RESTATED
ARTICLES OF INCORPORATION OF
LINCOLN
NATIONAL CORPORATION
ARTICLE
I
Name
The
name
of the Corporation is Lincoln National Corporation.
ARTICLE
II
Number,
Terms and Voting Rights of Shares
Section
1.
Number
and Classes of Shares.
The
total
number of shares which the Corporation shall have authority to issue is eight
hundred ten million (810,000,000) shares, consisting of eight hundred million
(800,000,000) shares of a single class of shares to be known as Common Stock,
and ten million (10,000,000) shares of a single class of shares to be known
as
Preferred Stock.
Section
2.
Terms
of Common Stock.
Only
when
all dividends accrued on all preferred or special classes of shares entitled
to
preferential dividends shall have been paid or declared and set apart for
payment, but not otherwise, the holders of Common Stock shall be entitled to
receive dividends, when and as declared by the Board of Directors. In event
of
any dissolution, liquidation or winding up of the Corporation, the holders
of
the Common Stock shall be entitled, after due payment or provision for payment
of the debts and other liabilities of the Corporation, and the amounts to which
the holders of preferred or special classes of shares may be entitled, to share
ratably in the remaining net assets of the Corporation.
Section
3.
Voting
Rights of Common Stock.
Except
as
otherwise provided by law, every holder of Common Stock of the Corporation
shall
have the right at every shareholders’ meeting to one vote for each share of
Common Stock standing in his name on the books of the Corporation on the date
established by the Board of Directors as the record date for determination
of
shareholders entitled to vote at such meeting.
Section
4.
Terms
of Preferred Stock.
The
Board
of Directors shall have authority to determine and state in the manner provided
by law the rights, preferences, qualifications, limitations and restrictions
(other than voting rights) of the Preferred Stock. The Preferred Stock may
be
issued in one or more series for such an amount of consideration as may be
fixed
from time to time by the Board of Directors, and the Board of Directors shall
have authority to determine and state in the manner provided by law the
designations and the relative rights, preferences, qualifications, limitations
and restrictions (other than voting rights) of each series.
Section
5.
Voting
Rights of Preferred Stock.
Except
as otherwise provided by law, every holder of Preferred Stock of the Corporation
shall have the right at every shareholders’ meeting to one vote for each share
of Preferred Stock standing in his name on the books of the Corporation on
the
date established by the Board of Directors as the record date for determination
of shareholders entitled to vote at such meeting.
At
any
time when six or more quarterly dividends, whether or not consecutive, on the
Preferred Stock, or on any one or more series thereof, shall be in default,
the
holders of all Preferred Stock at the time or times outstanding as to which
such
default shall exist shall be entitled, at the next annual meeting of
shareholders, voting as a class, to vote for and elect two Directors of the
Corporation.
In
the
case of any vacancy in the office of a Director occurring among the Directors
elected by the holders of the shares of the Preferred Stock voting as a class
pursuant to this Section, the remaining Director or Directors elected by the
holders of the shares of the Preferred Stock pursuant to this Section may elect
a successor or successors to hold office until the next annual or special
meeting of the shareholders.
At
all
meetings of shareholders held for the purpose of electing Directors during
such
time as the holders of the shares of the Preferred Stock shall have the right,
voting as a class, to elect Directors pursuant to this Section, the presence
in
person or by proxy of the holders of a majority of the outstanding shares of
the
Preferred Stock then entitled, as a class, to elect Directors pursuant to this
Section shall be required to constitute a quorum of such class for the election
of Directors; provided, that the absence of a quorum of the holders of Preferred
Stock shall not prevent the election at any such meeting or adjournment thereof
of Directors by any other class or classes of stock if the necessary quorum
of
the holders of such stock is present in person or by proxy at such
meeting.
The
right
of the holders of Preferred Stock, voting as a class, to participate in the
election of Directors pursuant to this Section shall continue in effect, in
the
case of all Preferred Stock entitled to receive cumulative dividends, until
all
accumulated and unpaid dividends have been paid or declared and set apart for
payment on all cumulative Preferred Stock, the holders of which shall have
been
entitled to vote at the previous annual meeting of shareholders, or in the
case
of all non-cumulative Preferred Stock until non-cumulative dividends have been
paid or declared and set apart for payment for four consecutive quarterly
dividend periods on all non-cumulative Preferred Stock, the holders of which
shall have been entitled to vote at the previous annual meeting of shareholders,
and thereafter the right of the holders of Preferred Stock, voting as a class,
to participate in the election of Directors pursuant to this Section shall
terminate.
Upon
termination of the right of the holders of Preferred Stock, voting as a class,
to participate in the election of Directors pursuant to this Section, the term
of office of each Director then in office elected by the holders of the
Preferred Stock shall terminate, and any vacancy so created may be filled as
provided by the bylaws of the Corporation.
Any
Director or Directors elected by the holders of Preferred Stock, voting as
a
class pursuant to this Section, may be removed, with or without cause, only
by a
vote of the holders of three-fourths of the outstanding shares of Preferred
Stock taken at a meeting as provided by Section 4 of Article III of these
Articles of Incorporation.
The
Corporation shall not, without the approval of the holders of at least
two-thirds of the Preferred Stock at the time outstanding, voting as a
class:
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(a)
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Amend
these Articles of Incorporation to create or authorize any kind of
stock
ranking prior to or on a parity with the Preferred Stock with respect
to
payment of dividends or distribution on dissolution, liquidation or
winding up, or create or authorize any security convertible into shares
of
stock of any such kind; or
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(b)
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Amend,
alter, change or repeal any of the express terms of the Preferred Stock,
or of any series thereof, then outstanding in a manner prejudicial
to the
holders thereof; provided, that if any such amendment, alteration,
change
or repeal would be prejudicial to the holders of one or more, but not
all,
of the series of the Preferred Stock at the time outstanding, only
such
consent of the holders of two-thirds of the total number of outstanding
shares of all series so affected shall be required, unless a different
or
greater vote shall be required by law; or
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(c)
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Authorize
the voluntary dissolution of the Corporation or any revocation of
dissolution proceedings theretofore approved, authorize the sale, lease,
exchange, or other disposition of all or substantially all of the property
of the Corporation, or approve any limitation of the term of existence
of
the Corporation; or
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(d)
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Merge
or consolidate with another corporation in such manner that the
Corporation does not survive as a continuing entity, if thereby the
rights, preferences, or powers of the Preferred Stock would be adversely
affected, or if there would thereupon be authorized or outstanding
securities which the Corporation, if it owned all of the properties
then
owned by the resulting corporation, could not create without the approval
of the holders of the Preferred Stock.
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Section
6.
Class
Voting.
The
holders of the outstanding shares of a class, or of any series thereof, shall
not be entitled to vote as a class except as shall be expressly provided by
this
Article or by law.
ARTICLE
III
Directors
Section
1.
Number.
The
initial Board of Directors shall be composed of thirteen members. The number
of
Directors may from time to time be fixed by the bylaws of the Corporation at
any
number not less than three. In the absence of a bylaw fixing the number of
Directors, the number shall be thirteen.
Section
2.
Qualifications.
Directors need not be shareholders of the Corporation, but shall have other
qualifications as the bylaws of the Corporation prescribe.
Section
3.
Classification.
When the
Board of Directors consists of nine or more members, the bylaws of the
Corporation may provide that the Directors shall be divided into two or more
classes whose terms of office shall expire at different times, but no term
shall
continue longer than three years.
Section
4.
Removal.
Any or
all of the members of the Board of Directors may be removed, with or without
cause, at a meeting of shareholders called expressly for that purpose by a
vote
of the holders of three-fourths of the shares of the Corporation outstanding
and
then entitled to vote at an election of Directors.
Section
5.
Amendment,
Repeal, etc.
Notwithstanding anything contained in these Articles of Incorporation to the
contrary, the affirmative vote of the holders of at least three-fourths of
the
shares of the Corporation outstanding and then entitled to vote at an election
of Directors, voting together and not by class, shall be required to alter,
amend, repeal, or adopt provisions inconsistent with, this Article III of these
Articles of Incorporation.
ARTICLE
IV
Provisions
for Regulation of Business and Conduct of Affairs of
Corporation
No
shares
of the Common Stock of The Lincoln National Life Insurance Company owned by
the
Corporation shall be sold, leased, exchanged, mortgaged, pledged, or otherwise
disposed of except by the vote of the holders of three-fourths of the shares
of
the Corporation outstanding and entitled to vote thereon at an annual or special
meeting of the shareholders held upon notice which includes notice of the
proposed sale, lease, exchange, mortgage, pledge, or other disposition.
ARTICLE
V
Provisions
for Certain Business Combinations
Section
1.
Vote
Required.
Clause
(a). Higher Vote for Certain Business Combinations.
In
addition to any affirmative vote required by law or these Articles of
Incorporation, and except as otherwise expressly provided in Section 2 of this
Article V:
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1.
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any
merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with (A) any Interested Shareholder (as hereinafter
defined), or (B) any other corporation (whether or not itself an
Interested Shareholder) which is, or after such merger or consolidation
would be, an Affiliate (as hereinafter defined) of an Interested
Shareholder; or
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2.
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any
sale, lease, exchange, mortgage, pledge, transfer or other disposition
(in
one transaction or a series of transactions) to or with any Interested
Shareholder or any Affiliate of any Interested Shareholder of any assets,
of the Corporation or any Subsidiary, having an aggregate Fair Market
Value of $1,000,000 or more; or
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3.
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the
issuance or transfer by the Corporation or any Subsidiary (in one
transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Shareholder or any
Affiliate of any Interested Shareholder in exchange for cash, securities
or other property (or a combination thereof) having an aggregate Fair
Market Value of $1,000,000 or more; or
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4.
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the
adoption of any plan or proposal for the liquidation or dissolution
of the
Corporation proposed by or on behalf of an Interested Shareholder or
any
Affiliate of any Interested Shareholder;
or
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5.
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any
reclassification of securities (including any reverse stock split),
or
recapitalization of the Corporation, or any merger or consolidation
of the
Corporation with any of its Subsidiaries or any other transaction (whether
or not with or into or otherwise involving an Interested Shareholder)
which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity
or
convertible securities of the Corporation or any Subsidiary which is
directly or indirectly owned by any Interested Shareholder or any
Affiliate of any Interested Shareholder;
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shall
require the affirmative vote of the holders of at least three-fourths of the
shares of the Corporation outstanding and then entitled to vote at an election
of directors (the “Voting Stock”), voting together and not by class (it being
understood that for purposes of this Article V, each share of the Voting Stock
shall have the number of votes granted to it pursuant to Article II of these
Articles of Incorporation). Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
Clause
(b). Definition of “Business Combination”.
The term
“Business Combination” as used in this Article V shall mean any transaction
which is referred to in any one or more of paragraphs 1 through 5 of Clause
(a)
of this Section 1.
Section
2.
When
Higher Vote is Not Required.
The
provisions of Section 1 of this Article V shall not be applicable to any
particular Business Combination, and such Business Combination shall require
only such affirmative vote as is required by law and any other provision of
these Articles of Incorporation, if all of the conditions specified in either
of
the following Clauses (a) and (b) are met:
Clause
(a). Approval by Continuing Directors.
The
Business Combination shall have been approved by a majority of the Continuing
Directors (as hereinafter defined).
Clause
(b). Price and Procedure Requirements.
All
of
the following conditions shall have been met:
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1.
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The
aggregate amount of the cash and the Fair Market Value (as hereinafter
defined), as of the date of the consummation of the Business Combination,
of consideration other than cash to be received per share by holders
of
Common Stock in such Business Combination shall be at least equal to
the
higher of the following:
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A.
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the
Highest Per Share Price paid by the Interested Shareholder for any
shares
of Common Stock acquired by it (i) within the two-year period immediately
prior to the first public announcement of the proposal of the Business
Combination (the “Announcement Date”) or (ii) in the transaction in which
it became an Interested Shareholder, whichever is higher;
and
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B.
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the
Fair Market Value per share of Common Stock on the Announcement Date
or on
the date on which the Interested Shareholder became an Interested
Shareholder (such latter date is referred to in this Article V as the
“Determination Date”), whichever is
higher.
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2.
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The
aggregate amount of the cash and the Fair Market Value, as of the date
of
the consummation of the Business Combination, of consideration other
than
cash to be received per share by holders of shares of any other class
of
outstanding Voting Stock shall be at least equal to the highest of
the
following (it being intended that the requirements of this Clause (b)2
shall be required to be met with respect to every class of outstanding
Voting Stock whether or not the Interested Shareholder has previously
acquired any shares of a particular class of Voting
Stock):
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A.
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the
Highest Per Share Price paid by the Interested Shareholder for any
shares
of such class of Voting Stock acquired by it (i) within the two-year
period immediately prior to the Announcement Date or (ii) in the
transaction in which it became an Interested Shareholder, whichever
is
higher;
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B.
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the
highest preferential amount per share to which the holders of shares
of
such class of Voting Stock are entitled in the event of any voluntary
or
involuntary liquidation, dissolution or winding up of the Corporation;
and
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C.
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the
Fair Market Value per share of such class of Voting Stock on the
Announcement Date or on the Determination Date, whichever is
higher.
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3.
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The
consideration to be received by holders of a particular class of
outstanding Voting Stock (including Common Stock) shall be in cash
or in
the same form as the Interested Shareholder has previously paid for
shares
of such class of Voting Stock. If the Interested Shareholder has paid
for
shares of any class of Voting Stock with varying forms of consideration,
the form of consideration for such class of Voting Stock shall be either
cash or the form used to acquire the largest number of shares of such
class of Voting Stock previously acquired by
it.
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4.
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After
such Interested Shareholder has become an Interested Shareholder and
prior
to the consummation of such Business Combination: (A) except as approved
by a majority of the Continuing Directors, there shall have been no
failure to declare and pay at the regular date therefor any full periodic
dividends (whether or not cumulative) on the outstanding Preferred
Stock,
No Par Value; (B) there shall have been (i) no reduction in the annual
rate of dividends paid on the Common Stock (except as necessary to
reflect
any subdivision of the Common Stock), except as approved by a majority
of
the Continuing Directors, and (ii) an increase in such annual rate
of
dividends as necessary to reflect any reclassification (including any
reverse stock split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of outstanding
shares of the Common Stock, unless the failure so to increase such
annual
rate is approved by a majority of the Continuing Directors; and (C)
such
Interested Shareholder shall not have become the beneficial owner of
any
additional shares of Voting Stock except as part of the transaction
which
results in such Interested Shareholder becoming an Interested
Shareholder.
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5.
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After
such Interested Shareholder has become an Interested Shareholder, such
Interested Shareholder shall not have received the benefit, directly
or
indirectly (except proportionately as a shareholder), of any loans,
advances, guarantees, pledges or other financial assistance or any
tax
credits or other tax advantages provided by the Corporation (or any
Subsidiary of the Corporation), whether in anticipation of or in
connection with such Business Combination or
otherwise.
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6.
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A
proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange
Act of 1934 and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall have been
mailed to shareholders of the Corporation at least 30 days prior to
the
consummation of such Business Combination (whether or not such proxy
or
information statement was required to be mailed pursuant to such Act
or
subsequent provisions).
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Section
3.
Certain
Definitions.
For the
purposes of this Article V:
Clause
(a).
A
“person” shall include any individual, firm, corporation or other entity. When
two or more persons act as a partnership, limited partnership, syndicate, or
other group for the purpose of acquiring Voting Stock of the Corporation, such
partnership, syndicate or group shall be deemed a “person”.
Clause
(b).
“Interested
Shareholder” shall mean any person (other than the Corporation or
any Subsidiary) who or which:
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1.
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is
the beneficial owner, directly or indirectly, of more than 10% of the
voting power of the outstanding Voting Stock;
or
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2.
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is
an Affiliate (as hereinafter defined) of the Corporation and at any
time
within the two-year period immediately prior to the date in question
was
the beneficial owner, directly or indirectly, of 10% or more of the
voting
power of the then outstanding Voting Stock;
or
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3.
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is
an assignee of or has otherwise succeeded to any shares of Voting Stock
which were at any time within the two-year period immediately prior
to the
date in question beneficially owned by any Interested Shareholder,
if such
assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering
within the meaning of the Securities Act of
1933.
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Clause
(c).
A person
shall be a “beneficial owner” of any Voting Stock:
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1.
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which
such person or any of its Affiliates or Associates (as hereinafter
defined) beneficially owns, directly or indirectly;
or
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2.
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which
such person or any of its Affiliates or Associates has (A) 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 (B) the right to vote pursuant to any agreement,
arrangement or understanding; or
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3.
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which
is 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 the purpose of acquiring,
holding, voting or disposing of any shares of Voting
Stock.
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Clause
(d).
For
the
purpose of determining whether a person is an Interested Shareholder pursuant
to
Clause (b) of this Section 3, the number of shares of Voting Stock deemed to
be
outstanding shall include shares deemed owned through application of Clause
(c)
of this Section 3 but shall not include any other shares of Voting Stock which
may be issuable pursuant to any agreement, arrangement or understanding, or
upon
exercise of conversion rights, warrants or options, or otherwise.
Clause
(e).
“Affiliate”
or
“Associate”
shall
have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on January 13, 1985.
Clause
(f).
“Subsidiary”
means
any corporation of which a majority of any class of equity
securities is owned, directly or indirectly, by the Corporation; provided,
however, that for the purposes of the definition of Interested Shareholder
set
forth in Clause (b) of this Section 3, the term “Subsidiary” shall mean only a
corporation of which a majority of each class of equity securities is owned,
directly or indirectly, by the Corporation.
Clause
(g).
“Continuing
Director” means any member of the Board of Directors of the
Corporation (the “Board”) who is unaffiliated with the Interested Shareholder
and was a member of the Board prior to the time that the Interested Shareholder
became an Interested Shareholder, and any successor of a Continuing Director
who
is unaffiliated with the Interested Shareholder and is recommended to succeed
a
Continuing Director by a majority of Continuing Directors then on the
Board.
Clause
(h).
“Fair
Market Value” means:
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1.
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in
the case of stock, the highest closing sale price during the 30-day
period
immediately preceding the date in question of a share of such stock
on the
Composite Tape for New York Stock Exchange-Listed Stock, or if such
stock
is not quoted on the Composite Tape, on the New York Stock Exchange,
or,
if such stock is not listed on such Exchange, on the principal United
States securities exchange registered under the Securities Exchange
Act of
1934 on which such stock is listed, or, if such stock is not listed
on any
such exchange, the highest closing sale price, or, if none, the highest
closing bid quotation with respect to a share of such stock during
the
30-day period preceding the date in question on the National Association
of Securities Dealers, Inc. Automated Quotations System or any system
then
in use, or if no such quotations are available, the fair market value
of a
share of such stock as determined by a majority of the Continuing
Directors in good faith, in any case with respect to any class of stock,
appropriately adjusted for any dividend or distribution in shares of
such
stock or any stock split, reclassification, recapitalization or
combination of outstanding shares of such stock into a greater or lesser
number of shares of such stock; and
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2.
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in
the case of property other than cash or stock, the fair market value
of
such property on the date in question as determined by a majority of
the
Continuing Directors in good faith.
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Clause
(i).
References
to “Highest Per Share Price” shall in each case with respect to any class of
stock reflect an appropriate adjustment for any dividend or distribution in
shares of such stock or any stock split, reclassification, recapitalization
or
combination of outstanding shares of such stock into a greater or lesser number
of shares of such stock.
Clause
(j).
In the
event of any Business Combination in which the Corporation survives, the phrase
“consideration other than cash to be received” as used in Clauses (b)1 and 2 of
Section 2 of this Article V shall include the shares of Common Stock and/or
the
shares of any other class of outstanding Voting Stock owned by the holders
of
such shares.
Section
4.
Powers
of the Board of Directors.
A
majority of the Continuing Directors of the Corporation shall have the power
and
duty to determine for the purposes of this Article V, on the basis of
information known to them after reasonable inquiry, (a) whether a person is
an
Interested Shareholder, (b) the number of shares of Voting Stock beneficially
owned by any person, (c) whether a person is an Affiliate or Associate of
another, and (d) whether the assets which are the subject of any Business
Combination have, or the consideration to be received for the issuance or
transfer of securities by the Corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of $1,000,000 or
more.
Section
5.
No
Effect on Fiduciary Obligations of Interested
Shareholders.
Nothing
contained in this Article V shall be construed to relieve any Interested
Shareholder from any fiduciary or other obligation imposed by law.
Section
6.
Amendment,
Repeal, etc.
Notwithstanding any other provisions of these Articles of Incorporation or
the
bylaws of the Corporation (and notwithstanding the fact that a lesser percentage
may be specified by law, in these Articles of Incorporation or the bylaws of
the
Corporation), the affirmative vote of the holders of three-fourths or more
of
the voting power of the shares of the then outstanding Voting Stock, voting
together and not by class, shall be required to alter, amend, repeal, or adopt
provisions inconsistent with, this Article V of these Articles of
Incorporation.
CERTIFICATE
OF RESOLUTION BY BOARD OF DIRECTORS
DETERMINING
AND STATING THE DESIGNATION AND THE
RELATIVE
RIGHTS, PREFERENCES, QUALIFICATIONS,
LIMITATIONS
AND RESTRICTIONS (OTHER THAN VOTING RIGHTS)
OF
A SERIES OF A CLASS OF PREFERRED SHARES
OF
LINCOLN
NATIONAL CORPORATION
RESOLVED
that, pursuant to the authority expressly granted to and vested in the Board
of
Directors of the Corporation by the provisions of the Articles of Incorporation
of the Corporation, this Board of Directors hereby creates and authorizes the
issue of, for the consideration stated, a series of the Preferred Stock of
the
Corporation, to consist of 2,233,421 shares of Preferred Stock of the
Corporation, and this Board of Directors hereby fixes the designation and the
relatives rights, preferences, qualifications, limitations and restrictions
(other than voting rights) of the shares of such series as follows:
Section
1.
Designation.
1.1.
The
designation of the series of Preferred Stock created by this resolution shall
be
“$3.00 Cumulative Convertible Preferred Stock, Series A” (the “Series A
Preferred Stock”).
Section
2.
Dividends.
2.1.
The
holders of the Series A Preferred Stock shall be entitled to receive, but only
when and as declared by the Board of Directors, out of any assets of the
Corporation legally available for the purpose, cash dividends at the rate of
$3.00 per share per annum, and no more, payable $0.75 per share quarterly on
the
fifth day of March, June, September and December of each year to such
stockholders of record on the respective dates, not exceeding 50 days preceding
such dividend dates, fixed for the purpose by the Board of
Directors.
2.2.
Dividends shall be cumulative on shares of the Series A Preferred Stock from
and
after dates determined as follows:
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(a)
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if
issued on or prior to the record date for the first dividend on such
shares, then from and after the fifth day of March, June, September
or
December next preceding such record date;
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(b)
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if
issued during the period immediately after a record date for a dividend
on
the Series A Preferred Stock and ending on the payment date for such
dividend, then from and after such dividend payment date; and
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(c)
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otherwise
from and after the fifth day of March, June, September or December
next
preceding the date of issue of such
shares.
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Accumulation
of dividends shall not bear interest.
2.3.
No
dividends (other than dividends payable in Common Stock of the Corporation)
shall be paid or declared on the Common Stock of the Corporation or on any other
series of the Preferred Stock or on any other class or series of stock of the
Corporation ranking as to dividends junior to or on a parity with the Series
A
Preferred Stock, unless full dividends on all outstanding shares of the Series
A
Preferred Stock for all past dividend periods have been paid and unless full
dividends on all such shares for the then current dividend period shall have
been paid or declared.
Section
3.
Preference
in Liquidation.
3.1.
In
the event of the liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of the Series A Preferred Stock
then outstanding shall be entitled to receive, after payment or provision for
payment of all creditors of the Corporation, but before any distribution or
payment shall be made in respect of the Common Stock or any other stock of
the
Corporation ranking junior to the Series A Preferred Stock as to assets on
liquidation, dissolution or winding up, an amount equal to $80 per share, plus
an amount equal to all unpaid dividends thereon accrued on a daily basis to
the
date when funds for payment are made available to the holders; and no payment
on
account of liquidation, dissolution or winding up shall be made to the holders
of any series of Preferred Stock or any other stock of the Corporation ranking
on a parity with the Series A Preferred Stock as to assets, unless there shall
likewise be paid at the same time to the holders of all shares of Series A
Preferred Stock like proportionate distributive amounts ratably, in proportion
to the full distributive amounts to which they are respectively entitled. The
holders of the Series A Preferred Stock shall have no rights in respect of
the
remaining assets of the Corporation.
3.2.
Neither the consolidation or merger of the Corporation with or into any other
corporation or corporations, nor the sale or transfer by the Corporation of
all
or any part of its assets, shall be deemed to be a liquidation, dissolution
or
winding up of the Corporation for purpose of this Section 3.
Section
4.
Redemption.
4.1.
At
any time or from time to time after October 31, 1974, (but not before such
time)
and so long as any dividends on the Series A Preferred Stock are not in arrears,
the Corporation at the option of its Board of Directors, shall have the right
to
redeem the Series A Preferred Stock, in whole or from time to time in part,
at a
price equal to $80 per share plus an amount equal to all unpaid dividends
thereon accrued on a daily basis to the date of redemption.
4.2.
Notice of every redemption shall be mailed at least 30 days, but not more than
60 days, prior to the date fixed for redemption, addressed to the holders of
record of the shares to be redeemed at their respective addresses as the same
shall appear on the books of the Corporation. In the case of a redemption of
a
part only of the Series A Preferred Stock the Corporation shall select by lot
the shares so to be redeemed.
4.3.
If
notice or redemption shall have been mailed as aforesaid, and if on or before
the redemption date specified in such notice a sum equal to the redemption
price
of the shares so called for redemption shall have been set aside by the
Corporation, separate and apart from its other funds for the pro rata benefit
of
the holders of the shares so called for redemption, so as to be and continue
to
be available therefor, then, whether or not certificates for the shares so
called for redemption shall have been surrendered for cancellation, such shares,
from and after the date of redemption so designated, shall be deemed to be
no
longer outstanding, the right to receive dividends thereon shall cease to accrue
and all rights with respect to such shares shall forthwith on such redemption
date cease and terminate except only the right of the holders thereof to receive
the redemption price.
4.4.
The
Corporation may, however, at any time prior to the redemption date specified
in
the notice of redemption but after such notice of redemption shall have been
mailed as aforesaid, deposit in trust, for the account of the holders of the
Series A Preferred Stock to be redeemed, with a bank or trust company in good
standing organized under the laws of the United States of America or of the
State of New York, or of the State of Illinois, doing business in the Borough
of
Manhattan, city of New York, or in the City of Chicago, Illinois, having
capital, surplus and undivided profits aggregating at least $5,000,000,
designated in such notice of redemption, a sum equal to the redemption price
of
such shares so called for redemption, and thereupon, whether or not certificates
for the shares so called for redemption shall have been surrendered for
cancellation (if such notice shall state that holders of the shares so called
for redemption may receive their redemption price at any time after such
deposit), all shares with respect to which such deposit shall have been made
shall be deemed to be no longer outstanding, the right to receive dividends
thereon for any period after the date so fixed for redemption shall cease to
accrue and all rights with respect to such shares shall forthwith upon such
deposit in trust cease and terminate except only (a) the rights of the holders
thereof to receive from such bank or trust company, at any time after the time
of such deposit, the redemption price of such shares to be redeemed, or (b)
the
right to exercise, on or before the close of business on the third business
day
prior to the date fixed for redemption, the privileges of conversion. Any moneys
so deposited by the Corporation which shall not be required for such redemption
because of the exercise of any such right of conversion, shall be repaid to
the
Corporation forthwith. Any moneys so deposited by the Corporation and unclaimed
at the end of six years from the date fixed for such redemption shall be repaid
to the Corporation upon its request expressed in a resolution of its Board
of
Directors, after which repayment the holders of the shares so called for
redemption shall look only to the Corporation for the payment
thereof.
4.5.
Shares of Series A Preferred Stock so redeemed shall, after the Corporation
takes appropriate steps required or permitted by the laws of Indiana, have
the
status of authorized and unissued shares of Preferred Stock, and the number
of
shares of Preferred Stock which the Corporation shall have authority to issue
shall not be decreased by the redemption of shares of Series A Preferred
Stock.
4.6.
Nothing in this Section 4 shall limit any legal right of the Corporation to
purchase or otherwise acquire any shares of the Preferred Stock at not exceeding
the price at which the same may be redeemed at the option of the
Corporation.
Section
5.
Conversion
Rights
.
5.1.
Subject to adjustment as provided in this Section 5, each share of Series A
Preferred Stock shall be convertible at the option of the respective holder
thereof, at the office of the transfer agent for the Common Stock, and at such
other place or places, if any, as the Board of Directors may determine, into
one
fully paid and non-assessable share of Common Stock (the “Common Stock”) of the
Corporation. In case of the redemption of any shares of Series A Preferred
Stock, such right of conversion shall terminate, as to the shares called for
redemption, at the close of business on the third business day prior to the
date
fixed for redemption, unless default shall be made in the payment of the
redemption price. Upon conversion the Corporation shall make no payment or
adjustment on account of unpaid dividends accrued on the Series A Preferred
Stock surrendered for conversion.
5.2.
The
Common Stock issuable upon conversion of Series A Preferred Stock shall be
Common Stock as constituted at the date of this resolution, except as otherwise
provided in subdivision (b) of Section 5.5.
5.3.
Before any holder of Series A Preferred Stock shall be entitled to convert
the
same into Common Stock, he shall surrender the certificate or certificates
for
such Series A Preferred Stock at the office of the transfer agent for the Common
Stock, which certificate or certificates, if the Corporation shall so request,
shall be duly endorsed to the Corporation or in blank or accompanied by proper
instruments of transfer to the Corporation or in blank, and shall give written
notice to the Corporation at that office that he elects so to convert Series
A
Preferred Stock, and shall state in writing therein the name of or names in
which he wishes the certificate or certificates for Common Stock to be issued.
Every such notice of election to convert shall constitute a contract between
the
holder of such Series A Preferred Stock and the Corporation, whereby the holder
of such Series A Preferred Stock shall be deemed to subscribe for the amount
of
Common Stock which he shall be entitled to receive upon such conversion, and,
in
satisfaction of such subscription, to deposit the Series A Preferred Stock
to be
converted and to release the Corporation from all liability thereunder, and
thereby the Corporation shall be deemed to agree that the surrender of the
certificate or certificates for the Series A Preferred Stock and the
extinguishment of liability thereon shall constitute full payment of such
subscription for Common Stock to be issued upon such conversion.
5.4.
As
soon as practicable after such deposit of certificates for Series A Preferred
Stock accompanied by the written notice and the statement above prescribed,
the
Corporation will issue and deliver at the office of the transfer agent to the
person for whose account such Series A Preferred Stock was so surrendered,
or to
his nominee or nominees, certificates for the number of full shares of Common
Stock to which he shall be entitled as aforesaid, together with a cash
adjustment of any fraction of a share as herein stated, if not evenly
convertible. Subject to the following provisions of this paragraph, such
conversion shall be deemed to have been made as of the date of such surrender
of
the Series A Preferred Stock to be converted; and the person or persons entitled
to receive the Common Stock issuable upon conversion of such Series A Preferred
Stock shall be treated for all purposes as the record holder or holders of
such
Common Stock on such date. The Corporation shall not be required to convert,
and
no surrender of Series A Preferred Stock shall be effective for that purpose,
while the stock transfer books of the Corporation are closed for any purpose;
but the surrender of Series A Preferred Stock for conversion during any period
while such books are so closed shall become effective for conversion immediately
upon the re-opening of such books, as if the conversion had been made on the
date such Series A Preferred Stock was surrendered.
5.5.
The
number of shares of Common Stock into which the shares of Series A Preferred
Stock shall be convertible shall be subject to adjustment from time to time
as
follows:
|
(a)
|
In
case the Corporation shall at any time or from time to
time
|
|
(1)
|
declare
a dividend payable in Common Stock,
|
|
(2)
|
issue
any shares of its Common Stock in subdivision of outstanding shares
of
|
Common
Stock, by reclassification or otherwise, or
|
(3)
|
make
any combination of shares of Common Stock, by reclassification or
otherwise,
|
the
conversion rate shall be adjusted so that the holder of each share of Series
A
Preferred Stock shall thereafter be entitled to receive upon the conversion
of
such share the number of shares of the Corporation which he would have owned
or
have been entitled to receive after the happening of any of the events described
above had such share been converted immediately prior to the happening of such
event. Further such adjustments shall be made whenever any of the events listed
above shall occur.
(b)
In
case
of any capital reorganization or any reclassification of the capital stock
of
the Corporation or in case of the consolidation or merger of the Corporation
with or into another corporation, or in case of any sale or conveyance to
another corporation of the assets of the Corporation as an entirety or
substantially as an entirety, the holder of each share of Series A Preferred
Stock then outstanding shall have the right to convert such share into the
kind
and number of shares of stock and other securities and property receivable
upon
such reorganization, reclassification, consolidation, merger, sale or
conveyance, as the case may be, by a holder of that number of shares of Common
Stock into which one share of Series A Preferred Stock is convertible; and,
in
any such case, appropriate adjustment (as determined in good faith by a
resolution of the Board of Directors of the Corporation) shall be made in the
application of the provisions herein set forth with respect to rights and
interests thereafter of the holders of the Series A Preferred Stock, to the
end
that the provisions set forth herein (including the specified adjustments)
shall
thereafter be applicable, as near as reasonably may be, in relation to any
shares or other property thereafter deliverable upon the conversion of the
Series A Preferred Stock.
(c)
In
case
the Corporation shall issue rights or warrants to the holders of its Common
Stock for the purpose of entitling them to subscribe for or purchase shares
of
Common Stock at a price per share less than 95% of the “current market price”
per share of Common Stock (as defined in Section 5.9) on the date at which
a
record is taken of the holders of such issuance, the number of shares of Common
Stock into which each share of Series A Preferred Stock shall thereafter be
convertible shall be determined by multiplying the number of shares of Common
Stock into which such share of Series A Preferred Stock was immediately
theretofore convertible by a fraction, of which the numerator shall be the
sum
of the number of shares of Common Stock outstanding at the time of the taking
of
such record plus the number of additional shares of Common Stock so offered
for
subscription or purchase, and of which the denominator shall be the sum of
the
number of shares of Common Stock outstanding at the time of the taking of such
record plus the number of shares of Common Stock which the aggregate offering
price of the total number of shares so offered would purchase at such current
market price per share for such date.
(d)
No
adjustment in the number of shares of Common Stock into which any share of
Series A Preferred Stock is convertible shall be required unless such adjustment
would require an increase or decrease of at least 5% in the number of shares
of
Common Stock into which a share of Series A Preferred Stock is then convertible;
provided, however, that any adjustments which by reason of this subdivision
(d)
are not required to be made shall be carried forward and taken into account
in
any subsequent adjustment. All calculations under this Section 5.5 shall be
made
to the nearest cent or to the nearest one-hundredth of a share, as the case
may
be.
Whenever
such an adjustment is to be made, the Corporation shall forthwith file with
the
transfer agent for the Series A Preferred Stock and the Common Stock, a
statement signed by the President or one of the Vice Presidents of the
Corporation and by its Treasurer or an Assistant Treasurer, stating the
adjustment to be made. Such statement shall show in detail the facts requiring
such adjustment. Whenever such an adjustment is to be made, the Corporation
will
forthwith cause a notice stating the adjustment to be mailed to the respective
holders of record of Series A Preferred Stock. Where appropriate, such notice
may be given in advance and included as a part of a notice required to be mailed
under the provisions of the following paragraph of this Section
5.5.
In
case
at any time:
(i)
the
Corporation shall pay any dividend payable in stock upon its Common Stock or
make any distribution (other than cash dividends) to the holders of its Common
Stock; or
(ii)
the
Corporation shall offer for subscription pro rata to the holders of its Common
Stock any additional shares of stock of any class or any other rights;
or
(iii)
the
consolidation or merger of the Corporation with or into another corporation
or
the sale or conveyance of all or substantially all the assets of the Corporation
shall be proposed by the Corporation;
then
in
any one or more of those cases, the Corporation shall cause at least fifteen
days’ prior notice to be mailed to the transfer agent for the Series A Preferred
Stock and the Common Stock and to the holders of record of the outstanding
Series A Preferred Stock of the date on which (x) the books of the Corporation
shall close, or a record be taken for such stock dividend, distribution or
subscription rights, or (y) such consolidation or merger or conveyance shall
take place, as the case may be. Such notice shall also specify the date as
of
which holders of Common Stock of record shall participate in the dividend,
distribution or subscription rights or shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
consolidation, merger, sale or conveyance, as the case may be, and shall specify
the proposed transactions in reasonable detail.
5.6.
Shares of Series A Preferred Stock converted into Common Stock shall have the
status of authorized and unissued shares of Preferred Stock, and the number
of
shares of Preferred Stock which the Corporation shall have authority to issue
shall not be decreased by the conversion of shares of Series A Preferred
Stock.
5.7.
The
Corporation shall at all times reserve and keep available, out of its authorized
and unissued Common Stock, solely for the purpose of effecting the conversion
of
the Series A Preferred Stock, such number of shares as shall from time to time
be sufficient to effect the conversion of all shares of Series A Preferred
Stock
from time to time outstanding. The Corporation shall from time to time, in
accordance with the laws of Indiana increase the authorized amount of its Common
Stock if at any time the number of shares of Common Stock remaining unissued
shall not be sufficient to permit the conversion of all the then outstanding
Series A Preferred Stock.
5.8.
No
fractions of shares of Common Stock will be issued upon conversion. In the
event
that because of any adjustments required to be made by Section 5.5 fractions
of
shares of Common Stock would be required to be issued upon conversion, the
Corporation will, in lieu of issuing such fractions of shares, pay to the person
otherwise entitled to such fractions the cash value of such fractions based
upon
the current market price (as defined in Section 5.9) per share of Common Stock
on the day prior to that on which shares of Series A Preferred Stock are
surrendered by such person for conversion.
5.9.
The
“current market price” per share of Common Stock as to any specified day shall
be deemed to be the last reported sale price of the Common Stock for such day
(or, if there is no sale on such day, the last bid quotation for the Common
Stock) on the New York Stock Exchange (or, if the Common Stock is not listed
on
the New York Stock Exchange, on a national securities exchange designated by
the
Corporation) or, if the Common Stock is not listed upon any national securities
exchange, the average of the closing bid and asked quotations for the Common
Stock for such day as furnished by the trading department of any New York Stock
Exchange member firm selected from time to time by the Corporation for the
purpose and deemed by it to be reliable. If an exchange was not open, or if
the
Common Stock was not traded on an exchange or elsewhere, on a day as of which
the current market price is to be determined, the determination of price or
quotation shall be made as of the last business day before such
day.
5.10.
The
Corporation will pay any and all issue and other taxes that may be payable
in
respect of any issue or delivery of shares of Common Stock on conversion of
Series A Preferred Stock pursuant hereto. The Corporation shall not, however,
be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of Common Stock in a name other than that in which
the
Series A Preferred Stock so converted was 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 any such tax, or has established, to
the
satisfaction of the Corporation, that such tax has been paid.
5.11.
The
Corporation covenants that if any shares of Common Stock, required to be
reserved for purposes of conversion of the Series A Preferred Stock hereunder,
require registration with, or approval of, any governmental authority under
any
federal or state law or listing on any national securities exchange, before
such
shares may be issued upon conversion, the Corporation will in good faith and
as
expeditiously as possible take such action as may be necessary to secure such
registration or approval or listing on the relevant national securities
exchange, as the case may be.
Section
6.
Consideration
for Issue of Series A Preferred Stock.
6.1.
Shares of Series A Preferred Stock shall be issued in exchange for shares of
common stock of Chicago Title and Trust Company pursuant to the terms of the
Memorandum of Understanding between this Corporation and Chicago Title and
Trust
Company, which memorandum was approved by the Board of Directors of the
Corporation at its special meeting of April 28, 1969. Pursuant to Section 4
of
Article II of the Articles of Incorporation, the Board of Directors hereby
fixes
as the amount of consideration to be received by the Corporation for the issue
of each share of Series A Preferred Stock, one share of common stock of Chicago
Title and Trust Company.