Pier 1 2009 Annual Report Download - page 166

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by the Board of Directors from time to time; provided, however, that in the event the
Company effects a stock split, either by way of a lawful stock dividend to the holders of,
or a reclassification of the shares of, the Formula Rate Preferred Stock, then the
amount of dividend per share which the holders of the Formula Rate Preferred Stock
shall be entitled to receive shall be adjusted to be equal to the per share dividend then
in effect for shares of Formula Rate Preferred Stock multiplied by a fraction the
numerator of which is the number of shares of Formula Rate Preferred Stock
outstanding immediately prior to the distribution of shares (in the case of a stock split
by way of a stock dividend) or the effectiveness of the stock split (in the case of a stock
split by way of a reclassification of shares) and the denominator of which is the number
of shares of Formula Rate Preferred Stock outstanding immediately after such stock
split. The resulting dividend rate shall hereinafter be referred to as the ‘‘Formula Rate.’’
Dividends on the Formula Rate Preferred Stock shall begin to accrue at the Formula
Rate from and after the date upon which the shares of stock are distributed (in the case
of a stock split by way of a stock dividend) or the reclassification becomes effective (in
the case of a stock split by way of reclassification of shares). In the event of any such
adjustment the Company shall (i) prepare a certificate setting forth the calculation of
the Formula Rate which certificate shall be kept by the Secretary of the Company and
made available to any holder of Formula Rate Preferred Stock who requests such
certificate, and (ii) notify holders of such stock of the adjustment. The Formula Rate
shall continue in effect unless and until the Company effects another stock split, in
which case the Formula Rate shall be further adjusted pursuant to the procedure set
forth above. Except as provided in this subparagraph (e), the holders of Formula Rate
Preferred Stock shall not be entitled to receive or participate in any cash dividends
which may be declared by the Board of Directors or paid by the Company.
(f) The holders of the Formula Rate Preferred Stock are entitled to vote with the
holders of the Common Stock as a single class, as follows:
1. On matters subject to a vote by holders of Common Stock the holders of
Formula Rate Preferred Stock shall be entitled to ten (10) votes per share, voting as a
single class together with the Common Stock, which is entitled to one vote per share.
2. The affirmative vote of at least two-thirds of the shares of the Formula Rate
Preferred Stock, voting as a single class, shall be required (i) to authorize, effect or
validate any amendment, alteration or repeal of any of the provisions of the Company’s
Certificate of Incorporation which would adversely affect the preferences, special rights
or powers of the Formula Rate Preferred Stock (provided, however, that an amendment
that would authorize or create or increase the authorized number of shares of any stock
ranking junior to the Formula Rate Preferred Stock shall not be deemed to adversely
affect the preferences, rights or powers of the Formula Rate Preferred Stock); or (ii) to
authorize, designate or create, or increase the authorized number of shares of, any
capital stock of the Company of any class or series, or any security convertible into such
capital stock, ranking prior to the Formula Rate Preferred Stock as to dividends or
rights upon liquidation, dissolution or winding up. In addition, the affirmative vote of
the holders of at least a majority of the Formula Rate Preferred Stock, voting as a single
class, shall be required to authorize, designate or create or increase the authorized
number of shares of, any class or series of capital stock of the Company or any security
convertible into capital stock of the Company of any class ranking on a parity with the
Formula Rate Preferred Stock as to dividends and liquidation rights. No affirmative
vote or consent of the holders of the Formula Rate Preferred Stock is required for the
creation, designation or classification of, or an increase or decrease in the number of
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