HILLENBRAND INDUSTRIES INC
FORM OF CERTIFICATE OF DESIGNATION
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<TYPE>EX-10.2
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<FILENAME>c85238exv10w2.txt
<DESCRIPTION>FORM OF CERTIFICATE OF DESIGNATION
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                                                                    EXHIBIT 10.2

                                    EXHIBIT A

                               FFS HOLDINGS, INC.

                     CERTIFICATE OF DESIGNATION, PREFERENCES
                        AND RELATIVE, OPTIONAL AND OTHER
                        SPECIAL RIGHTS OF PREFERRED STOCK
                         AND QUALIFICATIONS, LIMITATIONS
                            AND RESTRICTIONS THEREOF

                            ------------------------

                         Pursuant to Section 151 of the
                        Delaware General Corporation Law

                            ------------------------

            FFS Holdings, Inc. (the "COMPANY"), a corporation organized and
existing under the laws of the State of Delaware, hereby certifies that pursuant
to the provisions of Section 151 of the Delaware General Corporation Law, its
Board of Directors, by unanimous written consent, dated ___________, 2004,
adopted the following resolution, which resolution remains in full force and
effect as of the date hereof:

            WHEREAS, the Board of Directors of the Company is authorized, within
the limitations and restrictions stated in the Certificate of Incorporation, to
fix by resolution or resolutions the designation of preferred stock and the
powers, preferences and relative participating, optional or other special rights
and qualifications, limitations or restrictions thereof, including, without
limiting the generality of the foregoing, such provisions as may be desired
concerning voting, redemption, dividends, dissolution or the distribution of
assets, conversion or exchange, and such other subjects or matters as may be
fixed by resolution or resolutions of the Board of Directors under the Delaware
General Corporation Law; and

            WHEREAS, it is the desire of the Board of Directors of the Company,
pursuant to its authority as aforesaid, to authorize and fix the terms of the
preferred stock to be designated as Series A Redeemable Preferred Stock of the
Company and the number of shares constituting such preferred stock.

            NOW, THEREFORE, BE IT RESOLVED, that there is hereby authorized the
Series A Redeemable Preferred Stock on the terms and with the provisions herein
set forth:

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                   TERMS, PREFERENCES, RIGHTS AND LIMITATIONS

                                       of

                      SERIES A REDEEMABLE PREFERRED STOCK

                                       of

                               FFS HOLDINGS, INC.

      The relative rights, preferences, privileges, restrictions and other
matters relating to the Series A Redeemable Preferred Stock are as follows:

            (1) Designation and Amount. The shares of such series of preferred
stock, par value $.01 per share, of FFS Holdings, Inc. (the "COMPANY") shall be
designated as Series A Redeemable Preferred Stock (the "SERIES A PREFERRED
STOCK"), and the number of shares constituting the Series A Preferred Stock
shall be 28,700.

            (2) Rank. The Series A Preferred Stock shall, with respect to
distributions upon the liquidation, winding-up and dissolution of the Company,
rank prior to all classes of common stock of the Company and to each other class
of capital stock or series of preferred stock hereafter created by the Board.

            (3) Dividends and Distributions. (a) The holders of shares of Series
A Preferred Stock shall be entitled to receive, when, as and if declared by the
Board out of funds legally available therefor, dividends, at a rate of 5.0% per
annum (the "DIVIDEND RATE") of the Liquidation Preference (as hereinafter
defined) (computed on the basis of a 360-day year) payable in cash on the
anniversary of the Original Issue Date in each year (each a "DIVIDEND PAYMENT
DATE"). Subject to Section 3(b), dividends shall be cumulative and begin to
accrue from the Original Issue Date (and shall continue to accrue with respect
to each share until such share is no longer outstanding), whether or not
declared and whether or not there shall be net profits or net assets of the
Company legally available for the payment of those dividends. All undeclared
dividends and declared but unpaid dividends shall compound on an annual basis at
the Dividend Rate, without any duplication when and if the dividends are
actually paid.

                  (b) Subject always to Section 7(b), prior to the Mandatory
Redemption Date (as defined below) the holders of Series A Preferred Stock are
not entitled to a preference as to any other class of capital stock of the
Company with respect to dividends or any other distributions unless paid in
connection with the liquidation, dissolution or winding up of the Company and
dividends, may be declared and paid on shares of common stock of the Company
even if the dividends and distributions pertaining to the holders of Series A
Preferred Stock referred to in this Section 3 have not been declared or paid.

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            (4) Voting Rights. The holders of Series A Preferred Stock shall not
be entitled to any voting rights except as otherwise provided by law; provided,
however, that the holders of Series A Preferred Stock shall vote separately as a
class for any amendment to the Certificate of Incorporation or By-laws of the
Company that would adversely affect in any material respect the rights,
privileges, preferences or entitlements of the holders of Series A Preferred
Stock. The affirmative vote of the holders of a majority of the outstanding
Series A Preferred Stock shall be required to approve any such amendment.

            (5) Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever
(including by redemption or reclassification) shall be retired and cancelled
promptly after the acquisition thereof.

            (6) Liquidation, Dissolution or Winding Up. (a) Upon any
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, no distribution shall be made to any other class of capital stock
or series of preferred stock, unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received a liquidation preference of $1,000
per full share of Series A Preferred Stock plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, and
including such amounts for any partial annual period, to the date of payment
(the "LIQUIDATION PREFERENCE").

                  (b) If upon any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, the assets to be distributed among
the holders of Series A Preferred Stock shall be insufficient to permit the
payment to such stockholders of the full preferential amounts aforesaid, then
the entire assets of the Company to be distributed shall be distributed ratably
among the holders of Series A Preferred Stock, based on the full preferential
amounts for the number of shares of Series A Preferred Stock held by each
holder.

            (7) Redemption. (a) (a) Redemption at the Company's Option. The
Company may at any time redeem, at a redemption price equal to the Liquidation
Preference (the "REDEMPTION PRICE"), any or all outstanding shares of Series A
Preferred Stock. The Company shall (i) mail written notice of each redemption of
any Series A Preferred Stock, by first class mail, postage prepaid, to each
record holder thereof not more than sixty (60) nor less than thirty (30) days
prior to the date on which such redemption is to be made and (ii) pay the
Redemption Price, to the applicable holder of Series A Preferred Stock, against
delivery by such holder to the Company of those certificates representing Series
A Preferred Stock held by such holder which have then been so redeemed. In case
fewer than the total number of shares of Series A Preferred Stock represented by
any certificate are redeemed, a new certificate representing the number of
unredeemed shares of Series A Preferred Stock shall be issued to the holder
thereof without cost to such holder within five (5) days after surrender of the
certificate representing the redeemed shares of Series A Preferred Stock. Any
redemption effected by the Company pursuant to this Section 7(a) shall be
carried out in such a manner that

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the number of shares of Series A Preferred Stock redeemed from each holder bears
(as nearly as practicable) the same proportion to the total number of shares of
Series A Preferred Stock redeemed as the number of such shares held as of record
by such holder bears to the total number of outstanding shares of Series A
Preferred Stock.

                  (b) Mandatory Redemption Date. On the tenth (10th) anniversary
of the Original Issue Date (the "MANDATORY REDEMPTION DATE"), the Company shall
redeem all outstanding shares of the Series A Preferred Stock; provided,
however, that the sole consequence of the Company's failure to redeem all
outstanding shares of Series A Preferred Stock on the Mandatory Redemption Date
(and the sole remedy of any holder of shares of Series A Preferred Stock in the
event that the Company fails to so redeem such shares) will be that the Company
shall not thereafter, unless and until all outstanding shares of Series A
Preferred Stock theretofor have been redeemed at the Redemption Price, (x)
declare or pay any dividend or other distribution on or in respect of any shares
of the Company's capital stock other than Series A Preferred Stock ("OTHER
CAPITAL STOCK") (excluding a distribution of shares of the Company's Other
Capital Stock, or rights to acquire shares of Other Capital Stock, to the
holders of Other Capital Stock) or (y) make any payment on account of the
purchase, redemption, retirement or other acquisition of shares of Other Capital
Stock or rights to acquire shares of Other Capital Stock.

                  (c) Mandatory Redemption at a Qualified IPO. If a Qualified
IPO occurs, the Company shall redeem, at the Redemption Price, all of the
outstanding shares of Series A Preferred Stock, such redemption to occur
immediately prior to or simultaneously with the consummation of such Qualified
IPO.

                  (d) Mandatory Redemption at an Organic Change. If any Organic
Change occurs, the Company shall redeem, at the Redemption Price, all of the
outstanding shares of Series A Preferred Stock, such redemption to occur
immediately prior to or simultaneously with the consummation of such Organic
Change.

                  (e) Mandatory Redemption Under Certain Circumstances. At such
time as the Note is no longer outstanding, the Company may not declare or pay
any dividend or other distribution (excluding a distribution of shares of the
Company's Other Capital Stock, or rights to acquire shares of Other Capital
Stock, to the holders of Other Capital Stock) on or in respect of any shares of
the Company's Other Capital Stock ("Common Stock Dividend"), unless it shall
concurrently redeem the Series A Preferred Stock having an aggregate Liquidation
Preference equal to one-half of the Common Stock Dividend. The Company shall
give notice of such redemption on the date that the Common Stock Dividend is
declared or otherwise noticed, and shall pay the Redemption Price for the shares
so redeemed on the date that the Common Stock Dividend is paid.

                  (f) Status of Redeemed Shares. At the time of redemption
specified in the resolution of the Board authorizing such redemption, the rights
of the holders of the redeemed shares of Series A Preferred Stock shall, with
respect to such

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redeemed shares, cease, except for the right to receive the Redemption Price
specified in Section 7(a) hereof, without interest.

            (8) General Provisions. (a) (a) If any of the Series A Preferred
Stock certificates shall be mutilated, lost, stolen or destroyed, the Company
shall issue, in exchange and in substitution for and upon cancellation of the
mutilated Series A Preferred Stock certificate, or in lieu of and substitution
for the Series A Preferred Stock certificate lost, stolen or destroyed, a new
Series A Preferred Stock certificate of like tenor and representing an
equivalent number of shares of Series A Preferred Stock, but only upon receipt
of evidence of such loss, theft or destruction of such Series A Preferred Stock
certificate and indemnity, if requested, satisfactory to the Company.

                  (b) Any registered holder of Series A Preferred Stock may
proceed to protect and enforce its rights and the rights of such holders by any
available remedy by proceeding at law or in equity to protect and enforce any
such rights, whether for the specific enforcement of any provision in this
Certificate of Designation or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.

                  (c) The term "AFFILIATE" shall have the meaning assigned to
such term in the Note.

                  (d) The term "NOTE" means the promissory note in the principal
amount of $80,000,000 issued as of the date hereof by the Company to Hillenbrand
Industries, Inc. and any note exchanged therefor.

                  (e) The term "ORGANIC CHANGE" shall have the meaning assigned
to the term "Change of Control" in the Note.

                  (f) The term "ORIGINAL ISSUE DATE" shall mean the date of the
original issuance of shares of Series A Preferred Stock.

                  (g) The term "OUTSTANDING," when used in reference to shares
of a specific series or class of capital stock of the Company, shall mean issued
shares, excluding shares held by the Company or a subsidiary of the Company.

                  (h) The term "PERSON" shall mean any individual, corporation,
partnership, limited liability company, firm, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental body or
other entity.

                  (i) The term "QUALIFIED IPO" shall mean a public offering of
the capital stock of the Company pursuant to a registration statement filed
under the Securities Act of 1933, as amended, in which the net offering proceeds
of such public offering exceed $75,000,000.

                  (j) The term "SECURITIZATION NOTES" means, collectively, the
Series A notes in the aggregate principal amount of $- and the Series B notes in
the

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aggregate principal amount of $-, in each case issued by FLAC Holdings, LLC as
of the date hereof.

                  (k) The term "SUBSIDIARY" shall have the meaning ascribed to
such term in the Note.

                  (l) No holder of shares of Series A Preferred Stock shall, by
virtue of such holder's holding such shares, possess any preemptive rights to
subscribe for or acquire any unissued shares of capital stock of the Company
(whether now or hereafter authorized) or securities of the Company convertible
into, or exercisable or exchangeable for, shares of capital stock of the
Company.

                  (m) The headings of the sections, subsections, clauses and
subclauses hereof are for convenience of reference only and shall not define,
limit or affect any of the provisions hereof.

                  (n) If any payment, redemption, exchange or other action shall
be required by the terms hereof to be made or taken on a day that is not a
Business Day, such payment, redemption, exchange or other action shall be made
or taken on the immediately succeeding Business Day. "BUSINESS DAY" means any
day except a Saturday, Sunday or other day on which commercial banks in the
State of New York are authorized by law to close.

                  (o) The Company will give prior written notice (with a
description in reasonable detail) to the holders of shares of the Series A
Preferred Stock of any of the following:

                        (i)   an amendment to the Certificate of Incorporation
                              or Bylaws of the Company;

                        (ii)  a merger, recapitalization, dissolution or
                              liquidation of the Company or any significant
                              subsidiary of the Company;

                        (iii) an Organic Change; or

                        (iv)  a Qualified IPO.

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