Exhibit 10.9

October 7, 2016

Pollos Investment L.P.

c/o Primavera Capital Limited

28th Floor, 28 Hennessy Road

Hong Kong

Attention: Ena Leung

 

API (Hong Kong) Investment Limited

c/o Zhejiang Ant Small and Micro Financial Services Group Co., Ltd.

Block B, Dragon Times Plaza, 18 Wantang Road, Xihu District

Hangzhou, China 310099

Attention: Jason Zhu

 

Re:Letter Agreement

 

Ladies and Gentlemen:

 

Reference is made to that certain (i) Investment Agreement, dated as of
September 1, 2016 (the “PV Investment Agreement”), among Yum! Brands, Inc.
(“Parent”), Yum China Holdings, Inc. (the “Company”) and Pollos Investment L.P.
(“PV”) and (ii) Investment Agreement, dated as of September 1, 2016 (the “AF
Investment Agreement” and together with the PV Investment Agreement, the
“Investment Agreements”), among Parent, the Company and API (Hong Kong)
Investment Limited (“AF” and together with PV, the “Investors”).

 

This letter agreement (the “Letter Agreement”) constitutes Investors’ prior
written consent under Section 4.1(b) of each Investment Agreement with respect
to the Certificate Amendment and Bylaws Amendment (each, as defined below) as
well as sets forth the agreement between the Investors, Parent and the Company
with respect to an amendment to the Form of Shareholders Agreement attached as
Exhibit H to each Investment Agreement. Capitalized terms used in this letter
but not defined herein shall have the meanings set forth in the Investment
Agreements.

 

The Investors, Parent and the Company hereby agree as follows:

 

1. Investor Consent Under Section 4.1(b).  Pursuant to Section 9.2 of the
Investment Agreements, each Investor hereby consents to and otherwise waives the
requirements of Section 4.1(b)(i) and, solely in the case of clause (i) of this
sentence, Section 4.1(b)(iii), of the Investment Agreements, in each case,
solely to the extent required to permit (i) the Company’s adoption of the
Amended and Restated Certificate of Incorporation of the Company in the form
attached hereto as Exhibit A (the “Certificate Amendment”) and related adoption
of the stockholder rights plan and (ii) the Company’s adoption of the amendments
set forth on Exhibit B hereto to the Company’s bylaws in effect as of the date
hereof (the “Bylaws Amendment”); provided that nothing contained herein shall in
any way alter or otherwise affect the Company’s obligations with respect to the
approval and adoption of the Amended and Restated Bylaws under Section 5.3 of
the Investment Agreements.

 

 

 

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2. Amendment to Form of Shareholders Agreement. Section 1.1(a) of the Form of
Shareholders Agreement is hereby amended and restated in its entirety to read as
follows:

 

(a) As of one (1) Business Day after the date hereof, the board of directors of
the Company (the “Board”) shall consist of eleven (11) directors designated by
Parent, one (1) of which shall be Dr. Fred Hu (“FH”), who shall be appointed as
the Company’s initial Chairman; provided, that, and notwithstanding anything
contained in this Section 1.1 to the contrary, if FH is unable to serve due to
death, disability or incapacity as of such time of appointment, PV shall be
entitled to designate another Person to serve as the Investor Designee and a
director (who need not be the Chairman) of the Company effective as of one
Business Day after the Effective Time, in which event the Board shall consist of
eleven (11) directors or twelve (12) directors, as determined in the Board’s
discretion. FH and any other Investor Designee (as defined below) shall, at the
time of his or her appointment to the Board, execute and deliver to the Company
an irrevocable conditional letter of resignation in the form attached hereto as
Exhibit A (the “Resignation Letter”).

 

3. Miscellaneous.

 

 

a.

Except as expressly set forth in Section 1 hereof, the Investment Agreements
remain in full force and effect in accordance with their terms.  This Letter
Agreement shall take immediate effect.  This Letter Agreement is limited
specifically to the matters set forth above and does not constitute directly or
by implication a consent, amendment or waiver of any other provision of the
Investment Agreements or any default which may occur or may have occurred under
the Investment Agreements.

 

 

b.

Each party hereto represents and warrants to the other party that it has the
corporate power and authority to execute and deliver this Letter Agreement and
to carry out the terms and provisions of this Letter Agreement and the
Investment Agreements as amended hereby.

 

 

c.

The parties hereto acknowledge and confirm that all references in the Investment
Agreements to “this Agreement” shall be deemed to include the Investment
Agreements as amended by this Letter Agreement.

 

 

d.

This Letter Agreement may not be amended except by an instrument in writing
signed on behalf of all of the parties hereto.

 

 

e.

This Letter Agreement may be executed in any number of counterparts, each of
which will be deemed to be an original copy of this Letter Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement. The exchange of copies of this Letter Agreement and of signature
pages by facsimile or electronic mail transmission shall constitute effective
execution and delivery of this Letter Agreement as to the parties and may be
used in lieu of the original Letter Agreement for all purposes. Signatures of
the parties transmitted by facsimile or electronic mail shall be deemed to be
their original signatures for all purposes.

 

 

f.

This Letter Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware (without giving effect to any choice of law
principles thereof that would cause the application of the laws of another
jurisdiction).

 

[Remainder of this page intentionally left blank]

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Letter Agreement to be
executed by their respective officers hereunto duly authorized as of the date
first above written.

 

POLLOS INVESTMENT L.P.

 

 

By: Pollos Investment GP Ltd., general partner

 

 

By:

/s/ Michael Collins

Name:

Michael Collins

Title:

Director

 

 

API (HONG KONG) INVESTMENT LIMITED

 

 

By:

 

Name:

 

Title:

 

 

 

YUM CHINA HOLDINGS, INC.

 

 

By:

 

Name:

 

Title:

 

 

 

YUM! BRANDS, INC.

 

 

By:

 

Name:

 

Title:

 

 

[Signature Page to Letter Agreement]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Letter Agreement to be
executed by their respective officers hereunto duly authorized as of the date
first above written.

 

POLLOS INVESTMENT L.P.

 

 

By: Pollos Investment GP Ltd., general partner

 

 

By:

 

Name:

 

Title:

 

 

 

API (HONG KONG) INVESTMENT LIMITED

 

 

By:

/s/ Leiming Chen

Name:

Leiming Chen

Title:

Authorized Signatory

 

 

YUM CHINA HOLDINGS, INC.

 

 

By:

 

Name:

 

Title:

 

 

 

YUM! BRANDS, INC.

 

 

By:

 

Name:

 

Title:

 

 

[Signature Page to Letter Agreement]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Letter Agreement to be
executed by their respective officers hereunto duly authorized as of the date
first above written.

 

POLLOS INVESTMENT L.P.

 

 

By: Pollos Investment GP Ltd., general partner

 

 

By:

 

Name:

 

Title:

 

 

 

API (HONG KONG) INVESTMENT LIMITED

 

 

By:

 

Name:

 

Title:

 

 

 

YUM CHINA HOLDINGS, INC.

 

 

By:

/s/ Micky Pant

Name:

Micky Pant

Title:

CEO

 

 

YUM! BRANDS, INC.

 

 

By:

/s/ Scott Catlett

Name:

Scott Catlett

Title:

Vice President and Deputy General Counsel

 

 

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EXHIBIT A

 

 

[Attached]

 

 

 

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AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

YUM CHINA HOLDINGS, INC.

 

Yum China Holdings, Inc., a corporation organized and existing under the laws of
the State of Delaware (the “Corporation”), pursuant to Sections 242 and 245 of
the General Corporation Law of the State of Delaware, as the same may be amended
(the “DGCL”), hereby certifies as follows:

 

1. The name of the Corporation is Yum China Holdings, Inc. The Corporation was
originally formed as Yum! China Holding, Inc. by filing a Certificate of
Incorporation with the Secretary of State of the State of Delaware on April 1,
2016. On June 30, 2016, the Corporation filed a Certificate of Amendment with
the Secretary of State of the State of Delaware, which amended the Certificate
of Incorporation by changing the name of the Corporation to Yum China Holdings,
Inc.

 

2. This Amended and Restated Certificate of Incorporation was duly adopted in
accordance with the provisions of Sections 242 and 245 of the DGCL and by the
written consent of its stockholders in accordance with Section 228 of the DGCL.

 

3. This Amended and Restated Certificate of Incorporation amends and restates,
in its entirety, the original Certificate of Incorporation, as amended.

 

4. Effective as of 12:01 p.m. Eastern time on October 31, 2016, the text of the
original Certificate of Incorporation, as amended, is amended and restated to
read in its entirety as follows:

 

FIRST:  The name of the corporation is Yum China Holdings, Inc.

 

SECOND: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the DGCL.

 

THIRD: The number of shares of stock which the Corporation shall have authority
to issue 1,100,000,000 shares, par value $0.01 per share, of which 1,000,000,000
shares shall be Common Stock, and of which 100,000,000 shares shall be Preferred
Stock, with the following powers, preferences and rights, and qualifications,
limitations and restrictions.

 

(a) Except as otherwise provided by law, each share of Common Stock shall have
one vote, and, except as otherwise provided in respect of any series of
Preferred Stock hereafter issued, the exclusive voting power for all purposes
shall be vested in the holders of the Common Stock. In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, the holders of the Common Stock shall be entitled, after payment or
provision for payment of the debts and other liabilities of the Corporation and
the amount to which the holders of any series of Preferred Stock hereafter
issued having a preference on distribution in the liquidation, dissolution or
winding up of the Corporation shall be entitled, to share ratably in the
remaining net assets of the Corporation.

 

(b) Preferred Stock may be issued in one or more series, from time to time, with
each such series to consist of such number of shares and to have such voting
powers relative to other classes or series of Preferred Stock, if any, or Common
Stock, full or limited or no voting powers, and such designations, preferences
and relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, as shall be stated in the
resolution or resolutions and certificate of designation providing for the
issuance of such series adopted by the board of directors of the Corporation
(the “Board of Directors”), and the Board of Directors is hereby expressly
vested with the authority, to the fullest extent now or hereafter permitted by
applicable law, to adopt any such resolution or resolutions.

 

 

 

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(c) The Board of Directors has created a series of 10,000,000 shares of
Preferred Stock designated as “Series A Junior Participating Preferred Stock” by
filing a Certificate of Designations of the Corporation with the Secretary of
State of the State of Delaware, and the voting powers, designations, preferences
and relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of the Series A Junior
Participating Preferred Stock are set forth in Appendix A hereto and are
incorporated herein by reference.

 

FOURTH: The address of the registered office of the Corporation in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801, New Castle County.  The name of the Corporation’s registered agent is The
Corporation Trust Company. The Corporation may have such other offices, either
within or without the State of Delaware, as the Board of Directors may designate
or as the business of the Corporation may from time to time require.

 

FIFTH: No holder of any share of capital stock of the Corporation, whether now
or hereafter authorized, shall have any preemptive right to subscribe for or to
purchase any shares of capital stock or other securities of the Corporation, nor
have any right to cumulate such holder’s votes for the election of Directors (as
defined below). Any action required or permitted to be taken by the stockholders
of the Corporation (the “Stockholders”) must be effected at a duly called annual
or special meeting of the Stockholders and may not be effected by any consent in
writing in lieu of a meeting.

 

SIXTH: The term of existence of the Corporation shall be perpetual.

 

SEVENTH: The following provisions are intended for the management of the
business and for the regulation of the affairs of the Corporation, and it is
expressly provided that the same are intended to be in furtherance and not in
limitation of the powers conferred by statute:

 

(a) The business and affairs of the Corporation shall be managed by or under the
direction of the Board of Directors.  In addition to the powers and authorities
by this Amended and Restated Certificate of Incorporation expressly conferred
upon it, the Board of Directors may exercise all such powers of the Corporation
and do all such lawful acts and things as are not by statute or by this Amended
and Restated Certificate of Incorporation or by the bylaws of the Corporation
(as amended from time to time in accordance with the provisions thereof, the
“Bylaws”) required to be exclusively exercised or done by the Stockholders.

 

(b) Special meetings of the Stockholders may be called exclusively: (i) by the
Board of Directors; or (ii) by the Chairman of the Board of Directors, the
Corporation’s Chief Executive Officer or the Corporation’s Secretary, in each
case with the concurrence of a majority of the Board of Directors.  Special
meetings of Stockholders shall be held at such places and times as determined by
the Board of Directors in its discretion. Advance notice of stockholder
nominations for the election of Directors and of business to be brought before
any meeting of the Stockholders shall be given in the manner provided in the
Bylaws.

 

(c) The number of directors of the Corporation (“Directors”) constituting the
Board of Directors shall not be less than three nor more than fifteen. Within
such limit, the number of members of the entire Board of Directors shall be
fixed from time to time exclusively by the Board of Directors, subject to the
rights of holders of any series of Preferred Stock with respect to the election
of Directors, if any. During any period when the holders of any series of
Preferred Stock have the right to elect additional Directors as provided for or
fixed pursuant to the provisions of Article Third above, then upon commencement
and for the duration of the period during which such right continues, the then
otherwise total authorized number of Directors shall automatically be increased
by such specified number of Directors and the holders of such Preferred Stock
shall be entitled to elect the additional Directors so provided for or fixed
pursuant to such provisions.

 

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(d) Prior to the third annual meeting of Stockholders, the Board of Directors
shall be classified into three classes: Class I; Class II; and Class III. Each
class shall consist, as nearly as possible, of one-third of the total number of
Directors constituting the entire Board of Directors and the allocation
(including the initial allocation) of Directors among the three classes shall be
determined by the Board of Directors. The initial Class I Directors shall serve
for a term expiring at the first annual meeting of Stockholders following
October 31, 2016; the initial Class II Directors shall serve for a term expiring
at the second annual meeting of Stockholders following October 31, 2016; and the
initial Class III Directors shall serve for a term expiring at the third annual
meeting of Stockholders following October 31, 2016. Directors elected to replace
initial Class I and Class II Directors shall serve terms expiring at the third
annual meeting of Stockholders following October 31, 2016. Each Director in each
class shall hold office until his or her successor is duly elected and qualified
or until his or her earlier death, resignation or removal. If the number of
Directors is changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of Directors in each class as nearly equal
as possible.

 

(e) From and including the third annual meeting of Stockholders, each Director
shall be elected to serve a term of one year, with each Director’s term to
expire at the annual meeting next following the Director’s
election.  Notwithstanding the expiration of the term of a Director, the
Director shall continue to hold office until a successor shall be elected and
qualified or until his or her earlier death, resignation or removal.

 

(f) Directors may be removed:  (i) prior to the third annual meeting of
Stockholders, only for cause by the affirmative vote of a majority of the voting
power of outstanding Common Stock; and (ii) from and including the third annual
meeting of Stockholders, with or without cause by the affirmative vote of a
majority of the voting power of outstanding Common Stock.

 

(g) A vacancy occurring on the Board of Directors, including, without
limitation, a vacancy resulting from an increase in the number of Directors or
from the failure by Stockholders to elect the full authorized number of
Directors, may only be filled by a majority of the remaining Directors or by the
sole remaining Director in office. In the event of the death, resignation or
removal of a Director during his or her elected term of office, his or her
successor shall serve for the remainder of the full term of the directorship in
which the vacancy occurred and until a successor is elected and qualified or
until his or her earlier death, resignation or removal.

 

(h) The Board of Directors is expressly authorized to adopt, amend or repeal the
Bylaws, in whole or in part, without any action on the part of the Stockholders;

 

(i) The Corporation shall have the right, subject to any express provisions or
restrictions herein or in the Bylaws, from time to time, to amend, alter or
repeal any provision of this Amended and Restated Certificate of Incorporation
in any manner now or hereafter provided by law.

 

(j) The Board of Directors may create and make appointments to one or more
committees of the Board of Directors comprised exclusively of Directors who will
serve at the pleasure of the Board of Directors and who may have and exercise
such powers of the Board of Directors in directing the management of the
business and affairs of the Corporation as the Board of Directors may delegate,
in its sole discretion, consistent with the provisions of the DGCL and this
Amended and Restated Certificate of Incorporation.

 

(k) Unless and except to the extent the Bylaws so require, the election of
Directors need not be by written ballot.

 

EIGHTH:

 

(a) A Director shall not be personally liable to the Corporation or the
Stockholders for monetary damages for breach of fiduciary duty as a Director,
except to the extent such exemption from liability or limitation thereof is not
permitted under the DGCL as the same exists or may hereafter be amended.

 

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(b) Each Director and officer of the Corporation who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a “proceeding”), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a Director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including, without limitation, service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or agent
or in any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the DGCL, as the same exists or may hereafter be amended
(but, in the case of any such amendment, to the fullest extent permitted by law,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than said law permitted the Corporation to
provide prior to such amendment), against all expense, liability and loss
(including, without limitation, attorneys’ fees, judgments, fines, amounts paid
or to be paid in settlement, and excise taxes or penalties arising under the
Employee Retirement Income Security Act of 1974, as the same may be amended)
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that, except as provided in
paragraph (c) of this Article, the Corporation shall indemnify any such person
seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors. The right to indemnification conferred in
this Article Eighth shall be a contract right and shall include the right to be
paid by the Corporation the expenses incurred in defending any such proceeding
in advance of its final disposition; provided, however, that, if the DGCL
requires, the payment of such expenses incurred by a Director or officer in his
or her capacity as a Director or officer in advance of the final disposition of
a proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such Director or officer, to repay all amounts
so advanced if it shall ultimately be determined that such Director or officer
is not entitled to be indemnified under this Article Eighth or otherwise.  The
Corporation may, by action of the Board of Directors, provide indemnification to
employees and agents of the Corporation or another corporation, partnership,
joint venture, trust or other enterprise with the same scope and effect as the
foregoing indemnification of Directors and officers.

 

(c) If a claim under paragraph (b) of this Article is not paid in full by the
Corporation within thirty days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the DGCL for
the Corporation to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including, without limitation, its Board of Directors, independent
legal counsel, or the Stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the DGCL, nor an actual determination by the Corporation
(including, without limitation, its Board of Directors, independent legal
counsel, or the Stockholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.

 

(d) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Article Eighth shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of this Amended and
Restated Certificate of Incorporation, bylaw, agreement, vote of Stockholders or
disinterested Directors or otherwise.

 

(e) The Corporation may maintain insurance, at its expense, to protect itself
and any Director, officer, employee or agent of the Corporation or any director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any such expense, liability or loss, whether
or not the Corporation would have the power to indemnify such person against
such expense, liability or loss under the DGCL.

 

(f) Any amendment, repeal or modification of any provision of this Article
Eighth shall, unless otherwise required by law, be prospective only (except to
the extent such amendment, repeal or modification permits the Corporation to
further limit or eliminate the liability of Directors or officers) and shall not
adversely affect any right or protection of any current or former Director or
officer of the Corporation existing hereunder at the time of such amendment,
repeal or modification with respect to any act or omission occurring prior to
such amendment, repeal or modification.

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NINTH: Unless the Corporation consents in writing to the selection of an
alternative forum, the sole and exclusive forum for (a) any derivative action or
proceeding brought or purporting to be brought on behalf of the Corporation, (b)
any action asserting a claim for or based on a breach of a fiduciary duty owed
by any current or former Director, officer, employee or agent of the Corporation
to the Corporation or to the Stockholders, including, without limitation, a
claim alleging the aiding and abetting of such a breach of fiduciary duty, (c)
any action asserting a claim against the Corporation or any current or former
Director, officer, employee or agent of the Corporation arising pursuant to any
provision of the DGCL, this Amended and Restated Certificate of Incorporation or
the Bylaws (as either may be amended from time to time), (d) any action
asserting a claim related to or involving the Corporation that is governed by
the internal affairs doctrine, or (e) any action asserting an “internal
corporate claim” as that term is defined in Section 115 of the DGCL, shall be a
state court located within the State of Delaware (or, if no state court located
within the State of Delaware has jurisdiction, the federal court for the
District of Delaware).

 

TENTH: If any provision or provisions of this Amended and Restated Certificate
of Incorporation shall be held to be invalid, illegal or unenforceable as
applied to any circumstance for any reason whatsoever, the validity, legality
and enforceability of such provision in any other circumstance and of the
remaining provisions of this Amended and Restated Certificate of Incorporation
shall not in any way be affected or impaired thereby.

 

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IN WITNESS WHEREOF, the Corporation has duly executed this Amended and Restated
Certificate of Incorporation as of the ____ day of ________, 2016.

 

YUM CHINA HOLDINGS, INC.

 

By:

 

 

Name:

 

Title:

 

 

 

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APPENDIX A

 

CERTIFICATE OF DESIGNATIONS

of

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

of

YUM CHINA HOLDINGS, INC.

 

(Pursuant to Section 151 of the

Delaware General Corporation Law)

 

Yum China Holdings, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (hereinafter called the “Corporation”),
hereby certifies that the following resolution was adopted by a duly authorized
Committee of the Board of Directors of the Corporation as required by Section
151 of the General Corporation Law by written consent in lieu of a meeting:

 

RESOLVED, that pursuant to the authority granted to and vested in the Board of
Directors of this Corporation (hereinafter called the “Board of Directors” or
the “Board”) in accordance with the provisions of the Certificate of
Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $0.01 per share, of the Corporation (the “Preferred Stock”),
and hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:

 

Series A Junior Participating Preferred Stock:

 

Section 1. Designation and Amount. The shares of such series shall be designated
as “Series A Junior Participating Preferred Stock” (the “Series A Preferred
Stock”) and the number of shares constituting the Series A Preferred Stock shall
be 10,000,000. Such number of shares may be increased or decreased by resolution
of the Board of Directors; provided that no decrease shall reduce the number of
shares of Series A Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series A
Preferred Stock.

 

 

 

 

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Section 2. Dividends and Distributions.

 

(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $0.01
per share (the “Common Stock”), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December in each
year (each such date being referred to herein as a “Quarterly Dividend Payment
Date”), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1 or
(b) subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

 

(B) The Corporation shall declare a dividend or distribution on the Series A
Preferred Stock as provided in paragraph (A) of this Section immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.

 

(C) Dividends shall begin to accrue and be cumulative on outstanding shares of
Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.

 

Section 3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:

 

(A) Subject to the provision for adjustment hereinafter set forth, each share of
Series A Preferred Stock shall entitle the holder thereof to 100 votes on all
matters submitted to a vote of the stockholders of the Corporation. In the event
the Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

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(B) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.

 

(C) Except as set forth herein, or as otherwise provided by law, holders of
Series A Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any corporate action.

 

Section 4. Certain Restrictions.

 

(A) Whenever quarterly dividends or other dividends or distributions payable on
the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter
and until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding shall have been paid
in full, the Corporation shall not:

 

(i) declare or pay dividends, or make any other distributions, on any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;

 

(ii) declare or pay dividends, or make any other distributions, on any shares of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except dividends
paid ratably on the Series A Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;

 

(iii) redeem or purchase or otherwise acquire for consideration shares of any
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock, provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or

 

(iv) redeem or purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with the
Series A Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.

 

(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.

 

Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the Certificate
of Incorporation, or in any other Certificate of Designations creating a series
of Preferred Stock or any similar stock or as otherwise required by law.

 

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Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

 

Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each share of Series A
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

 

Section 8. No Redemption. The shares of Series A Preferred Stock shall not be
redeemable.

 

Section 9. Rank. The Series A Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any
other class of the Corporation’s Preferred Stock.

 

Section 10. Amendment. The Certificate of Incorporation of the Corporation shall
not be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.

 

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IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of
the Corporation by its _________________ and attested by its Secretary this
_______ day of ____________, 2016.

 

________________________________

 

 

Attest:

 

 

 

____________________________________

Secretary

 

 

 

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EXHIBIT B

 

The Company’s existing bylaws will be amended, so that as amended, Sections
3.11, 4.1 and 7.1 of such bylaws will read in their entirety as set forth below:

 

SECTION 3.11 COMMITTEES. The Board of Directors, by resolution adopted by the
majority of the whole Board, may designate one (1) or more committees, each
committee to consist of one (1) or more directors. The Board may designate one
(1) or more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. Any such committee, to the extent provided in such resolution, shall
have and may exercise all of the powers of the Board of Directors, including to
do all such things that these Bylaws designate can or shall be done by the Board
of Directors, in the management of the business and affairs of the Corporation
and may authorize the seal of the Corporation to be affixed to all papers which
may require it; but no such committee shall have the power or authority in
reference to the following matters: (i) approving or adopting, or recommending
to the stockholders, any action or matter (other than the election or removal of
directors) expressly required by law to be submitted to stockholders for
approval or (ii) adopting, amending or repealing any bylaw of the Corporation.

 

SECTION 4.1 NUMBER. The officers of the Corporation shall be determined by the
Board of Directors and shall include a Chief Executive Officer and Secretary,
and may also (but are not required to) include a Treasurer, one (1) or more Vice
Presidents, one (1) or more Assistant Secretaries and/or Assistant Treasurers,
and any other officers determined by the Board of Directors. Any two (2) or more
offices may be held by the same person. To the extent that the Board of
Directors determines to create and fill any such offices, then the individuals
holding such offices shall have the duties and responsibilities set forth in
this Article IV, if applicable, and such further duties and responsibilities as
may be assigned. The Board of Directors may choose not to fill any office for
any period it may deem advisable.

 

SECTION 7.1 DECLARATION OF DIVIDENDS. Subject to the provisions of the
Certificate of Incorporation, dividends upon the capital stock of the
Corporation may be declared by the Board of Directors or any duly authorized
committee thereof. Dividends may be paid in cash, in property or contractual
rights, or in shares of the capital stock of the Corporation, subject to the
provisions of the DGCL.