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Exhibit 4.6
CERTIFICATE OF DESIGNATIONS
OF
VARIABLE CUMULATIVE PREFERRED STOCK, SERIES B THROUGH F
OF
THE CHASE MANHATTAN CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
THE CHASE MANHATTAN CORPORATION, a corporation organized under the
laws of the State of Delaware (the "Corporation"), HEREBY CERTIFIES that the
following resolutions were duly adopted by the Board of Directors of the
Corporation at a meeting duly held and convened on September 12, 2000, and by
the Stock Committee of the Board of Directors by unanimous written consent
executed on , 2000, pursuant to authority conferred upon the Board of
Directors by the provisions of the Restated Certificate of Incorporation of the
Corporation, which authorized the issuance of up to 200,000,000 shares of
preferred stock, par value $1.00 per share, and pursuant to authority conferred
upon the Stock Committee of the Board of Directors by Section 141(c) of the
General Corporation Law of the State of Delaware, by the By-Laws of the
Corporation and by the resolutions of the Board of Directors adopted at a
meeting duly convened and held on September 12, 2000:
1. The Board of Directors on September 12, 2000 adopted the
following resolutions authorizing the Stock Committee of the Board of Directors
to act on behalf of the Board of Directors in connection with the issuance of
Preferred Stock pursuant to the terms and conditions of the Agreement and Plan
of Merger, dated as of September 12, 2000, between J.P. Morgan & Co.
Incorporated ("J.P. Morgan") and the Corporation, which provided for the merger
of J.P. Morgan with and into the Corporation, with the Corporation continuing as
the surviving corporation in the merger under the name "J.P. Morgan Chase &
Co.":
RESOLVED, that it is advisable and in the best interests of The
Chase Manhattan Corporation (the "Corporation") and its stockholders for the
Corporation to enter into the Agreement and Plan of Merger between the
Corporation and J.P. Morgan & Co. Incorporated, a Delaware corporation ("J.P.
Morgan"), substantially in the form presented to this Meeting (the "Merger
Agreement"), pursuant to which, among other things: (i) J.P. Morgan would merge
with and into the Corporation (the "Merger"); (ii) in accordance with the terms
and conditions of the Merger Agreement, each then outstanding share of common
stock, par value $2.50 per share, of J.P. Morgan ("J.P. Morgan Common Stock"),
other than shares which would be cancelled and retired and cease to exist as a
result of the Merger, would be converted into 3.70 fully paid and nonassessable
shares of common stock, par value $1.00 per share, of the Corporation (the
"Common Stock"); (iii) each then outstanding share of preferred stock, without
par value, of J.P. Morgan (the "J.P. Morgan Preferred Stock"), other than (A)
shares which would be cancelled and retired and cease to exist as a result of
the Merger and (B) shares as to which the holders have properly perfected any
rights of appraisal pursuant to Section 262 of the Delaware General Corporation
Law, shall be converted into a share of a corresponding series of preferred
stock, par value $1.00 per share, of the Corporation (the "Preferred Stock"), in
each case having
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substantially the same terms as the respective series of J.P. Morgan Preferred
Stock being so converted (such Preferred Stock of the Corporation to be so
issued being hereinafter referred to as the "Merger Preferred Stock"); and (iv)
the Corporation's Certificate of Incorporation would be amended pursuant to the
Merger Agreement and by virtue of the Merger to provide for (A) the change of
the name of the Corporation to "J.P. Morgan Chase & Co." and (B) the designation
of each series of Merger Preferred Stock; and further
RESOLVED, that subject to stockholder approval of the Merger
Agreement and to the filing with the Secretary of State of the State of Delaware
of the certificates of designations referred to below with respect to each
series of Merger Preferred Stock (collectively, the "Certificates of
Designation"), the issuance of such shares of Merger Preferred Stock in
accordance with the terms of the Merger Agreement be, and it hereby is,
authorized and, upon such issuance, such shares of Merger Preferred Stock shall
be validly issued, fully paid and nonassessable and free of preemptive rights;
and further
RESOLVED, that the maximum number of shares of each series of Merger
Preferred Stock authorized to be so issued in connection with the Merger upon
conversion of the respective series of J.P. Morgan Preferred Stock shall be as
follows: (i) up to 2,444,300 shares upon conversion of J.P. Morgan's Adjustable
Rate Cumulative Preferred Stock, Series A; (ii) up to 50,000 shares upon
conversion of J.P. Morgan's Variable Cumulative Preferred Stock, Series B; (iii)
up to 50,000 shares upon conversion of J.P. Morgan's Variable Cumulative
Preferred Stock, Series C; (iv) up to 50,000 shares upon conversion of J.P.
Morgan's Variable Cumulative Preferred Stock, Series D; (v) up to 50,000 shares
upon conversion of J.P. Morgan's Variable Cumulative Preferred Stock, Series E;
(vi) up to 50,000 shares upon conversion of J.P. Morgan's Variable Cumulative
Preferred Stock, Series F; and (vii) up to 400,000 shares upon conversion of
J.P. Morgan's 6.63% Cumulative Preferred Stock, Series H; and further
RESOLVED, that the voting powers, preferences and special rights of
each series of Merger Preferred Stock shall be substantially identical to the
voting powers, preferences and special rights applicable to, and specified in
the certificate of designations with respect to, the respective series of J.P.
Morgan Preferred Stock to be converted into such series of Merger Preferred
Stock pursuant to the Merger, and that the Certificate of Designation for each
series of Merger Preferred Stock shall provide for the voting rights specified
in the corresponding series of J.P. Morgan Preferred Stock; and further
RESOLVED, that the Stock Committee of the Board of Directors be, and
it hereby is, authorized to approve, within the limits specified in the
foregoing resolutions, the form, terms and provisions of each Certificate of
Designation and to take such other actions as such committee deems necessary or
desirable to effect the issuance of the Merger Preferred Stock in accordance
with these resolutions.
2. The Stock Committee of the Board of Directors on , 2000,
pursuant to authority conferred upon the Stock Committee of the Board of
Directors by Section 141(c) of the General Corporation Law of the State of
Delaware, by Section 3.03 of the By-Laws of the Corporation and by the
resolutions of the Board of Directors set forth above, adopted the following
resolution:
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"RESOLVED that pursuant to resolutions of the Board of Directors of the
Corporation adopted on September 12, 2000, the issue of (i) up to 50,000 shares
upon conversion of J.P. Morgan's Variable Cumulative Preferred Stock, Series B;
(ii) up to 50,000 shares upon conversion of J.P. Morgan's Variable Cumulative
Preferred Stock, Series C; (iii) up to 50,000 shares upon conversion of J.P.
Morgan's Variable Cumulative Preferred Stock, Series D; (iv) up to 50,000 shares
upon conversion of J.P. Morgan's Variable Cumulative Preferred Stock, Series E;
and (v) up to 50,000 shares upon conversion of J.P. Morgan's Variable Cumulative
Preferred Stock, Series F; of the Corporation is hereby authorized, and the
designation, preferences and privileges, relative, participating, optional and
other special rights, and qualifications of all the shares of such series are
hereby fixed as follows:
1. Designation. The designation of such preferred stock shall be the
Variable Cumulative Preferred Stock (hereinafter referred to as the "Variable
Cumulative Preferred Stock") and the number of shares constituting such Variable
Cumulative Preferred Stock is 250,000. Each share shall constitute a series, and
there shall be five groups each comprising 50,000 series (each group a
"Series"), such Series to be designated the Variable Cumulative Preferred Stock,
Series B-1 through B-50,000 (hereinafter referred to as "Series B"), Variable
Cumulative Preferred Stock, Series C-1 through C-50,000 (hereinafter referred to
as "Series C"), Variable Cumulative Preferred Stock, Series D-1 through D-50,000
(hereinafter referred to as "Series D"), Variable Cumulative Preferred Stock,
Series E-1 through E-50,000 (hereinafter referred to as "Series E"), and
Variable Cumulative Preferred Stock, Series F-1 through F-50,000 (hereinafter
referred to as "Series F"). Shares of the Variable Cumulative Preferred Stock
shall have a stated value of $1,000 per share.
2. Definitions. As used herein, the following terms shall have the
following meanings, unless the context otherwise requires:
"Affiliate" shall mean any Person controlled by, in control of, or
under common control with, the Corporation.
"Agent Member" shall mean the member of the Auction Stock Depositary
that will act on behalf of a Bidder and is identified as such in such Bidder's
Master Purchaser's Letter.
"Applicable Determining Rate" shall mean with respect to a Dividend
Period from 1 day to 5 days, the greater of the Effective Composite Commercial
Paper Rate for commercial paper of a term of 5 days and the Federal Funds Rate;
with respect to a Dividend Period of 6 days to 89 days, the Effective Composite
Commercial Paper Rate; with respect to a Dividend Period of 90 days to 364 days,
the Effective LIBOR Rate; and with respect to a Dividend Period of 365 days to
30 years, the U.S. Treasury Rate.
"Auction" shall mean the periodic implementation of the Auction
Procedures.
"Auction Date" shall mean the Business Day immediately preceding the
first day of a Dividend Period for MMP.
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"Auction Method" shall mean the method of determining the duration
of Dividend Periods and Dividend Rates for the Shares of Variable Cumulative
Preferred Stock of a Series pursuant to the procedures described in paragraph D
of Section 5 hereof.
"Auction Procedures" shall mean the procedures for conducting
Auctions set forth in Section 6 hereof.
"Auction Stock Depositary" shall mean any securities depositary
selected by the Corporation and reasonably acceptable to the Trust Company which
agrees to follow the procedures required to be followed by such securities
depositary in connection with the Auction of Shares of MMP.
"Available Shares" shall have the meaning specified in paragraph
C(1)(a) of Section 6 hereof.
"Bid" and "Bids" shall have the respective meanings specified in
paragraph A(2) of Section 6 hereof.
"Bidder" and "Bidders" shall have the respective meanings specified
in paragraph A(2) of Section 6 hereof.
"Board of Directors" shall mean the Board of Directors of the
Corporation or, unless the context otherwise requires, an authorized committee
thereof.
"Broker-Dealer" shall mean any broker-dealer, or other entity
permitted by law to perform the function required of a Broker-Dealer in the
Auction Procedures, that is a member of, or a participant in, the Auction Stock
Depositary, and that has been selected by the Corporation and has entered into a
Broker-Dealer Agreement with the Trust Company that remains effective and
pursuant to which agreement such Broker-Dealer agrees to follow the Auction
Procedures.
"Business Day" shall mean a day on which the New York Stock
Exchange, Inc. is open for trading and which is neither a Saturday, Sunday nor
other day on which banks in The City of New York, New York, are authorized by
law to close.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Converted MMP" shall mean Shares of MMP which, by reason of an
election by the Method Selection Agent of a different Dividend Determination
Method, will become SABRES at the end of the then-current Dividend Period
applicable thereto.
"Converted SABRES" shall mean Shares of SABRES which, by reason of
an election by the Method Selection Agent of a different Dividend Determination
Method, will become MMP at the end of the then-current Dividend Period
applicable thereto.
"Corporation" shall mean The Chase Manhattan Corporation, a Delaware
corporation, and where the context requires with respect to periods prior to the
Effective Time, shall also be deemed to refer to J.P. Morgan & Co. Incorporated
prior to the Effective Time.
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"Dividend Determination Method" or "Method" shall mean either the
Auction Method or the Remarketing Method.
"Dividend Payment Date" shall mean, with respect to each Share of
Variable Cumulative Preferred Stock, the First Business Day of the Subsequent
Dividend Period immediately following the end of each Dividend Period applicable
thereto, regardless of its length. In addition, "Dividend Payment Date" shall
mean (i) in the case of Dividend Periods for MMP of any Series of more than 99
days, such additional Dividend Payment Dates as are determined by the Term
Selection Agent for such Series prior to commencement of such Dividend Periods
and (ii) in the case of Dividend Periods for SABRES of more than 99 days, the
following additional dates: (a) if such Dividend Period is from 100 to 190 days,
the 9lst day of such Dividend Period; (b) if such Dividend Period is from 191 to
281 days, the 91st and 182nd days of such Dividend Period; (c) if such Dividend
Period is from 282 to 364 days, the 91st, 182nd and 273rd days of such Dividend
Period; and (d) if such Dividend Period is from 365 days to 30 years, January
15, April 15, July 15 and October 15 of each year. However, in all such cases,
if such Dividend Payment Date is not a Business Day, then such Dividend Payment
Date shall be the Business Day next succeeding such date and, so long as the
Auction Stock Depositary shall make payments to participants and members in
next-day funds, if a day that otherwise would be a Dividend Payment Date for
Shares of MMP is succeeded by a day which is not a Business Day then the
Dividend Payment Date will be the next succeeding Business Day that is
immediately succeeded by a Business Day.
"Dividend Period" and "Dividend Periods" shall mean, as to each
Share of Variable Cumulative Preferred Stock, each period, to which one or more
Dividend Payment Dates may relate, with respect to which dividends on such Share
shall accumulate and be payable, each such Dividend Period to be determined
pursuant to either the Auction Method or the Remarketing Method.
"Dividend Rate" and "Dividend Rates" shall mean, as to each Share of
Variable Cumulative Preferred Stock, each rate at which dividends accumulate and
are payable on such Share during a Dividend Period, such Dividend Rate to be
determined pursuant to either the Auction Method or the Remarketing Method.
"Effective Composite Commercial Paper Rate" shall mean, on any date,
(i) the Money Market Yield of the rate on commercial paper placed on behalf of
issuers whose corporate bonds are rated "AA" by Standard & Poor's or "Aa" by
Moody's or the equivalent of such rating by another nationally recognized rating
agency, for a maturity that equals the duration of the relevant Dividend Period
as such rate is made available on a discount basis or otherwise by the Federal
Reserve Bank of New York on such date, or (ii) in the event that the Federal
Reserve Bank of New York does not make available such a rate by 2:00 P.M., New
York City time, on such date, the Money Market Yield of the arithmetic mean of
the rates on commercial paper of such maturity placed on behalf of such issuers,
as quoted on a discount basis or otherwise by Lehman Commercial Paper
Incorporated, Credit Suisse First Boston Corporation or Goldman, Sachs & Co.,
or, in lieu of any thereof, their respective affiliates or successors that are
commercial paper dealers (the "Commercial Paper Dealers"), to the Trust Company
or the Tender Agent, as the case may be, for the close of business on the
Business Day immediately preceding such date. In the event that the Federal
Reserve Bank of New York does
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not make available such a rate and if any Commercial Paper Dealer does not quote
a rate required to determine the Effective Composite Commercial Paper Rate, the
Effective Composite Commercial Paper Rate shall be determined on the basis of
the quotation or quotations furnished by the remaining Commercial Paper Dealer
or Commercial Paper Dealers and any Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers selected by the Corporation to provide such
rate or rates not being supplied by any Commercial Paper Dealer or Commercial
Paper Dealers, as the case may be, or, if the Corporation does not select any
such Substitute Commercial Paper Dealer or Substitute Commercial Paper Dealers,
by the remaining Commercial Paper Dealer or Commercial Paper Dealers.
"Substitute Commercial Paper Dealers" shall mean Merrill Lynch, Pierce, Fenner &
Smith Incorporated or Citibank N.A., or, in lieu of either thereof, their
respective affiliates or successors that are commercial paper dealers. In the
event that no quoted rates are available for a maturity that equals the duration
of the relevant Dividend Period, then the rate will be the higher of the quoted
rate for the maturity immediately shorter or immediately longer than the
duration of the relevant Dividend Period.
"Effective LIBOR Rate" shall mean, on any date, the offered rates
for deposits in dollars for a period of the same duration as the relevant
Dividend Period, which appear on the Reuters Screen LIBO Page as of 11:00 A.M.,
London time, on such date. If at least two such offered rates appear on the
Reuters Screen LIBO Page, the Effective LIBOR Rate in respect of such date will
be the arithmetic mean of such offered rates. If fewer than two offered rates
appear, the Effective LIBOR Rate in respect of such date will be determined on
the basis of the rates quoted to the Trust Company or the Tender Agent, as the
case may be, at which deposits in dollars are offered by the Reference Banks (as
hereinafter defined) at approximately 11:00 A.M., London time, on the day that
is the Business Day preceding such date to prime banks in the London interbank
market for a period of the same duration as the relevant Dividend Period. The
Corporation shall request the principal London office of each of the Reference
Banks to provide a quotation of such rate to the Trust Company or the Tender
Agent, as the case may be. If at least two such quotations are provided, the
Effective LIBOR Rate in respect of such date will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the
Effective LIBOR Rate in respect of such date will be the arithmetic mean of the
rates quoted to the Trust Company or Tender Agent, as the case may be, by major
banks in New York City, selected by the Corporation, at approximately 11:00
A.M., New York City time, on such date for loans in dollars to leading European
banks for a period of the same duration as the relevant Dividend Period.
"Reference Banks" means four major banks in the London interbank market,
selected by the Corporation, and may include Morgan Guaranty Trust Company of
New York or any successor thereto or affiliate thereof. In the event that no
quoted rates are available for a maturity that equals the duration of the
relevant Dividend Period, then the rate will be the higher of the quoted rate
for the maturity immediately shorter or immediately longer than the duration of
the relevant Dividend Period.
"Effective Time" shall mean the effective time of the merger of J.P.
Morgan & Co. Incorporated with and into the Corporation pursuant to the
Agreement and Plan of Merger dated as of September 12, 2000 between the
Corporation and J.P. Morgan & Co. Incorporated.
"Existing Holder" shall mean, with respect to Shares of MMP, a
Person who has signed a Master Purchaser's Letter and is listed as the
beneficial owner of such Shares of MMP
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in the records of the Trust Company and will in all events include holders of
Converted SABRES.
"Federal Funds Rate" shall mean, on any date (i) the overnight
Federal funds rate as such rate is made available by the Federal Reserve Bank of
New York or (ii) in the event that the Federal Reserve Bank of New York does not
make available such a rate by 2:00 P.M., New York City time, on any day, the
arithmetic mean of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 A.M., New York City time, on that day by each of three
leading brokers of Federal funds transactions in New York City as selected by
the Corporation.
"Fixed/Adjustable Preferred Stock" shall mean the Fixed/Adjustable
Rate Noncumulative Preferred Stock, stated value $50 per share (par value $1 per
share), of the Corporation.
"Hold Order" and "Hold Orders" shall have the respective meanings
specified in paragraph A(2) of Section 6 hereof.
"Initial Auction Date" shall mean the Business Day immediately
preceding the first day of a Dividend Period for Converted SABRES.
"Initial Dividend Period" shall mean, for each Share of Variable
Cumulative Preferred Stock, the initial Dividend Period applicable to such
Share, which period (1) shall commence on the most recent Dividend Payment Date
next preceding the Effective Time (or on the date of the Effective Time if such
date is a Dividend Payment Date for such Share) on which a dividend was paid on
the applicable share of J.P. Morgan's Variable Cumulative Preferred Stock,
Series B; J.P. Morgan's Variable Cumulative Preferred Stock, Series C; J.P.
Morgan's Variable Cumulative Preferred Stock, Series D; J.P. Morgan's Variable
Cumulative Preferred Stock, Series E; or J.P. Morgan's Variable Cumulative
Preferred Stock, Series F (collectively referred to as the "J.P. Morgan Variable
Preferred Stock"), as the case may be, which was converted into such Share, and
(2) shall end on and include the day the day next preceding the first day of the
next applicable Dividend Period.
"Junior Stock" shall mean all stock of the Corporation now or
hereafter authorized, except (i) the Variable Cumulative Preferred Stock, (ii)
the Series A Preferred Stock, (iii) the Series H Preferred Stock, (iv) the
10.84% Preferred Stock, (iv) the Series L Preferred Stock, (v) the Series N
Preferred Stock, (vi) the Fixed/Adjustable Preferred Stock and (vii) any future
class of stock ranking prior to or on a parity with the Variable Cumulative
Preferred Stock as to dividends or distributions upon liquidation.
"Master Purchaser's Letter" shall mean a letter addressed to the
Corporation, the Trust Company, a Remarketing Agent, and an Agent Member in
which a Person agrees, among other things, that if such Person should offer to
purchase, purchase, offer to sell and/or sell Shares of a Series of Variable
Cumulative Preferred Stock, such Person will be bound by the Auction Procedures
and the Remarketing Procedures; such letter to be in substantially the form set
forth as Exhibit C to the Trust Company Agreement, dated as of December 15,
1989, between the Corporation and Bankers Trust Company, or in such other form
as may be agreed (i) with
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respect to MMP, by the Corporation and the Trust Company and (ii) with respect
to SABRES, by the Corporation and the applicable Remarketing Agent.
"Maximum Rate" shall mean, on any date, with respect to any Share of
Variable Cumulative Preferred Stock, the product of the percentage (determined
as set forth below based on the prevailing rating of such Share of Variable
Cumulative Preferred Stock in effect at the close of business on the second
Business Day immediately preceding such date) and the Applicable Determining
Rate for such Share on such date:
<TABLE>
<CAPTION>
Percentage of Applicable
Prevailing Rating Determining Rate
-------------------- ------------------------
<S> <C>
AA-/"aa3" or above 110%
A-/"a3" 125%
BBB-/"baa3" 150%
Below BBB-/"baa3" 200%
</TABLE>
For purposes of this definition, the "prevailing rating" of each
Series of Variable Cumulative Preferred Stock shall be (i) AA-/"aa3" or above,
if the Shares of such Series of Variable Cumulative Preferred Stock have a
rating of AA-or better by Standard & Poor's or "aa3" or better by Moody's or the
equivalent of either of such ratings by a substitute rating agency or agencies
selected as provided below, (ii) if not AA-/"aa3" or above, then A-/"a3" if the
Shares of such Series of Variable Cumulative Preferred Stock have a rating of
A-or better by Standard & Poor's or "a3" or better by Moody's or the equivalent
of either of such ratings by a substitute rating agency or agencies selected as
provided below, (iii) if not AA-/"aa3" or above or A-/"a3" then BBB-/"baa3" if
the Shares of such Series of Variable Cumulative Preferred Stock have a rating
of BBB- or better by Standard & Poor's or "baa3" or better by Moody's or the
equivalent of either of such ratings by a substitute rating agency or agencies
selected as provided below, and (iv) if not AA-/"aa3" or above, A-/"a3" or
BBB-/"baa3" then below BBB-/"baa3". The Corporation will take all reasonable
action necessary to enable Standard & Poor's and Moody's to provide a rating for
each Series of the Variable Cumulative Preferred Stock. If either Standard &
Poor's or Moody's fails to make such a rating available, the Corporation or its
duly authorized agent will select one or two nationally recognized securities
rating agencies to act as a substitute rating agency or agencies, as the case
may be. If an alternative nationally recognized securities rating agency or
agencies are not available, the applicable rating shall be the highest rating
last published by Standard & Poor's, Moody's or such substitute rating agency or
agencies.
"Method Selection Agent" shall mean at any time the entity appointed
by the Corporation to act on its behalf in selecting Dividend Determination
Methods for a Series of Variable Cumulative Preferred Stock, provided that, if
the Corporation shall appoint more than one entity to so act with respect to a
Series, "Method Selection Agent" shall mean, unless the context otherwise
requires, all entities so appointed.
"Money Market Yield" shall mean, with respect to any rate which is
quoted on a bank discount basis, a yield (expressed as a percentage) calculated
in accordance with the following formula:
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Money Market Yield = D x 360 x 100
-----------------
360 - (D x M)
where "D" refers to the per annum rate, quoted on a bank discount
basis and expressed as a decimal; and "M" refers to the number of days for which
such bank discount rate is quoted.
"MMP" shall mean the Shares of Variable Cumulative Preferred Stock
for which the Dividend Rate and Dividend Period are determined, other than
during a Payment Failure, pursuant to the Auction Method and during a Payment
Failure, "MMP" shall mean the Shares of Variable Cumulative Preferred Stock
which were MMP immediately preceding such Payment Failure.
"Moody's" shall mean Moody's Investors Service and its successors.
"Notice of Method Selection" shall mean a notice from the applicable
Method Selection Agent to all record holders of Shares of Variable Cumulative
Preferred Stock of a Series specifying the Dividend Determination Method for any
Subsequent Dividend Period with respect to all Shares of such Series.
"Notice of Removal" shall mean a notice from the Corporation to all
record holders of Shares of Variable Cumulative Preferred Stock of a Series
specifying that each Term Selection Agent or Method Selection Agent, as the case
may be, with respect to such Series has been removed by the Corporation.
"Notice of Term Selection" shall mean a notice from the applicable
Term Selection Agent to all record holders of Shares of MMP or Converted SABRES
of a Series specifying, among other things, the length of the next succeeding
Dividend Period with respect to such Series.
"Notice of Withdrawal" shall mean a notice from the applicable Term
Selection Agent to all record holders of Shares of MMP or Converted SABRES of a
Series specifying that the Notice of Term Selection previously sent to record
holders of Shares of such Series has been withdrawn.
"Order" and "Orders" shall have the respective meanings specified in
paragraph A(2) of Section 6 hereof.
"Other Outstanding Preferred Stock" shall mean the Series A
Preferred Stock, the Series H Preferred Stock, the Series L Preferred Stock, the
Series N Preferred Stock, the 10.84% Cumulative Preferred Stock, and the
Fixed/Adjustable Preferred Stock.
"Outstanding" shall mean, as of any date, Shares of a Series of
Variable Cumulative Preferred Stock theretofore issued by the Corporation except
(i) any Shares of such Series of Variable Cumulative Preferred Stock theretofore
cancelled or delivered for cancellation or redeemed by the Corporation, or as to
which a notice of redemption shall have been given by the Corporation (unless
the Corporation defaults in providing money for the payment of the redemption
price of such Shares within three Business Days following the redemption date
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therefor), (ii) any Shares of such Series of Variable Cumulative Preferred Stock
as to which the Corporation or any Affiliate thereof shall be an owner (except
that any Shares acquired by an Affiliate which is a Broker-Dealer and which
acquired such Shares in the normal course of its business shall be deemed to be
Outstanding), or (iii) any Shares of such Series of Variable Cumulative
Preferred Stock represented by any certificate in lieu of which a new
certificate has been executed and delivered by the Corporation.
"Outstanding Cumulative Preferred Stock" shall mean the Series A
Preferred Stock, the Series H Preferred Stock, the Series L Preferred Stock, the
Series N Preferred Stock and the 10.84% Preferred Stock.
"Paying Agent" shall mean a bank or trust company duly appointed as
such Paying Agent.
"Payment Failure" shall mean any failure by the Corporation to pay
(or set aside for payment): (i) any dividends in respect of any Share of
Variable Cumulative Preferred Stock which have accumulated during any Dividend
Period applicable to such Share on the last Dividend Payment Date with respect
to such Dividend Period or (ii) the redemption price in respect of Shares of
Variable Cumulative Preferred Stock called for redemption on the date of
redemption, provided that, in the case of either clause (i) or (ii) above, such
failure shall continue unremedied for more than three Business Days.
"Person" shall mean and include an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint venture or other
entity or a government or any agency or political subdivision thereof.
"Potential Holder" shall mean, with respect to Shares of MMP, any
Person, including any Existing Holder, (i) who shall have executed a Master
Purchaser's Letter and (ii) who may be interested in acquiring Shares of MMP
(or, in the case of an Existing Holder, acquiring additional Shares of MMP).
"Remaining Shares" shall have the meaning specified in paragraph
D(1)(d) of Section 6 hereof.
"Remarketing" shall mean the periodic implementation of the
Remarketing Procedures.
"Remarketing Agent" shall mean, at any time, the entity or entities
appointed by the Corporation to act on its behalf in establishing Dividend
Rates, Dividend Periods, redemption prices and redemption dates for Shares of
SABRES of a Series and to act on behalf of holders of such Shares in Remarketing
such Shares as provided in the Remarketing Procedures.
"Remarketing Agreement" shall mean an agreement between the
Corporation and a Remarketing Agent pursuant to which a Remarketing Agent agrees
to follow the Remarketing Procedures.
"Remarketing Conditions" shall mean the following factors: (i)
short-term and long-term market rates and indices of such short-term and
long-term rates, (ii) market supply and
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demand for short-term and long-term securities, (iii) yield curves for
short-term and long-term securities comparable to the Shares of Variable
Cumulative Preferred Stock, (iv) industry and financial conditions which may
affect the Shares of Variable Cumulative Preferred Stock, (v) the number of
Shares of Variable Cumulative Preferred Stock to be sold pursuant to an Auction
or a Remarketing, as the case may be, (vi) the number of potential purchasers of
Variable Cumulative Preferred Stock, (vii) the Dividend Periods and Dividend
Rates at which current and potential holders of Variable Cumulative Preferred
Stock would remain or become holders, (viii) current tax laws and administrative
interpretations with respect thereto and (ix) discussions with the Corporation
about its current and projected funding requirements based on its asset and
liability position, tax position and current financing objectives.
"Remarketing Method" shall mean a method of determining the duration
of Dividend Periods and Dividend Rates for the Shares of Variable Cumulative
Preferred Stock of a Series pursuant to the Remarketing Procedures, as described
in paragraph E of Section 5 hereof.
"Remarketing Procedures" shall mean the procedures for Remarketing
Shares of SABRES set forth in Section 7 hereof.
"Rounding Procedures" shall mean, if as a result of an Auction
(including the implementation of the Auction Procedures), any Existing Holder
would be entitled to hold or required to sell, or any Potential Holder would be
required to purchase, a number of Shares of MMP not evenly divisible by 100, on
any Auction Date, the Trust Company shall, in such manner as it determines,
round up or down the number of Shares of MMP to be held, purchased or sold by
each Existing Holder or Potential Holder on such Auction Date so that the number
of Shares of MMP held, purchased or sold by each Existing Holder or Potential
Holder on such Auction Date will be a number of Shares of MMP evenly divisible
by 100, even if such allocation results in one or more of such Potential Holders
not purchasing any Shares of MMP on such Auction Date.
"SABRES" shall mean the Shares of Variable Cumulative Preferred
Stock for which the Dividend Rate and Dividend Period are determined, other than
during a Payment Failure, pursuant to the Remarketing Method and during a
Payment Failure, "SABRES" shall mean the Shares of Variable Cumulative Preferred
Stock which were SABRES immediately preceding such Payment Failure.
"SABRES Depositary" shall mean any depositary selected by the
Corporation which agrees to follow the procedures required to be followed by
such depositary in connection with the Shares of SABRES.
"Sell Order" and "Sell Orders" shall have the respective meanings
specified in paragraph A(2) of Section 6 hereof.
"Series" shall mean each group of series of Shares of Variable
Cumulative Preferred Stock, of 50,000 Shares each, designated Series B, Series
C, Series D, Series E and Series F, respectively.
"Series A Preferred Stock" shall mean the Adjustable Rate Cumulative
Preferred Stock, Series A, stated value $100 per share (par value $1 per share),
of the Corporation.
<PAGE> 12
12
"Series H Preferred Stock" shall mean the 6-5/8% Cumulative
Preferred Stock, Series H, stated value $500 per share (par value $1 per share),
of the Corporation.
"Series L Preferred Stock" shall mean the Adjustable Rate Cumulative
Preferred Stock, Series L, stated value $100 per share (par value $1 per share),
of the Corporation.
"Series N Preferred Stock" shall mean the Adjustable Rate Cumulative
Preferred Stock, Series N, stated value $100 per share (par value $1 per share),
of the Corporation.
"Shares" shall mean the shares of any or all Series of Variable
Cumulative Preferred Stock. As the context requires with respect to any Share, a
reference to such "Share" prior to the Effective Time shall be deemed to refer
to the share of preferred stock of J.P. Morgan & Co. Incorporated that was
converted into such Share of the Corporation at the Effective Time.
"Standard & Poor's" shall mean Standard & Poor's Rating Services and
its successors.
"Standard Auction Period" shall mean 49 days, provided that, if
there is a change in tax law altering the holding period specified in Section
246(c) of the Code or any successor provision thereto, the Board of Directors
may increase or decrease the period of time theretofore constituting the
Standard Auction Period so as to adjust uniformly the number of days in the
Standard Auction Period for Dividend Periods commencing after the date of such
change in law to equal or exceed the then-current holding period specified in
Section 246(c) of the Code or any successor provision thereto, and such period
as so adjusted shall be the Standard Auction Period; and provided further that
the number of days as so adjusted shall not exceed 98 and shall be evenly
divisible by 7.
"Submission Deadline" shall mean 1:00 P.M., New York City time, on
any Auction Date or such other time on any Auction Date by which Broker-Dealers
are required to submit Orders to the Trust Company as specified by the Trust
Company from time to time.
"Submitted Bid" and "Submitted Bids" shall have the respective
meanings specified in paragraph C(l) of Section 6 hereof.
"Submitted Hold Order" and "Submitted Hold Orders" shall have the
respective meanings specified in paragraph C(1) of Section 6 hereof.
"Submitted Order" and "Submitted Orders" shall have the respective
meanings specified in paragraph C(1) of Section 6 hereof.
"Submitted Sell Order" and "Submitted Sell Orders" shall have the
respective meanings specified in paragraph C(1) of Section 6 hereof.
"Subsequent Dividend Period" and "Subsequent Dividend Periods" shall
mean, for each Share of Variable Cumulative Preferred Stock, each Dividend
Period applicable thereto other than the Initial Dividend Period applicable
thereto.
<PAGE> 13
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"Sufficient Clearing Bids" shall have the meaning specified in
paragraph C(1)(b) of Section 6 hereof.
"10.84% Preferred Stock" shall mean the 10.84% Cumulative Preferred
Stock, stated value $25 per share (par value $1 per share), of the Corporation.
"Tender Agent" shall mean, at any time, the bank or the organization
appointed by the Corporation to perform the duties of Tender Agent as provided
in the Remarketing Procedures.
"Term Selection Agent" shall mean at any time the entity appointed
by the Corporation to act on its behalf in establishing Dividend Periods,
redemption prices and redemption dates for a Series of MMP or Converted SABRES,
provided that, if the Corporation shall appoint more than one entity to so act
with respect to a Series, "Term Selection Agent" shall mean, unless the context
otherwise requires, all entities so appointed.
"Trust Company" shall mean a bank or trust company duly appointed as
such.
"Unit" shall mean 100 Shares, or integral multiples thereof, of a
Series of Variable Cumulative Preferred Stock.
"U.S. Treasury Rate" shall mean, on any date, (i) the yield as
calculated by reference to the bid price quotation of the actively traded,
current coupon Treasury security with a maturity most nearly comparable to the
length of the related Dividend Period, as such bid price quotation is published
on the Business Day immediately preceding such date by the Federal Reserve Bank
of New York in its Composite 3:30 P.M. Quotations for U.S. Government Securities
report for such Business Day, or (ii) if such yield as so calculated is not
available, the Alternate Treasury Rate on such date. "Alternate Treasury Rate"
on any date means the yield as calculated by reference to the arithmetic average
of the bid price quotations of the actively traded, current coupon Treasury
security with a maturity most nearly comparable to the length of the related
Dividend Period, as determined by bid price quotations as of any time on the
Business Day immediately preceding such date, obtained by the Trust Company or
the Tender Agent, as the case may be, from at least three recognized primary
U.S. Government securities dealers selected by the Corporation.
"Winning Bid Rate" shall have the meaning specified in paragraph
C(1)(c) of Section 6 hereof.
3. Parity. All Shares of all Series of Variable Cumulative Preferred
Stock, and all shares of Other Outstanding Preferred Stock shall rank equally
with respect to payments of dividends and distributions upon liquidation.
4. Different Shares as Different Series. Each Share of Variable
Cumulative Preferred Stock shall be a separate series of its respective Series.
Each Share shall have identical voting powers, designations, preferences and
relative, participating, optional or other rights, and qualifications,
limitations or restrictions thereof; provided, however, that each Share may have
a different Dividend Period, Dividend Rate, redemption price and redemption
<PAGE> 14
14
date from each other Share, including without limitation different Dividend
Rates, redemption prices and redemption dates for Shares having Dividend Periods
of equal length which were set on the same day. Shares will be issued in Units
only.
5. Dividends and Dividend Periods.
A. The holders of Shares of Variable Cumulative Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of Directors
of the Corporation, out of funds legally available therefor, cumulative cash
preferential dividends at the Dividend Rates per annum, on the dates, for the
periods and otherwise in the manner provided in this Section 5. Such
preferential dividends shall be declared and paid or set apart for payment in
full for all previous Dividend Periods before the declaration, payment or
setting apart of any funds or assets for payment of any dividends on, or the
making of, or the setting apart of, any funds or assets for any distribution
with respect to, any class of Junior Stock, and before any purchase, redemption
or other acquisition of any class of Junior Stock or the setting apart of any
funds or assets for such purchase, redemption or acquisition. Each Share of
Variable Cumulative Preferred Stock shall rank on a parity with each share of
Other Outstanding Preferred Stock and with each other Share of Variable
Cumulative Preferred Stock, irrespective of Series, with respect to the
preferential dividends at the respective rate fixed for such Share, and no
preferential dividend shall be declared or paid or set apart for payment on any
Shares of Variable Cumulative Preferred Stock of any Series for any current
Dividend Period if dividends on any other Shares of Variable Cumulative
Preferred Stock or Other Outstanding Preferred Stock are accumulated and unpaid
for any prior dividend period or, in case of payment of dividend arrearages on
Variable Cumulative Preferred Stock or Other Outstanding Preferred Stock, unless
at the same time the Corporation shall also declare or pay or set apart for
payment, as the case may be, such amounts with respect to all such dividend
arrearages on all shares of Variable Cumulative Preferred Stock and Other
Outstanding Preferred Stock so that all such shares shall share ratably in such
payment in proportion to the respective amounts of dividends in arrears on all
such shares to the date of payment. For purposes hereof, dividend accumulations
and arrearages do not include any dividends which have not yet become payable or
dividends for any Dividend Payment Date that has not occurred.
B. Dividends on each Share of Variable Cumulative Preferred Stock
shall accumulate from the first day of the Initial Dividend Period and shall be
payable on the last Dividend Payment Date with respect to each Dividend Period
applicable thereto, regardless of its length, and on each additional Dividend
Payment Date, if any, for such Share. The Dividend Rate for each Share of
Variable Cumulative Preferred Stock for the Initial Dividend Period shall be the
rate determined in accordance with the terms of the share of preferred stock of
J.P. Morgan & Co. Incorporated that was converted into such Share. Thereafter,
the determination of the duration of each Dividend Period with respect to each
Series of Variable Cumulative Preferred Stock and the Dividend Rate and each
Dividend Payment Date for such Subsequent Dividend Period shall be determined by
either the Auction Method or the Remarketing Method.
Subject to the limitations set forth below, either Dividend
Determination Method may be selected by the Method Selection Agent for a Series
of Variable Cumulative Preferred Stock for any Subsequent Dividend Period with
respect to all the Shares of Variable Cumulative Preferred Stock of such Series
if such Method Selection Agent determines at the time of such selection, based
upon then-current Remarketing Conditions, that the Method so selected will be
<PAGE> 15
15
the most favorable financing alternative for the Corporation. If more than one
entity is serving as Method Selection Agent for a Series, such entities shall
act in concert in performing their duties, provided that the notices referred to
herein may be given by one entity on behalf of all such entities. The Method
Selection Agent for any Series shall make such selection in a Notice of Method
Selection sent to holders of record of Shares of such Series by such Method
Selection Agent, by first-class mail, postage prepaid, to the address of each
such holder as the same appears on the stock register of the Corporation, not
less than seven Business Days prior to the first day of such Subsequent Dividend
Period. Copies of such Notice of Method Selection shall be delivered physically
or by telecopier or other written electronic communication to the Corporation
and the Trust Company or the Remarketing Agent, as the case may be, at the same
time they are transmitted to the record holders of Shares. Each Notice of Method
Selection will state the Method selected by the Method Selection Agent. If the
Method Selection Agent for a Series which are then SABRES selects the Auction
Method for any Subsequent Dividend Period, the Remarketing Agent for such Series
will establish Dividend Periods and Dividend Rates for Shares of such Series
until the Initial Auction Date in a manner that will best promote an orderly
transition to the Auction Method. Any Dividend Determination Method so selected
by the Method Selection Agent for a Series shall continue in effect for such
Series until the Method Selection Agent selects the other Method in the
aforesaid manner. Until a Method Selection Agent for any Series has been
appointed, the Dividend Determination Method will be the Auction Method.
Any Notice of Method Selection with respect to any Subsequent
Dividend Period for any Series of Variable Cumulative Preferred Stock shall be
deemed to have been withdrawn if on or prior to the second Business Day
preceding the first day of such Subsequent Dividend Period the Corporation shall
have removed the Method Selection Agent for such Series, and in such event the
Corporation shall give a Notice of Removal to record holders of Shares of such
Series by first-class mail, postage prepaid, to the address of each such holder
as the same appears on the stock register of the Corporation. If more than one
entity has been appointed and is acting as Method Selection Agent for that
Series, such Notice of Method Selection shall be deemed to have been withdrawn
only if the Corporation shall have removed all such entities; and the removal at
any time by the Corporation of one or more but not all such entities shall not
effect a deemed withdrawal of a Notice of Method Selection and in any such event
no Notice of Removal need be given. Copies of any Notice of Removal shall be
delivered physically or by telecopier or other written electronic communication
to the Trust Company or the applicable Remarketing Agent, as the case may be, at
the same time they are transmitted to the record holders of Shares. If the
Method Selection Agent for any Series resigns or is removed (or, in either case,
if more than one entity has been appointed and is acting as Method Selection
Agent for that Series, then all such entities), the Dividend Determination
Method applicable to such Series in effect at the time of such resignation or
removal will continue in effect until the Corporation appoints a successor
Method Selection Agent for such Series and such Method Selection Agent sends a
Notice of Method Selection. If, as a result of such resignation or removal of
the Method Selection Agent, the Dividend Determination Method for any Series
will continue to be the Auction Method, then the duration of the next succeeding
Dividend Period for such Series will be the Standard Auction Period.
Any Method for a Series of Variable Cumulative Preferred Stock
selected by the Method Selection Agent for such Series pursuant to a Notice of
Method Selection (except a
<PAGE> 16
16
Notice of Method Selection that is deemed to be withdrawn) shall be conclusive
and binding on the Corporation and the holders of Shares of such Series. If the
Notice of Method Selection is not deemed to have been withdrawn, any Method so
selected by the Method Selection Agent for a Series will continue in effect for
that Series until such Method Selection Agent selects the other Method in the
aforesaid manner. No defect in the Notice of Method Selection or the Notice of
Removal of the Method Selection Agent or in the mailing thereof shall affect the
validity of any change in the Dividend Determination Method or any such
withdrawal or removal.
Notwithstanding the foregoing, the Method Selection Agent for a
Series shall not be entitled to change the Dividend Determination Method then
applicable to such Series if (i) at the time of an election that the Remarketing
Method apply to a Series, the Corporation has not appointed (and given notice or
taken such other action as may be necessary for the timely effectiveness of such
appointment) a Remarketing Agent, a Tender Agent and a SABRES Depositary for
such Series, (ii) at the time of an election that the Auction Method apply to a
Series, the Corporation has not appointed (and given notice or taken such other
action as aforesaid) a Trust Company, an Auction Stock Depositary and at least
one Broker-Dealer for such Series, or such election would result in more than
one Dividend Period for the Shares of such Series or (iii) at the time of any
such election, a Payment Failure has occurred and is continuing. Once the Method
Selection Agent for a Series shall have selected a Dividend Determination Method
for such Series for a Subsequent Dividend Period in the aforesaid manner, such
selection shall become effective on the last day of the Dividend Period(s) then
applicable to Shares of such Series notwithstanding any Payment Failure which
may occur after the delivery of the Notice of Method Selection by the Method
Selection Agent, the failure to remarket tendered Shares of SABRES of such
Series, in the case of the selection of the Remarketing Method, or the lack of
Sufficient Clearing Bids in the Auction for such Series, in the case of the
selection of the Auction Method.
C. Each Dividend Period for Shares of Variable Cumulative Preferred
Stock shall have a duration of not more than 30 years and not less than (i) 7
days in the case of MMP and (ii) 1 Business Day in the case of SABRES. Each
Dividend Period shall end on the day immediately preceding the first day of a
Subsequent Dividend Period.
D. Each Subsequent Dividend Period for each Series of MMP will begin
on a Dividend Payment Date and, except as otherwise provided herein, the
duration of each Subsequent Dividend Period for each Series of MMP shall be the
Standard Auction Period, provided that, subject to the limitations set forth in
paragraph C of this Section 5, the applicable Term Selection Agent for such
Series may, except during the continuance of a Payment Failure, select the
duration of any Subsequent Dividend Period for Shares of MMP of such Series by
sending a Notice of Term Selection to all holders of record of Shares of MMP or
Converted SABRES of such Series, by first-class mail, postage prepaid, to the
address of each such holder as the same appears on the stock register of the
Corporation, not less than 7 Business Days nor more than 60 days prior to the
first day of such Subsequent Dividend Period. The Term Selection Agent for each
Series of MMP will establish Dividend Periods for such Series (and any
additional Dividend Payment Dates, and redemption dates and redemption prices)
that the Term Selection Agent determines will be the most favorable financing
alternative for the Corporation based upon the then-current Remarketing
Conditions. If more than one entity is serving as Term Selection Agent for a
Series, such entities shall act in concert in performing their duties,
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provided that notices referred to herein may be given by one such entity on
behalf of all such entities. Each Notice of Term Selection shall state (i) the
length of the next succeeding Dividend Period, (ii) in the case of any Dividend
Period in excess of 99 days in duration, any Dividend Payment Date or Dates
selected by the Term Selection Agent in addition to the last Dividend Payment
Date with respect to such Dividend Period and (iii) any additional dates on
which Shares of MMP may be redeemed and the corresponding redemption prices
(which may not be less than One Thousand Dollars ($1,000) per Share in the case
of Shares having a Dividend Period in excess of 364 days) determined by such
Term Selection Agent. In the absence of any Notice of Term Selection for a
Series of MMP with respect to a Subsequent Dividend Period, the duration of such
period shall be the Standard Auction Period. The Term Selection Agent for any
series of MMP may withdraw any Notice of Term Selection with respect to such
Series, if such Term Selection Agent determines that because of subsequent
changes in the Remarketing Conditions the duration of the Subsequent Dividend
Period specified in such Notice of Term Selection will not result in the most
favorable financing alternative for the Corporation, by sending a Notice of
Withdrawal to all holders of record of Shares of MMP or Converted SABRES of such
Series by first-class mail, postage prepaid, to the address of each such holder
as the same appears on the stock register of the Corporation, by no later than
3:00 P.M., New York City time, on the third Business Day preceding the first day
of the applicable Subsequent Dividend Period.
Any Notice of Term Selection with respect to any Series of MMP shall
be deemed to have been withdrawn if on or prior to the second Business Day
preceding the first day of the applicable Subsequent Dividend Period for such
Series, the Corporation shall have removed the Term Selection Agent for such
Series, and in such event the Corporation shall give a Notice of Removal to
record holders of Shares of such Series by first-class mail, postage prepaid, to
the address of each such holder as the same appears on the stock register of the
Corporation. If more than one entity has been appointed and is acting as Term
Selection Agent for that Series, such Notice of Term Selection shall be deemed
to have been withdrawn only if the Corporation shall have removed all such
entities; and the removal at any time by the Corporation of one or more but not
all such entities shall not effect a deemed withdrawal of a Notice of Term
Selection and in any such event no Notice of Removal need be given. If the Term
Selection Agent for any Series of MMP sends a Notice of Term Selection with
respect to any Subsequent Dividend Period for such Series and delivers a Notice
of Withdrawal with respect thereto or such Notice of Term Selection is deemed to
have been withdrawn, the duration of such Subsequent Dividend Period for such
Series will be the Standard Auction Period. In addition, if there is no Term
Selection Agent for any Series of MMP as a result of the resignation or removal
of all entities then serving as such, then the duration of each Subsequent
Dividend Period will be the Standard Auction Period until the Corporation shall
appoint a Term Selection Agent for such Series and such Term Selection Agent
shall send a Notice of Term Selection. Any Subsequent Dividend Period for a
Series of MMP established by the Term Selection Agent for such Series pursuant
to a Notice of Term Selection Agent for such Series pursuant to a Notice of Term
Selection (except a Notice of Term Selection that is deemed to be withdrawn) and
any withdrawal thereof pursuant to a Notice of Withdrawal shall be conclusive
and binding on the Corporation and the holders of Shares of such Series of MMP.
Copies of any Notice of Term Selection, Notice of Withdrawal or
Notice of Removal shall be delivered physically or by telecopier or other
written electronic communication
<PAGE> 18
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to the Trust Company and the applicable Method Selection Agent by the Term
Selection Agent or the Corporation, as the case may be, at the same time they
are transmitted to the record holders of Shares of MMP. The Trust Company will
thereupon use its reasonable best efforts to provide copies of any such notice
to each Broker-Dealer for such Series as soon as practicable after receiving
such notice. No defect in any notice or in the mailing thereof shall affect the
validity of any change in the Dividend Period or any such withdrawal or removal.
Notwithstanding the foregoing, in the event that Sufficient Clearing
Bids have not been made, so that the Dividend Rate for the next Dividend Period
for a Series of MMP is equal to the Maximum Rate, then the duration of the
Subsequent Dividend Period in respect of such Series of MMP shall be the lesser
of (i) the length of such Dividend Period as specified by the Term Selection
Agent in a Notice of Term Selection sent as described above, or (ii) the
Standard Auction Period.
At all times prior to a Payment Failure, all Shares of MMP of a
Series will have a single Dividend Period and will accumulate dividends at a
single Dividend Rate. Except as provided in paragraph G of this Section 5, the
Dividend Rate per annum on the Shares of MMP of a Series for each Subsequent
Dividend Period shall be equal to the rate per annum that the Trust Company
advises the Corporation has resulted from an Auction for such Series. An Auction
for MMP of each Series to determine the Dividend Rate for each Subsequent
Dividend Period for such Series will be held on the Business Day immediately
preceding the first day of each such Subsequent Dividend Period.
E. Each Subsequent Dividend Period for each Series of SABRES will
begin on a Dividend Payment Date, and except as otherwise provided in paragraphs
F and G of this Section 5, the duration of each Subsequent Dividend Period and
the Dividend Rate for each such Subsequent Dividend Period for each Share of
SABRES shall be established by the Remarketing Agent for such Shares pursuant to
the Remarketing Procedures, such determination to be conclusive and binding on
the Corporation and the holder of such Share of SABRES.
F. Notwithstanding the provisions of paragraphs D and E of this
Section 5, the Dividend Rate which results from the application of the Auction
Procedures or the Remarketing Procedures for any Subsequent Dividend Period for
any Share of Variable Cumulative Preferred Stock shall not be greater than the
Maximum Rate for such Share (i) on the Auction Date, if such Share is MMP or
Converted SABRES, or (ii) on the day of Remarketing of such Share, if such Share
is SABRES or Converted MMP.
G. Notwithstanding the foregoing provisions of this Section 5, the
application of the Auction Procedures and the Remarketing Procedures shall be
suspended during the continuance of a Payment Failure; and during such
continuance dividends will accumulate on the Shares of Variable Cumulative
Preferred Stock of all Series at Dividend Rates equal to two hundred percent
(200%) of the Applicable Determining Rate for successive Dividend Periods
commencing on and after the date such Payment Failure first occurred, or, in the
case of the Shares of any Series of Variable Cumulative Preferred Stock so
called for redemption, for successive Dividend Periods commencing on and after
such redemption date, the duration of such Dividend Periods to be one Business
Day in the case of Shares of SABRES and the Standard Auction Period in the case
of Shares of MMP. In no event shall the Dividend Rate on
<PAGE> 19
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any Share of Variable Cumulative Preferred Stock be adjusted prior to the end of
a Dividend Period for such Share. If no Payment Failure continues to exist at
the end of a Dividend Period, the application of the Auction Procedures and the
Remarketing Procedures shall be resumed.
H. The Corporation shall pay to the Paying Agent not later than (i)
in the case of Dividend Periods of one Business Day, 4:00 P.M., New York City
time, and (ii) in the case of all other Dividend Periods, 12:00 noon, New York
City time, in each case, on the Business Day next preceding each Dividend
Payment Date for Shares of Variable Cumulative Preferred Stock, an aggregate
amount of funds available on the next Business Day in The City of New York, New
York, equal to all dividends to be paid to all holders of Shares of such
Variable Cumulative Preferred Stock on such Dividend Payment Date. All such
moneys shall be held in trust for the payment of such dividends by the Paying
Agent for the benefit of the holders.
I. Each dividend shall be paid to the holders of record at their
respective addresses as the same appear on the stock register of the Corporation
on the Business Day next preceding the Dividend Payment Date relating to such
dividend. Dividends in arrears for any past Dividend Period may be declared and
paid at any time, without reference to any regular Dividend Payment Date.
J. The amount of dividends per Share accumulated on each Share of
Variable Cumulative Preferred Stock during any Dividend Period of less than 365
days shall be computed by multiplying the Dividend Rate for such Dividend Period
by a fraction, the numerator of which shall be the number of days in such
Dividend Period (calculated by counting the first day thereof and including the
last day thereof) and the denominator of which shall be 360, and multiplying One
Thousand Dollars ($1,000) by the rate so obtained. During any Dividend Period of
365 days or longer, the amount of dividends per Share accumulated on each Share
of Variable Cumulative Preferred Stock shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
K. Each prospective purchaser of Shares of Variable Cumulative
Preferred Stock will be required to sign a Master Purchaser's Letter and deliver
such Master Purchaser's Letter (i) to a Broker-Dealer (who will deliver copies
thereof to the Trust Company) as a condition precedent to purchasing MMP or (ii)
to the applicable Remarketing Agent (who will deliver copies thereof to the
Tender Agent) as a condition precedent to purchasing SABRES.
6. Auction Procedures.
A. Orders by Existing Holders and Potential Holders in an Auction.
All Orders must be submitted in Units. On or prior to the Submission Deadline on
each Auction Date:
(1) each Existing Holder may submit to a Broker-Dealer information
as to:
(a) the number of Outstanding Shares of MMP of such Series, if
any, held by such Existing Holder which such Existing Holder desires
to continue to hold for the next succeeding Dividend Period without
regard to the rate determined by the Auction Procedures for the next
succeeding Dividend Period;
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(b) the number of Outstanding Shares of MMP of such Series, if
any, that such Existing Holder desires to sell for the next
succeeding Dividend Period if the rate determined by the Auction
Procedures shall be less than the rate per annum specified by such
Existing Holder; and/or
(c) the number of Outstanding Shares of MMP of such Series, if
any, held by such Existing Holder which such Existing Holder offers
to sell without regard to the rate determined by the Auction
Procedures for the next succeeding Dividend Period; and
(2) one or more Broker-Dealers shall in good faith, for the purpose
of conducting a competitive Auction in a commercially reasonable manner,
contact Potential Holders, including Persons that are not Existing
Holders, by telephone or otherwise to determine the number of Shares of
MMP of such Series, if any, which each such Potential Holder offers to
purchase, provided that the rate determined by the Auction Procedures for
the next succeeding Dividend Period shall not be less than the rate per
annum specified by such Potential Holder. For the purposes hereof, the
communication to a Broker-Dealer of information referred to in paragraph
A(1)(a), A(1)(b), or A(1)(c) or A(2) of this Section 6 is hereinafter
referred to as an "Order" and collectively as "Orders" and each Existing
Holder and each Potential Holder placing an Order is hereinafter referred
to as a "Bidder" and collectively as "Bidders"; an Order containing the
information referred to in paragraph A(l)(a) of this Section 6 is
hereinafter referred to as a "Hold Order" and collectively as "Hold
Orders"; an Order containing the information referred to in paragraph
A(1)(b) or A(2) of this Section 6 is hereinafter referred to as a "Bid"
and collectively as "Bids"; and an Order containing the information
referred to in paragraph A(l)(c) of this Section 6 is hereinafter referred
to as a "Sell Order" and collectively as "Sell Orders."
(3) a Bid by an Existing Holder shall constitute an irrevocable
offer to sell:
(a) the number of Outstanding Shares of MMP of such Series
specified in such Bid if the rate determined by the Auction
Procedures on such Auction Date shall be less than the rate
specified therein; or
(b) such number or a lesser number of Outstanding Shares of
MMP of such Series to be determined as set forth in paragraph
D(1)(d) of this Section 6 if the rate determined by the Auction
Procedures on such Auction Date shall be equal to the rate specified
therein; or
(c) a lesser number of Outstanding Shares of MMP of such
Series to be determined as set forth in paragraph D(2)(c) of this
Section 6 if the rate specified therein shall be higher than the
Maximum Rate and Sufficient Clearing Bids do not exist.
(4) a Sell Order by an Existing Holder shall constitute an
irrevocable offer to sell:
<PAGE> 21
21
(a) the number of Outstanding Shares of MMP of such Series
specified in such Sell Order, or
(b) such number or a lesser number of Outstanding Shares of
MMP of such Series as set forth in paragraph D(2)(c) of this Section
6 if Sufficient Clearing Bids do not exist.
(5) a Bid by a Potential Holder shall constitute an irrevocable
offer to purchase:
(a) the number of Outstanding Shares of MMP of such Series
specified in such Bid if the rate determined by the Auction
Procedures on such Auction Date shall be higher than the rate
specified therein; or
(b) the number or a lesser number of Outstanding Shares of MMP
of such Series as set forth in paragraph D(1)(e) of this Section 6
if the rate determined by the Auction Procedures on such Auction
Date shall be equal to the rate specified therein.
B. Submission of Orders by Broker-Dealers to Trust Company.
(1) Each Broker-Dealer shall submit in writing to the Trust
Company prior to the Submission Deadline on each Auction Date for a
Series of MMP all Orders obtained by such Broker-Dealer and specify
with respect to each Order:
(a) the name of the Bidder placing such Order;
(b) the aggregate number of Shares of MMP of such Series that
are the subject of such Order;
(c) to the extent that such Bidder is an Existing Holder:
(i) the number of Shares of MMP of such Series, if
any, subject to any Hold Order;
(ii) the number of Shares of MMP of such Series, if
any, subject to any Bid and the rate specified in
such Bid; and
(iii) the number of Shares of MMP of such Series, if
any, subject to any Sell Order; and
(d) to the extent such Bidder is a Potential Holder, the rate
specified in such Potential Holder's Bid.
(2) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Trust Company shall round
such rate up to the next highest one thousandth (.001) of 1%.
<PAGE> 22
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(3) If an Order or Orders covering all of the Outstanding Shares of
MMP of such Series held by any Existing Holder is or are not submitted for
any reason to the Trust Company prior to the Submission Deadline, the
Trust Company shall deem a Hold Order to have been submitted on behalf of
such Existing Holder covering the number of Outstanding Shares of MMP of
such Series held by such Existing Holder and not subject to Orders
submitted to the Trust Company, except that (i) a Sell Order will be
deemed to have been submitted on behalf of an Existing Holder if an Order
is not submitted on behalf of such Existing Holder in the case of an
Auction for a Dividend Period of 365 days or more and (ii) a Sell Order
will be deemed to have been submitted on behalf of a holder of Converted
SABRES if an Order is not submitted on behalf of such holder.
(4) If one or more Orders covering in the aggregate more than the
number of Outstanding Shares of MMP of such Series held by any Existing
Holder are submitted to the Trust Company, such Orders shall be considered
valid as follows and in the following order of priority:
(a) all Hold Orders shall be considered valid, but only up to
and including in the aggregate the number of Shares of MMP of such
Series held by such Existing Holder, and, if the number of Shares of
MMP of such Series subject to such Hold Orders exceeds the number of
Shares of MMP of such Series held by such Existing Holder, the
number of Shares of MMP of such Series subject to each such Hold
Order shall be reduced pro rata to cover the number of Shares of MMP
of such Series held by such Existing Holder:
(b) (i) any Bid shall be considered valid up to and including
the excess of the number of Outstanding Shares of MMP of such Series
held by such Existing Holder over the number of Shares of MMP of
such Series subject to any Hold Order referred to in paragraph
B(4)(a) above,
(ii) subject to paragraph B(4)(b)(i) above, if more
than one Bid with the same rate is submitted on
behalf of such Existing Holder and the number of
Shares of MMP of such Series subject to such Bids
is greater than such excess then such Bids shall
be considered valid up to the amount of such
excess, and the number of Shares of MMP of such
Series subject to each Bid with the same rate
shall be reduced pro rata to cover the number of
Shares of MMP of such Series equal to such excess,
and
(iii) subject to paragraphs B(4)(b)(i) and (ii) above,
if more than one Bid with different rates is
submitted on behalf of such Existing Holder, such
Bids shall be considered valid in the ascending
order of their respective rates up to the amount
of such excess, and
(iv) in any such event the number, if any, of such
Shares of MMP of such Series subject to Bids not
valid under this
<PAGE> 23
23
paragraph B(4)(b) shall be treated as the subject
of a Bid by a Potential Holder; and
(c) all Sell Orders shall be considered valid but only up to
and including in the aggregate the excess of the number of
Outstanding Shares of MMP of such Series held by such Existing
Holder over the sum of the Shares of MMP of such Series subject to
Hold Orders referred to in paragraph B(4)(a) and valid Bids by
Existing Holders referred to in paragraph B(4)(b) above.
(5) If more than one Bid is submitted on behalf of any Potential
Holder, each Bid submitted shall be a separate Bid with the rate therein
specified.
C. Determination of Sufficient Clearing Bids, Winning Bid Rate and
Dividend Rate.
(1) Not earlier than the Submission Deadline on each Auction Date
for a Series of MMP, the Trust Company shall assemble all Orders submitted
or deemed submitted to it by Broker-Dealers (each such Order as submitted
or deemed submitted by a Broker-Dealer being hereinafter referred to
individually as a "Submitted Hold Order," a "Submitted Bid" or a
"Submitted Sell Order," as the case may be, or as a "Submitted Order" and
collectively as "Submitted Hold Orders," "Submitted Bids" or "Submitted
Sell Orders," as the case may be, or as "Submitted Orders") and shall
determine:
(a) the excess of the total number of Outstanding Shares of
MMP of such Series over the number of Outstanding Shares of MMP of
such Series that are the subject of Submitted Hold Orders (such
excess being hereinafter referred to as the "Available Shares");
(b) From the Submitted Orders whether the number of
Outstanding Shares of MMP of such Series that are the subject of
Submitted Bids by Potential Holders specifying one or more rates
equal to or lower than the Maximum Rate exceeds or is equal to the
sum of:
(i) the number of Outstanding Shares of MMP of such
Series that are the subject of Submitted Bids by
Existing Holders specifying one or more rates
higher than the Maximum Rate, and
(ii) the number of Outstanding Shares of MMP of such
Series that are subject to Submitted Sell Orders
(in the event of such excess or such equality,
other than because the number of Shares of MMP of
such Series in paragraphs C(1)(b)(i) and
C(1)(b)(ii) above is zero because all of the
Outstanding Shares of MMP of such Series are the
subject of Submitted Hold Orders, such Submitted
Bids in this paragraph (b) being hereinafter
referred to collectively as "Sufficient Clearing
Bids"), and
<PAGE> 24
24
(c) if Sufficient Clearing Bids exist, the lowest rate
specified in the Submitted Bids (the "Winning Bid Rate") which if:
(i) (A) each Submitted Bid from Existing Holders
specifying such lowest rate and (B) all other
Submitted Bids from Existing Holders specifying
lower rates were rejected, thus entitling such
Existing Holders to continue to hold the Shares of
MMP of such Series that are the subject of such
Submitted Bids, and
(ii) (A) each Submitted Bid from Potential Holders
specifying such lowest rate and (B) all other
Submitted Bids from Potential Holders specifying
lower rates were accepted, thus entitling the
Potential Holders to purchase the Shares of MMP of
such Series that are the subject of those
Submitted Bids, would result in such Existing
Holders described in paragraph C(1)(c)(i) above
continuing to hold an aggregate number of
Outstanding Shares of MMP of such Series which,
when added to the number of Outstanding Shares of
MMP of such Series to be purchased by such
Potential Holders described in paragraph
C(1)(c)(ii) above would equal not less than the
Available Shares.
(2) Promptly after the Trust Company has made the determinations
pursuant to paragraph C(1) above, the Trust Company shall advise the
Corporation of the Applicable Determining Rate and the Maximum Rate and,
based on such determinations, the Dividend Rate for the next succeeding
Dividend Period as follows:
(a) if Sufficient Clearing Bids exist, that the Dividend Rate
for the next succeeding Dividend Period shall be equal to the
Winning Bid Rate so determined;
(b) if Sufficient Clearing Bids do not exist (other than
because all of the Outstanding Shares of MMP of such Series of a
Series are the subject of Submitted Hold Orders), that the Dividend
Rate for the next succeeding Dividend Period shall be the Maximum
Rate; or
(c) if all of the Outstanding Shares of MMP of such Series are
the subject of Submitted Hold Orders, the Dividend Rate for the next
succeeding Dividend Period shall be equal to fifty-eight per cent
(58%) of the Applicable Determining Rate.
D. Acceptance and Rejection of Submitted Bids and Submitted Sell
Orders and Allocation of Shares in an Auction. Based on the determinations made
pursuant to paragraph C(l) above, the Submitted Bids and the Submitted Sell
Orders shall be accepted or rejected and the Trust Company shall take such other
action as set forth below:
<PAGE> 25
25
(1) If Sufficient Clearing Bids have been made, Submitted Bids and
Submitted Sell Orders shall be accepted or rejected as follows in the following
order of priority and all other Submitted Bids shall be rejected, subject to the
Rounding Procedures:
(a) the Submitted Sell Orders of Existing Holders shall be accepted
and the Submitted Bids of each of the Existing Holders specifying any rate
that is higher than the Winning Bid Rate shall be accepted, thus requiring
each such Existing Holder to sell the Shares of MMP of such Series that
are the subject of such Submitted Bids;
(b) the Submitted Bids of each of the Existing Holders specifying
any rate that is lower than the Winning Bid Rate shall be rejected, thus
requiring each such Existing Holder to continue to hold the Shares of MMP
of such Series that are the subject of such Submitted Bids;
(c) the Submitted Bids of each of the Potential Holders specifying
any rate that is lower than the Winning Bid Rate shall be accepted;
(d) the Submitted Bids of each of the Existing Holders specifying a
rate that is equal to the Winning Bid Rate shall be rejected, thus
requiring each such Existing Holder to continue to hold the Shares of MMP
of such Series that are the subject of such Submitted Bids, unless the
number of Outstanding Shares of MMP of such Series subject to all such
Submitted Bids shall be greater than the number of Shares ("Remaining
Shares") equal to the excess of the Available Shares over the number of
Shares of MMP of such Series subject to Submitted Bids described in
paragraphs D(1)(b) and D(1)(c) above, in which event the Submitted Bids of
each such Existing Holder shall be rejected in part, and each such
Existing Holder shall be required to continue to hold Shares of MMP of
such Series, but only in an amount equal to the difference between (A) the
number of Outstanding Shares of MMP of such Series then held by such
Existing Holder subject to such Submitted Bids and (B) the number of
Shares of MMP of such Series obtained by multiplying the number of
Remaining Shares by a fraction, the numerator of which shall be the number
of Outstanding Shares of MMP of such Series held by such Existing Holder
subject to such Submitted Bids, and the denominator of which shall be the
sum of the number of Outstanding Shares of MMP of such Series subject to
such Submitted Bids made by all such Existing Holders that specified a
rate equal to the Winning Bid Rate; and
(e) the Submitted Bids of each of the Potential Holders specifying a
rate that is equal to the Winning Bid Rate shall be accepted but only in
an amount equal to the number of Shares of MMP of such Series obtained by
multiplying the difference between the Available Shares and the number of
Shares of MMP of such Series subject to Submitted Bids described in
paragraphs D(1)(b), D(1)(c) and D(1)(d) above by a fraction, the numerator
of which shall be the number of Outstanding Shares of MMP of such Series
subject to such Submitted Bids, and the denominator of which shall be the
sum of the number of Outstanding Shares
<PAGE> 26
26
of MMP of such Series subject to such Submitted Bids made by all
such Potential Holders that specified a rate equal to the Winning
Bid Rate.
(2) If Sufficient Clearing Bids have not been made (other than
because all of the Outstanding Shares of MMP of such Series are subject to
Submitted Hold Orders), Submitted Orders shall be accepted or rejected as
follows in the following order of priority and all other Submitted Bids
shall be rejected, subject to the Rounding Procedures:
(a) the Submitted Bids of each Existing Holder specifying any
rate that is equal to or lower than the Maximum Rate shall be
rejected, thus requiring such Existing Holder to continue to hold
the Shares of MMP of such Series that are the subject of such
Submitted Bids;
(b) the Submitted Bids if each Potential Holder specifying any
rate that is equal to or lower than the Maximum Rate shall be
accepted; and
(c) the Submitted Bids of each Existing Holder specifying any
rate that is higher than the Maximum Rate shall be accepted and the
Submitted Sell Orders of each Existing Holder shall be accepted,
thus entitling each Existing Holder that submitted any such
Submitted Bid or Submitted Sell Order to sell the Shares of MMP of
such Series subject to Submitted Bid or Submitted Sell Order, but,
in both cases only in an amount equal to the difference between (A)
the number of Outstanding Shares of MMP of such Series then held by
such Existing Holder subject to such Submitted Bids or Submitted
Sell Orders and (B) the number of Shares of MMP of such Series
obtained by multiplying the difference between the Available Shares
and the aggregate number of Shares of MMP of such Series subject to
Submitted Bids described in paragraphs D(2)(a) and D(2)(b) above by
a fraction, the numerator of which shall be the number of
Outstanding Shares of MMP of such Series held by such Existing
Holder subject to such Submitted Bids or Submitted Sell Orders, and
the denominator of which shall be the number of Outstanding Shares
of MMP of such Series subject to all such Submitted Bids and
Submitted Sell Orders.
7. Remarketing Procedures.
A. Determination of Dividend Periods and Rates for Remarketed Stock.
Subject to paragraphs F and G of Section 5 hereof, the duration of each
Subsequent Dividend Period, and the Dividend Rate for each Subsequent Dividend
Period, will be established by the Remarketing Agent for each Share of SABRES
and will be conclusive and binding on the Corporation and the holder of such
Share of SABRES. Each Remarketing Agent will establish Dividend Rates (which
shall not exceed the Maximum Rate) for each Dividend Period for such Share of
SABRES which it shall determine will be the lowest rate at which tendered Shares
of SABRES would be remarketed at One Thousand Dollars ($1,000) per Share. In
establishing each Dividend Period and Dividend Rate, each Remarketing Agent will
select Dividend Periods and Dividend Rates which it shall determine will result
in the most favorable financing alternative for the Corporation based on the
then-current Remarketing Conditions. The Shares of SABRES will
<PAGE> 27
27
be remarketed and traded only in Units. All the Shares of SABRES in a Unit will
have the same Dividend Rate and Dividend Period.
B. Remarketing; Tender for Remarketing. The following procedures
shall be applicable to each Remarketed Share:
(1) The Remarketing Agent. The Corporation shall take all reasonable
action necessary so that, at all times when a Series of SABRES or
Converted MMP is outstanding, one or more investment banks, brokers,
dealers or other organizations qualified to remarket Shares of SABRES and
to establish Dividend Periods and Dividend Rates as herein provided shall
act as Remarketing Agent for each Share of SABRES of such Series. Each
Remarketing Agent shall use its best efforts to remarket all Shares of
SABRES, on behalf of the holders thereof, tendered for sale by Remarketing
for which it is acting as Remarketing Agent without charge to such holder,
only at $1,000 per Share, provided that no such Remarketing Agent shall be
obligated to remarket such Shares if there shall be a material
misstatement or omission in any disclosure document provided by the
Corporation and used in connection with the Remarketing of such Share or
at any time such Remarketing Agent shall have determined that it is not
advisable to remarket such Share by reason of: (i) a material adverse
change in the financial condition of the Corporation, (ii) a banking
moratorium, (iii) domestic or international hostilities, (iv) an amendment
of the provisions hereof which materially and adversely changes the nature
of the Shares of SABRES or the Remarketing Procedures or (v) a Payment
Failure. Any Remarketing Agent may purchase tendered Shares for its own
account. Should the Remarketing Agent for any Share of SABRES not succeed
in Remarketing all such Shares of SABRES so tendered for Remarketing on
any date, such Remarketing Agent shall select the Shares of such SABRES to
be sold from those tendered pro rata or in such other manner as it shall
deem appropriate so that each owner shall beneficially own Shares of
SABRES of a Series only in Units. Payments for Shares of SABRES remarketed
shall be made by the Tender Agent by crediting such payments to the
accounts of the holders thereof maintained by the Tender Agent or, to the
extent duly requested by holders, by wire or other transfer in immediately
available funds to their accounts with commercial banks in the United
States, but, in either case, only upon surrender to the Tender Agent of
the certificates representing such Shares of SABRES, properly endorsed for
transfer. If for any reason a Share of SABRES tendered for Remarketing is
not remarketed in the applicable Remarketing, such Share will be retained
by its holder. Until remarketed each such Share of SABRES will have
successive Dividend Periods of one Business Day and will be entitled to
dividends, payable daily, at the Maximum Rate.
(2) Notice of Shares To Be Retained. Each Share of SABRES or
Converted MMP shall be deemed to have been tendered to the Tender Agent
for sale by Remarketing on the Business Day immediately preceding the
first day of each Subsequent Dividend Period applicable thereto, unless
the holder thereof shall have given irrevocable notice otherwise to the
Remarketing Agent for such Share of SABRES or Converted MMP or, if so
instructed by such Remarketing Agent, to the Tender Agent. Such notice,
which may be telephonic or written, must be delivered to such agent prior
to 3:00 P.M., New York City time, on such Business Day or on such earlier
day specified in
<PAGE> 28
28
a notice, if any, mailed by the Tender Agent at the direction of such
Remarketing Agent to such record holder at its address as the same appears
on the stock register of the Corporation, which day shall be a Business
Day at least four Business Days after the mailing of such notice. The
notice from such holder of an election to retain Shares of SABRES shall
state (i) the number of the certificate representing the Shares of SABRES
not to be deemed to have been so tendered, unless such certificate is held
by the SABRES Depositary, (ii) the number of Shares of SABRES represented
by such certificate or, in the case of Shares of SABRES held by the SABRES
Depositary, the number of Shares so held, and (iii) the number of such
Shares of SABRES which shall be deemed not to have been so tendered. An
owner may tender Shares of SABRES or Converted MMP of a Series only in
Units.
(3) Shares Deemed To Have Been Tendered. The failure to give notice
with respect to any Share of SABRES or Converted MMP as provided in
paragraph B(2) above shall constitute the irrevocable tender for
Remarketing of such Share. Certificates representing Shares so tendered
and remarketed shall be issued to the purchasers thereof or to the SABRES
Depositary, irrespective of whether the certificates formerly representing
such Shares shall have been delivered to the Tender Agent. A holder which
has not given notice that it will retain Shares of SABRES or Converted MMP
shall have no further rights with respect to such Shares upon the
Remarketing of such Shares, except the right to receive any previously
declared but unpaid dividends thereon and the proceeds of the Remarketing
of such Shares (but only upon surrender of the certificates representing
such Shares to the Tender Agent properly endorsed for transfer, in the
case of a holder which has taken physical delivery of a Share
certificate). At any time, any or all Units of SABRES of a Series may have
Dividend Periods of various lengths. Depending on Remarketing Conditions
at the time of Remarketing, any or all Units of SABRES of a Series may
have different Dividend Rates, including those set on the same day for
Dividend Periods of equal length.
(4) Funds for Purchase of Shares. Shares of SABRES tendered for
Remarketing as provided in this Section 7 shall be purchased, and payments
to the holders for Shares of SABRES remarketed will be made, solely from
the proceeds received from the purchasers of such Shares in a Remarketing.
Neither the Corporation, the Tender Agent nor any Remarketing Agent shall
be obligated to provide funds to make payment to the holders of Shares so
tendered.
C. The Remarketing Process. The Remarketing process will be
conducted on the following schedule and in the following manner (all times are
New York City Time):
The Business Day Immediately Preceding the First Day of each
Subsequent Dividend Period (or such other time and day as may have been
specified in a notice mailed to the holders of Shares of SABRES or Converted
MMP):
Beginning Not Later Than 1:00 P.M. The Remarketing Agent for the
Shares then being remarketed will determine and, upon request, make available to
all interested persons non-binding indications of Dividend Periods and Dividend
Rates based upon then-current Remarketing Conditions. Each holder may obtain a
binding commitment as to the specific
<PAGE> 29
29
Dividend Period or Dividend Periods and the related Dividend Rate or Dividend
Rates which will be applicable to such holder's Shares.
At 3:00 P.M. Holders of Shares of SABRES and Converted MMP will be
deemed to have tendered Shares for sale by Remarketing at $1,000 per Share and
only in Units unless they have given contrary instructions to the Remarketing
Agent for such Shares or, if so instructed by such Remarketing Agent, to the
Tender Agent.
After 3:00 P.M. The applicable Remarketing Agent will solicit and
receive orders from prospective investors to purchase tendered Shares of SABRES.
A purchaser, at the time of its agreement to purchase Shares of SABRES, may
obtain a binding commitment as to the specific Dividend Period or Dividend
Periods and the related Dividend Rate or Dividend Rates for such Shares of
SABRES based upon then-current Remarketing Conditions.
The First Day of such Subsequent Dividend Period (always a
Business Day):
Opening of Business. The applicable Remarketing Agent will continue,
if necessary, Remarketing Shares of SABRES.
By 1:00 P.M. The applicable Remarketing Agent will have completed
Remarketing and will advise the Tender Agent as to the Dividend Rate and
Dividend Period applicable to each Share of SABRES commencing a Dividend Period
on that day and of any failure to remarket.
By 2:30 P.M. New holders must deliver the purchase price as
instructed by the applicable Remarketing Agent. Former holders will be paid the
proceeds of the Remarketing of their Shares by the Tender Agent (upon surrender
of their certificates, if applicable).
8. Miscellaneous.
A. The Board of Directors may interpret the provisions hereof to
resolve any inconsistency or ambiguity which may arise or be revealed in
connection with the Auction Procedures or the Remarketing Procedures provided
for herein.
B. So long as the Dividend Rate is based on the results of an
Auction, an Existing Holder (i) may sell, transfer or otherwise dispose of
Shares of MMP of such Series only pursuant to a Bid or Sell Order in accordance
with the Auction Procedures or to or through a Broker-Dealer or to a Person that
shall have delivered, or has caused to be delivered, a signed copy of a Master
Purchaser's Letter to the Trust Company, provided that in the case of all
transfers other than pursuant to Auctions, such Existing Holder, its Agent
Member or its Broker-Dealer advises the Trust Company of such transfer, and (ii)
shall have the ownership of the Shares of Variable Cumulative Preferred Stock of
the Series held by it maintained in book entry form by the Auction Stock
Depositary in the account of its Agent Member, which in turn will maintain
records of such Existing Holder's beneficial ownership. Any transfer of Shares
of MMP in violation of the terms of a Master Purchaser's Letter may affect the
right of the Person acquiring such Shares to participate in Auctions.
<PAGE> 30
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C. Each Remarketing Agent will be required to register on a list
maintained pursuant to a Remarketing Agreement a transfer of Shares of SABRES
for which it is the Remarketing Agent from a holder to another person only if
such transfer is made to a person that has delivered a signed Master Purchaser's
Letter to such Remarketing Agent and if (i) such transfer is pursuant to a
Remarketing or (ii) such Remarketing Agent has been notified in writing (A) by
such holder of such transfer or (B) by any person that purchased or sold such
Shares in a Remarketing of the failure of such Shares to be delivered or paid
for, as the case may be, in connection with such Remarketing. A Remarketing
Agent is not required to register a transfer of Shares of SABRES pursuant to
clause (ii) above on or prior to the Business Day immediately preceding the
first day of a Subsequent Dividend Period for such Shares unless it receives the
written notice required by such clause (ii) by 3:00 P.M., New York City time, on
the second Business Day preceding the first day of such Subsequent Dividend
Period. Such Remarketing Agent will rescind a transfer registered on such list
as a result of a Remarketing if the Remarketing Agent is notified in writing of
the failure of Shares to be delivered or paid for as required. Any transfer of
Shares of SABRES made in violation of the terms of a Master Purchaser's Letter
may affect the right of the Person acquiring such Shares to participate in
Remarketings.
D. The Corporation or any Affiliate of the Corporation may acquire,
hold or dispose of Shares of SABRES. As at the date of this Certificate of
Designations, the Corporation anticipates, subject to such limitations as it and
the Remarketing Agent may agree, that it and its Affiliates will purchase Shares
of SABRES during Remarketings only after 3:00 P.M. on the Business Day
immediately preceding the first day of each Subsequent Dividend Period and only
at Dividend Rates and for Dividend Periods established by the Remarketing Agents
without regard to such offers by the Corporation or its Affiliates and will
tender Shares of SABRES for Remarketing only upon at least ten days' prior
notice to the Remarketing Agents. In the event that the Corporation or its
Affiliates purchase Shares of SABRES for their respective accounts, all Shares
of the same Series of SABRES tendered by other owners, including any such Shares
of SABRES owned by a Remarketing Agent, will be remarketed before the
Remarketing of any such Shares of SABRES of such Series owned by the Corporation
or its Affiliates. If any Shares of SABRES tendered for Remarketing are not
sold, any Shares of SABRES of the same Series tendered for Remarketing by the
Corporation or an Affiliate of the Corporation, up to the number of such Shares
not so sold, will be deemed not to have been so tendered. If the Method of
determining the Dividend Rate for some or all of the Series of SABRES were to be
changed from the Remarketing Method to the Auction Method, the Corporation or
any Affiliate of the Corporation may submit Sell Orders in an Auction with
respect to the Converted SABRES created thereby.
Neither the Corporation nor any Affiliate thereof may submit an
Order in an Auction, except a Sell Order and, in the case of an Affiliate which
is then acting as a Broker-Dealer, Orders on behalf of Existing Holders or
Potential Holders not for its own account.
E. The Trust Company shall reject any Submitted Order of the
Corporation or an Affiliate, except for Sell Orders and Orders of affiliated
Broker-Dealers permitted under paragraph D of this Section 8.
<PAGE> 31
31
F. If (i) a Payment Failure shall have occurred or (ii) the Auction
Stock Depositary shall resign and the Corporation shall not have selected a
substitute Auction Stock Depositary reasonably acceptable to the Trust Company
prior to such resignation, Shares of MMP of each Series may be registered for
transfer or exchange and new certificates issued upon surrender of the older
certificates in form deemed by the Trust Company properly endorsed for transfer
with all necessary endorsers' signatures guaranteed in such manner and form as
the Trust Company may require by a guarantor reasonably believed by the Trust
Company to be responsible, accompanied by such assurances as the Trust Company
shall deem necessary or appropriate to evidence the genuineness and
effectiveness of each necessary endorsement and satisfactory evidence of
compliance with all applicable law relating to the collection of taxes or funds
necessary for the payment of such taxes.
G. The Corporation or any Affiliate of the Corporation may acquire
Shares of MMP from Existing Holders other than through an Auction, provided that
any Shares so acquired are cancelled and returned to the status of authorized
but undesignated shares of preferred stock.
H. Upon the selection of a Dividend Determination Method for a
Series of Variable Cumulative Preferred Stock for any Subsequent Dividend Period
other than the Dividend Determination Method then applicable to such Series, the
holders of record of the Shares of such Series shall transfer the certificates
for such Shares to the Auction Stock Depositary, in the case of the selection of
the Auction Method, or the SABRES Depositary, in the case of the selection of
the Remarketing Method, in either case on the first day of such Subsequent
Dividend Period. In the event a holder fails to so transfer its certificates as
aforesaid, such certificates shall be deemed cancelled and the Corporation shall
issue a new certificate to the Auction Stock Depositary or the SABRES
Depositary, as the case may be.
I. The purchase price of each Share of Variable Cumulative Preferred
Stock which is sold either through the Auction Procedures or the Remarketing
Procedures shall be One Thousand Dollars ($l,000).
J. All certificates representing Shares shall be issued in Share
amounts equivalent to Units.
K. An Auction will be held in respect of each Series of Converted
SABRES on the Initial Auction Date. If a holder of Converted SABRES does not
submit an Order in such Auction, such holder will be deemed to have submitted a
Sell Order in such Auction.
L. If a holder of Shares of Converted MMP fails to give irrevocable
notice otherwise to the Remarketing Agent for such Shares (or, if so instructed
by such Remarketing Agent, to the Tender Agent) by no later than 3:00 P.M., New
York City time, on the Business Day immediately preceding the first day of the
Subsequent Dividend Period applicable thereto, or such other day as is specified
in a notice delivered in the manner set forth in paragraph (B)(2) of Section 7,
such holder will be deemed to have tendered such Shares for sale by Remarketing
on such Business Day.
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M. At all times when Shares of a Series of MMP or Converted SABRES
are Outstanding, the Corporation will use its best efforts to maintain a
Broker-Dealer and Trust Company for such Shares. At all times when Shares of a
Series of SABRES or Converted MMP are outstanding, the Corporation will use its
best efforts to maintain a Remarketing Agent for such Shares.
9. Redemption.
A. The Shares of Variable Cumulative Preferred Stock of each Series
shall be subject to redemption in Units, as a whole or from time to time in part
at the option of the Corporation out of funds legally available therefor on one
of the following dates (each such date is hereinafter referred to herein as a
"redemption date") (i) on the last Dividend Payment Date with respect to any
Dividend Period and at any time when the Dividend Rate applicable to such Shares
is the Maximum Rate at a redemption price of One Thousand Dollars ($1,000) per
Share, plus an amount equal to accumulated and unpaid dividends thereon to, but
excluding, the date fixed for redemption and (ii) on such redemption dates and
at redemption prices (which may not be less than $1,000 per Share in the case of
Shares having a Dividend Period in excess of 364 days) established by the
applicable Term Selection Agent in the case of MMP, or by the applicable
Remarketing Agent in the case of SABRES, prior to the commencement of such
Dividend Period, plus an amount equal to accumulated and unpaid dividends
thereon to, but excluding, the date set for redemption. The applicable Term
Selection Agent or the applicable Remarketing Agent, as the case may be, will
establish dates on which Shares may be redeemed and the corresponding redemption
prices of such Shares on such dates that the applicable Term Selection Agent or
the applicable Remarketing Agent, as the case may be, determines based on the
then-current Remarketing Conditions will be the most favorable financing
alternative for the Corporation. Notice of redemption will be provided to record
holders of Shares of Variable Cumulative Preferred Stock to be redeemed not less
than 30 nor more than 60 days prior to the date fixed for redemption by mail,
first-class, postage prepaid, such notice to be addressed to the record holder
at the address for such holder as the same appears on the stock register of the
Corporation. Such notice shall specify the record date for determining holders
of Shares to be redeemed.
B. Notwithstanding the foregoing, if any dividends on Shares of
Variable Cumulative Preferred Stock are in arrears, no Shares of Variable
Cumulative Preferred Stock shall be redeemed unless all Outstanding Shares of
Variable Cumulative Preferred Stock are simultaneously redeemed, and the
Corporation shall not purchase or otherwise acquire any Shares of Variable
Cumulative Preferred Stock, provided, that the foregoing shall not prevent the
purchase or acquisition of Shares of Variable Cumulative Preferred Stock
pursuant to a purchase or exchange offer made on the same terms to holders of
all Outstanding Shares of Variable Cumulative Preferred Stock. None of the
foregoing shall preclude the Corporation from acquiring Shares of Variable
Cumulative Preferred Stock, constituting either all or a part of a Series, in a
tender or an exchange offer.
C. Each holder of Shares of Variable Cumulative Preferred Stock
called for redemption shall surrender the certificate or certificates, if any,
evidencing such Shares to the Corporation at the place designated in the notice
of redemption for such Shares (properly endorsed or assigned for transfer, if
the notice shall so state) and shall thereupon be entitled to
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receive payment of the redemption price plus an amount equal to accumulated and
unpaid dividends to, but excluding, the redemption date therefor.
D. If fewer than all of the Outstanding Shares of Variable
Cumulative Preferred Stock of any Series are to be redeemed as set forth above,
the number of Shares to be redeemed shall be determined by the Board of
Directors. In the case of Shares of MMP, the Shares of such Series shall be
redeemed pro rata from the holders of record of such Shares in proportion to the
number of such Shares held by such holders with adjustments for fractional
shares and so as to ensure that the Shares remaining Outstanding after such
redemption are held of record in Units. In the case of SABRES, the Shares of
such Series shall be redeemed pro rata from the holders of record of the Shares
of such Series having the same Dividend Period and redemption terms, with
adjustments for fractional shares and so as to ensure that the Shares remaining
Outstanding after such redemption are held of record in Units.
E. If notice of redemption shall have been given, then,
notwithstanding that any certificate for Shares so called for redemption shall
not have been surrendered for cancellation, from and after the date fixed for
redemption (unless a Payment Failure shall have occurred), the Shares
represented thereby shall no longer be deemed Outstanding, dividends thereon
shall cease to accumulate and all rights of the holders thereon with respect to
the Shares so called for redemption shall forthwith on such redemption date
cease and terminate, except only the right of the holders thereof to receive the
amount payable upon redemption thereof, without interest. After the date
designated for redemption, and if the redemption price has been paid or set
aside for payment, such Shares of Variable Cumulative Preferred Stock shall not
be transferrable on the stock register of the Corporation. Upon surrender in
accordance with the notice of redemption of the certificate or certificates for
the Shares so redeemed (properly endorsed or assigned for transfer, if such
notice shall so state), the redemption price set forth above will be paid by the
Paying Agent.
F. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the record holder
receives the notice. In any case, failure duly to give such notice to the holder
of any Shares of any Series of Variable Cumulative Preferred Stock designated
for redemption, in whole or in part, or any defect in such notice shall not
affect the validity of the proceedings for the redemption of any other Shares of
a Series.
G. Shares of Variable Cumulative Preferred Stock which have been
redeemed will be cancelled and upon the filing of any certificate that may be
required under Delaware law may be restored to the status of authorized but
undesignated and unissued shares of preferred stock.
10. Sinking Fund. There shall not be any sinking fund for the
redemption of any Shares of any Series of Variable Cumulative Preferred Stock.
11. Liquidation Preference.
A. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of Shares of Variable
Cumulative Preferred Stock of
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each Series shall be entitled to receive out of assets of the Corporation
available for distribution to stockholders, before any distribution of assets of
the Corporation is made to holders of Junior Stock, One Thousand Dollars
($1,000) per Share plus an amount equal to accumulated and unpaid dividends to
the date of distribution.
B. If, in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the amounts payable with respect
to each Series of the Variable Cumulative Preferred Stock, the Other Outstanding
Preferred Stock and any other shares of stock of the Corporation ranking as to
any such distribution on a parity with the Variable Cumulative Preferred Stock
are not paid in full, then the holders of the Variable Cumulative Preferred
Stock and of all such other shares shall share ratably in any such distribution
of assets of the Corporation in proportion to the full respective preferential
amounts to which they are entitled assuming all amounts thereon were paid in
full.
C. After payment to the holders of the Variable Cumulative Preferred
Stock of the full preferential amounts to which they are entitled, the holders
of the Shares of Variable Cumulative Preferred Stock will not be entitled to any
further participation in any distribution of assets by the Corporation. The
merger or consolidation of the Corporation into or with any other Person shall
not be or be deemed to be a liquidation, dissolution or winding up for purposes
of this Section 11.
12. Voting Rights.
A. Holders of the Variable Cumulative Preferred Stock of any Series
are not entitled to any voting rights, except as may be required by law or as
specified in this Section 12.
B. If at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of preferred stock of the
Corporation are in default, the number of directors constituting the Board of
Directors will be increased by two. The holders of record of the Variable
Cumulative Preferred Stock, voting separately as a class with the holders of
shares of any one or more other series of preferred stock upon which like voting
rights have been conferred (including, without limitation, the Outstanding
Cumulative Preferred Stock), shall be entitled at said meeting of stockholders
(and at each subsequent annual meeting of stockholders), unless all dividends in
arrears have been paid or declared and set apart for payment prior thereto, to
vote for the election of two directors of the Corporation, the holders of record
of Variable Cumulative Preferred Stock and all applicable Series of Outstanding
Cumulative Preferred Stock (other than the Series A Preferred Stock) being
entitled to cast one vote per share and the holders of record of Series A
Preferred Stock being entitled to cast one-tenth (1/10) of one vote per share,
with the remaining directors of the Corporation to be elected by the holders of
record of shares of any other class or classes or series of stock entitled to
vote therefor. Until the default in payments of all dividends which permitted
the election of said directors shall cease to exist, any director who shall have
been so elected pursuant to the next preceding sentence may be removed at any
time, without cause, only by the affirmative vote of the holders of record of
the shares of preferred stock at the time entitled to cast a majority of the
votes entitled to be cast for the election of any such director at a special
meeting of such holders of record called for that purpose, and any vacancy in
such directorship thereby created or otherwise created may be filled
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by the vote of such holders of record. If and when such default shall cease to
exist, the holders of record of Variable Cumulative Preferred Stock and the
holders of record of shares of any one or more series of preferred stock upon
which like voting rights have been conferred (including, without limitation, the
holders of record of the Outstanding Cumulative Preferred Stock) shall be
divested of the foregoing special voting rights, subject to revesting in the
event of each and every subsequent like default in payments of dividends. Upon
the termination of the foregoing special voting rights, the terms of office of
all persons who may have been elected directors pursuant to said special voting
rights shall forthwith terminate, and the number of directors constituting the
Board of Directors shall be reduced by two. For purposes of the foregoing,
default in the payment of dividends for the equivalent of six quarterly
dividends means, in the case of Variable Cumulative Preferred Stock which pays
dividends either more or less frequently than every quarter, default in the
payment of dividends in respect of one or more Dividend Periods containing in
the aggregate not less than 540 days.
C. Unless the vote or consent of the holders of record of a greater
number of shares shall then be required by law, the consent of the holders of
record of at least 66 2/3% of all of the Shares of all Series of Variable
Cumulative Preferred Stock and all other shares of the same class at the time
outstanding (including, without limitation, the holders of record of the Other
Outstanding Preferred Stock), given in person or by proxy, either in writing or
by a vote at a meeting called for that purpose, voting as a class without regard
to series, the holders of record of Shares of Variable Cumulative Preferred
Stock and Other Outstanding Preferred Stock (other than the Series A Preferred
Stock) being entitled to cast one vote per Share and the holders of record of
Series A Preferred Stock being entitled to cast one-tenth (1/10) of one vote per
share, shall be necessary for authorizing, effecting or validating the
amendment, alteration or repeal of any of the provisions of the Restated
Certificate of Incorporation or of any certificate amendatory thereof or
supplemental thereto (including any Certificate of Designations or any similar
document relating to any series of preferred stock) so as to affect adversely
the preferences, rights, powers or privileges of such series and any other
shares of the same class (including, without limitation, the Other Outstanding
Preferred Stock); provided, however, that in any case in which one or more, but
not all, series of Variable Cumulative Preferred Stock, Other Outstanding
Preferred Stock or other series of such class would be adversely affected as to
the preferences, rights, powers or privileges thereof, the affirmative consent
of holders of record of shares entitled to cast at least 66 2/3% of the votes
entitled to be cast by the holders of all of the shares of all of such series
that would be adversely affected (including, without limitation, the Other
Outstanding Preferred Stock), voting as a class, shall be required in lieu
thereof.
D. Unless the vote or consent of the holders of record of a greater
number of shares shall then be required by law, the consent of the holders of
record of at least 66 2/3% of all Shares of all Series of Variable Cumulative
Preferred Stock and all shares of all other series of preferred stock ranking on
a parity with the Shares, either as to dividends or upon liquidation (including,
without limitation, the Other Outstanding Preferred Stock), at the time
outstanding, given in person or by proxy, either in writing or by a vote at a
meeting called for the purpose at which the holders of record of Shares of all
Series of Variable Cumulative Preferred Stock, Other Outstanding Preferred Stock
and shares of such other series of preferred stock shall vote together as a
single class without regard to series, the holders of record of shares of all
Series of Variable Cumulative Preferred Stock and Other Outstanding Preferred
Stock (other than the Series A Preferred Stock) being entitled to cast one vote
per Share and the holders of record of Series A
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Preferred Stock being entitled to cast one-tenth (1/10) of one vote per share,
shall be necessary to issue, authorize, or increase the authorized amount of, or
issue or authorize any obligations or security convertible into or evidencing a
right to purchase, any additional class or series of stock ranking prior to the
Shares, Other Outstanding Preferred Stock or such other preferred stock as to
dividends or upon liquidation.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to
be signed by Anthony J. Horan, Secretary of the Corporation, on this ___ day of
_______, 2000.
THE CHASE MANHATTAN CORPORATION
By:____________________________________
Anthony J. Horan
Secretary
