Payment Date, the period between the first
issuance of any share or fraction of a share of Series C Preferred Stock and such first Quarterly
Dividend Payment Date), a dividend of $1.00 per share on the Series C Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series C
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Series C Preferred Stock, unless the date of issue of such shares is on or before the
record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue and be cumulative from the date of issue of such shares, or unless the date
of issue is a date after the record date for the determination of holders of shares of Series C
Preferred Stock entitled to receive a quarterly dividend and on or before such Quarterly Dividend
Payment Date, in which case dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on
shares of Series C Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series C Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall not be more than 60 days prior
to the date fixed for the payment thereof.
Section 3. Voting Rights
.
In addition to any other voting rights required by law, the holders
of shares of Series C Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each share of Series C
Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of
stockholders of the Corporation. If the Corporation shall at any time after the Rights Declaration
Date pay any dividend on Common Stock payable in shares of Common Stock or effect a subdivision or
combination of the outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series C Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately prior to such
event.
(b) Except as otherwise provided herein, or by law, the holders of shares of Series C
Preferred Stock and the holders of shares of Common Stock shall vote together as a single class on
all matters submitted to a vote of stockholders of the Corporation.
(c) (i) If at any time dividends on any Series C Preferred Stock shall be in arrears in an
amount equal to six quarterly dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a “default period”) which shall extend until such time as all
accrued and unpaid dividends for all previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series C Preferred Stock then outstanding shall have
been declared and paid or set apart for payment. During each default period, all holders of Series
C Preferred Stock and any other series of Preferred Stock then entitled as a class to elect
directors, voting together as a single class, irrespective of series, shall have the right to elect
two Directors.
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(ii) During any default period, such voting right of the holders of Series C Preferred Stock
may be exercised initially at a special meeting called pursuant to subparagraph 3(c)(iii) hereof or
at any annual meeting of stockholders, and thereafter at annual meetings of stockholders;
provided
that neither such voting right nor the right of the holders of any other series of Preferred Stock,
if any, to increase, in certain cases, the authorized number of Directors shall be exercised unless
the holders of 10% in number of shares of Preferred Stock outstanding shall be present in person or
by proxy. The absence of a quorum of holders of Common Stock shall not affect the exercise by
holders of Preferred Stock of such voting right. At any meeting at which holders of Preferred
Stock shall exercise such voting right initially during an existing default period, they shall have
the right, voting as a class, to elect Directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two Directors or, if such right is exercised at an annual
meeting, to elect two Directors. If the number that may be so elected at any special meeting does
not amount to the required number, the holders of the Preferred Stock shall have the right to make
such increase in the number of Directors as shall be necessary to permit the election by them of
the required number. After the holders of the Preferred Stock shall have exercised their right to
elect Directors in any default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of Preferred Stock as
herein provided or pursuant to the rights of any equity securities ranking senior to or
pari passu
with the Series C Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing default period, have
previously exercised their right to elect Directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than 10% of the total number of shares
of Preferred Stock outstanding, irrespective of series, may request, the calling of a special
meeting of holders of Preferred Stock, which meeting shall thereupon be called by the Chief
Executive Officer, the President, any Executive Vice President, any Senior Vice President or the
Secretary or any Assistant Secretary of the Corporation. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to vote pursuant to this paragraph
3(c)(iii) shall be given to each holder of record of Preferred Stock by mailing a copy of such
notice to such holder’s address as the same appears on the books of the Corporation. Such meeting
shall be called for a time not earlier than 20 days and not later than 60 days after such order or
request or in default of the calling of such meeting within 60 days after such order or request,
such meeting may be called on similar notice by any stockholder or stockholders owning in the
aggregate not less than 10% of the total number of shares of Preferred Stock outstanding,
irrespective of series. Notwithstanding the provisions of this paragraph 3(c)(iii), no such
special meeting shall be called during the period within 60 days immediately preceding the date
fixed for the next annual meeting of stockholders.
(iv) In any default period, the holders of Common Stock shall continue to be entitled to elect
the whole number of Directors until the holders of Preferred Stock shall have exercised their right
to elect two Directors voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until their successors shall
have been elected by such holders or until the expiration of the default period, and (y) any
vacancy in the Board of Directors may (except as provided in paragraph 3(c)(ii) hereof) be filled
by vote of a majority of the remaining Directors theretofore elected by the holders of the class of
stock that elected the Director whose office shall have become vacant. References in this
paragraph 3(c) to Directors elected by the holders of a particular class of stock shall include
Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default period, (x) the right of the holders of
Preferred Stock as a class to elect Directors shall cease, (y) the term of any Directors elected by
the holders of Preferred Stock as a class shall terminate, and (z) the number of Directors shall be
such number as may be provided for in the Certificate of Incorporation or Bylaws irrespective of
any increase made pursuant to the provisions of paragraph 3(c)(ii) hereof (such number being
subject, however, to change thereafter in any manner provided by law or in the certificate of
incorporation or bylaws). Any vacancies in the Board of Directors effected by the provisions of
clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining
Directors.
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(d) The Certificate of Incorporation of the Corporation shall not be amended in any manner
(whether by merger or otherwise) so as to adversely affect the powers, preferences or special
rights of the Series C Preferred Stock without the affirmative vote of the holders of a majority of
the outstanding shares of Series C Preferred Stock, voting separately as a class.
(e) Except as otherwise provided herein, holders of Series C Preferred Stock shall have no
special voting rights, and their consent shall not be required for taking any corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions payable on the Series C
Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on outstanding shares of Series C
Preferred Stock shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other distributions on, any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the
Series C Preferred Stock;
(ii) declare or pay dividends on, or make any other distributions on, any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with
the Series C Preferred Stock, except dividends paid ratably on the Series C Preferred Stock and all
such other parity stock on which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem, purchase or otherwise acquire for value any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the Series C Preferred
Stock;
provided
that the Corporation may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of stock of the Corporation ranking junior (as to
dividends and upon dissolution, liquidation or winding up) to the Series C Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value any shares of Series C Preferred Stock,
or any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series C Preferred Stock, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of Directors) to all holders of Series C
Preferred Stock and all such other parity stock upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for value any shares of stock of the Corporation unless the Corporation could,
under paragraph 4(a), purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares
.
Any shares of Series C Preferred Stock redeemed, purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock without designation as to series and may be
reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors as permitted by the Certificate of Incorporation or as otherwise permitted
under Delaware Law.
Section 6. Liquidation, Dissolution and Winding Up
.
Upon any liquidation, dissolution or
winding up of the Corporation, no distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the
Series C Preferred Stock unless, prior thereto, the holders of shares of Series C Preferred Stock
shall have received $1.00 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to
A-4
the date of such payment; provided that the holders of shares of Series C Preferred Stock
shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share to
holders of Common Stock, or (2) to the holders of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series C Preferred Stock, except
distributions made ratably on the Series C Preferred Stock and all such other parity stock in
proportion to the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. If the Corporation shall at any time after the Rights
Declaration Date pay any dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series C Preferred Stock were entitled immediately
prior to such event under the proviso in clause (1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, Etc
.
If the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash or any other property, then in any such case the
shares of Series C Preferred Stock shall at the same time be similarly exchanged for or changed
into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount of stock, securities, cash or any other property, as the case may
be, into which or for which each share of Common Stock is changed or exchanged. If the Corporation
shall at any time after the Rights Declaration Date pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or combination of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of shares of Common Stock,
then in each such case the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series C Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption
.
The Series C Preferred Stock shall not be redeemable.
Section 9. Rank
.
The Series C Preferred Stock shall rank junior (as to dividends and upon
liquidation, dissolution and winding up) to all other series of the Corporation’s preferred stock
except any series that specifically provides that such series shall rank junior to the Series C
Preferred Stock.
Section 10. Fractional Shares
.
Series C Preferred Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such holder’s fractional shares, to exercise
voting rights, receive dividends, participate in distributions and to have the benefit of all other
rights of holders of Series C Preferred Stock.
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