AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
CSX CORPORATION
Article I
NAME
The name of the Corporation is "CSX Corporation".
Article II
PURPOSE
The purpose for which the Corporation is organized is to transact
any lawful business not required to be specifically stated in the Articles of
Incorporation.
Article III
AUTHORIZED STOCK
3.1 Number and Designation. The Corporation shall have authority
----------------------
to issue three hundred million (300,000,000) shares of Common Stock, par value
$1.00 per share, and twenty-five million (25,000,000) shares of Serial Preferred
Stock, without par value.
3.2 Preemptive Rights. No holder of capital stock of the
------------------
Corporation of any class shall have any preemptive right to subscribe to or
purchase (i) any shares of capital stock of this Corporation, (ii) any
securities convertible into such shares or (iii) any options, warrants or rights
to purchase such shares or securities convertible into any such shares.
Article IV
SERIAL PREFERRED STOCK
4.1 Issuance in Series. The Board of Directors is hereby
--------------------
empowered to cause the Serial Preferred Stock of the Corporation to be issued in
series with such of the variations permitted by clauses (a)-(h), both inclusive,
of this Section 4.1 as shall have been fixed and determined by the Board of
Directors with respect to any series prior to the issue of any shares of such
series.
The shares of the Serial Preferred Stock of different series may
vary as to:
(a) the number of shares constituting such series and the
designation of such series, which shall be such as to distinguish the shares
thereof from the shares of all other series and classes;
(b) the rate of dividend, the time of payment and, if cumulative,
the dates from which dividends shall be cumulative, and the extent of
participation rights, if any;
(c) any right to vote with holders of shares of any other series
or class and any right to vote as a class, either generally or as a condition to
specified corporate action;
(d) the price at and the terms and conditions on which shares
may be redeemed;
(e) the amount payable upon shares in event of involuntary
liquidation;
(f) the amount payable upon shares in event of voluntary
liquidation;
(g) any sinking fund provisions for the redemption or purchase of
shares; and
(h) the terms and conditions on which shares may be converted, if
the shares of any series are issued with the privilege of conversion.
The shares of all series of Serial Preferred Stock shall be
identical except as, within the limits set forth above in this Section 4.1,
shall have been fixed and determined by the Board of Directors prior to the
issuance thereof.
On the date of these Amended and Restated Articles of
Incorporation, there were issued and outstanding shares of the Series A $7.00
Cumulative Convertible Preferred Stock. On the date of these Amended and
Restated Articles of Incorporation, there were authorized, but unissued,
3,000,000 shares of the Series B Junior Participating Preferred Stock. The dates
on which each such series was authorized by the Board of Directors and the
preferences, limitations and relative rights of the shares of each such series
not otherwise set forth in these Amended and Restated Articles of Incorporation
are set forth in Articles IX and X hereof. Prior to the date of these Amended
and Restated Articles of Incorporation, the Corporation had issued the Market
Auction Preferred Stock, Series C-1 and the Market Auction Preferred Stock,
Series C-2. On that date all of the shares of each of the aforesaid series which
had been issued had been redeemed by the Corporation and no share of any such
series remained issued and outstanding. Each such series provided that shares of
the series, when purchased, redeemed or otherwise acquired by the Corporation,
would become authorized but unissued shares of Preferred Stock, undesignated as
to series.
4.2 Dividends. The holders of the Serial Preferred Stock of each
---------
series shall be entitled to receive, if and when declared payable by the Board
of Directors, dividends in lawful money of the United States of America, at the
dividend rate for such series, and not exceeding such rate except to the extent
of any participation right. Such dividends shall be payable on such dates as
shall be fixed for such series. Dividends, if cumulative and in arrears, shall
not bear interest.
No dividends shall be declared or paid upon or set apart for the
Common Stock or for stock of any other class hereafter created ranking junior to
the Serial Preferred Stock in respect of dividends or assets (hereinafter called
Junior Stock), and no shares of Serial Preferred Stock, Common Stock or Junior
Stock shall be purchased, redeemed or otherwise reacquired for a consideration,
nor shall any funds be set aside for or paid to any sinking fund therefor,
unless and until (i) full dividends on the outstanding Serial Preferred Stock at
the dividend rate or rates therefor, together with the full additional amount
required by any participation right, shall have been paid or declared and set
apart for payment with respect to all past dividend periods, to the extent that
the holders of the Serial Preferred Stock are entitled to dividends with respect
to any past dividend period, and the current dividend period, and (ii) all
mandatory sinking fund payments that shall have become due in respect of any
series of the Serial Preferred Stock shall have been made. Unless full dividends
with respect to all past dividend periods on the outstanding Serial Preferred
Stock at the dividend rate or rates therefor, to the extent the holders of the
Serial Preferred Stock are entitled to dividends with respect to any particular
past dividend period, together with the full additional amount required by any
participation right, shall have been paid or declared and set apart for payment
and all mandatory sinking fund payments that shall have become due in respect of
any series of the Serial Preferred Stock shall have been made, no distributions
shall be made to the holders of the Serial Preferred Stock of any series unless
distributions are made to the holders of the Serial Preferred Stock of all
series then outstanding in proportion to the aggregate amounts of the
deficiencies in payments due to the respective series, and all payments shall be
applied, first, to dividends accrued and in arrears, next, to any amount
required by any participation right, and, finally, to mandatory sinking fund
payments. The terms "current dividend period" and "past dividend period" mean,
if two or more series of Serial Preferred Stock having different dividend
periods are at the time outstanding, the current dividend period or any past
dividend period, as the case may be, with respect to each such series.
4.3 Preference on Liquidation. In the event of any liquidation,
-------------------------
dissolution or winding up of the Corporation, the holders of the Serial
Preferred Stock of each series shall be entitled to receive, for each share
thereof, the fixed liquidation price for such series, plus, in case such
liquidation, dissolution or winding up shall have been voluntary, the fixed
liquidation premium for such series, if any, together in all cases with a sum
equal to all dividends accrued or in arrears thereon and the full additional
amount required by any participation right, before any distribution of the
assets shall be made to holders of the Common Stock or Junior Stock; but the
holders of the Serial Preferred Stock shall be entitled to no further
participation in such distribution. If, upon any such liquidation, dissolution
or winding up, the assets distributable among the holders of the Serial
Preferred Stock shall be insufficient to permit the payment of the full
preferential amounts aforesaid, then such assets shall be distributed among the
holders of the Serial Preferred Stock then outstanding ratably in proportion to
the full preferential amounts to which they are respectively entitled. For the
purposes of this Section 4.3, the expression "dividends accrued or in arrears"
means, in respect of each share of the Serial Preferred Stock of any series at a
particular time, an amount equal to the product of the rate of dividend per
annum applicable to the shares of such series multiplied by the number of years
and any fractional part of a year that shall have elapsed from the date when
dividends on such shares became cumulative to the particular time in question
less the total amount of dividends actually paid on the shares of such series or
declared and set apart for payment thereon; provided, however, that, if the
dividends on such shares shall not be fully cumulative, such expression shall
mean the dividends, if any, cumulative in respect of such shares for the period
stated in the articles of serial designation creating such shares less all
dividends paid in or with respect to such period.
Article V
COMMON STOCK
5.1 Dividends. Subject to the provisions of law and the rights of
---------
holders of shares at the time outstanding of all classes of stock having prior
rights as to dividends, the holders of Common Stock at the time outstanding
shall be entitled to receive such dividends at such times and in such amounts as
the Board of Directors may deem advisable.
5.2 Liquidation. In the event of any liquidation, dissolution or
-----------
winding up (whether voluntary or involuntary) of the Corporation, after the
payment or provision for payment in full for all debts and other liabilities of
the Corporation and all preferential amounts to which the holders of shares at
the time outstanding of all classes of stock having prior rights thereto shall
be entitled, the remaining net assets of the Corporation shall be distributed
ratably among the holders of the shares at the time outstanding of Common Stock.
5.3 Voting Rights. The holders of Common Stock shall be
--------------
entitled to one vote per share on all matters.
Article VI
NUMBER OF DIRECTORS
The number of directors shall be fixed by the By-Laws or, in the
absence of a By-law fixing the number, the number shall be four.
Article VII
LIMIT ON LIABILITY AND INDEMNIFICATION
7.1 Definitions. For purposes of this Article the following
-----------
definitions shall apply:
(a) "Corporation" means this Corporation,
-----------
including Chessie System, Inc. and Seaboard Coast Line Industries, Inc. and
no other predecessor entity or other legal entity;
(b) "expenses" include counsel fees, expert
--------
witness fees, and costs of investigation, litigation and appeal, as
well as any amounts expended in asserting a claim for
indemnification;
(c) "liability" means the obligation to pay a judgment,
---------
settlement, penalty, fine, or other such obligation, including, without
limitation, any excise tax assessed with respect to an employee
benefit plan;
(d) "legal entity" means a corporation, partnership,
------------
joint venture, trust, employee benefit plan or other enterprise;
(e) "predecessor entity" means a legal entity the
-------------------
existence of which ceased upon its acquisition by the Corporation in a merger or
otherwise; and
(f) "proceeding" means any threatened, pending,
----------
or completed action, suit, proceeding or appeal whether civil, criminal,
administrative or investigative and whether formal or informal.
7.2 Limit on Liability. In every instance permitted by the
-------------------
Virginia Stock Corporation Act, as it exists on the date hereof or may hereafter
be amended, the liability of a director or officer of the Corporation to the
Corporation or its shareholders arising out of a single transaction, occurrence
or course of conduct shall be limited to one dollar.
7.3 Indemnification of Directors and Officers. The Corporation
------------------------------------------
shall indemnify any individual who is, was or is threatened to be made a party
to a proceeding (including a proceeding by or in the right of the Corporation)
because such individual is or was a director or officer of the Corporation, or
because such individual is or was serving the Corporation or any other legal
entity in any capacity at the request of the Corporation, against all
liabilities and reasonable expenses incurred in the proceeding except such
liabilities and expenses as are incurred because of such individual's willful
misconduct or knowing violation of the criminal law. Service as a director or
officer of a legal entity controlled by the Corporation shall be deemed service
at the request of the Corporation. The determination that indemnification under
this Section 7.3 is permissible and the evaluation as to the reasonableness of
expenses in a specific case shall be made, in the case of a director, as
provided by law, and in the case of an officer, as provided in Section 7.4 of
this Article; provided, however, that if a majority of the directors of the
Corporation has changed after the date after the date of the alleged conduct
giving rise to a claim for indemnification, such determination and evaluation
shall, at the option of the person claiming indemnification, be made by special
legal counsel agreed upon by the Board of Directors and such person. Unless a
determination has been made that indemnification is not permissible, the
Corporation shall make advances and reimbursements for expenses incurred by a
director or officer in a proceeding upon receipt of an undertaking from such
director or officer to repay the same if it is ultimately determined that such
director or officer is not entitled to indemnification. Such undertaking shall
be an unlimited, unsecured general obligation of the director or officer and
shall be accepted without reference to such director's or officer's ability to
make repayment. The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent shall not of
itself create a presumption that a director or officer acted in such a manner as
to make such director or officer ineligible for indemnification. The Corporation
is authorized to contract in advance to indemnify and make advances and
reimbursements for expenses to any of its directors or officers to the same
extent provided in this Section 7.3.
7.4 Indemnification of Others. The Corporation may, to a lesser
--------------------------
extent or to the same extent that it is required to provide indemnification and
make advances and reimbursements for expenses to its directors and officers
pursuant to Section 7.3 of this Article, provide indemnification and make
advances and reimbursements for expenses to its employees and agents, the
directors, officers, employees and agents of its subsidiaries and predecessor
entities, and any person serving any other legal entity in any capacity at the
request of the Corporation, and may contract in advance to do so. The
determination that indemnification under this Section 7.4 is permissible, the
authorization of such indemnification and the evaluation as to the
reasonableness of expenses in a specific case shall be made as authorized from
time to time by general or specific action of the Board of Directors, which
action may be taken before or after a claim for indemnification is made, or as
otherwise provided by law. No person's rights under Section 7.3 of this Article
shall be limited by the provisions of this Section 7.4.
7.5 Miscellaneous. The rights of each person entitled to
-------------
indemnification under this Article shall inure to the benefit of such person's
heirs, executors and administrators. Special legal counsel selected to make
determinations under this Article may be counsel for the Corporation.
Indemnification pursuant to this Article shall not be exclusive of any other
right of indemnification to which any person may be entitled, including
indemnification pursuant to a valid contract, indemnification by legal entities
other than the Corporation and indemnification under policies of insurance
purchased and maintained by the Corporation or others. However, no person shall
be entitled to indemnification by the Corporation to the extent such person is
indemnified by another, including an insurer. The Corporation is authorized to
purchase and maintain insurance against any liability it may have under this
Article or to protect any of the persons named above against any liability
arising from their service to the Corporation or any other legal entity at the
request of the Corporation regardless of the Corporation's power to indemnify
against such liability. The provisions of this Article shall not be deemed to
preclude the Corporation from entering into contracts otherwise permitted by law
with any individuals or legal entities, including those named above. If any
provision of this Article or its application to any person or circumstances is
held invalid by a court of competent jurisdiction, the invalidity shall not
affect other provisions or applications of this Article, and to this end the
provisions of this Article are severable.
7.6 Application; Amendments. The provisions of this Article shall
-----------------------
be applicable from and after its adoption even though some or all of the
underlying conduct or events relating to a proceeding may have occurred before
its adoption. No amendment, modification or repeal of this Article shall
diminish the rights provided hereunder to any person arising from conduct or
events occurring before the adoption of such amendment, modification or repeal.
Article VIII
UNSURRENDERED SHARES OF CHESSIE SYSTEM, INC. AND
SEABOARD COAST LINE INDUSTRIES, INC.
8.1 Conversion of Shares. On October 31, 1980 (the "Merger
--------------------
Date"), the outstanding shares of Chessie Systems, Inc. ("Chessie") and
Seaboard Coast Line Industries, Inc. ("Industries") were converted by
operation of law into shares of the Corporation.
8.2 Failure to Surrender Shares. No holder of a Chessie or
------------------------------
Industries common stock certificate shall be entitled to vote at any meeting of
stockholders of the Corporation or to receive any dividends from the Corporation
until surrender of his certificate in exchange for a certificate for shares of
the Corporation's Common Stock. Upon such surrender, there shall be paid to the
holder the amount of dividends (without interest thereon) that have theretofore
become payable, but that have not been paid by reason of the foregoing, with
respect to the number of whole shares of the Corporation's Common Stock
represented by the certificates issued in exchange. The Corporation shall,
however, be entitled after the Merger Date to treat the certificates of
outstanding common stock of Chessie and Industries as evidencing the ownership
of the number of full shares of the Corporation's Common Stock into which the
Chessie and Industries shares, represented by such certificates, shall have been
converted, notwithstanding the failure to surrender such certificates.
Article IX
SERIAL PREFERRED STOCK, SERIES A
Pursuant to a resolution adopted by the Board of Directors of the
Corporation on April 20, 1982, 250,000 shares of Serial Preferred Stock
constitute a series of Serial Preferred Stock designated as the $7.00 Cumulative
Convertible Preferred Stock, Series A ($100 Stated Value) (the "Series A
Stock"), the shares of which have the following rights and preferences:
9.1 Designation. The designation of the series of Serial
-----------
Preferred Stock shall be "$7.00 Cumulative Convertible Preferred Stock, Series
A ($100 Stated Value)."
9.2 Dividends. The holders of shares of the Series A Stock shall
---------
be entitled to receive, when and as declared by the Board of Directors,
dividends in cash in the amount of $7.00 per share per annum, payable quarterly
on the last business day of January, April, July and October in each year (each
of the quarterly periods ending on the last business day of such months,
respectively, being hereinafter called a "dividend period"); provided, however,
no dividend shall be payable as to any payment date occurring in the same
calendar month in which the initial issuance of the Series A Stock occurs.
Dividends on shares of the Series A Stock shall be cumulative commencing with
the first day of the first dividend period for which a dividend is payable in
accordance with the first sentence of this subdivision (whether or not there
shall be net profits or net assets of the Corporation legally available for the
payment of such dividends). All dividends declared upon the shares of the Series
A Stock shall be declared pro rata. Holders of shares of the Series A Stock
shall not be entitled to any dividends, whether payable in cash, property or
stock, in excess of the dividends provided for herein.
9.3 Redemption. The shares of the Series A Stock shall
----------
be subject to redemption as follows:
(a) Mandatory Redemption Requirement. On the last
----------------------------------
day of the dividend period for the Series A Stock which includes the sixth
anniversary of the initial issuance of the Series A Stock, and on the last day
of each corresponding dividend period in the four successive twelve-month
periods (the "Mandatory Redemption Dates"), the Corporation shall redeem any
shares of the Series A Stock constituting Mandatory Redemption Shares in
accordance with the provisions hereof (other than any such Mandatory Redemption
Shares that have been converted or surrendered for conversion pursuant to
subdivision (6) hereof), at the redemption price of $100 a share. "Mandatory
Redemption Shares" shall be the 50,000 shares of Series A Stock selected in
each year by the transfer agent by lot as of the dates (the "Redemption Record
Dates") 90 days prior to the first, second, third, fourth and fifth Redemption
Dates, respectively, from a pool consisting of all of the shares of the
Series A Stock originally issued, less any shares of Series A Stock selected
as Mandatory Redemption Shares in a prior year. Mandatory Redemption Shares
shall be selected by the transfer agent by lot among the stock certificates
representing shares of the Series A Stock as of the respective Redemption
Record Dates and a hypothetical stock certificate representing all of the shares
of the Series A Stock that have been converted or surrendered for conversion
on or prior to the respective Redemption Record Dates, except that shares
previously drawn for redemption shall not be included in such hypothetical
stock certificates; provided that in such lot selection certificates
representing more than 10 shares of Series A Stock, including the hypothetical
certificate representing converted shares, shall be assigned separate lot
numbers for each whole or partial 10-share unit represented by such
certificates.
(b) Optional Redemption Right. At any time after
---------------------------
the fifth anniversary of the initial issuance of the Series A Stock, the
Corporation may call for redemption all of the outstanding Series A Stock (the
"Optional Redemption Shares") at a price of $110 a share within 60 days of
the class vote referred to below (the "Optional Redemption Date"), if (i) the
shares of the Series A Stock shall have voted as a class, either separately or
together with shares of any other series of Serial Preferred Stock, as a
condition to the taking of any corporate action other than action which would
change the Series A Stock dividend rights, liquidation preference, mandatory
redemption rights, redemption premium, voting rights or conversion rights, (ii)
the vote necessary to constitute approval of that action by such class shall
not have been obtained and (iii) the vote, necessary to constitute approval
of that action by the holders of the Common Stock shall have been obtained.
(c) Redemption Procedure. Notice of redemption of
---------------------
shares of the Series A Stock shall be given by a notice stating the Mandatory
or Optional Redemption Date, respectively, mailed by first class mail not less
than 30 nor more than 60 days prior to the date fixed for redemption to the
registered holders of the shares constituting the Mandatory or Optional
Redemption Shares, respectively, at their addresses as shown on the books of the
Corporation. On or at any time before the Mandatory or Optional Redemption Date,
respectively, the Corporation shall deposit in trust, for the account of the
holders of the shares redeemed, funds necessary for such redemption with a bank
or trust company in Richmond, Virginia or New York, New York, having capital
and surplus aggregating at least $50,000,000. Upon the making as
hereinabove provided of the notice of such redemption, provided such notice
specifies the office of such bank or trust company where such deposit in trust
has been made (or the date on which it will be made) and states that deposit is
(or shall be) immediately available to the holders of the shares to be
redeemed, and upon the making of such deposit in trust together with
irrevocable instructions and authority to pay the amounts due upon redemption,
then all shares with respect to the redemption of which such deposit and
instructions shall have been made and such notice therefor given shall,
whether or not the certificates therefor shall have been surrendered
for cancellation, be deemed no longer to be outstanding for any purpose,
and all rights with respect to such shares shall thereupon cease and terminate,
except only the right of the holders of the certificates for such shares to
receive, out of the funds so deposited in trust, from and after the date of
such deposit, the amount payable upon the redemption thereof (including all
accumulated dividends), without interest, and the right of the holders of
such shares to convert them as provided in subdivision (6) hereof. Any interest
on the funds so deposited shall be paid to the Corporation.
(d) Payment of Dividends at Redemption. Before
-----------------------------------
redeeming any shares of the Series A Stock, all accumulated dividends on the
Series A Stock, including the dividend payable on the Redemption Date, shall
be declared and paid on the Redemption Date.
9.4. Rights on Liquidation, Dissolution, Winding Up. In the event
----------------------------------------------
of any involuntary or voluntary liquidation, dissolution or winding up of the
Corporation, the holders of the Series A Stock then outstanding shall be
entitled to be paid out of assets of the Corporation available for distribution
to its stockholders an amount equal to $100 per share, plus an amount equal to
accumulated and unpaid dividends to and including the date on which such payment
is made, but the holders of Series A Stock shall be entitled to no further
participation in such distribution.
9.5 Voting. Except as otherwise provided by law, the voting
------
rights of the holders of the Series A Stock shall be as follows:
(a) Each holder of shares of the Series A Stock shall
be entitled to one vote for each share held, and the shares of such series,
the shares of Common Stock and any other class of stock of the Corporation then
having general voting rights shall vote together as one class.
(b) In the event that at any time or from time to time,
while any shares of the Series A Stock are outstanding, six or more
quarterly dividends, whether consecutive or not, on any shares of the Series
A Stock shall be in arrears and unpaid, whether or not earned or declared,
then the holders of all of the outstanding shares of the Series A Stock
together with the holders of any other series of Serial Preferred Stock then
entitled to such a vote under the terms of the Articles of Incorporation of the
Corporation, voting as a single class, shall be entitled to elect two
members of the Board of Directors of the Corporation. Immediately after
the occurrence of such event, the number of directors of the Corporation
shall be increased by two and (unless a regular meeting of stockholders of the
Corporation is to be held within 60 days for the purpose of electing directors)
the Corporation shall give prompt notice to the holders of all of the
outstanding shares of the Serial Preferred Stock then so entitled to such a
vote of a special meeting of such holders to take place within 60 days
after the occurrence of such event. If such meeting shall not have been
called as so provided, such meeting may be called at the expense of the
Corporation by the holders of not less than five percent of such Serial
Preferred Stock at the time outstanding, on written notice specifying the time
and place of the meeting given by mail not less than ten days or more than 30
days before the date of such meeting specified in such notice. At such meeting
the holders of all of such Serial Preferred Stock at the time outstanding,
voting as a single class, shall have the right to elect the two additional
members of the Board of Directors of the Corporation.
If a regular meeting of the stockholders of the Corporation for
the purpose of electing directors is to be held within 60 days after the
occurrence of such event, then at such meeting, and, in any event, at each
subsequent meeting of the stockholders of the Corporation called for the purpose
of electing directors, the holders of such Serial Preferred Stock at the time
outstanding, voting as a single class, shall have the right to elect two members
of the Board of Directors on the same conditions as stated above.
At any special or regular meeting provided for in the next two
preceding paragraphs, each outstanding share of such Serial Preferred Stock
shall be entitled to one vote for the election of the directors provided for
herein; the holders of a majority of the shares of such Serial Preferred Stock
at the time outstanding shall constitute a quorum; and a plurality vote of such
quorum shall govern.
The directors elected by the holders of such Serial Preferred
Stock shall hold office until their successors shall be elected. The right of
holders of the Serial Preferred Stock to elect such two additional directors
shall continue until such time as all accumulated dividends on such shares have
been paid in full. The right shall be terminated for the time being and the
terms of the directors so elected shall automatically expire at such time as all
dividends on all outstanding shares of such Serial Preferred stock in arrears
shall have been paid in full.
9.6 Conversion. (a) The Series A Stock shall be convertible, at
----------
the option of the holder thereof, at any time upon surrender, to any office or
agency maintained by the Corporation from time to time for this purpose, of the
certificates evidencing the shares to be converted, into fully paid and
nonassessable shares of Common Stock of the Corporation at the conversion rate
in effect at the time of conversion determined as hereinafter provided. Each
share of Series A Stock shall initially be convertible into two shares of Common
Stock. Any share of Series A Stock called for redemption or for which payment is
provided upon any liquidation, dissolution or winding up of the Corporation may
be converted, provided that the certificate evidencing such share is surrendered
for conversion at any time on or before the date fixed by the Corporation, which
date shall not be earlier than 3:00 p.m., Richmond, Virginia business time, on
the second full business day immediately preceding the Redemption Date
(excluding in such computation of date the Redemption Date), as the case may be.
Upon conversion, any payment or adjustment shall be made for dividends on any
class of shares.
(b) The number of shares of Common Stock and the
number of shares of stock of other classes of the Corporation, if any, into
which each share of the Series A Stock is convertible shall be subject to
adjustment from time to time, as follows:
(i) in case the Corporation shall take a record of
the holders of Common Stock to (A) declare and pay a dividend or
distribution payable in shares of its capital stock, (B) subdivide or split
its outstanding shares of Common Stock into a larger number of shares, (C)
combine its outstanding shares of Common Stock into a smaller number of
shares, or (D) issue any capital stock (all shares so issued to be included
in the term "Common Stock" as used in this paragraph (i)) as a result of a
reclassification or a change of the terms of its outstanding shares of Common
Stock, the holder of each share of Series A Stock shall thereafter be entitled
to receive, upon conversion, the number and kind of shares of Common Stock of
the Corporation he would have been entitled to receive after any of the events
described above had such conversion occurred immediately prior to such record
date.
(ii) in case the Corporation shall take a record
of the holders of its Common Stock for the purpose of issuing any rights or
warrants entitling them to subscribe for or purchase shares of Common Stock at
a price per share less than the average market price per share of Common Stock
(as defined in paragraph (v) of this subdivision 6(b)) for the date at which
such record is taken, in each such case, the number of shares of Common Stock
into which each share of Series A Stock shall thereafter be convertible shall
be determined by multiplying the number of shares of Common Stock into which
such share of Series A Stock was immediately theretofore convertible by a
fraction, of which the numerator shall be the sum of the number of shares of
Common Stock outstanding at the time of the taking of such record plus the
number of additional shares of Common Stock so offered for subscription or
purchase, and of which the denominator shall be the sum of the number of
shares of Common Stock outstanding at the time of the taking of such record
plus the number of shares of Common Stock which could be purchased at the
average market price per share of Common Stock (as defined in paragraph (v) of
this subdivision 6(b)) for such date with the aggregate offering price of
the total number of shares so offered.
(iii) in case the Corporation shall take a record
of the holders of Common Stock to distribute to the holders of its Common Stock
evidences of indebtedness or assets (excluding cash dividends), then the number
of shares of Common Stock into which each share of Series A Stock shall
thereafter be convertible shall be determined by multiplying the number of
shares of Common Stock into which such share of Series A Stock was immediately
theretofore convertible by a fraction of which the numerator shall be the
average market price per share of Common Stock (as defined in paragraph (v) of
this subdivision 6(b)) for the record date, and of which the denominator
shall be the average market price per share of Common Stock for such date, less
the fair market value (as reasonably determined by the Board of Directors of the
Corporation, whose determination shall be conclusive, and described in a
statement filed with the Transfer Agent or Transfer Agents for the Series A
Stock and for the Common Stock) of the portion of the assets or evidences of
indebtedness so distributed applicable to one of the outstanding shares of the
Common Stock.
(iv) in case of any reorganization,
recapitalization, consolidation, merger, or sale, transfer, exchange or
conveyance of all or substantially all of the property or assets of the
Corporation as a result of which the holders of Common Stock shall be entitled
to receive stock, other securities, cash or other assets with respect to or in
exchange for Common Stock, the holder of a share of Series A Stock shall have
the right thereafter to convert such share into the kind and amount of shares
of stock or other securities or other assets receivable upon such
reorganization, recapitalization, consolidation, merger, sale, transfer,
exchange or conveyance by a holder of the number of shares of Common Stock into
which such share of Series A Stock might have been converted immediately prior
to such reorganization, recapitalization, consolidation, merger, sale, transfer,
exchange or conveyance and shall have no other conversion rights with regard to
such share of Series A Stock.
(v) the term "average market price per share of
Common Stock" for any date shall mean the average of the daily closing prices
for the thirty consecutive business days commencing forty-five business days
before the date in question. The closing price for each day shall be as
reported on the New York Stock Exchange-Composite Transactions.
(vi) no adjustment in the number of shares of
Common Stock into which any share of Series A Stock is convertible shall be
required unless such adjustment would require an increase or decrease of at
least one percent (1%) in the number of shares of Common Stock into which a
share of Series A Stock is then convertible; provided, however, that any
adjustments which by reason of this paragraph (vi) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment;
and provided, further, that notwithstanding the foregoing, adjustment shall
be made not later than the earlier of (A) three years after the occurrence
of any of the events specified in paragraphs (i), (ii) and (iii) of this
subdivision 6(b) and (B) the date as to which the aggregate adjustments
not previously made would require a total increase or decrease of 1% in the
conversion rate. All calculations under this subdivision 6(b) shall be made to
the nearest cent or the nearest one-hundredths of a share, as the case may be.
Except as otherwise provided in this subdivision
6(b), no adjustment of the conversion rate shall be made by reason of the
issuance of shares of Common Stock in exchange for cash, property or services.
(vii) if the Corporation shall take a record for
the purpose of entitlement to any dividend, distribution, rights or warrants,
and thereafter legally abandon its plan to pay or deliver such dividend,
distribution, rights or warrants, then no adjustment in the number of shares of
Common Stock, or of other shares of the Corporation into which any share of
Series A Stock is convertible, shall be required.
(viii) in the event that at any time as a result of
an adjustment made pursuant to paragraph (i) of this subdivision 6(b), the
holder of any shares of Series A Stock shall become entitled to receive any
shares of capital stock of the Corporation other than Common Stock or shares
of stock or other securities or another corporation pursuant to subparagraph
(iv) of this subdivision 6(b), thereafter the number of such other shares or
amount of such other securities so receivable upon conversion of any share of
Series A Stock shall be subject to adjustment from time to time in the manner
and on the terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in paragraphs (i) through (vii) of this
subdivision 6(b), to the extent they can appropriately apply on like terms to
such other shares.
(c) Whenever any adjustment is required in the shares
into which any share of Series A Stock is convertible, the Corporation shall
forthwith (i) file with the Transfer Agent or Transfer Agents for the
Series A Stock and for the Common Stock a statement describing in reasonable
detail the adjustment and the method of calculation used, (ii) cause a notice
stating the nature and amount of such adjustment to be published at least once
in a newspaper printed in the English language and customarily published on
each business day and of general circulation in the City of Richmond,
Virginia and (iii) cause a copy of such notice to be mailed to the holders of
record of shares of Series A Stock, first class, postage prepaid, at their
respective address as the same shall appear on the books of the Corporation.
(d) No fractional shares or scrip representing
fractional shares shall be issued upon the conversion of any Series A Stock.
If the conversion of any Series A Stock results in a fraction, an amount equal
to such fraction multiplied by the average market price per share of Common
Stock (determined as provided in paragraph (v) of subdivision 6(b)) of the
Common Stock on the day of conversion shall be paid to such holder in cash by
the Corporation.
(e) The Corporation shall at all times reserve
and keep available out of its authorized but unissued shares the full number
of shares into which all shares of Series A Stock from time to time outstanding
are convertible.
9.7 Retirement of Redeemed Shares, etc. Shares of the Series A
------------------------------------
Stock which have been acquired by the Corporation shall not be reissued as
Series A Stock but shall be retired and cancelled in the manner provided by law
and shall become authorized as Serial Preferred Stock undesignated as to Series.
Shares of Series A Stock which are held by the Corporation shall not be deemed
outstanding for any purpose.
Article X
SERIAL PREFERRED STOCK, SERIES B
Pursuant to resolutions adopted by the Board of Directors of the
Corporation on April 29, 1986 and June 27, 2000, 3,000,000 shares of Serial
Preferred Stock constitute a series of Serial Preferred Stock designated as the
Junior Participating Preferred Stock, Series B (the "Series B Stock"), the
shares of which have the following rights and preferences;
10.1. Designation and Amount. The shares of such series shall be
----------------------
designated as "Junior Participating Preferred Stock, Series B" and the number of
shares constituting such series shall be 3,000,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of the Series B Stock to a number
less than that of the shares then outstanding.
10.2. Dividends and Distributions.
---------------------------
(a) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of the Series B Stock with respect to dividends, the holders of shares of
the Series B Stock, in preference to the holders of Common Stock of the
Corporation and of any other junior stock, shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the fifteenth day (or, if
not a business day, the preceding business day) of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of the Series B
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of Common Stock,
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
the Series B Stock. In the event the Corporation shall at any time after May 29,
1998 declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which holders of
shares of the Series B Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(b) The Corporation shall declare a dividend or distribution on
the Series B Stock as provided in paragraph (a) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series B
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of the Series B Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of the Series B Stock,
unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of the Series B Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of the Series B Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of the Series B Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be not more than 60 days prior to the date fixed for the
payment thereof.
10.3. Voting Rights. The holders of shares of the Series B
--------------
Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of the Series B Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the shareholders of the Corporation.
In the event the Corporation shall at any time after May 29, 1998 declare or pay
any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which holders of shares of
the Series B Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders of
Shares of the Series B Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of shareholders of
the Corporation.
(c) Except as set forth herein, holders of the Series B Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
10.4. Certain Restrictions.
--------------------
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of the Series B Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare, set apart or pay dividends on or make
any other distributions on the Common Stock or any shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series B Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series
B Stock, except dividends paid ratably on the Series B Stock and all such
parity stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled; or
(iii) redeem or purchase or otherwise acquire for
consideration shares of the Series B Stock, any such parity stock or any stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Stock, or set aside for or pay to any sinking fund
therefore.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 4 purchase or otherwise acquire such shares at such time and in
such manner.
10.5. Reacquired Shares. Any shares of the Series B Stock
------------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
10.6. Liquidation, Dissolution or Winding Up. Upon any
---------------------------------------------
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of Common Stock or of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series B Stock unless, prior thereto, the holders of shares of the Series B
Stock shall have received $100 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment, provided that the holders of shares of the Series B Stock shall
be entitled to receive an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of Common Stock, or (2) to the holders of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Stock, except distributions made
ratably on the Series B Stock and all other such parity stock in proportion to
the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time after May 29, 1998 declare or pay any dividend on Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of the Series B Stock were entitled
immediately prior to such event under the provision of clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
10.7. Consolidation, Merger, etc. In case the Corporation shall
----------------------------
enter into any consolidation, merger, combination or other transition in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
the Series B Stock shall at the same time be similarly exchanged or changed in
an amount per share (subject to the provision for adjustment hereinafter set
forth) equal to 100 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time after May 29, 1998 declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of the Series B Stock
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
10.8. No Redemption. The shares of the Series B Stock shall not
-------------
be redeemable.
10.9. Rank. The Series B Stock shall rank junior to all other
----
series of the Corporation's preferred stock outstanding as of April 29, 1986,
as to the payment of dividends and the distribution of assets.
10.10. Amendment. The Articles of Incorporation shall not be
---------
amended in any manner which would materially alter or change the power,
preferences or special rights of the Series B Stock so as to affect them
adversely without the affirmative vote of the holders of at least two-thirds of
the outstanding shares of the Series B Stock, voting together as a single voting
group.
Article XI
VOTE TO AMEND OR RESTATE
As to each voting group entitled to vote on an amendment or restatement
of these Articles of Incorporation the vote required for approval shall be (i)
the vote required by the terms of these Articles of Incorporation, as amended or
as restated from time to time, if such terms specifically require the approval
of more than a majority of the votes entitled to be cast thereon by such voting
group; or (ii) if clause (i) of this Article is not applicable, a majority of
the votes entitled to be cast thereon.
