Exhibit 4.1


 


CERTIFICATE OF DESIGNATIONS
OF


 


7.25% MANDATORY CONVERTIBLE
PREFERRED STOCK, SERIES C


 


of


 


SLM CORPORATION


 


Pursuant to Section 151 of the General
Corporation Law

of the State of Delaware


 


The undersigned, Mary F. Eure, Corporate Secretary
of SLM Corporation, a Delaware corporation (hereinafter called the “Corporation”), does hereby certify that, pursuant to the
provisions of Sections 103 and 151 of the General Corporation Law of the State
of Delaware (a) on December 19, 2007, the Executive Committee (the “Executive Committee”) of the board of
directors of the Corporation (the “Board of Directors”)
appointed a special subcommittee (the “Pricing
Committee”) and authorized the Pricing Committee to determine the
voting powers, designations, preferences, rights and qualifications,
limitations or restrictions and all other terms of the issuance of a series of
preferred stock; (b) on December 24, 2007, the Board of Directors
increased the authority of the Executive Committee and otherwise ratified the actions
of the Executive Committee taken at its meeting on December 19, 2007; and (c) on
December 27, 2007, the Pricing Committee adopted resolutions shown
immediately below, which resolutions are now, and at all times since their
respective dates of adoption have been in full force and effect:


 


RESOLVED, that, pursuant to Article IV of the
Restated Certificate of Incorporation of the Corporation (as such may be
amended, modified or restated from time to time, the “Restated Certificate of Incorporation”) (which
authorizes 20,000,000 shares of Preferred Stock, par value $0.20 per share (the
“Preferred Stock”)), and the authority
conferred on the Board of Directors, the Board of Directors hereby makes this
Certificate of Designations (this “Certificate”)
and fixes the powers, designations, preferences and relative, participating,
optional and other special rights, and the qualifications, limitations and
restrictions, of a series of Preferred Stock.


 


RESOLVED, that each share of such series of new
Preferred Stock shall rank equally in all respects and shall be subject to the
following provisions:


 


(1)           Number
and Designation.  Pursuant
to the Restated Certificate of Incorporation, 1,000,000 shares of the Preferred
Stock of the Corporation (up to 1,150,000 shares of Preferred Stock if the
underwriters exercise in full their option pursuant to the Underwriting
Agreement (as such term is defined herein) to purchase additional shares) shall
be designated as “7.25% Mandatory Convertible Preferred Stock, Series C”
(the “Mandatory  Convertible Preferred Stock”).


 


(2)           Certain
Definitions.  As used in
this Certificate, the following terms shall have the meanings defined in this Section 2.
Any capitalized term not otherwise defined herein shall have the meaning set
forth in the Restated Certificate of Incorporation, unless the context
otherwise requires:


 


“Affiliate”
shall have the meaning given to that term in Rule 405 of the Securities
Act of 1933, as amended, or any successor rule thereunder.


 


“Agent Members”
shall have the meaning set forth in Section 17(a).


 


“Applicable Market Value”
means the average of the Closing Prices per share of Common Stock over the 20
consecutive Trading Day period ending on the third Trading Day immediately
preceding the Mandatory Conversion Date.


 


“Board Observers”
shall have the meaning set forth in Section 6(b)(i).


 

















 


“Board of Directors”
shall have the meaning set forth in the recitals.


 


“Business Day”
means any day other than a Saturday or Sunday or any other day on which
commercial banks in New York City are authorized or required by law or
executive order to close.


 


A “Cash Acquisition”
will be deemed to have occurred at such time after the Issue Date upon the
consummation of any acquisition (whether by means of a liquidation, share
exchange, tender offer, consolidation, recapitalization, reclassification,
merger of the Corporation or any sale, lease or other transfer of the
consolidated assets of the Corporation and its subsidiaries) or a series of
related transactions or events pursuant to which 90% or more of the Common
Stock is exchanged for, converted into or constitutes solely the right to
receive cash, securities or other property, and more than 10% of the cash,
securities or other property consists of cash, securities or other property
that are not, or upon issuance shall not be, traded on the New York Stock
Exchange or quoted on the Nasdaq Global Select Market.


 


“Cash Acquisition
Conversion” shall have the meaning set forth in Section 10(a).


 


“Cash Acquisition
Conversion  Additional Conversion
Amount” shall have the meaning set forth in Section 10(c)(ii).


 


“Cash Acquisition
Conversion Date” shall have the meaning set forth in Section 11(c).


 


“Cash Acquisition
Conversion Period” shall have the meaning set forth in Section 10(a).


 


“Cash Acquisition
Conversion Rate” means the conversion rate set forth in the table
below for the Effective Date and the Stock Price applicable to any Cash
Acquisition Conversion during the related Cash Acquisition Conversion Period:


 


Stock
Price


 


	
  Effective Date

  	
   

  	
  $7.00

  	
   

  	
  $11.00

  	
   

  	
  $15.00

  	
   

  	
  $19.65

  	
   

  	
  $23.00

  	
   

  	
  $27.00

  	
   

  	
  $31.00

  	
   

  	
  $35.00

  	
   

  	
  $45.00

  	
   

  	
  $55.00

  	
   

  	
  $65.00

  	
   

  	
  $75.00

  	
   

  
	
  December 31, 2007

  	
   

  	
  49.6194

  	
   

  	
  46.7637

  	
   

  	
  44.1012

  	
   

  	
  42.2489

  	
   

  	
  41.6084

  	
   

  	
  41.2928

  	
   

  	
  41.2291

  	
   

  	
  41.2710

  	
   

  	
  41.4588

  	
   

  	
  41.5871

  	
   

  	
  41.6532

  	
   

  	
  41.6854

  	
   

  
	
  December 15, 2008

  	
   

  	
  50.4845

  	
   

  	
  48.4925

  	
   

  	
  45.6715

  	
   

  	
  43.1880

  	
   

  	
  42.2083

  	
   

  	
  41.6670

  	
   

  	
  41.4973

  	
   

  	
  41.4859

  	
   

  	
  41.5971

  	
   

  	
  41.6698

  	
   

  	
  41.6994

  	
   

  	
  41.7105

  	
   

  
	
  December 15, 2009

  	
   

  	
  50.8711

  	
   

  	
  50.2866

  	
   

  	
  48.0793

  	
   

  	
  44.7115

  	
   

  	
  43.0386

  	
   

  	
  42.0642

  	
   

  	
  41.7436

  	
   

  	
  41.6772

  	
   

  	
  41.7004

  	
   

  	
  41.7138

  	
   

  	
  41.7165

  	
   

  	
  41.7171

  	
   

  
	
  December 15, 2010

  	
   

  	
  50.8906

  	
   

  	
  50.8906

  	
   

  	
  50.8906

  	
   

  	
  50.8906

  	
   

  	
  43.4783

  	
   

  	
  41.7188

  	
   

  	
  41.7188

  	
   

  	
  41.7188

  	
   

  	
  41.7188

  	
   

  	
  41.7188

  	
   

  	
  41.7188

  	
   

  	
  41.7188

  	
   

  



 


If the Stock Price falls between two Stock Prices
set forth in the table above, or if the Effective Date falls between two
Effective Dates set forth in the table above, the Cash Acquisition Conversion
Rate shall be determined by straight-line interpolation between the Cash
Acquisition Conversion Rates set forth for the higher and lower Stock Prices
and the earlier and later Effective Dates, as applicable, based on a 365-day
year.


 


If the Stock Price is in excess of $75.00 per share
(subject to adjustment in the same manner as adjustments are made to the Stock
Price in accordance with the provisions of Section 14(c)(iv)), then the
Cash Acquisition Conversion Rate shall be the Minimum Conversion Rate.  If the Stock Price is less than $7.00 per
share (subject to adjustment in the same manner as adjustments are made to the
Stock Price in accordance with the provisions of  Section 14(c)(iv)), then the Cash
Acquisition Conversion Rate shall be the Maximum Conversion Rate.


 


The Stock Prices in the column headings in the table
above are subject to adjustment in accordance with the provisions of Section 14(c)(iv).  The conversion rates set forth in the table
above are each subject to adjustment in the same manner as each Fixed
Conversion Rate as set forth in Section 14.


 


2

















 


“Cash Acquisition Dividend
Make-Whole Amount” shall have the meaning set forth in Section 10(c)(i)(x)(B).


 


“Cash Acquisition Notice”
shall have the meaning set forth in Section 10(b).


 


“Certificate”
shall have the meaning set forth in the recitals.


 


“Closing Price”
of the Common Stock or any securities distributed in a Spin-Off, as the case
may be, means, as of any date of determination:


 


(a)the closing price on that date or, if no closing
price is reported, the last reported sale price, of shares of the Common Stock
or such other securities on the New York Stock Exchange on that date; or


 


(b)if the Common Stock or such other securities are
not traded on the New York Stock Exchange, the closing price on that date as
reported in composite transactions for the principal U.S. national or regional
securities exchange on which the Common Stock or such other securities are so
traded or, if no closing price is reported, the last reported sale price of
shares of the Common Stock or such other securities on the principal U.S.
national or regional securities exchange on which the Common Stock or such
other securities are so traded on that date; or


 


(c)if the Common Stock or such other securities are
not traded on a U.S. national or regional securities exchange, the last quoted
bid price on that date for the Common Stock or such other securities in the
over-the-counter market as reported by Pink Sheets LLC or a similar
organization; or


 


(d)if the Common Stock or such other securities are
not so quoted by Pink Sheets LLC or a similar organization, the market price of
the Common Stock or such other securities on that date as determined by a
nationally recognized independent investment banking firm retained by the
Corporation for this purpose.


 


For the purposes of this
Certificate, all references herein to the closing price and the last reported
sale price of the Common Stock on the New York Stock Exchange shall be such
closing price and last reported sale price as reflected on the website of the
New York Stock Exchange (www.nyse.com) and as reported by Bloomberg
Professional Service; provided that
in the event that there is a discrepancy between the closing price and the last
reported sale price as reflected on the website of the New York Stock Exchange
and as reported by Bloomberg Professional Service, the closing price and the
last reported sale price on the website of the New York Stock Exchange shall
govern.


 


“Common Stock”
as used in this Certificate means the Corporation’s common stock, par value
$0.20 per share, as the same exists at the date of filing of this Certificate,
or any other class of stock resulting from successive changes or
reclassifications of such common stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.


 


“Conversion and Dividend
Disbursing Agent” shall mean Computershare Investor Services, LLC,
the Corporation’s duly appointed transfer agent, registrar, and conversion and
dividend disbursing agent for the Mandatory Convertible Preferred Stock, and
any successor appointed under Section 16.


 


“Conversion Date”
shall have the meaning set forth in Section 4(d).


 


 “Corporate Trust Office” means the principal corporate trust
office of the Transfer Agent at which, at any particular time, its corporate
trust business shall be administered.


 


“Corporation”
shall have the meaning set forth in the recitals.


 


“Current Market Price”
per share of Common Stock on any date means for the purposes of determining an
adjustment to the Fixed Conversion Rate:


 


3

















 


(a)for purposes of adjustments pursuant to Section 14(a)(ii),
Section 14(a)(iv) in the event of an adjustment not relating to a
Spin-Off, and Section 14(a)(v), the average of the Closing Prices over the
five consecutive Trading Day period ending on the Trading Day immediately
preceding the Ex-Date with respect to the issuance or distribution requiring
such computation;


 


(b)for purposes of adjustments pursuant to Section 14(a)(iv) in
the event of an adjustment relating to a Spin-Off, the average of the Closing
Prices over the first ten consecutive Trading Days commencing on and including
the fifth Trading Day immediately following the Ex-Date for such distribution;
and


 


(c)for purposes of adjustments pursuant to Section 14(a)(vi),
the average of the Closing Prices over the five consecutive Trading Day period
ending on the seventh Trading Day after the Expiration Date of the relevant
tender offer or exchange offer.


 


“Depositary”
means DTC or its nominee or any successor appointed by the Corporation.


 


“Dividend Payment Date”
means March 15, June 15, September 15 and December 15 of
each year commencing on March 15, 2008, to and including the Mandatory
Conversion Date.


 


“Dividend Period”
means the period from, and including, a Dividend Payment Date to, but
excluding, the next Dividend payment Date, except that the initial Dividend
Period will commence on, and include, the Issue Date and will end on,  but exclude, the March 15, 2008 Dividend
Payment Date.


 


“Dividend Rate”
shall have the meaning set forth in Section 4(a).


 


“DTC” means The
Depository Trust Corporation.


 


“Early Conversion”
shall have the meaning set forth in Section 9(a).


 


“Early Conversion
Additional Conversion Amount” shall have the meaning set forth in Section 9(c).


 


“Early Conversion Date”
shall have the meaning set forth in Section 11(b).


 


“Effective Date”
shall have the meaning set forth in Section 10(a).


 


“Exchange Act”
shall mean the Securities and Exchange Act of 1934, as amended.


 


“Exchange Property”
shall have the meaning set forth in Section 14(e).


 


 “Ex-Date,” when used with respect to any issuance or
distribution, means the first date on which shares of the Common Stock trade
without the right to receive such issuance or distribution.


 


“Expiration Date”
shall have the meaning set forth in Section 14(a)(vi).


 


“Expiration Time”
shall have the meaning set forth in Section 14(a)(vi).


 


“Fair Market Value”
means the fair market value as determined in good faith by the Board of
Directors (or an authorized committee thereof), whose determination shall be
conclusive and set forth in a resolution of the Board of Directors (or such
authorized committee).


 


“Fixed Conversion Rates”
means the Maximum Conversion Rate and the Minimum Conversion Rate.


 


“Global Preferred Share”
shall have the meaning set forth in Section 17(a).


 


4

















 


“Global Shares Legend”
shall have the meaning set forth in Section 17(a).


 


“Holder” means
each person in whose name shares of the Mandatory Convertible Preferred Stock
are registered, who shall be treated by the Corporation and the Registrar as
the absolute owner of those shares of Mandatory Convertible Preferred Stock for
the purpose of making payment and settling conversions and for all other
purposes.


 


“Initial Price”
shall have the meaning set forth in Section 8(b)(ii).


 


“Issue Date”
shall mean December 31, 2007, the first original date of issuance of the
Mandatory Convertible Preferred Stock.


 


“Junior Stock”
means the Common Stock and each other class of capital stock or series of
Preferred Stock established after the Issue Date, the terms of which do not
expressly provide that such class or series ranks senior to or on a parity with
the Mandatory Convertible Preferred Stock as to dividend rights or rights upon
the Corporation’s liquidation, winding-up or dissolution.


 


“Liquidation Preference”
means, as to the Mandatory Convertible Preferred Stock, $1,000 per share.


 


“Mandatory Conversion
Additional Conversion Amount” shall have the meaning set forth in Section 8(d).


 


“Mandatory Conversion Date”
means December 15, 2010.


 


“Mandatory  Conversion Rate” shall have the meaning set forth in Section 8(b).


 


“Mandatory  Convertible Preferred Stock” shall have the meaning set
forth in Section 1.


 


“Maximum Conversion Rate”
shall have the meaning set forth in Section 8(b)(iii).


 


“Minimum Conversion Rate”
shall have the meaning set forth in Section 8(b)(i).


 


“Officer” means
the Chief Executive Officer, the Chief Financial Officer, the President, any
Executive Vice President, any Senior Vice President, any Vice President, the
Treasurer, or the Secretary of the Corporation.


 


“Officer’s Certificate”
means a certificate of the Corporation, signed by any duly authorized Officer
of the Corporation.


 


“Parity Stock”
means any class of capital stock or series of Preferred Stock established after
the Issue Date, the terms of which expressly provide that such class or series
shall rank on a parity with the Corporation’s 6.97% Cumulative Redeemable
Preferred Stock, Series A, the Corporation’s Floating Rate Non-Cumulative
Preferred Stock, Series B, and the Mandatory Convertible Preferred Stock
as to dividend rights or rights upon the Corporation’s liquidation, winding-up
or dissolution.


 


“Person” means a
legal person, including any individual, corporation, estate, partnership, joint
venture, association, joint-stock company, limited liability company or trust.


 


“Preferred Stock”
shall have the meaning set forth in the recitals.


 


“Preferred Stock Committee”
shall have the meaning set forth in Section 6(a).


 


5

















 


“Record Date”
means the March 1, June 1, September 1 and December 1
immediately preceding the Dividend Payment Date on March 15, June 15,
September 15 and December 15, respectively.  These Record Dates shall apply regardless of
whether a particular Record Date is a Business Day.


 


“Record Holder”
means a Holder of record of the Mandatory Convertible Preferred Stock as such
Holder appears on the stock register of the Corporation at 5:00 p.m., New
York City time, on a Record Date.


 


“Registrar”
shall initially mean Computershare Investor Services, LLC, the Corporation’s
duly appointed transfer agent, registrar, and conversion and dividend
disbursing agent for the Mandatory Convertible Preferred Stock and any
successor appointed under Section 16.


 


“Reorganization Event”
shall have the meaning set forth in Section 14(e).


 


“Restated Certificate of
Incorporation” shall have the meaning set forth in the recitals.


 


“Senior Stock”
means any class of capital stock or series of Preferred Stock established after
the Issue Date, the terms of which expressly provide that such class or series
shall rank senior to the Mandatory Convertible Preferred Stock as to dividend
rights or rights upon the Corporation’s liquidation, winding-up or dissolution.


 


“Share Cap”
shall have the meaning set forth in Section 4A(e).


 


“Shelf Registration
Statement” shall mean a shelf registration statement(s) filed
with the Securities and Exchange Commission in connection with the issuance of
or resales of shares of Common Stock issued as payment of a dividend, including
dividends paid in connection with a conversion.


 


“Spin-Off” means
a dividend or other distribution to all or substantially all holders of Common
Stock consisting of capital stock of, or similar equity interests in, or
relating to a subsidiary or other business unit of the Corporation.


 


“Stock Price”
means the price paid per share of Common Stock in a Cash Acquisition. If the
consideration paid consists only of cash, the Stock Price shall equal the
amount of cash paid per share of Common Stock. If the consideration paid
consists, in whole or in part, of any property other than cash, the Stock Price
shall be the average of the Closing Prices per share of the Common Stock over
the 10 consecutive Trading Day period ending on the Trading Day preceding the
Effective Date.


 


“Threshold Appreciation
Price” shall have the meaning set forth in Section 8(b)(i).


 


“Trading Day”
means a day on which the Common Stock:


 


(a)is
not suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business; and


 


(b)has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.


 


“Transfer Agent”
shall initially mean Computershare Investor Services, LLC, the Corporation’s
duly appointed transfer agent, registrar, and conversion and dividend
disbursing agent for the Mandatory Convertible Preferred Stock and any
successor appointed under Section 16.


 


“Underwriting Agreement”
means the Underwriting Agreement relating to the Mandatory Convertible
Preferred Stock, dated December 27, 2007, between the Corporation and the underwriters
named therein.


 


6

















 


(3)Ranking.  The
Mandatory Convertible Preferred Stock will, with respect to dividend rights or
rights upon the liquidation, winding-up or dissolution of the Corporation, rank
(i) senior to all Junior Stock, (ii) on parity with all Parity Stock
and (iii) junior to all Senior Stock and the Corporation’s existing and
future indebtedness.


 


(4)           Dividends.
(a)  Holders of shares of outstanding Mandatory Convertible Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors, or an authorized committee of the Board of Directors, out of funds
of the Corporation legally available therefor, cumulative dividends at the rate
per annum of 7.25% per share on the Liquidation Preference (the “Dividend Rate”) (equivalent to $72.50 per
annum per share).


 


Dividends shall be payable in arrears on each
Dividend Payment Date (commencing on March 15, 2008) for the Dividend
Period ending immediately prior to such Dividend Payment Date, to the Record
Holders on the Record Date applicable to such Dividend Payment Date.  If a Dividend Payment Date is not a Business
Day, payment will be made on the next succeeding Business Day, without any
interest or other payment in lieu of interest accruing with respect to this
delay.  Such dividends shall be
cumulative from the most recent date as to which dividends shall have been paid
or, if no dividends have been paid, from the Issue Date, whether or not in any
Dividend Period(s) there shall have been funds of the Corporation legally
available for the payment of such dividends.  
Accumulated dividends on shares of Mandatory Convertible Preferred Stock
shall not bear interest if they are paid subsequent to the applicable Dividend
Payment Date.


 


Dividends payable for each full Dividend Period will
be computed by dividing the Dividend Rate by four.   Dividends payable for any period other than
a full Dividend Period shall be computed on the basis of the actual number of
days elapsed during the period over a 360-day year (consisting of twelve 30-day
months).


 


(b)           No
dividend shall be declared or paid upon, or any sum or number of shares of the
Common Stock set apart for the payment of dividends upon, any outstanding share
of Mandatory Convertible Preferred Stock with respect to any Dividend Period
unless all dividends for all preceding Dividend Periods shall have been
declared and paid upon, or a sufficient sum or number of shares of Common Stock
shall have been set apart for the payment of such dividend upon, all
outstanding shares of Mandatory Convertible Preferred Stock.


 


(c)           Holders
shall not be entitled to any dividends on the Mandatory Convertible Preferred
Stock, whether payable in cash, property or stock, in excess of full cumulative
dividends.


 


(d)           Dividends
on any share of Mandatory Convertible Preferred Stock converted to Common Stock
shall cease to accumulate on the Mandatory Conversion Date, the Cash
Acquisition Conversion Date or the Early Conversion Date (each, a “Conversion Date”), as applicable.


 


(e)           The
Corporation shall disclose in its annual and quarterly reports on Form 10-K
and Form 10-Q, respectively, filed with the Securities and Exchange
Commission under the Exchange Act the amount of any accumulated and unpaid
dividends on Mandatory Convertible Preferred Stock for Dividend Periods ending
prior to the last date of the relevant quarterly or annual period as to which
such report relates.


 


(4A)        Method
of Payment of Dividends. (a)  Subject to Section 4A(e),
any declared dividend (or any portion of any declared dividend) on the
Mandatory Convertible Preferred Stock, whether or not for a current Dividend
Period or any prior Dividend Period (including in connection with the payment
of accumulated and declared and unpaid dividends to the extent required to be
paid pursuant to Section 8, 9 or 10), may be paid by the Corporation, as
determined in the Corporation’s sole discretion:


 


(i)            in cash;


 


(ii)           by delivery of shares of Common Stock; or


 


(iii)          through any combination of cash and shares of Common Stock.


 


7

















 


(b)           Each payment of a declared dividend on the Mandatory
Convertible Preferred Stock shall be made in cash, except to the extent the
Corporation elects to make all or any portion of such payment in Common
Stock.  The Corporation may make such
election by giving notice to Holders thereof of such election and the portions
of such payment that shall be made in cash and in Common Stock no later than 10
Trading Days prior to the Dividend Payment Date for such dividend.


 


(c)           Common
Stock issued in payment or partial payment of a declared dividend shall be
valued for such purpose at 97% of the average of the Closing Prices per share
of Common Stock over the five consecutive Trading Day period ending on the
second Trading Day immediately preceding:


 


(i)            the applicable Dividend Payment Date, in respect of a
dividend payable on any such date; or


 


(ii)           the Mandatory Conversion Date, the Early Conversion Date
or the Cash Acquisition Conversion Date, as applicable, in respect of a
dividend payable on such date.


 


(d)           No
fractional shares of Common Stock shall be delivered to Holders in payment or
partial payment of a dividend. A cash adjustment shall be paid to each Holder
that would otherwise be entitled to a fraction of a share of Common Stock based
on the average of the Closing Prices of the Common Stock over the five
consecutive Trading Day period ending on the second Trading Day immediately
preceding the Dividend Payment Date or Conversion Date on which such dividend
is payable, as applicable.


 


(e)           Notwithstanding
the foregoing, in no event shall the number of shares of Common Stock delivered
in connection with any regular dividend payment or any dividend payment made in
connection with a conversion exceed a number equal to the total dividend
payment divided by $6.88 (this number of shares, the “Share Cap”);
such dollar amount shall
be subject to adjustment in the same manner (but on an inversely proportional
basis) as each Fixed Conversion Rate as set forth in Section 14.  To the extent the
Corporation does not deliver shares of Common Stock as a result of the Share
Cap and the Corporation is legally able to do so, the Corporation shall,
notwithstanding any notice by it to the contrary, pay the remaining declared
and unpaid dividends in cash.


 


(f)            To
the extent that the Corporation, in its reasonable judgment, determines that a
Shelf Registration Statement is required in connection with the issuance of, or
for resales of, Common Stock issued as payment of a dividend, including
dividends paid in connection with a conversion, the Corporation shall, to the
extent such a Shelf Registration Statement is not currently filed and
effective, use its reasonable best efforts to file and maintain the
effectiveness of such a Shelf Registration Statement until the earlier of such
time as all shares of Common Stock have been resold thereunder and such time as
all such shares are freely tradable without registration.  To the extent applicable, the Corporation
shall also use its reasonable best efforts to have the shares of Common Stock
qualified or registered under applicable state securities laws, if required,
and approved for listing on the New York Stock Exchange (or if the Common Stock
is not listed on the New York Stock Exchange, on the principal other U.S.
national or regional securities exchange on which the Common Stock is then
listed, if any).


 


(5)           Payment
Restrictions. (a)  Unless all accumulated and unpaid
dividends on the Mandatory Convertible Preferred Stock for all prior Dividend
Periods shall have been paid in full, the Corporation shall not:


 


(i)            declare or pay any dividend or make any distribution of
assets on any Junior Stock, other than dividends or distributions in the form
of Junior Stock and cash solely in lieu of fractional shares in connection with
any such dividend or distribution;


 


(ii)           redeem, purchase or otherwise acquire any shares of Junior
Stock or pay or make any monies available for a sinking fund for such shares of
Junior Stock, other than (A) upon conversion or exchange for other Junior
Stock or (B) the purchase of fractional interests in shares of any Junior
Stock pursuant to the conversion or exchange provisions of such Junior Stock;


 


8

















 


(iii)          except as provided in Section 5(b), declare or pay any
dividend or make any distribution of assets on any shares of Parity Stock,
other than dividends or distributions in the form of Parity Stock or Junior
Stock and cash solely in lieu of fractional shares in connection with any such
dividend or distribution; or


 


(iv)          redeem, purchase or otherwise acquire any shares of Parity
Stock, except upon conversion into or exchange for other Parity Stock or Junior
Stock and cash solely in lieu of fractional shares in connection with any such
conversion or exchange.


 


(b)           When dividends are not paid in full upon the shares of
Mandatory Convertible Preferred Stock, all dividends declared on Mandatory
Convertible Preferred Stock and any other Parity Stock shall be paid either:


 


(i)            pro rata so that the amount of dividends so declared on
the shares of Mandatory Convertible Preferred Stock and each such other class
or series of Parity Stock shall in all cases bear to each other the same ratio
as accumulated dividends on the shares of Mandatory Convertible Preferred Stock
and such other class or series of Parity Stock bear to each other; or


 


(ii)           on another basis that is at least as favorable to the
Holders entitled to receive such dividends.


 


(6)           Voting
Rights.  (a)  The
Corporation’s Board of Directors shall maintain a committee (the “Preferred Stock Committee”) of the Board of
Directors whose purpose shall be to monitor and evaluate proposed actions of
the Corporation that may impact the rights of holders of the outstanding
Preferred Stock including the payment of dividends on the Mandatory Convertible
Preferred Stock, and to report to the 
Board of Directors thereon.  The
Board of Directors shall designate from among its “independent directors” (as
such term is defined (i) by the Corporation’s Bylaws as then in effect or (ii) by
the rules of the New York Stock Exchange) at least three directors to
serve on the Preferred Stock Committee. In designating the independent
directors to serve on the Preferred Stock Committee, the  Board of Directors may, in its sole discretion,
apply either of the foregoing definitions. The Preferred Stock Committee shall
meet at least once a year.


 


(b)           The Holders shall have no voting rights, either general or
special, except as set forth below or as otherwise required by Delaware law
from time to time.  Whenever dividends on
any shares of Mandatory Convertible Preferred Stock have not been declared by
the Board of Directors or paid for an aggregate of four or more Dividend
Periods, whether or not consecutive:


 


                                                (i)            The Holders, voting together as a
single class with all other classes or series of the Corporation’s capital
stock upon which like voting rights have been conferred and are exercisable and
which are entitled to vote as a class with the Mandatory Convertible Preferred
Stock in the election of two observers to the Board of Directors, will be
entitled to vote for the election of a total of two board observers (the “Board Observers”) at a special meeting
called by an Officer at the request of holders of record of at least 10% of (i) the
outstanding Mandatory Convertible Preferred Stock or (ii) any such other
class or series of the Corporation’s capital stock entitled to vote for such
Board Observers and reelected at each subsequent annual meeting of
stockholders, until all declared and unpaid dividends on the Mandatory Convertible
Preferred Stock have been fully paid and the Corporation shall have resumed the
payment of dividends in full on the Mandatory Convertible Preferred Stock for
four consecutive Dividend Periods.


 


                                                (ii)           If and when all accumulated and
unpaid dividends on the Mandatory Convertible Preferred Stock shall have been
paid in full or declared and a sum sufficient for the payment thereof set apart
for payment in full and the Corporation shall have resumed the payment of
dividends in full on the Mandatory Convertible Preferred Stock for four
consecutive Dividend Periods, the right of Holders to elect two Board Observers
will cease and, unless there are other classes and series of the Corporation’s
capital stock upon which like voting rights have been conferred and are
exercisable, all rights of each of the two Board Observers will immediately and
automatically terminate.


 


9






 












 


(iii)          The
Corporation shall provide to the Board Observers notice, and a detailed agenda
(to the extent prepared for any member of the 
Board of Directors), of all meetings of the  Board of Directors and any committee of the
Board of Directors which has been delegated responsibility for matters relating
to the payment or nonpayment of dividends, including the Preferred Stock
Committee. The Corporation shall also provide to the Board Observers copies of
all materials that may in any way be related to the payment or nonpayment of
dividends that are provided to the Board of Directors and to the members of any
such committees. The Board Observers shall be subject to the same
confidentiality obligations with respect to such materials as bind the Board of
Directors. The Board Observers may attend any meeting of the Board of Directors
or any committee thereof which has been delegated responsibility for matters
relating to the payment or nonpayment of dividends, including the Preferred
Stock Committee; the Board Observers may participate in any such meeting,
include statements in the minutes of such meetings, and present information and
make recommendations to, and ask questions of, the Board of Directors or the
Preferred Stock Committee with respect to all matters.


 


(iv)          If
a special meeting of the Holders for the election of the Board Observers is not
called by an Officer within 30 days after a request by Holder(s) of record
of at least 10% of the outstanding shares of Mandatory Convertible Preferred
Stock, then such requesting Holder(s) may designate a Holder to call that
meeting and the Corporation will pay all costs and expenses of calling and
holding that meeting and of electing Board Observers as described above.


 


The foregoing voting rights
will not apply if, at or prior to the time when the act with respect to which
such vote would otherwise be required will be effected, all outstanding shares
of Mandatory Convertible Preferred Stock have been converted and sufficient
shares and funds, if applicable, have been deposited in trust to effect such
conversion.


 


(c)           So
long as any shares of Mandatory Convertible Preferred Stock remain outstanding,
unless a greater percentage shall then be required by law, the Corporation
shall not, without the affirmative vote or consent of the holders of at least
66 2/3% of the outstanding shares of Mandatory Convertible Preferred Stock and
all other shares of Parity Stock having similar voting rights that are
exercisable, voting as a single class, in person or by proxy, at an annual meeting
of the Corporation’s shareholders or at a special meeting called for such
purpose, or by written consent in lieu of such meeting, alter, repeal or amend,
whether by merger, consolidation, combination, reclassification or otherwise,
any provisions of the Restated Certificate of Incorporation or this Certificate
if the amendment would amend, alter or affect the powers, preferences or rights
of Mandatory Convertible Preferred Stock so as to adversely affect the Holders,
including, without limitation, the creation of, increase in the authorized
number of, or issuance of, shares of any class or series of Senior Stock.


 


(d)           The
Corporation may authorize, increase the authorized amount of, or issue any
shares of any class or series of Parity Stock or Junior Stock, without the
consent of the Holders, and in taking such actions the Corporation shall not be
deemed to have affected adversely the powers, preferences or rights of Holders.


 


(e)           In
any matter in which the Mandatory Convertible Preferred Stock is entitled to
vote, including any action by written consent, each share of the Mandatory
Convertible Preferred Stock shall be entitled to one vote, except that when
shares of any other class or series of the Corporation’s capital stock have the
right to vote with the Mandatory Convertible Preferred Stock as a single class
on any matter, the Mandatory Convertible Preferred Stock and the shares of each
such other class or series will have one vote for each $50.00 of Liquidation
Preference (excluding accumulated dividends, if any). For the avoidance of
doubt, each share of Mandatory Convertible Preferred Stock shall be entitled to
20 votes in any such matter.


 


(7)           Liquidation,
Dissolution or Winding-Up. (a)  In the event of any
liquidation, winding-up or dissolution of the Corporation, whether voluntary or
involuntary, each Holder shall be entitled to receive the Liquidation
Preference plus an amount equal to accumulated and unpaid dividends on the
shares to the date fixed for liquidation, winding-up or dissolution to be paid
out of the assets of the Corporation available for distribution to its
shareholders, after satisfaction of liabilities owed to the Corporation’s
creditors and holders of any Senior Stock and before any payment or
distribution is made on any Junior Stock, including, without limitation, the
Common Stock.


 


(b)           Neither the sale (for cash, shares of stock, securities or
other consideration) of all or substantially all the assets or business of the
Corporation (other than in connection with the liquidation, winding-up or
dissolution of its business), nor the merger or consolidation of the
Corporation into or with any other Person, shall be deemed to be a liquidation,
winding-up or dissolution, voluntary or involuntary, for the purposes of this Section 7.


 


 


 


10

















 


(c)           If
upon the voluntary or involuntary liquidation, winding-up or dissolution of the
Corporation, the amounts payable with respect to the Liquidation Preference
plus an amount equal to accumulated and unpaid dividends of the Mandatory
Convertible Preferred Stock and all Parity Stock are not paid in full, the
Holders and all holders of the Parity Stock will share equally and ratably in
any distribution of the Corporation’s assets in proportion to the Liquidation
Preference and an amount equal to the accumulated and unpaid dividends to which
such holders are entitled.


 


(d)           After
the payment to the Holders of full preferential amounts provided for in this Section 7,
the Holders as such shall have no right or claim to any of the remaining assets
of the Corporation.


 


(8)           Mandatory
Conversion on the Mandatory Conversion Date.  (a) Each share of Mandatory Convertible
Preferred Stock shall automatically convert (unless previously converted at the
option of the Holder in accordance with Section 9 or pursuant to an
exercise of a Cash Acquisition Conversion right pursuant to Section 10) on
the Mandatory Conversion Date, into a number of shares of Common Stock equal to
the Mandatory Conversion Rate.


 


(b)           The “Mandatory
Conversion Rate” shall be as
follows:


 


(i)            if the Applicable Market Value is greater than $23.97
(the “Threshold Appreciation Price”),
then the Mandatory Conversion Rate shall be equal to 41.7188 shares of Common
Stock per share of Mandatory Convertible Preferred Stock (the “Minimum Conversion Rate”);


 


(ii)           if the Applicable Market Value is less than or equal to
the Threshold Appreciation Price but greater than or equal to $19.65 (the “Initial Price”), then the Mandatory
Conversion Rate shall be equal to $1,000 divided by the Applicable Market
Value; or


 


(iii)          if the Applicable Market Value is less than the Initial
Price, then the Mandatory Conversion Rate shall be equal to 50.8906 shares of
Common Stock per share of Mandatory Convertible Preferred Stock (the “Maximum Conversion Rate”).


 


(c)           The Fixed Conversion Rates, the Threshold Appreciation
Price, the Initial Price and the Applicable Market Value are each subject to
adjustment in accordance with the provisions of Section 14.


 


(d)           In addition to the number of shares of Common Stock
issuable pursuant to Section 8(a), the Holders on the Mandatory Conversion
Date shall have the right to receive an amount equal to all accumulated and
declared and unpaid dividends on the Mandatory Convertible Preferred Stock, for
the then-current Dividend Period ending on the Mandatory Conversion Date and
all prior Dividend Periods (other than previously declared dividends on the
Mandatory Convertible Preferred Stock payable to Record Holders as of a prior
Record Date).


 


If on the Mandatory Conversion Date the Corporation
has not declared all or any portion of the accumulated and unpaid dividends
payable on such date, the Mandatory Conversion Rate will be adjusted so that
Holders receive an additional number of shares of Common Stock equal to the
amount of accumulated and unpaid dividends that have not been declared (“Mandatory Conversion Additional Conversion Amount”) divided
by the average of the Closing Prices of the Common Stock over the twenty
consecutive Trading Day period ending on the third Trading Day immediately
preceding the Mandatory Conversion Date; provided, however,
that in no event shall the Corporation increase the number of shares of Common
Stock to be issued in excess of the Share Cap. To the extent that the
Corporation does not deliver any or all of the additional shares as a result of
the Share Cap, the Holders shall not have any claim whatsoever against the
Corporation in respect of the remaining Mandatory Conversion Additional
Conversion Amount.


 


(9)           Early
Conversion at the Option of the Holder. (a)  Other than
during a Cash Acquisition Conversion Period, the Holders shall have the right
to convert their shares of Mandatory Convertible Preferred 


 


 


11

















 


Stock, in whole or in part (but in no event
less than one share of Mandatory Convertible Preferred Stock), at any time
prior to the Mandatory Conversion Date (“Early
Conversion”), into shares of Common Stock at the Minimum Conversion
Rate, subject to satisfaction of the conversion procedures set forth in Section 11.


 


(b)           In
addition to the number of shares of Common Stock issuable pursuant to Section 9(a),
with respect to each share of Mandatory Convertible Preferred Stock being
converted, the converting Holder shall have the right to receive as of the
Early Conversion Date all accumulated and declared and unpaid dividends for all
prior Dividend Periods ending on or prior to the Dividend Payment Date
immediately preceding the Early Conversion Date (other than previously declared
dividends on the Mandatory Convertible Preferred Stock payable to Record
Holders as of a prior Record Date).


 


(c)           If
on the Early Conversion Date the Corporation has not declared all or any
portion of the accumulated and unpaid dividends payable for such prior Dividend
Periods, the Minimum Conversion Rate will be adjusted so that the converting
Holder receives an additional number of shares of Common Stock equal to the
amount of accumulated and unpaid dividends that have not been declared (the “Early Conversion Additional Conversion Amount”), divided by
the average of the Closing Prices of the Common Stock over the twenty
consecutive Trading Day period ending on the third Trading Day immediately
preceding the Early Conversion Date; provided, however,
that in no event shall the Corporation increase the number of shares of Common
Stock to be issued in excess of the Share Cap. To the extent that the
Corporation does not deliver any or all additional shares as a result of the
Share Cap, the Holders shall not have any claim whatsoever against the
Corporation in respect of the remaining Early Conversion Additional Conversion
Amount.  Except as described above, upon
any Early Conversion of the Mandatory Convertible Preferred Stock, the
Corporation shall make no payment or allowance for unpaid dividends on the
Mandatory Convertible Preferred Stock.


 


(10)         Cash
Acquisition Conversion. (a)  If a Cash Acquisition occurs
on or prior to the Mandatory Conversion Date, the Holders shall have the right
to convert their shares of Mandatory Convertible Preferred Stock, in whole or
in part (but in no event less than one share of Mandatory Convertible Preferred
Stock) (such right of the Holders to convert their shares pursuant to this Section 10(a) being
the “Cash Acquisition Conversion”)
during a period (the “Cash Acquisition
Conversion Period”) that begins on the effective date of such Cash
Acquisition (the “Effective Date”)
and ends at 5:00 p.m., New York City time, on the date that is 15 calendar
days after the Effective Date (or, if earlier, the Mandatory Conversion Date)
into shares of Common Stock at the Cash Acquisition Conversion Rate (as
adjusted pursuant to Section 14).


 


(b)           On
or before the twentieth calendar day prior to the anticipated Effective Date of
the Cash Acquisition, a written notice (the “Cash Acquisition Notice”) shall be
sent by or on behalf of the Corporation, by first-class mail, postage prepaid,
to the Holders of record as they appear on the stock register of the
Corporation. Such notice shall state:


 


(i)            the anticipated Effective Date of the Cash Acquisition;


 


(ii)           that Holders shall have the right to effect a Cash
Acquisition Conversion in connection with such Cash Acquisition during the Cash
Acquisition Conversion Period;


 


(iii)          the Cash Acquisition Conversion Period;


 


(iv)          if the Corporation shall elect to pay any amount payable
pursuant to Section 10(c) below in shares of Common Stock or a
combination cash and shares of Common Stock, that the Corporation shall pay
such amount payable in full in shares or in a combination of cash and shares of
Common Stock (and if so, will specify the combination, which may be in
percentage terms); and


 


(v)           the instructions a Holder must follow to effect a Cash
Acquisition Conversion in connection with such Cash Acquisition.


 


(c)           Upon
any conversion pursuant to Section 10(a), in addition to issuing to the
converting Holders the number of shares of Common Stock at the Cash Acquisition
Conversion Rate, the Corporation shall:


 


 


 


12

















 


(i)            (x)            pay
the converting Holders in cash (or in the Corporation’s sole discretion
(subject to the Share Cap) in shares of Common Stock or a combination of cash
and shares of Common Stock in accordance with Section 4A) to the extent
the Corporation is legally permitted to do so, the sum of:


 


(A)          an amount equal to any accumulated and declared and unpaid
dividends on shares of Mandatory Convertible Preferred Stock subject to such
Cash Acquisition Conversion (other than previously declared dividends on the
Mandatory Convertible Preferred Stock payable to Record Holders as of a prior
Record Date); and


 


(B)           the present value of all dividend payments on the shares
of Mandatory Convertible Preferred Stock subject to such Cash Acquisition Conversion
for all remaining Dividend Periods from the Effective Date to but excluding the
Mandatory Conversion Date (the “Cash
Acquisition Dividend Make-Whole Amount”) (which present value shall
be computed using a discount rate equal to 8.0%); or


 


(y)           increase the number of shares of Common Stock to be issued
on conversion by a number equal to (A) the sum of any accumulated and
declared and unpaid dividends and the Cash Acquisition Dividend Make-Whole
Amount, divided by (B) the Stock Price; and


 


(ii)           if the Corporation has not declared all or any portion of
the accumulated and unpaid dividends payable on the Effective Date, the Cash
Acquisition Conversion Rate will be adjusted so that converting Holders receive
an additional number of shares of Common Stock equal to the amount of
accumulated and unpaid dividends that have not been declared (the “Cash Acquisition Conversion  Additional Conversion Amount”), divided by
the Stock Price; provided, however, that in no
event shall the Corporation increase the number of shares of Common Stock to be
issued in excess of the Share Cap. To the extent that the Corporation does not
deliver any or all additional shares as a result of the Share Cap, the Holders
shall not have any claim whatsoever against the Corporation in respect of the
remaining Cash Acquisition Conversion Additional Conversion Amount.


 


(11)         Conversion
Procedures. (a) Pursuant to Section 8, on the
Mandatory Conversion Date, any outstanding shares of Mandatory Convertible
Preferred Stock will automatically convert into shares of Common Stock.  The person or persons entitled to receive the
shares of Common Stock issuable upon mandatory conversion of the Mandatory
Convertible Preferred Stock will be treated as the record holder(s) of
such shares of Common Stock as of 5:00 p.m., New York City time, on the
Mandatory Conversion Date.  Except as
provided under Section 14(c)(iii), prior to 5:00 p.m., New York City
time, on the Mandatory Conversion Date, the shares of Common Stock issuable
upon conversion of the Mandatory Convertible Preferred Stock will not be deemed
to be outstanding for any purpose and Holders shall have no rights with respect
to such shares of Common Stock, including voting rights, rights to respond to
tender offers and rights to receive any dividends or other distributions on the
Common Stock, by virtue of holding the Mandatory Convertible Preferred Stock.


 


(b)           To effect an Early Conversion pursuant to Section 9,
a Holder who:


 


(i)            holds a beneficial interest in a Global Preferred Share
must deliver to DTC the appropriate instruction form for conversion pursuant to
DTC’s conversion program and, if required, pay funds equal to the dividend
payable on the next Dividend Payment Date to which such Holder is not entitled
by virtue of Section 9(b) and, if required, pay all transfer or
similar taxes or duties, if any; or


 


(ii)           holds shares of Mandatory Convertible Preferred Stock in
certificated form must:


 


(A)          complete and manually sign the conversion notice on the
back of the Mandatory Convertible Preferred Stock certificate or a facsimile of
the conversion notice;


 


(B)           deliver the completed conversion notice and the
certificated shares of Mandatory Convertible Preferred Stock to be converted to
the Conversion and Dividend Disbursing Agent;


 


(C)           if required, furnish appropriate endorsements and transfer
documents;


 


 


 


13

















 


(D)          if required, pay funds equal to the dividend payable on the
next Dividend Payment Date to which such Holder is not entitled by virtue of Section 9(b) which
provides that, with respect to declared dividends, an early converting Holder
is entitled to receive as of the Early Conversion Date only all accumulated and
declared and unpaid dividends for all prior Dividend Periods ending on or prior
to the Dividend Payment Date immediately preceding the Early Conversion Date
(other than previously declared dividends on the Mandatory Convertible
Preferred Stock payable to Record Holders as of a prior Record Date); and


 


(E)           if required, pay all transfer or similar taxes or duties,
if any.


 


The Early Conversion will be effective on the date
on which a Holder has satisfied all of the foregoing requirements, to the
extent applicable (“Early Conversion Date”).  A Holder will not be required to pay any
transfer or similar taxes or duties relating to the issuance or delivery of
Common Stock if such Holder exercises its conversion rights, but such Holder
will be required to pay any transfer or similar tax or duty that may be payable
relating to any transfer involved in the issuance or delivery of Common Stock
in a name other than the name of such Holder. A certificate representing Common
Stock will be issued and delivered only after all applicable taxes and duties,
if any, payable by the Holder have been paid in full.


 


The person or persons entitled to receive the Common
Stock issuable upon Early Conversion shall be treated for all purposes as the
record holder(s) of such shares of Common Stock as of 5:00 p.m., New
York City time, on the applicable Early Conversion Date.  No allowance or adjustment, except as set
forth in Section 14(c)(iii), shall be made in respect of dividends payable
to holders of Common Stock of record as of any date prior to such applicable
Early Conversion Date.  Prior to such
applicable Early Conversion Date, shares of Common Stock issuable upon
conversion of any shares of Mandatory Convertible Preferred Stock shall not be
deemed outstanding for any purpose, and Holders shall have no rights with
respect to the Common Stock (including voting rights, rights to respond to
tender offers for the Common Stock and rights to receive any dividends or other
distributions on the Common Stock) by virtue of holding shares of Mandatory
Convertible Preferred Stock.


 


In the event that an Early Conversion is effected
with respect to shares of Mandatory Convertible Preferred Stock representing
less than all the shares of Mandatory Convertible Preferred Stock held by a
Holder, upon such Early Conversion the Corporation shall execute and the
Registrar shall countersign and deliver to the Holder thereof, at the expense
of the Corporation, a certificate evidencing the shares of Mandatory
Convertible Preferred Stock as to which Early Conversion was not effected.


 


The Corporation shall deliver the shares of Common
Stock and the amount of cash, if any, to which the Holder converting pursuant
to Section 9 is entitled on or prior to the third Trading Day immediately
following the Early Conversion Date.


 


(c)           To effect a Cash Acquisition Conversion pursuant to Section 10,
a Holder shall deliver to the Conversion and Dividend Disbursing Agent at any
time during the Cash Acquisition Conversion Period, the certificate(s) (if
such shares are held in certificated form) evidencing the shares of Mandatory
Convertible Preferred Stock with respect to which the Cash Acquisition
Conversion right is being exercised, duly assigned or endorsed for transfer to
the Corporation, or accompanied by duly executed stock powers relating thereto,
or in blank, with a written notice to the Corporation stating the Holder’s
intention to convert early in connection with the Cash Acquisition containing
the information set forth in Section 11(b)(ii) and paying the
transfer or similar taxes or duties, if any. 
If a Holder holds a beneficial interest in a Global Preferred Share,
such Holder must deliver to DTC the appropriate instruction form for conversion
pursuant to DTC’s conversion program and, if required, pay all transfer or
similar taxes or duties, if any.


 


The Cash Acquisition Conversion will be effective on
the date on which a Holder has satisfied all of the foregoing requirements, to
the extent applicable (the “Cash Acquisition
Conversion Date”).  A Holder
will not be required to pay any transfer or similar taxes or duties relating to
the issuance or delivery of Common Stock if such Holder exercises its
conversion rights, but such Holder will be required to pay any transfer or
similar tax or duty that may be payable relating to any transfer involved in
the issuance or delivery of Common Stock in a name other than the name of such
Holder.  A certificate representing
Common Stock will be issued and delivered only after all applicable taxes and
duties, if any, payable by the Holder have been paid in full.  For the avoidance of doubt, Holders who do
not submit their conversion notice during the Cash Acquisition Conversion
Period shall not be entitled to convert their shares of Mandatory Convertible
Preferred Stock at the Cash Acquisition Conversion Rate or to receive the Cash
Acquisition Dividend Make-Whole Amount.


 


 


14

















 


The person or persons entitled to receive the Common
Stock issuable upon such Cash Acquisition Conversion shall be treated for all
purposes as the record holder(s) of such shares of Common Stock as of 5:00 p.m.,
New York City time, on the applicable Cash Acquisition Conversion Date. No
allowance or adjustment, except as set forth in Section 14(c)(iii), shall
be made in respect of dividends payable to holders of Common Stock of record as
of any date prior to such applicable Cash Acquisition Conversion Date.  Prior to such applicable Cash Acquisition
Conversion Date, shares of Common Stock issuable upon conversion of any shares
of Mandatory Convertible Preferred Stock shall not be deemed outstanding for
any purpose, and Holders shall have no rights with respect to the Common Stock
(including voting rights, rights to respond to tender offers for the Common
Stock and rights to receive any dividends or other distributions on the Common
Stock) by virtue of holding shares of Mandatory Convertible Preferred Stock.


 


In the event that a Cash Acquisition Conversion is
effected with respect to shares of Mandatory Convertible Preferred Stock
representing less than all the shares of Mandatory Convertible Preferred Stock
held by a Holder, upon such Cash Acquisition Conversion the Corporation shall
execute and the Registrar shall countersign and deliver to the Holder thereof,
at the expense of the Corporation, a certificate evidencing the shares of
Mandatory Convertible Preferred Stock as to which Cash Acquisition Conversion
was not effected.


 


The Corporation shall deliver the shares of Common
Stock and the amount of cash to which the Holder converting pursuant to Section 10
is entitled on or prior to the third Trading Day immediately following the Cash
Acquisition Conversion Date.


 


(d)           In
the event that a Holder shall not by written notice designate the name in which
shares of Common Stock to be issued upon conversion of such Mandatory
Convertible Preferred Stock should be registered or the address to which the
certificate or certificates representing such shares of Common Stock should be
sent, the Corporation shall be entitled to register such shares, and make such
payment, in the name of the Holder as shown on the records of the Corporation
and to send the certificate or certificates representing such shares of Common
Stock to the address of such Holder shown on the records of the Corporation.


 


(e)           Shares
of Mandatory Convertible Preferred Stock shall cease to be outstanding on the
applicable Conversion Date, subject to the right of Holders of such shares to
receive shares of Common Stock issuable upon conversion of such shares of
Mandatory Convertible Preferred Stock and other amounts and shares of Common
Stock, if any, to which they are entitled pursuant to Section 8, 9 or 10,
as applicable.


 


(12)         Reservation
of Common Stock. (a)  The
Corporation shall at all times reserve and keep available out of its authorized
and unissued Common Stock or shares held in the treasury of the Corporation,
solely for issuance upon the conversion of shares of Mandatory Convertible
Preferred Stock as herein provided, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time to time be issuable
upon the conversion of all the shares of Mandatory Convertible Preferred Stock
then outstanding. For purposes of this Section 12(a), the number of shares
of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of Mandatory Convertible Preferred Stock shall be computed
as if at the time of computation all such outstanding shares were held by a
single Holder.


 


(b)           Notwithstanding the foregoing, the Corporation shall be
entitled to deliver upon conversion of shares of Mandatory Convertible
Preferred Stock, as herein provided, shares of Common Stock reacquired and held
in the treasury of the Corporation (in lieu of the issuance of authorized and
unissued shares of Common Stock), so long as any such treasury shares are free
and clear of all liens, charges, security interests or encumbrances (other than
liens, charges, security interests and other encumbrances created by the
Holders).


 


(c)           All
shares of Common Stock delivered upon conversion of the Mandatory Convertible
Preferred Stock shall be duly authorized, validly issued, fully paid and
non-assessable, free and clear of all liens, claims, security interests and
other encumbrances (other than liens, charges, security interests and other
encumbrances created by the Holders).


 


 


 


15

















 


(d)           Prior
to the delivery of any securities that the Corporation shall be obligated to
deliver upon conversion of the Mandatory Convertible Preferred Stock, the
Corporation shall use reasonable best efforts to comply with all federal and
state laws and regulations thereunder requiring the registration of such
securities with, or any approval of or consent to the delivery thereof by, any
governmental authority.


 


(e)           The
Corporation hereby covenants and agrees that, if at any time the Common Stock
shall be listed on the New York Stock Exchange or any other national securities
exchange or automated quotation system, the Corporation shall, if permitted by
the rules of such exchange or automated quotation system, list and keep
listed, so long as the Common Stock shall be so listed on such exchange or
automated quotation system, all Common Stock issuable upon conversion of the
Mandatory Convertible Preferred Stock; provided, however,
that if the rules of such exchange or automated quotation system permit
the Corporation to defer the listing of such Common Stock until the first
conversion of Mandatory Convertible Preferred Stock into Common Stock in
accordance with the provisions hereof, the Corporation covenants to list such
Common Stock issuable upon first conversion of the Mandatory Convertible
Preferred Stock in accordance with the requirements of such exchange or
automated quotation system at such time.


 


(13)         Fractional
Shares. (a)  No fractional shares of Common Stock shall be
issued as a result of any conversion of shares of Mandatory Convertible
Preferred Stock.


 


(b)           In lieu of any fractional share of Common Stock otherwise
issuable in respect of any mandatory conversion pursuant to Section 8 or a
conversion at the option of the Holder pursuant to Section 9 or Section 10,
the Corporation shall pay an amount in cash (computed to the nearest cent)
equal to the same fraction of:


 


(i)            in the case of a mandatory conversion pursuant to Section 8
or a Cash Acquisition Conversion pursuant to Section 10, the average of
the Closing Prices over the five consecutive Trading Day period preceding the
Trading Day immediately preceding the Mandatory Conversion Date or Cash
Acquisition Conversion Date, as applicable; or


 


(ii)           in the case of an Early Conversion pursuant to Section 9,
the Closing Price of the Common Stock on the second Trading Day immediately
preceding the Early Conversion Date.


 


(c)           If
more than one share of the Mandatory Convertible Preferred Stock is surrendered
for conversion at one time by or for the same Holder, the number of full shares
of Common Stock issuable upon conversion thereof shall be computed on the basis
of the aggregate number of shares of the Mandatory Convertible Preferred Stock
so surrendered.


 


(14)         Anti-Dilution
Adjustments to the Fixed Conversion Rates. (a) Each Fixed
Conversion Rate shall be subject to the following adjustments:


 


(i)            Stock Dividends and
Distributions. If the Corporation issues Common Stock to all or
substantially all of the holders of Common Stock as a dividend or other
distribution, each Fixed Conversion Rate in effect at 5:00 p.m., New York
City time, on the date fixed for determination of the holders of Common Stock
entitled to receive such dividend or other distribution will be divided by a
fraction:


 


(A)          the numerator of which is the number of shares of Common
Stock outstanding at 5:00 p.m., New York City time, on the date fixed for
such determination, and


 


(B)           the denominator of which is the sum of the number of
shares of Common Stock outstanding at 5:00 p.m., New York City time, on
the date fixed for such determination and the total number of shares of Common
Stock constituting such dividend or other distribution.


 


Any adjustment made pursuant
to this clause (i) will become effective immediately after 5:00 p.m.,
New York City time, on the date fixed for such determination. If any dividend
or distribution described in this clause (i) is declared but not so paid
or made, each Fixed Conversion Rate shall be readjusted, effective as of the
date the Board of Directors publicly announces its decision not to make such
dividend or distribution, to such Fixed Conversion Rate 


 


 


 


16

















 


that would be in effect if
such dividend or distribution had not been declared.   For the purposes of this clause (i), the
number of shares of Common Stock outstanding at 5:00 p.m., New York City
time, on the date fixed for such determination shall not include shares held in
treasury by the Corporation but shall include any shares issuable in respect of
any scrip certificates issued in lieu of fractions of shares of Common Stock.
The Corporation shall not pay any dividend or make any distribution on shares
of Common Stock held in treasury by the Corporation.


 


(ii)           Issuance of Stock Purchase
Rights. If the Corporation issues to all or substantially all
holders of Common Stock rights or warrants (other than rights or warrants
issued pursuant to a dividend reinvestment plan or share purchase plan or other
similar plans), entitling such holders, for a period of up to 45 calendar days
from the date of issuance of such rights or warrants, to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price, each Fixed Conversion Rate in effect at 5:00 p.m., New York
City time, on the date fixed for determination of the holders of Common Stock
entitled to receive such rights or warrants will be increased by multiplying
such Fixed Conversion Rate by a fraction:


 


(A)          the numerator of which is the sum of the number of shares
of Common Stock outstanding at 5:00 p.m., New York City time, on the date
fixed for such determination and the number of shares of Common Stock issuable
pursuant to such rights or warrants, and


 


(B)           the denominator of which shall be the sum of the number of
shares of Common Stock outstanding at 5:00 p.m., New York City time, on
the date fixed for such determination and the number of shares of Common Stock
equal to the quotient of the aggregate offering price payable to exercise such
rights or warrants divided by the Current Market Price.


 


Any adjustment made pursuant
to this clause (ii) will become effective immediately after 5:00 p.m.,
New York City time, on the date fixed for such determination. In the event that
such rights or warrants described in this clause (ii) are not so issued,
each Fixed Conversion Rate shall be readjusted, effective as of the date the
Board of Directors publicly announces its decision not to issue such rights or
warrants, to such Fixed Conversion Rate that would then be in effect if such
issuance had not been declared. To the extent that such rights or warrants are
not exercised prior to their expiration or shares of Common Stock are otherwise
not delivered pursuant to such rights or warrants upon the exercise of such
rights or warrants, each Fixed Conversion Rate shall be readjusted to such
Fixed Conversion Rate that would then be in effect had the adjustment made upon
the issuance of such rights or warrants been made on the basis of the delivery
of only the number of shares of Common Stock actually delivered. In determining
the aggregate offering price payable to exercise such rights or warrants, there
shall be taken into account any consideration received for such rights or
warrants and the value of such consideration (if other than cash, to be
determined by the Board of Directors (or an authorized committee thereof),
whose determination shall be conclusive). 
For the purposes of this clause (ii), the number of shares of Common
Stock at the time outstanding shall not include shares held in treasury by the
Corporation but shall include any shares issuable in respect of any scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Corporation shall not issue any such rights or warrants in respect of shares of
Common Stock held in treasury by the Corporation.


 


(iii)          Subdivisions and
Combinations of the Common Stock. If outstanding shares of Common
Stock shall be subdivided into a greater number of shares of Common Stock or combined
into a lesser number of shares of Common Stock, each Fixed Conversion Rate in
effect at 5:00 p.m., New York City time, on the effective date of such
subdivision or combination shall be multiplied by a fraction:


 


(A)          the numerator of which is the number of shares of Common
Stock that would be outstanding immediately after, and solely as a result of,
such subdivision or combination, and


 


(B)           the denominator of which is the number of shares of Common
Stock outstanding immediately prior to such subdivision or combination.


 


Any adjustment made pursuant
to this clause (iii) shall become effective immediately after 5:00 p.m.,
New York City time, on the effective date of such subdivision or combination.


 


 


 


17
















 


(iv)          Debt or Asset Distribution.
(A)  If the Corporation distributes to all or substantially all holders of
Common Stock evidences of its indebtedness, shares of capital stock,
securities, cash or other assets (excluding (1) any dividend or
distribution covered by Section 14(a)(i), (2) any rights or warrants
covered by Section 14(a)(ii), (3) any dividend or distribution
covered by Section 14(a)(v) and (4) any Spin-Off to which the
provisions set forth in Section 14(a)(iv)(B) apply), each Fixed
Conversion Rate in effect at 5:00 p.m., New York City time, on the date
fixed for the determination of holders of Common Stock entitled to receive such
distribution will be multiplied by a fraction:


 


1.             the
numerator of which is the Current Market Price, and


 


2.             the
denominator of which is the Current Market Price minus the Fair Market Value,
on such date fixed for determination, of the portion of the evidences of
indebtedness, shares of capital stock, securities, cash or other assets so
distributed applicable to one share of Common Stock.


 


(B)           In the case of a Spin-Off, each Fixed Conversion Rate in
effect at 5:00 p.m., New York City time, on the date fixed for the
determination of holders of Common Stock entitled to receive such distribution
will be multiplied by a fraction:


 


1.             the
numerator of which is the sum of (x) the Current Market Price and (y) the
Fair Market Value of the portion of those shares of capital stock or similar
equity interests so distributed which is applicable to one share of Common
Stock as of the fifteenth Trading Day after the Ex-Date for such distribution
(or, if such shares of capital stock or equity interests are listed on a
national or regional securities exchange, the average of the Closing Prices of
such securities for the ten consecutive Trading Day period ending on such
fifteenth Trading Day), and


 


2.             the
denominator of which is the Current Market Price.


 


Any adjustment made pursuant
to this clause (iv) shall become effective immediately after 5:00 p.m.,
New York City time, on the date fixed for the determination of the holders of
Common Stock entitled to receive such distribution. In the event that such
distribution described in this clause (iv) is not so made, each Fixed
Conversion Rate shall be readjusted, effective as of the date the Board of
Directors publicly announces its decision not to pay such dividend or
distribution, to such Fixed Conversion Rate that would then be in effect if
such distribution had not been declared. If an adjustment to each Fixed
Conversion Rate is required under this clause (iv) during any settlement
period in respect of shares of Mandatory Convertible Preferred Stock that have
been tendered for conversion, delivery of the shares of Common Stock issuable
upon conversion will be delayed to the extent necessary in order to complete
the calculations provided for in this clause (iv).


 


(v)           Cash Distributions.  If the Corporation distributes an amount
exclusively in cash to all or substantially all holders of Common Stock
(excluding (1) any cash that is distributed in a Reorganization Event to
which Section 14(e) applies, (2) any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Corporation
or (3) any consideration payable in as part of a tender or exchange offer
by the Corporation or any subsidiary of the Corporation), each Fixed Conversion
Rate in effect at 5:00 p.m., New York City time, on the date fixed for
determination of the holders of Common Stock entitled to receive such
distribution will be multiplied by a fraction:


 


(A)          the numerator of which is the Current Market Price, and


 


(B)           the denominator of which is the Current Market Price minus
the amount per share of Common Stock of such distribution.


 


Any adjustment made pursuant
to this clause (v) shall become effective immediately after 5:00 p.m.,
New York City time, on the date fixed for the determination of the holders of
Common Stock entitled to receive such distribution. In the event that any
distribution described in this clause (v) is not so made, each Fixed Conversion
Rate shall be 


 


 


 


18

















 


readjusted, effective as of
the date the Board of Directors publicly announces its decision not to pay such
distribution, to such Fixed Conversion Rate which would then be in effect if
such distribution had not been declared.


 


(vi)          Self Tender Offers and
Exchange Offers. If the Corporation or any subsidiary of the
Corporation successfully completes a tender or exchange offer pursuant to a
Schedule TO or registration statement on Form S-4 for Common Stock
(excluding any securities convertible or exchangeable for Common Stock), where
the cash and the value of any other consideration included in the payment per
share of Common Stock exceeds the Current Market Price, each Fixed Conversion
Rate in effect at 5:00 p.m., New York City time, on the date of expiration
of the tender or exchange offer (the “Expiration
Date”) will be multiplied by a fraction:


 


(A)          the numerator of which shall be equal to the sum of:


 


a.             the
aggregate cash and Fair Market Value on the Expiration Date of any other
consideration paid or payable for shares of Common Stock validly tendered or
exchanged and not withdrawn as of the Expiration Date; and


 


b.             the
product of the Current Market Price and the number of shares of Common Stock
outstanding immediately after the last time tenders or exchanges may be made
pursuant to such tender or exchange offer (the “Expiration
Time”) on the Expiration Date; and


 


(B)           the denominator of which shall be equal to the product of
the Current Market Price ; and the number of shares of Common Stock outstanding
immediately prior to the Expiration Time on the Expiration Date.


 


Any adjustment made pursuant
to this clause (vi) shall become effective immediately after 5:00 p.m.,
New York City time, on the seventh Trading Day immediately following the
Expiration Date. In the event that the Corporation or one of its subsidiaries
is obligated to purchase shares of Common Stock pursuant to any such tender
offer or exchange offer, but the Corporation or such subsidiary is permanently
prevented by applicable law from effecting any such purchases, or all such
purchases are rescinded, then each Fixed Conversation Rate shall be readjusted
to such Fixed Conversion Rate that would then be in effect if such tender offer
or exchange offer had not been made. Except as set forth in the preceding
sentence, if the application of this clause (vi) to any tender offer or
exchange offer would result in a decrease in each Fixed Conversation Rate, no
adjustment shall be made for such tender offer or exchange offer under this
clause (vi).  If an adjustment to each
Fixed Conversion Rate is required pursuant to this clause (vi) during any
settlement period in respect of shares of Mandatory Convertible Preferred Stock
that have been tendered for conversion, delivery of the related conversion
consideration will be delayed to the extent necessary in order to complete the
calculations provided for in this clause (vi).


 


(vii)         Except with respect to a Spin-Off, in cases where the Fair
Market Value of assets (including cash), debt securities or certain rights,
warrants or options to purchase securities of the Corporation as to which Section 14(a)(iv) or
Section 14(a)(v) apply, applicable to one share of Common Stock,
distributed to holders of Common Stock equals or exceeds the average of the
Closing Prices of the Common Stock over the five consecutive Trading Day period
ending on the Trading Day before the Ex-Date for such distribution, rather than
being entitled to an adjustment in each Fixed Conversion Rate, Holders shall be
entitled to receive upon conversion, in addition to a number of shares of
Common Stock equal to the applicable conversion rate in effect on the
applicable Conversion Date, the kind and amount of assets (including cash),
debt securities or rights, warrants or options comprising the distribution that
such Holder would have received if such Holder had converted its shares of
Mandatory Convertible Preferred Stock immediately prior to the date fixed for
determination of the holders of Common Stock entitled to receive the
distribution calculated by multiplying the kind and amount of assets (including
cash), debt securities or rights, warrants or options comprising such
distribution by the number of shares of Common Stock equal to the Minimum
Conversion Rate in effect on the applicable Conversion Date.


 


(viii)        Rights Plans.
To the extent that the Corporation has a rights plan in effect with respect to
the Common Stock on any Conversion Date, upon conversion of any Mandatory
Convertible Preferred Stock, Holders shall receive, in addition to the Common
Stock, the rights under such rights plan, unless, prior to 


 


 


19

















 


such Conversion Date, the rights have
separated from the Common Stock, in which case each Fixed Conversion Rate shall
be adjusted at the time of separation of such rights as if the Corporation made
a distribution to all holders of the Common Stock as described in Section 14(a)(iv),
subject to readjustment in the event of the expiration, termination or
redemption of such rights.


 


(b)           Adjustment for Tax Reasons.
The Corporation may make such increases in each Fixed Conversion Rate, in
addition to any other increases required by this Section 14, as the
Corporation deems advisable to avoid or diminish any income tax to holders of
the Common Stock resulting from any dividend or distribution of shares of
Common Stock (or issuance of rights or warrants to acquire shares of Common
Stock) or from any event treated as such for income tax purposes or for any
other reasons; provided that the same
proportionate adjustment must be made to each Fixed Conversion Rate.


 


(c)           Calculation of Adjustments; Adjustments to Threshold
Appreciation Price, Initial Price and Stock Price. (i) All
adjustments to each Fixed Conversion Rate shall be calculated to the nearest
1/10,000th of a share of Common Stock. Prior to the Mandatory Conversion Date,
no adjustment in a Fixed Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
therein; provided, that any adjustments which by
reason of this Section 14(c)(i) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment; provided, however that with respect to adjustments to be
made to the Fixed Conversion Rates in connection with cash dividends paid by
the Corporation, the Fixed Conversion Rates shall be adjusted regardless of
whether such aggregate adjustments amount to one percent or more of the Fixed
Conversion Rates no later than March 15 of each calendar year; provided, further that on the earlier of the Mandatory
Conversion Date, an Early Conversion Date and the Effective Date of a Cash
Acquisition, adjustments to each Fixed Conversion Rate shall be made with
respect to any such adjustment carried forward and which has not been taken
into account before such date.


 


(ii)           If an adjustment is made to the Fixed Conversion Rates
pursuant to Sections 14(a) or 14(b), an inversely proportional adjustment
shall also be made to the Threshold Appreciation Price and the Initial Price
solely for purposes of determining which of clauses (i), (ii) and (iii) of
Section 8(b) shall apply on the Mandatory Conversion Date. Such
adjustment shall be made by dividing each of the Threshold Appreciation Price
and the Initial Price by a fraction, the numerator of which shall be either
Fixed Conversion Rate immediately after such adjustment pursuant to Sections 14(a) or
14(b) and the denominator of which shall be such Fixed Conversion Rate
immediately before such adjustment.  The
Corporation shall make appropriate adjustments to the Closing Prices prior to
the relevant Ex-Date, effective date or Expiration Date, as the case may be,
used to calculate the Applicable Market Value to account for any adjustments to
the Initial Price, the Threshold Appreciation Price and the Fixed Conversion
Rates that become effective during the 20 consecutive Trading Day period used
for calculating the Applicable Market Value.


 


(iii)          If:


 


(A)          the record date for a dividend or distribution on Common
Stock occurs after the end of the 20 consecutive Trading Day period used for
calculating the Applicable Market Value and before the Mandatory Conversion
Date; and


 


(B)           such dividend or distribution would have resulted in an
adjustment of the number of shares of Common Stock issuable to the Holders had
such record date occurred on or before the last Trading Day of such 20-Trading
Day period,


 


then the Corporation shall deem the Holders to be holders of record of
Common Stock for purposes of that dividend or distribution. In this case, the
Holders would receive the dividend or distribution on Common Stock together
with the number of shares of Common Stock issuable upon the Mandatory
Conversion Date.


 


(iv)          If an adjustment is made to the Fixed Conversion Rates
pursuant to Sections 14(a) or 14(b), a proportional adjustment shall be
made to each Stock Price column heading set forth in the table included in the
definition of “Cash Acquisition Conversion Rate.” Such adjustment shall be made
by multiplying each Stock Price included in such table by a fraction, the
numerator of which is the Minimum Conversion Rate immediately prior to such
adjustment and the denominator of which is the Minimum Conversion Rate immediately
after such adjustment.


 


 


20

















 


(v)           No adjustment to the Fixed Conversion Rates shall be made
if Holders may participate in the transaction that would otherwise give rise to
an adjustment.  In addition, the
applicable Conversion Rate shall not be adjusted:


 


(A)          upon the issuance of any shares of Common Stock pursuant to
any present or future plan providing for the reinvestment of dividends or
interest payable on the Corporation’s securities and the investment of
additional optional amounts in shares of Common Stock under any plan;


 


(B)           upon the issuance of any shares of Common Stock or rights
or warrants to purchase those shares pursuant to any present or future
employee, director or consultant benefit plan or program of or assumed by the
Corporation or any of its subsidiaries;


 


(C)           upon the issuance of any shares of Common Stock pursuant
to any option, warrant, right or exercisable, exchangeable or convertible
security outstanding as of the Issue Date; or


 


(D)          for a change in the par value or no par value of the Common
Stock.


 


(d)           Notice of Adjustment. Whenever the Fixed Conversion Rates
and the Cash Acquisition Conversion Rates are to be adjusted, the Corporation
shall:


 


(i)            compute such adjusted Fixed Conversion Rates and Cash
Acquisition Conversion Rates and prepare and transmit to the Transfer Agent an
Officer’s Certificate setting forth such adjusted Fixed Conversion Rates and
Cash Acquisition Conversion Rates, the method of calculation thereof in reasonable
detail and the facts requiring such adjustment and upon which such adjustment
is based;


 


(ii)           within five Business Days following the occurrence of an
event that requires an adjustment to the Fixed Conversion Rates and the Cash
Acquisition Conversion Rates (or if the Corporation is not aware of such
occurrence, as soon as practicable after becoming so aware), provide, or cause
to be provided, a written notice to the Holders of the occurrence of such
event; and


 


(iii)          within five Business Days following the determination of
such adjusted Fixed Conversion Rates and Cash Acquisition Conversion Rates
provide, or cause to be provided, to the Holders a statement setting forth in
reasonable detail the method by which the adjustment to such Fixed Conversion Rates
and Cash Acquisition Conversion Rates, as applicable, was determined and
setting forth such adjusted Fixed Conversion Rates or Cash Acquisition
Conversion Rates.


 


(e)           Reorganization Events. In the event of:


 


(i)            any consolidation or merger of the Corporation with or
into another Person (other than a merger or consolidation in which the
Corporation is the continuing corporation and in which the Common Stock
outstanding immediately prior to the merger or consolidation is not exchanged
for cash, securities or other property of the Corporation or another Person);


 


(ii)           any sale, transfer, lease or conveyance to another Person
of all or substantially all of the property and assets of the Corporation;


 


(iii)          any reclassification of Common Stock into securities
including securities other than Common Stock; or


 


(iv)          any statutory exchange of securities of the Corporation
with another Person (other than in connection with a merger or acquisition),


 


 


 


21

















 


in each case, as a result of which the Corporation’s Common Stock would
be converted into, or exchanged for, securities, cash or property (each, a “Reorganization Event”), each share of
Mandatory Convertible Preferred Stock outstanding immediately prior to such
Reorganization Event shall, without the consent of Holders, become convertible
into the kind of securities, cash and other property (the “Exchange Property”) that such Holder would
have been entitled to receive if such Holder had converted its Mandatory Convertible
Preferred Stock into Common Stock immediately prior to such Reorganization
Event.  For purposes of the foregoing,
the type and amount of Exchange Property in the case of any Reorganization
Event that causes the Common Stock to be converted into the right to receive
more than a single type of consideration (determined based in part upon any
form of shareholder election) will be deemed to be the weighted average of the
types and amounts of consideration received by the holders of Common Stock that
affirmatively make such an election.  The
number of units of Exchange Property for each share of Mandatory Convertible
Preferred Stock converted following the Effective Date of such Reorganization
Event shall be determined based on the Mandatory Conversion Rate, Minimum
Conversion Rate or Cash Acquisition Conversion Rate, as the case may be, then
in effect on the applicable Conversion Date (without any interest thereon and
without any right to dividends or distributions thereon which have a record
date that is prior to the Conversion Date). 
The applicable conversion rate shall be (1) in the case of an Early
Conversion Date, the Minimum Conversion Rate, and (2) otherwise, the
Mandatory Conversion Rate as determined under Section 8(b) based upon
the Applicable Market Value.


 


For purposes of this Section 14(e), “Applicable Market Value” shall be deemed to refer to the
Applicable Market Value of the Exchange Property and such value shall be
determined (A) with respect to any publicly traded securities that compose
all or part of the Exchange Property, based on the Closing Price of such
securities, (B) in the case of any cash that composes all or part of the
Exchange Property, based on the amount of such cash and (C) in the case of
any other property that composes all or part of the Exchange Property, based on
the value of such property, as determined by a nationally recognized
independent investment banking firm retained by the Corporation for this
purpose. For purposes of this Section 14(e), the term “Closing Price” shall be deemed to refer to the closing sale
price, last quoted bid price or mid-point of the last bid and ask prices, as
the case may be, of any publicly traded securities that comprise all or part of
the Exchange Property. For purposes of this Section 14(e), references to
Common Stock in the definition of “Trading Day” shall be replaced by references
to any publicly traded securities that comprise all or part of the Exchange
Property.


 


The above provisions of this Section 14(e) shall
similarly apply to successive Reorganization Events and the provisions of Section 14
shall apply to any shares of capital stock of the Corporation (or any
successor) received by the holders of Common Stock in any such Reorganization
Event.


 


The Corporation (or any successor) shall, within 20
days of the occurrence of any Reorganization Event, provide written notice to
the Holders of such occurrence of such event and of the kind and amount of the
cash, securities or other property that constitute the Exchange Property.
Failure to deliver such notice shall not affect the operation of this Section 14(e).


 


(15)         Replacement
Stock Certificates. (a) If physical certificates in respect
of the Mandatory Convertible Preferred Stock are issued, and any of the
Mandatory Convertible Preferred Stock certificates shall be mutilated, lost,
stolen or destroyed, the Corporation shall, at the expense of the Holder,
issue, in exchange and in substitution for and upon cancellation of the
mutilated Mandatory Convertible Preferred Stock certificate, or in lieu of and
substitution for the Mandatory Convertible Preferred Stock certificate lost,
stolen or destroyed, a new Mandatory Convertible Preferred Stock certificate of
like tenor and representing an equivalent amount of shares of Mandatory
Convertible Preferred Stock, but only upon receipt of evidence of such loss,
theft or destruction of such Mandatory Convertible Preferred Stock certificate
and indemnity, if requested, satisfactory to the Corporation and the Registrar.


 


(b)           The Corporation is not required to issue any certificates
representing the Mandatory Convertible Preferred Stock on or after the
Mandatory Conversion Date. In lieu of the delivery of a replacement certificate
following the Mandatory Conversion Date, the Registrar, upon delivery of the
evidence and indemnity described above, shall deliver the shares of Common
Stock issuable pursuant to the terms of the Mandatory Convertible Preferred
Stock formerly evidenced by the certificate.


 


 


 


22

















 


(16)         Transfer
Agent, Registrar, and Conversion and Dividend Disbursing Agent.
The duly appointed Transfer Agent, Registrar and Conversion and Dividend
Disbursing Agent for the Mandatory Convertible Preferred Stock shall be
Computershare Investor Services, LLC. The Corporation may, in its sole
discretion, remove the Transfer Agent, Registrar or Conversion and Dividend
Disbursing Agent in accordance with the agreement between the Corporation and
the Transfer Agent, Registrar or Conversion and Dividend Disbursing Agent, as
the case may be; provided that if the Corporation
removes Computershare Investor Services, LLC, the Corporation shall appoint a
successor transfer agent, registrar and conversion and dividend disbursing
agent, as the case may be, who shall accept such appointment prior to the
effectiveness of such removal. Upon any such removal or appointment, the
Corporation shall send notice thereof by first-class mail, postage prepaid, to
the Holders.


 


(17)         Form.
(a) The Mandatory Convertible Preferred Stock shall be issued in the form
of one or more permanent global shares of Mandatory Convertible Preferred Stock
in definitive, fully registered form with the global legend (the “Global Shares Legend”) as set forth on the
form of Mandatory Convertible Preferred Stock certificate attached hereto as Exhibit A
(each, a “Global Preferred Share”),
which is hereby incorporated in and expressly made a part of this Certificate.
The Global Preferred Shares may have notations, legends or endorsements
required by law, stock exchange rules, agreements to which the Corporation is
subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the
Corporation). The Global Preferred Shares shall be deposited on behalf of the
Holders represented thereby with the Registrar, at its New York office as
custodian for the  Depositary, and
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Corporation and countersigned and registered by the Registrar
as hereinafter provided. The aggregate number of shares represented by each
Global Preferred Share may from time to time be increased or decreased by
adjustments made on the records of the Registrar and the Depositary or its
nominee as hereinafter provided. This Section 17(a) shall apply only
to a Global Preferred Share deposited with or on behalf of the Depositary. The
Corporation shall execute and the Registrar shall, in accordance with this Section 17,
countersign and deliver initially one or more Global Preferred Shares that (i) shall
be registered in the name of Cede & Co. or other nominee of the
Depositary and (ii) shall be delivered by the Registrar to Cede &
Co. or pursuant to instructions received from Cede & Co. or held by
the Registrar as custodian for the Depositary pursuant to an agreement between
the Depositary and the Registrar. Members of, or participants in, the
Depositary (“Agent Members”) shall
have no rights under this Certificate, with respect to any Global Preferred
Share held on their behalf by the Depositary or by the Registrar as the
custodian of the Depositary, or under such Global Preferred Share, and the
Depositary may be treated by the Corporation, the Registrar and any agent of
the Corporation or the Registrar as the absolute owner of such Global Preferred
Share for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Corporation, the Registrar or any agent of the
Corporation or the Registrar from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its Agent Members, the operation of customary practices of
the Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Preferred Share. The Holders may grant proxies or
otherwise authorize any Person to take any action that a Holder is entitled to
take pursuant to the Mandatory Convertible Preferred Stock, this Certificate or
the Restated Certificate of Incorporation. Owners of beneficial interests in
Global Preferred Shares shall not be entitled to receive physical delivery of
certificated shares of Mandatory Convertible Preferred Stock, unless (x) the
Depositary is unwilling or unable to continue as Depositary for the Global
Preferred Shares and the Corporation does not appoint a qualified replacement
for the Depositary within 90 days, (y) the Depositary ceases to be a “clearing
agency” registered under the Exchange Act and the Corporation does not appoint
a qualified replacement for the Depositary within 90 days or (z) the
Corporation decides to discontinue the use of book-entry transfer through DTC
(or any successor Depositary). In any such case, the Global Preferred Shares
shall be exchanged in whole for definitive shares of Mandatory Convertible
Preferred Stock in registered form, with the same terms and of an equal
aggregate Liquidation Preference. Definitive shares of Mandatory Convertible
Preferred Stock shall be registered in the name or names of the Person or Persons
specified by the Depositary in a written instrument to the Registrar.


 


(b)           (i) An Officer shall sign the Global Preferred Shares
for the Corporation, in accordance with the Corporation’s bylaws and applicable
law, by manual or facsimile signature.


 


(ii)           If an Officer whose signature is on a Global Preferred
Share no longer holds that office at the time the Registrar countersigns the
Global Preferred Share, the Global Preferred Share shall be valid nevertheless.


 


 


 


23

















 


(iii)          A Global Preferred Share shall not be valid until an
authorized signatory of the Registrar manually countersigns such Global
Preferred Share. The signature shall be conclusive evidence that such Global
Preferred Share has been countersigned under this Certificate. Each Global
Preferred Share shall be dated the date of its countersignature.


 


(18)         Miscellaneous.
(a) All notices referred to herein shall be in writing, and, unless
otherwise specified herein, all notices hereunder shall be deemed to have been
given upon the earlier of receipt thereof or three Business Days after the
mailing thereof if sent by registered or certified mail (unless first-class
mail shall be specifically permitted for such notice under the terms of this
Certificate) with postage prepaid, addressed: (i) if to the Corporation,
to its office at 12061 Bluemont Way, Reston, VA 20190 (Attention: Mary F. Eure,
Corporate Secretary) or to the Registrar, Transfer Agent or Conversion and
Dividend Disbursing Agent at its Corporate Trust Office, or other agent of the
Corporation designated as permitted by this Certificate, or (ii) if to any
holder of the Mandatory Convertible Preferred Stock or shares of Common Stock,
as the case may be, to such holder at the address of such holder as listed in
the stock record books of the Corporation (which may include the records of any
transfer agent or registrar for the Mandatory Convertible Preferred Stock or
Common Stock, as the case may be), or (iii) to such other address as the
Corporation or any such holder, as the case may be, shall have designated by
notice similarly given.


 


(b)           The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance or
delivery of shares of Mandatory Convertible Preferred Stock or shares of Common
Stock or other securities issued on account of Mandatory Convertible Preferred
Stock pursuant hereto or certificates representing such shares or securities.
The Corporation shall not, however, be required to pay any such tax that may be
payable in respect of any transfer involved in the issuance or delivery of
shares of Mandatory Convertible Preferred Stock or Common Stock or other
securities in a name other than that in which the shares of Mandatory Convertible
Preferred Stock with respect to which such shares or other securities are
issued or delivered were registered, or in respect of any payment to any person
other than a payment to the Holder thereof, and shall not be required to make
any such issuance, delivery or payment unless and until the person otherwise
entitled to such issuance, delivery or payment has paid to the Corporation the
amount of any such tax or has established, to the satisfaction of the
Corporation, that such tax has been paid or is not payable.


 


(c)           The
Liquidation Preference and the Dividend Rate each shall be subject to equitable
adjustment whenever there shall occur a stock split, combination,
reclassification or other similar event involving the Mandatory Convertible
Preferred Stock. Such adjustments shall be determined in good faith by the
Board of Directors and submitted by the Board of Directors to the Transfer
Agent.


 


 


 


24

















 


IN WITNESS WHEREOF, the Corporation has caused this
Certificate of Designations to be executed and attested to by the undersigned
this 27th day of December, 2007.


 


	
   

  	
  SLM CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ MARY F.
  EURE

  	
   

  
	
   

  	
  Name:

  	
  Mary F. Eure

  
	
   

  	
  Title:

  	
  Corporate Secretary

  



 


 


ATTEST:


 


 


 


	
  By:

  	
  /s/ MICHAEL E. SHEEHAN

  	
   

  
	
   

  	
  Name: Michael E. Sheehan

  
	
   

  	
  Title: Senior Vice
  President & Deputy General Counsel

  



 


 


 


 


25
















EXHIBIT
A


 


FORM OF 7.25% MANDATORY
CONVERTIBLE PREFERRED STOCK, SERIES C


 


	
   

  	
  SEE REVERSE FOR LEGEND

   

  
	
  Number: 

  	
   

  
	
   

  	
   

  
	
  7.25% Mandatory
  Convertible Preferred Stock, 

  Series C

  	
  Shares

  
	
   

  	
  CUSIP
  NO.: 78442 P 700

  



 


SLM CORPORATION


 


FACE OF SECURITY


 


This certifies that Cede & Co. is
the owner of fully paid and non-assessable shares of the 7.25% Mandatory
Convertible Preferred Stock, Series C, par value $0.20 of SLM Corporation
(hereinafter called the “Corporation”), transferable on the books of the
Corporation by the holder hereof in person or by duly authorized attorney, upon
surrender of this certificate properly endorsed.  This certificate and the shares represented
hereby are issued and shall be held subject to all the provisions of the
Restated Certificate of Incorporation of SLM Corporation and all amendments
thereto (copies of which are on file at the office of the Transfer Agent) to
all of which the holder of this certificate by acceptance hereof assents.  This certificate is not valid until
countersigned by the Registrar.


 


Capitalized terms used but not defined herein
shall have the meanings ascribed thereto in or pursuant to the Certificate of
Designations of 7.25% Mandatory Convertible Preferred Stock, Series C, of
the Corporation.


 


 

















 


IN WITNESS WHEREOF, SLM Corporation has
executed this certificate as of the date set forth below.


 


	
  SLM CORPORATION

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Dated:

  



 


 

















 


REGISTRAR’ S CERTIFICATE OF AUTHENTICATION


 


This is one of the certificates representing
shares of the 7.25% Mandatory Convertible Preferred Stock, Series C,
referred to in the within mentioned Certificate of Designations.


 


	
  COMPUTERSHARE INVESTOR SERVICES, LLC

  as Registrar

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Dated:

  



 


 

















 


REVERSE OF SECURITY


 


SLM CORPORATION


 


The shares of 7.25% Mandatory Convertible Preferred
Stock, Series C (the “Mandatory Convertible Preferred Stock”), shall
automatically convert on December 15, 2010 into a number of shares of
common stock, par value $0.20 per share, of the Corporation (the “Common Stock”)
as provided in the Certificate of Designations of the Corporation relating to
the Mandatory Convertible Preferred Stock (the “Certificate of Designations”).  The shares of the Mandatory Convertible
Preferred Stock are also convertible at the option of the holder, into shares
of Common Stock at any time prior to December 15, 2010 as provided in the
Certificate of Designations.  The
preceding description is qualified in its entirety by reference to the
Certificate of Designations, a copy of which shall be furnished by the
Corporation to any holder without charge upon request addressed to the
Secretary of the Corporation at its principal office in Reston, VA, or to the
Registrar named on the face of this certificate.


 


The Corporation shall furnish to any shareholders,
upon request, and without charge, a full statement of the designations,
relative rights, preferences and limitations of the shares of each class and
series authorized to be issued so far as the same have been determined and of
the authority of the Board of Directors to divide the shares into classes or
series and to determine and change the relative rights, preferences and
limitations of any class or series.  Any
such request should be addressed to the Secretary of the Corporation at its
principal office in Reston, VA, or to the Registrar named on the face of this
certificate.


 


UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE CORPORATION OR THE REGISTRAR NAMED ON THE
FACE OF THIS CERTIFICATE, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO HAS
AN INTEREST HEREIN.


 


TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED
TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE CERTIFICATE OF DESIGNATIONS. 
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR NAMED ON THE FACE OF THIS CERTIFICATE SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH REGISTRAR MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.


 


 

















 


NOTICE OF CONVERSION


 


(To be Executed by the Holder

in order to Convert the 7.25% Mandatory Convertible Preferred Stock, Series C)


 


The undersigned hereby irrevocably elects to convert
(the “Conversion”) 7.25% Mandatory
Convertible Preferred Stock, Series C (the “Mandatory Convertible Preferred Stock”), of SLM Corporation
(hereinafter called the “Corporation”),
represented by stock certificate No(s).
[            ] (the
“Mandatory Convertible Preferred Stock Certificates”),
into common stock, par value $0.20 per share, of the Corporation (the “Common Stock”) according to the conditions
of the Certificate of Designations of the Mandatory Convertible Preferred Stock
(the “Certificate of Designation”),
as of the date written below.  If Common
Stock is to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto, if any,
and is delivering herewith the Mandatory Convertible Preferred Stock Certificates.  No fee will be charged to the holder for any
conversion, except for transfer taxes, if any. 
Each Mandatory Convertible Preferred Stock Certificate is attached
hereto (or evidence of loss, theft or destruction thereof).


 


The undersigned represents and warrants that all
offers and sales by the undersigned of the Common Stock, if any, issuable to
the undersigned upon conversion of the Mandatory Convertible Preferred Stock
shall be made pursuant to registration of the Common Stock under the Securities
Act of 1933, as amended (the “Act”), or pursuant to any exemption from
registration under the Act.


 


Capitalized terms used but not defined herein shall
have the meanings ascribed thereto in or pursuant to the Certificate of
Designation.


 


	
  Date of Conversion:

  	
   

  
	
  Applicable Conversion Rate:

  	
   

  
	
  Shares of Mandatory Convertible Preferred Stock to be Converted:

  	
   

  
	
  Shares of Common Stock to be Issued:*

  	
   

  
	
  Signature:

  	
   

  
	
  Name:

  	
   

  
	
  Address:**

  	
   

  
	
  Fax No.:

  	
   

  
									



 


 


 


 






*                                         The Company is
not required to issue Common Stock until the original Mandatory Convertible
Preferred Stock Certificate(s) (or evidence of loss, theft or destruction
thereof) to be converted are received by the Company or the Conversion
Agent.  The Company shall issue and
deliver Common Stock to an overnight courier not later than three business days
following receipt of the original Mandatory Convertible Preferred Stock
Certificate(s) to be converted.


 


**                                  Address where
Common Stock and any other payments or certificates shall be sent by the
Company.


 


 

















 


ASSIGNMENT


 


	
  For value received,

  	
   

  	
  hereby sell, assign and
  transfer unto

  
	
   

  
	
   

  
	
  (Please Insert Social
  Security or Other Identifying Number of Assignee)

  
	
   

  
	
   

  
	
  (Please Print or Typewrite
  Name and Address, Including Zip Code, of Assignee)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  shares of the common stock
  represented by the within certificate, and do hereby irrevocably constitute
  and appoint Attorney to transfer the said stock on the books of the within
  named Corporation with full power of substitution in the premises.

  



 


	
  Dated

  	
   

  	
   

  



 




	
   

  	
   

  
	
  NOTICE:

  	
  The
  Signature to this Assignment Must Correspond with the Name As Written Upon
  the Face of the Certificate in Every Particular, Without Alteration
  or Enlargement or Any Change Whatever.

  






 


 


	
  SIGNATURE GUARANTEED

  
	
   

  
	
   

  	
   

  
	
  (Signature Must Be
  Guaranteed by a Member 

  
	
  of a Medallion Signature
  Program)