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In witness whereof, this letter agreement has been duly executed and delivered by the
duly authorized representatives of the parties hereto as of the date written below.
UNITED STATES DEPARTMENT OF THE
TREASURY
By:
COMPANY:
CITIZENS BANCSHARES CORPORATION
By:
James E. Young
President and Chief Executive Officer
Date:
Letter Agreement Signature Page.
UST Sequence Number: 31,2
CERTIFICATE OF DESIGNATIONS
OF
FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES B
OF
CITIZENS BANCSHARES CORPORATION
Citizens Bancshares Corporation, a corporation organized and existing under the laws of the State
of Georgia (the “Issuer”), in accordance with the provisions of Section 14-2-602 of the Georgia Business
Corporation Code thereof, does hereby certify:
The board of directors of the Issuer (the “Board of Directors”), or an applicable committee of the
Board of Directors, in accordance with the articles of incorporation and bylaws of the Issuer and
applicable law, adopted the following resolution on _______, 2010 creating a series of _______ shares of
Preferred Stock of the Issuer designated as “Fixed Rate Cumulative Perpetual Preferred Stock, Series B.”
RESOLVED, that pursuant to the provisions of the articles of incorporation and the bylaws of
the Issuer and applicable law, a series of Preferred Stock, no par value per share, of the Issuer be and
hereby is created, and that the designation and number of shares of such series, and the voting and other
powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations
and restrictions thereof, of the shares of such series, are as follows:
Part 1. Designation and Number of Shares. There is hereby created out of the authorized and
unissued shares of preferred stock of the Issuer a series of preferred stock designated as the “Fixed Rate
Cumulative Perpetual Preferred Stock, Series B” (the “Designated Preferred Stock”). The authorized
number of shares of Designated Preferred Stock shall be _________.
Part 2. Standard Provisions. The standard provisions contained in Schedule A attached hereto
are incorporated herein by reference in their entirety and shall be deemed to be a part of this Certificate of
Designations to the same extent as if such provisions had been set forth in full herein.
Part 3. Definitions. The following terms are used in this Certificate of Designations (including
the Standard Provisions in Schedule A hereto) as defined below:
(a)
“Common Stock” means the common stock, par value $1.00 per share, of the
Issuer.
(b)
“Dividend Payment Date” means February 15, May 15, August 15 and
November 15 of each year.
(c)
“Junior Stock” means the Common Stock, and any other class or series of stock
of the Issuer, the terms of which expressly provide that it ranks junior to Designated Preferred Stock as to
dividend rights and/or as to rights on liquidation, dissolution or winding up of the Issuer.
(d)
“Liquidation Amount” means $1,000 per share of Designated Preferred Stock.
(e)
“Minimum Amount” means $______________.
(f)
“Parity Stock” means any class or series of stock of the Issuer (other than
Designated Preferred Stock), the terms of which do not expressly provide that such class or series will
rank senior or junior to Designated Preferred Stock as to dividend rights and/or as to rights on liquidation,
1
Certificate of Designations
UST Sequence Number: 318
dissolution or winding up of the Issuer (in each case without regard to whether dividends accrue
cumulatively or non-cumulatively). Without limiting the foregoing, Parity Stock shall include the
Issuer’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A.
(g)
“Signing Date” means ___________, 2010.
Part 4. Certain Voting Matters. Holders of shares of Designated Preferred Stock will be entitled
to one vote for each such share on any matter on which holders of Designated Preferred Stock are entitled
to vote, including any action by written consent.
[Remainder of Page Intentionally Left Blank]
2
Certificate of Designations
UST Sequence Number: 318
IN WITNESS WHEREOF, Citizens Bancshares Corporation has caused this Certificate of
Designations to be signed by James E. Young, its Chairman and Chief Executive Officer, this ____ day of
__________, 2010.
CITIZENS BANCSHARES CORPORATION
By:
James E. Young
Chairman and Chief Executive Officer
Certificate of Designations Signature Page
UST Sequence Number: 318
Schedule A
STANDARD PROVISIONS
Section 1. General Matters. Each share of Designated Preferred Stock shall be identical in all
respects to every other share of Designated Preferred Stock. The Designated Preferred Stock shall be
perpetual, subject to the provisions of Section 5 of these Standard Provisions that form a part of the
Certificate of Designations. The Designated Preferred Stock shall rank equally with Parity Stock and
shall rank senior to Junior Stock with respect to the payment of dividends and the distribution of assets in
the event of any dissolution, liquidation or winding up of the Issuer.
Section 2. Standard Definitions. As used herein with respect to Designated Preferred Stock:
(a)
“Affiliate” means, with respect to any person, any person directly or indirectly
controlling, controlled by or under common control with, such other person. For purposes of this
definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common
control with”) when used with respect to any person, means the possession, directly or indirectly, of the
power to cause the direction of management and/or policies of such person, whether through the
ownership of voting securities by contract or otherwise.
(b)
“Applicable Dividend Rate” means (i) until the first day of the first Dividend Period
commencing on or after the eighth anniversary of the Original Issue Date, 2% per annum; provided,
however, that if a CDFI Event shall have occurred and it or any other CDFI Event is continuing at all
times, from and after the 180th day after the date on which the first CDFI Event occurred until the date on
which no CDFI Events are continuing, the Applicable Dividend Rate shall be 5% per annum, and (ii) for
any other Dividend Period, 9% per annum.
(c)
“Appropriate Federal Banking Agency” means the “appropriate Federal banking agency”
with respect to the Issuer as defined in Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
Section 1813(q)), or any successor provision.
(d)
“Business Combination” means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the Issuer’s stockholders.
(e)
“Business Day” means any day except Saturday, Sunday and any day on which banking
institutions in the State of New York or the District of Columbia generally are authorized or required by
law or other governmental actions to close.
(f)
“Bylaws” means the bylaws of the Issuer, as they may be amended from time to time.
(g)
“CDFI Events” means the failure by each Certified Entity at any time while the
Designated Preferred Stock is outstanding (i) to be certified by the Community Development Financial
Institution Fund of the United States Department of Treasury as a regulated community development
financial institution; (ii) together with all of its Affiliates collectively meet the eligibility requirements of
12 C.F.R. 1805.200(b); (iii) to have a primary mission of promoting community development, as may be
determined by the United States Department of the Treasury from time to time, based on criteria set forth
in 12 C.F.R. 1805.201(b)(1); (iv) to provide Financial Products, Development Services and/or other
similar financing as a predominant business activity in arm’s-length transactions; (v) to serve a Target
Market by serving one or more Investment Areas and/or Targeted Populations as may be determined by
the United States Department of the Treasury from time to time, substantially in the manner set forth in
12 C.F.R. 1805.201(b)(3); (vi) to provide Development Services in conjunction with its Financial
Certificate of Designations Schedule A
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Page 1 of 10
Products directly, through an Affiliate, or through a contract with a third-party provider; (vii) to maintain
accountability to residents of the applicable Investment Area(s) or Targeted Population(s) through
representation on its governing board of directors or otherwise; and (viii) to remain a non-governmental
entity which is not an agency or instrumentality of the United States of America, or any State or political
subdivision thereof, as described in 12 C.F.R. 1805. 201(b)(6) and within the meaning of any
supplemental regulations or interpretations of 12 C.F.R. 1805.201(b)(6) or such supplemental regulations
published by the Fund. For the avoidance of doubt, a CDFI Event shall not have occurred so long as at
least one Certified Entity satisfies the requirements set forth in clauses (i) through (viii) of the preceding
sentence, even if other Certified Entities fail to satisfy such requirements. Notwithstanding any other
provision hereof, as used in this definition, the terms “Affiliates,” “Financial Products,” “Development
Services,” “Target Market,” “Investment Areas,” and “Targeted Populations” have the meanings ascribed
to such terms in 12 C.F.R. 1805.104. A CDFI Event may be waived in writing by the holders of a
majority of the Designated Preferred Stock then outstanding.
(h)
“Certificate of Designations” means the Certificate of Designations or comparable
instrument relating to the Designated Preferred Stock, of which these Standard Provisions form a part, as
it may be amended from time to time.
(i)
“Certified Entity” means the Issuer or, if the Issuer itself has not been certified by the
Community Development Financial Institution Fund as a regulated community development financial
institution (“CDFI”), each Affiliate of the Issuer that has been certified by the CDFI and is specified on
Schedule A of that certain Letter Agreement by and between Issuer and the United States Department of
the Treasury.
(j)
“Charter” means the Issuer’s certificate or articles of incorporation, articles of
association, or similar organizational document.
(k)
“Dividend Period” has the meaning set forth in Section 3(a).
(l)
“Dividend Record Date” has the meaning set forth in Section 3(a).
(m)
“GAAP” means the generally accepted accounting principles in the United States.
(n)
“Issuer Subsidiary” means any subsidiary of the Issuer.
(o)
“Liquidation Preference” has the meaning set forth in Section 4(a).
(p)
first issued.
(q)
“Original Issue Date” means the date on which shares of Designated Preferred Stock are
“Preferred Director” has the meaning set forth in Section 7(b).
(r)
“Preferred Stock” means any and all series of preferred stock of the Issuer, including the
Designated Preferred Stock.
(s)
Reserved.
(t)
“Share Dilution Amount” means the increase in the number of diluted shares outstanding
(determined in accordance with GAAP, and as measured from the date of the Issuer’s most recent
consolidated financial statements prior to the Signing Date) resulting from the grant, vesting or exercise
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of equity-based compensation to employees and equitably adjusted for any stock split, stock dividend,
reverse stock split, reclassification or similar transaction.
(u)
“Standard Provisions” mean these Standard Provisions that form a part of the Certificate
of Designations relating to the Designated Preferred Stock.
(v)
“Voting Parity Stock” means, with regard to any matter as to which the holders of
Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these Standard
Provisions that form a part of the Certificate of Designations, any and all series of Parity Stock upon
which like voting rights have been conferred and are exercisable with respect to such matter.
Section 3. Dividends.
(a)
Rate. Holders of Designated Preferred Stock shall be entitled to receive, on each share of
Designated Preferred Stock if, as and when declared by the Board of Directors or any duly authorized
committee of the Board of Directors, but only out of assets legally available therefor, cumulative cash
dividends with respect to each Dividend Period (as defined below) at a rate per annum equal to the
Applicable Dividend Rate on (i) the Liquidation Amount per share of Designated Preferred Stock and (ii)
the amount of accrued and unpaid dividends for any prior Dividend Period on such share of Designated
Preferred Stock, if any. Such dividends shall begin to accrue and be cumulative from the Original Issue
Date, shall compound on each subsequent Dividend Payment Date (i.e., no dividends shall accrue on
other dividends unless and until the first Dividend Payment Date for such other dividends has passed
without such other dividends having been paid on such date) and shall be payable quarterly in arrears on
each Dividend Payment Date, commencing with the first such Dividend Payment Date to occur at least 20
calendar days after the Original Issue Date. In the event that any Dividend Payment Date would
otherwise fall on a day that is not a Business Day, the dividend payment due on that date will be
postponed to the next day that is a Business Day and no additional dividends will accrue as a result of that
postponement. The period from and including any Dividend Payment Date to but excluding the next
Dividend Payment Date is a “Dividend Period,” provided that the initial Dividend Period shall be the
period from and including the Original Issue Date to but excluding the next Dividend Payment Date.
Dividends that are payable on Designated Preferred Stock in respect of any Dividend Period shall
be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of
dividends payable on Designated Preferred Stock on any date prior to the end of a Dividend Period, and
for the initial Dividend Period, shall be computed on the basis of a 360-day year consisting of twelve
30-day months, and actual days elapsed over a 30-day month.
Dividends that are payable on Designated Preferred Stock on any Dividend Payment Date will be
payable to holders of record of Designated Preferred Stock as they appear on the stock register of the
Issuer on the applicable record date, which shall be the 15th calendar day immediately preceding such
Dividend Payment Date, or such other record date fixed by the Board of Directors or any duly authorized
committee of the Board of Directors that is not more than 60 nor less than 10 days prior to such Dividend
Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Date shall be a
Dividend Record Date whether or not such day is a Business Day.
Holders of Designated Preferred Stock shall not be entitled to any dividends, whether payable in
cash, securities or other property, other than dividends (if any) declared and payable on Designated
Preferred Stock as specified in this Section 3 (subject to the other provisions of the Certificate of
Designations).
Certificate of Designations Schedule A
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(b)
Priority of Dividends. So long as any share of Designated Preferred Stock remains
outstanding, no dividend or distribution shall be declared or paid on the Common Stock or any other
shares of Junior Stock (other than dividends payable solely in shares of Common Stock) or Parity Stock,
subject to Section 3(c) below and the immediately following paragraph in the case of Parity Stock, and no
Common Stock, Junior Stock or Parity Stock shall be, directly or indirectly, purchased, redeemed or
otherwise acquired for consideration by the Issuer or any of its subsidiaries unless all accrued and unpaid
dividends for all past Dividend Periods, including the latest completed Dividend Period (including, if
applicable as provided in Section 3(a) above, dividends on such amount), on all outstanding shares of
Designated Preferred Stock have been or are contemporaneously declared and paid in full (or have been
declared and a sum sufficient for the payment thereof has been set aside for the benefit of the holders of
shares of Designated Preferred Stock on the applicable record date).
When dividends are not paid (or declared and a sum sufficient for payment thereof set aside for
the benefit of the holders thereof on the applicable record date) on any Dividend Payment Date (or, in the
case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a
dividend payment date falling within a Dividend Period related to such Dividend Payment Date) in full
upon Designated Preferred Stock and any shares of Parity Stock, all dividends declared on Designated
Preferred Stock and all such Parity Stock and payable on such Dividend Payment Date (or, in the case of
Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment Date) shall be
declared pro rata so that the respective amounts of such dividends declared shall bear the same ratio to
each other as all accrued and unpaid dividends per share on the shares of Designated Preferred Stock
(including, if applicable as provided in Section 3(a) above, dividends on such amount) and all Parity
Stock payable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment
dates different from the Dividend Payment Dates, on a dividend payment date falling within the Dividend
Period related to such Dividend Payment Date) (subject to their having been declared by the Board of
Directors or a duly authorized committee of the Board of Directors out of legally available funds and
including, in the case of Parity Stock that bears cumulative dividends, all accrued but unpaid dividends)
bear to each other. If the Board of Directors or a duly authorized committee of the Board of Directors
determines not to pay any dividend or a full dividend on a Dividend Payment Date, the Issuer will provide
written notice to the holders of Designated Preferred Stock prior to such Dividend Payment Date.
Subject to the foregoing and Section 3(c) below, and not otherwise, such dividends (payable in
cash, securities or other property) as may be determined by the Board of Directors or any duly authorized
committee of the Board of Directors may be declared and paid on any securities, including Common
Stock and other Junior Stock, from time to time out of any funds legally available for such payment, and
holders of Designated Preferred Stock shall not be entitled to participate in any such dividends.
(c)
Restriction on Dividends. So long as any share of Designated Preferred Stock remains
outstanding, neither the Issuer nor any Issuer Subsidiary shall, declare or pay any dividend or make any
distribution on Common Stock, Junior Stock, Parity Stock or other capital stock or other equity securities
of any kind of the Issuer or any Issuer Subsidiary (other than (i) regular quarterly cash dividends of not
more than the amount of the last quarterly cash dividend per share declared or, if lower, announced to its
holders of Common Stock an intention to declare, on the Common Stock prior to November 17, 2008, as
adjusted for any stock split, stock dividend, reverse stock split, reclassification or similar transaction; (ii)
dividends payable solely in shares of Common Stock; (iii) regular dividends on shares of preferred stock
in accordance with the terms thereof and which are permitted under the terms of this Section 3; (iv)
dividends or distributions by any wholly-owned Issuer Subsidiary; (v) dividends or distributions by any
Issuer Subsidiary required pursuant to binding contractual agreements entered into prior to November 17,
2008; or (vi) in the case of pari passu Preferred Stock, dividends payable on a pro rata basis with
Designated Preferred Stock), unless all accrued and unpaid dividends for all past Dividend Periods,
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including the latest completed Dividend Period (including, if applicable as provided in Section 3(a)
above, dividends on such amount), on all outstanding shares of Designated Preferred Stock have been or
are contemporaneously declared and paid in full (or have been declared and a sum sufficient for the
payment thereof has been set aside for the benefit of the holders of shares of Designated Preferred Stock
on the applicable record date).
So long as any share of Designated Preferred Stock remains outstanding, neither the Issuer nor
any Issuer Subsidiary shall, (x) pay any per share dividend or distribution on Common Stock, Junior
Stock, Parity Stock or other capital stock or other equity securities of any kind of the Issuer at a rate that
is in excess of 100% of the aggregate per share dividends and distributions for the immediately prior
fiscal year (other than regular dividends on shares of preferred stock in accordance with the terms thereof
and which are permitted under the terms of this Section 3); provided that no increase in the aggregate
amount of dividends or distributions on Common Stock shall be permitted for any twelve (12) month
period, including, without limitation, as a result of any dividends or distributions paid in shares of
Common Stock, any stock split or any similar transaction or (y) pay aggregate dividends or distributions
on capital stock or other equity securities of any kind of any Issuer Subsidiary that is in excess of 100% of
the aggregate dividends and distributions paid for the immediately prior fiscal year (other than in the case
of this clause (y), (1) regular dividends on shares of preferred stock in accordance with the terms thereof
and which are permitted under the terms of this Section 3, (2) dividends or distributions by any whollyowned Issuer Subsidiary, (3) dividends or distributions by any Issuer Subsidiary required pursuant to
binding contractual agreements entered into prior to November 17, 2008 or (4) dividends or distributions
on newly issued shares of capital stock for cash or other property).
Section 4. Liquidation Rights.
(a)
Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or
winding up of the affairs of the Issuer, whether voluntary or involuntary, holders of Designated Preferred
Stock shall be entitled to receive for each share of Designated Preferred Stock, out of the assets of the
Issuer or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the
Issuer, subject to the rights of any creditors of the Issuer, before any distribution of such assets or
proceeds is made to or set aside for the holders of Common Stock and any other stock of the Issuer
ranking junior to Designated Preferred Stock as to such distribution, payment in full in an amount equal
to the sum of (i) the Liquidation Amount per share and (ii) the amount of any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount), whether
or not declared, to the date of payment (such amounts collectively, the “Liquidation Preference”).
(b)
Partial Payment. If in any distribution described in Section 4(a) above the assets of the
Issuer or proceeds thereof are not sufficient to pay in full the amounts payable with respect to all
outstanding shares of Designated Preferred Stock and the corresponding amounts payable with respect of
any other stock of the Issuer ranking equally with Designated Preferred Stock as to such distribution,
holders of Designated Preferred Stock and the holders of such other stock shall share ratably in any such
distribution in proportion to the full respective distributions to which they are entitled.
(c)
Residual Distributions. If the Liquidation Preference has been paid in full to all holders
of Designated Preferred Stock and the corresponding amounts payable with respect of any other stock of
the Issuer ranking equally with Designated Preferred Stock as to such distribution has been paid in full,
the holders of other stock of the Issuer shall be entitled to receive all remaining assets of the Issuer (or
proceeds thereof) according to their respective rights and preferences.
(d)
Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this
Section 4, the merger or consolidation of the Issuer with any other corporation or other entity, including a
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merger or consolidation in which the holders of Designated Preferred Stock receive cash, securities or
other property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all
or substantially all of the assets of the Issuer, shall not constitute a liquidation, dissolution or winding up
of the Issuer.
Section 5. Redemption.
(a)
Optional Redemption. The Issuer, at its option, subject to the approval of the
Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time and from time to time,
out of funds legally available therefor, the shares of Designated Preferred Stock at the time outstanding,
upon notice given as provided in Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) any accrued and unpaid dividends (including, if applicable as
provided in Section 3(a) above, dividends on such amount) (regardless of whether any dividends are
actually declared) to, but excluding, the date fixed for redemption.
The redemption price for any shares of Designated Preferred Stock shall be payable on the
redemption date to the holder of such shares against surrender of the certificate(s) evidencing such shares
to the Issuer or its agent. Any declared but unpaid dividends payable on a redemption date that occurs
subsequent to the Dividend Record Date for a Dividend Period shall not be paid to the holder entitled to
receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the
redeemed shares on such Dividend Record Date relating to the Dividend Payment Date as provided in
Section 3 above.
(b)
No Sinking Fund. The Designated Preferred Stock will not be subject to any mandatory
redemption, sinking fund or other similar provisions. Holders of Designated Preferred Stock will have no
right to require redemption or repurchase of any shares of Designated Preferred Stock.
(c)
Notice of Redemption. Notice of every redemption of shares of Designated Preferred
Stock shall be given by first class mail, postage prepaid, addressed to the holders of record of the shares
to be redeemed at their respective last addresses appearing on the books of the Issuer. Such mailing shall
be at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as
provided in this Subsection shall be conclusively presumed to have been duly given, whether or not the
holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in
the mailing thereof, to any holder of shares of Designated Preferred Stock designated for redemption shall
not affect the validity of the proceedings for the redemption of any other shares of Designated Preferred
Stock. Notwithstanding the foregoing, if shares of Designated Preferred Stock are issued in book-entry
form through The Depository Trust Company or any other similar facility, notice of redemption may be
given to the holders of Designated Preferred Stock at such time and in any manner permitted by such
facility. Each notice of redemption given to a holder shall state: (1) the redemption date; (2) the number
of shares of Designated Preferred Stock to be redeemed and, if less than all the shares held by such holder
are to be redeemed, the number of such shares to be redeemed from such holder; (3) the redemption price;
and (4) the place or places where certificates for such shares are to be surrendered for payment of the
redemption price.
(d)
Partial Redemption. In case of any redemption of part of the shares of Designated
Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro rata or in
such other manner as the Board of Directors or a duly authorized committee thereof may determine to be
fair and equitable. Subject to the provisions hereof, the Board of Directors or a duly authorized
committee thereof shall have full power and authority to prescribe the terms and conditions upon which
shares of Designated Preferred Stock shall be redeemed from time to time. If fewer than all the shares
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represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed
shares without charge to the holder thereof.
(e)
Effectiveness of Redemption. If notice of redemption has been duly given and if on or
before the redemption date specified in the notice all funds necessary for the redemption have been
deposited by the Issuer, in trust for the pro rata benefit of the holders of the shares called for redemption,
with a bank or trust company doing business in the Borough of Manhattan, The City of New York, and
having a capital and surplus of at least $500 million and selected by the Board of Directors, so as to be
and continue to be available solely therefor, then, notwithstanding that any certificate for any share so
called for redemption has not been surrendered for cancellation, on and after the redemption date
dividends shall cease to accrue on all shares so called for redemption, all shares so called for redemption
shall no longer be deemed outstanding 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 amount
payable on such redemption from such bank or trust company, without interest. Any funds unclaimed at
the end of three years from the redemption date shall, to the extent permitted by law, be released to the
Issuer, after which time the holders of the shares so called for redemption shall look only to the Issuer for
payment of the redemption price of such shares.
(f)
Status of Redeemed Shares. Shares of Designated Preferred Stock that are redeemed,
repurchased or otherwise acquired by the Issuer shall revert to authorized but unissued shares of Preferred
Stock (provided that any such cancelled shares of Designated Preferred Stock may be reissued only as
shares of any series of Preferred Stock other than Designated Preferred Stock).
Section 6. Conversion. Holders of Designated Preferred Stock shares shall have no right to
exchange or convert such shares into any other securities.
Section 7. Voting Rights.
(a)
General. The holders of Designated Preferred Stock shall not have any voting rights
except as set forth below or as otherwise from time to time required by law.
(b)
Preferred Stock Directors. Whenever, at any time or times, dividends payable on the
shares of Designated Preferred Stock have not been paid for an aggregate of eight quarterly Dividend
Periods or more, whether or not consecutive, the authorized number of directors of the Issuer shall
automatically be increased by two and the holders of the Designated Preferred Stock shall have the right,
with holders of shares of any one or more other classes or series of Voting Parity Stock outstanding at the
time, voting together as a class, to elect two directors (hereinafter the “Preferred Directors” and each a
“Preferred Director”) to fill such newly created directorships at the Issuer’s next annual meeting of
stockholders (or at a special meeting called for that purpose prior to such next annual meeting) and at
each subsequent annual meeting of stockholders until dividends payable on all outstanding shares of
Designated Preferred Stock have been declared and paid in full for four consecutive quarterly Dividend
Period (and which shall include all accrued and unpaid dividends for all past Dividend Periods, including
the latest completed Dividend Period (including, if applicable as provided in Section 3(a) above,
dividends on such amount)), at which time such right shall terminate with respect to the Designated
Preferred Stock, except as herein or by law expressly provided, subject to revesting in the event of each
and every subsequent default of the character above mentioned; provided that it shall be a qualification
for election for any Preferred Director that the election of such Preferred Director shall not cause the
Issuer to violate any corporate governance requirements of any securities exchange or other trading
facility on which securities of the Issuer may then be listed or traded that listed or traded companies must
have a majority of independent directors. Upon any termination of the right of the holders of shares of
Designated Preferred Stock and Voting Parity Stock as a class to vote for directors as provided above, the
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Preferred Directors shall cease to be qualified as directors, the term of office of all Preferred Directors
then in office shall terminate immediately and the authorized number of directors shall be reduced by the
number of Preferred Directors elected pursuant hereto. Any Preferred Director may be removed at any
time, with or without cause, and any vacancy created thereby may be filled, only by the affirmative vote
of the holders a majority of the shares of Designated Preferred Stock at the time outstanding voting
separately as a class together with the holders of shares of Voting Parity Stock, to the extent the voting
rights of such holders described above are then exercisable. If the office of any Preferred Director
becomes vacant for any reason other than removal from office as aforesaid, the remaining Preferred
Director may choose a successor who shall hold office for the unexpired term in respect of which such
vacancy occurred.
(c)
Class Voting Rights as to Particular Matters. So long as any shares of Designated
Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required by law
or by the Charter, the vote or consent of the holders of at least 66 2/3% of the shares of Designated
Preferred Stock at the time outstanding, voting as a separate class, given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for
effecting or validating:
(i)
Authorization of Senior Stock. Any amendment or alteration of the Certificate of
Designations for the Designated Preferred Stock or the Charter to authorize or create or increase
the authorized amount of, or any issuance of, any shares of, or any securities convertible into or
exchangeable or exercisable for shares of, any class or series of capital stock of the Issuer ranking
senior to Designated Preferred Stock with respect to either or both the payment of dividends
and/or the distribution of assets on any liquidation, dissolution or winding up of the Issuer;
(ii)
Amendment of Designated Preferred Stock. Any amendment, alteration or repeal
of any provision of the Certificate of Designations for the Designated Preferred Stock or the
Charter (including, unless no vote on such merger or consolidation is required by Section 7(c)(iii)
below, any amendment, alteration or repeal by means of a merger, consolidation or otherwise) so
as to adversely affect the rights, preferences, privileges or voting powers of the Designated
Preferred Stock; or
(iii)
Share Exchanges, Reclassifications, Mergers and Consolidations.
Any
consummation of a binding share exchange or reclassification involving the Designated Preferred
Stock, or of a merger or consolidation of the Issuer with another corporation or other entity,
unless in each case (x) the shares of Designated Preferred Stock remain outstanding or, in the
case of any such merger or consolidation with respect to which the Issuer is not the surviving or
resulting entity, are converted into or exchanged for preference securities of the surviving or
resulting entity or its ultimate parent, and (y) such shares remaining outstanding or such
preference securities, as the case may be, have such rights, preferences, privileges and voting
powers, and limitations and restrictions thereof, taken as a whole, as are not materially less
favorable to the holders thereof than the rights, preferences, privileges and voting powers, and
limitations and restrictions thereof, of Designated Preferred Stock immediately prior to such
consummation, taken as a whole;
provided, however, that for all purposes of this Section 7(c), any increase in the amount of the
authorized Preferred Stock, including any increase in the authorized amount of Designated Preferred
Stock necessary to satisfy preemptive or similar rights granted by the Issuer to other persons prior to the
Signing Date, or the creation and issuance, or an increase in the authorized or issued amount, whether
pursuant to preemptive or similar rights or otherwise, of any other series of Preferred Stock, or any
securities convertible into or exchangeable or exercisable for any other series of Preferred Stock, ranking
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equally with and/or junior to Designated Preferred Stock with respect to the payment of dividends
(whether such dividends are cumulative or non-cumulative) and the distribution of assets upon
liquidation, dissolution or winding up of the Issuer will not be deemed to adversely affect the rights,
preferences, privileges or voting powers, and shall not require the affirmative vote or consent of, the
holders of outstanding shares of the Designated Preferred Stock.
(d)
Changes after Provision for Redemption. No vote or consent of the holders of
Designated Preferred Stock shall be required pursuant to Section 7(c) above if, at or prior to the time
when any such vote or consent would otherwise be required pursuant to such Section, all outstanding
shares of the Designated Preferred Stock shall have been redeemed, or shall have been called for
redemption upon proper notice and sufficient funds shall have been deposited in trust for such
redemption, in each case pursuant to Section 5 above.
(e)
Procedures for Voting and Consents. The rules and procedures for calling and
conducting any meeting of the holders of Designated Preferred Stock (including, without limitation, the
fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the
obtaining of written consents and any other aspect or matter with regard to such a meeting or such
consents shall be governed by any rules of the Board of Directors or any duly authorized committee of the
Board of Directors, in its discretion, may adopt from time to time, which rules and procedures shall
conform to the requirements of the Charter, the Bylaws, and applicable law and the rules of any national
securities exchange or other trading facility on which Designated Preferred Stock is listed or traded at the
time.
Section 8. Restriction on Repurchases. So long as any share of Designated Preferred Stock
remains outstanding, neither the Issuer nor any Issuer Subsidiary shall, redeem, purchase or acquire any
shares of Common Stock, Junior Stock, Parity Stock or other capital stock or other equity securities of
any kind of the Issuer or any Issuer Subsidiary, or any trust preferred securities issued by the Issuer or any
Affiliate of the Issuer, (other than (i) redemptions, purchases, repurchases or other acquisitions of the
Designated Preferred Stock and (ii) repurchases of Junior Stock or Common Stock in connection with the
administration of any employee benefit plan in the ordinary course of business (including purchases to
offset any Share Dilution Amount pursuant to a publicly announced repurchase plan) and consistent with
past practice; provided that any purchases to offset the Share Dilution Amount shall in no event exceed
the Share Dilution Amount, (iii) the acquisition by the Issuer or any of the Issuer Subsidiaries of record
ownership in Junior Stock or Parity Stock for the beneficial ownership of any other persons (other than
the Issuer or any other Issuer Subsidiary), including as trustees or custodians, (iv) the exchange or
conversion of Junior Stock for or into other Junior Stock or of Parity Stock or trust preferred securities for
or into other Parity Stock (with the same or lesser aggregate liquidation amount) or Junior Stock, in each
case set forth in this clause (iv), solely to the extent required pursuant to binding contractual agreements
entered into prior to the Signing Date or any subsequent agreement for the accelerated exercise,
settlement or exchange thereof for Common Stock, (v) redemptions of securities held by the Issuer or any
wholly-owned Issuer Subsidiary or (vi) redemptions, purchases or other acquisitions of capital stock or
other equity securities of any kind of any Issuer Subsidiary required pursuant to binding contractual
agreements entered into prior to November 17, 2008, unless all accrued and unpaid dividends for all past
Dividend Periods, including the latest completed Dividend Period (including, if applicable as provided in
Section 3(a) above, dividends on such amount), on all outstanding shares of Designated Preferred Stock
have been or are contemporaneously declared and paid in full (or have been declared and a sum sufficient
for the payment thereof has been set aside for the benefit of the holders of shares of Designated Preferred
Stock on the applicable record date).
Section 9. Record Holders. To the fullest extent permitted by applicable law, the Issuer and the
transfer agent for Designated Preferred Stock may deem and treat the record holder of any share of
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Designated Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Issuer
nor such transfer agent shall be affected by any notice to the contrary.
Section 10. Notices. All notices or communications in respect of Designated Preferred Stock
shall be sufficiently given if given in writing and delivered in person or by first class mail, postage
prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the
Charter or Bylaws or by applicable law. Notwithstanding the foregoing, if shares of Designated Preferred
Stock are issued in book-entry form through The Depository Trust Company or any similar facility, such
notices may be given to the holders of Designated Preferred Stock in any manner permitted by such
facility.
Section 11. No Preemptive Rights. No share of Designated Preferred Stock shall have any rights
of preemption whatsoever as to any securities of the Issuer, or any warrants, rights or options issued or
granted with respect thereto, regardless of how such securities, or such warrants, rights or options, may be
designated, issued or granted.
Section 12. Replacement Certificates. The Issuer shall replace any mutilated certificate at the
holder’s expense upon surrender of that certificate to the Issuer. The Issuer shall replace certificates that
become destroyed, stolen or lost at the holder’s expense upon delivery to the Issuer of reasonably
satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity
that may be reasonably required by the Issuer.
Section 13. Other Rights. The shares of Designated Preferred Stock shall not have any rights,
preferences, privileges or voting powers or relative, participating, optional or other special rights, or
qualifications, limitations or restrictions thereof, other than as set forth herein or in the Charter or as
provided by applicable law.
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@FedFRASER