UNITED STATES
Securities and Exchange Commission
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report - March 31, 2000
(Date of earliest event reported: March 23, 2000)
EL PASO ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 001-14365 76-0568816
(State or other jurisdiction (Commission File Number)(I.R.S. Employer
of incorporation) Identification Number)
El Paso Energy Building, 1001 Louisiana Street, Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 420-2131
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Description
3.A Restated Certificate of Incorporation of El Paso Energy
Corporation, as filed with the Delaware Secretary of
State on March 23, 2000.
4.A Certificate of Designation, Preferences and Rights of
Series B Mandatorily Convertible Single Reset Preferred
Stock of El Paso Energy Corporation as filed with the
Delaware Secretary of State on March 27, 2000.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Date: March 31, 2000 El Paso Energy Corporation
By:/s/ Jeffrey I. Beason
-----------------------
Jeffrey I. Beason
Senior Vice President
and Controller
<PAGE>
Exhibit Index
Exhibit No. Description
3.A Restated Certificate of Incorporation of El Paso Energy
Corporation as filed with the Delaware Secretary of
State on March 23, 2000.
4.A Certificate of Designation, Preferences and Rights of
Series B Mandatorily Convertible Single Reset Preferred
Stock of El Paso Energy Corporation as filed with the
Delaware Secretary of State on March 27, 2000.
RESTATED
CERTIFICATE OF INCORPORATION
OF
EL PASO ENERGY CORPORATION
Pursuant to Section 245 of the
General Corporation Law of the State of Delaware
El Paso Energy Corporation, a corporation organized and
existing under the General Corporation Law of the State of
Delaware, does hereby certify:
1. The original Certificate of Incorporation was
filed with the Office of the Secretary of State of the State
of Delaware on April 17, 1998. The name under which it was
originally incorporated is El Paso Energy Corporation (the
"Corporation").
2. This Restated Certificate of Incorporation has
been adopted and approved in accordance with Section 245 of
the Delaware General Corporation Law, and pursuant to
Section 245 of the Delaware General Corporation Law, this
Restated Certificate of Incorporation only restates and
integrates and does not further amend the provisions of the
Corporation's Restated Certificate of Incorporation as
theretofore amended or supplemented, and there is no
discrepancy between those provisions and the provisions of
this Restated Certificate of Incorporation.
3. The text of the Restated Certificate of
Incorporation is hereby restated and integrated to read in
its entirety as follows:
ARTICLE 1. NAME
The name of this corporation is EL PASO ENERGY
CORPORATION.
ARTICLE 2. REGISTERED OFFICE AND AGENT
The address of the registered office of this
corporation is Corporation Trust Center, 1209 Orange Street,
City of Wilmington, County of New Castle, State of Delaware
19801, and the name of its registered agent at such address
is The Corporation Trust Company.
ARTICLE 3. PURPOSES
The purpose of this corporation is to engage in any
lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of
Delaware.
ARTICLE 4. SHARES
4.1 The total number of authorized shares of all
classes of stock of this corporation consist of 750,000,000
shares of common stock having a par value of $3.00 per share
(the "Common Stock") and 50,000,000 shares of preferred
stock having a par value of $0.01 per share ("Preferred
Stock"). Authority is hereby expressly granted to the Board
of Directors to fix by resolution or resolutions any of the
designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions which are
permitted by the General Corporation Law of the State of
Delaware in respect of any class or classes of stock or any
series of any class of stock of the corporation.
4.2 There shall be designated a series of the
corporation's Preferred Stock, as follows:
4.2.1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating
Preferred Stock," par value $.01 per share, and the number
of shares constituting such series shall be 7,500,000. Such
number of shares may be increased or decreased by resolution
of the Board of Directors; provided, that no decrease shall
reduce the number of shares of Series A Junior Participating
Preferred Stock to a number less than that of the shares
then outstanding plus the number of shares issuable upon
exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the
corporation.
4.2.2. 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 Series A Junior
Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior
Participating Preferred Stock in preference to the
holders of shares of Common Stock and any other junior
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 first day of January, April, July, and
October 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 the greater of (a) $25, or (b) subject to the
provision for adjustment hereinafter set forth, 200
times the aggregate per share amount of all cash
dividends, and 200 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 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 July 22, 1998 (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); provided that, in
the event no dividend or distribution shall have been
declared on the Common Stock during the period between
any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend
of $25 per share on the Series A Junior Participating
Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(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 60 days prior
to the date fixed for the payment thereof.
4.2.3. 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 200 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 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
subsection 4.2.3(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
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 Chairman of the Board, the President or
the Chief Executive Officer 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 10
days and not later than 60 days after such order or
request or in 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
subsection 4.2.3) 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 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 Restated Certificate of Incorporation or By-laws
irrespective of any increase made pursuant to the
provisions of paragraph (C) (ii) of this subsection
4.2.3 (such number being subject, however, to change
thereafter in any manner provided by law or in the
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.
4.2.4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior
Participating Preferred Stock as provided in subsection
4.2.2 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;
(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 subsection 4.2.4, purchase or otherwise acquire
such shares at such time and in such manner.
4.2.5. 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 canceled 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.
4.2.6. 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 per
share, the greater of 200 times $75 or 200 times the
payment made per share of Common 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) 200 (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 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 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.
(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.
4.2.7. Consolidation, Merger, etc. If 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 event 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 200
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 are outstanding immediately prior to such event.
4.2.8. Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
4.2.9. 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.
4.2.10. 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.
ARTICLE 5. BY-LAWS
The Board of Directors shall have the power to adopt,
amend or repeal the By-laws of this corporation, subject to
the power of the stockholders to amend or repeal such By-
laws. The stockholders having voting power shall also have
the power to adopt, amend or repeal the By-laws of this
corporation.
ARTICLE 6. ELECTION OF DIRECTORS
Except as may be otherwise required by the By-laws,
written ballots are not required in the election of
Directors.
ARTICLE 7. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to
shares of stock or securities convertible into shares of
stock of this corporation.
ARTICLE 8. CUMULATIVE VOTING
The right to cumulate votes in the election of
Directors shall not exist with respect to shares of stock of
this corporation.
ARTICLE 9. AMENDMENTS TO RESTATED CERTIFICATE OF
INCORPORATION
This corporation reserves the right to amend or repeal
any of the provisions contained in this Restated Certificate
of Incorporation in any manner now or hereafter permitted by
law, and the rights of the stockholders of this corporation
are granted subject to this reservation.
ARTICLE 10. LIMITATION OF DIRECTOR LIABILITY
To the full extent that the General Corporation Law of
the State of Delaware, as it exists on the date hereof or
may hereafter be amended, permits the limitation or
elimination of the liability of Directors, a Director of
this corporation shall not be liable to this corporation or
its stockholders for monetary damages for breach of
fiduciary duty as a Director. Any amendment to or repeal of
this Article 10 shall not adversely affect any right or
protection of a Director of this corporation for or with
respect to any acts or omissions of such Director occurring
prior to such amendment or repeal.
ARTICLE 11. ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action by the stockholders of this corporation
shall be taken at a meeting of stockholders and no action
may be taken by written consent of stockholders entitled to
vote on such action.
ARTICLE 12. SPECIAL VOTING REQUIREMENTS
In addition to any affirmative vote required by law, by
this Restated Certificate of Incorporation, by any agreement
with any national securities exchange, or as may be
otherwise required, any "Business Combination" (as
hereinafter defined) involving this corporation shall be
subject to approval in the manner set forth in this Article
12.
12.1 Definitions.
For the purposes of this Article 12:
(a) "Affiliate" and "beneficial owner" are used
herein as defined in Rule 12b-2 and Rule 13d-3,
respectively, under the Securities Exchange Act of 1934
as in effect on January 1, 1992 (the"1934 Act"). The
term "Affiliate" as used herein shall exclude this
corporation, but shall include the definition of
"Associate" as contained in said Rule 12b-2.
(b) An "Interested Stockholder" is a person other
than (i) the corporation or (ii) Burlington Resources
Inc., a Delaware corporation ("BRI"), as long as BRI
continues to own at least a majority of the stock of
this corporation entitled to vote for the election of
Directors ("Voting Stock") and there has been no Change
in Control of BRI since January 1, 1992, who is (A) the
beneficial owner of ten percent or more of the Voting
Stock or (B) an Affiliate of this corporation which (1)
at any time within a two-year period prior to the
record date for the vote on a Business Combination was
the beneficial owner of ten percent or more of the
Voting Stock, or (2) at the completion of the Business
Combination will be the beneficial owner of ten percent
or more of the Voting Stock.
(c) A "Person" is a natural person or a legal
entity of any kind, together with any Affiliate of such
person or entity, or any person or entity with whom
such person, entity or any Affiliate has any agreement
or understanding relating to acquiring, voting or
holding Voting Stock.
(d) A "Disinterested Director" is a member of the
Board of Directors of this corporation (other than the
Interested Stockholder) who was a Director prior to the
time the Interested Stockholder became an Interested
Stockholder, or any Director who was recommended for
election by the Disinterested Directors. Any action to
be taken by the Disinterested Directors shall require
the affirmative vote of at least two-thirds of the
Disinterested Directors.
(e) A "Business Combination" is (i) a merger or
consolidation of this corporation or any of its
subsidiaries with an Interested Stockholder; (ii) the
sale, lease, exchange, pledge, transfer or other
disposition (A) by this corporation or any of its
subsidiaries of all or a Substantial Part of the
corporation's Assets to an Interested Stockholder, or
(B) by an Interested Stockholder of any of its assets,
except in the ordinary course of business, to this
corporation or any of its subsidiaries; (iii) the
issuance of stock or other securities of this
corporation or any of its subsidiaries to an Interested
Stockholder, other than on a pro rata basis to all
holders of Voting Stock of the same class held by the
Interested Stockholder pursuant to a stock spilt, stock
dividend or distribution of warrants or rights; (iv)
the adoption of any plan or proposal for the
liquidation or dissolution of this corporation proposed
by or on behalf of an Interested Stockholder; (v) any
reclassification of securities, recapitalization,
merger or consolidation or other transaction which has
the effect, directly or indirectly, of increasing the
proportionate share of any Voting Stock beneficially
owned by an Interested Stockholder; or (vi) any
agreement, contract or other arrangement providing for
any of the foregoing transactions.
(f) A "Substantial Part of the corporation's
Assets" shall mean assets of this corporation or any of
its subsidiaries in an amount equal to twenty percent
or more of the fair market value, as determined by the
Disinterested Directors, of the total consolidated
assets of this corporation and its subsidiaries taken
as a whole as of the end of its most recent fiscal year
ended prior to the time the determination is made.
(g) A "Change in Control" shall be deemed to
occur (i) if any Person is or becomes the "beneficial
owner" (as defined in Rule 13d-3 of the 1934 Act),
directly or indirectly, of securities of BRI
representing twenty percent or more of the stock of BRI
entitled to vote for Directors of BRI, (ii) upon the
first purchase of BRI's common stock pursuant to a
tender or exchange offer (other than a tender or
exchange offer made by BRI), (iii) upon the approval by
BRI's stockholders of a merger or consolidation, a sale
or disposition of all or substantially all of BRI's
assets or a plan of liquidation or dissolution of BRI,
or (iv) if, during any period of two consecutive years,
individuals who at the beginning of such period
constitute the BRI Board of Directors cease for any
reason to constitute at least a majority thereof,
unless the election or nomination of the election by
BRI's stockholders of each new Director was approved by
a vote of at least two-thirds of the Directors then
still in office who were Directors at the beginning of
the period.
12.2 Vote Required for Business Combinations.
The affirmative vote of not less than fifty-one percent
of the Voting Stock, excluding the Voting Stock of an
Interested Stockholder who is a party to the Business
Combination, shall be required for the adoption or
authorization of a Business Combination, unless the
Disinterested Directors determine that:
(a) The Interested Stockholder is the beneficial
owner of not less than eighty percent of the Voting
Stock and has declared its intention to vote in favor
of or to approve such Business Combination; or
(b) (i) The fair market value of the
consideration per share to be received or retained by
the holders of each class or series of stock of this
corporation in a Business Combination is equal to or
greater than the consideration per share (including
brokerage commissions and soliciting dealer's fees)
paid by such Interested Stockholder in acquiring the
largest number of shares of such class of stock
previously acquired in any one transaction or series of
related transactions, whether before or after the
Interested Stockholder became an Interested Stockholder
and (ii) the Interested Stockholder shall not have
received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial
assistance provided by this corporation, whether in
anticipation of or in connection with such Business
Combination or otherwise.
12.3 Information Requirements.
In the event any vote of holders of Voting Stock is
required for the adoption or approval of any Business
Combination, a proxy or information statement describing the
Business Combination and complying with the requirements of
the 1934 Act shall be mailed at a date determined by the
Disinterested Directors to all stockholders of this
corporation whether or not such statement is required under
the 1934 Act. The statement shall contain any
recommendations as to the advisability of the Business
Combination which the Disinterested Directors, or any of
them, may choose to state and, if deemed advisable by the
Disinterested Directors, an opinion of an investment banking
firm as to the fairness of the terms of such Business
Combination. Such firm shall be selected by the
Disinterested Directors and be paid a fee for its services
by this corporation as approved by the Disinterested
Directors.
12.4 Amendment.
No amendment to this Restated Certificate of
Incorporation shall amend, alter, change or repeal any of
the provisions of Article 11 or of this Article 12 unless
such amendment shall receive the affirmative vote of not
less than fifty-one percent of the Voting Stock, excluding
the Voting Stock of any Interested Stockholder as defined in
Section 12.1 of this Article 12.
IN WITNESS WHEREOF, this Restated Certificate of
Incorporation has been executed by El Paso Energy
Corporation this 23rd day of March, 2000.
EL PASO ENERGY CORPORATION
By: /s/ David L. Siddall
__________________________
David L. Siddall
Vice President, Associate General
Counsel and Corporate Secretary
Certificate of Designation,
Preferences and Rights of
Series B Mandatorily Convertible Single Reset Preferred Stock
of
El Paso Energy Corporation
(Pursuant to Section 151
of the General Corporation Law of the State of Delaware)
I, H. Brent Austin, Executive Vice President and Chief
Financial Officer of El Paso Energy Corporation (the "Company"),
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 as follows:
That pursuant to the authority conferred upon the Board
of Directors by the Restated Certificate of Incorporation of the
Company, said Board of Directors delegated to the Project
Electron Committee the power to designate and fix the voting
rights, designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations
or restrictions of a series of the Company's Preferred Stock.
Pursuant to such delegated authority, the Project Electron
Committee of the Board of Directors of the Company adopted the
following resolution creating a series of 200,000 shares of
Preferred Stock designated as Series B Mandatorily Convertible
Single Reset Preferred Stock:
RESOLVED that pursuant to the authority granted to and
vested in the Board of Directors of this Company in accordance
with the provisions of the Restated Certificate of Incorporation
of the Company, and the authority delegated to the Project
Electron Committee by the Board of Directors of the Company, the
Project Electron Committee hereby creates a series of Preferred
Stock of the Company and hereby states the designation and number
of shares, and fixes the relative rights, preferences and
limitations thereof (in addition to the provisions set forth in
the Restated Certificate of Incorporation which are applicable to
the Preferred Stock of all classes and series) as follows:
Section 1. Designation and Amount. There shall be a
series of Preferred Stock of the Company which shall be
designated as "Series B Mandatorily Convertible Single Reset
Preferred Stock", par value $.01 per share, and the number of
shares initially constituting such series shall be 200,000. Such
number of shares may be increased by resolution of the Board of
Directors to the extent necessary to fulfill the Company's
obligations to issue additional shares of Series B Mandatorily
Convertible Single Reset Preferred Stock pursuant to the
Remarketing Agreement (as defined in Section 2 hereof). Such
number of shares may be decreased by resolution of the Board of
Directors, provided that no decrease shall reduce the number of
shares of Series B Mandatorily Convertible Single Reset Preferred
Stock to a number less than that of the number of shares then
outstanding.
Section 2. Definitions. Capitalized terms used herein
which are not otherwise defined herein shall have the meaning
ascribed thereto in the Company's Restated Certificate of
Incorporation. In addition, the following terms shall have the
following meanings when used herein:
"Average Trading Price" for a security for any given period
means an amount equal to (i) the sum of the Closing Price for
such security on each Trading Day in such period divided by (ii)
the total number of Trading Days in such period.
"Board of Directors" shall mean the Board of Directors of
the Company.
"Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which commercial banking institutions in the
State of New York or the State of Texas are authorized or
obligated by law or executive order to close.
"Closing Price" for a security means the closing price for
such security on the Trading Day in question (or if such day is
not a Trading Day then as of the Trading Day next preceding such
day) as reported by Bloomberg L.P., or if not so reported by
Bloomberg L.P., as reported by another recognized source selected
by the Board of Directors.
"Common Stock" shall have the meaning specified in
Subsection 6(9) hereof.
"Dividend Payment Date" shall have the meaning specified in
Subsection 3(1) hereof.
"Failed Remarketing" shall have the meaning ascribed to such
term in the Remarketing Agreement.
"Final Sale Date" shall have the meaning ascribed to such
term in the Remarketing Agreement.
"junior stock" shall mean (and references to shares ranking
"junior to" the Series B Mandatorily Convertible Single Reset
Preferred Stock shall refer to), with respect to Sections 3 and 7
hereof, the Series A Junior Participating Preferred Stock of the
Company, the Common Stock and any other class or series of stock
of the Company which by its terms is not entitled to receive any
dividends unless all dividends required to have been paid or
declared and set apart for payment on the Series B Mandatorily
Convertible Single Reset Preferred Stock shall have been so paid
or declared and, with respect to Sections 4 and 7 hereof, the
Series A Junior Participating Preferred Stock of the Company, the
Common Stock and any other class or series of stock of the
Company which by its terms is not entitled to receive any assets
upon the liquidation, dissolution or winding up of the affairs of
the Company until holders of the Series B Mandatorily Convertible
Single Reset Preferred Stock shall have received the entire
amount to which such holders are entitled upon liquidation,
dissolution or winding up.
"Limestone Note Trigger Event" shall have the meaning
ascribed to such term in the Remarketing Agreement.
"Mandatory Conversion" shall have the meaning specified in
Subsection 6(1) hereof.
"Mandatory Conversion Date" shall have the meaning specified
in Subsection 6(1) hereof.
"Mandatory Conversion Date Market Price" shall have the
meaning specified in Subsection 6(1) hereof.
"Mandatory Conversion Rate" shall have the meaning specified
in Subsection 6(1) hereof.
"Optional Conversion" shall have the meaning specified in
Subsection 6(2) hereof.
"Optional Conversion Rate" shall have the meaning specified
in Subsection 6(2) hereof.
"parity stock" shall mean (and references to shares ranking
"on a parity with" the Series B Mandatorily Convertible Single
Reset Preferred Stock shall refer to), with respect to Sections 3
and 7 hereof, any class or series of stock of the Company which
by its terms is entitled to receive payment of dividends on a
parity with the Series B Mandatorily Convertible Single Reset
Preferred Stock and, with respect to Sections 4 and 7 hereof, any
class or series of stock of the Company the holders of which by
its terms are entitled to receive assets upon the liquidation,
dissolution or winding up of the affairs of the Company on a
parity with the holders of Series B Mandatorily Convertible
Single Reset Preferred Stock.
"Principal Market" shall have the meaning ascribed to such
term in the Remarketing Agreement.
"Rate Reset Date" means the earlier to occur of (A) the
consummation of the remarketing of the Initial Shares (as such
term is defined in the Remarketing Agreement), which is expected
to be on or about the third Trading Day following the Successful
Repricing Date, and (B) the date of a Failed Remarketing.
"Redemption Event" means the occurrence of any of the
following: (i) any consolidation or merger of the Company with or
into another corporation or entity, unless in connection with
such consolidation or merger the outstanding shares of Common
Stock immediately preceding the consummation of such
consolidation or merger are converted into, exchanged for or
otherwise represent a majority of the outstanding shares of
common stock of the surviving or resulting corporation or entity
immediately succeeding the consummation of such consolidation or
merger or (ii) the Company sells or conveys to another entity
(other than a Subsidiary) all or substantially all of the assets
of the Company.
"Remarketing Agent" shall have the meaning ascribed to such
term in the Remarketing Agreement.
"Remarketing Agreement" shall mean the El Paso Preferred
Stock Remarketing and Registration Rights Agreement dated as of
March 27, 2000 among the Company, El Paso Electron Share Trust,
Limestone Electron Trust, United States Trust Company of New
York, as Indenture Trustee, and Donaldson, Lufkin & Jenrette
Securities Corporation, as Initial Remarketing Agent.
"Reset Common Yield" shall mean the quotient of (i) the
product of (x) 4 and (y) the amount of the ordinary quarterly
cash dividend on one share of Common Stock most recently declared
prior to the Trigger Date (as appropriately adjusted for the
events referred to in Subsection 6(3)(a)), unless subsequent to
such declaration and prior to the Trigger Date, the Company has
publicly announced a change to, or elimination of, its ordinary
quarterly cash dividend (including a filing with the Securities
and Exchange Commission including such change or elimination), in
which case clause (y) above shall be the amount of such proposed
ordinary quarterly cash dividend (or $0.00 if such dividend is to
be eliminated), divided by (ii) the Reset Price (provided,
however, that if as of the Trigger Date there is more than one
class of Common Stock, then the Reset Common Yield shall be
calculated with respect to each then outstanding class of Common
Stock, and the Reset Common Yield (as used herein) shall be the
amount calculated with respect to the class of Common Stock
resulting in the greatest Reset Common Yield).
"Reset Dividend Rate" shall mean an amount per annum per
share equal to the product of (i) the sum of (x) the Reset Common
Yield (expressed as a percentage), plus (y) 7% and (ii) $5,000.00
(rounded to the nearest cent).
"Reset Price" shall mean the higher of (i) the Closing Price
of a share of Common Stock on the Trigger Date or (ii) the
quotient (rounded up to the nearest cent) of $1,000,000,000
divided by the number, as of the Trigger Date, of the authorized
but unissued shares of Common Stock that have not been reserved
as of the Trigger Date by the Board of Directors for other
purposes, subject to adjustment as provided in Subsection 6(3)(a)
hereof.
"Rights" means rights or warrants distributed by the Company
under a shareholder rights plan or agreement to all holders of
Common Stock entitling the holders thereof to subscribe for or
purchase shares of the Company's capital stock (either initially
or under certain circumstances), which rights or warrants, until
the occurrence of a specified event or events ("Rights Events"),
(i) are deemed to be transferred with such shares of Common
Stock, (ii) are not exercisable and (iii) are also issued in
respect of future issuances of Common Stock.
"Rights Events" shall have the meaning ascribed to such term
in the definition of Rights.
"senior stock" shall mean (and references to shares ranking
"senior to" or "prior to" the Series B Mandatorily Convertible
Single Reset Preferred Stock shall refer to), with respect to
Sections 3 and 7 hereof, any class or series of stock of the
Company by its terms ranking senior to the Series B Mandatorily
Convertible Single Reset Preferred Stock in respect of the right
to receive dividends and, with respect to Sections 4 and 7
hereof, any class or series of stock of the Company by its terms
ranking senior to the Series B Mandatorily Convertible Single
Reset Preferred Stock with respect to the right of the holders
thereof to receive assets upon the liquidation, dissolution or
winding up of the affairs of the Company.
"Subsidiary" means any corporation or other entity of which
the Company owns, directly or indirectly sufficient securities or
other ownership interests having ordinary voting power to elect a
majority of the board of directors or other individuals
performing similar functions.
"Successful Repricing Date" shall have the meaning ascribed
to such term in the Remarketing Agreement.
"Threshold Appreciation Price" means the product of (i) the
Reset Price as of the time in question and (ii) 1.10.
"Trading Day" means a day on which the Principal Market with
respect to a security is regularly scheduled to be open for
trading. For purposes of this definition, a day on which any
such exchange is scheduled to close (as opposed to unexpectedly
closing) prior to its regular closing time shall not constitute a
Trading Day.
"Trigger Date" shall mean the earlier to occur of (A) the
Successful Repricing Date and (B) the date of a Failed
Remarketing.
Section 3. Dividends.
(1) The holders of the Series B Mandatorily Convertible
Single Reset Preferred Stock shall not be entitled to receive any
dividends (nor shall dividends commence to accrue) prior to, or
with respect to any period ending prior to, the Rate Reset Date.
The holders of the Series B Mandatorily Convertible Single Reset
Preferred Stock, in preference to the rights of holders of any
junior stock but subject to the rights of holders of any senior
stock and parity stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of any funds
legally available therefor cumulative cash dividends from the
Rate Reset Date at the Reset Dividend Rate, and no more, payable
on the dates as set forth in this Section 3. Dividends shall
accrue on the Series B Mandatorily Convertible Single Reset
Preferred Stock from the Rate Reset Date. Dividends shall be
payable quarterly in arrears on each January 1, April 1, July 1,
and October 1 commencing on the first such date following the
Rate Reset Date (each such date being hereinafter referred to as
a "Dividend Payment Date"); provided, that if any such Dividend
Payment Date is not a Business Day, then any payment with respect
to such Dividend Payment Date shall be payable on the next
succeeding Business Day. Each such dividend shall be payable to
holders of record as they appear on the books of the Company or
any transfer agent for the Series B Mandatorily Convertible
Single Reset Preferred Stock on such record dates as shall be
fixed by the Board of Directors subject to applicable law (which
record date shall be no more than 60 days prior to the date fixed
for the payment thereof). Dividends on the Series B Mandatorily
Convertible Single Reset Preferred Stock shall accrue on a daily
basis commencing on and including the Rate Reset Date, and
accrued dividends for each dividend period or portion thereof
shall cumulate, to the extent not paid, as of the date on which
such dividends were to have been paid. A dividend period shall
commence on a Dividend Payment Date or the Rate Reset Date, as
the case may be, and continue to the day next preceding the next
succeeding Dividend Payment Date. Accumulated unpaid dividends
shall not accrue interest. Dividends (or cash amounts equal to
accrued and unpaid dividends) payable on the Series B Mandatorily
Convertible Single Reset Preferred Stock for any period less than
or more than a full quarterly period shall be computed on the
basis of a 360-day year of twelve 30-day months and the actual
number of days elapsed in any period less than one month.
Dividends on the Series B Mandatorily Convertible Single Reset
Preferred Stock shall accrue whether or not the Company has
earnings, whether or not there are funds legally available for
the payment of such dividends and whether or not such dividends
are declared. Dividends in arrears for any past dividend periods
or portions thereof may be declared and paid at any time without
reference to any regular Dividend Payment Date to holders of
record on such date as shall be fixed by the Board of Directors
subject to applicable law. As provided in Subsection 6(1),
dividends on the Series B Mandatorily Convertible Single Reset
Preferred Stock shall cease to accrue on the day immediately
preceding the Mandatory Conversion Date and, in the case of an
Optional Redemption of the Series B Mandatorily Convertible
Single Reset Preferred Stock, dividends shall accrue only to the
extent provided in Subsection 6(2).
(2) As long as any shares of Series B Mandatorily
Convertible Single Reset Preferred Stock are outstanding, no
dividends or other distributions for any dividend period (other
than dividends or other distributions payable in shares of, or
warrants, rights or options exercisable for or convertible into,
junior stock, and cash in lieu of fractional shares of such
junior stock in connection with any such dividend or
distribution) will be paid on any junior stock unless: (i) full
dividends, if any, on all outstanding shares of senior stock,
parity stock and Series B Mandatorily Convertible Single Reset
Preferred Stock have been paid, or declared and set aside for
payment, for all dividend periods terminating on or prior to the
payment date of such junior stock dividend or distribution, to
the extent such dividends on senior stock, parity stock or Series
B Mandatorily Convertible Single Reset Preferred Stock are
cumulative; (ii) the Company has paid or set aside all amounts,
if any, then or theretofore required to be paid or set aside for
all purchase, retirement, and sinking funds, if any, for any
outstanding shares of senior stock or parity stock; and (iii) the
Company is not in default on any of its obligations to redeem any
outstanding shares of senior stock or parity stock.
In addition, as long as any Series B Mandatorily Convertible
Single Reset Preferred Stock is outstanding, no shares of any
junior stock may be purchased, redeemed, or otherwise acquired by
the Company or any Subsidiary (except in connection with a
reclassification or exchange of any junior stock through the
issuance of other junior stock and cash in lieu of fractional
shares of such junior stock in connection therewith) and except
for the acquisition of shares of any junior stock pursuant to
contractual obligations binding against the Company or any
Subsidiary that were entered into prior to the date of the first
issuance of shares of Series B Mandatorily Convertible Single
Reset Preferred Stock or pursuant to contractual obligations that
are entered into at a time subsequent thereto when such
acquisitions of shares could be made pursuant to this Subsection
6(2) nor may any funds be set aside or made available for any
sinking fund for the purchase or redemption of any junior stock
unless: (i) full dividends, if any, on all outstanding shares of
senior stock, parity stock and Series B Mandatorily Convertible
Single Reset Preferred Stock have been paid, or declared and set
aside for payment, for all dividend periods terminating on or
prior to the date of such purchase, redemption or acquisition, to
the extent dividends on such senior stock, parity stock or Series
B Mandatorily Convertible Single Reset Preferred Stock dividends
are cumulative, (ii) the Company has paid or set aside all
amounts, if any, then or theretofore required to be paid or set
aside for all purchase, retirement, and sinking funds, if any,
for any outstanding shares of senior stock or parity stock; and
(iii) the Company is not in default on any of its obligations to
redeem any outstanding shares of senior stock or parity stock.
Subject to the provisions described above, such dividends or
other distributions (payable in cash, property, or junior stock)
as may be determined from time to time by the Board of Directors
may be declared and paid on the shares of any junior stock and
from time to time junior stock may be purchased, redeemed or
otherwise acquired by the Company or any Subsidiary. In the
event of the declaration and payment of any such dividends or
other distributions, the holders of such junior stock will be
entitled, to the exclusion of holders of any outstanding senior
stock or parity stock, to share therein according to their
respective interests.
(3) As long as any Series B Mandatorily Convertible Single
Reset Preferred Stock is outstanding, dividends or other
distributions for any dividend period may not be paid on any
outstanding shares of parity stock (other than dividends or other
distributions payable in shares of, or warrants, rights or
options exercisable for or convertible into, parity stock or
junior stock and cash in lieu of fractional shares of such parity
stock or junior stock in connection with any such dividend),
unless either: (a)(i) full dividends, if any, on all outstanding
shares of senior stock, parity stock and Series B Mandatorily
Convertible Single Reset Preferred Stock have been paid, or
declared and set aside for payment, for all dividend periods
terminating on or prior to the payment date of such dividend or
distribution with respect to such senior stock, parity stock or
Series B Mandatorily Convertible Single Reset Preferred Stock, to
the extent dividends on such senior stock, parity stock or Series
B Mandatorily Convertible Single Reset Preferred Stock are
cumulative; (ii) the Company has paid or set aside all amounts,
if any, then or theretofore required to be paid or set aside for
all purchase, retirement and sinking funds, if any, for any
outstanding shares of senior stock or parity stock; and (iii) the
Company is not in default on any of its obligations to redeem any
outstanding shares of senior stock or parity stock; or (b) any
such dividends are declared and paid pro rata so that the amounts
of any dividends declared and paid per share on outstanding
Series B Mandatorily Convertible Single Reset Preferred Stock and
each share of such parity stock will in all cases bear to each
other the same ratio that accrued and unpaid dividends (including
any accumulation with respect to unpaid dividends for prior
dividend periods, if such dividends are cumulative) per share of
outstanding Series B Mandatorily Convertible Single Reset
Preferred Stock and such outstanding shares of parity stock bear
to each other.
In addition, as long as any Series B Mandatorily Convertible
Single Reset Preferred Stock is outstanding, no shares of any
parity stock may be purchased, redeemed or otherwise acquired by
the Company or any Subsidiary (except with any parity stock,
junior stock and cash in lieu of fractional shares of such parity
stock or junior stock in connection therewith and except for the
acquisition of shares of any parity stock pursuant to contractual
obligations binding against the Company or any Subsidiary that
were entered into prior to the date of the first issuance of
shares of Series B Mandatorily Convertible Single Reset Preferred
Stock or pursuant to contractual obligations that are entered
into at a time subsequent thereto when such acquisitions of
shares could be made pursuant to this Subsection 6(3)) unless:
(i) full dividends, if any, on all outstanding shares of senior
stock, parity stock and Series B Mandatorily Convertible Single
Reset Preferred Stock have been paid, or declared and set aside
for payment, for all dividend periods terminating on or prior to
the date of such purchase, redemption or other acquisition, to
the extent dividends on such senior stock, parity stock or Series
B Mandatorily Convertible Single Reset Preferred Stock are
cumulative; (ii) the Company has paid or set aside all amounts,
if any, then or theretofore required to be paid or set aside for
all purchase, retirement, and sinking funds, if any, for any
outstanding shares of senior stock or parity stock; and (iii) the
Company is not in default of any of its obligations to redeem any
outstanding shares of senior stock or parity stock.
(4) Any dividend payment made on the Series B Mandatorily
Convertible Single Reset Preferred Stock shall first be credited
against the earliest accrued but unpaid dividend due with respect
to the Series B Mandatorily Convertible Single Reset Preferred
Stock.
(5) All dividends paid with respect to the Series B
Mandatorily Convertible Single Reset Preferred Stock shall be
paid pro rata to the holders entitled thereto.
Section 4. Liquidation Preference. In the event of
any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Company, then, before any distribution
or payments shall be made to the holders of any junior stock, but
subject to the rights of any senior stock or parity stock, the
holders of the Series B Mandatorily Convertible Single Reset
Preferred Stock shall be entitled to be paid in full in cash the
amount of $5,000.00 per share, together with, to the extent
lawful, accrued dividends to the date of such distribution or
payment, whether or not earned or declared. If such payment
shall have been made in full to the holders of the Series B
Mandatorily Convertible Single Reset Preferred Stock and all
preferential payments or distributions to be made with respect to
senior stock and parity stock have been made in full, the
remaining assets and funds of the Company shall be distributed
among the holders of the junior stock, according to their
respective rights and preferences and in each case according to
their respective shares. If, upon any liquidation, dissolution
or winding up of the affairs of the Company, the amounts so
payable are not paid in full to the holders of all shares of the
Series B Mandatorily Convertible Single Reset Preferred Stock and
parity stock, the holders of the Series B Mandatorily Convertible
Single Reset Preferred Stock, together with holders of parity
stock, shall share ratably in any distribution of assets in
proportion to the full amounts to which they would otherwise be
respectively entitled. Neither the consolidation or merger of
the Company with another entity, nor the sale, lease, transfer,
exchange or conveyance of all or a part of its assets, shall be
deemed a liquidation, dissolution or winding up of the affairs of
the Company within the meaning of the foregoing provisions of
this Section 4.
Section 5. Redemption. The Company shall have the
right to redeem all, but not less than all, of the outstanding
Series B Mandatorily Convertible Single Reset Preferred Stock (x)
at any time following a Redemption Event and prior to a Trigger
Date and (y) at any time prior to a Limestone Note Trigger Event,
in each case in cash at the redemption price of $5,000.00 per
share (the "Redemption Price"). Except as set forth in the
preceding sentence and to the extent contemplated by Section
6(1)(y), the Company shall not have the right to redeem any or
all of the Series B Mandatorily Convertible Single Reset
Preferred Stock at any other time. Notice of a redemption of the
Series B Mandatorily Convertible Single Reset Preferred Stock
shall be provided in writing to the holders of record of such
shares at their respective addresses as they shall appear on the
books of the Company at least two Business Days and not more than
60 calendar days prior to the date fixed for redemption. Each
such notice of redemption shall specify the date fixed for
redemption and the Redemption Price. On or after the date fixed
for redemption as stated in such notice, each holder of the
shares called for redemption shall surrender the certificate
evidencing such shares to the Company and shall thereupon be
entitled to receive payment of the Redemption Price. If, on the
date fixed for redemption, funds necessary for the redemption
shall be available therefor and shall have been irrevocably
deposited or set aside, then, notwithstanding that the
certificates evidencing any shares so called for redemption shall
not have been surrendered, the shares shall no longer be deemed
outstanding, and all rights whatsoever with respect to the shares
so called for redemption (except the right of the holders to
receive the Redemption Price without interest upon surrender of
their certificates therefor) shall terminate.
Section 6. Conversion.
(1) Unless previously converted at the option of the holder
in accordance with the provisions hereof, on the earlier to occur
of (i) the third anniversary of the Rate Reset Date and (ii)
March 15, 2006, or if such date is not a Business Day, the next
succeeding day that is a Business Day (the "Mandatory Conversion
Date"), each outstanding share of Series B Mandatorily
Convertible Single Reset Preferred Stock shall, without
additional notice to holders thereof, convert automatically (the
"Mandatory Conversion") into (x) a number of fully paid and non-
assessable shares of Common Stock at the Mandatory Conversion
Rate (as defined herein) in effect on the Mandatory Conversion
Date; and (y) the right to receive an amount in cash equal to all
accrued and unpaid dividends on such share of Series B
Mandatorily Convertible Single Reset Preferred Stock (other than
previously declared dividends payable to a holder of record as of
a prior date) to and including the day immediately prior to the
Mandatory Conversion Date, whether or not earned or declared, out
of funds legally available therefor (and if sufficient funds are
not then legally available therefor, the Company shall pay such
amount, if any, pro rata (based on the amounts so owing) to the
holders of the Series B Mandatorily Convertible Single Reset
Preferred Stock and any parity stock then entitled to similar
payment as is then legally available therefor and shall pay any
deficiency thereafter as soon as funds are legally available
therefor). The "Mandatory Conversion Rate" is equal to the
following number of shares of Common Stock per share of Series B
Mandatorily Convertible Single Reset Preferred Stock: (a) if the
Mandatory Conversion Date Market Price is greater than or equal
to the Threshold Appreciation Price, the quotient of (i)
$5,000.00 divided by (ii) the Threshold Appreciation Price, (b)
if the Mandatory Conversion Date Market Price is less than the
Threshold Appreciation Price but is greater than the Reset Price,
the quotient of $5,000.00 divided by the Mandatory Conversion
Date Market Price and (c) if the Mandatory Conversion Date Market
Price is less than or equal to the Reset Price, the quotient of
$5,000.00 divided by the Reset Price, subject to adjustment as
provided in this Section 6. "Mandatory Conversion Date Market
Price" shall mean the Average Trading Price per share of Common
Stock for the 20 consecutive Trading Days immediately prior to,
but not including, the Mandatory Conversion Date; provided,
however, that if an event occurs during such 20 consecutive
Trading Days that would require an adjustment to the Mandatory
Conversion Rate pursuant to Subsections 6(3) or 6(5), the Board
of Directors may make such adjustments to the Average Trading
Price for shares of Common Stock for such 20 Trading Day period
as it reasonably deems appropriate to effectuate the intent of
the adjustments in Subsections 6(3) and 6(5), in which case any
such determination by the Board of Directors shall be set forth
in a resolution of the Board of Directors and shall be conclusive
absent manifest error.
Dividends on the Series B Mandatorily Convertible Single
Reset Preferred Stock shall cease to accrue on the day
immediately preceding, and the Series B Mandatorily Convertible
Single Reset Preferred Stock shall cease to be outstanding on,
the Mandatory Conversion Date. The Company shall make
arrangements as it deems appropriate for the issuance of
certificates representing Common Stock and for the payment of
cash in respect of such accrued and unpaid dividends, if any, or
cash in lieu of fractional shares, if any, in exchange for and
contingent upon surrender of certificates representing the Series
B Mandatorily Convertible Single Reset Preferred Stock, and the
Company may defer the payment of dividends on such Common Stock
and the voting thereof until, and make such payment and voting
contingent upon, the surrender of such certificates representing
the Series B Mandatorily Convertible Single Reset Preferred
Stock, provided that the Company shall give the holders of the
Series B Mandatorily Convertible Single Reset Preferred Stock
such notice of any such actions as the Company deems appropriate
and upon such surrender such holders shall be entitled to receive
such dividends declared and paid on such Common Stock subsequent
to the Mandatory Conversion Date. Amounts payable in cash in
respect of the Series B Mandatorily Convertible Single Reset
Preferred Stock or in respect of such Common Stock shall not bear
interest.
(2) Shares of Series B Mandatorily Convertible Single Reset
Preferred Stock shall be convertible, at the option of the
holders thereof ("Optional Conversion") at any time on or after
the Rate Reset Date and before the Mandatory Conversion Date,
into Common Stock at a rate equal to the number of shares of
Common Stock per share of Series B Mandatorily Convertible Single
Reset Preferred Stock (the "Optional Conversion Rate") equal to
the quotient of (i) $5,000.00 divided by (ii) the Threshold
Appreciation Price, subject to adjustment as set forth in this
Section 6. Prior to the Rate Reset Date, the Optional Conversion
Rate shall be 122.231 shares of Common Stock for each share of
Series B Mandatorily Convertible Single Reset Preferred Stock,
subject to adjustment as set forth in this Section 6. Optional
Conversion of shares of Series B Mandatorily Convertible Single
Reset Preferred Stock may be effected by delivering certificates
evidencing such shares of Series B Mandatorily Convertible Single
Reset Preferred Stock, together with written notice of conversion
and, if required by the Company, a proper assignment of such
certificates to the Company or in blank (and, if applicable as
provided in the following paragraph, cash payment of an amount
equal to the dividends attributable to the current dividend
period payable on such shares), to the office of the transfer
agent for the shares of Series B Mandatorily Convertible Single
Reset Preferred Stock or to any other office or agency maintained
by the Company for that purpose and otherwise in accordance with
Optional Conversion procedures established by the Company. Each
Optional Conversion shall be deemed to have been effected
immediately before the close of business on the date on which the
foregoing requirements shall have been satisfied. The Optional
Conversion shall be at the Optional Conversion Rate in effect at
such time and on such date.
Holders of shares of Series B Mandatorily Convertible Single
Reset Preferred Stock at the close of business on a record date
for any payment of declared dividends shall be entitled to
receive the dividend payable on such shares on the corresponding
Dividend Payment Date or other date fixed for payment of
dividends notwithstanding the Optional Conversion of such shares
following such record date and on or prior to such Dividend
Payment Date or other date fixed for payment of dividends.
However, shares of Series B Mandatorily Convertible Single Reset
Preferred Stock surrendered for Optional Conversion after the
close of business on a record date for any payment of declared
dividends and before the opening of business on the next
succeeding Dividend Payment Date or other date fixed for payment
of dividends must be accompanied by payment in cash of an amount
equal to the dividends attributable to the current dividend
period payable on such shares on such next succeeding Dividend
Payment Date or other date fixed for payment of dividends.
Except as provided in this Subsection 6(2), upon any Optional
Conversion, the Company shall make no payment of or allowance for
unpaid dividends, whether or not in arrears, on such converted
shares of Series B Mandatorily Convertible Single Reset Preferred
Stock as to which Optional Conversion has been effected or for
previously declared dividends or distributions on the shares of
Common Stock issued upon such Optional Conversion.
(3) The Optional Conversion Rate shall be adjusted from
time to time and the Mandatory Conversion Rate shall be adjusted
from time to time after the Rate Reset Date in respect of events
occurring after the Rate Reset Date, as follows:
(a) In case the Company shall (i) pay a dividend on
its Common Stock in other Common Stock, (ii) subdivide or split
its outstanding Common Stock into a greater number of shares,
(iii) combine its outstanding Common Stock into a smaller number
of Common Stock, or (iv) issue by reclassification of its Common
Stock any other Common Stock (including in connection with a
merger in which the Company is a surviving corporation), then, in
any such event, (1) the Mandatory Conversion Rate in effect
immediately prior to such event shall be adjusted such that the
Reset Price shall be adjusted by multiplying it by a fraction
(which fraction and all other fractions referred to herein may be
improper fractions), the numerator of which is one and the
denominator of which is the number of shares of Common Stock that
a holder of one share of Common Stock prior to any event
described above would hold after such event (assuming the
issuance of fractional shares) (the "Recapitalization Adjustment
Ratio"), and (2) the Optional Conversion Rate in effect
immediately prior to such event shall be adjusted by multiplying
it by a fraction, the numerator of which is one and the
denominator of which is the Recapitalization Adjustment Ratio.
Such adjustment shall become effective immediately after the
effective date of any such event (or the earlier record date in
the case of any such dividend) whenever any of the events listed
above shall occur.
(b) In case the Company shall issue rights or warrants to
all holders of its Common Stock entitling them (for a period,
except in the case of Rights, expiring within 45 days after the
record date for determination of the shareholders entitled to
receive such rights or warrants) to subscribe for or purchase
Common Stock at a price per share of Common Stock less than the
current market price per share of Common Stock (as defined in
Subsection 6(4)) on such record date, then in each such case the
Mandatory Conversion Rate on the date of such issuance shall be
adjusted such that the Reset Price shall be adjusted by
multiplying it by a fraction the numerator of which shall be the
sum of (x) the number of shares of Common Stock outstanding
immediately prior to such issuance, plus (y) the number of
additional shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock so offered
for subscription or purchase would purchase at the Average
Trading Price for a share of Common Stock on the record date for
such issuance, and the denominator of which shall be the sum of
(x) the number of shares of Common Stock outstanding immediately
prior to such issuance, plus (y) the number of additional shares
of Common Stock offered for subscription or purchase pursuant to
such rights or warrants (the "Anti-Dilution Adjustment Ratio");
and (B) the Optional Conversion Rate in effect on the record date
described below shall be adjusted by multiplying it by a
fraction, the numerator of which is one and the denominator of
which is the Anti-Dilution Adjustment Ratio. For purposes of
this Subsection 6(3)(b), the issuance of rights or warrants to
subscribe for or purchase securities exercisable for, convertible
into, or exchangeable for, shares of Common Stock shall be deemed
to be the issuance of rights or warrants to purchase the shares
of Common Stock into which such securities are exercisable,
convertible or exchangeable at an aggregate offering price equal
to the aggregate offering price of such securities plus the
minimum aggregate amount (if any) payable upon the exercise,
conversion or exchange of such securities. Such adjustment shall
become effective at the opening of business on the Business Day
next following the record date for such rights or warrants. To
the extent that any shares of Common Stock, or securities
exercisable for, convertible into, or exchangeable for, shares of
Common Stock so offered for subscription or purchase are not so
subscribed or purchased by the expiration of such rights or
warrants, the Mandatory Conversion Rate and the Optional
Conversion Rate shall each be readjusted to the rates or amounts,
respectively, which would then be in effect, had the adjustment
made upon the issuance of such rights or warrants been made upon
the basis of the issuance of rights or warrants in respect of
only the number of shares of Common Stock and securities
exercisable for, convertible into, or exchangeable for, shares of
Common Stock actually issued upon exercise of such rights or
warrants.
(c) If the Company shall pay a dividend or make a
distribution to all holders of its Common Stock consisting of
evidences of its indebtedness or other assets (including capital
shares of the Company other than Common Stock but excluding any
Ordinary Cash Dividends (as defined below)), or shall issue to
all holders of its Common Stock rights or warrants to subscribe
for or purchase any of its securities (other than those referred
to in Subsection 6(b)), then in each such case the Mandatory
Conversion Rate in effect immediately prior to such event shall
be adjusted such that the Reset Price shall be adjusted by
multiplying it by a fraction, the numerator of which shall be the
Average Trading Price for a share of Common Stock on such record
date, minus the fair market value as of such record date of the
portion of evidences of indebtedness or other assets so
distributed, or of such subscription rights or warrants,
applicable to one share of Common Stock (provided that such
numerator shall never be less than $1.00) and the denominator of
which shall be the Average Trading Price for a share of Common
Stock on such record date (the "Distribution Adjustment Ratio");
and (B) the Optional Conversion Rate in effect immediately prior
to such event shall be adjusted by multiplying it by a fraction,
the numerator of which is one and the denominator of which is the
Distribution Adjustment Ratio. Such adjustment shall become
effective on the opening of business on the Business Day next
following the record date for such dividend or distribution or
the determination of shareholders entitled to receive such
dividend or distribution or rights or warrants, as the case may
be. "Ordinary Cash Dividends" shall mean (i) any regular cash
dividend on the Common Stock that does not exceed the per share
amount of immediately preceding regular cash dividend on the
Common Stock (as adjusted to appropriately reflect any of the
events referred to in Subsection 6(3)(a)) and (ii) any other cash
dividend or distribution which, when combined on a per share
basis with the per share amount of all other cash dividends and
distributions paid on the Common Stock during the 365-day period
ending on the date of declaration of such dividend or
distribution (as adjusted to appropriately reflect any of the
events referred to in Subsection 6(3)(a) and excluding cash
dividends or distributions that resulted in an adjustment to the
Mandatory Conversion Rate or the Optional Conversion Rate), does
not exceed 10% of the current market price per Common Stock
(determined pursuant to Subsection 6(4)) on the Trading Day
immediately preceding the date of declaration of such dividend or
distribution.
(4) For the purpose of any computation under Subsection
6(3), the "current market price per share of Common Stock" on any
date in question shall mean the Average Trading Price for shares
of Common Stock for the 15 consecutive Trading Days ending on the
earlier of the day in question and, if applicable, the day before
the "ex" date with respect to the issuance or distribution
requiring such computation; provided, however, that if another
event occurs that would require an adjustment pursuant to
Subsection 6(3), the Board of Directors may make such adjustments
to the Average Trading Price for shares of Common Stock during
such 15 Trading Day period as it reasonably deems appropriate to
effectuate the intent of the adjustments in Subsection 6(3), in
which case any such determination by the Board of Directors shall
be set forth in a Board resolution and shall be conclusive absent
manifest error. For purposes of this Subsection, the term "ex"
date, when used with respect to any issuance or distribution,
means the first date on which the shares of Common Stock trade
regular way on the relevant exchange or in the relevant market
from which the Average Trading Price was obtained without the
right to receive such issuance or distribution. For the purpose
of any computation under Subsection 6(3), the "fair market value"
of any assets, evidences of indebtedness, subscription rights or
warrants on any date in question: (i) in the event any such item
is a publicly traded security ("Publicly Traded Security"), shall
be determined for such date pursuant to the provisions of this
Subsection 6(4) for determination of the "current market price
per share of Common Stock", except that (x) each reference
therein to "Common Stock" shall be deemed to mean such Publicly
Traded Security, and (y) if such Publicly Traded Security does
not trade on a "when issued" basis for the 15 consecutive Trading
Days preceding the "ex" date, such determination shall be made
for the period of 15 consecutive Trading Days commencing on the
"ex" date; and (ii) in the event any such item is not a Publicly
Traded Security, shall be reasonably determined in good faith for
such date by the Board of Directors, as evidenced by a resolution
of the Board, whose determination shall be conclusive absent
manifest error.
(5) In any case of any reclassification of Common Stock
(other than a reclassification of the Common Stock referred to in
Subsection 6(3)(a)); any consolidation or merger of the Company
with or into another company or other entity (other than a merger
resulting in a reclassification of the Common Stock referred to
in Subsection 6(3)(a)); or any sale or conveyance to another
entity (other than a Subsidiary) of all or substantially all of
the assets of the Company (any such event referred to herein as a
"Transaction"), then the Optional Conversion Rate and Mandatory
Conversion Rate shall be adjusted so that after consummation of
such a Transaction the holders of shares of Series B Mandatorily
Convertible Single Reset Preferred Stock will receive, in lieu of
the number of shares of Common Stock which such holder would have
received upon conversion but for such Transaction, the kind and
amount of securities, cash and other property receivable upon
consummation of such Transaction by a holder of such number of
shares of Common Stock, subject to further adjustment as provided
in this Section 6, including without limitation, an adjustment to
the Optional Conversion Rate on the Rate Reset Date if such
Transaction occurs prior to the Rate Reset Date. On and after
the consummation of any such Transaction, the Mandatory
Conversion Date Market Price, which shall be used for purposes of
the determination as to which of clauses (a), (b) or (c) of the
definition of Mandatory Conversion Rate applies, shall mean the
sum of (i) the product of the Average Trading Price of any
Publicly Traded Security received upon consummation of such
Transaction for the 20 consecutive Trading Days immediately prior
to, but not including, the Mandatory Conversion Date multiplied
by the fraction of such security received in such Transaction per
share of Common Stock (assuming the issuance of fractional
shares) plus (ii) the fair market value of the cash and other
property received upon consummation of such Transaction per share
of Common Stock as of the day preceding the Mandatory Conversion
Date as determined in accordance with Subsection 6(4). In
determining the kind and amount of securities, cash or other
property receivable upon consummation of such Transaction by a
holder of shares of Common Stock, it shall be assumed that such
holder is not a person or entity with which the Company
consolidated or into which the Company was merged or which merged
into the Company, as the case may be, or an affiliate of any such
Person and that such holder of Common Stock failed to exercise
rights of election, if any, as to the kind or amount of
securities, cash, or other property receivable upon consummation
of such transaction (provided that, if the kind or amount of
securities, cash, or other property receivable upon consummation
of such Transaction is not the same for each non-electing share,
then the kind and amount of securities, cash, or other property
receivable upon consummation of such transaction for each non-
electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares).
In the event of such a reclassification, consolidation, merger,
sale or conveyance, effective provisions shall be made in the
certificate of incorporation or similar document of the resulting
or surviving Company or entity so that the conversion rate
applicable to any securities or property into which the shares of
the Series B Mandatorily Convertible Single Reset Preferred Stock
shall then be convertible shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock
contained in Subsections 6(3)(a), 6(3)(b) and 6(3)(c) inclusive,
and the other provisions of this Section 6 with respect to the
Common Stock shall apply on terms as nearly equivalent as
practicable to any such other securities and property deliverable
upon conversion of shares of Series B Mandatorily Convertible
Single Reset Preferred Stock.
(6) Whenever any adjustments are required in the shares of
Common Stock into which each share of Series B Mandatorily
Convertible Single Reset Preferred Stock is convertible, the
Company shall forthwith (a) compute the adjusted Mandatory
Conversion Rate and Optional Conversion Rate in accordance
herewith and prepare a certificate signed by an officer of the
Company setting forth the adjusted Mandatory Conversion Rate and
the Optional Conversion Rate, describing in reasonable detail the
method of calculation used and the facts requiring such
adjustment and upon which such adjustment is based, which
certificate shall be conclusive, final and binding evidence of
the correctness of the adjustment and file with the transfer
agent of the Series B Mandatorily Convertible Single Reset
Preferred Stock such certificate and (b) cause a copy of such
certificate to be mailed to each holder of record of the Series B
Mandatorily Convertible Single Reset Preferred Stock as of or
promptly after the effective date of such adjustment and, with
respect to adjustments applicable after the Rate Reset Date, make
a prompt public announcement of such adjustment.
(7) The Company shall at all times reserve and keep
available, free from preemptive rights out of its authorized but
unissued shares of Common Stock for the purpose of issuance upon
conversion of the Series B Mandatorily Convertible Single Reset
Preferred Stock a number of shares of Common Stock equal to the
product of (i) the number of shares of Common Stock then
deliverable at such time upon an Optional Conversion of all
shares of the Series B Mandatorily Convertible Single Reset
Preferred Stock multiplied by (ii) 1.10.
(8) The Company will pay any and all documentary stamp or
similar issue or transfer taxes that may be payable in respect of
the issuance or delivery of shares of Common Stock on conversion
of shares of the Series B Mandatorily Convertible Single Reset
Preferred Stock pursuant to this Section 6. The Company shall
not, however, be required to pay any tax which may be payable in
respect of any transfer involving the issue and delivery of
shares of Common Stock in the name other than in that which the
shares of Series B Mandatorily Convertible Single Reset Preferred
Stock so converted were registered and no such issue and delivery
shall be made unless and until the person requesting such issue
has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company, that such tax has
been paid.
(9) For the purpose of this Section 6, the term "Common
Stock" shall include any shares of the Company of any class or
series which has no preference or priority in the payment of
dividends or in the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. However,
Common Stock issuable upon conversion of the Series B Mandatorily
Convertible Single Reset Preferred Stock shall include only
shares of the class designated as Common Stock as of the original
date of issuance of the Series B Mandatorily Convertible Single
Reset Preferred Stock, or shares of the Company of any classes or
series resulting from any reclassification or reclassifications
thereof (including reclassifications referred to in clause (iv)
of Subsection 6(3)(a)) and which have no preference or priority
in the payment of dividends or in the distribution of assets upon
any voluntary or involuntary liquidation, dissolution or winding
up of the Company and which are not subject to redemption by the
Company, provided that, if at any time, there shall be more than
one such resulting class or series, the shares of such class and
series then so issuable shall be in the same proportion, if
possible, or if not possible, in substantially the same
proportion which the total number of shares of such class and
series resulting from all such reclassifications bears to the
total number of shares of all classes and series resulting from
all such reclassifications.
(10) No fractional shares or scrip representing fractional
shares shall be issued upon the conversion of the Series B
Mandatorily Convertible Single Reset Preferred Stock. If any
such conversion would otherwise require the issuance of a
fractional share, an amount equal to such fraction multiplied by
the current market price per share of Common Stock (determined as
provided in Subsection 6(4)) of the Common Stock on the date of
conversion shall be paid to the holder in cash by the Company.
If on such date there is no current market price per share of
Common Stock, the fair market value of a share of Common Stock
(determined as provided in Subsection 6(4)) on such date, shall
be used. If more than one share of Series B Mandatorily
Convertible Single Reset Preferred Stock shall be surrendered for
conversion at one time or for the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series
B Mandatorily Convertible Single Reset Preferred Stock so
surrendered.
(11) All shares of the Series B Mandatorily Convertible
Single Reset Preferred Stock purchased or otherwise acquired by
the Company (including shares surrendered for conversion) shall
be canceled and thereupon restored to the status of authorized
but unissued shares of Preferred Stock undesignated as to series.
(12) No adjustment in the Mandatory Conversion Rate and the
Optional Conversion Rate shall be required unless such adjustment
(plus any adjustments not previously made by reason of this
Subsection 6(12)) would require an increase or decrease of at
least 1% in the number of shares of Common Stock into which each
share of the Series B Mandatorily Convertible Single Reset
Preferred Stock is then convertible; provided, however, that any
adjustments which by reason of this Subsection 6(12) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment and provided further that
any adjustment shall be required and made in accordance with the
provisions of Subsection 6(3) not later than such time as may be
required in order to preserve the tax free nature of a
distribution to the holders of shares of Common Stock. If any
action or transaction would require adjustment to the Mandatory
Conversion Rate or the Optional Conversion Rate pursuant to this
Section 6, only one adjustment shall be made and such adjustment
shall be the amount of the adjustment that has the highest
absolute value. All calculations under this Section 6 shall be
made to the nearest one-hundredth of a share of Common Stock.
(13) The Board of Directors may make such upward adjustments
in the Mandatory Conversion Rate and the Optional Conversion
Rate, in addition to those required by this Section 6, as shall
be determined by the Board of Directors, as evidenced by a
resolution of the Board of Directors, to be advisable in order
that any stock dividends, subdivisions of shares, distribution of
rights to purchase stock or securities, or distribution of
securities convertible into or exchangeable for stock (or any
transaction that could be treated as any of the foregoing
transactions pursuant to Section 305 of the Internal Revenue Code
of 1986, as amended) made by the Company to its stockholders
after the Rate Reset Date shall not be taxable. The
determination of the Board of Directors as to whether an
adjustment should be made pursuant to the provisions of this
Subsection 6(13), and if so, as to what adjustment should be made
and when, shall be conclusive, final and binding on the Company
and all stockholders of the Company.
(14) In any case in which Section 6 shall require that an
adjustment as a result of any event become effective at the
opening of business on the Business Day next following a record
date and the date fixed for conversion occurs after such record
date, but before the occurrence of such event, the Company may,
in its sole discretion, elect to defer (A) issuing to the holder
of any converted Series B Mandatorily Convertible Single Reset
Preferred Stock the additional shares of Common Stock issuable
upon such conversion over the shares of Common Stock issuable
before giving effect to such adjustments and (B) paying to such
holder any amount in cash in lieu of a fractional share of Common
Stock pursuant to Subsection 6(10), in each case until after the
occurrence of such event.
(15) Notwithstanding the foregoing provisions of this
Section 6, no adjustment of the Optional Conversion Rate or the
Mandatory Conversion Rate shall be required to be made upon the
issuance of any shares of Common Stock pursuant to any present or
future plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment
of additional optional amounts in shares of Common Stock under
any such plan or upon the issuance of shares of Common Stock (or
securities, rights, warrants, options or similar rights, which
are convertible or exercisable for shares of Common Stock)
pursuant to any compensatory plan of the Company.
(16) Notwithstanding any other provision of this Section 6,
the issuance or distribution of Rights shall not be deemed to
constitute an issuance or a distribution or dividend of rights,
warrants, or other securities to which any of the adjustment
provisions described above applies until the occurrence of the
earliest Rights Event.
(17) For purposes of this Section 6, shares of Common Stock
owned by, or held for the account of, the Company, a Subsidiary
or another entity of which a majority of the common stock or
common equity interests are owned, directly or indirectly, by the
Company shall be deemed to be not outstanding.
Section 7. Voting Rights. The holders of Series B
Mandatorily Convertible Single Reset Preferred Stock shall have
no right to vote except as otherwise specifically provided
herein, in the Company's Restated Certificate of Incorporation or
as required by statute.
(1) So long as any shares of Series B Mandatorily
Convertible Single Reset Preferred Stock are outstanding, in
addition to any other vote or consent of shareholders required in
the Company's Restated Certificate of Incorporation by law, the
affirmative vote of the holders of at least a majority of the
Series B Mandatorily Convertible Single Reset Preferred Stock,
given in person or by proxy, either pursuant to a consent in
writing without a meeting (if permitted by law) and the Company's
Restated Certificate of Incorporation or by vote at any meeting
called for the purpose, shall be necessary for effecting or
validating:
(a) any amendment, alteration or repeal of any of the
provisions of the Company's Restated Certificate of Incorporation
which affects adversely the powers, rights or preferences of the
holders of the Series B Mandatorily Convertible Single Reset
Preferred Stock or reduces the minimum time required for any
notice to which holders of Series B Mandatorily Convertible
Single Reset Preferred Stock then outstanding may be entitled;
provided, that the amendment of the provisions of the Company's
Restated Certificate of Incorporation so as to authorize or
create, or to increase the authorized amount of any junior stock
or parity stock (including additional shares of Series B
Mandatorily Convertible Single Reset Preferred Stock) shall not
be deemed to affect adversely the powers, rights or preferences
of the holders of the Series B Mandatorily Convertible Single
Reset Preferred Stock and shall not be subject to approval by the
holders of the Series B Mandatorily Convertible Single Reset
Preferred Stock and such holders shall not be entitled to vote
thereon to the fullest extent permitted by law.
(b) the authorization, creation or issuance of, or the
increase in the authorized amount of, any stock of any class or
series, or any security convertible into stock of any class or
series, ranking senior to the Series B Mandatorily Convertible
Single Reset Preferred Stock; or
(c) the merger or consolidation of the Company with or into
any other corporation or other entity, unless in connection with
such merger or consolidation each holder of shares of Series B
Mandatorily Convertible Single Reset Preferred Stock immediately
preceding such merger or consolidation shall either (I) with
respect to a merger or consolidation consummated prior to, on or
after the Rate Reset Date, receive or continue to hold in the
surviving or resulting corporation or other entity the same
number of shares, with substantially the same rights and
preferences (except as contemplated by Subsection 6(5) and except
for those rights and preferences that could be affected without
the vote of the holders of the Series B Mandatorily Convertible
Single Reset Preferred Stock, such as the authorization and
issuance of parity stock or junior stock), as correspond to the
shares of Series B Mandatorily Convertible Single Reset Preferred
Stock held immediately prior to such merger or consolidation or
(II) with respect to a merger or consolidation consummated after
the Rate Reset Date, receive the kind and amount of securities,
cash and other property that would have been receivable upon
consummation of such merger or consolidation by such holder
(subject to the assumptions set forth in Subsection 6(5)) if the
Mandatory Conversion had occurred immediately prior to the
consummation of such merger or consolidation and the Mandatory
Conversion Rate was determined as of such time (and if clause (I)
or (II) are applicable, then such merger or consolidation or
shall not be subject to approval by the holders of the Series B
Mandatorily Convertible Single Reset Preferred Stock and such
holders shall not be entitled to vote thereon).
(2) (a) In the event that full cumulative dividends on the
Series B Mandatorily Convertible Single Reset Preferred Stock are
not paid and are in arrears for six consecutive quarterly
dividend periods following the Rate Reset Date, the number of
directors of the Company constituting the entire Board of
Directors shall be increased by two persons and the holders of
shares of the Series B Mandatorily Convertible Single Reset
Preferred Stock, voting separately as a class (together with the
holders of shares of all other series of capital stock of the
Company, including the Series A Junior Participating Preferred
Stock, having the then present right to elect one or more
directors as a result of a dividend arrearage but not then
entitled to other separate voting rights to elect one or more
directors in the event of such an arrearage (herein referred to
as "Class Voting Stock")), shall have the right to elect such
additional two directors to fill such positions at any regular
meeting of shareholders or special meeting held in place thereof,
or at a special meeting called as provided in Subsection 7(2)(c).
Whenever all arrearages of dividends on the Series B Mandatorily
Convertible Single Reset Preferred Stock then outstanding shall
have been paid or declared and irrevocably set apart for payment,
then the right of the holders of shares of the Series B
Mandatorily Convertible Single Reset Preferred Stock to elect
such additional two directors shall cease (but subject always to
the same provisions for the vesting of such voting rights in the
case of any similar future arrearages in dividends), and the
terms of office of all persons previously elected as directors by
the holders of shares of the Series B Mandatorily Convertible
Single Reset Preferred Stock and such other Class Voting Stock
shall forthwith terminate and the number of the Board of
Directors shall be reduced accordingly.
(b) At any time after the voting power referred to in
Subsection 7(2)(a) shall have been so vested in the holders of
shares of the Series B Mandatorily Convertible Single Reset
Preferred Stock, the Secretary of the Company may, and upon the
written request of any holder or the holders of at least 10% of
the number of shares of Series B Mandatorily Convertible Single
Reset Preferred Stock then outstanding (addressed to the
Secretary at the principal executive office of the Company)
shall, call a special meeting of the holders of shares of the
Series B Mandatorily Convertible Single Reset Preferred Stock and
all other Class Voting Stock for the election of the directors to
be elected by them pursuant to Subsection 7(2)(a); provided that
the Secretary shall not be required to call such special meeting
if the request for such meeting is received less than 45 calendar
days before the date fixed for the next ensuing annual meeting of
shareholders. Such call shall be made by notice similar to that
provided in the bylaws of the Company for a special meeting of
the shareholders or as required by law. Subject to the foregoing
provisions, if any such special meeting required to be called as
above provided shall not be called by the Secretary within 20
calendar days after receipt of an appropriate request, then any
holder of shares of Series B Mandatorily Convertible Single Reset
Preferred Stock may call such meeting, upon the notice above
provided, and for that purpose shall have access to the stock
books and records of the Company. Except as otherwise provided
by law, at any such meeting, the holders of a majority of the
number of shares of Series B Mandatorily Convertible Single Reset
Preferred Stock and such other Class Voting Stock then
outstanding shall constitute a quorum for the purpose of electing
directors as contemplated in Subsection 7(2)(a). If at any such
meeting or adjournment thereof, a quorum of such holders of
Series B Mandatorily Convertible Single Reset Preferred Stock
and, if applicable, such other Class Voting Stock shall not be
present, no election of directors by the Series B Mandatorily
Convertible Single Reset Preferred Stock and, if applicable, such
other Class Voting Stock shall take place, and any such meeting
may be adjourned from time to time for periods not exceeding 30
calendar days until a quorum of the Series B Mandatorily
Convertible Single Reset Preferred Stock and, if applicable, the
Class Voting Stock is present at such adjourned meeting. Unless
otherwise provided by law or the Company's Restated Certificate
of Incorporation, directors to be elected by the holders of
shares of Series B Mandatorily Convertible Single Reset Preferred
Stock and, if applicable, such other Class Voting Stock shall be
elected by a plurality of the votes cast by such holders at a
meeting at which a quorum is present. Notwithstanding the
foregoing, the absence of a quorum of the Series B Mandatorily
Convertible Single Reset Preferred Stock and, if applicable, such
other Class Voting Stock shall not prevent the voting of,
including the election of, directors by the holders of Common
Stock and other classes of capital stock at such meeting.
(c) Any director who shall have been elected by
holders of shares of Series B Mandatorily Convertible Single
Reset Preferred Stock voting separately as a class, together, if
applicable, with the holders of one or more other series of Class
Voting Stock, or any director so elected as provided below, may
be removed at any time during a class voting period, either for
or without cause, by, and only by, the affirmative vote of the
holders of a majority of the number of shares of Series B
Mandatorily Convertible Single Reset Preferred Stock then
outstanding, voting separately as a class, together, if
applicable, with the holders of all other series of Class Voting
Stock then outstanding, given at a special meeting of such
shareholders called for such purpose, and any vacancy thereby
created may be filled during such class voting period only by the
holder of shares of Series B Mandatorily Convertible Single Reset
Preferred Stock and, if applicable the other series, if any, of
Class Voting Stock. In case any vacancy (other than as provided
in the preceding sentence) shall occur among the directors
elected by the holders of shares of the Series B Mandatorily
Convertible Single Reset Preferred Stock (and, if applicable,
such other Class Voting Stock), a successor shall be elected by
the Board of Directors to serve until the next annual meeting of
the shareholders or special meeting held in place thereof upon
the nomination of the then remaining director elected by the
holders of the Series B Mandatorily Convertible Single Reset
Preferred Stock (and, if applicable, such other Class Voting
Stock) or the successor of such remaining director.
(3) Holders of Series B Mandatorily Convertible Single
Reset Preferred Stock shall not be entitled to receive notice of
any meeting of shareholders at which they are not entitled to
vote or consent except as otherwise provided by applicable law.
Section 8. Other Rights. Shares of Series B
Mandatorily Convertible Single Reset Preferred Stock shall not
have any relative, participating, optional or other special
rights or powers other than as set forth herein, in the Company's
Restated Certificate of Incorporation or as required by law.
Section 9. Notices. Subsequent to the Rate Reset
Date, at any time while any shares of Series B Mandatorily
Convertible Single Reset Preferred Stock are outstanding, (i) the
Company shall declare a dividend (or any other distribution) on
its Common Stock, excluding any cash dividends, (ii) the Company
shall authorize the issuance to all holders of its Common Stock
of rights or warrants to subscribe for or purchase shares of
Common Stock or of securities exercisable for, convertible into,
or exchangeable for, shares of Common Stock or (iii) the Company
shall authorize any reclassification of its Common Stock (other
than a subdivision or combination thereof) or any consolidation
or merger to which the Company is a party and for which approval
of any stockholders of the Company is required (except for a
merger of the Company into one of its subsidiaries solely for the
purpose of changing the corporate name or corporate domicile of
the Company to another state of the United States and in
connection with which there is no substantive change in the
rights or privileges of any securities of the Company other than
changes resulting from differences in the corporate statutes of
the then existing and the new state of domicile), or the sale or
transfer to another corporation of the property of the Company as
an entirety or substantially as an entirety, then the Company
shall cause to be filed at each office or agency maintained for
the purpose of conversion of the Series B Mandatorily Convertible
Single Reset Preferred Stock, and shall cause to be mailed to the
holders of Series B Mandatorily Convertible Single Reset
Preferred Stock at their last addresses as they shall appear on
the stock register, at least 10 days before the date hereinafter
specified (or the earlier of the dates hereinafter specified, in
the event that more than one date is specified), a notice stating
(A) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights or warrants, or, if a record
is not to be taken the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined, or (B) the date on which
any such reclassification, consolidation, merger, sale or
transfer is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall
be entitled to exchange their Common Stock for securities or
other property (including cash), if any, deliverable upon such
reclassification, consolidation, merger, sale or transfer. The
failure to give or receive the notice required hereby or any
defect therein shall not affect the legality or validity of such
dividend, distribution, right or warrant or other action.
IN WITNESS WHEREOF, EL PASO ENERGY CORPORATION has
caused this Certificate of Designation, Preferences and Rights of
Series B Mandatorily Convertible Single Reset Preferred Stock to
be executed by its Vice President and Corporate Secretary this
27th day of March, 2000.
EL PASO ENERGY CORPORATION
/s/ H. Brent Austin
--------------------
H. Brent Austin
Executive Vice President and
Chief Financial Officer
