APPENDIX III
ARTICLES SUPPLEMENTARY classifying
6,200,000 shares of Preferred Stock
as
8% SERIES B CUMULATIVE CONVERTIBLE PREFERRED STOCK
of
Alexander & Alexander Services Inc.
(Pursuant to Section 2-208 of the
Maryland General Corporation Law)
Alexander & Alexander Services Inc., a corporation organized and existing under the
laws of the State of Maryland (hereinafter called the "Corporation"), and having its principal
office in this State at 10461 Mill Run Circle, Owings Mills, Maryland 21117, hereby certifies to
the State Department of Assessments and Taxation of Maryland that:
FIRST: Pursuant to the authority granted to and vested in the Board of Directors of the
Corporation (hereinafter called the "Board of Directors" or the "Board") in accordance with the
provisions of Article SIXTH of the Charter of the Corporation (the "Charter"), the Board of
Directors, at a meeting duly convened and held on June 6, 1994, regarding the sale and issuance
by the Corporation of cumulative convertible preferred stock (the "Securities"), adopted
resolutions (the "Resolutions") classifying 6,200,000 shares of Preferred Stock of the
Corporation into a single series to be designated as -8% Series B Cumulative Convertible
Preferred Stock" and setting the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption of
such shares as follows:
8% Series B Cumulative Convertible Preferred Stock1. Designation and Amount. There shall be a series of Preferred Stock designated
as Series B Cumulative Convertible Preferred Stock" and the number of shares
constituting such series shall be 6,200,000, of which 4,000,000 shall be issued initially
(the date of such issuance, the "Original Issue Date") and the remainder shall be reserved
for issuance as dividends pursuant to Section 3 below. Such series is referred to herein as
the "Series B Convertible Preferred Stock." The number of shares designated as shares of
Series B Convertible Preferred Stock may be decreased (but not increased) by the Board
of Directors without a vote of stockholders; provided, however, that such number may
not be decreased below the number of then currently outstanding shares of Series B
Convertible Preferred Stock plus the then maximum number of such shares which could
be issued pursuant to Section 3 below assuming all dividends payable on or prior to
December 15, 1999 are paid in shares of Series B Convertible Preferred Stock.
2. Defined Terms. All capitalized terms used herein without definition shall have
the respective meanings assigned thereto in the Charter.
3. Dividends. The holders of shares of Series B Convertible Preferred Stock shall
be entitled to receive, when, as and if authorized and declared by the Board of Directors
out of funds at the time legally available therefor, dividends at the rate of 8% per annum
per share, and no more, which shall be fully cumulative, shall accrue without interest and
shall be payable quarterly in arrears on March 15, June 15, September 15 and December
15 of each year, commencing September 15, 1994 (except that if any such date is a
Saturday, Sunday or legal holiday, then such dividend shall be payable on the next day
that is not a Saturday, Sunday or legal holiday) to holders of record as they appear upon
the stock transfer books of the Corporation on each March 1, June 1, September I and
December I immediately preceding the payment dates, or such other dates as shall be
fixed at the time of the authorization and declaration by the Board of Directors (or, to the
extent permitted by applicable law, a duly authorized committee thereof), which date
shall not be less than ten (10) nor more than sixty (60) days preceding the relevant
dividend payment date. For purposes hereof, the term "legal holiday" shall mean any day
on which banking institutions are authorized to close in New York, New York. Subject to
the sixth succeeding paragraph of this Section 3, dividends on account of arrears for any
past dividend period may be declared and paid at any time, without reference to any
regular dividend payment date; provided, however, that dividends on account of arrears
for any past dividends which were required to be made in shares of Series B Convertible
Preferred Stock shall be declared and paid in shares of Series B Convertible Preferred
Stock and shall include such number of shares of Series B Convertible Preferred Stock as
any holder would have been entitled to receive had all such dividends been declared and
paid on a timely basis. The amount of dividends payable per share of Series B
Convertible Preferred Stock for each quarterly dividend period shall be computed by
dividing the annual dividend amount by four and shall include fractional shares. The
amount of dividends payable for the initial dividend period and any period shorter than a
full quarterly period shall be computed on the basis of a 360-day year of twelve 30-day
months and the actual number of days elapsed in the period in which payable. No interest
shall be payable in respect of any dividend payment on the Series B Convertible
Preferred Stock or any other Parity Dividend Stock (as hereinafter defined) or any Senior
Dividend Stock (as hereinafter defined) which may be in arrears.
Any dividend payments made on or prior to December 15, 1996 shall be made in
additional shares of Series B Convertible Preferred Stock valued at the liquidation
preference of the Series B Convertible Preferred Stock. Any dividend payments made
after December 15, 1996 and on or prior to December 15, 1999 may be made, in the sole
discretion of the Board of Directors, either in (i) cash or (11) additional shares of Series B
Convertible Preferred Stock valued at the liquidation preference of the Series B
Convertible Preferred Stock but not in any combination of cash and additional shares of
Series B Convertible Preferred Stock. On and after the earlier of (i) December 16, 1999
or (ii) the first date the Corporation pays any dividend in cash, dividends on the Series B
Convertible Preferred Stock shall be made only in cash. All shares of Series B
Convertible Preferred Stock issued as a dividend with respect to the Series B Convertible
Preferred Stock shall thereupon be duly authorized, validly issued, fully paid and
nonassessable.
In the case of shares of Series B Convertible Preferred Stock issued on the
Original Issue Date, dividends shall accrue and be cumulative from such date. In the case
of shares of Series B Convertible Preferred Stock issued as a dividend on shares of Series
B Convertible Preferred Stock, dividends shall accrue and be cumulative from the
dividend payment date in respect of which such shares were issued as a dividend.
Each fractional share of Series B Convertible Preferred Stock outstanding shall be
entitled to a ratably proportionate amount of all dividends accruing with respect to each
outstanding share of Series B Convertible Preferred Stock, and all such dividends with
respect to such outstanding fractional shares shall be cumulative and shall accrue
(whether or not declared), and shall be payable in the same manner and at such times as
provided for above with respect to dividends on each outstanding share of Series B
Convertible Preferred Stock. Each fractional share of Series B Convertible Preferred
Stock outstanding shall also be entitled to a ratably proportionate amount of any other
distributions made with respect to each outstanding share of Series B Convertible
Preferred Stock, and all such distributions shall be payable in the same manner and at the
same time as distributions on each outstanding share of Series B Convertible Preferred
Stock. No dividends or other distributions, other than dividends payable solely in shares
of Common Stock, Class A Common Stock, Class C Common Stock or Class D
Common Stock or other stock of the Corporation ranking junior as to dividends and as to
liquidation rights to the Series B Convertible Preferred Stock, shall be authorized,
declared, paid or set apart for payment on any shares of Common Stock, Class A
Common Stock, Class C Common Stock or Class D Common Stock or other stock of the
Corporation ranking junior as to dividends to the Series B Convertible Preferred Stock,
including the Series A Junior Participating Preferred Stock, when and if issued
(collectively, the "Junior Dividend Stock"), unless and until all accrued and unpaid
dividends on the Series B Convertible Preferred Stock for all dividend payment periods
ending on or prior to the date of payment of such dividends or other distributions on
Junior Dividend Stock shall have been authorized, declared and paid or set apart in trust
for payment and all obligations of the Corporation to purchase shares of Series B
Convertible Preferred Stock tendered to it pursuant to Section 7 and to make Extra
Payments have been fully satisfied.
The Corporation shall not permit Reed Stenhouse Companies Limited ("RSC") (in
respect of RSC Class A Shares) or Alexander & Alexander Services UK plc ("AAE") (in
respect of AAE Dividend Shares) to authorize, declare, pay or set apart any dividends or
other distributions, other than dividends payable solely in Junior Dividend Stock, RSC
Class A Shares or AAE Dividend Shares or other stock of the Corporation, RSC or AAE
ranking junior as to dividends to the Series B Convertible Preferred Stock, unless and
until all accrued and unpaid dividends on the Series B Convertible Preferred Stock for all
dividend payment periods ending on or prior to the date of payment of such dividends or
other distributions on RSC Class A Shares or AAE Dividend Shares shall have been
authorized, declared and paid or set apart in trust for payment and all obligations of the
Corporation to purchase shares of Series B Convertible Preferred Stock tendered to it
pursuant to Section 7 and to make Extra Payments have been fully satisfied.
If at any time any dividend on any stock of the Corporation hereafter issued
ranking senior as to dividends to the Series B Convertible Preferred Stock (the "Senior
Dividend Stock") shall be in arrears, in whole or in part, then (except to the extent
allowed by the terms of such Senior Dividend Stock) no dividend shall be authorized,
declared, paid or set apart for payment on the Series B Convertible Preferred Stock (other
than dividends payable in additional shares of Series B Convertible Preferred Stock)
unless and until all accrued and unpaid dividends with respect to the Senior Dividend
Stock for all payment periods ending on or prior to the date of payment of the current
dividend on the Series B Convertible Preferred Stock shall have been authorized,
declared and paid or set apart for payment. No full dividends shall be authorized,
declared, paid or set apart for payment on any class or series of the Corporation's stock
heretofore or hereafter issued ranking, as to dividends, on a parity with the Series B
Convertible Preferred Stock (including the Series A Convertible Preferred Stock)
(collectively, the "Parity Dividend Stock") for any period unless full cumulative
dividends have been, or contemporaneously are, authorized, declared and paid or set
apart in trust for such payment on the Series B Convertible Preferred Stock for all
dividend payment periods terminating on or prior to the date of payment of such full
cumulative dividends. No full dividends (other than dividends payable in additional
shares of Series B Convertible Preferred Stock) shall be authorized, declared, paid or set
apart for payment on the Series B Convertible Preferred Stock for any period unless full
cumulative dividends have been, or contemporaneously are, authorized, declared and
paid or set apart for payment on the Parity Dividend Stock for all dividend periods
terminating on or prior to the date of payment of such full cumulative dividends. When
accrued dividends are not paid in full on the Series B Convertible Preferred Stock and the
Parity Dividend Stock, all cash dividends authorized, declared and paid or set apart for
payment on the Series B Convertible Preferred Stock and the Parity Dividend Stock shall
be authorized, declared, paid or set apart for payment pro rata so that the amount of
dividends authorized, declared, paid or set apart for payment per share on the Series B
Convertible Preferred Stock and the Parity Dividend Stock shall in all cases bear to each
other the same ratio that accrued and unpaid dividends per share on the Series B
Convertible Preferred Stock and the Parity Dividend Stock bear to each other.
Any reference to "distribution" contained in this Section 3 shall not be deemed to
include any distribution made in connection with any liquidation, dissolution or winding
up of the Corporation, RSC or AAE, whether voluntary or involuntary.
4. Liquidation Preference. Subject to the full payment of the liquidation
preferences of shares of stock of the Corporation hereafter issued ranking senior as to
liquidation rights to the Series B Convertible Preferred Stock (the "Senior Liquidation
Stock"), in the event of a liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of shares of Series B Convertible Preferred
Stock shall be entitled to receive out of the assets of the Corporation, whether such assets
are stated capital or surplus of any nature, an amount equal to the dividends accrued and
unpaid on such shares on the date of final distribution to such holders, whether or not
declared, without interest, plus a sum equal to $50.00 per share, and no more, before any
payment shall be made or any assets distributed to the holders of shares of Common
Stock, Class A Common Stock, Class C Common Stock, Class D Common Stock or any
other class or series of the Corporation's stock hereafter issued ranking junior as to
liquidation rights to the Series B Convertible Preferred Stock, including the Series A
Junior Participating Preferred Stock (collectively, the "Junior Liquidation Stock").Further, in the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, (i) the Board of Directors shall determine
(which determination shall be conclusive) whether (1) there is some likelihood that the
holders of Series B Convertible Preferred Stock will not receive, on such liquidation,
dissolution or winding up of the Corporation, the full amounts to which they are entitled
pursuant to this Section 4, and (2) there is some likelihood that the holders of RSC Class
A Shares will receive out of the assets of RSC a distribution as the result of any
liquidation, dissolution or winding up, or other action taken or to be taken by RSC in
connection or concurrently with the liquidation, dissolution or winding up of the
Corporation, in an amount greater than the holders of Common Stock are likely to receive
on the liquidation, dissolution or winding up of the Corporation, and (ii) if the Board
determines that both likelihoods exist, then, provided that paragraph 2 of the Keepwell
Agreement between the Corporation and RSC dated July 31, 1985 does not apply, the
Corporation shall take such action as may be reasonably necessary to cause the transfer of
shares of Common Stock of the Corporation to the holders of RSC Class A Shares in
satisfaction of the obligations of RSC to the holders of such shares; provided, however,
that no director of RSC shall be required to take any action which would cause such
director to breach any duties under applicable law as advised by independent counsel.
The entire assets of the Corporation available for distribution after the liquidation
preferences of the Senior Liquidation Stock are fully met shall be distributed ratably
among the holders of the Series A Convertible Preferred Stock, the Series B Convertible
Preferred Stock and any other class or series of the Corporation's stock hereafter issued
ranking on a parity as to liquidation rights with the Series B Convertible Preferred Stock
in proportion to the respective preferential amounts to which each is entitled (but only to
the extent of such preferential amounts). After payment in full of the liquidation
preferences of the shares of the Series B Convertible Preferred Stock, the holders of such
shares shall not be entitled to any further participation in any distribution of assets by the
Corporation. Neither a consolidation or merger of the Corporation with or into another
corporation nor a merger of any other corporation with or into the Corporation, nor a sale
or transfer of all or any part of the Corporation's assets for cash, securities or other
property, will be considered a liquidation, dissolution or winding up of the Corporation.
5. Limitation on Share Repurchase. If at any time any dividends on the Series B
Convertible Preferred Stock shall be in arrears or the Corporation shall have failed to
make any purchase of shares of Series B Convertible Preferred Stock tendered to it
pursuant to Section 7, the Corporation shall not, and the Corporation shall not permit
RSC, AAE or any other corporation or legal entity directly or indirectly controlled by the
Corporation (collectively, the "subsidiaries") to, repurchase, redeem, retire or otherwise
acquire any shares of Junior Dividend Stock, Junior Liquidation Stock, RSC Class A
Shares, AAE Dividend Shares or any warrants, rights, calls or options exercisable for or
convertible into any shares of Junior Dividend Stock, Junior Liquidation Stock, RSC
Class A Shares or AAE Dividend Shares, except by conversion into or exchange for
shares of Junior Dividend Stock or Junior Liquidation Stock and other than purchases,
redemptions, retirements or acquisitions made pursuant to and as required by the terms of
any employee incentive or benefit plan of the Corporation or any subsidiary of the
Corporation in effect on June 1, 1994, or for consideration aggregating not more than
$100,000 in any calendar year.If at any time any dividends on the Series B Convertible Preferred Stock shall be
in arrears or the Corporation shall have failed to make any purchase of shares of Series B
Convertible Preferred Stock tendered to it pursuant to Section 7, the Corporation shall
not, and shall not permit any subsidiary to, repurchase, redeem, retire or otherwise
acquire any shares of the Corporation's or any such subsidiary's stock except (i) as
permitted by the immediately preceding paragraph and (ii) any subsidiary which is
wholly owned by the Corporation may repurchase, redeem, retire or otherwise acquire
shares of its stock.
6. Redemption at Option of the Corporation. The Series B Convertible Preferred
Stock may not be redeemed by the Corporation prior to December 15, 1999. Thereafter,
so long as shares of Common Stock shall have traded on the New York Stock Exchange
on each trading day during a 30 consecutive trading day period (each of which trading
days shall be after December 15, 1999) and had a Closing Price (as hereinafter defined)
on each such day in excess of 150% of the conversion price then in effect for the Series B
Convertible Preferred Stock for each such trading day, the Series B Convertible Preferred
Stock may thereafter be redeemed by the Corporation, at its option on any date set by the
Board of Directors, in whole or in part at any time, at a redemption price of $54.00 per
share, plus an amount in cash equal to accrued and unpaid dividends thereon, whether or
not authorized or declared, to but excluding the date fixed for redemption, if redeemed on
or prior to December 14, 2000, and at the following redemption prices per share, if
redeemed during the 12-month period beginning December 15:
Year Redemption Price
2000 $53.50
2001 53.00
2002 52.50
2003 52.00
2004 51.50
2005 51.00
2006 50.50
and thereafter at $50.00 per share, plus, in each case, an amount in cash equal to all
dividends on the Series B Convertible Preferred Stock accrued and unpaid thereon,
whether or not authorized or declared, to but excluding the date fixed for redemption,
such sum being hereinafter referred to as the "Redemption Price."
In case of the redemption of less than all of the then outstanding shares of Series
B Convertible Preferred Stock, the Corporation shall effect such redemption pro rata.
Notwithstanding the foregoing, the Corporation shall not redeem less than all of the
shares of Series B Convertible Preferred Stock at any time outstanding until all dividends
accrued and in arrears upon all shares of Series B Convertible Preferred Stock then
outstanding shall have been paid for all past dividend periods.
Not more than sixty nor less than forty-five days prior to the redemption date
fixed by the Board of Directors, notice by first class mail, postage prepaid, shall be given
to the holders of record of shares of the Series B Convertible Preferred Stock to be
redeemed, addressed to such holders at their last addresses as shown upon the stock
transfer books of the Corporation. Each such notice of redemption shall specify the date
fixed for redemption, the Redemption Price, the place or places of payment, that payment
will be made upon presentation and surrender of the shares of Series B Convertible
Preferred Stock, that on and after the redemption date dividends will cease to accrue on
such shares, the then effective conversion price pursuant to Section 8 and that the right of
holders to convert shares of Series B Convertible Preferred Stock shall terminate at the
close of business on the business day prior to the redemption date (unless the Corporation
defaults in the payment of the Redemption Price).
Any notice that is mailed as herein provided shall be conclusively presumed to
have been duly given, whether or not the holder of shares of Series B Convertible
Preferred Stock receives such notice; and failure to give such notice by mail, or any
defect in such notice, to the holders of any shares designated for redemption shall not
affect the validity of the proceedings for the redemption of any other shares of Series B
Convertible Preferred Stock. On or after the date fixed for redemption as stated in such
notice, each holder of the shares called for redemption, subject to such holder's right to
convert shares of Series B Convertible Preferred Stock as provided above, shall surrender
the certificate representing such shares to the Corporation at the place designated in such
notice and shall thereupon be entitled to receive payment of the Redemption Price. If less
than all the shares evidenced by any such surrendered certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares. Notice having been given
as aforesaid, if, on the date fixed for redemption, funds necessary for the redemption shall
be available therefor and shall have been irrevocably deposited or set aside in trust for the
holders of the shares of Series B Convertible Preferred Stock, then, notwithstanding that
the certificates representing any shares so called for redemption shall not have been
surrendered, dividends with respect to the shares so called shall cease to accrue after the
date fixed for redemption, such shares shall no longer be deemed outstanding, the holders
thereof shall cease to be stockholders of the Corporation and all rights whatsoever with
respect to the shares so called for redemption (except the right of the holders to receive
the Redemption Price without interest upon surrender of their certificates therefor) shall
terminate. If funds legally available for such purpose are not sufficient for redemption of
the shares of Series B Convertible Preferred Stock to be redeemed, then the certificates
representing such shares shall be deemed not to be surrendered, such shares shall remain
outstanding and the rights of holders of shares of Series B Convertible Preferred Stock
thereafter shall continue to be only those of a holder of shares of the Series B Convertible
Preferred Stock.Except as provided in Section 7, the shares of Series B Convertible Preferred
Stock shall not be subject to the operation of any mandatory purchase, retirement or
sinking fund.
7. Repurchase at Option of the Holder. If one or more Special Events shall occur
at any time or from time to time on or after the Original Issue Date, each holder of shares
of the Series B Convertible Preferred Stock shall have the right, at such holder's option
exercisable at any time within 120 days after the happening of each such Special Event,
to require the Corporation to purchase all or any part of the shares of Series B
Convertible Preferred Stock then held by such holder as such holder may elect at $58.82
per share if the Special Event occurs on or before six months after the Original Issue
Date, $66.18 per share if the Special Event occurs more than six months after the
Original Issue Date and on or before twelve months after the Original Issue Date and
$72.06 per share if the Special Event occurs more than twelve months after the Original
Issue Date plus, in each case, an amount in cash equal to the accrued and unpaid
dividends thereon, whether or not authorized or declared, to but excluding the date fixed
for redemption. Any shares of Series B Convertible Preferred Stock which would have
accrued but have not been paid on any shares tendered for purchase shall be deemed to be
tendered for purchase. The Corporation shall, immediately upon becoming aware of any
facts or events that could reasonably be expected to result in the occurrence of a Special
Event, give a written notice thereof by first class mail, postage prepaid, to the holders of
record of shares of the Series B Convertible Preferred Stock, addressed to such holders at
their last address as shown upon the stock transfer books of the Corporation.
A "Special Event" shall mean (v) the declaration or payment on or after the
Original Issue Date by the Corporation, RSC or AAE of an Extraordinary Equity
Payment (as hereinafter defined), (w) the sale or other disposition, directly or indirectly,
by the Corporation or any of its subsidiaries in one or a series of related transactions of
assets representing 35% or more of the then book value of the Corporation's assets on a
consolidated basis or 35% or more of the Corporation's gross revenues on a consolidated
basis in either of the two most recently ended fiscal years, (x) the merger or consolidation
of the Corporation or any of its Principal Subsidiaries (as hereinafter defined) with or into
any other firm, corporation or other legal entity other than (i) a merger or consolidation of
one subsidiary of the Corporation into another or the Corporation, or (ii) a merger or
consolidation in which the securities of the Corporation outstanding before the merger or
consolidation are not affected and in which the Corporation issues equity securities
having an aggregate market value of less than 20% of the total market value of the
Corporation's equity securities outstanding prior to such merger or consolidation, or (y)
the occurrence of a Specified Corporate Action on or after the Original Issue Date. "Extraordinary Equity Payment" shall mean (a) the declaration or payment on or
after June 1, 1994 by the Corporation, RSC, AAE or any of their respective subsidiaries
of any dividend or distribution (except for any dividend or distribution from one
subsidiary of the Corporation to another subsidiary of the Corporation or from a
subsidiary of the Corporation to the Corporation, RSC or AAE or any of their respective
wholly owned subsidiaries; provided that all of such dividend paid or distribution made,
net of applicable withholding taxes, is received by the Corporation, RSC or AAE or such
recipient subsidiary) on any class or series of its stock (other than regularly scheduled
quarterly cash dividends on the Series A Convertible Preferred Stock and Series B
Convertible Preferred Stock in accordance with the terms thereof as in effect on the
Original Issue Date) other than the declaration and payment by the Corporation, RSC and
AAE of dividends on the Common Stock, the RSC Class A Shares and the AAE
Dividend Shares, respectively, which do not exceed (i) on and after June 1, 1994 and on
and prior to December 3 1, 1994, more than $0.075 per share, (ii) on and after January 1,
1995 and on and prior to December 31, 1996, in the aggregate more than 25% of the
Corporation's net income available for distribution to common shareholders (after
preferred dividends) through the end of the last fiscal quarter prior to the date of
declaration of such dividend and (iii) on and after January 1, 1997, in the aggregate more
than the sum of (A) 50% of the Corporation's net income available for distribution to
common shareholders (after preferred dividends) on and after such date and through the
end of the last fiscal quarter prior to the date of declaration of such dividend and (B) the
excess, if any, of( 1) 25% of the Corporation's net income available for distribution to
common shareholders (after preferred dividends) during the period ending on and after
January 1, 1995 through December 31, 1996 over (2) the aggregate amount of dividends
declared during the period from January 1, 1995 through December 31, 1996 and (b) any
repurchases, redemptions, retirements or other acquisitions directly or indirectly by the
Corporation or any of its subsidiaries on or after June 1, 1994 of any stock of the
Corporation or any of its subsidiaries (other than a wholly-owned subsidiary) (other than
redemptions or repurchases of the Series B Convertible Preferred Stock in accordance
with Sections 6 and 7) in excess of net proceeds on or after June 1, 1994 to the
Corporation from sales of stock of the Corporation (less amounts expended on
redemptions or repurchases of Series A Convertible Preferred Stock and Series B
Convertible Preferred Stock on or after June 1, 1994). For purposes of Section 8 below,
all amounts treated as an Extraordinary Equity Payment shall be treated as having been
made by the Corporation."Specified Corporate Action" shall mean such time as (i) the Corporation shall
consent or agree to the acquisition of, or the commencement of a tender offer for, or the
Board of Directors of the Corporation shall recommend or, within 10 business days after
the commencement of the tender offer, not recommend that shareholders reject, a tender
offer for, "beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act) by
any "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended ("the Exchange Act")) other than American
International Group, Inc. ("AIG") and its affiliates or any transferee thereof, of securities
of the Corporation entitled to vote generally in the election of directors, or securities
convertible into or exchangeable for such securities (collectively, "Designated Securi-
ties"), representing, when added to the Designated Securities already owned by any such
person or group, thirty-five percent (35%) or more of such Designated Securities; (ii) the
Corporation shall amend, modify or supplement, or waive the benefit of, the Rights
Agreement between Alexander & Alexander Services Inc. and First Chicago Trust
Company of New York, dated as of June 11, 1987, as amended and restated on March 22,
1990, as amended on August 21, 1992 and June 6, 1994 (the "Rights Agreement"), so as
to permit any acquisition of beneficial ownership of thirty-five percent (35%) or more of
the Designated Securities without causing a person or group (other than AIG and its
affiliates or any transferee thereof) to become an Acquiring Person (as defined in the
Rights Agreement) or without causing the Distribution Date or the Shares Acquisition
Date (each as defined in the Rights Agreement) to occur or without giving rise to a
Section I I (a)(ii) Event (as defined in the Rights Agreement); (iii) the Corporation shall
take any action under Section 3-603(c) of the Maryland General Corporation Law to
exempt any transaction between the Corporation and any of its subsidiaries, on the one
hand, and any person or group (other than AIG and its affiliates or any transferee
thereof), or any affiliates of any such person or group, on the other hand, who (A)
acquire, own or hold beneficial ownership of Designated Securities representing thirty-
five percent (35%) or more of such Designated Securities from the provisions of Title 3,
Subtitle 6 of the Maryland General Corporation Law or (B) acquire, own or hold
beneficial ownership of Designated Securities representing ten percent (10%) or more of
such Designated Securities unless such other person or group, or any affiliate of such
person or group, enters into a standstill agreement with the Corporation limiting the
acquisition of Designated Securities by such other person or group, or any affiliates of
such person or group, to less than 35% of the Designated Securities and such standstill
agreement remains in full force and effect; (iv) the Corporation shall issue, sell or
transfer, in one or a series of related transactions, Designated Securities to any person or
group (other than AIG and its affiliates or any transferee thereof) if after giving effect
thereto said person or group shall have, or shall have the then contractual right to acquire
through conversion, exercise of warrants or otherwise, more than thirty-five percent
(35%) of the combined voting power to vote generally in the election of directors of the
Corporation; or (v) the Corporation shall agree to merge or consolidate with or into any
person, firm, corporation or other legal entity (other than AIG and its affiliates or any
transferee thereof) or shall agree to sell all or substantially all its assets to any such
person, firm, corporation or other legal entity other than (i) a merger or consolidation of
one subsidiary of the Corporation into another or the Corporation, or (ii) a merger or
consolidation in which the securities of the Corporation outstanding before the merger or
consolidation are not affected and in which the Corporation issues equity securities
having an aggregate market value of less than 20% of the total market value of the
Corporation's equity securities outstanding prior to such merger or consolidation."Principal Subsidiary" means a subsidiary, including its subsidiaries, which meets
any of the following conditions:
(i) The Corporation's and its other subsidiaries' investments in and
advances to the subsidiary exceed ten percent (10%) of the total assets of the
Corporation and its subsidiaries consolidated as of the end of the most recently
completed fiscal year of the Corporation; or
(ii) The Corporation's and its other subsidiaries' proportionate share of the
total assets (after intercompany eliminations) of the subsidiary exceed ten percent
(10%) of the total assets of the Corporation and its subsidiaries consolidated as of
the end of the most recently completed fiscal year of the Corporation; or(iii) The Corporation's and its other subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items and cumulative
effect of a change in accounting principles of the subsidiary exceeds ten percent
(10%) of such income of the Corporation and its subsidiaries consolidated for the
most recently completed fiscal year of the Corporation.
"Affiliate" means, when used with reference to any person, any other person
directly or indirectly controlling, controlled by, or under direct or indirect common
control with, the referent person or such other person, as the case may be, or any person
who beneficially owns, directly or indirectly, 10% or more of the voting equity interests
of such person or warrants, options or other rights to acquire or hold more than 10% of
any class of voting equity interests of such person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to direct or
cause the direction of management or policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise; and the
terms "affiliated ... .. controlling" and "controlled" have meanings correlative to the
foregoing.
The date fixed for each such repurchase shall be the 121st day following the
occurrence of the Special Event giving rise thereto. The place of payment shall be at an
office or agency in the City of New York, New York fixed therefor by the Corporation
or, if not fixed, at the principal executive office of the Corporation.
The Corporation shall, within 20 days of the occurrence of a Special Event, give a
written notice thereof by first class mail, postage prepaid, to the holders of record of
shares of the Series B Convertible Preferred Stock, addressed to such holders at their last
addresses as shown upon the stock transfer books of the Corporation. Each such notice
shall specify the Special Event which has occurred and the date of such occurrence, the
place or places of payment, the then effective conversion price pursuant to Section 8, the
then effective repurchase price and the date the right of such holder to require such
repurchase shall terminate. Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of shares of
Series B Convertible Preferred Stock receives such notice; and failure to give such notice
by mail, or any defect in such notice, to the holders of any shares shall not affect the
validity of the proceedings for the repurchase of any other shares of Series B Convertible
Preferred Stock.
On the date fixed for any such repurchase, each holder of shares of Series B
Convertible Preferred Stock who elects to have shares of Series B Convertible Preferred
Stock held by it purchased shall surrender the certificate representing such shares to the
Corporation at the place designated in such notice together with an election to have such
purchase made and shall thereupon be entitled to receive payment therefor provided in
this Section 7. If less than all the shares represented by any such surrendered certificate
are repurchased, a new certificate shall be issued representing the unpurchased shares.
Dividends with respect to the shares of Series B Convertible Preferred Stock so
purchased shall cease to accrue after the date so purchased, such shares shall no longer be
deemed outstanding and the holders thereof shall cease to be stockholders of the
Corporation and all rights whatsoever with respect to the shares so purchased shall
terminate. If the funds legally available for such purchase are not sufficient to purchase
all the shares of Series B Convertible Preferred Stock tendered to the Corporation for
purchase, the Corporation shall purchase the greatest number of whole shares for which
such funds are so available on a pro rata basis among all tendering holders based on the
ratio of the number of shares tendered by each of them to the aggregate amount of all
shares so tendered, and the certificates representing the unpurchased shares shall be
deemed not to be surrendered for repurchase, such unpurchased shares shall remain
outstanding and the rights of the holders of shares of Series B Convertible Preferred
Stock thereafter shall continue to be those of a holder of shares of the Series B
Convertible Preferred Stock; provided, however, the Corporation shall thereafter be
required to repurchase all such remaining shares at the first date it has sufficient funds
legally available for such purpose at the price it would have paid at the date such shares
were actually tendered and the Corporation shall give notice as aforesaid to each holder
whose shares were not repurchased for such reason and such holder shall thereafter have
the right to elect to have such shares repurchased, such election to be made within 30
days of receipt of such notice.8. Conversion.(a) Right of Conversion. Each share of Series B Convertible Preferred
Stock shall be convertible at the option of the holder thereof, at any time prior to
the close of business on the business day prior to the date fixed for redemption of
such share as herein provided, into fully paid and nonassessable shares of Class D
Common Stock and such other securities and property as hereinafter provided, at
the rate of that number of shares of Class D Common Stock for each full share of
Series B Convertible Preferred Stock that is equal to $50.00 divided by the
conversion price applicable per share of Class D Common Stock. For purposes of
this resolution, the "conversion price" applicable per share of Class D Common
Stock shall initially be equal to $17.00, and shall be adjusted from time to time in
accordance with the provisions of this Section 8.
For the purpose of this Section 8, the term "Common Stock" shall mean
the class designated as Common Stock, par value $1.00 per share, of the
Corporation as of June 1, 1994 and any other shares into which such shares may
hereafter be changed from time to time. For purposes of this Section 8, the term
"Class D Common Stock" shall mean the class designated as Class D Common
Stock, par value $1.00 per share, of the Corporation as of the Original Issue Date
and any other shares into which such shares may hereafter be changed from time
to time.
(b) Conversion Procedures. Any holder of shares of Series B Convertible
Preferred Stock desiring to convert such shares into Class D Common Stock shall
surrender the certificate or certificates representing such shares of Series B
Convertible Preferred Stock at the office of the transfer agent for the Series B
Convertible Preferred Stock, which certificate or certificates, if the Corporation
shall so require, shall be duly endorsed to the Corporation or in blank, or
accompanied by proper instruments of transfer to the Corporation or in blank,
accompanied by irrevocable written notice to the Corporation that the holder
elects so to convert such shares of Series B Convertible Preferred Stock and
specifying the name or names (with address or addresses) in which a certificate or
certificates evidencing shares of Class D Common Stock are to be issued.
Subject to Section 8(l) hereof, no payments or adjustments in respect of
dividends on shares of Series B Convertible Preferred Stock surrendered for
conversion or on account of any dividend on the Class D Common Stock issued
upon conversion shall be made upon the conversion of any shares of Series B
Convertible Preferred Stock.
The Corporation shall, as soon as practicable after such deposit of
certificates representing shares of Series B Convertible Preferred Stock
accompanied by the written notice and compliance with any other conditions
herein contained, deliver at such office of the transfer agent to the person for
whose account such shares of Series B Convertible Preferred Stock were so
surrendered or to the nominee or nominees of such person certificates
representing the number of full shares of Class D Common Stock to which such
person shall be entitled as aforesaid, together with a cash adjustment in respect of
any fraction of a share of Class D Common Stock as hereinafter provided. Subject
to the following provisions of this paragraph, such conversion shall be deemed to
have been made as of the date of such surrender of the shares of Series B
Convertible Preferred Stock to be converted, and the person or persons entitled to
receive the Class D Common Stock deliverable upon conversion of such Series B
Convertible Preferred Stock shall be treated for all purposes as the record holder
or holders of such Class D Common Stock on such date.
(c) Adjustment of Conversion Price. The conversion price at which a share
of Series B Convertible Preferred Stock is convertible into Class D Common
Stock shall be subject to adjustment from time to time as follows:
(i) In case the Corporation shall pay or make a dividend or other
distribution on its Common Stock exclusively in Common Stock or shall
pay or make a dividend or other distribution on any other class of stock of
the Corporation which dividend or distribution includes Common Stock or
shall exchange outstanding Rights (as defined in Section 8(k) hereof) for
shares of Common Stock, the conversion price in effect at the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution or to
exchange such Rights shall be reduced by multiplying such conversion
price by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination and the denominator shall be the sum of such number
of shares and the total number of shares constituting such dividend or
other distribution or exchange, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination.In case the Corporation shall issue or otherwise sell or distribute
shares of Common Stock for a consideration per share in cash or property
less than the conversion price in effect at the time of such issuance, the
conversion price then in effect shall be reduced by multiplying such
conversion price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding immediately prior to such
issuance, sale or distribution plus the number of shares of Common Stock
which the aggregate consideration received by the Corporation for such
issuance, sale or distribution (such consideration, if other than cash, as
determined by the Board of Directors including a majority of the Directors
who are not officers or employees of the Corporation or any of its
subsidiaries, whose determination shall be conclusive and described in a
resolution of the Board of Directors) would purchase at the conversion
price per share and the denominator shall be the number of shares of
Common Stock outstanding immediately after giving effecting to such
issuance, sale or distribution.
(ii) In case the Corporation shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall
otherwise issue to all or substantially all holders of its Common Stock,
rights or warrants entitling the holders thereof to subscribe for or purchase
shares of Common Stock at a price per share less than the then current
market price per share (determined as provided in subparagraph (vii) of
this Section 8(c)) of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights or warrants,
the conversion price in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate of the offering price of the
total number of shares of Common Stock so offered for subscription or
purchase would purchase at such current market price and the denominator
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of
shares of Common Stock so offered for subscription or purchase, such
reduction to become effective immediately after the opening of business
on the day following the date fixed for such determination. In case any
rights or warrants referred to in this subparagraph (ii) in respect of which
an adjustment shall have been made shall expire unexercised, the
conversion price shall be readjusted at the time of such expiration to the
conversion price that would have been in effect if no adjustment had been
made on account of the distribution or issuance of such expired rights or
warrants. For the purposes of this Section 8(c)(ii), if both a Distribution
Date and a Section I I (a)(ii) Event (as such terms are defined in the Rights
Agreement) shall have occurred, then the later to occur of such events
shall be deemed to constitute an issuance of rights to purchase shares of
Common Stock.(iii) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
conversion price in effect at the opening of business on the day following
the day upon which such subdivision becomes effective shall be
proportionately reduced, and conversely, in case outstanding shares of
Common Stock shall each be combined into a smaller number of shares of
Common Stock, the conversion price in effect at the opening of business
on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as
the case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or
combination becomes effective.
(iv) Subject to the last sentence of this subparagraph (iv), in case
the Corporation shall, by dividend or otherwise, distribute to all or
substantially all holders of its Common Stock evidences of its
indebtedness, shares of any class of stock, cash or assets (including
securities, but excluding any rights or warrants referred to in subparagraph
(ii) of this Section 8(c), excluding any dividend or distribution paid
exclusively in cash (other than an Extraordinary Equity Payment) and
excluding any dividend or distribution referred to in subparagraph (i) of
this Section 8(c)) (for the purposes of this subparagraph (iv), such
evidence of indebtedness, shares of stock, cash and assets are herein called
"Securities"), the conversion price shall be reduced so that the same shall
equal the price determined by multiplying the conversion price in effect
immediately following the close of business on the Determination Date (as
defined in Section 8(i)) by a fraction of which the numerator shall be the
current market price per share (determined as provided in subparagraph
(vii) of this Section 8(c)) of the Common Stock on the Determination Date
less the fair market value (as determined by the Board of Directors
including a majority of the Directors who are not officers or employees of
the Corporation or any of its subsidiaries, whose determination shall be
conclusive and described in a resolution of the Board of Directors), on the
date of such effectiveness, of the portion of the Securities so distributed
applicable to one share of Common Stock and the denominator shall be
such current market price per share of the Common Stock, such reduction
to become effective immediately prior to the opening of business on the
day following the Determination Date. If the Board of Directors so
determines as aforesaid the fair market value of any distribution for
purposes of this subparagraph (iv) by reference to the actual or when
issued trading market for any Securities comprising such distribution, it
must in doing so consider the prices in such market over the same period
used in computing the current market price per share of Common Stock
pursuant to subparagraph (vii) of this Section 8(c). Notwithstanding the
foregoing, if the holders of the Series B Convertible Preferred Stock elect
to cause the Corporation to reserve the Securities to be distributed for
distribution to the holders of the Series B Convertible Preferred Stock
upon the conversion of the shares of Series B Convertible Preferred Stock
so that any such holder converting shares of Series B Convertible
Preferred Stock will receive upon such conversion, in addition to the
shares of the Class D Common Stock to which such holder is entitled, the
amount and kind of such Securities which such holder would have
received if such holder had, immediately prior to the Determination Date
for such distribution of Securities, converted its shares of Series B
Convertible Preferred Stock into Class D Common Stock, the fair market
value of the Securities shall, for purposes of this subparagraph (iv), be
deemed to be zero.For purposes of this subparagraph (iv), any dividend or distribution
that includes shares of Common Stock, rights or warrants to subscribe for
or purchase shares of Common Stock or other securities convertible into
or exchangeable for shares of Common Stock shall be deemed instead to
be (1) a dividend or distribution of the evidences of indebtedness, cash,
assets or shares of stock other than such shares of Common Stock, such
rights or warrants or such other convertible or exchangeable securities
(making any conversion price reduction required by this subparagraph
(iv)) immediately followed by (2) in the case of such shares of Common
Stock or such rights or warrants, a dividend or distribution thereof
(making any further conversion price reduction required by subparagraph
(i) or (ii) of this Section 8(c), except (A) the Determination Date of such
dividend or distribution shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution or to exchange such Rights" and "the date fixed for such
determination" within the meaning of subparagraphs (i) and (ii) of this
Section 8(c) and (B) any shares of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning of
subparagraph (i) of this Section 8(c)) or (3) in the case of such other
convertible or exchangeable securities, a dividend or distribution of such
number of shares of Common Stock as would then be issuable upon the
conversion or exchange thereof, whether or not the conversion or
exchange of such securities is subject to any conditions (making any
further conversion price reduction required by subparagraph (i) of this
Section 8(c), except (A) the Determination Date of such dividend or
distribution shall be substituted as "the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution or to
exchange such Rights" and "the date fixed for such determination" and (B)
the shares deemed to constitute such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination," each within the meaning of subparagraph (i) of this
Section 8(c)).(v) Subject to the last sentence of this subparagraph (v), in case the
Corporation shall, by dividend or otherwise, at any time distribute to all
holders of its Common Stock cash (excluding (1) any cash that is
distributed as part of a distribution referred to in subparagraph (iv) of this
Section 8(c) and constitutes an Extraordinary Equity Payment and (2) any
cash representing an amount per share of Common Stock of any quarterly
cash dividend on the Common Stock to the extent such cash does not
constitute an Extraordinary Equity Payment), the conversion price shall be
reduced so that the same shall equal the price determined by multiplying
the conversion price in effect immediately prior to the effectiveness of the
conversion price reduction contemplated by this subparagraph (v) by a
fraction of which the numerator shall be the current market price per share
(determined as provided in subparagraph (vii) of this Section 8(c)) of the
Common Stock on the Determination Date less the amount of cash so
distributed and not excluded as above provided applicable to one share of
Common Stock and the denominator shall be such current market price
per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following the
Determination Date. Notwithstanding the foregoing, if the Corporation
elects to reserve the cash to be distributed for distribution to the holders of
the Series B Convertible Preferred Stock upon the conversion of the shares
of Series B Convertible Preferred Stock so that any such holder converting
shares of Series B Convertible Preferred Stock will receive upon such
conversion, in addition to the shares of the Class D Common Stock to
which such holder is entitled, the amount of cash which such holder would
have received if such holder had, immediately prior to the Determination
Date for such distribution of cash, converted its shares of Series B
Convertible Preferred Stock into Class D Common Stock, then the
conversion price shall not be so reduced.
(vi) In case a tender or exchange offer made by the Corporation or
any subsidiary of the Corporation for all or any portion of the
Corporation's Common Stock shall expire and such tender or exchange
offer shall involve the payment by the Corporation or such subsidiary of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, including a majority of the
Directors who are not officers or employees of the Corporation or any of
its subsidiaries, whose determination shall be conclusive and described in
a resolution of the Board of Directors) at the last time (the "Expiration
Time") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) that exceeds the current
market price per share (determined as provided in subparagraph (vii) of
this Section 8(c)) of the Common Stock on the Trading Day next
succeeding the Expiration Time, the conversion price shall be reduced so
that the same shall equal the price determined by multiplying the
conversion price in effect immediately prior to the Expiration Time by a
fraction of which the numerator shall be the number of shares of Common
Stock outstanding (including any tendered or exchanged shares) on the
Expiration Time multiplied by the current market price per share
(determined as provided in subparagraph (vii) of this Section 8(c)) of the
Common Stock on the Trading Day next succeeding the Expiration Time
and the denominator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the current market price per share (determined as provided in
subparagraph (vii) of this Section 8(c)) of the Common Stock on the
Trading Day next succeeding the Expiration Time, such reduction to
become effective immediately prior to the opening of business on the day
following the Expiration Time.(vii) For the purpose of any computation under this subparagraph
and subparagraphs (ii), (iv) and (v) of this Section 8(c), the current market
price per share of Common Stock on any date shall be deemed to be the
average of the daily Closing Prices (as defined in Section 8(i)) on the five
consecutive Trading Days prior to and including the date in question;
provided, however, that (1) if the "ex" date (as hereinafter defined) for any
event (other than the issuance or distribution requiring such computation)
that requires an adjustment to the conversion price pursuant to
subparagraph (i), (ii), (iii), (iv), (v) or (vi) above occurs on or after the
twentieth Trading Day prior to the day in question and prior to the "ex"
date for the issuance or distribution requiring such computation, the
Closing Price for each Trading Day prior to the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the same
fraction by which the conversion price is so required to be adjusted as a
result of such other event, (2) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an
adjustment to the conversion price pursuant to subparagraph (i), (ii), (iii),
(iv), -(v) or (vi) above occurs on or after the "ex" date for the issuance or
distribution requiring such computation and on or prior to the day in
question, the Closing Price for each Trading Day on and after the "ex"
date for such other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the conversion price is so
required to be adjusted as a result of such other event, and (3) if the "ex"
date for the issuance or distribution requiring such computation is on or
prior to the date in question, after taking into account any adjustment
required pursuant to clause (2) of this proviso, the Closing Price for each
Trading Day on or after such "ex" date shall be adjusted by adding thereto
the amount of any cash and the fair market value on the day in question
(as determined by the Board of Directors, including a majority of the
Directors who are not officers or employees of the Corporation, in a
manner consistent with any determination of such value for purposes of
paragraph (iv) or (v) of this Section 8(c), whose determination shall be
conclusive and described in a resolution of the Board of Directors) of the
evidences of indebtedness, shares of stock or assets being distributed
applicable to one share of Common Stock as of the close of business on
the day before such "ex" date. For the purpose of any computation under
subparagraph (vi) of this Section 8(c), the current market price per share
of Common Stock on any date shall be deemed to be the average of the
daily Closing Prices for such day and the next two succeeding Trading
Days; provided that, if the "ex" date for any event (other than the tender or
exchange offer requiring such computation) that requires an adjustment to
the conversion price pursuant to subparagraph (i), (ii), (iii), (iv), (v) or (vi)
above occurs on or after the Expiration Time for the tender or exchange
offer requiring such computation and on or prior to the day in question, the
Closing Price for each Trading Day on and after the "ex" date or such
other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the conversion price is so required to
be adjusted as a result of such other event. For purposes of this
subparagraph (vii), the term "ex" date, (1) when used with respect to any
issuance or distribution, means the first date on which the Common Stock
trades regular way on the relevant exchange or in the relevant market from
which the Closing Price was obtained without the right to receive such
issuance or distribution, (2) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which
the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes
effective, and (3) when used with respect to any tender or exchange offer,
means the first date on which the Common Stock trades regular way on
such exchange or in such market after the Expiration Time of such offer.
(viii) The Corporation may make such reductions in the conversion
price, in addition to those required by subparagraphs (i), (ii), (iii), (iv), (v)
and (vi) of this Section 8(c), as it considers -to be advisable to avoid or
diminish any income tax to holders of Class D Common Stock or rights to
purchase Class D Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes. The Corporation from time to time may
reduce the conversion price by any amount for any period of time if the
period is at least thirty days, the reduction is irrevocable during the period
and the Board of Directors shall have made a determination that such
reduction would be in the best interest of the Corporation, which
determination shall be conclusive. Whenever the conversion price is
reduced pursuant to the preceding sentence, the Corporation shall mail to
holders of record of the Series B Convertible Preferred Stock a notice of
the reduction at least fifteen days prior to the date the reduced conversion
price takes effect, and such notice shall state the reduced conversion price
and the period it will be in effect.
(ix) No adjustment in the conversion price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
the conversion price; provided, however, that any adjustments which by
reason of this subparagraph (ix) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
(x) Notwithstanding any other provision of t
