Document:

ex10_2.htm

     

     

    

    Exhibit
10.2

     

     

    

    
      	
               

               

               

              PRIVATE &
      CONFIDENTIAL,

               

              January
      21, 2009

               

              Hartmarx
      Corporation

              101
      North Wacker Drive, 23rd
      Floor

              Chicago,
      Illinois 60606

              Attn:
      Mr. Glenn R. Morgan

            	
              
                Michael
      Buenzow

                Senior
      Managing Director

                FTI
      Consulting, Inc.

                333
      W. Wacker, Suite 600

                Chicago,
      IL  60606

              

               
      (312) 252-9333

            
	 
      

    

    

    Re:           Hartmarx
Corporation

    

    Dear
Mr. Morgan:

    

    
      	
              1.

            	
              Introduction

            

    

    

    This
letter confirms that we, FTI Consulting, Inc. (“FTI”), have been retained by
you, Hartmarx Corporation (“you”, the “Company”, or “Hartmarx”), to provide
certain financial advisory and consulting services (the “Services”) as set out
below.  This letter of engagement (the “Engagement”) and the related
Standard Terms and Conditions constitute the engagement contract (the
“Engagement Contract”) pursuant to which the Services will be
provided.

    

    
      	
              2.

            	
              Scope
      of Services

            

    

    

    The
Services that FTI will render to the Company may include, but are not limited
to, the following:

     

    Cash
Management and Financial Projections

    
      	
               
      

            	
              ·

            	
              Evaluate
      current liquidity position and expected future cash
  flows;

            

    

    
      	
               
      

            	
              ·

            	
              Assist
      management in the updating of weekly cash flow forecasts required pursuant
      to the Credit Facility;

            

    

    
      	
               
      

            	
              ·

            	
              Assist
      in the management and control all cash
  disbursements;

            

    

    
      	
               
      

            	
              ·

            	
              Advise
      management on cash conservation measures and assist with implementation of
      cash forecasting and reporting tools as requested;
  and

            

    

    
      	
               
      

            	
              ·

            	
              Assist
      in the development of financial
projections.

            

    

    

    Situational
Assessment

    
      	
               
      

            	
              ·

            	
              Assess
      current situation and determine solution for highest and best recovery and
      recommend appropriate strategic
alternatives;

            

    

    

    Bankruptcy
Advisory Assistance

    
      	
               
      

            	
              ·

            	
              Assist
      management and the Board of Directors in managing the various aspects of
      the execution of a Chapter 11
filing;

            

    

    

    
      
        
           

        

        
          1

          
            

          

        

        
           

        

      

    

    

    

    
      	
               
      

            	
              ·

            	
              Advise
      the Company in the process of obtaining and maintaining debtor in
      possession (“DIP”) financing and assist the Company in preparing a
      collateral package in support of such
financing;

            

    

    
      	
               
      

            	
              ·

            	
              Assist
      Company personnel with the communications and negotiations, at your
      request and under your guidance, with lenders, creditors, and other
      parties-in-interest including the preparation of financial information for
      distribution to such
parties-in-interest;

            

    

    
      	
               
      

            	
              ·

            	
              Advise
      and assist the Company in their preparation, analysis and monitoring of
      historical, current and projected financial affairs, including without
      limitation, if necessary, schedules of assets and liabilities (“SOAL’s”),
      statements of financial affairs (“SOFA’s”), periodic operating reports
      (“MOR’s), analyses of cash receipts and disbursements, analyses of cash
      flow forecasts, analyses of various asset and liability accounts, analyses
      of any unusual or significant transactions between themselves and any
      other entities, and analyses of proposed restructuring
      transactions;

            

    

    
      	
               
      

            	
              ·

            	
              Assist
      the Company in the valuation of businesses and in the preparation of a
      liquidation valuation for a reorganization plan and/or negotiation
      purposes;

            

    

    
      	
               
      

            	
              ·

            	
              Assist
      the Company in managing and executing the claims reconciliation process;
      and

            

    

    
      	
               
      

            	
              ·

            	
              Advise
      and assist the Company in identifying and/or reviewing preference
      payments, fraudulent conveyances and other causes of
    action.

            

    

    

    Interim
Management Services

    
      	
               
      

            	
              ·

            	
              If
      the Company decides to file for protection under Chapter 11 of the U.S.
      Bankruptcy Code, if required by the Lender Group and authorized by the
      Board of Directors, Michael Buenzow will commence serving as the Chief
      Restructuring Officer (the “CRO”) of the Company, reporting directly to
      the Board of Directors;

            

    

    
      	
               
      

            	
              ·

            	
              To
      the extent determined by the Board of Directors from time to time, Michael
      Buenzow will be granted the right to attend and participate (but not vote)
      in the meetings of the Board of Directors of the Company as an observer
      (such role referred to as “Board
Observer”);

            

    

    
      	
               
      

            	
              ·

            	
              Other
      temporary employees (the “Temporary Employees”) whom you may approve from
      time to time to support Michael Buenzow in his role as the
      CRO;

            

    

    
      	
               
      

            	
              ·

            	
              Lead
      management efforts to further identify and implement both short-term and
      long-term profit improvement, liquidity generating and debt reduction
      initiatives in an effort to improve the ongoing viability of the
      Company;

            

    

    
      	
               
      

            	
              ·

            	
              In
      conjunction with the Company’s retention of Moelis & Company to
      evaluate strategic alternatives, the CRO will lead efforts to evaluate all
      bids or proposals received for any of the Company’s assets to determine
      which bid or bids constitute the highest and best
  bids;

            

    

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    

    
      	
               
      

            	
              ·

            	
              Perform
      the typical duties of a CRO, work collaboratively with all
      parties-in-interest including but not limited to secured creditors,
      unsecured creditors, administrative creditors, shareholders, existing
      management and employees of the Company;
and

            

    

    
      	
               
      

            	
              ·

            	
              Proactively
      lead, direct and coordinate the Company’s Chapter 11 restructuring
      efforts.

            

    

    

    

    Other

    
      	
               
      

            	
              ·

            	
              Assist
      with such other accounting and financial advisory services as requested by
      the Company and/or the Board of Directors consistent with the role of a
      financial advisor and not duplicative of services provided by other
      professionals.

            

    

    

    The
Services may be performed by FTI employees or by any employees of subsidiaries
of FTI, as FTI shall determine in consultation with the Company.  FTI
may also provide, with the prior approval of the Company, non-officer Services
through agents or independent contractors.  References herein to FTI
and its employees shall be deemed to apply also, unless the context shall
otherwise indicate, to employees of each such subsidiary and to any such agents
or independent contractors and their employees.    The
Services will be directed and led by Michael Buenzow, a Senior Managing Director
who is expected to devote approximately 10-20 hours per week to this
engagement.  Mr. Buenzow will be assisted by other experienced
restructuring personnel familiar with complex bankruptcy cases.

    

    
      	
              3.

            	
              Confidentiality

            

    

    

    We
understand that the Company will make available to us information from their
books and records solely for the purpose of this analysis in connection with
your loan evaluation process. Such information will be held in strict confidence
and will not be used for any other purpose except for purposes stated herein.
The information accumulated by us will only be furnished to outside parties if
the Company instructs FTI to do so.

     

    
      	
              4.

            	
              Fees
      and Cash on Account

            

    

    

    Hourly
Fees

    

    Fees
in connection with this Engagement will be based upon the time incurred
providing the Services, multiplied by our standard hourly rates applicable in
the United States.  Effective January 1, 2009 our standard hourly
rates are summarized as follows:

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	 
      	
                                  Per
      Hour

                                
	 
      	 
      	 
      
	 
      	
                                  Senior
      Managing Directors

                                	
                                  $710
      - $825

                                
	 
      	
                                  Directors
      / Managing Directors

                                	
                                  $520
      - $685

                                
	 
      	
                                  Consultants/Senior
      Consultants

                                	
                                  $255
      - $480

                                
	 
      	
                                  Administrative
      / Paraprofessionals

                                	
                                  $105
      -
$210

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Hourly
rates are generally revised periodically. To the extent this engagement requires
services of our International divisions or personnel, the time will be
multiplied by our standard hourly rates applicable on International engagements.
Note that we do not provide any assurance regarding the outcome of our work and
our fees will not be contingent on the results of such work.

    

    
      	
               
      

            	
              In
      addition to the fees outlined above, FTI will bill for reasonable
      allocated and direct expenses which are likely to be incurred on your
      behalf during this Engagement.  Allocated expenses include the
      cost of items which are not billed directly to the engagement, including
      administrative support and other overhead expenses that are not billed
      through as direct reimbursable expenses, and are calculated at 6.0% of
      FTI’s standard professional rates.

            

    

    

    
      
        	
                 
      

              	
                Direct
      expenses include reasonable and customary out-of-pocket expenses which are
      billed directly to the engagement such as certain telephone, overnight
      mail, messenger, travel, meals, accommodations and other expenses
      specifically related to the engagement.  Further, if FTI and/or
      any of its employees are required to testify or provide evidence at or in
      connection with any judicial or administrative proceeding relating to this
      matter, FTI will be compensated by you at its regular hourly rates and
      reimbursed for reasonable allocated and direct expenses
      (including counsel fees) with respect thereto.

              
	 	 
	 	Performance
      / Completion Fees:   In addition to the monthly fees
      and expenses, after conclusion of a Chapter 11 Bankruptcy proceeding,
      FTI may elect to seek certain performance fees.  The
      potential incentive based performance fees are as
  follows:

      

    

     

    
      	
               
      

            	
              i.

            	
              $900,000
      in the event a Plan of Reorganization (“POR”) is confirmed by the
      Bankruptcy Court and the Company determines the CRO and FTI were
      instrumental in effectuating the development of the Plan.  No
      fee will be deemed to be earned and payable unless a Chapter 11 POR is
      confirmed by the Bankruptcy Court;

            

    

     

    
      	
               
      

            	
              ii.

            	
              In
      the event the Company is not reorganized as a stand alone Company or if
      substantially all of the Company’s are not sold to a strategic or
      financial buyer, FTI will be entitled to a Completion Fee of $300,000 for
      coordinating, negotiating and managing the sale of the Company’s assets to
      liquidation buyers.  FTI shall be entitled to this fee if the
      work is completed as outlined, required and requested;
  and

            

    

     

    
      	
               
      

            	
              iii.

            	
              All
      Performance and Completion Fees must be approved by the Board of Directors
      and the Bankruptcy Court.

            

    

     

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

     

    Payment of Fees and
Expenses

    

    
      	
               
      

            	
              Prior
      to the Chapter 11 filing, the Company will forward to us the amount of
      $150,000, which funds will be held as a “Retainer” to be applied against
      our final invoice for professional fees, charges and disbursements for the
      Engagement (the "Retainer").  To the extent this amount exceeds
      our fees, charges and disbursements upon the completion of the Engagement,
      we will refund any unused portion.  We will send the Company
      regular monthly invoices for services rendered and charges and
      disbursements incurred on the basis discussed above, and in certain
      circumstances, an invoice may be for estimated fees, charges and
      disbursements through a date certain.  All post-petition fees,
      charges and disbursements will be due and payable immediately upon entry
      of an order containing such court approval or at such time thereafter as
      instructed by the court.

            

    

    

    
      	
               
      

            	
              The
      Company understands that while the arrangement in this paragraph may be
      altered in whole or in part by the Bankruptcy Court, the Company shall
      nevertheless remain liable for payment of court approved post-petition
      fees and expenses.  Such items are afforded administrative
      priority under 11 U.S.C. § 503(b)(1).  The Bankruptcy Code
      provides in pertinent part, at 11 U.S.C. § 1129(a)(9)(A), that a plan
      cannot be confirmed unless these priority claims are paid in full in cash
      on the effective date of any plan (unless the holders of such claims agree
      to different treatment).

            

    

    

    
      	
               
      

            	
              Other

            

    

    
      	
               
      

            	
              In
      a case under the Bankruptcy Code, fees and expenses may not be paid
      without the express prior approval of the Bankruptcy Court.  In
      most cases of this size and complexity, on request of a party in interest,
      the Bankruptcy Court permits the payment of interim fees during the
      case.  The Company agrees that, if asked to do so by us, the
      Company will request the bankruptcy court to establish a procedure for the
      payment of interim fees during the case that would permit payment of
      interim fees.

            

    

    

    
      	
               
      

            	
              If
      the bankruptcy court approves such a procedure, we will submit invoices on
      account against our final fee.  These interim invoices will be
      based on such percentage as the bankruptcy court allows of our internal
      time charges and costs and expenses for the work performed during the
      relevant period and will constitute a request for an interim payment
      against the reasonable fee to be determined at the conclusion of our
      representation.

            

    

    

    
      	
               
      

            	
              Further,
      if FTI and/or any of its employees are required to testify or provide
      evidence at or in connection with any judicial or administrative
      proceeding relating to this matter, FTI will be compensated by you at its
      regular hourly rates and reimbursed for reasonable allocated and direct
      expenses with respect thereto.

            

    

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

     

    Our
fees will be based upon actual time incurred, plus out-of-pocket
expenses.  If we do not receive payment of any invoice within 15 days
of the due date, we shall be entitled, without prejudice to any other rights
that we may have, to immediately suspend provision of the Services until all
sums due are paid in full.  It is important that you understand that
total fees will depend upon the condition and accessibility of the books and
records, the level of cooperation provided by management, and the ultimate scope
of our work.  All fees and expenses are payable promptly after
approval is received from the bankruptcy court. Hourly rates are revised from
time to time.  We will provide you with prior written notice of any
changes to our rates.  Note that we do not provide any assurance
regarding the outcome of our work and our fees will not be contingent on the
results of such work.

     

    Further,
if FTI and/or any of its employees are required to testify or provide evidence
at or in connection with any judicial or administrative proceeding relating to
this matter, FTI will be compensated by you at its regular hourly rates and
reimbursed for reasonable allocated and direct expenses (including counsel fees)
with respect thereto.

    
 

    
      	
              5.

            	
              Terms
      and Conditions

            

    

     

    The
attached Standard Terms and Conditions set forth the duties of each party with
respect to the Services. Further, this letter and the Standard Terms and
Conditions attached comprise the entire Engagement Contract for the provision of
the Services to the exclusion of any other express or implied terms, whether
expressed orally or in writing, including any conditions, warranties and
representations, and shall supersede all previous letters of engagement,
undertakings, agreements, understandings, correspondence and other
communications, whether written or oral, regarding the Services.

    

    
      	
              6.

            	
              Conflicts
      of Interest

            

    

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    

    Based
on the list of interested parties (the “Potentially Interested Parties”),
provided by you, we have undertaken a limited review of our records to determine
FTI's professional relationships with the Company.  As you may be
aware, FTI is regularly retained by the administrative agent and/or other
members of your lending group (or law firms retained by the administrative agent
or lending group members).  However, such representations are in
matters unrelated to this engagement.

    

    From
the results of such review, we were not made aware of any conflicts of interest
or additional relationships that we believe would preclude us from performing
the Services.  However, as you know, we are a large consulting firm
with numerous offices throughout the United States.  We are regularly
engaged by new clients, which may include one or more of the Potentially
Interested Parties.  We will not knowingly accept an engagement that
directly conflicts with this Engagement without your prior written
consent.

    

    
      	
              7.

            	
              Limitation
      of Liability

            

    

    

    FTI
personnel serving as employees of the Company will be entitled to the benefit of
the most favorable indemnities provided by the Company to its officers and
directors, whether under the Company’s by-laws, certificate of incorporation, by
contract or otherwise.

    

    The
Company agrees that it will specifically include and cover Michael Buenzow (and
any other employee of FTI who, at the request of the Board of Directors of the
Company, FTI agrees will serve as an employee or officer of the Company) under
the Company’s policies for directors’ and officers’ insurance.  The
Company agrees to also maintain insurance coverage for Michael Buenzow for a
period of not less than two (2) years following the date of termination of such
employee's services hereunder. In the event that the Company is unable to
include FTI employees serving as employees or officers of the Company under the
Company’s policies, it is agreed that FTI will attempt to purchase a separate
directors’ and officers’ policy providing coverage similar to the coverage
provided to the Company’s other directors and officers that will cover FTI’s
employees serving as employees or officers of the Company only and that the cost
of the same shall be invoiced to the Company as an out-of-pocket
expense.

    

    If
FTI is unable to purchase such coverage, then it shall have the right to
terminate this letter agreement upon notice to the Company.  The
provisions of this section 7 are in the nature of contractual obligations and no
change in applicable law or the Company's charter, bylaws or other
organizational documents or policies shall affect any of Michael Buenzow’s
rights hereunder. The obligations of the parties as reflected herein shall
survive the termination of the Engagement.

    

    The
parties intend that an independent contractor relationship will be created by
this letter agreement.  As an independent contractor, FTI will have
complete and

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

    exclusive
charge of the management and operation of its business, including hiring and
paying the wages and other compensation of all its employees and agents, and
paying all bills, expenses and other charges incurred or payable with respect to
the operation of its business.

    

    None
of FTI’s employees serving as a Temporary Employee, including Michael Buenzow in
his capacity as CRO of the Company, will be entitled to receive from the Company
any salary, bonus, compensation, vacation pay, sick leave, retirement, pension
or social security benefits, workers compensation, disability, unemployment
insurance benefits or any other Company employee benefits.  FTI will
be responsible for all employment, withholding, income and other taxes incurred
in connection with the operation and conduct of its business (including those
related to Michael Buenzow, and the Temporary Employees).

    

    

    
      	
              8.

            	
              Acknowledgement
      and Acceptance

            

    

    

    Please
acknowledge your acceptance of the terms of this Engagement Contract by signing
both the confirmation below and the attached Standard Terms and Conditions and
returning a copy of each to us at the above address.

    

    Thank
you very much for allowing us to assist you in this matter.  If you
have any questions regarding this letter or the attached Standard Terms and
Conditions, please do not hesitate to contact Michael Buenzow at (312)
252-9333.

    

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

     

    
      

      Very
truly yours,

      

      FTI
Consulting, Inc.

    

     

     

    
      
        
          
            
              
                
                  
                    	
                            By:

                          	
                            /s/
      Michael Buenzow

                          	 
      
	 
      	
                            Michael
      Buenzow

                          
	 
      	
                            Senior
      Managing
Director

                          

                  

                

              

            

          

        

      

    

    

    
      

      
        	
                Date:

              	
                1/23/09

              	 
      

      

      

      

      

      

      
        	
                Agreed
      by:

              	
                 Hartmarx
      Corporation, Inc.

              

      

      

      
        	
                By:

              	
                /s/
      Glenn R. Morgan

              	 
      

      

      

      
        	
                Name:

              	
                Glenn
      R. Morgan

              	 
      
	 
      	 
      
	
                Title:

              	
                /s/
      EVP, Chief Financial Officer

              	 
      
	 
      	 
      
	
                Date:

              	
                1/23/09

              	 
      

      

     

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    

    FTI
CONSULTING, INC.

    

    STANDARD TERMS AND
CONDITIONS

    

    The
following are the Standard Terms and Conditions on which we will provide the
Services to you set forth within the attached letter of engagement with Hartmarx
Corporation, dated January 21, 2009.  The Engagement letter and the
Standard Terms and Conditions  (collectively the “Engagement
Contract”) form the entire agreement between us relating to the Services and
replace and supersede any previous proposals, letters of engagement,
undertakings, agreements, understandings, correspondence and other
communications, whether written or oral, regarding the Services.  The
headings and titles in the Engagement Contract are included to make it easier to
read but do not form part of the Engagement Contract.

    

      
        	
                1.

              	
                Reports
      and Advice

              
	 
      	 
      
	
                1.1

              	
                Use and purpose of advice and
      reports – Any advice given or report issued by us is provided
      solely for your use and benefit and only in connection with the purpose in
      respect of which the Services are provided. Unless required by law, you
      shall not provide any advice given or report issued by us to any third
      party, or refer to us or the Services, without our prior written consent.
      In no event, regardless of whether consent has been provided, shall we
      assume any responsibility to any third party to which any advice or report
      is disclosed or otherwise made available.

              
	 
      	 
      
	
                2.

              	
                Information
      and Assistance

              
	 
      	 
      
	
                2.1

              	
                Provision of information and
      assistance – Our performance of the Services is dependent upon your
      providing us with such information and assistance as we may reasonably
      require from time to time.

              
	 
      	 
      
	
                2.2

              	
                Punctual and accurate
      information – You shall use reasonable skill, care and attention to
      ensure that all information we may reasonably require is provided on a
      timely basis and is accurate and complete and relevant for the purpose for
      which it is required.  You shall also notify us if you
      subsequently learn that the information provided is incorrect or
      inaccurate or otherwise should not be relied upon.

              
	 
      	 
      
	
                2.3

              	
                No assurance on financial
      data – While our work may include an analysis of financial and
      accounting data, the Services will not include an audit, compilation or
      review of any kind of any financial statements or components
      thereof.  Company management will be responsible for any and all
      financial information they provide to us during the course of this
      Engagement, and we will not examine or compile or verify any such
      financial information.  Moreover, the circumstances of the
      Engagement may cause our advice to be limited in certain respects
      based

              

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      

      
        	 
      	
                upon,
      among other matters, the extent of sufficient and available data and the
      opportunity for supporting investigations in the time
      period.  Accordingly, as part of this Engagement, we will not
      express any opinion or other form of assurance on financial statements of
      the Company.

              
	 
      	 
      
	
                2.4

              	
                Prospective financial
      information - In the event the Services involve prospective
      financial information, our work will not constitute an examination or
      compilation, or apply agreed-upon procedures, in accordance with standards
      established by the American Institute of Certified Public Accountants or
      otherwise, and we will express no assurance of any kind on such
      information.  There will usually be differences between
      estimated and actual results, because events and circumstances frequently
      do not occur as expected, and those differences may be
      material.  We will take no responsibility for the achievability
      of results or events projected or anticipated by the management of the
      Company.

              
	 
      	 
      
	 
      	 
      
	
                3.

              	
                Additional
      Services

              
	 
      	 
      
	
                3.1

              	
                Responsibility for other
      parties – You shall be solely responsible for the work and fees of
      any other party engaged by you to provide services in connection with the
      Engagement regardless of whether such party was introduced to you by
      us.  Except as provided in this Engagement Contract, we shall
      not be responsible for providing or reviewing the advice or services of
      any such third party, including advice as to legal, regulatory, accounting
      or taxation matters.  Further, we acknowledge that we are not
      authorized under our Engagement Contract to engage any third party to
      provide services or advice to you, other than our agents or independent
      contractors engaged to provide Services, without your written
      authorization.

              
	 
      	 
      
	
                4.

              	
                Confidentiality

              
	 
      	 
      
	
                4.1

              	
                Restrictions on confidential
      information – Both parties agree that any confidential information
      received from the other party shall only be used for the purposes of
      providing or receiving Services under this or any other contract between
      us. Except as provided below, neither party will disclose the other
      party’s confidential information to any third party without the other
      party’s consent. Confidential information shall not include information
      that:

              
	 
      	 
      
	 
      	
                4.1.1

              	
                is
      or becomes generally available to the public other than as a result of a
      breach of an obligation under this Clause 4.1;

              
	 
      	 
      	 
      
	 
      	
                4.1.2

              	
                is
      acquired from a third party who, to the recipient party’s knowledge, owes
      no obligation of confidence in respect of the information;
    or

              
	 
      	 
      	 
      
	 
      	
                4.1.3

              	
                is
      or has been independently developed by the
  recipient.

              

      

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      

      
        	
                4.2

              	
                Disclosing confidential
      information – Notwithstanding Clause 1.1 or 4.1 above, either party
      will be entitled to disclose confidential information of the other to a
      third party to the extent that this is required by valid legal process,
      provided that (and without breaching any legal or regulatory requirement)
      where reasonably practicable not less than 2 business days’ notice in
      writing is first given to the other party.

              
	 
      	 
      
	
                4.3

              	
                Citation of engagement –
      Without prejudice to Clause 4.1 and Clause 4.2 above, to the extent our
      engagement is or becomes known to the public, we may cite the performance
      of the Services to our clients and prospective clients as an indication of
      our experience, unless we and you specifically agree otherwise in
      writing.

              
	 
      	 
      
	
                4.4

              	
                Internal quality reviews
      – Notwithstanding the above, we may disclose any information referred to
      in this Clause 4 to any other FTI entity or use it for internal quality
      reviews.

              
	 
      	 
      
	
                4.5

              	
                Maintenance of
      workpapers – Notwithstanding the above, we may keep one archival
      set of our working papers from the Engagement, including working papers
      containing or reflecting confidential information, in accordance with our
      internal policies.

              
	 
      	 
      
	
                5.

              	
                Termination

              
	 
      	 
      
	
                5.1

              	
                Termination of Engagement with
      notice – Either party may terminate the Engagement Contract for
      whatever reason upon written notice to the other party. Upon receipt of
      such notice, we will stop all work immediately. You will be responsible
      for all fees and expenses incurred by us through the date termination
      notice is received.

              
	 
      	 
      
	
                5.2

              	
                Continuation of terms –
      The terms of the Engagement that by their context are intended to be
      performed after termination or expiration of this Engagement Contract,
      including but not limited to, Clauses 3 and 4 of the Engagement letter,
      and Clauses 1.1, 4, 6 and 7 of the Standard Terms and Conditions, are
      intended to survive such termination or expiration and shall continue to
      bind all parties.

              
	 
      	 
      
	
                6.

              	
                Indemnification and
      Liability Limitation;
      Waiver of Jury Trial

              
	 
      	 
      
	
                6.1

              	
                Indemnification - You
      agree to indemnify and hold harmless FTI and any of its subsidiaries and
      affiliates, officers, directors, principals, shareholders, agents,
      independent contactors and employees (collectively “Indemnified Persons”)
      from and against any and all claims, liabilities, damages, obligations,
      costs and expenses (including reasonable attorneys’ fees and expenses and
      costs of investigation) arising out of or relating to your retention of
      FTI, the execution and delivery of this Engagement Contract, the provision
      of Services or other matters relating to or arising from this Engagement
      Contract, except to the extent that any such claim, liability, obligation,
      damage, cost or expense shall have
been.

              

      

      

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      

      
        	 
      	
                determined
      by final non-appealable order of a court of competent jurisdiction to have
      resulted from the gross negligence or willful misconduct of the
      Indemnified Person or Persons in respect of whom such liability is
      asserted

              
	 
      	 
      
	
                6.2

              	
                Limitation of liability -
      You agree that no Indemnified Person shall have any liability as a
      result of your retention of FTI, the execution and delivery of this
      Engagement Contract, the provision of Services or other matters relating
      to or arising from this Engagement Contract, other than liabilities that
      shall have been determined by final non-appealable order of a court of
      competent jurisdiction to have resulted from the gross negligence or
      willful misconduct of the Indemnified Person or Persons in respect of whom
      such liability is asserted.  Without limiting the generality of
      the foregoing, in no event shall any Indemnified Person be liable for
      consequential, indirect or punitive damages, damages for lost profits or
      opportunities or other like damages or claims of any
  kind.

              
	 
      	 
      
	
                6.3

              	
                WAIVER OF JURY TRIAL –TO
      FACILITATE JUDICIAL RESOLUTION AND SAVE TIME AND EXPENSE, YOU AND FTI
      IRREVOCABLY AND UNCONDITIONALLY AGREE NOT TO DEMAND A TRIAL BY JURY IN ANY
      ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THE
      SERVICES OR ANY SUCH OTHER MATTER. .

              
	 
      	 
      
	
                7.

              	
                Governing Law and
      Jurisdiction-The Engagement Contract shall be governed by and
      interpreted in accordance with the laws of the State of New York, without
      giving effect to the choice of law provisions thereof.  The
      United States District Court for the Southern District of New York and the
      appropriate Courts of the State of New York sitting in the Borough of
      Manhattan, City of New York shall have exclusive jurisdiction in relation
      to any claim, dispute or difference concerning the Engagement Contract and
      any matter arising from it. The parties submit to the jurisdiction of such
      Courts and irrevocably waive any right they may have to object to any
      action being brought in these Courts, to claim that the action has been
      brought in an inconvenient forum or to claim that those Courts do not have
      jurisdiction.

              

      

      

      Confirmation of Standard
Terms and Conditions

      

      We
agree to engage FTI Consulting, Inc. upon the terms set forth in these Standard
Terms and Conditions as outlined above.

      

      Hartmarx
Corporation.

      

      
        	
                By:

              	
                /s/
      Glenn R. Morgan

              	 
      
	 
      	 
      
	 
      	 
      
	
                Date:

              	
                1/23/09

              	 
      

      

     

    
      
        

      

    

    13Filed by Bowne Pure Compliance

Exhibit 4.1

CERTIFICATE OF DETERMINATION

OF

FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES A

OF

PLUMAS BANCORP

Pursuant to Section 401 of the Corporations Code of the State of California:

We, Douglas N. Biddle, President and Chief Executive Officer and Terrance J. Reeson,
Secretary, of Plumas Bancorp organized under the laws of the State of California (hereinafter
called the “Issuer”), do hereby certify as follows:

1. On December 17, 2008, the Board of Directors of the Issuer adopted a resolution
designating 11,976 shares of Preferred Stock as Fixed Rate Cumulative Perpetual Preferred Stock,
Series A.

2. No shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A have been issued.

3. Pursuant to the authority conferred upon the Board of Directors by the Articles of
Incorporation of the Issuer, the following resolution was duly adopted by the Board of Directors on
December 16, 2008 creating the series of Preferred Stock designated as Fixed Rate Cumulative
Perpetual Preferred Stock, Series A:

RESOLVED, that pursuant to the provisions of the Articles of Incorporation of the Issuer and
applicable law, a series of Preferred Stock of the Issuer be and hereby is created, and that the
designation and number of shares of such series, and the voting and other powers, preferences and
relative, participating, optional or other rights, and the qualifications, limitations and
restrictions thereof, of the shares of such series are as follows:

Part 1. Designation and Number of Shares. There is hereby created out of the
authorized and unissued shares of preferred stock of the Issuer a series of preferred stock
designated as the “Fixed Rate Cumulative Perpetual Preferred Stock, Series A” (the “Designated
Preferred Stock”). The authorized number of shares of Designated Preferred Stock shall be
Eleven Thousand Nine Hundred Seventy-Six (11,976).

Part 2. Standard Provisions. The Standard Provisions contained in Exhibit A attached
hereto are incorporated herein by reference in their entirety and shall be deemed to be a part of
this Certificate of Determination to the same extent as if such provisions had been set forth in
full herein.

PLU-12230803.1

UST Sequence #359

 

 

 

Part 3. Definitions. The following terms are used in this Certificate of
Determination (including the Standard Provisions in Exhibit A hereto) as defined below:

(a) “Common Stock” means the common stock, no par value per share, of the Issuer.

(b) “Dividend Payment Date” means February 15, May 15, August 15 and November 15 of
each year.

(c) “Junior Stock” means the Common Stock, and any other class or series of stock of
the Issuer the terms of which expressly provide that it ranks junior to Designated Preferred Stock
as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Issuer.

(d) “Liquidation Amount” means $1,000 per share of Designated Preferred Stock.

(e) “Minimum Amount” means $2,994,000.00.

(f) “Parity Stock” means any class or series of stock of the Issuer (other than
Designated Preferred Stock) the terms of which do not expressly provide that such class or series
will rank senior or junior to Designated Preferred Stock as to dividend rights and/or as to rights
on liquidation, dissolution or winding up of the Issuer (in each case without regard to whether
dividends accrue cumulatively or non-cumulatively).

(g) “Signing Date” means “Original Issue Date.”

Part 4. Certain Voting Matters. Holders of shares of Designated Preferred Stock will
be entitled to one vote for each such share on any matter on which holders of Designated Preferred
Stock are entitled to vote, including any action by written consent.

UST Sequence #359

 

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We further declare under penalty of perjury under the laws of the State of California that the
matters set forth in this certificate are true and correct of our own knowledge.

Date: January 5, 2009

	 	 	 	 	 
	 	                                                   /s/ D.N. Biddle
 	 
	 	Name:  	Doug Biddle 	 
	 	Title:  	President and Chief Executive Officer 	 
	 	 	 
	 	                                                   /s/ Terrance J. Reeson
 	 
	 	Name:  	Terrance J. Reeson 	 
	 	Title:  	Secretary 	 

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EXHIBIT A

STANDARD PROVISIONS

Section 1. General Matters. Each share of Designated Preferred Stock shall be
identical in all respects to every other share of Designated Preferred Stock. The Designated
Preferred Stock shall be perpetual, subject to the provisions of Section 5 of these Standard
Provisions that form a part of the Certificate of Determination. The Designated Preferred Stock
shall rank equally with Parity Stock and shall rank senior to Junior Stock with respect to the
payment of dividends and the distribution of assets in the event of any dissolution, liquidation or
winding up of the Issuer.

Section 2. Standard Definitions. As used herein with respect to Designated Preferred
Stock:

(a) “Applicable Dividend Rate” means (i) during the period from the Original Issue
Date to, but excluding, the first day of the first Dividend Period commencing on or after the fifth
anniversary of the Original Issue Date, 5% per annum and (ii) from and after the first day of the
first Dividend Period commencing on or after the fifth anniversary of the Original Issue Date, 9%
per annum.

(b) “Appropriate Federal Banking Agency” means the “appropriate Federal banking
agency” with respect to the Issuer as defined in Section 3(q) of the Federal Deposit Insurance Act
(12 U.S.C. Section 1813(q)), or any successor provision.

(c) “Business Combination” means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the Issuer’s stockholders.

(d) “Business Day” means any day except Saturday, Sunday and any day on which banking
institutions in the State of New York generally are authorized or required by law or other
governmental actions to close.

(e) “Bylaws” means the bylaws of the Issuer, as they may be amended from time to time.

(f) “Certificate of Determination” means the Certificate of Determination or
comparable instrument relating to the Designated Preferred Stock, of which these Standard
Provisions form a part, as it may be amended from time to time.

(g) “Charter” means the Issuer’s certificate or articles of incorporation, articles of
association, or similar organizational document.

(h) “Dividend Period” has the meaning set forth in Section 3(a).

(i) “Dividend Record Date” has the meaning set forth in Section 3(a).

(j) “Liquidation Preference” has the meaning set forth in Section 4(a).

UST Sequence #359

 

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(k) “Original Issue Date” means the date on which shares of Designated Preferred Stock
are first issued.

(l) “Preferred Director” has the meaning set forth in Section 7(b).

(m) “Preferred Stock” means any and all series of serial preferred stock of the
Issuer, including the Designated Preferred Stock.

(n) “Qualified Equity Offering” means the sale and issuance for cash by the Issuer to
persons other than the Issuer or any of its subsidiaries after the Original Issue Date of shares of
perpetual Preferred Stock, Common Stock or any combination of such stock, that, in each case,
qualify as and may be included in Tier 1 capital of the Issuer at the time of issuance under the
applicable risk-based capital guidelines of the Issuer’s Appropriate Federal Banking Agency (other
than any such sales and issuances made pursuant to agreements or arrangements entered into, or
pursuant to financing plans which were publicly announced, on or prior to November 17, 2008).

(o) “Standard Provisions” mean these Standard Provisions that form a part of the
Certificate of Determination relating to the Designated Preferred Stock.

(p) “Successor Preferred Stock” has the meaning set forth in Section 5(a).

(q) “Voting Parity Stock” means, with regard to any matter as to which the holders of
Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these
Standard Provisions that form a part of the Certificate of Determination, any and all series of
Parity Stock upon which like voting rights have been conferred and are exercisable with respect to
such matter.

Section 3. Dividends.

(a) Rate. Holders of Designated Preferred Stock shall be entitled to receive, on each
share of Designated Preferred Stock if, as and when declared by the Board of Directors or any duly
authorized committee of the Board of Directors, but only out of assets legally available therefor,
cumulative cash dividends with respect to each Dividend Period (as defined below) at a rate per
annum equal to the Applicable Dividend Rate on (i) the Liquidation Amount per share of Designated
Preferred Stock and (ii) the amount of accrued and unpaid dividends for any prior Dividend Period
on such share of Designated Preferred Stock, if any. Such dividends shall begin to accrue and be
cumulative from the Original Issue Date, shall compound on each subsequent Dividend Payment Date
(i.e., no dividends shall accrue on other dividends unless and until the first Dividend Payment
Date for such other dividends has passed without such other dividends having been paid on such
date) and shall be payable quarterly in arrears on each Dividend Payment Date, commencing with the
first such Dividend Payment Date to occur at least 20 calendar days after the Original Issue Date.
In the event that any Dividend Payment Date would otherwise fall on a day that is not a Business
Day, the dividend payment due on that date will be postponed to the next day that is a Business Day
and no additional dividends will accrue as a result of that postponement. The period from and
including any Dividend Payment Date to, but excluding, the next Dividend Payment Date is a
“Dividend Period”, provided that the initial Dividend Period shall be the period from and
including the Original Issue Date to, but excluding, the next Dividend Payment Date.

UST Sequence #359

 

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Dividends that are payable on Designated Preferred Stock in respect of any Dividend Period
shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of
dividends payable on Designated Preferred Stock on any date prior to the end of a Dividend Period,
and for the initial Dividend Period, shall be computed on the basis of a 360-day year consisting of
twelve 30-day months, and actual days elapsed over a 30-day month.

Dividends that are payable on Designated Preferred Stock on any Dividend Payment Date will be
payable to holders of record of Designated Preferred Stock as they appear on the stock register of
the Issuer on the applicable record date, which shall be the 15th calendar day immediately
preceding such Dividend Payment Date or such other record date fixed by the Board of Directors or
any duly authorized committee of the Board of Directors that is not more than 60 nor less than 10
days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day
that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a
Business Day.

Holders of Designated Preferred Stock shall not be entitled to any dividends, whether payable
in cash, securities or other property, other than dividends (if any) declared and payable on
Designated Preferred Stock as specified in this Section 3 (subject to the other provisions of the
Certificate of Determination).

(b) Priority of Dividends. So long as any share of Designated Preferred Stock remains
outstanding, no dividend or distribution shall be declared or paid on the Common Stock or any other
shares of Junior Stock (other than dividends payable solely in shares of Common Stock) or Parity
Stock, subject to the immediately following paragraph in the case of Parity Stock, and no Common
Stock, Junior Stock or Parity Stock shall be, directly or indirectly, purchased, redeemed or
otherwise acquired for consideration by the Issuer or any of its subsidiaries unless all accrued
and unpaid dividends for all past Dividend Periods, including the latest completed Dividend Period
(including, if applicable as provided in Section 3(a) above, dividends on such amount), on all
outstanding shares of Designated Preferred Stock have been or are contemporaneously declared and
paid in full (or have been declared and a sum sufficient for the payment thereof has been set aside
for the benefit of the holders of shares of Designated Preferred Stock on the applicable record
date). The foregoing limitation shall not apply to (i) redemptions, purchases or other
acquisitions of shares of Common Stock or other Junior Stock in connection with the administration
of any employee benefit plan in the ordinary course of business and consistent with past practice;
(ii) the acquisition by the Issuer or any of its subsidiaries of record ownership in Junior Stock
or Parity Stock for the beneficial ownership of any other persons (other than the Issuer or any of
its subsidiaries), including as trustees or custodians; and (iii) the exchange or conversion of
Junior Stock for or into other Junior Stock or of Parity Stock for or into other Parity Stock (with
the same or lesser aggregate liquidation amount) or Junior Stock, in each case, solely to the
extent required pursuant to binding contractual agreements entered into prior to the Signing Date
or any subsequent agreement for the accelerated exercise, settlement or exchange thereof for Common
Stock.

UST Sequence #359

 

A-3

 

When dividends are not paid (or declared and a sum sufficient for payment thereof set aside
for the benefit of the holders thereof on the applicable record date) on any Dividend Payment Date
(or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment
Dates, on a dividend payment date falling within a Dividend Period related to
such Dividend Payment Date) in full upon Designated Preferred Stock and any shares of Parity
Stock, all dividends declared on Designated Preferred Stock and all such Parity Stock and payable
on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates
different from the Dividend Payment Dates, on a dividend payment date falling within the Dividend
Period related to such Dividend Payment Date) shall be declared pro rata so that the respective
amounts of such dividends declared shall bear the same ratio to each other as all accrued and
unpaid dividends per share on the shares of Designated Preferred Stock (including, if applicable as
provided in Section 3(a) above, dividends on such amount) and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from
the Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related
to such Dividend Payment Date) (subject to their having been declared by the Board of Directors or
a duly authorized committee of the Board of Directors out of legally available funds and including,
in the case of Parity Stock that bears cumulative dividends, all accrued but unpaid dividends) bear
to each other. If the Board of Directors or a duly authorized committee of the Board of Directors
determines not to pay any dividend or a full dividend on a Dividend Payment Date, the Issuer will
provide written notice to the holders of Designated Preferred Stock prior to such Dividend Payment
Date.

Subject to the foregoing, and not otherwise, such dividends (payable in cash, securities or
other property) as may be determined by the Board of Directors or any duly authorized committee of
the Board of Directors may be declared and paid on any securities, including Common Stock and other
Junior Stock, from time to time out of any funds legally available for such payment, and holders of
Designated Preferred Stock shall not be entitled to participate in any such dividends.

Section 4. Liquidation Rights.

(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution
or winding up of the affairs of the Issuer, whether voluntary or involuntary, holders of Designated
Preferred Stock shall be entitled to receive for each share of Designated Preferred Stock, out of
the assets of the Issuer or proceeds thereof (whether capital or surplus) available for
distribution to stockholders of the Issuer, subject to the rights of any creditors of the Issuer,
before any distribution of such assets or proceeds is made to or set aside for the holders of
Common Stock and any other stock of the Issuer ranking junior to Designated Preferred Stock as to
such distribution, payment in full in an amount equal to the sum of (i) the Liquidation Amount per
share and (ii) the amount of any accrued and unpaid dividends (including, if applicable as provided
in Section 3(a) above, dividends on such amount), whether or not declared, to the date of payment
(such amounts collectively, the “Liquidation Preference”).

(b) Partial Payment. If in any distribution described in Section 4(a) above the assets
of the Issuer or proceeds thereof are not sufficient to pay in full the amounts payable with
respect to all outstanding shares of Designated Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Issuer ranking equally with Designated Preferred
Stock as to such distribution, holders of Designated Preferred Stock and the holders of such other
stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.

UST Sequence #359

 

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(c) Residual Distributions. If the Liquidation Preference has been paid in full to all
holders of Designated Preferred Stock and the corresponding amounts payable with respect of any
other stock of the Issuer ranking equally with Designated Preferred Stock as to such distribution
has been paid in full, the holders of other stock of the Issuer shall be entitled to receive all
remaining assets of the Issuer (or proceeds thereof) according to their respective rights and
preferences.

(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this
Section 4, the merger or consolidation of the Issuer with any other corporation or other entity,
including a merger or consolidation in which the holders of Designated Preferred Stock receive
cash, securities or other property for their shares, or the sale, lease or exchange (for cash,
securities or other property) of all or substantially all of the assets of the Issuer, shall not
constitute a liquidation, dissolution or winding up of the Issuer.

Section 5. Redemption.

(a) Optional Redemption. Except as provided below, the Designated Preferred Stock may
not be redeemed prior to the first Dividend Payment Date falling on or after the third anniversary
of the Original Issue Date. On or after the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date, the Issuer, at its option, subject to the approval of
the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time and from time
to time, out of funds legally available therefor, the shares of Designated Preferred Stock at the
time outstanding, upon notice given as provided in Section 5(c) below, at a redemption price equal
to the sum of (i) the Liquidation Amount per share and (ii) except as otherwise provided below, any
accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends
on such amount) (regardless of whether any dividends are actually declared) to, but excluding, the
date fixed for redemption.

Notwithstanding the foregoing, prior to the first Dividend Payment Date falling on or after
the third anniversary of the Original Issue Date, the Issuer, at its option, subject to the
approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time
and from time to time, the shares of Designated Preferred Stock at the time outstanding, upon
notice given as provided in Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below, any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount)
(regardless of whether any dividends are actually declared) to, but excluding, the date fixed for
redemption; provided that (x) the Issuer (or any successor by Business Combination) has received
aggregate gross proceeds of not less than the Minimum Amount (plus the “Minimum Amount” as defined
in the relevant certificate of determination for each other outstanding series of preferred stock
of such successor that was originally issued to the United States Department of the Treasury (the
“Successor Preferred Stock”) in connection with the Troubled Asset Relief Program Capital
Purchase Program) from one or more Qualified Equity Offerings (including Qualified Equity Offerings
of such successor), and (y) the aggregate redemption price of the Designated Preferred Stock (and
any Successor Preferred Stock) redeemed pursuant to this paragraph may not exceed the aggregate net
cash proceeds received by the Issuer (or any successor by Business Combination) from such Qualified
Equity Offerings (including Qualified Equity Offerings of such successor).

UST Sequence #359

 

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The redemption price for any shares of Designated Preferred Stock shall be payable on the
redemption date to the holder of such shares against surrender of the certificate(s) evidencing
such shares to the Issuer or its agent. Any declared but unpaid dividends payable on a redemption
date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be paid to
the holder entitled to receive the redemption price on the redemption date, but rather shall be
paid to the holder of record of the redeemed shares on such Dividend Record Date relating to the
Dividend Payment Date as provided in Section 3 above.

(b) No Sinking Fund. The Designated Preferred Stock will not be subject to any
mandatory redemption, sinking fund or other similar provisions. Holders of Designated Preferred
Stock will have no right to require redemption or repurchase of any shares of Designated Preferred
Stock.

(c) Notice of Redemption. Notice of every redemption of shares of Designated Preferred
Stock shall be given by first class mail, postage prepaid, addressed to the holders of record of
the shares to be redeemed at their respective last addresses appearing on the books of the Issuer.
Such mailing shall be at least 30 days and not more than 60 days before the date fixed for
redemption. Any notice mailed as provided in this Subsection shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice, but failure duly to give such
notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of
Designated Preferred Stock designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Designated Preferred Stock. Notwithstanding
the foregoing, if shares of Designated Preferred Stock are issued in book-entry form through The
Depository Trust Company or any other similar facility, notice of redemption may be given to the
holders of Designated Preferred Stock at such time and in any manner permitted by such facility.
Each notice of redemption given to a holder shall state: (1) the redemption date; (2) the number of
shares of Designated Preferred Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such holder; (3) the
redemption price; and (4) the place or places where certificates for such shares are to be
surrendered for payment of the redemption price.

(d) Partial Redemption. In case of any redemption of part of the shares of Designated
Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro
rata or in such other manner as the Board of Directors or a duly authorized committee thereof may
determine to be fair and equitable. Subject to the provisions hereof, the Board of Directors or a
duly authorized committee thereof shall have full power and authority to prescribe the terms and
conditions upon which shares of Designated Preferred Stock shall be redeemed from time to time. If
fewer than all the shares represented by any certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without charge to the holder thereof.

(e) Effectiveness of Redemption. If notice of redemption has been duly given and if on
or before the redemption date specified in the notice all funds necessary for the redemption have
been deposited by the Issuer, in trust for the pro rata benefit of the holders of the shares called
for redemption, with a bank or trust company doing business in the Borough of Manhattan, The City
of New York, and having a capital and surplus of at least $500 million and selected by the Board of
Directors, so as to be and continue to be available solely therefor, then, notwithstanding that any
certificate for any share so called for redemption has not been surrendered for cancellation, on
and after the redemption date dividends shall cease to accrue on
all shares so called for redemption, all shares so called for redemption shall no longer be
deemed outstanding and all rights with respect to such shares shall forthwith on such redemption
date cease and terminate, except only the right of the holders thereof to receive the amount
payable on such redemption from such bank or trust company, without interest. Any funds unclaimed
at the end of three years from the redemption date shall, to the extent permitted by law, be
released to the Issuer, after which time the holders of the shares so called for redemption shall
look only to the Issuer for payment of the redemption price of such shares.

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(f) Status of Redeemed Shares. Shares of Designated Preferred Stock that are redeemed,
repurchased or otherwise acquired by the Issuer shall revert to authorized but unissued shares of
Preferred Stock (provided that any such cancelled shares of Designated Preferred Stock may be
reissued only as shares of any series of Preferred Stock other than Designated Preferred Stock).

Section 6. Conversion. Holders of Designated Preferred Stock shares shall have no
right to exchange or convert such shares into any other securities.

Section 7. Voting Rights.

(a) General. The holders of Designated Preferred Stock shall not have any voting
rights except as set forth below or as otherwise from time to time required by law.

(b) Preferred Stock Directors. Whenever, at any time or times, dividends payable on
the shares of Designated Preferred Stock have not been paid for an aggregate of six quarterly
Dividend Periods or more, whether or not consecutive, the holders of the Designated Preferred Stock
shall have the right, with holders of shares of any one or more other classes or series of Voting
Parity Stock outstanding at the time, voting together as a class, to elect two directors
(hereinafter the “Preferred Directors” and each a “Preferred Director”) at the
Issuer’s next annual meeting of stockholders (or at a special meeting called for that purpose prior
to such next annual meeting) and at each subsequent annual meeting of stockholders until all
accrued and unpaid dividends for all past Dividend Periods, including the latest completed Dividend
Period (including, if applicable as provided in Section 3(a) above, dividends on such amount), on
all outstanding shares of Designated Preferred Stock have been declared and paid in full at which
time such right shall terminate with respect to the Designated Preferred Stock, except as herein or
by law expressly provided, subject to revesting in the event of each and every subsequent default
of the character above mentioned; provided that it shall be a qualification for election for any
Preferred Director that the election of such Preferred Director shall not cause the Issuer to
violate any corporate governance requirements of any securities exchange or other trading facility
on which securities of the Issuer may then be listed or traded that listed or traded companies must
have a majority of independent directors. Upon any termination of the right of the holders of
shares of Designated Preferred Stock and Voting Parity Stock as a class to vote for directors as
provided above, the Preferred Directors shall cease to be qualified as directors and the term of
office of all Preferred Directors then in office shall terminate immediately. Any Preferred
Director may be removed at any time, with or without cause, and any vacancy created thereby may be
filled, only by the affirmative vote of the holders a majority of the shares of Designated
Preferred Stock at the time outstanding voting separately as a class together with the holders of
shares of Voting Parity Stock, to the extent the voting rights of such holders described above are
then exercisable. If the office of any Preferred Director becomes vacant for any reason
other than removal from office as aforesaid, the remaining Preferred Director may choose a
successor who shall hold office for the unexpired term in respect of which such vacancy occurred.

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(c) Class Voting Rights as to Particular Matters. So long as any shares of Designated
Preferred Stock are outstanding, in addition to any other vote or written consent of stockholders
required by law or by the Charter, the vote or written consent of the holders of at least 66 2/3%
of the shares of Designated Preferred Stock at the time outstanding, voting as a separate class,
given in person or by proxy, either in writing without a meeting or by vote at any meeting called
for the purpose, shall be necessary for effecting or validating:

(i) Authorization of Senior Stock. Any amendment or alteration of the
Certificate of Determination for the Designated Preferred Stock or the Charter to authorize
or create or increase the authorized amount of, or any issuance of, any shares of, or any
securities convertible into or exchangeable or exercisable for shares of, any class or
series of capital stock of the Issuer ranking senior to Designated Preferred Stock with
respect to either or both the payment of dividends and/or the distribution of assets on any
liquidation, dissolution or winding up of the Issuer;

(ii) Amendment of Designated Preferred Stock. Any amendment, alteration or
repeal of any provision of the Certificate of Determination for the Designated Preferred
Stock or the Charter (including, unless no vote on such merger or consolidation is required
by Section 7(c)(iii) below, any amendment, alteration or repeal by means of a merger,
consolidation or otherwise) so as to adversely affect the rights, preferences, privileges or
voting powers of the Designated Preferred Stock; or

(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any
consummation of a binding share exchange or reclassification involving the Designated
Preferred Stock, or of a merger or consolidation of the Issuer with another corporation or
other entity, unless in each case (x) the shares of Designated Preferred Stock remain
outstanding or, in the case of any such merger or consolidation with respect to which the
Issuer is not the surviving or resulting entity, are converted into or exchanged for
preference securities of the surviving or resulting entity or its ultimate parent, and (y)
such shares remaining outstanding or such preference securities, as the case may be, have
such rights, preferences, privileges and voting powers, and limitations and restrictions
thereof, taken as a whole, as are not materially less favorable to the holders thereof than
the rights, preferences, privileges and voting powers, and limitations and restrictions
thereof, of Designated Preferred Stock immediately prior to such consummation, taken as a
whole;

provided, however, that for all purposes of this Section 7(c), any increase in the amount of the
authorized Preferred Stock, including any increase in the authorized amount of Designated Preferred
Stock necessary to satisfy preemptive or similar rights granted by the Issuer to other persons
prior to the Signing Date, or the creation and issuance, or an increase in the authorized or issued
amount, whether pursuant to preemptive or similar rights or otherwise, of any other series of
Preferred Stock, or any securities convertible into or exchangeable or exercisable for any other
series of Preferred Stock, ranking equally with and/or junior to Designated Preferred Stock with
respect to the payment of dividends (whether such dividends are cumulative or non-cumulative)
and the distribution of assets upon liquidation, dissolution or winding up of the Issuer will not
be deemed to adversely affect the rights, preferences, privileges or voting powers, and shall not
require the affirmative vote or consent of, the holders of outstanding shares of the Designated
Preferred Stock.

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(d) Changes after Provision for Redemption. No vote or consent of the holders of
Designated Preferred Stock shall be required pursuant to Section 7(c) above if, at or prior to the
time when any such vote or consent would otherwise be required pursuant to such Section, all
outstanding shares of the Designated Preferred Stock shall have been redeemed, or shall have been
called for redemption upon proper notice and sufficient funds shall have been deposited in trust
for such redemption, in each case pursuant to Section 5 above.

(e) Procedures for Voting and Consents. The rules and procedures for calling and
conducting any meeting of the holders of Designated Preferred Stock (including, without limitation,
the fixing of a record date in connection therewith), the solicitation and use of proxies at such a
meeting, the obtaining of written consents and any other aspect or matter with regard to such a
meeting or such consents shall conform to the requirements of the Charter, the Bylaws, and
applicable law and the rules of any national securities exchange or other trading facility on which
Designated Preferred Stock is listed or traded at the time.

Section 8. Record Holders. To the fullest extent permitted by applicable law, the
Issuer and the transfer agent for Designated Preferred Stock may deem and treat the record holder
of any share of Designated Preferred Stock as the true and lawful owner thereof for all purposes,
and neither the Issuer nor such transfer agent shall be affected by any notice to the contrary.

Section 9. Notices. All notices or communications in respect of Designated Preferred
Stock shall be sufficiently given if given in writing and delivered in person or by first class
mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of
Determination, in the Charter or Bylaws or by applicable law. Notwithstanding the foregoing, if
shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust
Company or any similar facility, such notices may be given to the holders of Designated Preferred
Stock in any manner permitted by such facility.

Section 10. No Preemptive Rights. No share of Designated Preferred Stock shall have
any rights of preemption whatsoever as to any securities of the Issuer, or any warrants, rights or
options issued or granted with respect thereto, regardless of how such securities, or such
warrants, rights or options, may be designated, issued or granted.

Section 11. Replacement Certificates. The Issuer shall replace any mutilated
certificate at the holder’s expense upon surrender of that certificate to the Issuer. The Issuer
shall replace certificates that become destroyed, stolen or lost at the holder’s expense upon
delivery to the Issuer of reasonably satisfactory evidence that the certificate has been destroyed,
stolen or lost, together with any indemnity that may be reasonably required by the Issuer.

Section 12. Other Rights. The shares of Designated Preferred Stock shall not have any
rights, preferences, privileges or voting powers or relative, participating, optional or other
special rights, or qualifications, limitations or restrictions thereof, other than as set forth
herein or in the Charter or as provided by applicable law.

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