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EXHIBIT 3
RESTATED CERTIFICATE OF INCORPORATION
OF
WILLIAMS COMMUNICATIONS GROUP, INC.
The name of the corporation (which is hereinafter referred to as the
"Corporation") is "Williams Communications Group, Inc."
The original Certificate of Incorporation (the "Certificate of
Incorporation") was filed with the Secretary of State of the State of Delaware
on December 1, 1994, under the name "WilTel Technology Ventures, Inc." Such
Certificate of Incorporation was amended on September 20, 1995, and February 11,
1997.
This Restated Certificate of Incorporation, which restates, integrates and
amends the Certificate of Incorporation, has been duly adopted in accordance
with Sections 103, 242 and 245 of the General Corporation Law of the State of
Delaware. The text of the Certificate of Incorporation of the Corporation is
hereby amended and restated to read in its entirety as follows:
ARTICLE I
The name of this corporation (hereinafter called the "Corporation") is:
WILLIAMS COMMUNICATIONS GROUP, INC.
ARTICLE II
The purpose or purposes of this Corporation shall be to engage in any
lawful acts or activities for which corporations may be organized under the
General Corporation Law of the State of Delaware (the "Delaware Code").
ARTICLE III
The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
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ARTICLE IV
CAPITAL STOCK
SECTION 1. Authorized Stock.
The maximum number of shares of capital stock which this Corporation shall
have authority to issue is 2,000,000,000 consisting of 1,000,000,000 shares of
class A common stock, $.01 par value per share (the "Class A Common Stock"),
500,000,000 shares of class B common stock, $.01 par value per share (the "Class
B Common Stock"), and 500,000,000 shares of preferred stock, $.01 par value per
share (the "Preferred Stock"). The Class A Common Stock and the Class B Common
Stock are hereinafter referred to collectively as the "Common Stock." The
powers, preferences and rights and the qualifications, limitations and
restrictions in respect of the shares of each class are set forth in the
following Sections.
SECTION 2. Preferred Stock.
The Preferred Stock may be issued from time to time in one or more series.
The Board of Directors is hereby expressly authorized, by resolution or
resolutions, to provide for the issuance of up to 500,000,000 shares of
Preferred Stock in one or more series and, by filing a certificate pursuant to
the Delaware Code (hereinafter referred to as a "Preferred Stock Designation"),
to establish from time to time the number of shares constituting each such
series and the designation of such series, the voting powers (if any) of the
shares of such series, and the relative rights, powers, privileges, preferences
and limitations of the shares of such series. The authority of the Board of
Directors with respect to each series shall include, but not be limited to,
determination of the following:
(a) the designation of the series, which may be made by distinguishing
number, letter or title;
(b) the number of shares of the series, which number the Board of
Directors may thereafter (except where otherwise provided in the Preferred Stock
Designation) increase or decrease, but not below the number of shares thereof
then outstanding) in the manner permitted by law;
(c) the rate of any dividends (or method of determining the dividends)
payable to the holders of the shares of such series, any conditions upon which
such dividends shall be paid and the date or dates or the method for determining
the date or dates upon which such dividends shall be payable;
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(d) whether dividends, if any, shall be cumulative or noncumulative,
and, in the case of shares of any series having cumulative dividend rights, the
date or dates or method of determining the date or dates from which dividends on
the shares of such series shall cumulate;
(e) if the shares of such series may be redeemed by the Corporation,
the price or prices (or method of determining such price or prices) at which,
the form of payment of such price or prices (which may be cash, property or
rights, including securities of the Corporation or of another corporation or
other entity) for which, the period or periods within which and the other terms
and conditions upon which the shares of such series may be redeemed, in whole or
in part, at the option of the Corporation or at the option of the holder or
holders thereof or upon the happening of a specified event or events, if any,
including the obligation, if any, of the Corporation to purchase or redeem
shares of such series pursuant to a sinking fund or otherwise;
(f) the amount payable out of the assets of the Corporation to the
holders of shares of the series in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation;
(g) provisions, if any, for the conversion or exchange of the shares of
such series, at any time or times, at the option of the holder or holders
thereof or at the option of the Corporation or upon the happening of a specified
event or events, into shares of any other class or classes or any other series
of the same class of capital stock of the Corporation or into any other security
of the Corporation, or into the stock or other securities of any other
corporation or other entity, and the price or prices or rate or rates of
conversion or exchange and any adjustments applicable thereto, and all other
terms and conditions upon which such conversion or exchange may be made;
(h) restrictions on the issuance of shares of the same series or of any
other class or series of capital stock of the Corporation, if any; and
(i) the voting rights and powers, if any, of the holders of shares of
the series.
Shares of Preferred Stock, regardless of series, that are converted into
other securities or other consideration shall be retired and canceled and the
Corporation shall take all such actions as are necessary to cause such shares to
have the status of authorized but unissued shares of Preferred Stock, without
designation as to series.
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SECTION 3. Common Stock.
A. Voting Rights.
Subject to applicable law and the rights of any outstanding series of
Preferred Stock to vote as a separate class or series, the shares of Class A
Common Stock and Class B Common Stock shall vote together as a single class and
shall have the following voting rights: (i) each share of Class A Common Stock
shall entitle the holder thereof to one (1) vote upon all matters upon which
stockholders shall have the right to vote; and (ii) each share of Class B Common
Stock shall entitle the holder thereof to ten (10) votes upon all matters upon
which stockholders shall have the right to vote, subject to Section 3.E.8. of
this Article IV. The authorized number of shares of Class A Common Stock may be
increased or decreased (but not below the number of shares thereof then
outstanding or reserved for issuance upon conversion of the Class B Common Stock
or any other class or series of outstanding Stock) by the affirmative vote of
the holders of Common Stock entitled to cast a majority of the total votes
entitled to be cast by the holders of the Common Stock, voting as a single
class, without a separate class vote of the holders of the Class A Common Stock.
The Corporation may, as a condition to counting the votes cast by any holder of
shares of Class B Common Stock, require proof as set forth in Section 3.E.8 of
this Article IV that the shares of Class B Common Stock held by such holder have
not been converted into shares of Class A Common Stock. Except as otherwise
provided by law or by another provision of this Restated Certificate of
Incorporation or by a Preferred Stock Designation, the Common Stock shall have
the exclusive right to vote for the election of directors and on all other
matters or proposals presented to the stockholders and all matters to be voted
on by stockholders must be approved by a majority of the outstanding shares
entitled to vote; provided, however, that the holders of shares of Common Stock,
as such, shall not be entitled to vote on any amendment of this Restated
Certificate of Incorporation (including any amendment of any provision of a
Preferred Stock Designation) that solely relates to the powers, privileges,
preferences or rights pertaining to one or more outstanding series of Preferred
Stock, or the number of shares of any such series, and does not affect the
number of authorized shares of Preferred Stock or the powers, privileges and
rights pertaining to the Common Stock, if the holders of any of such series of
Preferred Stock are entitled, separately or together with the holders of any
other series of Preferred Stock, to vote thereon pursuant to this Restated
Certificate of Incorporation (including any Preferred Stock Designation) or
pursuant to the Delaware Code, unless a vote of holders of shares of Common
Stock is otherwise
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required by any provision of the Preferred Stock Designation for any such series
or any other provision of this Restated Certificate of Incorporation fixing the
powers, privileges, and rights of any such series or the qualifications,
limitations or restrictions thereon or is otherwise required by law. Holders of
Preferred Stock of any series shall not be entitled to receive notice of any
meeting of stockholders at which they are not entitled to vote, except as may be
explicitly provided by any Preferred Stock Designation. The number of authorized
shares of Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock, without a vote
of the holders of the Preferred Stock, or any series thereof, unless a vote of
any such holders is required pursuant to another provision of this Restated
Certificate of Incorporation (including any Preferred Stock Designation). Except
as otherwise provided by law or in this Restated Certificate of Incorporation,
and subject to any voting rights granted to holders of any outstanding Preferred
Stock, amendments to this Restated Certificate of Incorporation must be approved
by a majority of the votes entitled to be cast by all shares of Class A Common
Stock and Class B Common Stock, voting together as a single class, provided,
however, that any amendment to this Restated Certificate of Incorporation that
would alter or change the powers, preferences or special rights of the Class A
Common Stock so as to affect them adversely also must be approved by a majority
of the votes entitled to be cast by the holders of the Class A Common Stock,
voting as a separate class. Any amendment to this Restated Certificate of
Incorporation to increase the authorized shares of any class requires the
approval only of a majority of the votes entitled to be cast by all shares of
Class A Common Stock and Class B Common Stock, voting together as a single
class, subject to the rights set forth in any series of Preferred Stock. Holders
of shares of Common Stock are not entitled to cumulate their votes in the
election of directors.
B. Dividends and Distributions.
Subject to the preferential and other dividend rights of any outstanding
series of Preferred Stock, holders of Class A Common Stock and Class B Common
Stock shall be entitled to such dividends and other distributions in cash, stock
or property of the Corporation as may be declared thereon by the Board of
Directors from time to time out of assets or funds of the Corporation legally
available therefor. No dividend or other distribution may be declared or paid on
any share of Class A Common Stock unless a like dividend or other distribution
is simultaneously declared or paid, as the case may be, on each share of Class B
Common Stock, nor shall any dividend or other distribution be declared or paid
on any share of Class B Common Stock unless a like dividend or other
distribution is simultaneously declared or paid, as the case
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may be, on each share of Class A Common Stock, in each case without preference
or priority of any kind; provided, however, that all dividends and distributions
on the Class A Common Stock and Class B Common Stock payable in shares of Common
Stock of the Corporation shall be made in shares of Class A Common Stock and
Class B Common Stock, respectively. In no event will shares of either class of
Common Stock be reclassified, split, divided or combined unless the outstanding
shares of the other class of Common Stock shall be proportionately reclassified,
split, divided or combined.
In the event of a transaction as a result of which the shares of Class A
Common Stock are converted into or exchanged for one or more other securities,
cash or other property (a "Class A Conversion Event"), then from and after such
Class A Conversion Event, a holder of Class B Common Stock shall be entitled to
receive, upon the conversion of such Class B Common Stock pursuant to Section
3.E. of this Article IV, the amount of such securities, cash and other property
that such holder would have received if the conversion of such Class B Common
Stock had occurred immediately prior to the record date (or if there is no
record date, the effective date) of the Class A Conversion Event and if the
securities, cash or other property that the Class A Common Stock may be
converted into or exchanged for in a Class A Conversion Event is dependent upon
the holder of the Class A Common Stock making an election, the holder of the
Class A Common Stock had failed to make an election. This paragraph shall be
applicable in the same manner to all successive conversions or exchanges of
securities issued pursuant to any Class A Conversion Event. No adjustments in
respect of dividends shall be made upon the conversion of any share of Class B
Common Stock; provided, however, that if a share shall be converted after the
record date for the payment of a dividend or other distribution on shares of
Class B Common Stock but before such payment, then the record holder of such
share at the close of business on such record date shall be entitled to receive
the dividend or other distribution payable on such share of Class B Common Stock
on the payment date notwithstanding the conversion thereof.
C. Options, Rights or Warrants.
Subject to Section 3.B. of this Article IV, the Corporation shall not, and
shall not be entitled to, issue additional shares of Class B Common Stock, or
issue options, rights or warrants to subscribe for or purchase additional shares
of Class B Common Stock, except that the Corporation may (i) make a pro rata
offer to all holders of Common Stock of rights to subscribe for additional
shares of the class of Common Stock held by them and (ii) issue additional
shares of Class B Common Stock under the circumstances permitted by the
Separation Agreement (the "Separation
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Agreement"), dated as of , 1999, between the Corporation and The Williams
Companies, Inc. ("Williams"). The Corporation may make offerings of options,
rights or warrants to subscribe for or purchase shares of any class or classes
of capital stock (other than Class B Common Stock) to all holders of Class A
Common Stock or Class B Common Stock if an identical offering is made
simultaneously to all the holders of the other class of Common Stock. All
offerings of options, rights or warrants shall offer the respective holders of
Class A Common Stock and Class B Common Stock the right to subscribe or purchase
at the same consideration per share.
D. Merger or Consolidation.
In the event of a merger or consolidation of the Corporation with or into
another entity (whether or not the Corporation is the surviving entity), the
holders of each share of Class A Common Stock and Class B Common Stock shall be
entitled to receive the same per share consideration as the per share
consideration, if any, received by the holders of each share of the other class
of Common Stock; provided that, if such consideration shall consist in any part
of voting securities (or of options, rights or warrants to purchase, or of
securities convertible into or exchangeable for, voting securities), then the
Corporation may provide in the applicable merger or such other agreement for the
holders of shares of Class B Common Stock to receive, on a per share basis,
voting securities with ten (10) times the number of votes per share as those
voting securities to be received by the holders of shares of Class A Common
Stock (or options, rights or warrants to purchase, or securities convertible
into or exchangeable for, voting securities with ten (10) times the number of
votes per share as those voting securities issuable upon exercise of the
options, rights or warrants to be received by the holders of the shares of Class
A Common Stock, or into which the convertible or exchangeable securities to be
received by the holders of the shares of Class A Common Stock may be converted
or exchanged).
E. Conversion of Class B Common Stock.
1. Voluntary Conversion.
Prior to the date on which shares of Class B Common Stock are
transferred to stockholders of Williams in a Tax-Free Spin-Off (as
defined in paragraph (E) (3)(a) below), each share of Class B Common
Stock shall be convertible, at the option of its record holder, into
one validly issued, fully paid and non-assessable share of Class A
Common Stock at any time. Following a Tax-Free Spin-Off, shares
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of Class B Common Stock shall no longer be convertible into shares of
Class A Common Stock.
2. Voluntary Conversion Procedures.
At the time of a voluntary conversion, the record holder of shares
of Class B Common Stock shall deliver to the principal office of the
Corporation or any transfer agent for shares of the Class A Common
Stock (i) the certificate or certificates representing the shares of
Class B Common Stock to be converted, duly endorsed in blank or
accompanied by proper instruments of transfer, and (ii) written notice
to the Corporation stating that the record holder elects to convert
such share or shares and stating the name or names and denominations in
which the certificate or certificates representing the shares of Class
A Common Stock issuable upon the conversion are to be issued and
including instructions for the delivery thereof. Conversion shall be
deemed to have been effected at the time when delivery is made to the
principal office of the Corporation or the office of any transfer agent
for shares of Class A Common Stock of such written notice and the
certificate or certificates representing the shares of Class B Common
Stock to be converted, and as of such time, each Person (as hereinafter
defined) named in such written notice as the Person to whom a
certificate representing shares of Class A Common Stock is to be issued
shall be deemed to be the holder of record of the number of shares of
Class A Common Stock to be evidenced by that certificate. Upon such
delivery, the Corporation or its transfer agent shall promptly issue
and deliver a certificate or certificates representing the number of
shares of Class A Common Stock to which such record holder is entitled
by reason of such conversion, and shall cause such shares of Class A
Common Stock to be registered in the name of the record holder.
3. Automatic Conversion.
(a) Subject to Section 3.E.3.(b) of this Article IV, prior to a
Tax-Free Spin-Off, in the event of any Transfer (as hereinafter
defined) of any share of Class B Common Stock to any Person, other than
to the Williams Group (as defined in paragraph (E)(9) below) such share
of Class B Common Stock shall automatically, without any further
action, convert into one share of Class A Common Stock.
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Notwithstanding anything to the contrary set forth in this Restated
Certificate of Incorporation, shares of Class B Common Stock shall not
convert into shares of Class A Common Stock (i) in any transfer
effected in connection with a distribution of Class B Common Stock to
stockholders or security holders of Williams in a transaction
(including any distribution in exchange for shares of capital stock or
securities of Williams) intended to qualify as a tax-free distribution
under Section 355 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any successor provision (a "Tax-Free Spin-Off") or (ii) in
any transfer after a Tax-Free Spin-Off. For purposes of this paragraph
(E), a Tax-Free Spin-Off shall be deemed to have occurred at the time
shares are first transferred to stockholders or security holders of
Williams.
(b) Notwithstanding anything to the contrary set forth in this
Article IV, Section 3, a holder of shares of Class B Common Stock may
pledge such holder's shares of Class B Common Stock to a financial
institution pursuant to a bona fide pledge of such shares of Class B
Common Stock as collateral security for any indebtedness or other
obligation of any Person (the "Pledged Stock") due to the pledgee or
its nominee; provided, however, that (i) such shares shall not be voted
by or registered in the name of the pledgee and shall remain subject to
the provisions of this Article IV, Section 3.E. and (ii) upon any
foreclosure, realization or other similar action by the pledgee prior
to a Tax-Free Spin-Off, such Pledged Stock shall automatically convert
into shares of Class A Common Stock on a share-for-share basis.
(c) The foregoing automatic conversion events described in this
Article IV, Section 3.E.3 shall be referred to hereinafter as an "Event
of Automatic Conversion." The determination of whether an Event of
Automatic Conversion shall have occurred will be made by the Board of
Directors or a duly authorized committee thereof in accordance with
Article IV, Section 3.E.8 below.
4. Automatic Conversion Procedure.
Any conversion pursuant to an Event of Automatic Conversion shall be
deemed to have been effected at the time the
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Event of Automatic Conversion occurred (the "Conversion Time"). At the
Conversion Time, the certificate or certificates that represented
immediately prior thereto the shares of Class B Common Stock that were
so converted (the "Converted Class B Common Stock") shall,
automatically and without further action, represent the same number of
shares of Class A Common Stock. Holders of Converted Class B Common
Stock shall deliver their certificates, duly endorsed in blank or
accompanied by proper instruments of transfer, to the principal office
of the Corporation or the office of any transfer agent for shares of
the Class A Common Stock, together with a written notice setting out
the name or names (with addresses) and denominations in which the
certificate or certificates representing such shares of Class A Common
Stock are to be issued and including instructions for delivery thereof.
Upon such delivery, the Corporation or its transfer agent shall
promptly issue and deliver at such stated address to such holder of
shares of Class A Common Stock a certificate or certificates
representing the number of shares of Class A Common Stock to which such
holder is entitled by reason of such conversion, and shall cause such
shares of Class A Common Stock to be registered in the name of such
holder. The Person entitled to receive the shares of Class A Common
Stock issuable upon such conversion shall be treated for all purposes
as the record holder of such shares of Class A Common Stock at and as
of the Conversion Time, and the rights of such Person as a holder of
shares of Class B Common Stock that have been converted shall cease and
terminate at and as of the Conversion Time, in each case without regard
to any failure by such holder to deliver the certificates or the notice
required by this Section.
5. Unconverted Shares.
In the event of the conversion of less than all the shares of Class
B Common Stock evidenced by a certificate surrendered to the
Corporation in accordance with the procedures of this Section 3.E., the
Corporation shall execute and deliver to, or upon the written order of,
the holder of such unconverted shares, without charge to such holder, a
new certificate evidencing the number of shares of Class B Common Stock
not converted.
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6. Retired Shares.
Shares of Class B Common Stock that are converted into shares of
Class A Common Stock as provided herein shall be retired and canceled
and the Corporation shall take all such actions as are necessary to
cause such shares to have the status of authorized but unissued shares
of Class B Common Stock.
7. Reservation.
The Corporation shall at all times prior to a Tax-Free Spin-Off
reserve and keep available, out of its authorized and unissued shares
of Class A Common Stock, for the purposes of effecting conversions,
such number of duly authorized shares of Class A Common Stock as shall
from time to time be sufficient to effect the conversion of all
outstanding shares of Class B Common Stock. All the shares of Class A
Common Stock so issuable shall, when so issued, be duly and validly
issued, fully paid and non-assessable and free from liens and charges
with respect to such issuance.
8. Determination of Voting Rights and Event of Automatic Conversion.
The Board of Directors of the Corporation or a duly authorized
committee thereof shall have the power to determine, in good faith
after reasonable inquiry, whether an Event of Automatic Conversion has
occurred with respect to any share of Class B Common Stock. A
determination by the Board of Directors of the Corporation or such
committee that an Event of Automatic Conversion has occurred shall be
conclusive. As a condition to counting the votes cast by any holder of
shares of Class B Common Stock at any annual or special meeting of
stockholders, in connection with any written consent of stockholders,
as a condition to registration of transfer of shares of Class B Common
Stock, or for any other purpose, the Board of Directors or a duly
authorized committee thereof, in its discretion, may require the holder
of such shares to furnish such affidavits or other proof as the Board
of Directors or such committee deems necessary or advisable to
determine whether an Event of Automatic Conversion shall have occurred.
If the Board of Directors or such committee shall determine that a
holder has substantially failed to comply promptly with any request by
the Board of Directors or such committee for such proof, the shares
held by such holder shall be
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entitled to one (1) vote per share until such time as the Board of
Directors or such committee shall determine that such holder has
complied with such request. The Board of Directors or a duly authorized
committee thereof may exercise the authority granted by this Article
IV, Section 3.E.8 through duly authorized officers or agents of the
Corporation.
9. Definitions.
For purposes of this Article IV, Section E:
(a) Beneficial Owner.
A Person shall be deemed the "Beneficial Owner" of, and to
"Beneficially Own" and to have "Beneficial Ownership" of, any
share (i) which such Person has the power to vote or dispose,
or to direct the voting or disposition of, directly or
indirectly, through any agreement, arrangement or
understanding (written or oral), or (ii) which such Person has
the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (written or oral), or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise.
(b) Nominee.
The term "Nominee" shall mean a Person that is acting as a
bona fide nominee for the registration of record ownership of
securities Beneficially Owned by another Person.
(c) Subsidiary.
The term "Subsidiary" shall mean, as to any person or entity,
a corporation, partnership, joint venture, association or
other entity in which such person or entity beneficially owns
(directly or indirectly) 50% or more of the outstanding voting
stock, voting power, partnership
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interests or similar voting interests, or 50% or more of the
value of the equity of such entity.
(d) Person.
The term "Person" means any natural person, corporation,
association, partnership, limited liability company,
organization, business, government or political subdivision
thereof or governmental agency.
(e) Transfer.
The term "Transfer" shall mean any sale, transfer (including a
transfer made in whole or in part without consideration as a
gift), exchange, assignment, pledge, encumbrance, alienation
or any other disposition or hypothecation of record ownership
or of Beneficial Ownership of any share, whether by operation
of law or otherwise; provided, however, that (i) a pledge of
any share made in accordance with the provisions of Article
IV, Section 3.E.3.(b). and (ii) a grant of a revocable proxy,
written consent or other authorization with respect to any
share to a Person designated by the Board of Directors or
management of the Corporation who is soliciting proxies on
behalf of the Corporation shall not be considered a
"Transfer"; and provided, further, that in the case of any
transferee of record ownership that is a Nominee, such
Transfer of record ownership shall be deemed to be made to the
Person or Persons for whom such Nominee is acting.
(f) Williams Group.
The term "Williams Group" shall mean Williams, its direct and
indirect subsidiaries, any person or entity in which Williams
or any successor beneficially owns, directly or indirectly, at
least 50% of the equity or the voting securities, any
successor of any of the foregoing and stockholders of Williams
who receive the Corporation's Class B Common Stock in a
transaction
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intended to qualify as a tax-free distribution under Section
355 of the Code, or any corresponding provision of any
successor statute in a Tax-Free Spin-Off, but shall not
include the Corporation and its subsidiaries.
10. Stock Legend.
The Corporation shall include a legend on the certificates
representing shares of Class B Common Stock stating that such shares
are subject to automatic conversion in certain circumstances as set
forth in this Article IV, Section 3.E.
11. Taxes.
The issuance of a certificate representing shares of Class A Common
Stock issued upon conversion of shares of Class B Common Stock shall be
made without charge to the holder of such shares for any stamp or other
similar tax in respect of such issuance. However, if any such
certificate is to be issued in a name other than that of the record
holder of the shares of Class B Common Stock converted, the Person or
Persons requesting the issuance thereof shall pay to the Corporation
the amount of any tax which may be payable in respect of any Transfer
involved in such issuance or shall establish to the satisfaction of the
Corporation that such tax has been paid or is not required to be paid.
F. Liquidation.
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, after distribution in full of the preferential
and/or other amounts to be distributed to the holders of shares of any
outstanding series of Preferred Stock, the holders of shares of Class A Stock
and Class B Common Stock shall be entitled to receive all of the remaining
assets of the Corporation available for distribution to its stockholders,
ratably in proportion to the number of shares of Common Stock held by them. In
any such distribution shares of Class A Common Stock and Class B Common Stock
shall be treated equally on a per share basis.
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ARTICLE V
Purchase of Shares by Corporation
The Corporation may purchase any shares of outstanding capital stock of the
Corporation or the right to purchase any such shares of capital stock from any
holder thereof on terms and conditions established by the Board of Directors or
a duly authorized committee thereof.
ARTICLE VI
Board of Directors
SECTION 1. Number and Terms.
Except as otherwise fixed by or pursuant to the provisions of this Restated
Certificate of Incorporation relating to the rights of the holders of any class
or series of Preferred Stock, the number of directors of the Corporation shall
be determined by resolution adopted by a majority of the entire Board of
Directors, but the number shall not be less than three; provided, however, that
(i) no reduction in the number of directors shall end the term of office of any
incumbent director prior to the date such director's term of office would
otherwise end, and (ii) the By-laws of the Corporation (the "By-laws") may
provide that the vote of a greater number of the directors may be required for
action of the Board of Directors changing the size of the Board of Directors.
The directors, other than those who may be elected by the holders of any class
or series of Preferred Stock, shall be classified by the Board of Directors with
respect to the time for which they severally hold office, into three classes, as
nearly equal in number as possible, one class to be originally elected for a
term expiring at the annual meeting of stockholders to be held in 2000, another
class to be originally elected for a term expiring at the annual meeting of
stockholders to be held in 2001, and another class to be originally elected for
a term expiring at the annual meeting of stockholders to be held in 2002. Each
director of the Corporation shall hold office until his or her successor is duly
elected and qualified, such classification to be effective upon the date shares
of Class A Common Stock are first publicly held. At each succeeding annual
meeting of stockholders, directors elected to succeed those directors whose
terms then expire shall be elected for a term of office to expire at the third
annual meeting of stockholders following such director's election and until such
director's successor shall have been elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director. Unless and
except to the extent that the By-laws shall so require, the election of
directors need not be by written ballot.
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SECTION 2. Vacancies.
Except as otherwise provided for or fixed by or pursuant to the provisions
of this Restated Certificate of Incorporation relating to the rights of the
holders of any series of Preferred Stock, any vacancy on the Board of Directors
of the Corporation resulting from death, resignation, removal or other cause and
any newly created directorship resulting from any increase in the authorized
number of directors between meetings of stockholders shall be filled only by the
affirmative vote of (i) at least 66 and 2/3% of the remaining directors then in
office if prior to the Trigger Date, or (ii) a majority of all the directors
then in office, even though less than a quorum if on or after the Trigger Date,
but in any event not by the stockholders. Any director so chosen shall hold
office for the remainder of the full term of the class of directors in which the
vacancy occurred or the new directorship was created and until a successor is
duly elected and qualified or until his or her earlier death, resignation or
removal from office in accordance with this Restated Certificate of
Incorporation or any applicable law or pursuant to an order of a court. If there
are no directors in office, then an election of directors may be held in the
manner provided by applicable law.
SECTION 3. Notice.
Advance notice of nominations for the election of directors and business to
be transacted at any stockholders' meeting shall be given in the manner and to
the extent provided in the By-laws.
SECTION 4. Removal.
Except as otherwise provided for or fixed by or pursuant to the provisions
of this Restated Certificate of Incorporation relating to the rights of the
holders of any series of Preferred Stock, (i) prior to the Trigger Date, any
director may be removed from office with or without cause but only by the
affirmative vote of the holders of a majority of the combined voting power of
the then-outstanding shares of stock of the Corporation entitled to vote for the
election of directors, voting together as a single class, and (ii) on and after
the Trigger Date, any director may be removed from office only for cause by the
affirmative vote of the holders of at least a majority of the combined voting
power of the then-outstanding shares of stock of the Corporation entitled to
vote for the election of directors, voting together as a single class.
SECTION 5. Amendment of this Article.
Notwithstanding anything to the contrary elsewhere contained in this
Restated Certificate of Incorporation, the affirmative vote of the holders of at
least 66 and 2/3%
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of the combined voting power of the then-outstanding shares of stock of the
Corporation entitled to vote for the election of directors, voting together as a
single class, shall be required to alter, amend or repeal, or to adopt any
provision inconsistent with, this Article VI.
ARTICLE VII
Stockholder Action; No Cumulative Voting
SECTION 1. Action by Consent in Lieu of a Meeting.
Effective upon and commencing as of the day following the day on which
Williams, and any company that is directly or indirectly controlled by Williams
and of which at least a majority of the equity interests therein are directly or
indirectly beneficially owned by Williams shall first cease to be the owner, in
the aggregate, of at least a majority of the then-outstanding shares of Common
Stock (the "Trigger Date"), and except as otherwise provided pursuant to the
provisions of this Restated Certificate of Incorporation (including any
Preferred Stock Designation) fixing the powers, privileges or rights of any
class or series of stock other than the Common Stock in respect of action by
written consent of the holders of such class or series of stock, any action
required or permitted to be taken by the stockholders of the Corporation must be
effected at a duly called annual or special meeting of such holders and may not
be effected by any consent in writing by such holders. Prior to the Trigger
Date, the By-laws may provide that any action required to be taken at any
meeting of stockholders may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of shares of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares of stock entitled to vote were
present and voted, provided that prompt notice of the taking of the corporation
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing.
SECTION 2. Meetings.
Effective upon and commencing as of the Trigger Date, except as otherwise
required by law and subject to the rights of the holders of any class or series
of Preferred Stock, special meeting of stockholders of the Corporation of any
class or
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series for any purpose or purposes may be called only by the Board of Directors
pursuant to a resolution stating the purpose or purposes thereof approved by a
majority of the entire Board of Directors and, effective as of the Trigger Date,
any power of stockholders to call a special meeting is specifically denied. No
business other than that stated in the notice shall be transacted at any special
meeting.
Prior to the Trigger Date, subject to the rights of the holders of any
outstanding series of Preferred Stock, special meetings of stockholders of the
Corporation may be called only by the Secretary of the Corporation at the
request of Williams or its affiliates.
Notwithstanding the foregoing, whenever the holders of any one or more
outstanding series of Preferred Stock shall have the right, voting separately by
class or series, as applicable, to elect directors at an annual or special
meeting of stockholders, the calling of special meetings of the holders of such
class or series shall be governed by the terms of the applicable resolution or
resolutions of the Board of Directors establishing such series of Preferred
Stock pursuant to Article IV of this Restated Certificate of Incorporation.
SECTION 3. Stockholder Nomination of Director Candidates and other Stockholder
Proposals.
Advance notice of stockholder nominations for the election of directors and
of the proposal by stockholders of any other action to be taken by the
stockholders shall be given in such manner as shall be provided in the By-laws
(as amended and in effect from time to time).
SECTION 4. Amendment of this Article.
Notwithstanding anything to the contrary contained in this Restated
Certificate of Incorporation, the affirmative vote of the holders of at least
66 and 2/3% of the combined voting power of the then-outstanding shares of stock
of the Corporation entitled to vote for the election of directors, voting
together as a single class, shall be required to alter, amend or repeal, or to
adopt any provision inconsistent with, this Article.
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ARTICLE VIII
By-laws
The Board of Directors shall have the power to adopt, alter, amend or
repeal the By-laws. The stockholders of the Corporation may adopt, amend or
repeal the By-laws but only by the affirmative vote of holders of at least a
majority of the combined voting power of the then-outstanding shares of capital
stock of all classes and series of the Corporation entitled to vote generally on
matters requiring the approval of stockholders, voting together as a single
class.
ARTICLE IX
Amendments
The Corporation reserves the right at any time from time to time to amend,
alter, change or repeal any provision contained in this Restated Certificate of
Incorporation, and any other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted, in the manner now or
hereafter prescribed by law; and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Restated Certificate of Incorporation in its
present form or as hereafter amended are granted subject to the right reserved
in this Article IX.
ARTICLE X
Indemnification; Limitation of Liability.
SECTION 1. Indemnification.
A. Each person who was or is made a party or is threatened to be made a party to
or is otherwise involved in any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a director of the Corporation or any
of its direct or indirect subsidiaries or is or was serving at the request of
the Corporation as a director of any other corporation or of a partnership,
limited liability company, joint venture, trust, or other enterprise, including
service with respect to an employee benefit plan (hereinafter an "indemnitee"),
whether the basis of such proceeding is alleged action in an official capacity
as a director or in any other capacity while serving as a director, shall be
indemnified and held harmless by the Corporation to the fullest
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extent authorized by the Delaware Code, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights than
permitted prior thereto), against all expense, liability, and loss (including
attorneys' fees, judgments, fines, excise or other taxes assessed with respect
to an employee benefit plan, penalties, and amounts paid in settlement)
reasonably incurred or suffered by such indemnitee in connection therewith, and
such indemnification shall continue as to an indemnitee who has ceased to be a
director and shall inure to the benefit of the indemnitee's heirs, executors,
and administrators; provided, however, that, except as provided in Paragraph B
of this Section 1 with respect to proceedings to enforce rights to
indemnification, the Corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.
B. The right to indemnification conferred in Paragraph A of this Section 1 shall
include the right to be paid by the Corporation the expenses incurred in
defending any proceeding for which such right to indemnification is applicable
in advance of its final disposition (hereinafter an "advancement of expenses");
provided, however, that, if the Delaware Code requires, an advancement of
expenses incurred by an indemnitee in his or her capacity as a director (and not
in any other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be
made only upon delivery to the Corporation of an undertaking (hereinafter an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses under
this Section 1 or otherwise.
C. The rights to indemnification and to the advancement of expenses conferred in
Paragraphs A and B of this Section 1 shall be contract rights. If a claim under
Paragraph A or B of this Section 1 is not paid in full by the Corporation within
60 days after a written claim has been received by the Corporation, except in
the case of a claim for an advancement of expenses, in which case the applicable
period shall be 20 days, the indemnitee may at anytime thereafter bring suit
against the Corporation to recover the unpaid amount of the claim. If successful
in whole or in part in any such suit, or in a suit brought by the Corporation to
recover an advancement of expenses pursuant to the terms of an undertaking, the
indemnitee shall be entitled to be paid also the expense of prosecuting or
defending such suit. In (i) any suit brought by the indemnitee to enforce a
right to indemnification hereunder (but not in a suit
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brought by an indemnitee to enforce a right to an advancement of expenses) it
shall be a defense that the indemnitee has not met any applicable standard for
indemnification set forth in the Delaware Code, and (ii) any suit by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the Corporation shall be entitled to recover such expenses upon a
final adjudication that the indemnitee has not met any applicable standard for
indemnification set forth in the Delaware Code. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware Code, nor an actual determination by the Corporation (including its
Board of Directors, independent legal counsel, or its stockholders) that the
indemnitee has not met such applicable standard of conduct, shall create a
presumption that the indemnitee has not met the applicable standard of conduct
or, in the case of such a suit brought by the indemnitee to enforce a right to
indemnification or to an advancement of expenses hereunder, or by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to be
indemnified, or to such advancement of expenses, under this Section 1 or
otherwise, shall be on the Corporation.
D. The rights to indemnification and to the advancement of Expenses conferred in
this Section 1 shall not be exclusive of any right which any person may have or
hereafter acquire under any statute, this certificate of incorporation, by-law,
agreement, vote of stockholders or disinterested directors, or otherwise.
E. The Corporation may maintain insurance, at its expense, to protect itself and
any director, officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust, or other enterprise against any
expense, liability, or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability, or loss under the
Delaware Code.
F. The Corporation's obligation, if any, to indemnify any person who was or is
serving as a director of any direct or indirect subsidiary of the Corporation
or, at the request of the Corporation, of any other corporation or of a
partnership, joint venture, trust, or other enterprise shall be reduced by any
amount such person may collect as indemnification from such other corporation,
partnership, joint venture, trust or other enterprise.
G. Any repeal or modification of the foregoing provisions of this Section 1
shall
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not adversely affect any right or protection hereunder of any person in respect
of any act or omission occurring prior to the time of such repeal or
modification.
H. The Corporation may, to the extent authorized from time to time by the Board
of Directors, grant indemnification rights and rights to the advancement of
expenses to any officer, employee or agent of the Corporation to the fullest
extent of the provision of this Article with respect to the indemnification and
advancement of expenses to directors.
SECTION 2. Limited Liability.
No director of the Corporation shall be liable to the Corporation or any of
its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that this provision does not eliminate the liability of the
director (i) for any breach of the director's duty of loyalty to the Corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of Title B of the Delaware Code, or (iv) for any transaction from
which the director derived an improper personal benefit. For purposes of the
prior sentence, the term "damages" shall, to the extent permitted by law,
include without limitation, any judgment, fine amount paid in settlement,
penalty, punitive damages, excise or other tax assessed with respect to an
employee benefit plan, or expense of any nature (including, without limitation,
counsel fees and disbursements). Each person who serves as a director of the
Corporation while this Section 2 is in effect shall be deemed to be doing so in
reliance on the provisions of this Section 2, and neither the amendment or
repeal of this Section 2, nor the adoption of any provision of this Restated
Certificate of Incorporation inconsistent with this Section 2, shall apply to or
have any effect on the liability or alleged liability of any director of the
Corporation for, arising out of, based upon, or in connection with any acts or
omissions of such director occurring prior to such amendment, repeal, or
adoption of an inconsistent provision. The provisions of this Section 2 are
cumulative and shall be in addition to and independent of any and all other
limitations on or eliminations of the liabilities of directors of the
Corporation, as such, whether such limitation or eliminations arise under or are
created by any law, rule, regulation, by-law, agreement, vote of stockholders or
disinterested directors, or otherwise.
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ARTICLE XI
Certain Transactions With Stockholders and Corporation Opportunities.
SECTION 1. Certain Acknowledgments; Certain Fiduciary Duties
In anticipation that (i) the Corporation will cease to be a wholly owned
subsidiary of Williams, but that Williams will remain a stockholder of the
Corporation and have continued contractual, corporate, and business relations
with the Corporation, and in anticipation that the Corporation and Williams may
enter into contracts or otherwise transact business with each other and that the
Corporation may derive benefits therefrom, (ii) that directors, officers and/or
employees of Williams or of Affiliated Companies (as defined below in this
Article XI) of Williams may serve as directors and/or officers of the
Corporation, (iii) that Williams and Affiliated Companies thereof engage and are
expected to continue to engage in the same, similar or related lines of business
as those in which the Corporation, directly or indirectly, may engage and/or
other business activities that overlap with or compete with those in which the
Corporation, directly or indirectly, may engage, subject to the Separation
Agreement, (iv) the Corporation may from time to time enter into contractual,
corporate or business relations with one or more of its directors, or one or
more corporations, partnerships, associations or other organizations in which
one or more of its directors have a financial interest (collectively, "Related
Entities"), the provisions of this Article XI Section 2. are set forth to
regulate and define certain contractual relations of the Corporation as they may
involve Williams, Related Entities, and their respective officers and directors,
and the powers, rights, duties and liabilities of the Corporation and its
officers, directors and stockholders in connection therewith. The provisions of
this Article XI, Section 2. are in addition to, and not in limitation of, the
provisions of the Delaware Code and the other provisions of this Restated
Certificate of Incorporation. Any contract or business relation that does not
comply with the procedures set forth in this Article XI., Section 2. shall not
by reason thereof be deemed void or voidable or result in any breach of
fiduciary duty or duty of loyalty or failure to act in good faith or in the best
interests of the Corporation or derivation of any improper personal benefit, but
shall be governed by the provisions of this Restated Certificate of
Incorporation, the By-laws, the Delaware Code, and other applicable law.
SECTION 2. Certain Agreements and Transactions Permitted
No contract, agreement, arrangement or transaction (or any amendment,
modification or termination thereof) between the Corporation and Williams or
between the Corporation and one or more of the directors or officers of the
Corporation, Williams, or any Affiliated Company or between the Corporation and
any Affiliated Company shall be void or voidable solely for the reason that
Williams, any Affiliated Company, or any one or more of the officers or
directors of the
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Corporation, Williams, or any Affiliated Company are parties thereto, or solely
because any such directors or officers are present at or participate in the
meeting of the Board of Directors or committee thereof which authorizes the
contract, agreement, arrangement, or transaction (or the amendment, modification
or termination thereof), or solely because his or their votes are counted for
such purpose. Subject to Section 4 of this Article, no such agreement (or the
amendment, modification or termination thereof), or the performance thereof by
the Corporation or Williams, or any Affiliated Company thereof, (a) shall be
contrary to (i) any fiduciary duty that Williams or any Affiliated Company
thereof may owe to the Corporation or any Affiliated Company thereof or to any
stockholder or other owner of an equity interest in the Corporation or any
Affiliated Company thereof by reason of Williams or any Affiliated Company
thereof being a controlling stockholder of the Corporation or participating in
the control of the Corporation or of any Affiliated Company thereof; or (ii) any
fiduciary duty of any director or officer of the Corporation or of any
Affiliated Company thereof who is also a director, officer or employee of
Williams or any Affiliated company thereof to the Corporation or such Affiliated
Company, or to any stockholder thereof; and Williams, any Affiliated Company,
and such directors and officers (i) shall be deemed to have acted in good faith
and in a manner such persons reasonably believe to be in and not opposed to the
best interests of the Corporation and (ii) shall be deemed not to have breached
their duties of loyalty to the Corporation and its stockholders and not to have
derived an improper personal benefit therefrom, if:
(i) such agreement shall have been entered into before
the Corporation ceased to be a wholly owned
subsidiary of Williams and continued in effect in
respect of any such transaction or opportunity after
such time, or
(ii) the material facts as to the contract, agreement,
arrangement, transaction, amendment, modification or
termination are disclosed or are known to the Board
of Directors or the committee thereof which
authorizes the contract, agreement, arrangement or
transaction (or the amendment, modification or
termination thereof), and the Board of Directors or
such committee in good faith authorizes the contract,
agreement, arrangement or transaction (or the
amendment, modification or termination
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thereof) is approved by (a) the affirmative vote of a
majority of the disinterested directors, even though
the disinterested directors be less than a quorum;
(b) such committee of the Board of Directors
constituted solely of members who are not Interested
Persons in respect of such agreement by the
affirmative vote of a majority of the members of such
committee or (c) one or more officers or employees of
the Corporation (including officers or employees of
the Corporation acting as directors, officers,
trustees, partners or members of, or in any similar
capacity on behalf of, any Affiliated Company of the
Corporation) who in each case is not an Interested
Person in respect of such agreement and to whom the
authority to approve such agreement has been
delegated either by the Board of Directors by the
same affirmative vote required by subclause (a) of
this subparagraph for approval of such agreement by
the Board of Directors or by a committee of the Board
of Directors constituted as provided by and acting by
the same affirmative vote as required by subclause
(b) of this subparagraph for approval of such
agreement by such committee or, in the case of an
employee, to whom such authority has been delegated
by an officer to whom authority to approve such
agreement has been so delegated,
(iii) the material facts as to the contract, agreement,
arrangement or transaction (or the amendment,
modification or termination thereof) are disclosed or
are known to the holders of voting stock entitled to
vote thereon, and the contract, agreement,
arrangement, or transaction (or the amendment,
modification or termination thereof) is specifically
approved in good faith by vote of the holders of a
majority of the then-outstanding voting stock not
owned by
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Williams or a Affiliated Company, as the case may be,
or
(iv) such contract, agreement, arrangement or transaction
(or the amendment, modification or termination
thereof) is fair as to the Corporation as of the time
it is authorized, approved or ratified by the Board
of Directors, a committee thereof or the stockholders
of the Corporation, or
(v) in the case of any such transaction that was not
entered into in the performance of an agreement that
satisfied the requirements of clause (i), (ii), (iii)
or (iv) of this sentence, such transaction shall have
been approved or ratified by (a) the Board of
Directors of the Corporation by the affirmative vote
of a majority of the members (even though less than a
quorum) who are not Interested Persons in respect of
such transaction or (b) by a committee of the Board
of Directors of the Corporation constituted solely of
members who are not Interested Persons in respect of
such transaction by the affirmative vote of a
majority of the members of such committee or (c) by
one or more officers or employees of the Corporation
(including officers or employees of the Corporation
acting as directors, officers, trustees, partners or
members of, or in any similar capacity on behalf of,
any Affiliated Company of the Corporation) who in
each case is not an Interested Person in respect of
such transaction and to whom the authority to approve
such transaction has been delegated either by the
Board of Directors by the same affirmative vote
required by subclause (a) of this subparagraph for
approval of such transaction of the Board of
Directors or a committee of the Board of Directors
constituted as provided by and acting
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by the same affirmative vote as required by subclause
(b) of this subparagraph for approval of such
transaction by such committee or, in the case of an
employee, to whom such authority has been delegated
by an officer to whom authority to approve such
transaction has been so delegate;, provided, however,
that, before such approval or ratification, the
material facts of the relationship between the
Corporation or such Affiliated Company thereof, on
the one hand, and Williams or such Affiliated Company
thereof, on the other hand, and the material facts as
to such transaction were disclosed to or were known
by the members of the Board of directors or of such
committee or the officer or officers or employee or
employees who acted on approval or ratification of
such transaction, as the case may be; or
(vi) in the case of any such transaction that was not
entered into in the performance of an agreement that
satisfied the requirements of clause (i), (ii), (iii)
or (iv) of this sentence, such transaction was fair
to the Corporation as of the time it was entered into
by the Corporation; or
(vii) in the case of any such transaction that was not
entered into in the performance of an agreement that
satisfied the requirements of clause (i), (ii), (iii)
or (iv) of this sentence, such transaction was
approved or ratified by the affirmative vote of the
holders of a majority of the shares of capital stock
of the Corporation entitled to vote thereon and who
do not vote thereon, exclusive of Williams and any
Affiliated Company thereof and any Interested Person
in respect of such transaction.
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Subject to Section 4 of this Article XI, neither Williams nor any
Affiliated Company thereof, as a stockholder of the Corporation or participant
in control of the Corporation, shall have or be under any fiduciary duty to
refrain from entering into any agreement or participating in any transaction
that meets the requirements of any of clauses (i), (ii), (iii), (iv), (v), (vi)
or (vii) of the immediately preceding sentence and no director, officer or
employees of the Corporation who is also a director, officer or employee of
Williams or any Affiliated Company thereof shall have or be under any fiduciary
duty to the Corporation to refrain from acting on behalf of the Corporation or
any Affiliated Company thereof in respect of any such agreement or transaction
or performing any such agreement in accordance with its terms. Directors of the
Corporation who are also directors or officers of Williams or any Affiliated
Company may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee which authorizes the contract,
agreement, arrangement, or transaction (or the amendment, modification or
termination thereof). Voting stock owned by Williams and any Affiliated
Companies thereof may be counted in determining the presence of a quorum at a
meeting of stockholders which authorizes the contract, agreement, arrangement or
transaction. Any person purchasing or otherwise acquiring any shares of capital
stock of the Corporation, or any interest therein, shall be deemed to have
notice of and to have consented to the provisions of this Article. The failure
of any agreement or transaction between the Corporation or an Affiliated Company
thereof, on the one hand, and Williams or an Affiliated Company thereof, on the
other hand, to satisfy the requirements of this Section shall not, by itself,
cause such agreement or transaction to constitute any breach of any fiduciary
duty to the Corporation or to any Affiliated Company thereof, or, any to
stockholder or other owner of an equity interest therein, by any controlling
stockholder of the Corporation or such Affiliated Company thereof or by any
director or officer of the Corporation.
For purposes of this Article XI, Section 2., any contract, agreement,
arrangement, or transaction (or amendment, modification, or termination thereof)
with any corporation, partnership, joint venture, association, or other entity
in which the Corporation owns (directly or indirectly) 50% or more of the
outstanding voting stock, voting power, partnership interests, or similar
ownership interests, or with any officer or director thereof, shall be deemed to
be a contract, agreement, arrangement or transaction with the Corporation.
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SECTION 3. Certain Definitions.
For purposes of this Article, the following definitions shall apply:
"Affiliated Company" shall mean in respect of Williams, any company which
is controlled by Williams controls Williams or is under common control with
Williams (other than the Corporation and any company that is controlled by the
Corporation) and in respect of the Corporation shall mean any company controlled
by the Corporation.
"Interested Person" in respect of an agreement or transaction referred to
in Section 2 of this Article XI shall mean any director, officer or employees of
Williams or an Affiliated Company thereof and any person who has a financial
interest that is material to such person in Williams or such Affiliated Company
or otherwise has a personal financial interest that is material to such person
in such agreement or transaction; provided, however, that no such financial
interest shall be considered material by reason of a person' ownership of
securities of Williams or an Affiliated Company thereof, if such ownership of
securities has been determined in good faith not to be reasonably likely to
influence such individual's decision on behalf of the Corporation or an
Affiliated Company thereof in respect of the agreement or transaction either in
the specific instance by, or pursuant to, a policy adopted by, the Board of
Directors of the Corporation by the affirmative vote of a majority of the
members (even though less than a quorum) who are not directors, officers or
employees of Williams or any Affiliated Company thereof or a committee of the
Board of Directors of the Corporation constituted solely of members who are not
directors, officers or employees of Williams or any Affiliated Company thereof
by the affirmative vote of a majority of such committee.
SECTION 4. Termination.
The provisions of this Article XI shall have no further force or effect at
such time as Williams and any company controlling, controlled by or under common
control with Williams shall first cease to be the owner, in the aggregate, of
stock representing 25% or more of the votes entitled to be cast by the holders
of all the then-outstanding shares of stock entitled to vote; provided, however,
that such termination shall not terminate the effect of such provisions with
respect to (i) any agreement between the Corporation or an Affiliated Company
thereof and Williams or an Affiliated Company thereof that was entered into
before such time or any transaction entered into in the performance of such
agreement, whether entered into before or after such time, or (ii) any
transaction entered into between the Corporation or an Affiliated Company
thereof and Williams or an Affiliated Company thereof or the allocation of any
opportunity between them before such time.
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SECTION 5. Amendment of this Article.
Notwithstanding anything to the contrary elsewhere contained in this
Restated Certificate of Incorporation, the affirmative vote of the holders of at
least 66 and 2/3% of the combined voting power of the then-outstanding shares of
stock of the Corporation entitled to vote for the election of directors, voting
together as a single class, shall be required to alter, amend or repeal, or to
adopt any provision inconsistent with, this Article XI.
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IN WITNESS WHEREOF, Williams Communications Group, Inc. has caused this
Restated Certificate of Incorporation to be signed by its Secretary this 24th
day of September, 1999.
Williams Communications Group, Inc.
/s/ SHAWNA L. GEHRES
------------------------------------
Name: Shawna L. Gehres
Title: Secretary
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CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
WILLIAMS COMMUNICATIONS GROUP, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, the undersigned officers of Williams Communications Group, Inc., a
corporation organized and existing under the General Corporation Law of the
State of Delaware, in accordance with the provisions of Section 103 thereof, DO
HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Amended and Restated Certificate of Incorporation of the said Corporation,
the said Board of Directors on September 30, 1999, adopted the following
resolution creating a series of 10,000,000 shares of Preferred Stock designated
as Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its Amended
and Restated Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" and the number of
shares constituting such series shall be 10,000,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series
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A Junior Participating Preferred Stock with respect to dividends, the holders of
shares of Series A Junior Participating Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the last day
of February, May, August and November in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to, 100 times the aggregate
per share amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Class A Common Stock, par value $0.01 per share or Class B Common Stock,
par value $0.01 per share, of the Corporation (the "Common Stock"), since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Participating Preferred Stock. In the
event the Corporation shall at any time after September 30, 1999 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of Series A Junior Participating Preferred
Stock were entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in Paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock).
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(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior Participating Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Junior Participating Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the number of votes per share to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such
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<PAGE> 35
event shall be adjusted by multiplying such number by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal to six
(6) quarterly dividends thereon, the occurrence of such contingency shall
mark the beginning of a period (herein called a "default period") which
shall extend until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly dividend
period on all shares of Series A Junior Participating Preferred Stock then
outstanding shall have been declared and paid or set apart for payment.
During each default period, all holders of Preferred Stock (including
holders of the Series A Junior Participating Preferred Stock) with
dividends in arrears in an amount equal to six (6) quarterly dividends
thereon, voting as a class, irrespective of series, shall have the right to
elect two (2) directors.
(ii) During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of
this Section 3(C) or at any annual meeting of stockholders, and thereafter
at annual meetings of stockholders, provided that neither such voting right
nor the right of the holders of any other series of Preferred Stock, if
any, to increase, in certain cases, the authorized number of directors
shall be exercised unless the holders of ten percent (10%) in number of
shares of Preferred Stock outstanding shall be present in person or by
proxy. The absence of a quorum of the holders of Common Stock shall not
affect the exercise
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<PAGE> 36
by the holders of Preferred Stock of such voting right. At any meeting at
which the holders of Preferred Stock shall exercise such voting right
initially during an existing default period, they shall have the right,
voting as a class, to elect directors to fill such vacancies, if any, in
the Board of Directors as may then exist up to two (2) directors or, if
such right is exercised at an annual meeting, to elect two (2) directors.
If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall
have the right to make such increase in the number of directors as shall be
necessary to permit the election by them of the required number. After the
holders of the Preferred Stock shall have exercised their right to elect
directors in any default period and during the continuance of such period,
the number of directors shall not be increased or decreased except by vote
of the holders of Preferred Stock as herein provided or pursuant to the
rights of any equity securities ranking senior to or pari passu with the
Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding, irrespective of
series, may request, the calling of a special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by the President,
a Vice-President or the Secretary of the Corporation. Notice of such
meeting and of any annual meeting at which holders of Preferred Stock are
entitled to vote pursuant to this Paragraph (C)(iii) shall be given to each
holder of record of Preferred Stock by mailing a copy of such notice to him
at his last address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than 20 days and not
later than 60 days after such order or request or in
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<PAGE> 37
default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding. Notwithstanding the
provisions of this Paragraph (C)(iii), no such special meeting shall be
called during the period within 60 days immediately preceding the date
fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to
be entitled to elect the whole number of directors until the holders of
Preferred Stock shall have exercised their right to elect two (2) directors
voting as a class, after the exercise of which right (x) the directors so
elected by the holders of Preferred Stock shall continue in office until
their successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the Board of
Directors may (except as provided in Paragraph (C)(ii) of this Section 3)
be filled by vote of a majority of the remaining directors theretofore
elected by the holders of the class of stock which elected the director
whose office shall have become vacant. References in this Paragraph (C) to
directors elected by the holders of a particular class of stock shall
include directors elected by such directors to fill vacancies as provided
in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect directors
shall cease, (y) the term of any directors elected by the holders of
Preferred Stock as a class shall terminate, and (z) the number of directors
shall be such number as may be provided for in the amended and restated
certificate of incorporation or by-laws irrespective of any increase made
pursuant to the provisions of Paragraph (C)(ii) of this Section
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<PAGE> 38
3 (such number being subject, however, to change thereafter in any manner
provided by law or in the amended and restated certificate of incorporation
or by-laws). Any vacancies in the Board of Directors effected by the
provisions of clauses (y) and (z) in the preceding sentence may be filled
by a majority of the remaining directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred
Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Junior Participating Preferred Stock, except dividends paid ratably on the
Series A Junior Participating Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
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<PAGE> 39
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to
the Series A Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Junior Participating Preferred Stock, [or any shares of stock
ranking on a parity with the Series A Junior Participating Preferred
Stock,] except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors, after consideration
of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under Paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
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<PAGE> 40
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received an amount equal to $100 per share of Series A Participating
Preferred Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the
"Series A Liquidation Preference"). Following the payment of the full amount of
the Series A Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have received
an amount per share (the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series A Liquidation Preference by (ii) 100 (as appropriately
adjusted as set forth in subparagraph (C) below to reflect such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock)
(such number in clause (ii), the "Adjustment Number"). Following the payment of
the full amount of the Series A Liquidation Preference and the Common Adjustment
in respect of all outstanding shares of Series A Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in the
ratio of the Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
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<PAGE> 41
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior Participating
Preferred Stock shall not be redeemable.
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Section 9. Ranking. The Series A Junior Participating Preferred Stock
shall rank junior to all other series of the Corporation's Preferred Stock as to
the payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment. At any time when any shares of Series A Junior
Participating Preferred Stock are outstanding, neither the Amended and Restated
Certificate of Incorporation of the Corporation nor this Certificate of
Designation shall be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of [a majority] or more of the outstanding
shares of Series A Junior Participating Preferred Stock, voting separately as a
class.
Section 11. Fractional Shares. Series A Junior Participating Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this 30th day
of September, 1999.
/s/ S. MILLER WILLIAMS
----------------------------------------
Senior Vice President
Attest:
/s/ SHAWNA L. GEHRES
-------------------------------
Secretary
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CERTIFICATE OF DESIGNATIONS
OF
6.75% REDEEMABLE CUMULATIVE CONVERTIBLE PREFERRED STOCK
SETTING FORTH THE POWERS, PREFERENCES, RIGHTS, QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF SUCH PREFERRED STOCK
Pursuant to Section 151 of the Delaware General Corporation Law,
Williams Communications Group, Inc., a Delaware corporation (the "Company"),
does hereby certify that the Board of Directors of the Company (the "Board of
Directors") and the Special Committee of the Board of Directors (the "Special
Committee"), pursuant to and in accordance with authority validly delegated to
the Special Committee by resolutions duly adopted by the Board of Directors,
duly adopted the following resolution and that such resolution has not been
modified and is in full force and effect:
RESOLVED that, pursuant to the authority vested in the Board of
Directors (including as delegated to the Special Committee) in accordance with
the provisions of the Restated Certificate of Incorporation of the Company (the
"Certificate of Incorporation"), a series of preferred stock of the Company is
hereby created and the designation and number of shares thereof and the voting
powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations and
restrictions thereof, are as set forth below in this Certificate of Designations
(this "Certificate"):
SECTION 1. NUMBER; DESIGNATION; REGISTERED FORM. (a) The shares of such
series shall be designated as "6.75% Redeemable Cumulative Convertible Preferred
Stock" (the "Preferred Stock") and shall have a par value of $.01 per share. The
number of shares constituting the Preferred Stock shall initially be 5,750,000.
Certificates for shares of Preferred Stock shall be issuable only in registered
form.
(b) All shares of Preferred Stock redeemed, purchased,
exchanged, converted or otherwise acquired by the Company shall be retired and
canceled and, upon the taking of any action required by applicable law, shall be
restored to the status of authorized but unissued shares of Preferred Stock of
the Company, without designation as to series, and may thereafter be reissued.
(c) Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in Section 11 below.
SECTION 2. RANKING. The Preferred Stock shall, with respect to dividend
rights and rights upon liquidation, winding-up or dissolution, rank:
(a) senior to the Common Stock, the Class B Common Stock and
any other class or series of Capital Stock of the Company, the terms of which do
not expressly provide that such class or series ranks senior to or on a parity
with the Preferred Stock as to dividend rights and rights on liquidation,
winding-up and dissolution of the Company (collectively, the "Junior Stock");
(b) on a parity with any other class or series of Capital
Stock of the Company, the terms of which expressly provide that such class or
series ranks on a parity with the Preferred Stock as to dividend rights and
rights on liquidation, winding-up and dissolution of the Company (collectively,
the "Parity Stock"); and
(c) junior to each class or series of Capital Stock of the
Company, the terms of which expressly provide that such class or series ranks
senior to the Preferred Stock as to dividend rights and rights on liquidation,
winding-up and dissolution of the Company (collectively, the "Senior Stock").
<PAGE> 44
SECTION 3. DIVIDENDS. (a) The holders of shares of Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available therefor, dividends on the shares of Preferred
Stock, cumulative from the first date of issuance of any such shares (the
"Initial Issuance Date"), at a rate per annum equal to 6.75% of the Liquidation
Preference per share, payable in cash. Dividends on the shares of Preferred
Stock shall be payable quarterly in arrears on January 15, April 15, July 15 and
October 15 of each year, or if any such date is not a Business Day, on the next
succeeding Business Day (each such date, a "Dividend Payment Date", and each
such quarterly period, a "Dividend Period"), beginning on January 15, 2001, in
preference to and in priority over dividends on any Junior Stock but subject to
the rights of any holders of Senior Stock or Parity Stock. Such dividends shall
be paid to the holders of record of the shares of Preferred Stock as they appear
on the applicable Record Date. As used herein, the term "Record Date" means,
with respect to the dividends payable on January 15, April 15, July 15 and
October 15 of each year, January 1, April 1, July 1 and October 1 of each year,
respectively, or such other record date, not more than 60 days and not less than
10 days preceding the applicable Dividend Payment Date, as shall be fixed by the
Board of Directors. Dividends on the shares of Preferred Stock shall be fully
cumulative and shall accumulate (whether or not there are funds of the Company
legally available for the payment of dividends) from the Initial Issuance Date
(or the last Dividend Payment Date for which dividends were paid, whichever is
later) based on a 360-day year comprised of twelve 30-day months. Arrearages of
unpaid dividends for any past Dividend Period and dividends in connection with
any optional redemption may be declared and paid at any time, without reference
to any Dividend Payment Date, to holders of record on such date, not more than
45 days prior to the payment thereof, as may be fixed by the Board of Directors.
(b) No dividend whatsoever shall be declared or paid upon, or
any sum set apart for the payment of dividends upon, any outstanding share of
Preferred Stock with respect to any dividend period unless all dividends for all
preceding dividend periods have been declared and paid, or declared and a
sufficient sum set apart for the payment of such dividends, upon all outstanding
shares of Preferred Stock.
(c) No dividend shall be declared or paid or set apart for
payment or other distribution declared or made, whether in cash, obligations or
shares of Capital Stock of the Company or other property, directly or
indirectly, upon any shares of Junior Stock or Parity Stock, nor shall any
shares of Junior Stock or Parity Stock be redeemed, repurchased or otherwise
acquired for consideration by the Company through a sinking fund or otherwise,
unless all accumulated and unpaid dividends, including Special Dividends, if
any, through the most recent Dividend Payment Date (whether or not there are
funds of the Company legally available for the payment of dividends) on the
shares of Preferred Stock and any Parity Stock have been or contemporaneously
are declared and paid in full or set apart for payment; provided, however, that,
notwithstanding any provisions of this paragraph (c) to the contrary, the
Company shall be entitled to (i) declare and pay dividends on shares of Junior
Stock payable solely in shares of Junior Stock and on shares of Parity Stock
payable solely in shares of Parity Stock or Junior Stock, or in each case, by an
increase in the liquidation preference of the Junior Stock or Parity Stock, and
(ii) redeem, repurchase or otherwise acquire Junior Stock or Parity Stock in
exchange for consideration consisting of Junior Stock, in the case of Junior
Stock, or Parity Stock or Junior Stock, in the case of Parity Stock. When
dividends are not paid in full, as aforesaid, upon the shares of Preferred
Stock, all dividends declared on the Preferred Stock and any other Parity Stock
shall be declared and paid either (A) pro rata so that the amount of dividends
so declared on the shares of Preferred Stock and each such other class or series
of Parity Stock shall in all cases bear to each other the same ratio as
accumulated dividends on the shares of Preferred Stock and such class or series
of Parity Stock bear to each other or (B) on another basis that is at least as
favorable to the holders of the Preferred Stock entitled to receive such
dividends.
(d) All dividends paid with respect to shares of Preferred
Stock pursuant to this Section 3 shall be paid pro rata to the holders entitled
thereto. Holders of the Preferred Stock will not be entitled to any dividends,
whether payable in cash, property or stock, in excess of the full cumulative
dividends as herein described. In the event that the equivalent of six quarterly
dividends payable on the shares of Preferred Stock are accumulated and unpaid
(whether or not consecutive and whether or not declared), the holders will have
the rights and remedies set forth in Section 6(c).
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(e) The Company shall have the option to pay all or any part
of a dividend by delivering shares of Common Stock to the transfer agent for the
Preferred Stock (the "Transfer Agent") to be resold for cash. In such case, the
Company shall be obligated to deliver to the Transfer Agent a number of shares
of Common Stock which, when resold by the Transfer Agent, shall result in net
cash proceeds sufficient to pay the applicable dividend in cash to the holders
of shares of Preferred Stock. All shares of Common Stock that the Company may
deliver to the Transfer Agent as provided in this paragraph (e) shall be
registered under the Securities Act of 1933, as amended (the "Securities Act").
(f) (i) Upon the occurrence of a Registration Default,
additional dividends ("Special Dividends") will accumulate on the
Preferred Stock, from and including the date of such Registration
Default to but excluding the day on which such Registration Default has
been cured. In the event of each such Registration Default, the Company
shall pay Special Dividends to each holder of Preferred Stock at a rate
per annum equal to 0.50% of the Liquidation Preference of the Preferred
Stock, which shall accumulate from the date of the Registration Default
to and including the 90th day following such Registration Default, and
shall increase by 0.25% per annum of the Liquidation Preference for
each subsequent 90-day period; provided, however, that such Special
Dividends may not accumulate at any time at a rate greater than 1.00%
per annum of the Liquidation Preference of the Preferred Stock in the
aggregate regardless of the number of Registration Defaults then in
effect. Following the cure of all Registration Defaults, the
accumulation of Special Dividends with respect to such Preferred Stock
shall cease (without in any way limiting the effect of any subsequent
Registration Default).
(ii) If, after the cure of all Registration Defaults then in
effect, there is a subsequent Registration Default, the Special
Dividends for such subsequent Registration Default shall initially be
0.25% per annum of the Liquidation Preference of the Preferred Stock,
regardless of the Special Dividends in effect with respect to any prior
Registration Default at the time of the cure of such Registration
Default.
(iii) The Company shall notify the Transfer Agent within five
Business Days after each and every date on which a Registration Default
occurs. Special Dividends shall be paid by the Company to the record
Holders of shares of Preferred Stock on each Dividend Payment Date in
the manner provided for payment of regular dividends. Each obligation
to pay Special Dividends shall be deemed to commence accumulating on
the date of the applicable Registration Default and to cease
accumulating when all Registration Defaults have been cured.
SECTION 4. LIQUIDATION PREFERENCE. Each share of Preferred Stock will
have a preference on liquidation equal to $50.00 per share (the "Liquidation
Preference").
(a) Upon any voluntary or involuntary liquidation, dissolution
or winding-up of the Company, each holder of shares of Preferred Stock shall be
entitled to payment out of the assets of the Company available for distribution
of an amount equal to the then effective Liquidation Preference per share of
Preferred Stock held by such holder, plus all accumulated and unpaid dividends,
including Special Dividends, if any, thereon to the date of such liquidation,
dissolution or winding-up, before any distribution is made on any Junior Stock,
including, without limitation, the Common Stock, but after any distributions on
any Senior Stock. After payment in full of the then- effective Liquidation
Preference and all accumulated and unpaid dividends, including Special
Dividends, if any, to which holders of shares of Preferred Stock are entitled,
such holders shall not be entitled to any further participation in any
distribution of assets of the Company. If, upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company, the amounts payable with
respect to shares of Preferred Stock and all other Parity Stock are not paid in
full, the holders of shares of Preferred Stock and the holders of the Parity
Stock shall share equally and ratably in any distribution of assets of the
Company in proportion to the full Liquidation Preference and all accumulated and
unpaid dividends, including Special Dividends, if any, to which each such holder
is entitled.
3
<PAGE> 46
(b) Neither the voluntary sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Company nor the
consolidation, merger or amalgamation of the Company with or into any
corporation or the consolidation, merger or amalgamation of any corporation with
or into the Company shall be deemed to be a voluntary or involuntary
liquidation, dissolution or winding-up of the Company.
(c) No funds are required to be set aside to protect the
Liquidation Preference of the shares of Preferred Stock, although such
Liquidation Preference will be substantially in excess of the par value of the
shares of the Preferred Stock.
SECTION 5. REDEMPTION. Shares of Preferred Stock shall be redeemable by
the Company as provided below.
(a) Optional Redemption. The shares of Preferred Stock shall
not be redeemable prior to October 15, 2005 (the "Initial Redemption Date").
After the Initial Redemption Date, the shares of Preferred Stock shall be
subject to redemption at any time or from time to time at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days prior
notice sent by first class mail to each holder's registered address, at a price,
payable in cash, equal to the percentage set forth below of the Liquidation
Preference per share for redemption during the 12-month period beginning on the
dates indicated below, plus, in each case, an amount equal to accumulated and
unpaid dividends, including Special Dividends, if any, thereon (the "Optional
Redemption Price"), whether or not there are funds of the Company legally
available for the payment of dividends, to the Redemption Date (except to the
extent payable to a holder of Preferred Stock on a dividend payment Record Date
prior to the Redemption Date).
<TABLE>
<CAPTION>
Period Redemption Price
------ ----------------
<S> <C>
October 15, 2005......................................... 103.38%
October 15, 2006......................................... 102.70%
October 15, 2007......................................... 102.03%
October 15, 2008......................................... 101.35%
October 15, 2009......................................... 100.68%
October 15, 2010 and thereafter.......................... 100.00%
</TABLE>
(b) Mandatory Redemption. On October 15, 2012, the Company
shall be obligated to redeem all outstanding shares of Preferred Stock for cash,
upon not less than 30 nor more than 60 days notice sent by first class mail to
each holder's registered address, at a price (the "Mandatory Redemption Price"),
payable in cash, equal to 100.00% of the Liquidation Preference per share, plus
accumulated and unpaid dividends, including Special Dividends, if any, to the
Redemption Date (except to the extent payable to a holder of Preferred Stock on
a dividend payment Record Date prior to the Redemption Date).
(c) Redemption Procedures. (i) In the event that fewer than
all of the shares of Preferred Stock are to be redeemed pursuant to
this Section 5, the Company shall call for redemption shares of
Preferred Stock pro rata among the holders, based on the number of
shares of Preferred Stock held by each holder (with adjustments to
avoid fractional shares), except that the Company may redeem all of the
shares of Preferred Stock held by any holders of fewer than 100 shares
of Preferred Stock (or all the shares of Preferred Stock held by
holders who would hold less than 100 shares of Preferred Stock as a
result of such redemption). If fewer than all the shares of Preferred
Stock represented by any share certificate are to be so redeemed, (i)
the Company shall issue a new certificate for the shares not redeemed
and (ii) if any shares represented thereby are converted before
termination of the conversion right with respect to such shares, such
converted shares shall be deemed (so far as may be) to be the shares
represented by such share certificate that was selected for redemption.
4
<PAGE> 47
(ii) In the event the Company elects to effect an
optional redemption, the Company shall (i) make a public announcement
of the redemption and (ii) give a redemption notice (the "Redemption
Notice") to the holders not fewer than 30 days nor more than 60 days
before the Redemption Date. Whenever a Redemption Notice is required to
be delivered to the holders, such Redemption Notice shall provide the
information set forth below and be given by first class mail, postage
prepaid to each holder of shares of Preferred Stock to be redeemed, at
such holder's address appearing in the Preferred Stock register. All
Redemption Notices shall identify the Preferred Stock to be redeemed
(including CUSIP number) and shall state:
(A) the Redemption Date;
(B) the Redemption Price;
(C) if fewer than all outstanding shares of Preferred Stock
are to be redeemed, the identification (and, in the case of partial
redemption, the certificate number, the total number of shares
represented thereby and the number of such shares being redeemed on the
Redemption Date) of the particular shares of Preferred Stock to be
redeemed;
(D) that, on the Redemption Date, the Redemption Price to the
Redemption Date, will become due and payable upon each such share of
Preferred Stock to be redeemed and that dividends thereon will cease to
accumulate on and after said date;
(E) the Conversion Price, the date on which the right to
convert Preferred Stock to be redeemed will terminate and the place or
places where such Preferred Stock may be surrendered for conversion;
and
(F) the place of places where such Preferred Stock is to be
surrendered for payment of the Redemption Price.
The Redemption Notice shall be given by the Company or, at the
Company's request, by the Registrar in the name and at the expense of
the Company; provided, that if the Company so requests, it shall
provide the Registrar adequate time, as reasonably determined by the
Registrar, to deliver such notices in a timely fashion.
(iii) Prior to any Redemption Date, the Company shall
deposit with the Registrar or with a Paying Agent (or, if the Company
is acting as its own Paying Agent, segregate and hold in trust) an
amount of consideration sufficient to pay the Redemption Price of all
shares of Preferred Stock which are to be redeemed on that date other
than any Preferred Stock called for redemption on that date that have
been converted into shares of Common Stock prior to the date of such
deposit. If any shares of Preferred Stock called for redemption are
converted, any consideration deposited with the Registrar or with any
Paying Agent or so segregated and held in trust for the redemption of
such shares of Preferred Stock shall (subject to any right of the
holder of such Preferred Stock to receive accumulated but unpaid
dividends, including Special Dividends, if any, thereon as provided in
Section 7) be paid or delivered to the Company upon Company Order or,
if then held by the Company, shall be discharged from such trust.
(iv) Notice of redemption having been given as
aforesaid, the Redemption Price of the Preferred Stock so to be
redeemed shall, on the Redemption Date, become due and payable, and
from and after such date (unless the Company shall default in the
payment of the Redemption Price), such shares of Preferred Stock shall
no longer be outstanding, dividends on such Preferred Stock shall cease
to accumulate, such shares shall cease to be convertible into Common
Stock and all rights of the holders thereof as stockholders of the
Company (except the right to receive the Redemption Price) shall cease.
Upon surrender of any such share
5
<PAGE> 48
of Preferred Stock for redemption in accordance with said notice, such
share of Preferred Stock shall be redeemed by the Company at the
Redemption Price.
(v) Any certificate that represents more than one
share of Preferred Stock and is to be redeemed only in part shall be
surrendered at any office or agency of the Company designated for that
purpose (with, if the Company or the Registrar so requires, due
endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by, the
holder thereof or such holder's attorney duly authorized in writing),
and the Company shall execute, and the Registrar shall countersign and
deliver to the holder of such shares of Preferred Stock without service
charge, a new certificate or certificates, representing any number of
shares of Preferred Stock, as requested by such holder, in an aggregate
amount equal to and in exchange for the number of shares not redeemed
and represented by the certificate so surrendered.
(vi) In the event that the Redemption Date occurs
after a dividend payment Record Date and prior to the related Dividend
Payment Date, the holders of the shares of Preferred Stock at the close
of business on such dividend payment Record Date shall be entitled to
receive the dividend payable on such shares on the corresponding
Dividend Payment Date.
(vii) No optional redemption may be authorized or
made unless, prior to giving the applicable Redemption Notice, all
accumulated and unpaid dividends, including Special Dividends, if any,
for periods ended prior to the date of such Redemption Notice shall
have been paid in cash.
SECTION 6. VOTING RIGHTS. (a) The holders of shares of Preferred Stock
shall be entitled to vote with the holders of Common Stock on all matters
submitted for a vote of holders of Common Stock and, on such matters, each
holder of shares of Preferred Stock shall be entitled to a number of votes equal
to that number of shares of Common Stock into which such holder's shares of
Preferred Stock are then convertible.
(b) The affirmative vote of the holders of at least a majority
of the outstanding shares of Preferred Stock, voting as a single class with
holders of shares of all other classes and series of preferred stock affected in
the same way, in person or by proxy, at a special or annual meeting called for
that purpose, or by written consent in lieu of meeting, will be required to
amend, alter, repeal or change, whether by merger, consolidation, combination,
reclassification or otherwise, any provisions of the Certificate of
Incorporation, the bylaws of the Company or this Certificate in any manner which
would adversely affect, alter or change the powers, preferences or special
rights of the Preferred Stock and any of those securities affected in the same
way; provided that any such amendment or alteration that changes the dividend
payable on, or the Liquidation Preference of, the Preferred Stock shall require
the affirmative vote, at a meeting of holders of Preferred Stock duly called for
such purpose, or the written consent, of each holder of a share of Preferred
Stock.
(c) (i) If, at any time, the equivalent of six quarterly
dividends payable on the shares of Preferred Stock are accumulated and
unpaid (whether or not consecutive and whether or not declared), the
holders of all outstanding shares of Preferred Stock and any Parity
Stock or Senior Stock having similar voting rights then exercisable,
voting separately as a single class without regard to series, shall be
entitled to elect at the next annual meeting of the stockholders of the
Company two directors (each, a "Preferred Stock Director") to serve
until all dividends accumulated and unpaid on any such voting shares
have been paid, or declared and funds set aside to provide for payment
in full.
(ii) The voting rights set forth in the preceding
sentence will continue until such time as all dividends in arrears on
the Preferred Stock are paid in full, at which time the term of any
Preferred Stock Director shall terminate. At any time after voting
power to elect directors shall have become vested and be continuing in
the holders of the Preferred Stock pursuant to this Section 6(c), or if
a vacancy shall exist in the offices of Preferred Stock Directors, the
Board of Directors may, and upon written request of the holders
6
<PAGE> 49
of record of at least 25% of the Outstanding Preferred Stock addressed
to the Chairman of the Board of the Company shall, call a special
meeting of the holders of the Preferred Stock for the purpose of
electing the Preferred Stock Directors that such holders are entitled
to elect. At any meeting held for the purpose of electing Preferred
Stock Directors, the presence in person or by proxy of the holders of
at least a majority of the Outstanding Preferred Stock shall be
required to constitute a quorum of such Preferred Stock. Any vacancy
occurring in the office of a Preferred Stock Director may be filled by
the remaining Preferred Stock Director unless and until such vacancy
shall be filled by the holders of the Preferred Stock. The Preferred
Stock Directors shall agree, prior to their election to office, to
resign upon any termination of the right of the holders of Preferred
Stock to vote as a class for Preferred Stock Directors as herein
provided, and upon such termination, the Preferred Stock Directors then
in office shall forthwith resign.
(d) The creation, authorization or issuance of any other class
or series of the Company's Capital Stock, any increase or decrease in the amount
of authorized capital stock of any of those classes or series or of the
Preferred Stock (other than a decrease in the amount of authorized Preferred
Stock to an amount that is less than the Outstanding Preferred Stock at the time
of such decrease), or any increase, decrease or change in the par value of any
class or series of Capital Stock, including the Preferred Stock, will not
require the consent of the holders of the Preferred Stock and will not be deemed
to affect adversely, alter or change the powers, preferences and special rights
of the shares of Preferred Stock.
SECTION 7. CONVERSION. (a) Each share of Preferred Stock shall be
convertible at any time and from time to time at the option of the holder
thereof into fully paid and nonassessable shares of Common Stock. The number of
shares of Common Stock deliverable upon conversion of a share of Preferred
Stock, adjusted as hereinafter provided, is referred to herein as the
"Conversion Ratio". The Conversion Ratio as of the Initial Issuance Date shall
be 1.7610 and shall equal the ratio the numerator of which is the Liquidation
Preference and the denominator of which is the Conversion Price (rounded to the
nearest 1/1000 of a share). The "Conversion Price" shall be $28.39, subject to
adjustment from time to time as provided in Section 8.
(b) Conversion of shares of Preferred Stock may be effected by
any holder upon the surrender to the Company, at the principal office of the
Company or at the office of the Transfer Agent as may be designated by the Board
of Directors, of the certificate or certificates for such shares of Preferred
Stock to be converted accompanied by a written notice stating that such holder
elects to convert all or a specified whole number of such shares in accordance
with the provisions of this Section 7 and specifying the name or names in which
such holder wishes the certificate or certificates for shares of Common Stock to
be issued. In case such notice shall specify a name or names other than that of
such holder, such notice shall be accompanied by payment of all transfer taxes
payable upon the issuance of shares of Common Stock in such name or names. Other
than such taxes, the Company shall pay any documentary, stamp or similar issue
or transfer taxes that may be payable in respect of any issuance or delivery of
shares of Common Stock upon conversion of shares of Preferred Stock pursuant
hereto. As promptly as practicable after the surrender of such certificate or
certificates and the receipt of such notice relating to the conversion and
payment of all required transfer taxes, if any (or the demonstration to the
satisfaction of the Company that such taxes have been paid), the Company shall
deliver or cause to be delivered (i) certificates representing the number of
validly issued, fully paid and nonassessable full shares of Common Stock to
which the holder of shares of Preferred Stock being converted (or such holder's
transferee) shall be entitled, and (ii) if less than the full number of shares
of Preferred Stock evidenced by the surrendered certificate or certificates is
being converted, a new certificate or certificates, of like tenor, for the
number of shares evidenced by such surrendered certificate or certificates less
the number of shares being converted. Such conversion shall be deemed to have
been made at the close of business on the date of giving such notice and of such
surrender of the certificate or certificates representing the shares of
Preferred Stock to be converted so that the rights of the holder thereof as to
the shares being converted shall cease except for the right to receive shares of
Common Stock and, to the extent so provided in Section 7(c), accumulated and
unpaid dividends, including Special Dividends, if any, with respect to the
shares of Preferred Stock being converted, in each case, in accordance herewith,
and the person entitled to receive the shares of Common Stock shall be treated
for all purposes as having become the record holder of such shares of Common
Stock at such time.
7
<PAGE> 50
(c) Holders of shares of Preferred Stock at the close of
business on a dividend payment Record Date will be entitled to receive the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion of such shares following the dividend payment
Record Date and prior to such Dividend Payment Date. However, shares of
Preferred Stock surrendered for conversion during the period between the close
of business on any dividend payment Record Date and the opening of business on
the corresponding Dividend Payment Date must be accompanied by payment of an
amount equal to the dividend payable on such shares on such Dividend Payment
Date. Notwithstanding the foregoing, if shares of Preferred Stock are converted
during the period between the close of business on any dividend payment Record
Date and the opening of business on the corresponding Dividend Payment Date, and
we have called such shares of Preferred Stock for redemption or we have given a
notice to the holders of shares of Preferred Stock that we will cause the
conversion rights of such shares to terminate, the holder who tenders such
shares for conversion will receive the dividend payable on such Dividend Payment
Date and need not include payment of the amount of such dividend upon surrender
of shares of Preferred Stock for conversion. A holder of shares of Preferred
Stock on a dividend payment Record Date who converts such shares into shares of
Common Stock on the corresponding Dividend Payment Date will receive the
dividend payable on such shares of Preferred Stock on such Dividend Payment
Date, and the converting holder need not include payment of the amount of such
dividend upon surrender of shares of Preferred Stock for conversion. Except as
provided above, we will make no payment or allowance for unpaid dividends,
whether or not in arrears, on converted shares of Preferred Stock or the
dividends on the shares of Common Stock issued upon such conversion.
(d) In case any shares of Preferred Stock are to be redeemed
pursuant to Section 5, such right of conversion shall cease and terminate, as to
the shares of Preferred Stock to be redeemed, at the close of business on the
Business Day immediately preceding the date fixed for redemption, unless the
Company shall default in the payment of the Redemption Price therefor, as
provided herein.
(e) In connection with the conversion of any shares of
Preferred Stock, no fractions of shares of Common Stock shall be issued. In lieu
thereof, the Company shall round the applicable number of shares up or down to
the nearest whole number of shares. If more than one share of Preferred Stock
shall be surrendered for conversion by the same holder at the same time, the
number of full shares of Common Stock issuable on conversion thereof shall be
computed on the basis of the total number of shares of Preferred Stock so
surrendered.
(f) The Company shall at all times reserve and keep available,
free from preemptive rights, for issuance upon the conversion of shares of
Preferred Stock such number of its authorized but unissued shares of Common
Stock as will from time to time be sufficient if necessary to permit the
conversion of all outstanding shares of Preferred Stock. Prior to the delivery
of any securities which the Company shall be obligated to deliver upon
conversion of the Preferred Stock, the Company shall comply with all applicable
federal and state laws and regulations which require action to be taken by the
Company. All shares of Common Stock delivered upon conversion of the Preferred
Stock will upon delivery be duly and validly issued and fully paid and
nonassessable, free of all liens and charges and not subject to any preemptive
rights.
SECTION 8. CONVERSION PRICE ADJUSTMENTS. (a) The Conversion Price shall
be subject to adjustment from time to time as follows:
(i) STOCK SPLITS AND COMBINATIONS. In case the
Company shall at any time or from time to time after the Initial
Issuance Date (A) subdivide or split the outstanding shares of Common
Stock, (B) combine or reclassify the outstanding shares of Common Stock
into a smaller number of shares or (C) issue by reclassification of the
shares of Common Stock any shares of Capital Stock of the Company,
then, and in each such case, the Conversion Price in effect immediately
prior to such event or the record date therefor, whichever is earlier,
shall be adjusted so that the holder of any shares of Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock or other securities of the Company
which such holder would have owned or have been entitled to receive
after the
8
<PAGE> 51
occurrence of any of the events described above, had such shares of
Preferred Stock been surrendered for conversion immediately prior to
the occurrence of such event or the record date therefor, whichever is
earlier. An adjustment made pursuant to this subparagraph (i) shall
become effective at the close of business on the day upon which such
corporate action becomes effective. Such adjustment shall be made
successively whenever any event listed above shall occur.
(ii) STOCK DIVIDENDS IN COMMON STOCK. In case the
Company shall at any time or from time to time after the Initial
Issuance Date pay a dividend or make a distribution in shares of Common
Stock on any class of Capital Stock of the Company other than dividends
or distributions of shares of Common Stock or other securities with
respect to which adjustments are provided in Section 8(a)(i) above, and
the total number of shares constituting such dividend or distribution
shall exceed 25% of the total number of shares of Common Stock
outstanding at the close of business on the record date fixed for
determination of stockholders entitled to receive such dividend or
distribution, the Conversion Price shall be adjusted so that the holder
of each share of Preferred Stock shall be entitled to receive upon
conversion thereof, the number of shares of Common Stock determined by
multiplying (A) the applicable Conversion Price by (B) a fraction, the
numerator of which shall be the number of shares of Common Stock
theretofore outstanding and the denominator of which shall be the sum
of such number of shares and the total number of shares issued in such
dividend or distribution. In case the total number of shares
constituting such dividend or distribution shall not exceed 25% of the
total number of shares of Common Stock outstanding at the close of
business on the record date fixed for such dividend or distribution,
such shares of Common Stock shall be considered to be issued at the
time of any such next succeeding dividend or other distribution in
which the number of shares of Common Stock issued, together with the
number of shares issued in all previous such dividends and
distributions for which no adjustment to the Conversion Price has been
made, exceeds 25% of the total number of shares of Common Stock
outstanding at the close of business on the record date for such
dividend or distribution.
(iii) ISSUANCE OF RIGHTS OR WARRANTS. In case the
Company shall issue to all holders of Common Stock rights or warrants
expiring within 45 days entitling such holders to subscribe for or
purchase Common Stock at a price per share less than the Current Market
Price, the Conversion Price in effect immediately prior to the close of
business on the record date fixed for determination of stockholders
entitled to receive such rights or warrants shall be reduced by
multiplying such Conversion Price by a fraction, the numerator of which
is the sum of the number of shares of Common Stock outstanding at the
close of business on such record date and the number of shares of
Common Stock that the aggregate offering price of the total number of
shares of Common Stock so offered for subscription or purchase would
purchase at such Current Market Price and the denominator of which is
the sum of the number of shares of Common Stock outstanding at the
close of business on such record date and the number of additional
shares of Common Stock so offered for subscription or purchase. For
purposes of this subparagraph (iii), the issuance of rights or warrants
to subscribe for or purchase securities convertible into Common Stock
shall be deemed to be the issuance of rights or warrants to purchase
the Common Stock into which such securities are convertible at an
aggregate offering price equal to the sum of the aggregate offering
price of such securities and the minimum aggregate amount (if any)
payable upon conversion of such securities into Common Stock. Such
adjustment shall be made successively whenever any such event shall
occur.
(iv) DISTRIBUTION OF INDEBTEDNESS, SECURITIES OR
ASSETS. In case the Company shall distribute to all holders of Common
Stock (whether by dividend or in a merger, amalgamation or
consolidation or otherwise) evidences of indebtedness, shares of
Capital Stock of any class or series, other securities, cash or assets
(other than Common Stock, rights or warrants referred to in
subparagraph (iii) above or a dividend payable exclusively in cash and
other than as a result of a Fundamental Change (as defined below)), the
Conversion Price in effect immediately prior to the close of business
on the record date fixed for determination of stockholders entitled to
receive such distribution shall be reduced by multiplying such
Conversion Price by a fraction, the numerator of which is the Current
Market Price on such record date less
9
<PAGE> 52
the fair market value (as determined by the Board of Directors, except
in the case of a Spin-Off (as defined below), whose determination in
good faith shall be conclusive) of the portion of such evidences of
indebtedness, shares of capital stock, other securities, cash and
assets so distributed applicable to one share of Common Stock, and the
denominator of which is the Current Market Price. Such adjustment shall
be made successively whenever any such event shall occur.
In respect of a dividend or other distribution of
shares of Capital Stock of any class or series, or similar equity
interests, of or relating to a Subsidiary or other business unit of the
Company (a "Spin-Off"), the adjustment to the Conversion Price under
this subparagraph (iv) shall occur at the earlier of (A) 20 trading
days after the effective date of the Spin-Off and (B) the date of the
Initial Public Offering of the securities being distributed in the
Spin-Off, if that Initial Public Offering is effected simultaneously
with the Spin-Off.
(v) FUNDAMENTAL CHANGES. In case any transaction or
event (including, without limitation, any merger, consolidation,
combination, recapitalization, sale of assets, tender or exchange
offer, reclassification, compulsory share exchange or liquidation)
shall occur in which all or substantially all outstanding shares of
Common Stock are converted into or exchanged or acquired for or
constitute the right to receive stock, other securities, cash, property
or assets (each, a "Fundamental Change"), the holder of each share of
Preferred Stock outstanding immediately prior to the occurrence of such
Fundamental Change shall have the right upon any subsequent conversion
to receive (but only out of legally available funds, to the extent
required by applicable law) the kind and amount of stock, other
securities, cash, property or assets that such holder would have
received if such share had been converted immediately prior thereto.
(vi) SPECIAL ADJUSTMENT FOR SOME CHANGES OF CONTROL.
In the event of a Fundamental Change that constitutes a Change of
Control in which (A) the stockholders of the Company receive
consideration per share of Common Stock that is greater than the
Conversion Price at the effective time of the Change of Control,
without giving effect to the adjustment described below, and (B) at
least 10% of the total consideration paid to the stockholders of the
Company consists of cash, cash equivalents, securities or other assets
(other than publicly traded securities) (collectively, "Non-Public
Consideration"), then upon conversion of shares of Preferred Stock
after the Change of Control, in addition to the Common Stock or other
securities deliverable upon the conversion of the Preferred Stock as
described in Section 7 and subparagraphs (i) through (v) above, the
holder will receive a number of publicly traded securities of the
acquiror determined through the following calculation:
PV Cash Flows x (Non-Public Consideration/Total Consideration)
--------------------------------------------------------------
Acquiror Stock Price
where:
PV Cash Flows = the present value of the aggregate
dividend payments that would have
been payable on the Preferred Stock
from the date of conversion through
October 15, 2005. The present value
for this purpose will be calculated
using a discount rate equal to 3.25%
plus the yield to maturity of U.S.
Treasury securities having a
maturity closest to, but not later
than, October 15, 2005;
Total
Consideration = the total value of the consideration
payable to the Company's
stockholders at the effective time
of such Change of Control, with the
value of any assets or securities
other than cash or publicly traded
securities being determined in good
faith by the Board of Directors
based on an opinion as to such value
obtained from an accounting,
appraisal or investment banking firm
of international standing; and
10
<PAGE> 53
Acquiror
Stock Price = the price per security of the
acquiror's publicly traded
securities delivered in connection
with such Change of Control at the
effective time of such Change of
Control;
provided, however, that if the consideration received by the Company's
stockholders in respect of such Change of Control consists of at least 75%
Non-Public Consideration or if the acquiror's common stock is not publicly
traded, then upon conversion of shares of Preferred Stock after such Change of
Control, in lieu of issuing additional securities of the acquiror, as set forth
in this subparagraph (vi), each holder shall be entitled to receive an
additional amount in cash calculated as follows:
PV Cash Flows x (Non-Public Consideration/Total Consideration)
(b) Anything in paragraph (a) to the contrary notwithstanding,
the Company shall not be required to give effect to any adjustment in the
Conversion Price unless and until the net effect of one or more adjustments
(each of which shall be carried forward until counted toward adjustment),
determined as above provided, shall have resulted in a change of the Conversion
Price by at least 1%, and when the cumulative net effect of more than one
adjustment so determined shall be to change the Conversion Price by at least 1%,
such change in the Conversion Price shall thereupon be given effect. In the
event that, at any time as a result of the provisions of this paragraph (b), the
holder of shares of Preferred Stock upon subsequent conversion shall become
entitled to receive any shares of Capital Stock of the Company other than Common
Stock, the number of such other shares so receivable upon conversion of shares
of Preferred Stock shall thereafter be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions
contained herein.
(c) There shall be no adjustment of the Conversion Price in
case of the issuance of any Capital Stock of the Company in a merger,
reorganization, acquisition, reclassification, recapitalization or other similar
transaction except as provided in this Section.
(d) In any case in which paragraph (a) requires that an
adjustment as a result of any event is to become effective from and after a
record date, the Company may elect to defer until after the occurrence of such
event (i) issuing to the holder of any shares of Preferred Stock converted after
such record date and before the occurrence of such event the additional shares
of Common Stock issuable upon such conversion over and above the shares issuable
on the basis of the Conversion Price in effect immediately prior to adjustment
and (ii) paying to such holder any amount in cash in lieu of a fractional share
of Common Stock.
(e) If the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or other
distribution, and shall thereafter and before the distribution to stockholders
thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the number of shares of Common
Stock issuable upon exercise of the right of conversion or in the Conversion
Price then in effect shall be required by reason of the taking of such record.
(f) The Board of Directors shall have the power to resolve any
ambiguity or correct any error in this Section 8, and its action in so doing
shall be final and conclusive.
SECTION 9. TERMINATION OF CONVERSION RIGHTS. On or after October 15,
2005, the Company may, at its option, upon not less than 30 nor more than 60
days prior notice sent by first class mail to each holder's registered address,
cause the conversion rights of the shares of Preferred Stock set forth in
Section 7 to terminate. The Company may exercise such option only if, for at
least 20 trading days within any period of 30 consecutive trading days,
including the last trading day of such period, the daily closing price of the
Company's Common Stock exceeds 140% of the Conversion Price, subject to
adjustment as provided in Section 8.
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SECTION 10. CHANGE IN CONTROL. (a) If a Change of Control occurs with
respect to the Company, each holder of shares of Preferred Stock shall have the
right to require the Company to purchase all or any part of such holder's shares
of Preferred Stock at a purchase price equal to 100% of the Liquidation
Preference of such shares, plus all accumulated and unpaid dividends, including
Special Dividends, if any, on such shares to the date of purchase. Within 30
days following such Change of Control, the Company shall mail a notice to each
holder of shares of Preferred Stock describing the transaction or transactions
that constitute such Change of Control and offering to purchase such holder's
shares of Preferred Stock on the date specified in such notice, which date shall
be no earlier than 30 days and no later than 60 days from the date such notice
is mailed. The Company shall have the option to pay for such shares either
solely in cash or solely in shares of Common Stock valued at 95% of the average
closing sale price of the Common Stock for the five trading days before and
including the third trading day before the repurchase date.
(b) Holders of the Preferred Stock shall not have the right
set forth in paragraph (a) above if:
(i) the daily closing price per share of the Common
Stock for any five trading days within the period of 10 consecutive
trading days ending immediately after the later of the Change of
Control or the public announcement thereof (in the case of a Change of
Control under paragraph (a) of the definition of "Change of Control")
or the period of 10 consecutive trading days ending immediately before
the Change of Control (in the case of a Change of Control under
paragraph (b), (c) or (d) of the definition of "Change of Control")
shall equal or exceed 105% of the Conversion Price of the Preferred
Stock in effect on the date of the Change of Control or the public
announcement thereof, as applicable; or
(ii) at least 90% of the consideration in the Change
of Control transaction consists of Capital Stock traded on a U.S.
national securities exchange or quoted on the NASDAQ National Market,
and as a result of the transaction, the Preferred Stock becomes
convertible solely into such Capital Stock.
(c) The Company shall comply with the requirements of Rule
14e-1 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and any other securities laws and regulations to the extent such laws and
regulations are applicable in connection with the purchase of Preferred Stock as
a result of a Change of Control with respect to the Company. To the extent that
the provisions of any securities laws or regulations conflict with any of the
provisions of this Section 10, the Company shall comply with the applicable
securities laws and regulations and shall be deemed not to have breached its
obligations under this Section 10.
(d) On the date scheduled for payment of shares of Preferred
Stock tendered to the Company for repurchase as provided in this Section 10, the
Company shall, to the extent lawful, (i) accept for payment all shares of
Preferred Stock properly tendered, (ii) deposit with the Transfer Agent an
amount equal to the purchase price of the shares of Preferred Stock so tendered
and (iii) deliver or cause to be delivered to the Transfer Agent shares of
Preferred Stock so accepted together with an officers' certificate stating the
aggregate Liquidation Preference of the shares of Preferred Stock being
purchased by the Company. The Transfer Agent shall promptly mail or deliver to
each holder of shares of Preferred Stock so tendered the applicable payment for
such shares of Preferred Stock, and the Transfer Agent shall promptly
countersign and mail or deliver, or cause to be transferred by book-entry, to
each holder new shares of Preferred Stock equal in Liquidation Preference to any
unpurchased portion of the shares of Preferred Stock surrendered, if any. The
Company shall publicly announce the results of its offer on or as soon as
practicable after the payment date for the purchase of shares of Preferred Stock
in connection with a Change of Control of the Company.
(e) The Company shall not be required to make an offer to
purchase any shares of Preferred Stock upon the occurrence of a Change of
Control of the Company if a third party makes an offer in the manner, at the
times and otherwise in compliance with the requirements described in this
Section 10 and purchases all shares of Preferred Stock validly tendered and not
withdrawn.
(f) The right of the holders of shares of Preferred Stock
described in this Section 10 will be subject to the Company's obligation to:
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(i) repay all obligations in full under the Company's
credit facility; and
(ii) offer to purchase and purchase all of the
Company's senior redeemable notes that have been tendered for purchase
in connection with a Change of Control that constitutes a "change of
control" under the terms of such senior redeemable notes or the
indenture relating thereto.
(g) In addition, the right of the holders of shares of
Preferred Stock described in this Section 10 shall be subject to the repurchase
or repayment of any future indebtedness of the Company that the Company is
required to repurchase or repay in connection with a transaction or event that
constitutes a Change of Control.
When the Company shall have satisfied the obligations, or repurchased
or repaid the indebtedness, described above in paragraphs (f) and (g) of this
Section 10, and, subject to the legal availability of funds for such purpose,
the Company shall purchase all shares of Preferred Stock tendered for purchase
by the Company upon a Change of Control pursuant to this Section 10.
SECTION 11. CERTAIN DEFINITIONS. As used in this Certificate, the
following terms shall have the following meanings, unless the context otherwise
requires:
"Business Day" means any day other than a Saturday, Sunday or a U.S.
federal holiday.
"Capital Stock" of any person means any and all shares, interests,
participations or other equivalents however designated of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such person and any rights (other than debt securities convertible
or exchangeable into an equity interest), warrants or options to acquire an
equity interest in such person.
"Change of Control" means, with respect to the Company, the occurrence
of any of the following:
(a) if any "person" or "group" (as such terms are used in
Section 13(d) and Section 14(d) of the Exchange Act
or any successor provisions to either of the
foregoing), including any group acting for the
purpose of acquiring, holding, voting or disposing of
securities within the meaning of Rule 13d-5(b)(1)
under the Exchange Act, other than any one or more of
the Permitted Holders, becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act,
except that a person will be deemed to have
"beneficial ownership" of all shares that any such
person has the right to acquire, whether such right
is exercisable immediately or only after the passage
of time), directly or indirectly, of 35% or more of
the total voting power of the Voting Stock of the
Company at a time when the Permitted Holders are the
"beneficial owners" (as defined in Rule 13d-3 under
the Exchange Act, except that a person will be deemed
to have "beneficial ownership" of all shares that any
such person has the right to acquire, whether such
right is exercisable immediately or only after the
passage of time), directly or indirectly, in the
aggregate of a lesser percentage of the total voting
power of the Voting Stock of the Company than such
other person or group (for purposes of this
paragraph, such person or group shall be deemed to
beneficially own any Voting Stock of a corporation
held by any other corporation so long as such person
or group beneficially owns, directly or indirectly,
in the aggregate a majority of the total voting power
of the Voting Stock of such other corporation), or
any Permitted Holder files a Schedule 13D or TO (or
any successor schedule, form or report under the
Exchange Act) in connection with a transaction or
event as a result of which (a) such person becomes
the "beneficial owner" of additional shares of Common
Stock and (b) the Common Stock ceases, or immediately
upon consummation of or immediately following such
transaction or event, will cease, to be listed on a
U.S. national securities exchange or approved for
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quotation on the Nasdaq National Market or any
similar U.S. system for automated dissemination of
quotations of securities prices; or
(b) if the Company consolidates or merges with or into
any other person, other than a consolidation or
merger (a) of the Company with or into Williams or a
Subsidiary of the Company or Williams or (b) under a
transaction in which the outstanding Voting Stock of
the Company is changed into or exchanged for cash,
securities or other property with the effect that the
beneficial owners of the Company's outstanding Voting
Stock immediately before that transaction,
beneficially own, directly or indirectly, more than
35% of the voting stock, measured by voting power
rather than number of shares, of the surviving
corporation immediately following that transaction;
or
(c) upon the sale, transfer, assignment, lease,
conveyance or other disposition, directly or
indirectly, of all or substantially all the assets of
the Company and its subsidiaries considered as a
whole (other than a merger or consolidation of the
Company or a disposition of such assets as an
entirety or virtually as an entirety to one or more
Permitted Holders); or
(d) if during any period of two consecutive years,
individuals who at the beginning of such period
constituted the Board of Directors (together with any
new directors whose election or appointment by the
Board of Directors or whose nomination for election
by the Company's stockholders was approved by a vote
of a majority of the directors then still in office
who were either directors at the beginning of such
period or whose election or nomination for election
was previously so approved) cease for any reason to
constitute a majority of the Company's Board of
Directors then in office.
Notwithstanding anything herein to the contrary, any transaction
completed to effectuate the separation of the Company's business from Williams'
energy business shall not constitute a "Change of Control."
"Common Stock" means the Class A common stock, par value $.01 per
share, of the Company.
"Company Order" means a written request or order signed in the name of
the Company by its Chairman of the Board, its President or a Vice President and
by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary.
"Current Market Price" of the Common Stock means the average of the
daily closing prices of the Common Stock for the five consecutive trading days
selected by the Board of Directors commencing not more than 20 trading days
before, and ending not later than the date immediately preceding the record date
fixed in connection with such event; provided, that the Current Market Price of
the Common Stock in connection with a Spin-Off shall mean the average of the
daily closing prices of the Common Stock for the same five consecutive trading
days used to determine the Fair Market Value of the securities being distributed
in such Spin-Off; provided further, that if an Initial Public Offering of the
securities being distributed in any Spin-Off is to be effected simultaneously
with such Spin-Off, the Current Market Price of the Common Stock shall mean the
closing price of the Common Stock on the trading day on which the Initial Public
Offering price of such securities is determined.
"Fair Market Value" of the securities to be distributed to the holders
of the Common Stock in connection with a Spin-Off that is not effected
simultaneously with an Initial Public Offering of the securities being
distributed in the Spin-Off, shall mean the average of the daily closing prices
of such securities for the five consecutive trading days selected by the Board
of Directors beginning on the first day of trading of such securities after the
effectiveness of such Spin-Off and ending not later than 20 days after the
effectiveness of the "Spin-Off"; provided, however, that if an Initial
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<PAGE> 57
Public Offering of the securities being distributed in any Spin-Off is to be
effected simultaneously with such Spin-Off, the Fair Market Value of such
securities shall mean the initial public offering price.
"Initial Public Offering" means, in the event of a Spin-Off, the first
time securities of the same class or type as the securities being distributed in
the Spin-Off are bona fide offered to the public for cash.
"Initial Purchasers" means the purchasers set forth on Schedule A to
the Purchase Agreement.
"Officer" means the Chairman of the Board of Directors, the President,
any Vice President, a Treasurer, an Assistant Treasurer, the Secretary, or any
Assistant Secretary.
"Outstanding" means, when used with respect to Preferred Stock, as of
the date of determination, all shares of Preferred Stock outstanding as of such
date, provided, however, that, if such Preferred Stock is to be redeemed, notice
of such redemption has been duly given pursuant to this Certificate or provision
therefor satisfactory to the Registrar has been made; and (c) shares of
Preferred Stock (i) that are mutilated, destroyed, lost or stolen which the
Company has decided to pay or (ii) in exchange for or in lieu of which other
shares of Preferred Stock have been authenticated and delivered pursuant to this
Certificate; provided, however, that, in determining whether the holders of
Preferred Stock have given any request, demand, authorization, direction,
notice, consent or waiver or taken any other action hereunder, Preferred Stock
owned by the Company shall be deemed not to be Outstanding, except that, in
determining whether the Registrar shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only Preferred Stock which the Registrar has actual knowledge of being
so owned shall be deemed not to be Outstanding.
"Permitted Holder" means:
o Williams and any of its subsidiaries,
o any corporation, the outstanding voting power of the Capital
Stock of which is beneficially owned, directly or indirectly,
by the Company's stockholders in substantially the same
proportions as their ownership of the voting power of the
Company's Capital Stock,
o any underwriter during the period engaged in a firm commitment
underwriting on behalf of the Company with respect to the
shares of Capital Stock being underwritten, or
o the Company or any Subsidiary of the Company.
"Purchase Agreement" means that certain Purchase Agreement, dated
September 14, 2000, by and among the Company and the Initial Purchasers.
"Redemption Date" shall mean (a) in the case of a redemption pursuant
to Section 5(a), the date fixed for redemption, and (b) in the case of a
redemption pursuant to Section 5(b), October 15, 2012.
"Redemption Price" shall mean (a) in the case of a redemption pursuant
to Section 5(a), the Optional Redemption Price, and (b) in the case of a
redemption pursuant to Section 5(b), the Mandatory Redemption Price.
"Registrar" means The Bank of New York as the Company's initial
registrar and transfer agent, and thereafter, any successor registrar and
transfer agent duly appointed by the Company.
"Registration Default" has the meaning ascribed to it in the
Registration Rights Agreement.
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"Registration Rights Agreement" means that certain Registration Rights
Agreement to be executed by the Company and the Initial Purchasers in connection
with the sale of the Preferred Stock pursuant to the Purchase Agreement.
"Shelf Registration Statement" means the shelf registration statement
required to be filed with the Securities and Exchange Commission pursuant to the
Registration Rights Agreement.
"Subsidiary" means, with respect to any person, (a) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other Subsidiaries of that person (or a combination
thereof) and (b) any partnership (i) the sole general partner or the managing
general partner of which is such person or a Subsidiary of such person or (ii)
the only general partners of which are such person or of one or more
Subsidiaries of such person (or any combination thereof).
"Voting Stock" of any person means Capital Stock of such person which
ordinarily has voting power for the election of directors, or persons performing
similar functions, of such person, whether at all times or only for so long as
no senior class of securities has such voting power by reason of any
contingency.
"Williams" means The Williams Companies, Inc.
SECTION 12. CURRENCY. All shares of Preferred Stock shall be
denominated in U.S. currency, and all payments and distributions thereon or with
respect thereto shall be made in U.S. currency. All references herein to "$" or
"dollars" refer to U.S. currency.
SECTION 13. FORM. (a) Preferred Stock shall be issued in the form of
one or more permanent global shares of Preferred Stock in definitive, fully
registered form with the global legend (the "Global Shares Legend") and, until
such time as determined by the Company and the Registrar, the global restricted
shares legend (the "Global Restricted Shares Legend"), in each case, as set
forth on the form of Preferred Stock certificate attached hereto as Exhibit A
(each, a "Global Preferred Share"), which is hereby incorporated in and
expressly made a part of this Certificate. The Global Preferred Share may have
notations, legends or endorsements required by law, stock exchange rules,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
The Global Preferred Share shall be deposited on behalf of the holders of the
Preferred Stock represented thereby with the Registrar, at its New York office,
as custodian for The Depository Trust Company, New York, New York ("DTC") or its
nominee and their respective successors (the "Depositary"), and registered in
the name of the Depositary or a nominee of the Depositary, duly executed by the
Company and countersigned and registered by the Registrar as hereinafter
provided. The aggregate number of shares represented by each Global Preferred
Share may from time to time be increased or decreased by adjustments made on the
records of the Registrar and the Depositary or its nominee as hereinafter
provided. Global Preferred Shares initially will bear CUSIP number 969455 20 3.
(b) This paragraph shall apply only to a Global Preferred
Share deposited with or on behalf of the Depositary. The Company shall execute
and the Registrar shall, in accordance with this Section, countersign and
deliver initially one or more Global Preferred Shares that (i) shall be
registered in the name of Cede & Co. or other nominee of the Depositary and (ii)
shall be delivered by the Registrar to Cede & Co. or pursuant to instructions
received from Cede & Co. or held by the Registrar as custodian for the
Depositary pursuant to an agreement between the Depositary and the Registrar.
Members of, or participants in, the Depositary ("Agent Members") shall have no
rights under this Certificate with respect to any Global Preferred Share held on
their behalf by the Depositary or by the Registrar as the custodian of the
Depositary or under such Global Preferred Share, and the Depositary may be
treated by the Company, the Registrar and any agent of the Company or the
Registrar as the absolute owner of such Global Preferred Share for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
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Company, the Registrar or any agent of the Company or the Registrar from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of the Depositary governing the exercise of the
rights of a holder of a beneficial interest in any Global Preferred Share.
Owners of beneficial interests in Global Preferred Shares will not be entitled
to receive physical delivery of certificated shares of Preferred Stock, unless
(x) DTC is unwilling or unable to continue as Depositary for
the Global Preferred Share and we do not appoint a qualified replacement for DTC
within 90 days or (y) DTC ceases to be a "Clearing Agency" registered under the
Exchange Act. In either such case, the Global Preferred Share will be exchanged
in whole for definitive shares of Preferred Stock in registered form, with the
same terms and of an equal aggregate Liquidation Preference. Definitive shares
of preferred stock will be registered in the name or names of the person or
person specified by DTC in a written instrument to the Registrar.
(c) (i) Two Officers shall sign the Global Preferred Share for
the Company, in accordance with the Company's bylaws and applicable law, by
manual or facsimile signature. The Company's seal shall be impressed, affixed,
imprinted or reproduced on the Global Preferred Share and may be in facsimile
form.
(ii) If an Officer whose signature is on a Global
Preferred Share no longer holds that office at the time the Transfer
Agent authenticates the Global Preferred Share, the Global Preferred
Share shall be valid nevertheless.
(iii) A Global Preferred Share shall not be valid
until an authorized signatory of the Transfer Agent manually
countersigns Global Preferred Share. The signature shall be conclusive
evidence that the Global Preferred Share has been authenticated under
this. Each Global Preferred Share shall be dated the date of its
authentication.
SECTION 14. REGISTRATION; TRANSFER. (a) The Preferred Stock has not
been registered under the Securities Act and may not be resold, pledged or
otherwise transferred prior to the date when they no longer constitute
"restricted securities" for purposes of Rule 144(k) under the Securities Act
other than (i) to the Company, (ii) to "qualified institutional buyers" ("QIBs")
pursuant to and in compliance with Rule 144A under the Securities Act ("Rule
144A"), (iii) pursuant to an exemption from the registration requirements of the
Securities Act provided by Rule 144 under the Securities Act or (iv) pursuant to
an effective registration statement under the Securities Act, in each case, in
accordance with any applicable securities laws of any state of the United
States.
(b) Notwithstanding any provision to the contrary herein, so
long as a Global Preferred Share remains outstanding and is held by or on behalf
of the Depositary, transfers of a Global Preferred Share, in whole or in part,
or of any beneficial interest therein, shall only be made in accordance with
this Section 14; provided, however, that beneficial interests in a Global
Preferred Share may be transferred to persons who take delivery thereof in the
form of a beneficial interest in the same or a different Global Preferred Share
in accordance with the transfer restrictions set forth in the Global Restricted
Shares Legend.
(i) Except for transfers or exchanges made in
accordance with subparagraph (ii) of this Section 14(b), transfers of a
Global Preferred Share shall be limited to transfers of such Global
Preferred Share in whole, but not in part, to nominees of the
Depositary or to a successor of the Depositary or such successor's
nominee.
(ii) If an owner of a beneficial interest in a Global
Preferred Share deposited with the Depositary or with the Registrar as
custodian for the Depositary wishes at any time to transfer its
interest in such Global Preferred Share to a person who is eligible to
take delivery thereof in the form of a beneficial interest in a Global
Preferred Share, such owner may, subject to the rules and procedures of
the Depositary, cause the exchange of such interest for a new
beneficial interest in the applicable Global Preferred Share. Upon
receipt by the Registrar at its office in The City of New York of (A)
instructions from the holder directing the Registrar to transfer its
interest in the applicable Global Preferred Share, such instructions to
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contain the name of the transferee and appropriate account information,
(B) unless the Shelf Registration Statement has become effective and
such shares are being transferred pursuant to the Shelf Registration
Statement, a certificate in the form of Exhibit B given by the
transferor, to the effect set forth therein, and (C) such other
certifications, legal opinions and other information as the Company or
the Registrar may reasonably require to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act, then
the Registrar shall instruct the Depositary to reduce or cause to be
reduced such Global Preferred Share by the number of shares of the
beneficial interest therein to be exchanged and to debit or cause to be
debited from the account of the person making such transfer the
beneficial interest in the Global Preferred Share that is being
transferred, and concurrently with such reduction and debit, the
Registrar will instruct the Depositary to increase or cause to be
increased the applicable Global Preferred Share by the aggregate number
of shares being exchanged and to credit or cause to be credited to the
account of the transferee the beneficial interest in the Global
Preferred Share that is being transferred.
(c) Except in connection with a Shelf Registration Statement
contemplated by and in accordance with the terms of the Registration Rights
Agreement relating to the Preferred Stock and shares of Common Stock issuable on
conversion of the Preferred Stock (collectively, the "Registerable Securities,")
if Preferred Stock is issued upon the transfer, exchange or replacement of
Preferred Stock bearing the Global Restricted Shares Legend, or if a request is
made to remove such Global Restricted Shares Legend on Preferred Stock, the
Preferred Stock so issued shall bear the Global Restricted Shares Legend and the
Global Restricted Shares Legend shall not be removed unless there is delivered
to the Company and the Registrar such satisfactory evidence, which may include
an opinion of counsel licensed to practice law in the State of New York, as may
be reasonably required by the Company or the Registrar, that neither the legend
nor the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144A or Rule 144 or that
such shares of Preferred Stock are not "restricted securities" within the
meaning of Rule 144 under the Securities Act. Upon provision of such
satisfactory evidence, the Registrar, at the direction of the Company, shall
countersign and deliver shares of Preferred Stock that do not bear the Global
Restricted Shares Legend.
(d) The Registrar shall have no responsibility for any actions
taken or not taken by the Depositary.
(e) The Company agrees that it will refuse to register any
transfer of Preferred Stock or any Common Stock issuable upon conversion thereof
that is not made in accordance with the provisions of Rule 144A, pursuant to a
registration statement that has been declared effective under the Securities Act
or pursuant to an available exemption from the registration requirements of the
Securities Act; provided that the provisions of this paragraph (e) shall not be
applicable to any Preferred Stock that does not bear any Global Restricted
Shares Legend or to any Common Stock that does not bear the Common Share Legend
(as defined below).
(f) Common Stock issued upon a conversion of the Preferred
Stock prior to the effectiveness of a Shelf Registration Statement shall be
delivered in certificated form and shall bear the common share legend (the
"Common Share Legend") set forth in Exhibit C hereto. If (i) shares of Common
Stock issued prior to the effectiveness of a Shelf Registration Statement are to
be registered in a name other than that of the holder of Preferred Stock or (ii)
shares of Common Stock represented by a certificate bearing the Common Share
Legend are transferred subsequently by such holder, then, unless the Shelf
Registration Statement has become effective and such shares are being
transferred pursuant to the Shelf Registration Statement, the holder must
deliver to the Registrar a certificate in substantially the form of Exhibit D as
to compliance with the restrictions on transfer applicable to such Common Stock
and the Registrar shall not be required to register any transfer of such Common
Stock not so accompanied by a properly completed certificate. Such Common Share
Legend may be removed, and new certificates representing the Common Stock may be
issued, upon the presentation of satisfactory evidence that such Common Share
Legend is no longer required as described above in paragraph (c) of this Section
14 with respect to the Preferred Stock.
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SECTION 15. PAYING AGENT AND CONVERSION AGENT. (a) The Company shall
maintain in the Borough of Manhattan, City of New York, State of New York (i) an
office or agency where Preferred Stock may be presented for payment (the "Paying
Agent") and (ii) an office or agency where Preferred Stock may be presented for
conversion (the "Conversion Agent"). The Company may appoint the Registrar, the
Paying Agent and the Conversion Agent and may appoint one or more additional
paying agents and one or more additional conversion agents in such other
locations as it shall determine. The term "Paying Agent" includes any additional
paying agent and the term "Conversion Agent" includes any additional conversion
agent. The Company may change any Paying Agent or Conversion Agent without prior
notice to any holder. The Company shall notify the Registrar of the name and
address of any Paying Agent or Conversion Agent appointed by the Company. If the
Company fails to appoint or maintain another entity as Paying Agent or
Conversion Agent, the Registrar shall act as such. The Company or any of its
affiliates may act as Paying Agent, Registrar, coregistrar or Conversion Agent.
(b) Neither the Company nor the Registrar shall be required
(i) to issue, countersign or register the transfer of or exchange any Preferred
Stock during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Preferred Stock under Section 5
and ending at the close of business on the day of such mailing or (ii) to
register the transfer of or exchange any Preferred Stock so selected for
redemption in whole or in part, except the unredeemed portion of any Preferred
Stock being redeemed in part.
(c) Payments due on the Preferred Stock shall be payable at
the office or agency of the Company maintained for such purpose in The City of
New York and at any other office or agency maintained by the Company for such
purpose. Payments shall be payable by United States dollar check drawn on, or
wire transfer (provided, that appropriate wire instructions have been received
by the Registrar at least 15 days prior to the applicable date of payment) to a
U.S. dollar account maintained by the holder with, a bank located in New York
City; provided that at the option of the Company, payment of dividends may be
made by check mailed to the address of the person entitled thereto as such
address shall appear in the Preferred Stock register.
SECTION 16. HEADINGS. The headings of the Sections of this Certificate
are for convenience of reference only and shall not define, limit or affect any
of the provisions hereof.
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IN WITNESS WHEREOF, the Company has caused this Certificate of
Designations to be duly executed by Howard S. Kalika, Vice President and
Treasurer of the Company, and attested by Loretta K. Roberts, Secretary of the
Company, this 18th day of September, 2000.
WILLIAMS COMMUNICATIONS GROUP, INC.
By: /s/ Howard S. Kalika
-----------------------------------
Name: Howard S. Kalika
Title: Vice President and Treasurer
ATTEST:
By: /s/ Loretta K. Roberts
------------------------
Name: Loretta K. Roberts
Title: Secretary
20
<PAGE> 63
EXHIBIT A
FACE OF SECURITY
[GLOBAL SHARES LEGEND (include if Security is issued as a global certificate):
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE PREFERRED
STOCK SCHEDULE REFERRED TO BELOW.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR AND
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.]
[GLOBAL RESTRICTED SHARES LEGEND (include if Security is not registered under
the Securities Act of 1933): THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS
SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE
SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO)
OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE
THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1)
TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY), (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER
THE SECURITIES ACT OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A.
A-1
<PAGE> 64
Number: ____ ____ Shares
CUSIP NO.: 969455 20 3
6.75% REDEEMABLE CUMULATIVE CONVERTIBLE PREFERRED STOCK
OF
WILLIAMS COMMUNICATIONS GROUP, INC.
WILLIAMS COMMUNICATIONS GROUP, INC., a Delaware corporation
(the "Company"), hereby certifies that [HOLDER] (the "Holder") is the registered
owner of fully paid and non-assessable shares of preferred stock of the Company
designated as the 6.75% Redeemable Cumulative Convertible Preferred Stock, par
value $0.01 per share and liquidation preference $50.00 per share (the
"Preferred Stock"). The shares of Preferred Stock are transferable on the books
and records of the Registrar, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Stock represented hereby are issued and shall in all
respects be subject to the provisions of the Certificate of Designations of the
Company dated September 18, 2000, as the same may be amended from time to time
in accordance with its terms (the "Certificate of Designations"). Capitalized
terms used herein but not defined shall have the respective meanings given them
in the Certificate of Designations. The Company will provide a copy of the
Certificate of Designations to a Holder without charge upon written request to
the Company at its principal place of business.
Reference is hereby made to select provisions of the Preferred
Stock set forth on the reverse hereof, and to the Certificate of Designations,
which select provisions and the Certificate of Designations shall for all
purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the
Certificate of Designations and is entitled to the benefits thereunder.
Unless the Transfer Agent's valid countersignature appears
hereon, the shares of Preferred Stock evidenced hereby shall not be entitled to
any benefit under the Certificate of Designations or be valid or obligatory for
any purpose.
A-2
<PAGE> 65
IN WITNESS WHEREOF, the Company has executed this Preferred
Stock certificate as of the date set forth below.
WILLIAMS COMMUNICATION GROUP, INC.
By:
------------------------------------
Name:
Title: [Vice President]
[Seal]
By:
------------------------------------
Name:
Title: [Secretary]
Dated:
------------------------------------
COUNTERSIGNED AND REGISTERED
THE BANK OF NEW YORK,
as Transfer Agent,
By:
-------------------------------
Authorized Signatory
Dated:
-------------------------------
A-3
<PAGE> 66
REVERSE OF SECURITY
WILLIAMS COMMUNICATIONS GROUP, INC.
6.75% Redeemable Cumulative Convertible Preferred Stock
Dividends on each share of Preferred Stock shall be payable in
cash at the rate per annum set forth on the face hereof or as provided in the
Certificate of Designations (including Special Dividends, if any).
The shares of Preferred Stock shall be redeemable as provided
in the Certificate of Designations. The shares of Preferred Stock shall be
convertible into the Company's Class A common stock in the manner and according
to the terms set forth in the Certificate of Designations.
The Company shall furnish to any holder upon request and
without charge, a full summary statement of the designations, voting rights,
preferences, limitations and special rights of the shares of each class or
series authorized to be issued by the Company so far as they have been fixed and
determined and the authority of the Board of Directors to fix and determine the
designations, voting rights, preferences, limitations and special rights of the
class and series of shares of the Company.
A-4
<PAGE> 67
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers the
shares of Preferred Stock evidenced hereby to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
--------------------------------------------------------------------------------
(Insert address and zip code of assignee)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
and irrevocably appoints:
--------------------------------------------------------------------------------
agent to transfer the shares of Preferred Stock evidenced hereby on the books of
the Transfer Agent and Registrar. The agent may substitute another to act for
him or her.
Date:
---------------------------------------
Signature:
----------------------------------
(Sign exactly as your name appears on the other side of this Preferred Stock
Certificate)
Signature Guarantee: *
-------------------------------
----------
* Signature must be guaranteed by an "eligible guarantor institution"
(i.e., a bank, stockbroker, savings and loan association or credit
union) meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.
A-5
<PAGE> 68
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Preferred Stock)
The undersigned hereby irrevocably elects to convert (the "Conversion")
_________ shares of 6.75% Redeemable Cumulative Convertible Preferred Stock (the
"Preferred Stock") into shares of Class A common stock, par value $0.01 per
share ("Common Stock"), of Williams Communications Group, Inc. (the "Company")
according to the conditions of the Certificate of Designations establishing the
terms of the Preferred Stock (the "Certificate of Designations"), as of the date
written below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates. No fee will be charged to
the holder for any conversion, except for transfer taxes, if any. A copy of each
stock certificate representing the shares to be converted is attached hereto (or
evidence of loss, theft or destruction thereof).*
The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Preferred Stock shall be made pursuant to registration of the
Common Stock under the Securities Act of 1933 (the "Act") or pursuant to any
exemption from registration under the Act.
Any holder, upon the exercise of its conversion rights in accordance with the
terms of the Certificate of Designations and the Preferred Stock, agrees to be
bound by the terms of the Registration Rights Agreement.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in or pursuant to the Certificate of Designations.
Date of Conversion:
-------------------------------------------
Applicable Conversion Price:
----------------------------------
Number of shares of
Preferred Stock to be Converted:
------------------------------
Number of shares of
Common Stock to be Issued:
------------------------------------
Signature:
----------------------------------------------------
Name:
---------------------------------------------------------
Address:**
----------------------------------------------------
Fax No.:
------------------------------------------------------
* The Company is not required to issue shares of Common Stock to a person
holding Preferred Stock until the original stock certificates
representing such Preferred Stock (or evidence of loss, theft or
destruction thereof) to be converted are received by the Company or its
Transfer Agent. The Company shall issue and deliver shares of Common
Stock to an overnight courier not later than three Business Days
following receipt of the original stock certificates representing such
Preferred Stock to be converted.
** Address where shares of Common Stock and any other payments or
certificates shall be sent by the Company.
A-6
<PAGE> 69
[Global Share Schedule: (include if Security is issued as a global certificate)]
SCHEDULE A
SCHEDULE OF EXCHANGES FOR GLOBAL SECURITY
The initial number of shares of Preferred Stock represented by
this Global Preferred Share shall be [_______]. The following exchanges of a
part of this Global Preferred Share have been made:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
Amount of decrease in Amount of increase in Number of shares repre
Date number of shares repre number of shares sented by this Global Signature of
of sented by this represented by this Preferred Share following authorized officer
Exchange Global Preferred Share Global Preferred Share such decrease or increase of Registrar
-------- ---------------------- ---------------------- ------------------------- ------------
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
</TABLE>
A-7
<PAGE> 70
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
(Transfers pursuant to Section 14(b)(ii)
of the Certificate of Designations)
Bank of New York, as Transfer Agent
101 Barclay
New York, NY 10286
Attn:
Re: Williams Communications Group, Inc.
6.75% Redeemable Cumulative Convertible Preferred Stock
(the "Preferred Stock")
Reference is hereby made to the Certificate of Designations
relating to the Preferred Stock dated September 18, 2000 (the "Certificate of
Designations"). Capitalized terms used but not defined herein shall have the
respective meanings given them in the Certificate of Designations.
This Letter relates to _____________ shares of Preferred Stock
(the "Securities") which are held in the form of a Global Preferred Share (CUSIP
NO. 969455 20 3) with the Depositary in the name of [name of transferor] (the
"Transferor") to effect the transfer of the Securities.
In connection with such request, and in respect of the
Preferred Stock, the Transferor does hereby certify that shares of the Preferred
Stock are being transferred (i) in accordance with applicable securities laws of
any state of the United States or any other jurisdiction and (ii) in accordance
with their terms:
CHECK ONE BOX BELOW:
(1) [ ] to a transferee that the Transferor reasonably believes is
a qualified institutional buyer within the meaning of Rule
144A under the Securities Act purchasing for its own
account or for the account of a qualified institutional
buyer in a transaction meeting the requirements of Rule
144A;
(2) [ ] pursuant to an exemption from registration under the
Securities Act provided by Rule 144 thereunder (if
available); or
(3) [ ] in accordance with another exemption from the registration
requirements of the Securities Act (based upon an opinion
of counsel if the Company so requests).
[Name of Transferor]
By:
-------------------------
Name:
Title:
Dated:
cc: Williams Communications Group, Inc.
One Williams Center
Tulsa, OK 74172
Attn: Secretary
B-1
<PAGE> 71
EXHIBIT C
Form of Common Share Legend
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE
COMPANY, (2) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501 (a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT ("INSTITUTIONAL
ACCREDITED INVESTOR") (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THE
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND THAT, PRIOR TO
SUCH TRANSFER, DELIVERS TO THE COMPANY AND THE TRANSFER AGENT A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER MAY BE
OBTAINED FROM THE TRANSFER AGENT), (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER
THE SECURITIES ACT OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE LAWS OF ANY
STATE OF THE UNITED STATES. PRIOR TO A TRANSFER OF THIS SECURITY (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE (4) ABOVE), THE HOLDER OF THIS SECURITY MUST, PRIOR
TO SUCH TRANSFER, FURNISH TO THE COMPANY AND THE TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM
THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND
AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) (1), (2), (3) OR (7) UNDER THE
SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND
NOT FOR DISTRIBUTION. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY
EXCEPT AS PERMITTED BY THE SECURITIES ACT."
C-1
<PAGE> 72
EXHIBIT D
FORM OF CERTIFICATE OF TRANSFER
FOR COMMON SHARES
(Transfers pursuant to Section 14(c) of the
Certificate of Designations)
Bank of New York, as Transfer Agent
101 Barclay
New York, NY 10286
Attn:
Re: Williams Communications Group, Inc.
6.75% Redeemable Cumulative Convertible Preferred Stock
(the "Preferred Stock")
Reference is hereby made to the Certificate of Designations relating to
the Preferred Stock dated September 18, 2000 (the "Certificate of
Designations"). Capitalized terms used but not defined herein shall have the
respective meanings given them in the Certificate of Designations.
This letter relates to ____________shares of Common Stock represented
by the accompanying certificate(s) that were issued upon conversion of the
Preferred Stock and which are held in the name of [name of transferor] (the
"Transferor") to effect the transfer of such Common Stock.
In connection with such request and in respect of the shares of Common
Stock, the Transferor does hereby certify that the shares of Common Stock are
being transferred (i) in accordance with applicable securities laws of any state
of the United States or any other jurisdiction and (ii) in accordance with their
terms:
CHECK ONE BOX BELOW
(1) [ ] to a transferee that the Transferor reasonably believes
is an institutional "accredited investor" as defined in
Rule 501 (a) (1), (2), (3) or (7) under the Securities
Act that is acquiring such Common Stock for investment
purposes and not for distribution and is acquiring the
Common Stock for its own account or for one or more
accounts as to which the transferee exercises sole
investment discretion:
(2) [ ] pursuant to an exemption from registration under the
Securities Act provided by Rule 144 thereunder (if
available); or
(3) [ ] in accordance with another exemption from the
registration requirements of the Securities Act (based
upon an opinion of counsel if the Company so requests).
[Name of Transferor]
By:
-------------------------
Name:
Title:
Dated:
cc: Williams Communications Group, Inc.
One Williams Center
Tulsa, OK 74172
Attn: Secretary
D-1
