UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND
- ---- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998 OR
--------------------------------
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the transition period from to
--------------- ---------------
Commission file number 1-3950
------
FORD MOTOR COMPANY
------------------
(Exact name of registrant as specified in its charter)
Incorporated in Delaware 38-0549190
--------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
The American Road, Dearborn, Michigan 48121
-----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 313-322-3000
-----------------
Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| . No .
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date: As of March 31, 1998, the Registrant had outstanding 1,142,136,738 shares
of Common Stock and 70,852,076 shares of Class B Stock.
Exhibit index located on sequential page number 17
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
HIGHLIGHTS
----------
First Quarter
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
(unaudited)
Worldwide vehicle unit sales of cars and trucks
(in thousands)
- North America 1,059 1,066
- Outside North America 662 615
----- -----
Total 1,721 1,681
===== =====
Sales and revenues (in millions)
- Automotive $ 29,076 $ 30,037
- Financial Services 7,508 7,277
--------- ---------
Total $ 36,584 $ 37,314
========= =========
Net income (in millions)
- Automotive $ 1,235 $ 1,004
- Financial Services (including income of
The Associates through March 12, 1998) 456 465
--------- ---------
Subtotal 1,691 1,469
- Gain on spin-off of The Associates 15,955 -
--------- ---------
Total $ 17,646 $ 1,469
========= =========
Capital expenditures (in millions)
- Automotive $ 2,101 $ 1,613
- Financial Services 98 126
--------- ---------
Total $ 2,199 $ 1,739
========= =========
Automotive capital expenditures as a percentage
of sales 7.2% 5.4%
Stockholders' equity at March 31
- Total (in millions) $ 21,497 $ 27,252
- After-tax return on Common and Class B
stockholders' equity 24.8% 22.1%
Automotive net cash at March 31
(in millions)
- Cash and marketable securities $ 21,277 $ 15,967
- Debt 8,178 8,202
--------- ---------
Automotive net cash $ 13,099 $ 7,765
========= =========
After-tax return on sales
- North American Automotive 5.0% 4.9%
- Total Automotive 4.3% 3.4%
Shares of Common and Class B Stock (in millions)
- Average number outstanding 1,210 1,190
- Number outstanding at March 31 1,213 1,191
Common Stock price (per share)
(adjusted to reflect The Associates spin-off)
- High $43-7/8 $23-3/8
- Low 28-15/32 20-35/64
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
AFTER PREFERRED STOCK DIVIDENDS
Income assuming dilution
- Automotive $ 0.99 $ 0.82
- Financial Services (including income of
The Associates through March 12, 1998) 0.37 0.38
--------- ---------
Subtotal 1.36 1.20
- Premium on Series B Preferred Stock repurchase (0.07) -
- Gain on spin-off of The Associates 12.94 -
--------- ---------
Total $ 14.23 $ 1.20
========= =========
Cash dividends $ 0.42 $ 0.385
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
VEHICLE UNIT SALES
------------------
For the Periods Ended March 31, 1998 and 1997
(in thousands)
First Quarter
---------------------
1998 1997
--------- --------
<S> <C> <C>
(unaudited)
North America
United States
Cars 391 367
Trucks 564 612
----- -----
Total United States 955 979
Canada 76 69
Mexico 28 18
----- -----
Total North America 1,059 1,066
Europe
Britain 142 98
Germany 106 115
Italy 70 64
France 39 36
Spain 37 46
Other countries 100 97
----- -----
Total Europe 494 456
Other international
Brazil 42 41*
Argentina 30 29*
Australia 30 30
Taiwan 29 25
Japan 8 10
Other countries 29 24
----- -----
Total other international 168 159
----- -----
Total worldwide vehicle unit sales 1,721 1,681
===== =====
</TABLE>
Vehicle unit sales generally are reported worldwide on a "where sold"
basis and include sales of all Ford-badged units, as well as units
manufactured by Ford and sold to other manufacturers
*Adjusted to reflect change in reporting practice
-3-
<PAGE>
<TABLE>
<CAPTION>
Part I. Financial Information
-----------------------------
Item 1. Financial Statements
- ------- --------------------
Ford Motor Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
--------------------------------
For the Periods Ended March 31, 1998 and 1997
(in millions)
First Quarter
-------------------------
1998 1997
----------- ----------
<S> <C> <C>
(unaudited)
AUTOMOTIVE
Sales $29,076 $30,037
Costs and expenses (Note 2)
Costs of sales 25,584 26,795
Selling, administrative and other expenses 1,686 1,538
-------- -------
Total costs and expenses 27,270 28,333
Operating income 1,806 1,704
Interest income 322 249
Interest expense 199 194
-------- -------
Net interest income 123 55
Equity in net loss of affiliated companies (10) (144)
Net expense from transactions with
Financial Services (48) (19)
------- -------
Income before income taxes - Automotive 1,871 1,596
FINANCIAL SERVICES
Revenues 7,508 7,277
Costs and expenses
Interest expense 2,370 2,356
Depreciation 2,037 1,765
Operating and other expenses 1,583 1,500
Provision for credit and insurance losses 708 845
------- -------
Total costs and expenses 6,698 6,466
Net revenue from transactions with Automotive 48 19
Gain on spin-off of The Associates (Note 3) 15,955 -
------- -------
Income before income taxes - Financial Services 16,813 830
------- -------
TOTAL COMPANY
Income before income taxes 18,684 2,426
Provision for income taxes 972 898
------- -------
Income before minority interests 17,712 1,528
Minority interests in net income of subsidiaries 66 59
------- -------
Net income $17,646 $ 1,469
======= =======
Income attributable to Common and Class B Stock
after preferred stock dividends $17,551 $ 1,455
Average number of shares of Common and Class B
Stock outstanding 1,210 1,190
AMOUNTS PER SHARE OF COMMON AND CLASS B STOCK
Basic income (Note 4) $ 14.48 $ 1.23
Diluted income (Note 4) $ 14.23 $ 1.20
Cash dividends $ 0.42 $ 0.385
</TABLE>
The accompanying notes are part of the financial statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
--------------------------
(in millions)
March 31, December 31,
1998 1997
---------------- --------------
<S> <C> <C>
(unaudited)
ASSETS
Automotive
Cash and cash equivalents $ 6,804 $ 6,316
Marketable securities 14,473 14,519
-------- --------
Total cash and marketable securities 21,277 20,835
Receivables 2,993 3,097
Inventories (Note 5) 6,340 5,468
Deferred income taxes 3,174 3,249
Other current assets 3,703 3,782
Net current receivable from Financial Services 0 416
-------- --------
Total current assets 37,487 36,847
Equity in net assets of affiliated companies 1,874 1,951
Net property 35,438 34,594
Deferred income taxes 3,643 3,712
Other assets 7,062 7,975
-------- --------
Total Automotive assets 85,504 85,079
Financial Services
Cash and cash equivalents 1,424 1,618
Investments in securities 1,117 2,207
Net receivables and lease investments 124,062 176,416
Other assets 11,128 13,777
Net receivable from Automotive 3 0
-------- --------
Total Financial Services assets 137,734 194,018
-------- --------
Total assets $223,238 $279,097
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Automotive
Trade payables $ 11,850 $ 11,997
Other payables (Note 3) 5,428 2,557
Accrued liabilities 17,539 16,250
Income taxes payable 1,366 1,358
Debt payable within one year 801 1,129
Net current payable to Financial Services 3 0
-------- --------
Total current liabilities 36,987 33,291
Long-term debt 7,377 7,047
Other liabilities 28,663 28,899
Deferred income taxes 1,203 1,210
-------- --------
Total Automotive liabilities 74,230 70,447
Financial Services
Payables 3,975 4,539
Debt 113,375 160,071
Deferred income taxes 4,430 4,347
Other liabilities and deferred income 5,053 7,865
Net payable to Automotive 0 416
-------- --------
Total Financial Services liabilities 126,833 177,238
Company-obligated mandatorily redeemable preferred securities of a subsidiary
trust holding solely junior subordinated debentures of the Company (Note 6) 678 678
Stockholders' equity
Capital stock
Preferred Stock, par value $1.00 per share (aggregate liquidation preference
of $177 million and $637 million) * *
Common Stock, par value $1.00 per share (1,144 and 1,132 million shares issued) 1,144 1,132
Class B Stock, par value $1.00 per share (71 million shares issued) 71 71
Capital in excess of par value of stock 5,225 5,564
Accumulated other comprehensive income (1,416) (1,228)
ESOP loan and other (346) (39)
Earnings retained for use in business 16,819 25,234
-------- --------
Total stockholders' equity 21,497 30,734
-------- --------
Total liabilities and stockholders' equity $223,238 $279,097
======== ========
</TABLE>
The accompanying notes are part of the financial statements.
- - - - -
*Less than $1 million
-5-
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------
For the Periods Ended March 31, 1998 and 1997
(in millions)
First Quarter 1998 First Quarter 1997
---------------------------- ---------------------------
Financial Financial
Automotive Services Automotive Services
------------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
(unaudited) (unaudited)
Cash and cash equivalents at January 1 $ 6,316 $ 1,618 $ 3,578 $ 3,689
Cash flows from operating activities before securities trading 3,138 4,463 3,161 2,342
Net sales/(purchases) of trading securities 108 (113) (832) 37
------- -------- ------- -------
Net cash flows from operating activities 3,246 4,350 2,329 2,379
Cash flows from investing activities
Capital expenditures (2,101) (98) (1,613) (126)
Purchase of leased assets (110) - - -
Acquisitions of receivables and lease investments - (27,772) - (26,481)
Collections of receivables and lease investments - 19,289 - 21,192
Net acquisitions of daily rental vehicles - (611) - (528)
Purchases of securities (123) (569) 0 (1,054)
Sales and maturities of securities 62 491 0 793
Proceeds from sales of receivables and lease investments - 2,368 - 807
Net investing activity with Financial Services 403 - 364 -
Other 269 (661) 78 151
------- -------- ------- -------
Net cash used in investing activities (1,600) (7,563) (1,171) (5,246)
Cash flows from financing activities
Cash dividends (519) (1) (472) (7)
Issuance of Common Stock 93 - 23 -
Preferred stock - Series B repurchase, Series A redemption (420) - - -
Changes in short-term debt 76 1,882 (101) 1,033
Proceeds from issuance of other debt 337 7,996 210 3,842
Principal payments on other debt (812) (5,650) (64) (3,839)
Net financing activity with Automotive - (403) - (364)
Spin-off of The Associates cash - (508) - -
Other (323) 53 0 106
------- --------- ------- -------
Net cash (used in)/provided by financing activities (1,568) 3,369 (404) 771
Effect of exchange rate changes on cash (9) 69 (35) (92)
Net transactions with Automotive/Financial Services 419 (419) (998) 998
------- -------- - ------- -------
Net increase/(decrease) in cash and cash equivalents 488 (194) (279) (1,190)
-------- -------- ------- -------
Cash and cash equivalents at March 31 $ 6,804 $ 1,424 $ 3,299 $ 2,499
======= ======== ======= =======
</TABLE>
The accompanying notes are part of the financial statements.
-6-
<PAGE>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(unaudited)
1. Financial Statements - The financial data presented herein are unaudited,
but in the opinion of management reflect those adjustments necessary for a
fair presentation of such information. Results for interim periods should
not be considered indicative of results for a full year. Reference should
be made to the financial statements contained in the registrant's Annual
Report on Form 10-K (the "10-K Report") for the year ended December 31,
1997. For purposes hereof, "Ford" or the "Company" means Ford Motor Company
and its majority owned subsidiaries unless the context requires otherwise.
Certain amounts for prior periods are reclassified, if required, to conform
with 1998 presentations.
2. Selected Automotive costs and expenses are summarized as follows (in
millions):
<TABLE>
<CAPTION>
First Quarter
--------------------
1998 1997
-------- --------
<S> <C> <C>
Depreciation $680 $683
Amortization 718 787
</TABLE>
3. Spin-off of The Associates - On March 2, 1998, the Board of Directors of
the Company approved the spin-off of The Associates by declaring a dividend
on Ford's outstanding shares of Common and Class B Stock consisting of
Ford's 80.7% interest (279.5 millions shares) in The Associates. The Board
of Directors also declared a dividend in cash on shares of Company stock
held in U.S. employee savings plans equal to the market value of The
Associates stock to be distributed per share of the Company's Common and
Class B Stock. Both the spin-off dividend and the cash dividend were paid
on April 7, 1998 to stockholders of record on March 12, 1998.
Holders of Ford Common and Class B Stock on the record date received
0.262085 shares of The Associates common stock for each share of Ford
stock, and participants in U.S. employee savings plans on the record date
received $22.12 in cash per share of Ford stock, based on the
volume-weighted average price of The Associates stock of $84.3849 per share
on April 7, 1998. The total value of the distribution (including the $3.2
billion cash dividend) was $26.8 billion or $22.12 per share of Ford stock.
As a result of the spin-off of The Associates, Ford realized a gain of
$15,955 million based on the fair value of The Associates as of the record
date, March 12, 1998, in first quarter 1998. Ford has received a ruling
from the U.S. Internal Revenue Service that the distribution qualifies as a
tax-free transaction for U.S. federal income tax purposes.
The Company's results in first quarter 1998 include Ford's share of The
Associates earnings through the record date, March 12 ($177 million). The
balance sheet at March 31, 1998 no longer includes The Associates. Other
payables includes a $3.2 billion dividend payable generated by the cash
dividend to participants in U.S. employee savings plans.
4. Income Per Share of Common and Class B Stock - Basic income per share of
Common and Class B Stock is calculated by dividing the income attributable
to Common and Class B Stock by the average number of shares of Common and
Class B Stock outstanding during the applicable period, adjusted for
issuable shares and uncommitted ESOP shares.
The company had Series A Preferred Stock convertible to Common Stock until
January 9, 1998. Other obligations, such as stock options, are considered
to be dilutive potential common stock. The calculation of diluted income
per share of Common and Class B Stock takes into account the effect of
dilutive potential common stock.
Income per share of Common and Class B Stock was as follows (in millions,
except per share amounts):
<TABLE>
<CAPTION>
First Quarter 1998 First Quarter 1997
----------------------- ----------------------
Income Shares Income Shares
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income $17,646 1,210 $1,469 1,190
Preferred stock dividend requirements (95) - (14) -
Issuable and uncommitted ESOP shares - 2 - (3)
------- ----- ------ -----
Basic income and shares $17,551 1,212 $1,455 1,187
Basic income per share $ 14.48 $ 1.23
----------------------
Basic income and shares $17,551 1,212 $1,455 1,187
Net dilutive effect of options - 20 - 14
Convertible preferred stock and other 0 1 4 12
------- ----- ------ -----
Diluted income and shares $17,551 1,233 $1,459 1,213
Diluted income per share $ 14.23 $ 1.20
------------------------
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
Ford Motor Company and Subsidiaries
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(unaudited)
5. Automotive inventories are summarized as follows (in millions):
March 31, December 31,
1998 1997
------------- -------------
<S> <C> <C>
Raw materials, work in process and supplies $3,357 $2,875
Finished products 2,983 2,593
------ ------
Total inventories $6,340 $5,468
====== ======
U.S. inventories $2,617 $1,993
</TABLE>
6. Company-Obligated Mandatorily Redeemable Preferred Securities of a
Subsidiary Trust - The sole asset of Ford Motor Company Capital Trust I
(the "Trust"), which is the obligor on the Preferred Securities of such
Trust, is $632 million principal amount of 9% Junior Subordinated
Debentures due 2025 of Ford Motor Company.
7. Changes in stockholders' equity for the three months ended March 31, 1998
were as follows (in millions):
<TABLE>
<CAPTION>
Earnings Capital
Retained Accum. in Excess
for Use Other of Par
in the Compr. Capital Value of
Total Business Income Other Stock Stock
-------------- --------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1 $ 30,734 $ 25,234 $(1,228) $ (39) $1,203 $5,564
Comprehensive income
Net income 17,646 17,646
Other comprehensive income (188) (188)
--------
Total comprehensive income 17,458
Common stock issued for Series A Preferred
Stock conversion, employee benefit plans
and other 93 12 81
Associates spin-off to Ford Common
stockholders (22,298) (22,298)
Associates spin-off cash distribution to
savings plans (3,242) (3,242)
Preferred stock - Series B repurchase and
Series A redemption (420) (420)
ESOP loan and other (309) (2) (307)
Quarterly cash dividends (519) (519)
-------- -------- ------- ----- ------ ------
Balance at March 31 $ 21,497 $ 16,819 $(1,416) $(346) $1,215 $5,225
======== ======== ======= ===== ====== ======
</TABLE>
-8-
<PAGE>
[Coopers & Lybrand L.L.P. letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Ford Motor Company
We have reviewed the consolidated balance sheet of Ford Motor Company and
Subsidiaries at March 31, 1998 and the related consolidated statement of income
and condensed consolidated statement of cash flows for the periods set forth in
the Ford Motor Company Quarterly Report on Form 10-Q for the quarter ended March
31, 1998. These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet at December 31, 1997 and the related
consolidated statements of income, stockholders' equity and cash flows for the
year then ended (not presented herein); and in our report dated January 26,
1998, we expressed an unqualified opinion on those consolidated financial
statements.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Detroit, Michigan
April 15, 1998
-9-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
- ------------------------------------------------------------------------
OVERVIEW
The company's worldwide operating earnings were $1,691 million in first quarter
1998, or $1.36 per diluted share of Common and Class B Stock in first quarter
1998, compared with $1,469 million, or $1.20 per diluted share in first quarter
1997.
These operating results exclude a one-time gain of $15,955 million, or $12.94
per diluted share, resulting from the spin-off of The Associates (discussed
below), and a one-time earnings per share reduction of $0.07 per share resulting
from the premium paid to repurchase the company's Series B Cumulative Preferred
Stock. Including both one-time factors, the company's reported first quarter
earnings were $17,646 million, or $14.23 per diluted share. The company's
results in first quarter 1998 include Ford's share of The Associates' earnings
through March 12, the record date for the spin-off of The Associates.
The company's worldwide sales and revenues were $36.6 billion in first quarter
1998, down $730 million from first quarter 1997. Vehicle unit sales of cars and
trucks were 1,721,000, up 40,000 units or 2% from a year ago. Stockholders'
equity was $21.5 billion at March 31, 1998, compared with $30.7 billion at
December 31, 1997. The reduction in stockholders' equity reflects primarily The
Associates spin-off.
RESULTS OF OPERATIONS
The company's net income for worldwide Automotive operations in first quarter
1998 and 1997 was as follows (in millions):
<TABLE>
<CAPTION>
First Quarter 1998
--------------------- O/(U)
1998 1997 1997
-------- -------- -------
<S> <C> <C> <C>
North America Automotive $1,010 $1,020 $(10)
Automotive Outside North America
- Europe 230 105 125
- South America (45) (47) 2
- Other 40 (74) 114
------ ------ ----
Total Automotive Outside North America 225 (16) 241
------ ------ ----
Total Automotive $1,235 $1,004 $231
====== ====== ====
</TABLE>
The company's net income for worldwide Financial Services operations in first
quarter 1998 and 1997 was as follows (in millions):
<TABLE>
<CAPTION>
First Quarter 1998
--------------------- O/(U)
1998 1997 1997
-------- -------- --------
<S> <C> <C> <C>
Ford Credit $ 278 $ 276 $ 2
The Associates 220* 238 (18)
Hertz 35 20 15
Minority Interests, Eliminations and Other (77) (69) (8)
------- ------ -------
Financial Services (excluding the gain
on The Associates spin-off) 456 465 (9)
Gain on Spin-Off of The Associates 15,955 - 15,955
------- ------ -------
Total Financial Services $16,411 $ 465 $15,946
======= ====== =======
Memo: Ford's share of earnings in
The Associates $ 177* $ 192 (15)
Hertz 29 20 9
- - - - -
* Through March 12, 1998
</TABLE>
-10-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
- ------------------------------------------------------------------------
FIRST QUARTER 1998 COMPARED WITH FIRST QUARTER 1997
Automotive Operations
- ---------------------
Ford's worldwide Automotive operations earned $1,235 million in first quarter
1998 on sales of $29.1 billion, compared with earnings of $1,004 million on
sales of $30 billion in first quarter 1997. Increased earnings in first quarter
1998 compared with first quarter 1997 reflect primarily continued cost
reductions, the effects of improved product mix, and higher volumes outside
North America. Adjusted for constant volume and mix, total automotive costs were
down $400 million compared with first quarter a year ago.
Earnings for Automotive operations in North America were $1,010 million in first
quarter 1998, down $10 million compared with first quarter a year ago. Cost
reductions in North America were offset by higher marketing costs. The after-tax
return on sales was 5%, up 1/10 of a point from first quarter 1997.
The U.S. economy continued on a path of strong growth, low unemployment, and
moderate inflation in first quarter 1998. The seasonally-adjusted annual selling
rate for the U.S. car and truck industry was 15.3 million units in first quarter
1998, down from 15.9 million units in first quarter 1997. The company expects
car and truck industry sales for full-year 1998 to be slightly lower than the
15.5 million units in 1997. Ford's combined U.S. car and truck share was 24.5%,
down 6/10 of a point from first quarter a year ago.
Automotive operations in Europe earned $230 million in first quarter 1998, up
$125 million compared with first quarter a year ago. The improvement reflected
primarily higher volumes and lower operating costs, offset partially by
increased marketing costs.
The seasonally-adjusted annual selling rate for the European car and truck
industry was 15.5 million units in first quarter 1998, compared with 14.3
million units in first quarter 1997. European car and truck industry sales in
full-year 1998 are expected to be about equal to or slightly higher than the 15
million units in 1997. Ford's combined European car and truck share was 11.5% in
first quarter 1998, unchanged from first quarter a year ago.
Automotive operations in South America lost $45 million in first quarter 1998,
compared with a loss of $47 million in first quarter a year ago. In first
quarter 1998, the seasonally-adjusted annual selling rate for the Brazilian car
and truck industry totaled 1.6 million units, compared with 1.8 million units in
first quarter a year ago. For full-year 1998, the company expects the car and
truck industry in Brazil to be lower than the 1.9 million units in 1997. Ford's
combined car and truck share in Brazil was 13.7% in first quarter 1998, up 2.7
points from first quarter 1997.
Financial Services Operations
- -----------------------------
Operating results for Financial Services operations in first quarter 1998 were
$456 million, down $9 million compared with first quarter a year ago. Including
the gain on the spin-off of The Associates in first quarter 1998, results were
$16,411 million, up $15,946 million from first quarter 1997. Excluding Ford's
share of The Associates operating income in first quarter 1998 ($177 million
through March 12) and the gain on the spin-off, operating results were $279
million, compared with $273 million in first quarter 1997 on a comparable basis.
-11-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
- -------------------------------------------------------------------------
Earnings at Ford Credit in first quarter 1998 were $278 million, up $2 million
compared with first quarter a year ago. The increase reflects primarily a
smaller increase in credit loss reserve requirements and higher levels of
earning assets compared with a year ago; lower net financing margins, higher
credit losses, and higher operating costs were partial offsets. Net financing
margins decreased in first quarter 1998 compared with first quarter a year ago,
reflecting primarily higher depreciation expense for leased vehicles, offset
partially by lower borrowing costs. Higher depreciation expense for leased
vehicles reflects primarily lower-than-anticipated residual values on leased
vehicles, and is expected to adversely affect Ford Credit's earnings for the
remainder of 1998. As a result, based on the present outlook, the goal of 10
percent or greater earnings growth for Ford Credit in 1998 will be very
difficult to achieve.
Earnings at Hertz in first quarter 1998 were a record $35 million (of which $29
million was Ford's share), up $15 million from the same period a year ago. The
increase reflects primarily higher revenues in U.S. car rental operations.
LIQUIDITY AND CAPITAL RESOURCES
Automotive Operations
- ---------------------
Automotive cash and marketable securities were $21.3 billion at March 31, 1998,
up $442 million from December 31, 1997. The company paid $519 million in cash
dividends on its Common Stock, Class B Stock and Preferred Stock during first
quarter 1998. As described below, in connection with The Associates spin-off, a
$3.2 billion cash dividend on shares of Ford stock held in U.S. employee savings
plans was paid on April 7, 1998.
Automotive capital expenditures totaled $2.1 billion in first quarter 1998, up
$488 million from first quarter 1997. Capital expenditures were 7.2% of sales in
first quarter 1998, up 1.8 points from first quarter 1997.
Automotive debt at March 31, 1998 totaled $8.2 billion, which was 28% of total
capitalization (stockholders' equity and Automotive debt), compared with $8.1
billion, or 21% of total capitalization at December 31, 1997. The increase in
the ratio in 1998 reflects the reduction in stockholders' equity resulting from
The Associates spin-off.
For a discussion of support facilities available to the company's Automotive and
Financial Services operations, see Note 9 of the company's Notes to Financial
Statements for the year ended December 31, 1997, which are included in the
company's Annual Report on Form 10-K for such year.
Financial Services Operations
- -----------------------------
The company's balance sheet at March 31, 1998 does not include The Associates,
which explains primarily the declines discussed below.
Financial Services cash and investments in securities totaled $2.5 billion at
March 31, 1998, down $1.3 billion from December 31, 1997.
Net receivables and lease investments were $124.1 billion at March 31, 1998,
down $52.3 billion from December 31, 1997.
Total debt was $113.4 billion at March 31, 1998, down $46.7 billion from
December 31, 1997.
Outstanding commercial paper at March 31, 1998 totaled $42.3 billion at Ford
Credit, and $1.5 billion at Hertz, with an average remaining maturity of 22 days
and 42 days, respectively.
-12-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
- -------------------------------------------------------------------------
SPIN-OFF OF THE ASSOCIATES
On March 2, 1998, the Board of Directors of the company approved the spin-off of
The Associates by declaring a dividend on Ford's outstanding shares of Common
and Class B Stock consisting of Ford's 80.7% interest (279.5 millions shares) in
The Associates. The Board of Directors also declared a dividend in cash on
shares of company stock held in U.S. employee savings plans equal to the market
value of The Associates stock to be distributed per share of the company's
Common and Class B Stock. Both the stock dividend and the cash dividend were
paid on April 7, 1998 to stockholders of record on March 12, 1998.
Holders of Ford Common and Class B Stock on the record date received 0.262085
shares of The Associates common stock for each share of Ford stock, and
participants in U.S. employee savings plans who held Ford stock in such plans on
the record date received $22.12 in cash per share of Ford stock, which amount
was based on the volume-weighted average price of The Associates stock of
$84.3849 per share on the New York Stock Exchange on April 7, 1998. The total
value of the distribution (including the $3.2 billion cash dividend) was $26.8
billion or $22.12 per share of Ford stock.
As a result of the spin-off of The Associates, Ford realized a gain of $15,955
million based on the fair value of The Associates as of the record date, March
12, 1998. Ford has received a ruling from the U.S. Internal Revenue Service that
the distribution qualifies as a tax-free transaction for U.S. federal income tax
purposes.
The company's results in first quarter 1998 include Ford's share of The
Associates earnings through the record date, March 12 ($177 million). The
balance sheet at March 31, 1998 does not include The Associates, but it includes
in "Other payables" a $3.2 billion dividend payable generated by the cash
dividend to participants in U.S. employee savings plans.
NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosures
about Segments of an Enterprise and Related Information," effective for 1998,
establishes standards for reporting information about operating segments in
annual financial statements and, beginning in 1999, requires reporting of
selected information about operating segments in interim financial reports
issued to stockholders. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers. Ford will
adopt SFAS 131 for its financial statements for the year ending December 31,
1998. Management is evaluating the impact, if any, the Statement will have on
the company's present segment reporting.
Statement of Financial Accounting Standards No. 132 ("SFAS 132"), "Employers'
Disclosures about Pensions and Other Postretirement Benefits," was issued by the
Financial Accounting Standards Board in February 1998. This Statement revises
employers' disclosures about pension and other postretirement benefit plans. It
does not change the measurement or recognition of those plans. This Statement
standardizes the disclosure requirements for pensions and other postretirement
benefits to the extent practicable, requires additional information on changes
in the benefit obligations and fair values of plan assets, and eliminates
certain disclosures. Restatement of disclosures for earlier periods is required.
The Statement is effective for Ford's financial statements for the year ended
December 31, 1998.
Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use," was issued by the American
Institute of Certified Public Accountants in March 1998. This SOP provides
guidance on accounting for the costs of computer software developed or obtained
for internal use. Effective for fiscal years beginning after December 15, 1998,
this SOP requires capitalization of certain internal-use computer software
costs. Presently, Ford expenses the costs of developing or obtaining
internal-use software.
-13-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
- ------------------------------------------------------------------------
OTHER FINANCIAL INFORMATION
Coopers & Lybrand L.L.P., Ford's independent public accountants, performed a
limited review of the financial data presented on pages 4 through 8 inclusive.
The review was performed in accordance with standards for such reviews
established by the American Institute of Certified Public Accountants. The
review did not constitute an audit; accordingly, Coopers & Lybrand L.L.P. did
not express an opinion on the aforementioned data. The financial data include
any material adjustments or disclosures proposed by Coopers & Lybrand L.L.P. as
a result of their review.
Part II. Other Information
--------------------------
Item 5. Other Information
Final regulations implementing the Fastener Quality Act of 1990 are applicable
to certain fasteners (i.e., nuts, bolts, washers and screws) manufactured after
July 26, 1998. The regulations impose burdensome and costly testing,
certification and record keeping requirements which are not compatible with
quality assurance systems used in the automotive industry. Unless the
regulations are delayed or modified, there is a risk that fastener manufacturers
that supply Ford and its suppliers will not be able to timely comply with the
regulations. As a result, Ford's ability to produce vehicles could be adversely
affected.
-14-
<PAGE>
<TABLE>
<CAPTION>
Supplemental Schedule
Ford Motor Company
CONDENSED FINANCIAL INFORMATION OF SUBSIDIARY
---------------------------------------------
(in millions)
Ford Capital B.V.
-----------------
March 31, December 31,
1998 1997
--------------- ---------------
<S> <C> <C>
(unaudited)
Current assets $1,696 $2,046
Noncurrent assets 2,399 2,390
------ ------
Total assets $4,095 $4,436
====== ======
Current liabilities $1,200 $1,551
Noncurrent liabilities 2,435 2,433
Minority interests in net
assets of subsidiaries 16 14
Stockholder's equity 444 438
------ ------
Total liabilities and
stockholder's equity $4,095 $4,436
====== ======
First Quarter
----------------------------------
1998 1997
--------------- -------------
(unaudited)
Sales and other revenue $641 $744
Operating income 27 34
Income before income taxes 18 21
Net income 6 8
</TABLE>
Ford Capital B.V., a wholly owned subsidiary of Ford Motor Company, was
established primarily for the purpose of raising funds through the
issuance of commercial paper and debt securities. Ford Capital B.V. also
holds shares of the capital stock of Ford Nederland B.V., Ford Motor
Company (Belgium) N.V., Ford Motor Company A/S (Denmark), Ford Poland
S.A., and Ford Distribution Sp. z.o.o., Ltd. Substantially all of the
assets of Ford Capital B.V., other than its ownership interests in
subsidiaries, represent receivables from Ford Motor Company or its
consolidated subsidiaries.
-15-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
Please refer to the Exhibit Index on page 17.
(b) Reports on Form 8-K
The Registrant filed the following Current Reports on Form 8-K during
the quarter ended March 31, 1998:
Current Report on Form 8-K dated January 27, 1998 included
information relating to Ford's 1997 financial results.
Current Report on Form 8-K dated February 2, 1998 included the
consolidated financial statements of Ford and its subsidiaries for
the year ended December 31, 1997.
Current Report on Form 8-K dated March 3, 1998 included
information relating to the timing of Ford's spin-off of The
Associates and the related cash dividend to U.S. employee savings
plans.
Current Report on Form 8-K dated March 13, 1998 included
information relating to the distribution ratio for Ford's spin-off
of The Associates.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FORD MOTOR COMPANY
-------------------------------------------
(Registrant)
Date: May 12, 1998 By: /s/ W. J. Cosgrove
------------ ----------------------------------------
W. J. Cosgrove
Corporate Controller
(principal accounting officer)
-16-
<PAGE>
EXHIBIT INDEX
Designation Description
----------------------- -------------------------------------------------
Exhibit 3.1 Restated Certificate of Incorporation of Ford
Motor Company dated April 9, 1998.
Exhibit 3.2 By-Laws of Ford Motor Company as amended through
March 12, 1998.
Exhibit 12 Ford Motor Company and Subsidiaries Calculation
of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends.
Exhibit 15 Letter of Coopers & Lybrand L.L.P., Independent
Public Accountants, dated May 12, 1998, relating
to Financial Information.
Exhibit 27.1 Restated Financial Data Schedule,
Conglomerate Totals, for the Nine Months Ended
September 30, 1997 (included with electronic
EDGAR filing only).
Exhibit 27.2 Restated Financial Data Schedule, Automotive
Segment, for the Nine Months Ended September 30,
1997 (included with electronic EDGAR filing
only).
Exhibit 27.3 Restated Financial Data Schedule, Financial
Services Segment, for the Nine Months Ended
September 30, 1997 (included with electronic
EDGAR filing only).
Exhibit 27.4 Restated Financial Data Schedule, Conglomerate
Totals, for the Six Months Ended June 30, 1997
(included with electronic EDGAR filing only).
Exhibit 27.5 Restated Financial Data Schedule, Automotive
Segment, for the Six Months Ended June 30, 1997
(included with electronic EDGAR filing only).
Exhibit 27.6 Restated Financial Data Schedule, Financial
Services Segment, for the Six Months Ended June
30, 1997 (included with electronic EDGAR filing
only).
Exhibit 27.7 Restated Financial Data Schedule, Conglomerate
Totals, for the Three Months Ended March 31, 1997
(included with electronic EDGAR filing only).
Exhibit 27.8 Restated Financial Data Schedule, Conglomerate
Totals, for the Year Ended December 31, 1996
(included with electronic EDGAR filing only).
Exhibit 27.9 Restated Financial Data Schedule, Conglomerate
Totals, for the Nine Months Ended September 30,
1996 (included with electronic EDGAR filing
only).
-17-
FORD MOTOR COMPANY
---------------
RESTATED
CERTIFICATE OF INCORPORATION
---------------
April 9, 1998
<PAGE>
TABLE OF CONTENTS
Article Page
FIRST Name of Corporation....................................... 1
SECOND Registered Office and Registered Agent.................... 1
THIRD Purposes.................................................. 1
FOURTH Capital Stock............................................. 3
1. Voting Powers and Rights............................. 3
1.1. Generally........................................ 3
1.2. Common Stock..................................... 3
1.3. Class B Stock.................................... 3
1.3a. 40% of Total Voting Power..................... 3
1.3b. 30% of Total Voting Power..................... 3
1.3c. One Vote per Share Voting Power............... 3
1.3d. Computations.................................. 4
1.4. No Cumulative Voting............................. 4
1.5. Quorum.......................................... 4
1.6. Manner of Voting................................ 4
1.7. Class Vote by Class B Stock..................... 4
1.8. Preferred Stock................................. 5
2. Ownership and Conversion of Class B Stock........... 5
2.1. Ownership of Class B Stock...................... 5
2.2. Transfers of Class B Stock on Corporate Books... 5
2.3. Conversion of Class B Stock for the Purpose of
Sale or Other Disposition....................... 7
2.4. Ultimate Convertibility of Class B Stock for
Any Purpose..................................... 8
2.5. Legend on Certificates for Class B Stock........ 8
2.6. Violations of Subsections 2.1 and 2.2........... 8
2.7. Definitions; Verification of Affidavits......... 8
3. General Provisions With Respect to Conversions...... 9
3.1. Manner of Effecting Conversions................. 9
3.2. Dividends....................................... 9
3.3. Prohibition against Reissue..................... 9
3.4. Reservation of Common Stock..................... 9
3.5. Investigation of Facts.......................... 9
4. Subscription Rights................................. 10
<PAGE>
4.1. Special Right of Subscription -- Class B Stock.. 10
4.2. Other Subscription Rights Denied................ 10
4.3. Discretionary Offering of Common Stock.......... 10
5. Rights to Dividends................................. 10
6. Adjustments......................................... 10
6.1. Increase in Outstanding Stock................... 10
6.2. Consolidation or Combination of Shares.......... 11
7. All Shares Otherwise Equal.......................... 11
8. Preferred Stock..................................... 11
8.1. Preferred Stock................................. 11
8.2. Full Voting Preferred Stock..................... 13
9. Miscellaneous Provisions............................ 13
9.1. Original Stock Ledger Conclusive................ 13
9.2. Treasury Stock Not Outstanding.................. 13
9.3. Singular and Plural............................. 13
9.4. References...................................... 13
9.5. Captions or Headings............................ 13
10. Series B Cumulative Preferred Stock................ 13
FIFTH Original Capital......................................... 18
SIXTH Duration................................................. 18
SEVENTH Property of Stockholders Not Subject to Corporate Debts.. 18
EIGHTH Management of Business................................... 18
1. Powers of the Board of Directors.................... 18
1.1. General......................................... 18
1.2. Powers Conferred by By-Laws..................... 19
2. Meeting, Officers and Books......................... 19
3. Validity of Contract................................ 19
4. Ratification........................................ 19
5. Limitation on Liability of Directors; Indemnification
and Insurance....................................... 20
5.1. Limitation on Liability of Directors............ 20
5.2. Effect of Any Repeal or Modification of
Subsection 5.1.................................. 20
5.3. Indemnification and Insurance................... 20
<PAGE>
5.3a. Right to Indemnification..................... 20
5.3b. Right of Claimant to Bring Suit.............. 21
5.3c. Miscellaneous................................ 21
5.3d. Non-Exclusivity of Rights.................... 21
5.3e. Insurance.................................... 21
5.3f. Indemnification of Agents of the Corporation. 21
6. Limitation of Actions............................... 21
NINTH Amendments............................................... 22
<PAGE>
CERTIFICATION
The undersigned officer of Ford Motor Company, a Delaware corporation,
does hereby certify that the following is a true and correct copy of the
Restated Certificate of Incorporation of the Company in effect on the date
hereof.
Witness my hand and the seal of the Company this ________ day of
_______________, _________.
-------------------------
Secretary
<PAGE>
RESTATED
CERTIFICATE OF INCORPORATION
OF
FORD MOTOR COMPANY
(originally incorporated on July 9, 1919 under the name Eastern Holding Company)
---------------
FIRST. The name of the corporation is Ford Motor Company.
SECOND. Its registered office in the State of Delaware is located at 1209 Orange
Street in the City of Wilmington, County of New Castle. The name and address of
its registered agent is THE CORPORATION TRUST COMPANY, 1209 Orange Street,
Wilmington, Delaware 19801.
THIRD. The nature of the business of the corporation, and the objects or
purposes proposed to be transacted, promoted or carried on by it, are:
1. To manufacture, buy, sell, deal in and with automobiles, trucks,
cars, tractors, farm machinery and implements, aircraft, landcraft and
watercraft, and vehicles and articles of every type and description, and
parts, accessories and equipment therefor and for use in connection
therewith, and generally to conduct a manufacturing business in all its
branches;
2. To manufacture, buy, sell, deal in, and to engage in, conduct and
carry on the business of manufacturing, buying, selling and dealing in
goods, commodities, wares, merchandise, services and real and personal
property of every type and description;
3. To engage in and carry on the business of mining, drilling for,
preparing for market, buying, selling, exchanging, producing and otherwise
dealing in coal, oil, gas, minerals, ores and metals, and in the products
and by-products thereof, of every type and description; to buy, sell,
exchange, lease, acquire and deal in lands, mines, coal, oil, gas and
mineral rights and claims, and to conduct all business appertaining thereto;
4. To buy, sell, exchange, lease, acquire, deal in and with, and operate
boats, vessels, railroads and means of transportation of every type and
description and to conduct all business appertaining thereto;
5. To render management, supervisory, accounting, styling, technical and
other services and advice for any person, firm, association or corporation,
domestic or foreign, by contract or otherwise, and to receive therefor fixed
or contingent compensation, or compensation in the form of commissions,
management fees, shares in gross or net receipts or profits, or in any other
manner, or upon any other terms whatsoever, or so to act without direct
compensation;
1
<PAGE>
6. To sow, cultivate and harvest agricultural products and products of
the soil; to breed, feed, raise, slaughter, store, pack, sell and deal in
and with livestock and products therefrom; to operate greenhouses, hotbeds
and cold frames for the raising of plants, shrubs and flowers; in general to
conduct in all their several departments and branches the businesses of
agriculturists, farmers, fruit growers, dairymen, stock raisers,
slaughterers, packers, gardeners, nurserymen and florists;
7. To improve, manage, develop, sell, assign, transfer, lease, mortgage,
pledge, or otherwise dispose of or turn to account or deal with all or any
part of the property of the corporation and from time to time to vary any
investment or employment of capital of the corporation;
8. To borrow money, and to make and issue notes, bonds, debentures,
obligations and evidences of indebtedness of every type and description,
whether secured by mortgage, pledge or otherwise, without limit as to
amount, and to secure the same by mortgage, pledge or otherwise; and
generally to make and perform agreements and contracts of every type and
description;
9. To the same extent as natural persons might or could do, to purchase
or otherwise acquire, and to hold, own, maintain, work, develop, sell,
lease, exchange, hire, convey, mortgage or otherwise dispose of and deal in,
lands and leaseholds, and interests, estates and rights of every type and
description in real, personal or mixed property, and franchises, rights,
licenses or privileges necessary, convenient or appropriate for any of the
purposes herein expressed;
10. To apply for, obtain, register, purchase, lease or otherwise acquire
and to hold, own, use, develop, operate and introduce, and to sell, assign,
grant licenses or territorial rights in respect to, or otherwise to turn to
account or dispose of, copyrights, trademarks, trade names, brands, labels,
and registrations of the foregoing whether issued by the United States or
any other country or government, patent rights, letters patent of the United
States or of any other country or government, and inventions, improvements
and processes, whether used in connection with or secured under letters
patent or otherwise;
11. To make donations for the public welfare or for charitable,
scientific or educational purposes; and to cooperate with other corporations
or with natural persons, or to act alone, in the creation and maintenance of
community funds or of charitable, scientific, or educational
instrumentalities;
12. To acquire by purchase, subscription or otherwise, and to hold for
investment or otherwise and to use, sell, assign, underwrite, transfer,
mortgage, pledge or otherwise deal with or dispose of stocks, bonds or any
other obligations or securities of any person, firm, association or
corporation, public, private or municipal, or of the Government of the
United States or of any state, territory, colony or dependency thereof, or
of any foreign state or country; to merge or consolidate with any
corporation in such manner as may be permitted by law; to acquire, and to
pay for in cash, stocks or bonds of this corporation, or otherwise, the good
will, rights, assets and property, and to undertake or assume the whole or
any part of the obligations or liabilities, of any person, firm, association
or corporation; to aid in any manner any corporation whose stocks, bonds or
other obligations are held or in any manner guaranteed by this corporation,
or in which this corporation is in any way interested; and to do any other
act or thing for the preservation, protection, improvement or enhancement of
the value of any such stocks, bonds or other obligations; and while the
owner of such stocks, bonds or other obligations to exercise all the rights,
powers and privileges of ownership thereof, and to exercise any and all
voting powers thereon; to guarantee the payment of dividends upon any stock,
or of the principal or interest, or both, of any bond or other obligation,
and the performance of any contract; and
13. To do everything necessary, suitable or proper for the
accomplishment of any purpose or the attainment of any object or the
furtherance of any power hereinbefore set forth, either alone or in
association with other corporations, firms or individuals, and to do every
other act or thing incidental or appurtenant to or growing out of or
connected with the aforesaid business or purposes, objects or powers, or any
part or parts thereof, provided the same be not inconsistent with the laws
under which the corporation is organized.
2
<PAGE>
The business of the corporation is from time to time to do any one or more
of the acts and things hereinabove set forth, and it shall have power to conduct
and carry on its business, or any part thereof, and to have one or more offices,
and to exercise any or all of its corporate powers and rights in the State of
Delaware, and in the various other states, territories, colonies and
dependencies of the United States, in the District of Columbia, and in any or
all foreign countries.
The objects and purposes of the corporation amended herein shall be
construed as powers as well as objects and purposes and their enumeration herein
shall not be deemed to exclude, by inference or otherwise, any power, object or
purpose which the corporation is empowered to exercise, whether expressly or
impliedly, under the law of the State of Delaware now or hereafter in effect.
FOURTH. The total number of shares of all classes of stock which the corporation
shall have authority to issue is 3,295,058,688 shares, consisting of 30,000,000
shares of Preferred Stock of the par value of One Dollar ($1.00) each,
265,058,688 shares of Class B Stock of the par value of One Dollar ($1.00) each
and 3,000,000,000 shares of Common Stock of the par value of One Dollar ($1.00)
each.
The following is a statement of all of the designations and the powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, of the three classes of the stock of the corporation:
SECTION 1.
VOTING POWERS AND RIGHTS.
1.1. Generally. All rights to vote and all voting power (including, without
limitation thereto, the right to elect directors) shall be vested exclusively,
in accordance with the provisions of subsections 1.1 through 1.7, inclusive, in
the holders of Class B Stock and the holders of Common Stock, voting together
without regard to class, all except as otherwise expressly provided by
subsection 1.7 or by the Board of Directors pursuant to subsection 8.1 or as
otherwise expressly required by the law of the State of Delaware.
1.2. Common Stock. At every meeting of the stockholders each holder of
Common Stock shall be entitled to one vote for each share of such stock held by
him.
1.3. Class B Stock. At every meeting of the stockholders each holder of
Class B Stock shall be entitled, for each share of such stock held by him, to
such number of votes (which may be or include a fraction of a vote) as shall be
determined in accordance with the provisions of this subsection 1.3, which
number of votes, so determined from time to time, is hereinafter referred to as
the "Class B voting power per share."
1.3a. 40% of Total Voting Power. Until the total number of outstanding
shares of Class B Stock shall first fall below 60,749,880, the Class B
voting power per share shall be the quotient derived by dividing the total
number of outstanding shares of Class B Stock into a number equal to
two-thirds of the aggregate number of votes which could be cast by the
holders of all of the outstanding shares of (i) Common Stock and (ii) Full
Voting Preferred Stock (as defined in subsection 8.2), if any, if they were
present at the meeting.
1.3b. 30% of Total Voting Power. From and after the time when the total
number of outstanding shares of Class B Stock shall first fall below
60,749,880 and until such number shall first fall below 33,749,932, the
Class B voting power per share shall be the quotient derived by dividing the
total number of outstanding shares of Class B Stock into a number equal to
three-sevenths of the aggregate number of votes which could be cast by the
holders of all of the outstanding shares of (i) Common Stock and (ii) Full
Voting Preferred Stock, if any, if they were present at the meeting.
1.3c. One Vote per Share Voting Power. From and after the time when the
total number of outstanding shares of Class B Stock shall first fall below
33,749,932, the Class B voting power per share shall be one vote per share.
3
<PAGE>
1.3d. Computations. The quotients referred to in this subsection 1.3
shall be computed to the nearest one-thousandth of a vote (or, if there be
no nearest one-thousandth, shall be computed to a ten-thousandth of a vote).
1.4. No Cumulative Voting. No stockholder shall be entitled to exercise any
right of cumulative voting. If, however, any stockholder should at any time
become entitled to exercise a right of cumulative voting, whether by express
requirement of the law of the State of Delaware or otherwise, then at all
elections of directors each holder of Class B Stock shall be entitled to cast
for each share of Class B Stock held by him a number of votes equal to the Class
B voting power per share then exercisable (computed as provided in subsection
1.3), each holder of Common Stock shall be entitled to cast one vote for each
share of Common Stock held by him, and each holder of Full Voting Preferred
Stock, if any, of any series shall be entitled to cast the number of votes
(which may be one vote or more or less than one vote) for each share of Full
Voting Preferred Stock held by him which the Board of Directors shall have
determined pursuant to subsection 8.1 in establishing voting rights with respect
to such series, in each case multiplied by the number of directors to be
elected, and each such holder shall be entitled to cast all of his votes for a
single director or to distribute them among the number of directors to be voted
for, or to cast his votes for any two or more of them as he may see fit.
1.5. Quorum. At any meeting of stockholders, the presence in person or by
proxy of the holders of shares entitled to cast a majority of all of the votes
(computed, in the case of each share of Class B Stock, as provided in subsection
1.3) which could be cast at such meeting by the holders of all of the
outstanding shares of stock of the corporation entitled to vote on every matter
that is to be voted on without regard to class at such meeting shall constitute
a quorum.
1.6. Manner of Voting. At every meeting of stockholders, the holders of
Class B Stock, the holders of Common Stock and the holders of Full Voting
Preferred Stock, if any, shall vote together, without regard to class, and their
votes (computed, in the case of each share of Class B Stock, as provided in
subsection 1.3) shall be counted and totalled together; and at any meeting duly
called and held at which a quorum (determined in accordance with the provisions
of subsection 1.5) is present, a majority of the votes (computed, in the case of
each share of Class B Stock, as provided in subsection 1.3) which could be cast
at such meeting upon a given question by such holders who are present in person
or by proxy shall be necessary, in addition to any vote or other action that may
be expressly required by the provisions of this Certificate of Incorporation or
by the law of the State of Delaware, to decide such question, and shall decide
such question if no such additional vote or other action is so required.
1.7. Class Vote by Class B Stock. Notwithstanding any of the other
provisions of this Section 1, the corporation shall not, until the total number
of outstanding shares of Class B Stock shall first fall below 33,749,932, take
any of the following actions except with the affirmative vote of the holders of
a majority of the outstanding shares of Class B Stock, given separately as a
class, which vote shall be in addition to any vote or other action required by
the law of the State of Delaware:
(i) issue any additional shares of Class B Stock except pursuant to an
offer for subscription or purchase required by the provisions of subsection
4.3 or for the purpose of payment of a stock dividend; or
(ii) effect any reduction, by amendment of the Certificate of
Incorporation, retirement or exchange or otherwise, in the number of
outstanding shares of Class B Stock in any manner other than by conversion
into Common Stock as expressly provided in Section 2 or through voluntary
disposition thereof to the corporation by a holder of shares of Class B
Stock; or
(iii) effect any change or alteration in any provision of this Article
FOURTH, except as required by the provisions of subsection 3.3; or
(iv) merge or consolidate with or into any other corporation, or permit
any other corporation to merge or consolidate with or into it; or
(v) sell, lease or exchange all or substantially all of its property and
assets; or
4
<PAGE>
(vi) transfer any assets to another corporation and in connection
therewith distribute stock or other securities of such other corporation to
the holders of stock or other securities of this corporation; or
(vii) voluntarily dissolve or liquidate.
1.8. Preferred Stock. Each holder of Preferred Stock shall be entitled to
vote to the extent, if any, provided by the Board of Directors pursuant to
subsection 8.1.
SECTION 2.
OWNERSHIP AND CONVERSION OF CLASS B STOCK.
2.1. Ownership of Class B Stock. Until the time when the total number of
outstanding shares of Class B Stock shall first fall below 33,749,932, holders
of shares of such stock may (i) sell or otherwise dispose of or transfer any or
all of the shares of such stock held by them, respectively, only to persons who
at the time of transfer meet the qualifications set forth in clause (i), (ii),
(iii), (iv), (v), (vi) or (vii) of subsection 2.2, and to no other persons, or
(ii) convert any or all of such shares into shares of Common Stock for the
purpose of effecting the sale or disposition of such shares of Common Stock to
any person as provided in subsection 2.3. Until such time, no one other than
those persons in whose names shares of Class B Stock become registered on the
original stock ledger of the corporation by reason of their record ownership of
shares of Class A Common Stock or Class B Common Stock of the corporation which
are reclassified into shares of Class B Stock, or transferees or successive
transferees who at the time of transfer meet such qualifications set forth in
subsection 2.2, shall by virtue of the acquisition of a certificate for shares
of Class B Stock have the status of an owner or holder of shares of Class B
Stock or be recognized as such by the corporation or be otherwise entitled to
enjoy for his own benefit the special rights and powers of a holder of shares of
Class B Stock.
From and after the time when the total number of outstanding shares of Class
B Stock shall first fall below 33,749,932, holders of shares of such stock may
(i) sell or otherwise dispose of or transfer such shares to any person or (ii)
convert such shares into shares of Common Stock for any purpose as provided in
subsection 2.4, and any person may have the status of an owner or holder of
shares of Class B Stock.
Holders of shares of Class B Stock may at any and all times transfer to any
person the shares of Common Stock issuable upon conversion of such shares of
Class B Stock.
2.2. Transfers of Class B Stock on Corporate Books. Shares of Class B Stock
shall be transferred on the books of the corporation and a new certificate
therefor issued, upon presentation at the office of the Secretary of the
corporation (or at such additional place or places as may from time to time be
designated by the Secretary or any Assistant Secretary of the corporation) of
the certificate for such shares, in proper form for transfer and accompanied by
all requisite stock transfer tax stamps, only if such certificate when so
presented shall also be accompanied by an affidavit of the record holder of such
shares stating that such certificate is being presented to effect a transfer of
such shares to any one or more of the following:
(i) a natural person who meets the qualification that he is either (A) a
natural person in whose name shares of Class B Stock became registered on
the original stock ledger of the corporation by reason of his record
ownership of shares of Class A Common Stock or Class B Common Stock of the
corporation which were reclassified into shares of Class B Stock, or (B) a
descendant (including any descendant by adoption and any descendant of an
adopted descendant) of a natural person in whose name shares of Class B
Stock were so registered by reason of such record ownership, or (C) a spouse
or surviving spouse of a natural person who is or was while living included
within the provisions of either of the foregoing subclauses (A) or (B); or
(ii) any two or more natural persons each of whom meets the
qualification set forth in clause (i) next above; or
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(iii) a transferee as trustee of a trust, created by deed or will, which
trust meets the following requirements: (1) the income thereof from the date
of transfer to such trustee shall be required to be paid to or applied for
the use and benefit of or accumulated for one or more natural persons,
concurrently or successively, all of whom meet or will meet the
qualification set forth in clause (i) above, and no other persons, except
for such portion of the income as is payable to or to be applied for the use
and benefit of or accumulated for one or more (A) other natural persons
during terms not to exceed their respective lives, who, though they do not
meet the qualification set forth in clause (i) above, are relatives of or
are or were employees or dependents of natural persons meeting such
qualification, or (B) exempt organizations (as defined in subsection 2.7)
for terms not exceeding 33 years from the date of the commencement of the
trust, and except for such accumulated income as may be required to be paid
over to others upon the death of the person for whom it was accumulated, and
(2) the principal thereof shall be required to be transferred, assigned and
paid over upon failure or termination of the interests in the income thereof
referred to in subclause (1) above; provided, however, that if the
provisions of such trust relating to the disposition of income or principal
are subject to amendment in such manner that the trust could be changed to a
trust not meeting the requirements of this clause (iii), the trustee
thereof, as such, shall have entered into a written agreement with the
corporation providing that if such trust shall be amended at any time prior
to the time when the total number of outstanding shares of Class B Stock
shall first fall below 33,749,932 such trustee will promptly deliver to the
corporation a copy, duly certified by such trustee, of the instrument
effecting such amendment and will, unless such trust as so amended then
meets the requirements of this clause (iii), promptly surrender the
certificates for the shares of Class B Stock then held in such trust for
conversion of such shares into an equal number of shares of Common Stock in
the manner set forth in subsection 3.1; or
(iv) a stock corporation (hereinafter called a "corporate holder"), not
less than 75% of the number of outstanding shares of each class of the
capital stock (other than shares of non-voting preferred stock as defined in
subsection 2.7) of which shall, at the time at which the certificate for
shares of Class B Stock is presented for transfer, be owned beneficially and
of record by natural persons who meet the qualification set forth in clause
(i) above (provided that the same natural person need not be both the
beneficial and the record owner), or be owned of record by trustees (or
successor trustees) of trusts which meet the requirements set forth in
clause (iii) above, or be so owned in part by such natural persons and so
owned in part by such trustees (or successor trustees); which corporate
holder shall have entered into a written agreement with this corporation
providing that if, at any time prior to the time when the total number of
outstanding shares of Class B Stock shall first fall below 33,749,932, less
than 75% of the number of outstanding shares of each class of the capital
stock (other than shares of non-voting preferred stock as defined in
subsection 2.7) of such corporate holder shall be so owned, then such
corporate holder will either promptly (A) transfer the shares of Class B
Stock then held by it to one or more persons who at the time of transfer
meet the qualifications set forth in clause (i), (ii), (iii), (iv), (v),
(vi) or (vii) of subsection 2.2 and cause the certificates therefor to be
duly presented for transfer into the name of such person or persons, or (B)
surrender the certificates for such shares of Class B Stock for conversion
of such shares into an equal number of shares of Common Stock, in the manner
set forth in subsection 3.1, or (C) transfer some of such shares as provided
in the foregoing subclause (A) and surrender the certificates for the
remainder of such shares for conversion as provided in the foregoing
subclause (B); or
(v) a legatee under the will of any stockholder of the corporation
deceased prior to the effective date of the reclassification of the Class A
Common Stock and the Class B Common Stock of the corporation into Class A
Stock, Class B Stock and Common Stock, such transfer being made for the
purpose of satisfying, in any manner permitted by such will, all or any part
of the claim of the said legatee in respect to a legacy of any kind under
said will; provided, however, that the aggregate number of shares of Class B
Stock transferred pursuant to this clause (v) shall not exceed 8,437,480; or
(vi) a transferee as successor trustee or as co-trustee of a trust of
which his immediate transferor was or is a trustee registered as a record
holder of such shares of Class B Stock as permitted by the provisions of
subsection 2.1; provided, however, that if the proviso in clause (iii) above
is applicable such successor trustee or co-trustee shall have entered into a
written agreement with the corporation whereby he assumes the obligations of
the agreement required by said clause (iii); or
(vii) the corporation for the purpose of retirement pursuant to the
provisions of subsection 3.3;
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and if the certificate for such shares of Class B Stock when presented for
transfer shall also be accompanied
(a) in the case of a transfer to a transferee as trustee of a trust
which meets the requirements set forth in clause (iii) above, by copies,
duly certified by such trustee, of the instrument creating such trust and of
all amendments thereto, and by an original counterpart or certified copy of
any agreement required by said clause (iii), or
(b) in the case of a transfer to a corporate holder as defined in clause
(iv) above, by a copy, duly certified by the Secretary or an Assistant
Secretary of such corporate holder, of the list of its stockholders and
their respective holdings as shown on its stock books at the time at which
the certificate for shares of Class B Stock is presented for transfer, and
by an original counterpart or certified copy of the agreement referred to in
said clause (iv), or
(c) in the case of a transfer to a legatee described in clause (v)
above, by a copy of the will of the deceased stockholder, duly certified by
the clerk of the court in which the same shall have been probated, or
(d) in the case of a transfer to a transferee as successor trustee or
co-trustee as permitted by clause (vi) above, by an original counterpart or
certified copy of any agreement of such transferee required by said clause
(vi).
From and after the time when the total number of outstanding shares of Class
B Stock shall first fall below 33,749,932, shares of Class B Stock shall be
transferable to any person without regard to the foregoing provisions of this
subsection 2.2.
2.3. Conversion of Class B Stock for the Purpose of Sale or Other
Disposition. A record holder of shares of Class B Stock shall be entitled at any
time and from time to time to convert any or all of such shares held by him into
the same number of shares of Common Stock in the manner set forth in subsection
3.1, for the purpose of effecting the sale or other disposition of such shares
of Common Stock, by surrendering certificates representing the shares of Class B
Stock to be converted, in proper form for transfer of the shares of Common Stock
issuable upon such conversion and accompanied by all stock transfer tax stamps
requisite for such transfer, and also accompanied by a written notice by such
record holder to the corporation stating that such record holder desires to
convert such shares of Class B Stock into the same number of shares of Common
Stock for the purpose of the sale or other disposition of such shares of Common
Stock and requesting that the corporation issue all of such shares of Common
Stock to persons (other than such record holder) named therein, setting forth
the number of shares of Common Stock to be issued to each such person and the
denominations in which the certificates therefor are to be issued. Each such
notice shall be signed by the record holder (or in an appropriate case by his
guardian, committee, executor, administrator or other legal representative).
If a record holder of shares of Class B Stock shall deliver a certificate
for such shares, endorsed by him for transfer or accompanied by an instrument of
transfer signed by him, to a person who does not meet the qualifications set
forth in clause (i), (ii), (iii), (iv), (v), (vi) or (vii) of subsection 2.2,
then such person or any successive transferee of such certificate may treat such
endorsement or instrument as authorizing him on behalf of such record holder to
convert such shares in the manner above provided for the purpose of the transfer
to himself of the shares of Common Stock issuable upon such conversion, and to
give on behalf of such record holder the written notice of conversion above
required, and may convert such shares of Class B Stock accordingly.
If such shares of Class B Stock shall improperly have been registered in the
name of such a person (or in the name of any successive transferee of such
certificate) and a new certificate therefor issued, such person or transferee
may surrender such new certificate for cancellation, accompanied by the written
notice of conversion above required, in which case (A) such person or transferee
shall be deemed to have elected to treat the endorsement on (or instrument of
transfer accompanying) the certificate so delivered by such former record holder
as authorizing such person or transferee on behalf of such former record holder
so to convert such shares and so to give such notice, (B) the shares of Class B
Stock registered in the name of such former record holder shall be deemed to
have been surrendered for conversion for the purpose of the transfer to such
person or transferee of the shares of Common Stock issuable upon conversion, and
(C) the appropriate entries shall be made on the books of the corporation to
reflect such action.
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2.4. Ultimate Convertibility of Class B Stock for Any Purpose. From and
after the time when the total number of outstanding shares of Class B Stock
shall first fall below 33,749,932, (i) each record holder of shares of such
stock may convert such shares into an equal number of shares of Common Stock,
irrespective of the purpose of such conversion, by surrendering the certificates
for such shares in the manner set forth in subsection 3.1; and (ii) no
additional shares of Class B Stock shall be issued by the corporation, and the
corporation shall promptly after such time take such appropriate action as may
be necessary to reduce the authorized amount of Class B Stock to the number of
shares then outstanding.
2.5. Legend on Certificates for Class B Stock. Every certificate for shares
of Class B Stock shall bear a legend on the face thereof reading as follows:
"The shares of Class B Stock represented by this certificate may not be
transferred to any person who does not meet the qualifications set forth in
clause (i), (ii), (iii), (iv), (v), (vi) or (vii) of subsection 2.2 of
Article FOURTH of the Certificate of Incorporation of this corporation as
amended (Sections 1 to 9 of said Article FOURTH being set forth in full on
the reverse hereof) and no person who does not meet the qualifications
prescribed by subsection 2.1 of said Article FOURTH is entitled to own or to
be registered as the record holder of such shares of Class B Stock, until
the time referred to in said subsection 2.1, but the record holder of this
certificate may at any time convert such shares of Class B Stock into the
same number of shares of Common Stock for the purpose of effecting the sale
or other disposition of such shares of Common Stock to any person. Each
holder of this certificate, by accepting the same, accepts and agrees to all
of the foregoing."
Any certificate for shares of Class B Stock which shall be issued after the
time when the total number of outstanding shares of Class B Stock shall first
fall below 33,749,932 shall not bear such legend.
2.6. Violations of Subsections 2.1 and 2.2. In the event that the Board of
Directors of the corporation (or any committee of the Board of Directors, or any
officer of the corporation, designated for the purpose by the Board of
Directors) shall determine, upon the basis of facts not disclosed in any
affidavit or other document accompanying the certificate for shares of Class B
Stock when presented for transfer, that such shares of Class B Stock have been
registered in violation of the provisions of subsection 2.1 or 2.2, or shall
determine that a person is enjoying for his own benefit the special rights and
powers of shares of Class B Stock in violation of such provisions, then the
corporation shall take such action at law or in equity as is appropriate under
the circumstances. An unforeclosed pledge made to secure a bona fide obligation
shall not be deemed to violate such provisions.
2.7. Definitions; Verification of Affidavits. For the purposes of this
Section 2, each reference to a "person" shall be deemed to include not only a
natural person, but also a corporation, partnership, association, unincorporated
organization or legal entity of any kind; each reference to a "natural person"
(or to a "record holder" of shares, if a natural person) shall be deemed to
include in his representative capacity a guardian, committee, executor,
administrator or other legal representative of such natural person or record
holder; the term "non-voting preferred stock" as applied to stock in a corporate
holder, shall mean stock which does not entitle the holder thereto to vote for
the election of directors under any circumstances and carries no right to
dividends or interest in earnings other than the right to dividends in a fixed
amount per annum, which right may be cumulative; and the term "exempt
organization" shall mean any corporation, community chest, fund or foundation
organized and operated exclusively for religious, charitable, scientific,
literary, or educational purposes which, at the date of verification of the
affidavit in which reference thereto is made, shall have been exempted or be
exempt, wholly or partially, from taxation on income under the provisions of
Section 501(c)(3) of the Internal Revenue Code of 1986, as then in effect, or
other provision of Federal law then in effect governing the exemption from
Federal taxation on income of institutions organized and operated exclusively
for any one or more of the foregoing purposes. Each affidavit of a record holder
furnished pursuant to subsection 2.2 shall be verified as of a date not earlier
than five days prior to the date of delivery thereof, and, where such record
holder is a corporation or partnership, shall be verified by an officer of the
corporation or by a general partner of the partnership, as the case may be.
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SECTION 3.
GENERAL PROVISIONS WITH RESPECT TO CONVERSIONS.
3.1. Manner of Effecting Conversions. Each conversion of shares of Class B
Stock into shares of Common Stock made pursuant to the provisions of Section 2
shall be effected by the surrender of the certificate representing the shares to
be converted at the office of the Secretary of the corporation (or at such
additional place or places as may from time to time be designated by the
Secretary or any Assistant Secretary of the corporation) in such form and
accompanied by such notice, affidavits, other documents and stock transfer tax
stamps, if any, as may be prescribed by and shall comply with the applicable
provisions of Section 2, and upon such surrender the record holder of such
shares (or, in the case of a conversion made for the purpose of effecting the
sale, gift or other disposition of the shares of Common Stock issuable upon such
conversion, the person named in the prescribed notice) shall be entitled to
become, and shall be registered in the original stock ledger of the corporation
as, the record holder of the number of shares of Common Stock issuable upon such
conversion, and each such share of Class B Stock shall be converted into one
share of Common Stock, as the Common Stock shall then be constituted, and
thereupon there shall be issued and delivered to such record holder or other
named person, as the case may be, promptly at such office or other designated
place, a certificate or certificates for such number of shares of Common Stock.
3.2. Dividends. Upon any conversion of shares of Class B Stock into shares
of Common Stock pursuant to the provisions of Section 2, any dividend, for which
the record date shall be subsequent to such conversion, which may have been
declared on the shares of Class B Stock so converted shall be deemed to have
been declared, and shall be payable, with respect to the shares of Common Stock
into or for which such shares of Class B Stock shall have been so converted, and
any such dividend which shall have been declared on such shares payable in
shares of Class B Stock shall be deemed to have been declared, and shall be
payable, in shares of Common Stock.
3.3. Prohibition against Reissue. The corporation shall not reissue or
resell any shares of Class B Stock which shall have been converted into shares
of Common Stock pursuant to or as permitted by the provisions of Section 2, or
any shares of Class B Stock which shall have been acquired by the corporation in
any other manner. The corporation shall, from time to time, take such
appropriate action as may be necessary to retire such shares and to reduce the
authorized amount of Class B Stock accordingly.
3.4. Reservation of Common Stock. The corporation shall at all times reserve
and keep available, out of its authorized but unissued Common Stock, such number
of shares of Common Stock as would become issuable upon the conversion of all
shares of Class B Stock then outstanding.
3.5. Investigation of Facts. In connection with any transfer or conversion
of any stock of the corporation pursuant to or as permitted by the provisions of
Section 2 of this Article FOURTH, or in connection with the making of any
determination referred to in subsection 2.6,
(i) the corporation shall be under no obligation to make any
investigation of facts unless an officer, employee or agent of the
corporation responsible for making such transfer or determination or issuing
Common Stock pursuant to such conversion has substantial reason to believe,
or unless the Board of Directors (or a committee of the Board of Directors
designated for the purpose) determines that there is substantial reason to
believe, that any affidavit or other document is incomplete or incorrect in
a material respect or that an investigation would disclose facts upon which
any determination referred to in subsection 2.6 should be made, in either of
which events the corporation shall make or cause to be made such
investigation as it may deem necessary or desirable in the circumstances and
have a reasonable time to complete such investigation, and
(ii) neither the corporation nor any director, officer, employee or
agent of the corporation shall be liable in any manner for any action taken
or omitted in good faith.
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SECTION 4.
SUBSCRIPTION RIGHTS.
4.1. Special Right of Subscription -- Class B Stock. No shares of Class B
Stock and no obligations or shares convertible into shares of Class B Stock,
whether now or hereafter authorized and whether unissued or in the treasury,
shall be issued, for money paid, property or any other consideration, unless the
holders of Class B Stock shall first have been given a special right to
subscribe thereto, on a ratable basis, at a price not less favorable than that
at which such shares or obligations are to be offered to others.
4.2. Other Subscription Rights Denied. Except for the special subscription
rights conferred on the holders of Class B Stock by the provisions of
subsections 4.1 and 4.3, no holder of stock of the corporation of any class
shall have any pre-emptive or preferential right to subscribe to or purchase any
shares of any class of stock of the corporation, whether now or hereafter
authorized and whether unissued or in the treasury, or any obligations
convertible into shares of any class of stock of the corporation, at any time
issued or sold, or any right to subscribe to or purchase any thereof.
4.3. Discretionary Offering of Common Stock. If the Board of Directors in
its discretion should at any time offer shares of Common Stock, or any shares or
obligations convertible into shares of Common Stock, for subscription or
purchase by the holders of Common Stock, then there shall be offered to all of
the holders of Class B Stock for subscription or purchase on a ratable basis,
and at the same price per share or unit, shares of stock of that class, or
shares or obligations convertible into shares of stock of that class, as the
case may be; provided, however, that from and after the time when the total
number of outstanding shares of Class B Stock shall first have fallen below
33,749,932, there shall be offered to the holders of the outstanding shares of
such stock for subscription or purchase shares of Common Stock or shares or
obligations convertible into shares of Common Stock, as the case may be, in lieu
of additional shares of Class B Stock or shares or obligations convertible into
shares of Class B Stock, as the case may be.
SECTION 5.
RIGHTS TO DIVIDENDS.
When and as dividends are declared (other than dividends declared with
respect to Preferred Stock), whether payable in cash, in property or in shares
of stock of the corporation (other than shares of Class B Stock or Common
Stock), the holders of Class B Stock and the holders of Common Stock shall be
entitled to share equally, share for share, in such dividends. No dividends
shall be declared or paid in shares of Class B Stock or Common Stock of the
corporation, except dividends, otherwise ratable, payable in shares of Class B
Stock to holders of that class of stock, and in shares of Common Stock to
holders of that class of stock; provided, however, that from and after the time
when the total number of outstanding shares of Class B Stock shall first have
fallen below 33,749,932, any such dividend shall be declared and paid to the
holders of shares of Class B Stock in shares of Common Stock.
SECTION 6.
ADJUSTMENTS.
6.1. Increase in Outstanding Stock. If the corporation shall in any manner
increase the number of outstanding shares of Class B Stock, then each of the
share numbers set forth in the Table below and appearing in the provision of
this Article FOURTH set forth in such Table opposite such share number shall be
deemed to be increased by a number bearing the same proportion to such share
number that such increase in the number of outstanding shares of Class B Stock
bears to the number of shares of Class B Stock outstanding immediately prior to
such increase; and in each such case all of such provisions and this subsection
6.1 shall be applied so as to give effect to such share numbers as so increased.
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If any such increase shall be effected by amendment of the Certificate of
Incorporation, then such amendment shall itself increase each of the appropriate
share numbers in accordance with the foregoing.
TABLE
Provision Share Number
--------- ------------
1.3a.................................................. 60,749,880
1.3b.................................................. 60,749,880
1.3b.................................................. 33,749,932
1.3c.................................................. 33,749,932
1.7................................................... 33,749,932
2.1................................................... 33,749,932
2.2(iii).............................................. 33,749,932
2.2(iv)............................................... 33,749,932
2.2(v)................................................ 8,437,480
2.2 (last paragraph).................................. 33,749,932
2.4................................................... 33,749,932
2.5................................................... 33,749,932
4.3................................................... 33,749,932
5..................................................... 33,749,932
6.2. Consolidation or Combination of Shares. If the corporation shall effect
the consolidation or combination of all outstanding shares of Class B Stock by
amendment of the Certificate of Incorporation, so as to reduce the number of
outstanding shares thereof, then such amendment shall also decrease each of the
share numbers set forth in the Table in subsection 6.1 and appearing in the
provision of this Article FOURTH set forth in such Table opposite such share
number, by a number bearing the same proportion to such share number that the
decrease in the number of outstanding shares of stock of such class effected by
such consolidation or combination bears to the number of shares of stock of such
class outstanding immediately prior to the effective date of such consolidation
or combination.
SECTION 7.
ALL SHARES OTHERWISE EQUAL.
Except as herein otherwise expressly provided, shares of Class B Stock and
Common Stock shall all be of equal rank and shall all entitle the holders
thereof to the same rights and privileges.
SECTION 8.
PREFERRED STOCK.
8.1. Preferred Stock. Shares of Preferred Stock may be issued from time to
time in one or more series. Subject to the limitations set forth in this Article
FOURTH and any limitations prescribed by the law of the State of Delaware, the
Board of Directors is expressly authorized, prior to issuance of any series of
Preferred Stock, to fix by resolution or resolutions providing for the issue of
any series the number of shares included in such series and the designation,
relative powers, preferences and rights, and the qualifications, limitations or
restrictions of such series. Pursuant to the foregoing general authority vested
in the Board of Directors, but (except as provided in the proviso to clause (v)
of this subsection 8.1) not in limitation of the powers conferred on the Board
of Directors thereby and by the law of the State of Delaware, the Board of
Directors is expressly authorized to determine with respect to each series of
Preferred Stock:
(i) the distinctive designation of such series and the number of shares
(which number from time to time may be decreased by the Board of Directors,
but not below the number of such shares then outstanding, or may be
increased by the Board of Directors unless otherwise provided in creating
such series) constituting such series;
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(ii) the rate and time at which, and the preferences and conditions
under which, dividends shall be payable on shares of such series, the status
of such dividends as cumulative, or non-cumulative, the date or dates from
which dividends, if cumulative, shall accumulate, and the status of such
shares as participating or non-participating after the payment of dividends
as to which such shares are entitled to any preference;
(iii) the right, if any, of holders of shares of such series to convert
such shares into, or to exchange such shares for, shares of any other class
or classes (other than Class B) or of any other series of the same class,
the prices or rates of conversion or exchange, and adjustments thereto, and
any other terms and conditions applicable to such conversion or exchange;
(iv) the rights and preferences, if any, of the holders of shares of
such series upon the liquidation, dissolution or winding up of the affairs
of, or upon any distribution of the assets of, the corporation, which amount
may vary depending upon whether such liquidation, dissolution, or winding up
is voluntary or involuntary, and, if voluntary, may vary at different dates,
and the status of the shares of such series as participating or
non-participating after the satisfaction of any such rights and preferences;
(v) the voting powers, if any, of the holders of shares of such series which
may, without limiting the generality of the foregoing, include (A) the
general right to one vote (or more or less than one vote) per share on every
matter (including, without limitation, the election of directors) voted on
by the stockholders without regard to class and (B) the limited right to
vote, as a series by itself or together with other series of Preferred Stock
or together with all series of Preferred Stock as a class, upon such
matters, under such circumstances and upon such conditions as the Board of
Directors may fix, including, without limitation, the right, voting as a
series by itself or together with other series of Preferred Stock or
together with all series of Preferred Stock as a class, to elect one or more
directors of the corporation in the event there shall have been a default in
the payment of dividends on any one or more series of Preferred Stock;
provided, however, that, notwithstanding the provisions of the preceding
subclause (B) or any other provisions of this subsection 8.1 to the
contrary, the holders of Preferred Stock, considered in the aggregate
(whether voting by individual series or together with other series of
Preferred Stock or together with all series of Preferred Stock as a class),
shall not have the right to a separate class vote for the election of one or
more directors of the corporation except in the event there shall have been
a default in the payment of dividends on any one or more series of Preferred
Stock and, in such event, shall not have the right to a separate class vote
for more than a total of two directors;
(vi) the times, terms and conditions, if any, upon which shares of such
series shall be subject to redemption, including the amount which the
holders of shares of such series shall be entitled to receive upon
redemption (which amount may vary under different conditions or at different
redemption dates) and the amount, terms, conditions and manner of operation
of any purchase, retirement or sinking fund to be provided for the shares of
such series;
(vii) the limitations, if any, applicable while such series is
outstanding on the payment of dividends or making of distributions on, or
the acquisition or redemption of, Common Stock or Class B Stock or any other
class of shares ranking junior, either as to dividends or upon liquidation,
to the shares of such series;
(viii) the conditions or restrictions, if any, upon the issue of any
additional shares (including additional shares of such series or any other
class) ranking on a parity with or prior to the shares of such series either
as to dividends or upon liquidation; and
(ix) any other relative powers, preferences and participating, optional
or other special rights, and the qualifications, limitations or restrictions
thereof, of shares of such series;
in each case, so far as not inconsistent with the provisions of the
Certificate of Incorporation or the law of the State of Delaware. All shares
of Preferred Stock shall be identical and of equal rank except as to the
particulars that may be fixed by the Board of Directors as provided above,
and all shares of each series of Preferred Stock shall be identical and of
equal rank except as to the dates from which cumulative dividends, if any,
thereon shall be cumulative.
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8.2. Full Voting Preferred Stock. As used in this Article FOURTH, the term
"Full Voting Preferred Stock" shall mean Preferred Stock of any one or more
series the holders of which shall be entitled to vote on every matter
(including, without limitation, the election of directors) voted on by the
stockholders without regard to class.
SECTION 9.
MISCELLANEOUS PROVISIONS.
9.1. Original Stock Ledger Conclusive. In determining the number or the
record holders of outstanding shares of any class of stock of the corporation
for the purpose of computing or determining the method of computing the vote or
determining the right to vote at any meeting of stockholders or of a class of
stockholders, the original stock ledger of the corporation as at the close of
business on the record date fixed for such meeting or, if the stock transfer
books of the corporation shall have been closed for a period immediately
preceding the date of such meeting, then as at the close of business on the date
as of which such stock transfer books were so closed, shall be conclusive for
all purposes, and in determining the number or the record holders of outstanding
shares of any class of stock of the corporation for any other purpose, the
original stock ledger of the corporation as at the close of business on the date
as of which the determination is being made, shall be conclusive for all
purposes; all notwithstanding any other provision of this Article FOURTH or any
entries made on the books of the corporation pursuant to the last paragraph of
subsection 2.3 subsequent to the close of business on such record or other date.
9.2. Treasury Stock Not Outstanding. The term "outstanding" as used in this
Article FOURTH with reference to shares of stock of the corporation shall not
include any stock held in the treasury of the corporation.
9.3. Singular and Plural. Wherever a term shall be used in the singular in
this Article FOURTH, it shall be deemed in all appropriate circumstances to
include also the plural, and wherever a term shall be so used in the plural, it
shall similarly be deemed to include also the singular.
9.4. References. Unless otherwise stated, all references contained in this
Article FOURTH to Sections, subsections, paragraphs, clauses or subclauses refer
to Sections, subsections, paragraphs, clauses or subclauses of this Article
FOURTH.
9.5. Captions or Headings. The captions or headings contained in this
Article FOURTH are for purposes of reference only and shall not limit or affect,
or have any bearing on the construction or interpretation of, any of the terms
or provisions of this Article FOURTH.
SECTION 10.
SERIES B CUMULATIVE PREFERRED STOCK.
The provisions of the corporation's Certificate of the Designations, Powers,
Preferences and Relative, Participating or Other Rights, and the Qualifications,
Limitations or Restrictions Thereof, of the Series B Cumulative Preferred Stock
are set forth below:
(1) Number of Shares and Designation. Twenty-three thousand (23,000) shares
of the preferred stock, $1.00 par value, of the corporation are hereby
constituted as a series of the preferred stock designated as Series B Cumulative
Preferred Stock (the "Series B Preferred Stock").
(2) Definitions. For purposes of the Series B Preferred Stock, the following
terms shall have the meanings indicated:
"Board of Directors" shall mean the board of directors of the
corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Series B Preferred
Stock.
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"Business Day" shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Class B Stock" shall mean the Class B Stock of the corporation, par
value $1.00 per share.
"Common Stock" shall mean the Common Stock of the corporation, par value
$1.00 per share.
"Dividend Payment Date" shall have the meaning specified in Section 3(a)
hereof.
"Dividend Periods" shall mean quarterly dividend periods commencing on
the first day of March, June, September and December of each year and ending
on and including the day preceding the first day of the next succeeding
Dividend Period (other than the Initial Dividend Period).
"Initial Dividend Period" shall mean the period commencing on the Issue
Date and ending on (and including) February 28, 1993.
"Issue Date" shall mean the first date on which any shares of Series B
Preferred Stock are issued.
"Person" shall mean any individual, firm, partnership, corporation or
other entity, and shall include any successor (by merger or otherwise) of
such entity.
"Transfer Agent" means Chemical Bank or such other agent or agents of
the corporation as may be designated by the Board of Directors of the
corporation as the transfer agent for the Series B Preferred Stock.
(3) Dividends. (a) The holders of shares of the Series B Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available therefor, cash dividends at the rate per annum of
$4,125 per share of Series B Preferred Stock. Such dividends shall be cumulative
from the Issue Date, whether or not in any Dividend Period or Periods there
shall be funds of the corporation legally available for the payment of such
dividends, and shall be payable quarterly, when, as and if declared by the Board
of Directors, on the first Business Day of March, June, September and December
of each year (each a "Dividend Payment Date"), commencing on the first Business
Day next succeeding the Initial Dividend Period, or at such additional times and
for such interim periods, if any, as determined by the Board of Directors. Each
such dividend shall be payable in arrears to the holders of record of shares of
the Series B Preferred Stock, as they appear on the stock records of the
corporation at the close of business on such record dates, not more than 60 days
preceding the payment dates thereof, as shall be fixed by the Board of
Directors. Accrued and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular Dividend Payment
Date, to holders of record on such date, not exceeding 45 days preceding the
payment date thereof, as may be fixed by the Board of Directors.
(b) The amount of dividends payable for each full Dividend Period for the
Series B Preferred Stock shall be computed by dividing the annual dividend rate
by four. The amount of dividends payable for the Initial Dividend Period on the
Series B Preferred Stock, or any other period shorter or longer than a full
Dividend Period on the Series B Preferred Stock, shall be computed on the basis
of twelve 30-day months and a 360-day year. Holders of shares of Series B
Preferred Stock called for redemption on a redemption date between a dividend
payment record date and the respective Dividend Payment Date shall not be
entitled to receive the dividend payable on such Dividend Payment Date. Holders
of shares of Series B Preferred Stock shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of cumulative dividends,
as herein provided, on the Series B Preferred Stock. No interest, or sum of
money in lieu of interest, shall be payable in respect of any dividend payment
or payments on the Series B Preferred Stock which may be in arrears.
(c) So long as any shares of the Series B Preferred Stock are outstanding,
no dividends, except as described in the next succeeding sentence, shall be
declared or paid or set apart for payment on any class or series of stock of the
corporation ranking, as to dividends, on a parity with the Series B Preferred
Stock, for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on the Series B Preferred Stock for
all Dividend Periods terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full or a sum sufficient
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for such payment is not set apart, as aforesaid, upon the shares of the Series B
Preferred Stock and any other class or series of stock ranking on a parity as to
dividends with the Series B Preferred Stock, all dividends declared upon shares
of the Series B Preferred Stock and all dividends declared upon such other stock
shall be declared pro rata so that the amounts of dividends per share declared
on the Series B Preferred Stock and such other stock shall in all cases bear to
each other the same ratio that accrued dividends per share on the shares of the
Series B Preferred Stock and such other stock bear to each other.
(d) So long as any shares of the Series B Preferred Stock are outstanding,
no dividends (other than dividends or distributions paid in shares of, or
options, warrants or rights to subscribe for or purchase shares of Common Stock,
Class B Stock or other stock ranking junior to the Series B Preferred Stock, as
to dividends and upon liquidation) shall be declared or paid or set apart for
payment or other distribution declared or made upon the Common Stock, Class B
Stock or any other stock of the corporation ranking junior to the Series B
Preferred Stock, as to dividends or upon liquidation nor shall any Common Stock,
nor any Class B Stock nor any other such stock of the corporation ranking junior
to the Series B Preferred Stock, as to dividends or upon liquidation be
redeemed, purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption of any shares
of any such stock) by the corporation (except by conversion into or exchange for
stock of the corporation ranking junior to the Series B Preferred Stock, as to
dividends and upon liquidation) unless, in each case (i) the full cumulative
dividends on all outstanding shares of the Series B Preferred Stock and any
other stock of the corporation ranking on a parity with the Series B Preferred
Stock, as to dividends or upon liquidation shall have been paid or set apart for
payment for all past Dividend Periods and dividend periods with respect to such
other stock and (ii) sufficient funds shall have been set apart for the payment
of the dividend for the current Dividend Period with respect to the Series B
Preferred Stock and the dividend period with respect to any other stock of the
corporation ranking on a parity with the Series B Preferred Stock, as to
dividends or upon liquidation.
(4) Liquidation Preference. (a) In the event of any liquidation, dissolution
or winding up of the corporation, whether voluntary or involuntary, before any
payment or distribution of the assets of the corporation (whether capital or
surplus) shall be made to or set apart for the holders of Common Stock, Class B
Stock or any other series or class or classes of stock of the corporation
ranking junior to the Series B Preferred Stock, upon liquidation, dissolution or
winding up, the holders of the shares of Series B Preferred Stock shall be
entitled to receive $50,000 per share plus an amount equal to all dividends
(whether or not earned or declared) accrued and accumulated and unpaid thereon
to the date of final distribution to such holders; but such holders shall not be
entitled to any further payment. If, upon any liquidation, dissolution or
winding up of the corporation, the assets of the corporation, or proceeds
thereof, distributable among the holders of the shares of Series B Preferred
Stock shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any other shares of stock ranking, as to liquidation,
dissolution or winding up, on a parity with the Series B Preferred Stock, then
such assets, or the proceeds thereof, shall be distributed among the holders of
shares of Series B Preferred Stock and any such other stock ratably in
accordance with the respective amounts which would be payable on such shares of
Series B Preferred Stock and any such other stock if all amounts payable thereon
were paid in full. For the purposes of this Section (4), (i) a consolidation or
merger of the corporation with one or more corporations, (ii) a sale or transfer
of all or substantially all of the corporation's assets or (iii) a statutory
share exchange shall not be deemed to be a liquidation, dissolution or winding
up, voluntary or involuntary.
(b) Subject to the rights of the holders of shares of any series or class or
classes of stock ranking on a parity with or prior to Series B Preferred Stock,
upon liquidation, dissolution or winding up, upon any liquidation, dissolution
or winding up of the corporation, after payment shall have been made in full to
the holders of Series B Preferred Stock, as provided in this Section (4), any
other series or class or classes of stock ranking junior to Series B Preferred
Stock, upon liquidation, dissolution or winding up shall, subject to the
respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets remaining to be paid or distributed, and the holders
of Series B Preferred Stock shall not be entitled to share therein.
(5) Redemption at the Option of the Corporation. (a) Series B Preferred
Stock may not be redeemed by the corporation prior to December 1, 2002, on or
after which the corporation, at its option, may, subject to the next succeeding
paragraph, redeem the shares of Series B Preferred Stock, in whole or in part,
out of funds legally available therefor, at any time or from time to time,
subject to the notice provisions and provisions for partial redemption described
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below, at a redemption price of $50,000 per share, plus an amount equal to
accrued and unpaid dividends, if any, to the date fixed for redemption, whether
or not earned or declared.
In addition to any other requirement for or condition to the redemption of
the Series B Preferred Stock set forth in this Section (5), the corporation
shall not redeem any shares of Series B Preferred Stock pursuant to this Section
(5)(a) unless within the two-year period ending on the date fixed for redemption
the corporation shall have issued sufficient shares of Common Stock to result in
receipt by the corporation of net proceeds from such issuances of an aggregate
amount at least equal to the aggregate liquidation preference of the shares of
Series B Preferred Stock proposed to be redeemed.
(b) In the event that full cumulative dividends on the Series B Preferred
Stock and any other class or series of stock of the corporation ranking, as to
dividends, on a parity with the Series B Preferred Stock have not been paid or
declared and set apart for payment, the Series B Preferred Stock may not be
redeemed in part and the corporation may not purchase or acquire shares of
Series B Preferred Stock or such other stock otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of shares of
Series B Preferred Stock and such other stock.
(c) In the event the corporation shall redeem shares of Series B Preferred
Stock, notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than 10 nor more than 60 days prior to the redemption
date, to each holder of record of the shares to be redeemed, at such holder's
address as the same appears on the stock records of the corporation. Each such
notice shall state: (1) the redemption date; (2) the number of shares of Series
B Preferred Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (3) the redemption price; (4) the place or places where certificates for
such shares are to be surrendered for payment of the redemption price; and (5)
that dividends on the shares to be redeemed shall cease to accrue on such
redemption date. Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the corporation in providing
money for the payment of the redemption price), (i) dividends on the shares of
the Series B Preferred Stock so called for redemption shall cease to accrue,
(ii) said shares shall no longer be deemed to be outstanding, and (iii) all
rights of the holders thereof as stockholders of the corporation (except the
right to receive from the corporation the redemption price without interest
thereon) shall cease. The corporation's obligation to provide moneys in
accordance with the preceding sentence shall be deemed fulfilled if, on or
before the redemption date, the corporation shall deposit with a bank or trust
company (which may be an affiliate of the corporation) having an office in the
Borough of Manhattan, City of New York, and having a capital and surplus of at
least $50,000,000, funds necessary for such redemption, in trust, with
irrevocable instructions that such funds be applied to the redemption of the
shares of Series B Preferred Stock so called for redemption. Any interest
accrued on such funds shall be paid to the corporation from time to time. Any
funds so deposited and unclaimed at the end of two years from such redemption
date shall be released or repaid to the corporation, after which, subject to any
applicable laws relating to escheat or unclaimed property, the holder or holders
of such shares of Series B Preferred Stock so called for redemption shall look
only to the corporation for payment of the redemption price.
Upon surrender in accordance with said notice of the certificates for any
such shares so redeemed (properly endorsed or assigned for transfer, if the
Board of Directors shall so require and the notice shall so state), such shares
shall be redeemed by the corporation at the applicable redemption price
aforesaid. If fewer than all the outstanding shares of Series B Preferred Stock
are to be redeemed, shares to be redeemed shall be selected by the corporation
from outstanding shares of Series B Preferred Stock not previously called for
redemption by lot or pro rata (as nearly as may be) or by any other method
determined by the corporation in its sole discretion to be equitable. If fewer
than all the shares represented by any certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof.
(6) Shares to be Retired. All shares of Series B Preferred Stock purchased
or redeemed by the corporation shall be retired and canceled and shall be
restored to the status of authorized but unissued shares of preferred stock,
without designation as to series.
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(ii) the rate and time at which, and the preferences and conditions
under which, dividends shall be payable on shares of such series, the status
of such dividends as cumulative, or non-cumulative, the date or dates from
which dividends, if cumulative, shall accumulate, and the status of such
shares as participating or non-participating after the payment of dividends
as to which such shares are entitled to any preference;
(iii) the right, if any, of holders of shares of such series to convert
such shares into, or to exchange such shares for, shares of any other class
or classes (other than Class B) or of any other series of the same class,
the prices or rates of conversion or exchange, and adjustments thereto, and
any other terms and conditions applicable to such conversion or exchange;
(iv) the rights and preferences, if any, of the holders of shares of
such series upon the liquidation, dissolution or winding up of the affairs
of, or upon any distribution of the assets of, the corporation, which amount
may vary depending upon whether such liquidation, dissolution, or winding up
is voluntary or involuntary, and, if voluntary, may vary at different dates,
and the status of the shares of such series as participating or
non-participating after the satisfaction of any such rights and preferences;
(v) the voting powers, if any, of the holders of shares of such series which
may, without limiting the generality of the foregoing, include (A) the
general right to one vote (or more or less than one vote) per share on every
matter (including, without limitation, the election of directors) voted on
by the stockholders without regard to class and (B) the limited right to
vote, as a series by itself or together with other series of Preferred Stock
or together with all series of Preferred Stock as a class, upon such
matters, under such circumstances and upon such conditions as the Board of
Directors may fix, including, without limitation, the right, voting as a
series by itself or together with other series of Preferred Stock or
together with all series of Preferred Stock as a class, to elect one or more
directors of the corporation in the event there shall have been a default in
the payment of dividends on any one or more series of Preferred Stock;
provided, however, that, notwithstanding the provisions of the preceding
subclause (B) or any other provisions of this subsection 8.1 to the
contrary, the holders of Preferred Stock, considered in the aggregate
(whether voting by individual series or together with other series of
Preferred Stock or together with all series of Preferred Stock as a class),
shall not have the right to a separate class vote for the election of one or
more directors of the corporation except in the event there shall have been
a default in the payment of dividends on any one or more series of Preferred
Stock and, in such event, shall not have the right to a separate class vote
for more than a total of two directors;
(vi) the times, terms and conditions, if any, upon which shares of such
series shall be subject to redemption, including the amount which the
holders of shares of such series shall be entitled to receive upon
redemption (which amount may vary under different conditions or at different
redemption dates) and the amount, terms, conditions and manner of operation
of any purchase, retirement or sinking fund to be provided for the shares of
such series;
(vii) the limitations, if any, applicable while such series is
outstanding on the payment of dividends or making of distributions on, or
the acquisition or redemption of, Common Stock or Class B Stock or any other
class of shares ranking junior, either as to dividends or upon liquidation,
to the shares of such series;
(viii) the conditions or restrictions, if any, upon the issue of any
additional shares (including additional shares of such series or any other
class) ranking on a parity with or prior to the shares of such series either
as to dividends or upon liquidation; and
(ix) any other relative powers, preferences and participating, optional
or other special rights, and the qualifications, limitations or restrictions
thereof, of shares of such series;
in each case, so far as not inconsistent with the provisions of the
Certificate of Incorporation or the law of the State of Delaware. All shares
of Preferred Stock shall be identical and of equal rank except as to the
particulars that may be fixed by the Board of Directors as provided above,
and all shares of each series of Preferred Stock shall be identical and of
equal rank except as to the dates from which cumulative dividends, if any,
thereon shall be cumulative.
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8.2. Full Voting Preferred Stock. As used in this Article FOURTH, the term
"Full Voting Preferred Stock" shall mean Preferred Stock of any one or more
series the holders of which shall be entitled to vote on every matter
(including, without limitation, the election of directors) voted on by the
stockholders without regard to class.
SECTION 9.
MISCELLANEOUS PROVISIONS.
9.1. Original Stock Ledger Conclusive. In determining the number or the
record holders of outstanding shares of any class of stock of the corporation
for the purpose of computing or determining the method of computing the vote or
determining the right to vote at any meeting of stockholders or of a class of
stockholders, the original stock ledger of the corporation as at the close of
business on the record date fixed for such meeting or, if the stock transfer
books of the corporation shall have been closed for a period immediately
preceding the date of such meeting, then as at the close of business on the date
as of which such stock transfer books were so closed, shall be conclusive for
all purposes, and in determining the number or the record holders of outstanding
shares of any class of stock of the corporation for any other purpose, the
original stock ledger of the corporation as at the close of business on the date
as of which the determination is being made, shall be conclusive for all
purposes; all notwithstanding any other provision of this Article FOURTH or any
entries made on the books of the corporation pursuant to the last paragraph of
subsection 2.3 subsequent to the close of business on such record or other date.
9.2. Treasury Stock Not Outstanding. The term "outstanding" as used in this
Article FOURTH with reference to shares of stock of the corporation shall not
include any stock held in the treasury of the corporation.
9.3. Singular and Plural. Wherever a term shall be used in the singular in
this Article FOURTH, it shall be deemed in all appropriate circumstances to
include also the plural, and wherever a term shall be so used in the plural, it
shall similarly be deemed to include also the singular.
9.4. References. Unless otherwise stated, all references contained in this
Article FOURTH to Sections, subsections, paragraphs, clauses or subclauses refer
to Sections, subsections, paragraphs, clauses or subclauses of this Article
FOURTH.
9.5. Captions or Headings. The captions or headings contained in this
Article FOURTH are for purposes of reference only and shall not limit or affect,
or have any bearing on the construction or interpretation of, any of the terms
or provisions of this Article FOURTH.
SECTION 10.
SERIES B CUMULATIVE PREFERRED STOCK.
The provisions of the corporation's Certificate of the Designations, Powers,
Preferences and Relative, Participating or Other Rights, and the Qualifications,
Limitations or Restrictions Thereof, of the Series B Cumulative Preferred Stock
are set forth below:
(1) Number of Shares and Designation. Twenty-three thousand (23,000) shares
of the preferred stock, $1.00 par value, of the corporation are hereby
constituted as a series of the preferred stock designated as Series B Cumulative
Preferred Stock (the "Series B Preferred Stock").
(2) Definitions. For purposes of the Series B Preferred Stock, the following
terms shall have the meanings indicated:
"Board of Directors" shall mean the board of directors of the
corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Series B Preferred
Stock.
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"Business Day" shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Class B Stock" shall mean the Class B Stock of the corporation, par
value $1.00 per share.
"Common Stock" shall mean the Common Stock of the corporation, par value
$1.00 per share.
"Dividend Payment Date" shall have the meaning specified in Section 3(a)
hereof.
"Dividend Periods" shall mean quarterly dividend periods commencing on
the first day of March, June, September and December of each year and ending
on and including the day preceding the first day of the next succeeding
Dividend Period (other than the Initial Dividend Period).
"Initial Dividend Period" shall mean the period commencing on the Issue
Date and ending on (and including) February 28, 1993.
"Issue Date" shall mean the first date on which any shares of Series B
Preferred Stock are issued.
"Person" shall mean any individual, firm, partnership, corporation or
other entity, and shall include any successor (by merger or otherwise) of
such entity.
"Transfer Agent" means Chemical Bank or such other agent or agents of
the corporation as may be designated by the Board of Directors of the
corporation as the transfer agent for the Series B Preferred Stock.
(3) Dividends. (a) The holders of shares of the Series B Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available therefor, cash dividends at the rate per annum of
$4,125 per share of Series B Preferred Stock. Such dividends shall be cumulative
from the Issue Date, whether or not in any Dividend Period or Periods there
shall be funds of the corporation legally available for the payment of such
dividends, and shall be payable quarterly, when, as and if declared by the Board
of Directors, on the first Business Day of March, June, September and December
of each year (each a "Dividend Payment Date"), commencing on the first Business
Day next succeeding the Initial Dividend Period, or at such additional times and
for such interim periods, if any, as determined by the Board of Directors. Each
such dividend shall be payable in arrears to the holders of record of shares of
the Series B Preferred Stock, as they appear on the stock records of the
corporation at the close of business on such record dates, not more than 60 days
preceding the payment dates thereof, as shall be fixed by the Board of
Directors. Accrued and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular Dividend Payment
Date, to holders of record on such date, not exceeding 45 days preceding the
payment date thereof, as may be fixed by the Board of Directors.
(b) The amount of dividends payable for each full Dividend Period for the
Series B Preferred Stock shall be computed by dividing the annual dividend rate
by four. The amount of dividends payable for the Initial Dividend Period on the
Series B Preferred Stock, or any other period shorter or longer than a full
Dividend Period on the Series B Preferred Stock, shall be computed on the basis
of twelve 30-day months and a 360-day year. Holders of shares of Series B
Preferred Stock called for redemption on a redemption date between a dividend
payment record date and the respective Dividend Payment Date shall not be
entitled to receive the dividend payable on such Dividend Payment Date. Holders
of shares of Series B Preferred Stock shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of cumulative dividends,
as herein provided, on the Series B Preferred Stock. No interest, or sum of
money in lieu of interest, shall be payable in respect of any dividend payment
or payments on the Series B Preferred Stock which may be in arrears.
(c) So long as any shares of the Series B Preferred Stock are outstanding,
no dividends, except as described in the next succeeding sentence, shall be
declared or paid or set apart for payment on any class or series of stock of the
corporation ranking, as to dividends, on a parity with the Series B Preferred
Stock, for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on the Series B Preferred Stock for
all Dividend Periods terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full or a sum sufficient
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for such payment is not set apart, as aforesaid, upon the shares of the Series B
Preferred Stock and any other class or series of stock ranking on a parity as to
dividends with the Series B Preferred Stock, all dividends declared upon shares
of the Series B Preferred Stock and all dividends declared upon such other stock
shall be declared pro rata so that the amounts of dividends per share declared
on the Series B Preferred Stock and such other stock shall in all cases bear to
each other the same ratio that accrued dividends per share on the shares of the
Series B Preferred Stock and such other stock bear to each other.
(d) So long as any shares of the Series B Preferred Stock are outstanding,
no dividends (other than dividends or distributions paid in shares of, or
options, warrants or rights to subscribe for or purchase shares of Common Stock,
Class B Stock or other stock ranking junior to the Series B Preferred Stock, as
to dividends and upon liquidation) shall be declared or paid or set apart for
payment or other distribution declared or made upon the Common Stock, Class B
Stock or any other stock of the corporation ranking junior to the Series B
Preferred Stock, as to dividends or upon liquidation nor shall any Common Stock,
nor any Class B Stock nor any other such stock of the corporation ranking junior
to the Series B Preferred Stock, as to dividends or upon liquidation be
redeemed, purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption of any shares
of any such stock) by the corporation (except by conversion into or exchange for
stock of the corporation ranking junior to the Series B Preferred Stock, as to
dividends and upon liquidation) unless, in each case (i) the full cumulative
dividends on all outstanding shares of the Series B Preferred Stock and any
other stock of the corporation ranking on a parity with the Series B Preferred
Stock, as to dividends or upon liquidation shall have been paid or set apart for
payment for all past Dividend Periods and dividend periods with respect to such
other stock and (ii) sufficient funds shall have been set apart for the payment
of the dividend for the current Dividend Period with respect to the Series B
Preferred Stock and the dividend period with respect to any other stock of the
corporation ranking on a parity with the Series B Preferred Stock, as to
dividends or upon liquidation.
(4) Liquidation Preference. (a) In the event of any liquidation, dissolution
or winding up of the corporation, whether voluntary or involuntary, before any
payment or distribution of the assets of the corporation (whether capital or
surplus) shall be made to or set apart for the holders of Common Stock, Class B
Stock or any other series or class or classes of stock of the corporation
ranking junior to the Series B Preferred Stock, upon liquidation, dissolution or
winding up, the holders of the shares of Series B Preferred Stock shall be
entitled to receive $50,000 per share plus an amount equal to all dividends
(whether or not earned or declared) accrued and accumulated and unpaid thereon
to the date of final distribution to such holders; but such holders shall not be
entitled to any further payment. If, upon any liquidation, dissolution or
winding up of the corporation, the assets of the corporation, or proceeds
thereof, distributable among the holders of the shares of Series B Preferred
Stock shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any other shares of stock ranking, as to liquidation,
dissolution or winding up, on a parity with the Series B Preferred Stock, then
such assets, or the proceeds thereof, shall be distributed among the holders of
shares of Series B Preferred Stock and any such other stock ratably in
accordance with the respective amounts which would be payable on such shares of
Series B Preferred Stock and any such other stock if all amounts payable thereon
were paid in full. For the purposes of this Section (4), (i) a consolidation or
merger of the corporation with one or more corporations, (ii) a sale or transfer
of all or substantially all of the corporation's assets or (iii) a statutory
share exchange shall not be deemed to be a liquidation, dissolution or winding
up, voluntary or involuntary.
(b) Subject to the rights of the holders of shares of any series or class or
classes of stock ranking on a parity with or prior to Series B Preferred Stock,
upon liquidation, dissolution or winding up, upon any liquidation, dissolution
or winding up of the corporation, after payment shall have been made in full to
the holders of Series B Preferred Stock, as provided in this Section (4), any
other series or class or classes of stock ranking junior to Series B Preferred
Stock, upon liquidation, dissolution or winding up shall, subject to the
respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets remaining to be paid or distributed, and the holders
of Series B Preferred Stock shall not be entitled to share therein.
(5) Redemption at the Option of the Corporation. (a) Series B Preferred
Stock may not be redeemed by the corporation prior to December 1, 2002, on or
after which the corporation, at its option, may, subject to the next succeeding
paragraph, redeem the shares of Series B Preferred Stock, in whole or in part,
out of funds legally available therefor, at any time or from time to time,
subject to the notice provisions and provisions for partial redemption described
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below, at a redemption price of $50,000 per share, plus an amount equal to
accrued and unpaid dividends, if any, to the date fixed for redemption, whether
or not earned or declared.
In addition to any other requirement for or condition to the redemption of
the Series B Preferred Stock set forth in this Section (5), the corporation
shall not redeem any shares of Series B Preferred Stock pursuant to this Section
(5)(a) unless within the two-year period ending on the date fixed for redemption
the corporation shall have issued sufficient shares of Common Stock to result in
receipt by the corporation of net proceeds from such issuances of an aggregate
amount at least equal to the aggregate liquidation preference of the shares of
Series B Preferred Stock proposed to be redeemed.
(b) In the event that full cumulative dividends on the Series B Preferred
Stock and any other class or series of stock of the corporation ranking, as to
dividends, on a parity with the Series B Preferred Stock have not been paid or
declared and set apart for payment, the Series B Preferred Stock may not be
redeemed in part and the corporation may not purchase or acquire shares of
Series B Preferred Stock or such other stock otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of shares of
Series B Preferred Stock and such other stock.
(c) In the event the corporation shall redeem shares of Series B Preferred
Stock, notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than 10 nor more than 60 days prior to the redemption
date, to each holder of record of the shares to be redeemed, at such holder's
address as the same appears on the stock records of the corporation. Each such
notice shall state: (1) the redemption date; (2) the number of shares of Series
B Preferred Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (3) the redemption price; (4) the place or places where certificates for
such shares are to be surrendered for payment of the redemption price; and (5)
that dividends on the shares to be redeemed shall cease to accrue on such
redemption date. Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the corporation in providing
money for the payment of the redemption price), (i) dividends on the shares of
the Series B Preferred Stock so called for redemption shall cease to accrue,
(ii) said shares shall no longer be deemed to be outstanding, and (iii) all
rights of the holders thereof as stockholders of the corporation (except the
right to receive from the corporation the redemption price without interest
thereon) shall cease. The corporation's obligation to provide moneys in
accordance with the preceding sentence shall be deemed fulfilled if, on or
before the redemption date, the corporation shall deposit with a bank or trust
company (which may be an affiliate of the corporation) having an office in the
Borough of Manhattan, City of New York, and having a capital and surplus of at
least $50,000,000, funds necessary for such redemption, in trust, with
irrevocable instructions that such funds be applied to the redemption of the
shares of Series B Preferred Stock so called for redemption. Any interest
accrued on such funds shall be paid to the corporation from time to time. Any
funds so deposited and unclaimed at the end of two years from such redemption
date shall be released or repaid to the corporation, after which, subject to any
applicable laws relating to escheat or unclaimed property, the holder or holders
of such shares of Series B Preferred Stock so called for redemption shall look
only to the corporation for payment of the redemption price.
Upon surrender in accordance with said notice of the certificates for any
such shares so redeemed (properly endorsed or assigned for transfer, if the
Board of Directors shall so require and the notice shall so state), such shares
shall be redeemed by the corporation at the applicable redemption price
aforesaid. If fewer than all the outstanding shares of Series B Preferred Stock
are to be redeemed, shares to be redeemed shall be selected by the corporation
from outstanding shares of Series B Preferred Stock not previously called for
redemption by lot or pro rata (as nearly as may be) or by any other method
determined by the corporation in its sole discretion to be equitable. If fewer
than all the shares represented by any certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof.
(6) Shares to be Retired. All shares of Series B Preferred Stock purchased
or redeemed by the corporation shall be retired and canceled and shall be
restored to the status of authorized but unissued shares of preferred stock,
without designation as to series.
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(7) Ranking. Any class or classes of stock of the corporation shall be
deemed to rank:
(i) prior to the Series B Preferred Stock, as to dividends or as to
distribution of assets upon liquidation, dissolution or winding up, if the
holders of such class shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of Series B Preferred
Stock;
(ii) on a parity with the Series B Preferred Stock, as to dividends or
as to distribution of assets upon liquidation, dissolution or winding up,
whether or not the dividend rates, dividend payment dates or redemption or
liquidation prices per share thereof be different from those of the Series B
Preferred Stock, if the holders of such class of stock and the Series B
Preferred Stock shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may
be, in proportion to their respective amounts of accrued and unpaid
dividends per share or liquidation prices, without preference or priority
one over the other; and
(iii) junior to the Series B Preferred Stock, as to dividends or as to
the distribution of assets upon liquidation, dissolution or winding up, if
such stock shall be Common Stock or Class B Stock or if the holders of
Series B Preferred Stock shall be entitled to receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of shares of such
stock.
(8) Voting. Except as herein provided or as otherwise from time to time
required by law, holders of Series B Preferred Stock shall have no voting
rights. Whenever, at any time or times, dividends payable on the shares of
Series B Preferred Stock at the time outstanding shall be in arrears for such
number of Dividend Periods, which Dividend Periods need not be consecutive,
which shall in the aggregate contain not less than 540 days, the holders of
Series B Preferred Stock shall have the exclusive right, voting separately as a
class with holders of shares of any one or more other series of preferred stock
ranking on a parity with the Series B Preferred Stock as to dividends, or on the
distribution of assets upon liquidation, dissolution or winding up and upon
which like voting rights have been conferred and are exercisable, to elect two
directors of the corporation at the corporation's next annual meeting of
stockholders and at each subsequent annual meeting of stockholders. At elections
for such directors, each holder of Series B Preferred Stock shall be entitled to
one vote for each share held (the holders of shares of any other series of
preferred stock ranking on such a parity being entitled to such number of votes,
if any, for each share of stock held as may be granted to them). Upon the
vesting of such right of the holders of Series B Preferred Stock, the maximum
authorized number of members of the Board of Directors shall automatically be
increased by two and the two vacancies so created shall be filled by vote of the
holders of outstanding Series B Preferred Stock (either alone or together with
the holders of shares of any one or more other series of preferred stock ranking
on such a parity and having like voting rights) as hereinafter set forth. The
right of holders of Series B Preferred Stock, voting separately as a class, to
elect (either alone or together with the holders of shares of any one or more
other series of preferred stock ranking on such a parity and having like voting
rights) members of the Board of Directors as aforesaid shall continue until such
time as all dividends accumulated on Series B Preferred Stock shall have been
paid in full, at which time such right shall terminate, except as herein or by
law expressly provided, subject to revesting in the event of each and every
subsequent default of the character above mentioned.
If the office of any director elected by the holders of Series B Preferred
Stock, voting as a class, becomes vacant by reason of death, resignation,
retirement, disqualification or removal from office or otherwise, the remaining
director elected by the holders of Series B Preferred Stock, voting as a class,
may choose a successor who shall hold office for the unexpired term in respect
of which such vacancy occurred. Upon any termination of the right of the holders
of Series B Preferred Stock to vote for directors as herein provided, the term
of office of all directors then in office elected by Series B Preferred Stock,
voting as a class, shall terminate immediately. Whenever the term of office of
the directors elected by the holders of Series B Preferred Stock, voting as a
class, shall so terminate and the special voting powers vested in the holders of
Series B Preferred Stock shall have expired, the number of directors shall be
such number as may be provided for in the By-Laws irrespective of any increase
made pursuant to the provisions of this Section (8).
So long as any shares of the Series B Preferred Stock remain outstanding,
the consent of the holders of at least two-thirds of the shares of Series B
Preferred Stock outstanding at the time given in person or by proxy, either in
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writing or at any special or annual meeting, shall be necessary to permit,
effect or validate any one or more of the following:
(a) The authorization, creation or issuance, or any increase in the
authorized or issued amount, of any class or series of stock ranking prior to
Series B Preferred Stock as to dividends or the distribution of assets upon
liquidation, dissolution or winding up, or
(b) The amendment, alteration or repeal, whether by merger, consolidation or
otherwise, of any of the provisions of the Certificate of Incorporation of the
corporation, as amended, which would materially and adversely affect any right,
preference or voting power of Series B Preferred Stock or of the holders
thereof; provided, however, that any increase in the amount of authorized
preferred stock or the creation and issuance of other series of preferred stock,
or any increase in the amount of authorized shares of such series or of any
other series of preferred stock, in each case ranking on a parity with or junior
to the Series B Preferred Stock with respect to the payment of dividends and the
distribution of assets upon liquidation, dissolution or winding up, shall not be
deemed to materially and adversely affect such rights, preferences or voting
powers.
The foregoing voting provisions shall not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of Series B Preferred Stock shall have been
redeemed or sufficient funds shall have been deposited in trust to effect such
redemption, scheduled to be consummated within three months after such time.
(9) Record Holders. The corporation and the Transfer Agent may deem and
treat the record holder of any shares of Series B Preferred Stock as the true
and lawful owner thereof for all purposes, and neither the corporation nor the
Transfer Agent shall be affected by any notice to the contrary.
FIFTH. The amount of capital with which the corporation will commence business
is One Thousand Dollars ($1,000).
SIXTH. The corporation is to have perpetual existence.
SEVENTH. The private property of the stockholders shall not be subject to the
payment of corporate debts to any
extent whatever.
EIGHTH. The following provisions are inserted for the management of the business
and for the conduct of the affairs of the corporation:
SECTION 1.
POWERS OF THE BOARD OF DIRECTORS.
1.1. General. In furtherance, and not in limitation, of the powers conferred
by statute, the Board of Directors is expressly authorized:
(1) To make, alter or repeal the By-Laws of the corporation; to set
apart out of any funds of the corporation available for dividends a reserve
or reserves for any proper purpose and to abolish the same in the manner in
which it was created, and to fix and determine and to vary the amount of the
working capital of the corporation; to determine the use and disposition of
the working capital and of any surplus or net profits over and above the
capital of the corporation determined as provided by law, and to fix the
times for the declaration and payment of dividends; to authorize and cause
to be executed mortgages and liens, without limit as to amount, upon the
real and personal property of the corporation; and to fix and determine the
fees and other compensation to be paid by the corporation to its directors;
(2) To determine from time to time whether and to what extent, and at
what times and places, and under what conditions and regulations, the
accounts and books of the corporation (other than the stock ledger), or any
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of them, shall be open to inspection of the stockholders; and no stockholder
shall have any right to inspect any account, book or document of the
corporation except as conferred by statute, unless authorized by a
resolution of the stockholders or directors;
(3) To make donations for the public welfare or for charitable,
scientific or educational purposes; and to cause the corporation to
cooperate with other corporations or with natural persons, or to act alone,
in the creation and maintenance of community funds or charitable,
scientific, or educational instrumentalities, and to make donations for the
public welfare or for charitable, scientific, or educational purposes; and
(4) To designate, by resolution passed by a majority of the entire Board,
one or more committees, each committee to consist of two or more of the
directors of the corporation, which to the extent provided in the resolution
or in the By-Laws of the corporation, shall have and may exercise the powers
of the Board of Directors in the management of the business and affairs of
the corporation, and may authorize the seal of the corporation to be affixed
to all papers which may require it.
1.2. Powers Conferred by By-Laws. The corporation may in its By-Laws confer
powers upon its directors in addition to the foregoing, and in addition to the
powers and authorities expressly conferred upon them by the laws of the State of
Delaware.
SECTION 2.
MEETING, OFFICERS AND BOOKS.
If the By-Laws so provide, the stockholders and the directors may hold their
meetings, and the corporation may have one or more offices, outside the State of
Delaware. The books of the corporation (subject to the provisions of the laws of
the State of Delaware) may be kept outside of the State of Delaware at such
places as from time to time may be designated by the Board of Directors.
SECTION 3.
VALIDITY OF CONTRACT.
No contract, transaction or act of the corporation shall be affected or
invalidated by the fact that any of the directors of the corporation are in any
wise interested in or connected with any other party to such contract,
transaction or act or are themselves parties to such contract, transaction or
act, provided that such interest shall be fully disclosed or otherwise known to
the Board of Directors, or a majority thereof, at a meeting of the Board at
which such contract, transaction or act is authorized, ratified or confirmed;
and any such director may be counted in determining the existence of a quorum at
any such meeting and may vote thereat in connection with such authorization,
ratification or confirmation with like force and effect as if he were not so
interested or connected or was not a party to such contract, transaction or act.
SECTION 4.
RATIFICATION.
The Board of Directors in its discretion may submit for approval,
ratification or confirmation by the stockholders at any meeting thereof any
contract, transaction or act of the Board or of any officer, agent or employee
of the corporation, and any such contract, transaction or act which shall have
been so approved, ratified or confirmed by the holders of Common Stock and
holders of Class B Stock, voting as provided in subsection 1.6 of Article FOURTH
hereof shall be as valid and binding upon the corporation and upon the
stockholders thereof as though it had been approved and ratified by each and
every stockholder of the corporation.
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SECTION 5.
LIMITATION ON LIABILITY OF DIRECTORS; INDEMNIFICATION AND INSURANCE.
5.1. Limitation on Liability of Directors. A director of the corporation
shall not be personally liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability
(i) for any breach of the director's duty of loyalty to the corporation
or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law or
(iv) for any transaction from which the director derived an improper
personal benefit.
If the Delaware General Corporation Law is amended after approval by the
stockholders of this subsection 5.1 of Article EIGHTH to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of a director of the corporation shall be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law, as so
amended.
5.2. Effect of Any Repeal or Modification of Subsection 5.1. Any repeal or
modification of subsection 5.1 of this Article EIGHTH by the stockholders of the
corporation shall not adversely affect any right or protection of a director of
the corporation existing at the time of such repeal or modification.
5.3. Indemnification and Insurance.
5.3a. Right to Indemnification. Each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative, investigative or otherwise
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director, officer or
employee of the corporation or is or was serving at the request of the
corporation as a director, officer or employee of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer or employee or in
any other capacity while serving as a director, officer or employee, shall be
indemnified and held harmless by the corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the corporation to provide broader indemnification
rights than said law permitted the corporation to provide prior to such
amendment), against all expense, liability and loss (including penalties, fines,
judgments, attorney's fees, amounts paid or to be paid in settlement and excise
taxes or penalties imposed on fiduciaries with respect to (i) employee benefit
plans, (ii) charitable organizations or (iii) similar matters) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer or employee and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that the corporation shall
indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person (other than pursuant to
subsection 5.3b of this Article EIGHTH) only if such proceeding (or part
thereof) was authorized by the Board of Directors of the corporation. The right
to indemnification conferred in this subsection 5.3a of Article EIGHTH shall be
a contract right and shall include the right to be paid by the corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that if the Delaware General Corporation Law
requires, the payment of such expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer, including
without limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding shall be made only upon delivery to the corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this subsection 5.3a of Article
EIGHTH or otherwise.
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5.3b. Right of Claimant to Bring Suit. If a claim which the corporation is
obligated to pay under subsection 5.3a of this Article EIGHTH is not paid in
full by the corporation within 60 days after a written claim has been received
by the corporation, the claimant may at any time thereafter bring suit against
the corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
corporation. Neither the failure of the corporation (including its Board of
Directors, independent legal counsel or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the corporation (including its Board of
Directors, independent legal counsel or its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
5.3c. Miscellaneous. The provisions of this Section 5.3 of Article EIGHTH
shall cover claims, actions, suits and proceedings, civil or criminal, whether
now pending or hereafter commenced, and shall be retroactive to cover acts or
omissions or alleged acts or omissions which heretofore have taken place. If any
part of this Section 5.3 of Article EIGHTH should be found to be invalid or
ineffective in any proceeding, the validity and effect of the remaining
provisions shall not be affected.
5.3d. Non-Exclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section 5.3 of Article EIGHTH shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, provision of the Certificate of Incorporation, By-Law,
agreement, vote of stockholders or disinterested directors or otherwise.
5.3e. Insurance. The corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the corporation
would have the power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law.
5.3f. Indemnification of Agents of the Corporation. The corporation may, to
the extent authorized from time to time by the Board of Directors, grant rights
to indemnification, and rights to be paid by the corporation the expenses
incurred in defending any proceeding in advance of its final disposition, to any
agent of the corporation to the fullest extent of the provisions of this Section
5.3 of Article EIGHTH with respect to the indemnification and advancement of
expenses of directors, officers and employees of the corporation.
SECTION 6.
LIMITATION OF ACTIONS.
Every asserted right of action by or on behalf of the corporation or by or
on behalf of any stockholder against any past, present or future member of the
Board of Directors, or any committee thereof, or any officer or employee of the
corporation or any subsidiary thereof, arising out of or in connection with any
bonus, supplemental compensation, stock investment, stock option or other plan
or plans for the benefit of any employee, irrespective of the place where such
right of action may arise or be asserted and irrespective of the place of
residence of any such director, member, officer or employee, shall cease and be
barred upon the expiration of three years from the later of the following dates:
(a) the date of any alleged act or omission in respect of which such right of
action may be asserted to have arisen, or (b) the date upon which the
corporation shall have made generally available to its stockholders information
with respect to, as the case may be, the aggregate amount credited for a fiscal
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year to a bonus or supplemental compensation reserve, or the aggregate amount of
awards in a fiscal year of bonuses or supplemental compensation, or the
aggregate amount of stock optioned or made available for purchase during a
fiscal year, or the aggregate amount expended by the corporation during a fiscal
year in connection with any other plan for the benefit of such employees, to all
or any part of which such asserted right of action may relate; and every
asserted right of action by or on behalf of any employee, past, present or
future, or any spouse, child, or legal representative thereof, against the
corporation or any subsidiary thereof arising out of or in connection with any
such plan, irrespective of the place where such asserted right of action may
arise or be asserted, shall cease and be barred by the expiration of three years
from the date of the alleged act or omission in respect of which such right of
action shall be asserted to have arisen.
NINTH. The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by the law of the State of Delaware, and all rights of
the stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which only
restates and integrates and does not further amend the provisions of the
Restated Certificate of Incorporation of this corporation as heretofore amended
or supplemented, there being no discrepancies between those provisions and the
provisions of this Restated Certificate of Incorporation, and it having been
duly adopted by the corporation's Board of Directors in accordance with Section
245 of the Delaware General Corporation Law, has been signed by its duly
authorized officer this 9th day of April, 1998.
FORD MOTOR COMPANY
By:/s/John M. Rintamaki
---------------------------
John M. Rintamaki
Secretary
[FORD LOGO]
Ford Motor Company
By-Laws
As Amended Through March 12, 1998
<PAGE>
BY-LAWS
OF
FORD MOTOR COMPANY
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I - Offices..........................................................................1
ARTICLE II - Stockholders.....................................................................1
Section 1. Annual Meeting..................................................................1
Section 2. Special Meetings................................................................1
Section 3. Notice of Meetings..............................................................2
Section 4. Quorum..........................................................................2
Section 5. Organization....................................................................2
Section 6. Proxies and Voting..............................................................2
Section 7. Stock Lists.....................................................................2
Section 8. Ratification....................................................................3
Section 9. Judges..........................................................................3
ARTICLE III - Board of Directors...............................................................3
Section 1. Number, Term of Office and Eligibility..........................................3
Section 2. Meetings........................................................................3
Section 3. Notice of Meetings..............................................................4
Section 4. Quorum and Organization of Meetings.............................................4
Section 5. Powers..........................................................................4
Section 6. Reliance upon Books, Reports and Records........................................6
Section 7. Compensation of Directors.......................................................6
ARTICLE IV - Committees.......................................................................6
Section 1. Committees of the Board of Directors............................................6
Section 2. Audit Committee.................................................................7
Section 3. Compensation and Option Committee...............................................7
Section 4. Environmental and Public Policy Committee.......................................7
Section 5. Finance Committee...............................................................8
Section 6. Organization Review and Nominating Committee....................................8
Section 7. Other Committees................................................................9
Section 8. Rules and Procedures............................................................9
Section 9. Application of Article..........................................................9
ARTICLE V - Officers.........................................................................9
Section 1. Officers........................................................................9
Section 2. Office of the Chief Executive..................................................10
Section 3. Chairman of the Board of Directors.............................................10
Section 4. Vice Chairmen of the Board of Directors........................................10
Section 5. President......................................................................10
Section 6. Chief Operating Officer........................................................10
Section 7. Vice Chairmen of the Company, Executive Vice Presidents,
Group Vice Presidents and Vice Presidents................................11
Section 8. Treasurer and Assistant Treasurer..............................................11
<PAGE>
Section 9. Secretary and Assistant Secretary..............................................11
Section 10. General Counsel................................................................12
Section 11. Controller.....................................................................12
Section 12. Salaries.......................................................................12
ARTICLE VI - Resignations, Removals and Vacancies...........................................12
Section 1. Resignations..................................................................12
Section 2. Removals......................................................................13
Section 3. Vacancies.....................................................................13
ARTICLE VII - Capital Stock - Dividends - Seal...............................................13
Section 1. Certificates of Shares........................................................13
Section 2. Addresses of Stockholders.....................................................13
Section 3. Lost, Destroyed or Stolen Certificate.........................................14
Section 4. Fixing a Record Date..........................................................14
Section 5. Regulations...................................................................14
Section 6. Corporate Seal................................................................14
ARTICLE VIII - Execution of Contracts and Other Documents.....................................15
Section 1. Contracts, etc................................................................15
Section 2. Checks, Drafts, etc...........................................................15
ARTICLE IX - Fiscal Year....................................................................15
ARTICLE X - Miscellaneous..................................................................15
Section 1. Original Stock Ledger.........................................................15
Section 2. Notices and Waivers Thereof...................................................16
Section 3. Voting upon Stocks............................................................16
ARTICLE XI - Amendments.....................................................................17
</TABLE>
<PAGE>
CERTIFICATION
The undersigned officer of Ford Motor Company, a Delaware
corporation, does hereby certify that the following is a true and
correct copy of the By-Laws of the Company in effect on the date hereof.
Witness my hand and the seal of the Company this day of 19
---------------------
Secretary
<PAGE>
BY-LAWS
OF
FORD MOTOR COMPANY
ARTICLE I
OFFICES
The registered office of the Company shall be in the City of Wilmington,
County of New Castle, State of Delaware. The Company may also have an office in
the City of Dearborn, State of Michigan, and at such other places as the Board
of Directors may from time to time determine or as the business of the Company
may require. The books and records of the Company may be kept (except as
otherwise provided by law) at the office of the Company in the City of Dearborn,
State of Michigan, outside of the State of Delaware, or at such other places as
from time to time may be determined by the Board of Directors.
ARTICLE II
STOCKHOLDERS
Section 1. Annual Meeting.
The annual meeting of the stockholders for the purpose of electing directors
and of transacting such other business as may come before it shall be held in
the City of Detroit, State of Michigan, unless otherwise determined by the Board
of Directors, on the second Thursday of May in each and every year, if not a
legal holiday, and if a legal holiday then on the next day not a legal holiday.
The Board of Directors shall, by resolution duly adopted, fix the place within
the City of Detroit, Michigan, or elsewhere if so determined, and the time for
the holding of each such meeting. At least twenty (20) days' notice shall be
given to each stockholder entitled to vote at such meeting of the place and time
so fixed.
Section 2. Special Meetings.
Special meetings of the stockholders shall be held at the office of the
Company in the City of Dearborn, State of Michigan, unless otherwise determined
by resolution of the stockholders or of the Board of Directors, whenever called
in the manner required by law for purposes as to which there are special
statutory provisions, and for other purposes whenever called by the Chairman of
the Board of Directors, a Vice Chairman of the Board of Directors or the
President, or by resolution of the Board of Directors, and whenever the holders
of thirty percent (30%) or more of the total number of outstanding shares of any
class of stock the holders of which are entitled to vote on every matter that is
to be voted on without regard to class at such meeting shall file with the
Secretary a written application for such meeting stating the time and purpose
thereof.
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Section 3. Notice of Meetings.
Except as otherwise provided by law, at least twenty (20) days' notice of
stockholders' meetings stating the time and place and the objects thereof shall
be given by the Chairman of the Board of Directors, a Vice Chairman of the Board
of Directors, the President or the Secretary to each stockholder of record
having voting power in respect of the business to be transacted thereat. No
business other than that stated in the notice shall be transacted at any
meeting.
Section 4. Quorum.
At any meeting of the stockholders the number of shares the holders of which
shall be present or represented by proxy in order to constitute a quorum for,
and the votes that shall be necessary for, the transaction of any business shall
be as expressly provided in Article FOURTH of the Certificate of Incorporation,
as amended. At any meeting of stockholders at which a quorum is not present, the
holders of shares entitled to cast a majority of all of the votes (computed, in
the case of each share of Class B Stock, as provided in subsection 1.3 of said
Article FOURTH) which could be cast at such meeting by the holders of
outstanding shares of stock of the Company who are present in person or by proxy
and who are entitled to vote on every matter that is to be voted on without
regard to class at such meeting may adjourn the meeting from time to time.
Section 5. Organization.
The Chairman of the Board of Directors shall act as chairman of meetings of
the stockholders. The Board of Directors may designate any other officer or
director of the Company to act as chairman of any meeting in the absence of the
Chairman of the Board of Directors, and the Board of Directors may further
provide for determining who shall act as chairman of any stockholders meeting in
the absence of the Chairman of the Board of Directors and such designee.
The Secretary of the Company shall act as secretary of all meetings of the
stockholders, but in the absence of the Secretary the presiding officer may
appoint any other person to act as secretary of any meeting.
Section 6. Proxies and Voting.
Every stockholder entitled to vote at any meeting may vote in person or by
proxy authorized by an instrument in writing or by a transmission permitted by
law filed in accordance with the procedures established for the meeting. No
proxy shall be voted after three years from its date unless such proxy provides
expressly for a longer period. Shares of the Company's stock belonging to the
Company shall not be voted upon directly or indirectly.
Section 7. Stock Lists.
A complete list of stockholders entitled to vote at any meeting of
stockholders shall be prepared, in alphabetical order by class, by the Secretary
and shall be open to the examination of any stockholder, at the place where the
meeting is to be held, for at least ten days before the meeting and during the
whole time of the meeting.
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Section 8. Ratification.
Any transaction questioned in any stockholders' derivative suit, or any other
suit to enforce alleged rights of the Company or any of its stockholders, on the
ground of lack of authority, defective or irregular execution, adverse interest
of any director, officer or stockholder, nondisclosure, miscomputation or the
application of improper principles or practices of accounting may be approved,
ratified and confirmed before or after judgment by the Board of Directors or by
the holders of Common Stock and the holders of Class B Stock voting as provided
in subsection 1.6 of Article FOURTH of the Certificate of Incorporation, as
amended, and, if so approved, ratified or confirmed, shall have the same force
and effect as if the questioned transaction had been originally duly authorized,
and said approval, ratification or confirmation shall be binding upon the
Company and all of its stockholders and shall constitute a bar to any claim or
execution of any judgment in respect of such questioned transaction.
Section 9. Judges.
All votes by ballot at any meeting of stockholders shall be conducted by two
judges appointed for the purpose either by the directors or by the meeting. The
judges shall decide upon the qualifications of voters, count the votes and
declare the result.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Number, Term of Office and Eligibility.
Except as provided by the laws of the State of Delaware or by the Certificate
of Incorporation, as amended, the business and the property of the Company shall
be managed by or under the direction of a Board of not less than ten and not
more than twenty directors, the exact number of which shall be fixed from time
to time by resolution of the Board. Each director shall be elected annually by
ballot by the holders of Common Stock and the holders of Class B Stock voting as
provided in subsection 1.6 of Article FOURTH of the Certificate of
Incorporation, as amended, at the annual meeting of stockholders, to serve until
his or her successor shall have been elected and shall have qualified, except as
provided in this Section. No person may be elected or re-elected a director of
the Company if at the time of his or her election or re-election he or she shall
have attained the age of seventy years, and the term of any director who shall
have attained such age while serving as a director shall terminate as of the
time of the first annual meeting of stockholders following his or her seventieth
birthday; provided, however, that the Board by resolution may waive such age
limitation in any year and from year to year with respect to any director or
directors.
Section 2. Meetings.
The directors may hold their meetings outside of the State of Delaware, at
the office of the Company in the City of Dearborn, State of Michigan, or at such
other place as from time to time they may determine.
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The annual meeting of the Board of Directors, for the election of officers
and the transaction of other business, shall be held at the World Headquarters
of the Company in Dearborn, Michigan, on the same day as, and as soon as
practicable following, the annual meeting of stockholders, or at such other time
or place as shall be determined by the Board at its regular meeting next
preceding said annual meeting of stockholders. No notice of said annual meeting
of the Board shall be required to be given to the directors.
Regular meetings of the Board of Directors may be held at such time and place
as shall from time to time be determined by the Board.
Special meetings of the Board of Directors shall be held whenever called by
direction of the Chairman of the Board of Directors, a Vice Chairman of the
Board of Directors or the President or by one-third of the directors then in
office.
Section 3. Notice of Meetings.
The Secretary or an Assistant Secretary shall give notice of the time and
place of holding of meetings of the Board of Directors (excepting the annual
meeting of directors) by mailing such notice not later than during the second
day preceding the day on which such meeting is to be held, or by sending a
cablegram, facsimile transmission, mailgram, radiogram, telegram or other form
of recorded communication containing such notice or delivering such notice
personally or by telephone not later than during the first day preceding the day
on which such meeting is to be held to each director. Unless otherwise stated in
the notice thereof any and all business may be transacted at any meeting.
Section 4. Quorum and Organization of Meetings.
A third of the total number of members of the Board of Directors as
constituted from time to time, but in no event less than three, shall constitute
a quorum for the transaction of business; but if at any meeting of the Board of
Directors there shall be less than a quorum present, a majority of those present
may adjourn the meeting from time to time, and the meeting may be held as
adjourned without further notice or waiver. Except as otherwise provided by law
or by the Certificate of Incorporation, as amended, or by these By-Laws, a
majority of the directors present at any duly constituted meeting may decide any
question brought before such meeting. Meetings shall be presided over by the
Chairman of the Board of Directors, or in his or her absence, by a Vice Chairman
of the Board of Directors or the President, as designated by the Board of
Directors, or in the absence of all of the aforesaid officers by such other
person as the Board of Directors may designate or the members present may
select.
Section 5. Powers.
In addition to the powers and authorities by these By-Laws expressly
conferred upon them, the Board of Directors shall have and may exercise all such
powers of the Company and do all such lawful acts and things that are not by
statute or by the Certificate of Incorporation, as amended, or by these By-Laws
directed or required to be exercised or done by the stockholders. Without
prejudice to or limitation of such general powers and any other powers conferred
by statute, or by the Certificate of Incorporation, as amended, or by these
By-Laws, the Board of Directors shall have the following powers:
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(1) To determine, subject to the requirements of law and of Section 5
of Article FOURTH of the Certificate of Incorporation, as amended, what,
if any, dividends shall be declared and paid to the stockholders out of
net profits, current or accumulated, or out of surplus or other assets
of the Company available for dividends.
(2) To fix, and from time to time to vary, the amount of working
capital of the Company, and to set aside from time to time out of net
profits, current or accumulated, or surplus of the Company such amount
or amounts as they in their discretion may deem necessary and proper as,
or as a safeguard to the maintenance of, working capital, as a reserve
for contingencies, as a reserve for repairs, maintenance, or
rehabilitation, or as a reserve for revaluation of profits of the
Company or for such other proper purpose as may in the opinion of the
directors be in the best interests of the Company; and in their sole
discretion to abolish or modify any such provision for working capital
or any such reserve, and to credit the amount thereof to net profits,
current or accumulated, or to the surplus of the Company.
(3) To purchase, or otherwise acquire for the Company, any business,
property, rights or privileges which the Company may at the time be
authorized to acquire, at such price or consideration and generally on
such terms and conditions as they think fit; and at their discretion to
pay therefor either wholly or partly in money, stock, bonds, debentures
or other securities of the Company.
(4) To create, make and issue mortgages, bonds, deeds of trust, trust
agreements or negotiable or transferable instruments or securities,
secured by mortgage or otherwise, and to do every other act and thing
necessary to effect the same.
(5) To appoint any person or corporation to accept and hold in trust
for the Company any property belonging to the Company, or in which it is
interested, or for any other purpose, and to execute such deeds and do
all things requisite in relation to any such trust.
(6) To delegate any of the powers of the Board in the course of the
business of the Company to any officer, employee or agent, and to
appoint any person the agent of the Company, with such powers (including
the power to subdelegate) and upon such terms as the Board may think
fit.
(7) To remove any officer of the Company with or without cause, and
from time to time to devolve the powers and duties of any officer upon
any other person for the time being.
(8) To confer upon any officer of the Company the power to appoint,
remove and suspend subordinate officers, agents and employees.
(9) To determine who shall be authorized on the Company's behalf,
either generally or specifically, to make and sign bills, notes,
acceptances, endorsements, checks, releases, receipts, contracts,
conveyances, and all other written instruments executed on behalf of the
Company.
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(10) To make and change regulations, not inconsistent with these
By-Laws, for the management of the Company's business and affairs.
(11) To adopt and, unless otherwise provided therein, to amend and
repeal, from time to time, a bonus or supplemental compensation plan for
employees (including employees who are officers or directors) of the
Company or any subsidiary. Power to construe, interpret, administer,
modify or suspend such plan shall be vested in the Board of Directors or
a committee thereof.
(12) To adopt a retirement plan, or plans, for the purpose of making
retirement payments to employees (including employees who are officers
or directors) of the Company or of any subsidiary thereof; and to adopt
a group insurance plan, or plans, for the purpose of enabling employees
(including employees who are officers or directors) of the Company or of
any subsidiary thereof to acquire insurance protection; any such
retirement plan or insurance plan, unless otherwise provided therein,
shall be subject to amendment or revocation by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records.
Each director, each member of any committee designated by the Board of
Directors and each officer, in the performance of his or her duties, shall be
fully protected in relying in good faith upon the books of account or reports
made to the Company by any of its officials, or by an independent certified
public accountant, or by an appraiser selected with reasonable care by the Board
of Directors or by any such committee, or in relying in good faith upon other
records of the Company.
Section 7. Compensation of Directors.
Directors, as such, may receive, pursuant to resolution of the Board of
Directors, fixed fees and other compensation for their services as directors,
including, without limitation, services as members of committees of the
directors; provided, however, that nothing herein contained shall be construed
to preclude any director from serving the Company in any other capacity and
receiving compensation therefor.
ARTICLE IV
COMMITTEES
Section 1. Committees of the Board of Directors.
There are hereby established as committees of the Board of Directors an Audit
Committee, a Compensation and Option Committee, an Environmental and Public
Policy Committee, a Finance Committee, and an Organization Review and Nominating
Committee, each of which shall have the powers and functions set forth in
Sections 2, 3, 4, 5, and 6 hereof, respectively, and such additional powers as
may be delegated to it by the Board of Directors. The Board of Directors may
from time to time establish additional standing committees or special committees
of the Board of Directors, each of which shall have such powers and functions as
may be delegated to it by the Board of Directors. The Board of Directors may
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abolish any committee established by or pursuant to this Section 1 as it may
deem advisable. Each such committee shall consist of two or more directors, the
exact number being determined from time to time by the Board of Directors;
provided, however, that membership on the Audit Committee and on the
Compensation and Option Committee shall be limited to directors who are not
officers or employees of the Company. Designations of the Chairman and members
of each such committee, and, if desired, a Vice Chairman and alternates for
members, shall be made by the Board of Directors. Each such committee shall have
a secretary who shall be designated by its chairman. A vice chairman of a
committee shall act as the chairman of the committee in the absence or
disability of the chairman.
Section 2. Audit Committee.
The Audit Committee shall select and engage, on behalf of the Company,
independent public accountants to (1) audit the books of account and other
corporate records of the Company and (2) perform such other duties as the
Committee may from time to time prescribe. The Committee shall transmit
financial statements certified by such independent public accountants to the
Board of Directors after the close of each fiscal year. The selection of
independent public accountants for each fiscal year shall be made in advance of
the annual meeting of stockholders in such fiscal year and shall be submitted
for ratification or rejection at such meeting. The Committee shall confer with
such accountants and review and approve the scope of the audit of the books of
account and other corporate records of the Company. The Committee shall have the
power to confer with and direct the officers of the Company to the extent
necessary to review the internal controls, accounting practices, financial
structure and financial reporting of the Company. From time to time the
Committee shall report to and advise the Board of Directors concerning the
results of its consultation and review and such other matters relating to the
internal controls, accounting practices, financial structure and financial
reporting of the Company as the Committee believes merit review by the Board of
Directors. The Committee also shall perform such other functions and exercise
such other powers as may be delegated to it from time to time by the Board of
Directors.
Section 3. Compensation and Option Committee.
The Compensation and Option Committee shall fix from time to time the
salaries of members of the Board of Directors who are officers or employees of
the Company and of any and all Vice Chairmen of the Company, Executive Vice
Presidents, Group Vice Presidents and Vice Presidents of the Company. It also
shall perform such functions as may be delegated to it under the provisions of
any bonus, supplemental compensation, special compensation or stock option plan
of the Company.
<PAGE>
Section 4. Environmental and Public Policy Committee.
The Environmental and Public Policy Committee shall review all aspects of the
Company's policies and practices that relate to environmental and public policy
considerations facing the Company worldwide. From time to time the Committee
shall report and make recommendations to the Board of Directors concerning the
results of its review and such other matters relating to the foregoing matters
as the Committee believes merit consideration by the Board of Directors. The
Committee also shall perform such other functions and exercise such other powers
as may be delegated to it from time to time by the Board of Directors.
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Section 5. Finance Committee.
The Finance Committee shall include the Chairman of the Board of Directors
together with such other directors as the Board of Directors shall designate.
The Committee during intervals between meetings of the Board of Directors
shall have, and may exercise in such manner as it shall deem to be in the best
interests of the Company, all the powers of the Board of Directors (except with
respect to matters within the powers of the Audit Committee, the Environmental
and Public Policy Committee, or the Compensation and Option Committee)
concerning the determination of financial policies of the Company and the
management of its financial affairs, not inconsistent, however, with law or with
such specific directions as to the conduct of affairs as shall have been given
by the Board of Directors. The Committee also shall perform such other functions
and exercise such other powers as may be delegated to it from time to time by
the Board of Directors. The Committee may redelegate from time to time and to
the full extent permitted by law, in writing, to any officer or employee of the
Company any of such powers.
During intervals between meetings of the Committee, the Chairman, and, if
any, the Vice Chairman, of the Committee shall have and may exercise such of the
powers of the Committee as from time to time shall be conferred upon them by
resolution of the Board of Directors or of the Finance Committee.
All actions by the Committee shall be reported to the Board of Directors and
shall be subject to revision by the Board of Directors, provided no acts or
rights of third parties shall be affected thereby.
Section 6. Organization Review and Nominating Committee.
The Organization Review and Nominating Committee from time to time shall
consider and make recommendations to the Board of Directors, to the Chairman of
the Board of Directors and to the Chief Operating Officer with respect to the
management organization of the Company, the nominations or elections of
directors and officers of the Company and the appointments of such other
employees of the Company as shall be referred to the Committee.
The Committee from time to time shall consider the size and composition of
the Board of Directors and make recommendations to the Board of Directors with
respect to such matters. Prior to the annual meeting of stockholders each year,
and prior to any special meeting of stockholders at which a director is to be
elected, the Committee shall recommend to the Board of Directors persons
proposed to constitute the nominees whose election at such meeting will be
recommended by the Board of Directors.
The authority vested in the Committee by this section shall not derogate from
the power of individual members of the Board of Directors to recommend or place
in nomination persons other than those recommended by the Committee.
The Committee also shall perform such other functions and exercise such other
powers as may be delegated to it from time to time by the Board of Directors.
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Section 7. Other Committees.
The Board of Directors, or any committee, officer or employee of the Company
may establish additional standing committees or special committees to serve in
an advisory capacity or in such other capacities as may be permitted by law, by
the Certificate of Incorporation and by the By-Laws. The members of any such
committee need not be members of the Board of Directors. Any committee
established pursuant to this Section 6 may be abolished by the person or body by
whom it was established as he, she or it may deem advisable. Each such committee
shall consist of two or more members, the exact number being determined from
time to time by such person or body. Designations of members of each such
committee and, if desired, alternates for members, shall be made by such person
or body, at whose will all such members and alternates shall serve. The chairman
of each such committee shall be designated by such person or body. Each such
committee shall have a secretary who shall be designated by the chairman.
Section 8. Rules and Procedures.
Each committee may fix its own rules and procedures and shall meet at such
times and places as may be provided by such rules, by resolution of the
committee, or by call of the chairman or vice chairman. Notice of meeting of
each committee, other than of regular meetings provided for by its rules or
resolutions, shall be given to committee members. The presence of one-third of
its members, but not less than two, shall constitute a quorum of any committee,
and all questions shall be decided by a majority vote of the members present at
the meeting. All action taken at each committee meeting shall be recorded in
minutes of the meeting.
Section 9. Application of Article.
Whenever any provision of any other document relating to any committee of the
Company named therein shall be in conflict with any provision of this Article
IV, the provisions of this Article IV shall govern, except that if such other
document shall have been approved by the stockholders, voting as provided in the
Certificate of Incorporation, or by the Board of Directors, the provisions of
such other document shall govern.
ARTICLE V
OFFICERS
Section 1. Officers.
The Officers of the Company shall include a Chairman of the Board of
Directors and may include one or more Vice Chairmen of the Board of Directors
and a President, each of whom shall be chosen from among the directors, and one
or more Vice Chairmen of the Company, one or more Executive Vice Presidents, one
or more Group Vice Presidents, one or more Vice Presidents, a Treasurer, a
Controller and a Secretary, each of whom shall be elected by the Board of
Directors to hold office until his or her successor shall have been chosen and
shall have qualified. The Board of Directors may elect or appoint one or more
Assistant Treasurers, one or more Assistant Secretaries, and such other officers
as it may deem necessary, or desirable, each of whom shall have such authority,
shall perform such duties and shall hold office for such term as may be
prescribed by the Board of Directors from time to time. Any person may hold at
one time more than one office.
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Section 2. Office of the Chief Executive.
The Chairman of the Board of Directors and such other members as the Chief
Executive Officer shall designate shall constitute the Office of the Chief
Executive. Subject to the provisions of these By-Laws and to the direction of
the Board of Directors and the Chief Executive Officer, the members of this
Office shall share in the responsibilities for the general management and
control of the affairs and business of the Company.
Section 3. Chairman of the Board of Directors.
The Chairman of the Board of Directors shall be the Chief Executive Officer
of the Company. He or she shall be a member of the Office of the Chief Executive
and, a subject to the provisions of these By-Laws and to the direction of the
Board of Directors, shall have ultimate authority for decisions relating to the
general management and control of the affairs and business of the Company and
shall perform all other duties and exercise all other powers commonly incident
to the position of Chief Executive Officer or which are or from time to time may
be delegated to him or her by the Board of Directors, or which are or may at any
time be authorized or required by law. He or she shall preside at all meetings
of the Board of Directors. He or she may redelegate from time to time and to the
full extent permitted by law, in writing, to officers or employees of the
Company any or all of such duties and powers, and any such redelegation may be
either general or specific. Whenever he or she so shall delegate any of his or
her authority, he or she shall file a copy of the redelegation with the
Secretary of the Company.
Section 4. Vice Chairmen of the Board of Directors.
Subject to the provisions of these By-Laws and to the direction of the Board
of Directors and of the Chief Executive Officer, the Vice Chairmen of the Board
of Directors shall have such powers and shall perform such duties as from time
to time may be delegated to them by the Board of Directors or by the Chief
Executive Officer, or which are or may at any time be authorized or required by
law.
Section 5. President.
Subject to the provisions of these By-Laws and to the direction of the Board
of Directors and of the Chief Executive Officer, the President shall have such
powers and shall perform such duties as from time to time may be delegated to
him or her by the Board of Directors or by the Chief Executive Officer, or which
are or may at any time be authorized or required by law.
Section 6. Chief Operating Officer.
The Chief Operating Officer shall be selected by the Board of Directors from
among the Vice Chairmen of the Board of Directors and the President. Subject to
the provisions of these By-Laws and to the direction of the Board of Directors
and of the Chief Executive Officer, he or she shall have such powers and shall
perform such duties as from time to time may be delegated to him or her by the
Board of Directors or by the Chief Executive Officer, or which are or may at any
time be authorized or required by law. In the absence or disability of the
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Chairman of the Board of Directors, or in the event of, and during the period
of, a vacancy in such office, the Chief Operating Officer also shall be the
Chief Executive Officer.
Section 7. Vice Chairmen of the Company, Executive Vice Presidents, Group
Vice Presidents and Vice Presidents.
Each of the Vice Chairmen of the Company, each of the Executive Vice
Presidents, each of the Group Vice Presidents and each of the other Vice
Presidents shall have such powers and shall perform such duties as may be
delegated to him or her by the Board of Directors, by the Chairman of the Board
of Directors or by the Chief Operating Officer.
In addition, the Board of Directors shall designate one of the Vice Chairmen
of the Company, Executive Vice Presidents, Group Vice Presidents, or Vice
Presidents as the Chief Financial Officer, who, among his or her other powers
and duties, shall provide and maintain, subject to the direction of the Board of
Directors and the Finance Committee, financial and accounting controls over the
business and affairs of the Company. Such office shall maintain, among others,
adequate records of the assets, liabilities and financial transactions of the
Company, and shall direct the preparation of financial statements, reports and
analyses. The Chief Financial Officer shall perform such other duties and
exercise such other powers as are incident to such functions, subject to the
control of the Board of Directors.
Section 8. Treasurer and Assistant Treasurer.
The Treasurer, subject to the direction of the Board of Directors, shall have
the care and custody of all funds and securities which may come into his or her
hands. When necessary or proper he or she shall endorse on behalf of the
Company, for collection, checks, notes and other obligations, and shall deposit
all funds of the Company in such banks or other depositaries as may be
designated by the Board of Directors or by such officers or employees as may be
authorized by the Board of Directors so to designate. He or she shall perform
all acts incident to the office of Treasurer, subject to the control of the
Board of Directors. He or she may be required to give a bond for the faithful
discharge of his or her duties, in such sum and upon such conditions as the
Board of Directors may require.
At the request of the Treasurer, any Assistant Treasurer, in the case of the
absence or inability to act of the Treasurer, temporarily may act in his or her
place. In the case of the death of the Treasurer, or in the case of his or her
absence or inability to act without having designated an Assistant Treasurer to
act temporarily in his or her place, the Assistant Treasurer so to perform the
duties of the Treasurer shall be designated by the Chairman of the Board of
Directors, the Chief Operating Officer, a Vice Chairman of the Company or an
Executive Vice President.
Section 9. Secretary and Assistant Secretary.
The Secretary shall keep the minutes of the meetings of the stockholders and
of the Board of Directors, and, when required, the minutes of meetings of the
committees, and shall be responsible for the custody of all such minutes.
Subject to the direction of the Board of Directors, the Secretary shall have
custody of the stock ledgers and documents of the Company. He or she shall have
custody of the corporate seal and shall affix and attest such seal to any
instrument whose execution under seal shall have been duly authorized. He or she
11
<PAGE>
shall give notice of meetings and, subject to the direction of the Board of
Directors, shall perform all other duties and enjoy all other powers commonly
incident to his or her office.
At the request of the Secretary, any Assistant Secretary, in the case of the
absence or inability to act of the Secretary, temporarily may act in his or her
place. In the case of the death of the Secretary, or in the case of his or her
absence or inability to act without having designated an Assistant Secretary to
act temporarily in his or her place, the Assistant Secretary or other person so
to perform the duties of the Secretary shall be designated by the Chairman of
the Board of Directors, the Chief Operating Officer, a Vice Chairman of the
Company or an Executive Vice President.
Section 10. General Counsel.
The Company may have a General Counsel who shall be appointed by the Board of
Directors and who shall have general supervision of all matters of a legal
nature concerning the Company.
Section 11. Controller.
The Controller shall have such powers and shall perform such duties as may be
delegated to him or her by the Board of Directors, the Chairman of the Board of
Directors, the Chief Operating Officer or the appropriate Vice Chairman of the
Company, Executive Vice President, Group Vice President or Vice President.
Section 12. Salaries.
Salaries of officers, agents or employees shall be fixed from time to time by
the Board of Directors or by such committee or committees, or person or persons,
if any, to whom such power shall have been delegated by the Board of Directors.
An employment contract, whether with an officer, agent or employee, if expressly
approved or specifically authorized by the Board of Directors, may fix a term of
employment thereunder; and such contract, if so approved or authorized, shall be
valid and binding upon the Company in accordance with the terms thereof,
provided that this provision shall not limit or restrict in any way the right of
the Company at any time to remove from office, discharge or terminate the
employment of any such officer, agent or employee prior to the expiration of the
term of employment under any such contract, except that the Company shall not
thereby be relieved of any continuing liability for salary or other compensation
provided for in such contract.
ARTICLE VI
RESIGNATIONS, REMOVALS AND VACANCIES
Section 1. Resignations.
Any director, officer or agent of the Company, or any member of any
committee, may resign at any time by giving written notice to the Board of
Directors, to the Chairman of the Board of Directors, to a Vice Chairman of the
Board of Directors, to the President or to the Secretary of the Company. Any
such resignation shall take effect at the time specified therein, or if the time
12
<PAGE>
be not specified therein, then upon receipt thereof. The acceptance of such
resignation shall not be necessary to make it effective.
Section 2. Removals.
At any meeting thereof called for the purpose, the holders of Common Stock
and the holders of Class B Stock voting as provided in subsection 1.6 of Article
FOURTH of the Certificate of Incorporation, as amended, may remove from office
or terminate the employment of any director, officer or agent with or without
cause; and the Board of Directors, by vote of not less than a majority of the
entire Board at any meeting thereof called for the purpose, may, at any time,
remove from office or terminate the employment of any officer, agent or member
of any committee.
Section 3. Vacancies.
Subject to the last sentence of Section 1 of Article III, any vacancy in the
office of any director, officer or agent through death, resignation, removal,
disqualification, increase in the number of directors or other cause may be
filled by the Board of Directors (in the case of vacancies in the Board, by the
affirmative vote of a majority of the directors then in office, even though less
than a quorum remains) and the person so elected shall hold office until his or
her successor shall have been elected and shall have qualified.
ARTICLE VII
CAPITAL STOCK-DIVIDENDS-SEAL
Section 1. Certificates of Shares.
The certificates for shares of the capital stock of the Company shall be in
such form, not inconsistent with the Certificate of Incorporation, as amended,
as shall be approved by the Board of Directors. The certificates shall be signed
by the Chairman of the Board of Directors, a Vice Chairman of the Board of
Directors, the President, a Vice Chairman of the Company, an Executive Vice
President, a Group Vice President or a Vice President, and also by the Treasurer
or an Assistant Treasurer, or the Secretary or an Assistant Secretary. Any and
all signatures may be facsimiles.
All certificates shall bear the name of the person owning the shares
represented thereby, shall state the number of shares represented by such
certificate and the date of issue; and such information shall be entered in the
Company's original stock ledger.
Section 2. Addresses of Stockholders.
It shall be the duty of every stockholder to notify the Company of his or her
post office address and of any change therein. The latest address furnished by
each stockholder shall be entered on the original stock ledger of the Company
and the latest address appearing on such original stock ledger shall be deemed
conclusively to be the post office address and the last-known post office
address of such stockholder. If any stockholder shall fail to notify the Company
of his or her post office address, it shall be sufficient to send corporate
notices to such stockholder at the address, if any, understood by the Secretary
to be his or her post office address, or in the absence of such address, to such
13
<PAGE>
stockholder, at the General Post Office in the City of Wilmington, State of
Delaware.
Section 3. Lost, Destroyed or Stolen Certificate.
Any person claiming a stock certificate in lieu of one lost, destroyed or
stolen, shall give the Company an affidavit as to his, her or its ownership of
the certificate and of the facts which go to prove that it has been lost,
destroyed or stolen. If required by the Board of Directors, he, she or it also
shall give the Company a bond, in such form as may be approved by the Board of
Directors, sufficient to indemnify the Company against any claim that may be
made against it on account of the alleged loss of the certificate or the
issuance of a new certificate.
Section 4. Fixing a Record Date.
The Board of Directors may fix in advance a date not exceeding (i) sixty (60)
days preceding the date of any meeting of stockholders, or the date for payment
of any dividend, or the date for the allotment of rights, or the date when any
change or conversion or exchange of stock shall go into effect (other than
conversions or exchanges pursuant to Sections 2, 3 or 4 of Article FOURTH of the
Certificate of Incorporation, as amended), as a record date for the
determination of the stockholders entitled to notice of and to vote at any such
meeting and any adjournment thereof, or entitled to payment of any such dividend
or to any such allotment of rights or to exercise the rights in respect of any
such change, or conversion or exchange of stock (other than conversions or
exchanges pursuant to Sections 2, 3 or 4 of Article FOURTH of the Certificate of
Incorporation, as amended), or (ii), ten (10) days after adoption of the
resolution fixing such date, as a record date for the determination of the
stockholders entitled to consent in writing to corporate action; and in any such
case, such stockholders and only such stockholders, as shall be stockholders of
record on the date so fixed, shall be entitled, subject to the provisions of
Article FOURTH of the Certificate of Incorporation, as amended, to such notice
of and to vote at such meeting and any adjournment thereof or to receive payment
of such dividend or to receive such allotment of rights or to exercise such
rights or to give such consent, as the case may be, notwithstanding any transfer
of any stock on the books of the Company after such record date.
Section 5. Regulations.
The Board of Directors shall have power and authority to make all such rules
and regulations not inconsistent with any of the provisions of Sections 2, 3, 4
or 5 of Article FOURTH of the Certificate of Incorporation, as amended, as it
may deem expedient, concerning the issue, transfer and registration of
certificates for shares of the stock of the Company.
Section 6. Corporate Seal.
The corporate seal shall have inscribed thereon the name of the Company, the
year of its organization, and the words "Corporate Seal" and "Delaware." If and
when so authorized by the Board of Directors, a duplicate of the seal may be
kept and used by the Secretary or Treasurer or by any Assistant Secretary or
Assistant Treasurer.
14
<PAGE>
ARTICLE VIII
EXECUTION OF CONTRACTS AND OTHER DOCUMENTS
Section 1. Contracts, etc.
Except as otherwise prescribed in these By-Laws, such officers, employees or
agents of the Company as shall be specified by the Board of Directors shall
sign, in the name and on behalf of the Company, all deeds, bonds, contracts,
mortgages and other instruments or documents, the execution of which shall be
authorized by the Board of Directors; and such authority may be general or
confined to specific instances. Except as so authorized by the Board of
Directors, no officer, agent or employee of the Company shall have power or
authority to bind the Company by any contract or engagement or to pledge,
mortgage, sell or otherwise dispose of its credit or any of its property or to
render it pecuniarily liable for any purpose or in any amount.
Section 2. Checks, Drafts, etc.
Except as otherwise provided in these By-Laws, all checks, drafts, notes,
bonds, bills of exchange or other orders, instruments or obligations for the
payment of money shall be signed by such officer or officers, employee or
employees, or agent or agents, as the Board of Directors shall by resolution
direct. The Board of Directors may, in its discretion, also provide by
resolution for the countersignature or registration of any or all such orders,
instruments or obligations for the payment of money.
ARTICLE IX
FISCAL YEAR
The fiscal year of the Company shall begin the first day of January in each
year.
ARTICLE X
MISCELLANEOUS
Section 1. Original Stock Ledger.
As used in these By-Laws and in the Certificate of Incorporation, as amended,
the words "original stock ledger" shall mean the record maintained by the
Secretary of the Company of the name and address of each of the holders of
shares of any class of stock of the Company, and the number of shares and the
numbers of the certificates for such shares held by each of them, taking into
account transfers at the time made by and recorded on the transfer sheets of
each of the Transfer Agents of the Company although such transfers may not then
have been posted in the record maintained by the Secretary.
15
<PAGE>
Section 2. Notices and Waivers Thereof.
Whenever any notice whatever is required by these By-Laws or by the
Certificate of Incorporation, as amended, or by any of the laws of the State of
Delaware to be given to any stockholder, director or officer, such notice,
except as otherwise provided by the laws of the State of Delaware, may be given
personally or by telephone or be given by cablegram, facsimile transmission,
mailgram, radiogram, telegram or other form of recorded communication, addressed
to such stockholder at the address set forth as provided in Section 2 of Article
VII, or to such director or officer at his or her Company location, if any, or
at such address as appears on the books of the Company, or the notice may be
given in writing by depositing the same in a post office, or in a regularly
maintained letter box, in a postpaid, sealed wrapper addressed to such
stockholder at the address set forth in Section 2 of Article VII, or to such
director or officer at his or her Company location, if any, or such address as
appears on the books of the Company.
Any notice given by cablegram, mailgram, radiogram or telegram shall be
deemed to have been given when it shall have been delivered for transmission.
Any notice given by facsimile transmission or other form of recorded
communication shall be deemed to have been given when it shall have been
transmitted. Any notice given by mail shall be deemed to have been given when it
shall have been mailed.
A waiver of any such notice in writing, including by cablegram, facsimile
transmission, mailgram or telegram, signed or dispatched by the person entitled
to such notice or by his or her duly authorized attorney, whether before or
after the time stated therein, shall be deemed equivalent to the notice required
to be given, and the presence at any meeting of any person entitled to notice
thereof shall be deemed a waiver of such notice as to such person.
Section 3. Voting upon Stocks.
The Board of Directors (whose authorization in this connection shall be
necessary in all cases) may from time to time appoint an attorney or attorneys
or agent or agents of the Company, or may at any time or from time to time
authorize the Chairman of the Board of Directors, any Vice Chairman of the Board
of Directors, the President, any Vice Chairman of the Company, any Executive
Vice President, any Group Vice President, any Vice President, the Treasurer or
the Secretary to appoint an attorney or attorneys or agent or agents of the
Company, in the name and on behalf of the Company, to cast the votes which the
Company may be entitled to cast as a stockholder or otherwise in any other
corporation or association, any of the stock or securities of which may be held
by the Company, at meetings of the holders of the stock or other securities of
such other corporation or association, or to consent in writing to any action by
any such other corporation or association, and the Board of Directors or any
aforesaid officer so authorized may instruct the person or persons so appointed
as to the manner of casting such votes or giving such consent, and the Board of
Directors or any aforesaid officer so authorized may from time to time authorize
the execution and delivery, on behalf of the Company and under its corporate
seal, or otherwise, of such written proxies, consents, waivers or other
instruments as may be deemed necessary or proper in the premises.
16
<PAGE>
<PAGE>
ARTICLE XI
AMENDMENTS
The Board of Directors shall have power to make, alter, amend or repeal the
By-Laws of the Company by vote of not less than a majority of the entire Board
at any meeting of the Board. The holders of Common Stock and the holders of
Class B Stock voting as provided in subsection 1.6 of Article FOURTH of the
Certificate of Incorporation, as amended, shall have power to make, alter, amend
or repeal the By-Laws at any regular or special meeting, if the substance of
such amendment be contained in the notice of such meeting of stockholders.
17
<TABLE>
<CAPTION>
Exhibit 12
Ford Motor Company and Subsidiaries
CALCULATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
----------------------------------------------------------------------------------------
(in millions)
First For the Years Ended December 31
Quarter ------------------------------------------------------------
1998 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Earnings
- --------
Income before income taxes $18,684 $10,939 $ 6,793 $ 6,705 $ 8,789 $ 4,003
Equity in net (income)/loss of affiliates
plus dividends from affiliates 13 121 36 179 (182) (98)
Adjusted fixed charges a/ 2,656 10,911 10,801 10,556 8,122 7,648
------- ------- ------- ------- ------- -------
Earnings $21,353 $21,971 $17,630 $17,440 $16,729 $11,553
======= ======= ======= ======= ======= =======
Combined Fixed Charges and
Preferred Stock Dividends
- --------------------------
Interest expense b/ $ 2,585 $10,570 $10,464 $10,121 $ 7,787 $ 7,351
Interest portion of rental expense c/ 61 309 300 396 265 266
Preferred stock dividend requirements of
majority owned subsidiaries and trusts d/ 14 55 55 199 160 115
------- ------- ------- ------- ------- -------
Fixed charges 2,660 10,934 10,819 10,716 8,212 7,732
Ford preferred stock dividend requirements e/ 100 82 95 459 472 442
------- ------- ------- ------- ------- -------
Total combined fixed charges
and preferred stock dividends $ 2,760 $11,016 $10,914 $11,175 $ 8,684 $ 8,174
======= ======= ======= ======= ======= =======
Ratios
- ------
Ratio of earnings to fixed charges 8.0 f/ 2.0 1.6 1.6 2.0 1.5
Ratio of earnings to combined fixed
charges and preferred stock dividends 7.7 f/ 2.0 1.6 1.6 1.9 1.4
</TABLE>
- - - - - -
a/ Fixed charges, as shown below, adjusted to exclude the amount of interest
capitalized during the period and preferred stock dividend requirements of
majority owned subsidiaries.
b/ Includes interest, whether expensed or capitalized, and amortization of debt
expense and discount or premium relating to any indebtedness.
c/ One-third of all rental expense is deemed to be interest.
d/ Preferred stock dividend requirements of Ford Holdings, Inc. (applicable for
1993 through 1995) increased to an amount representing the pre-tax earnings
which would be required to cover such dividend requirements based on Ford's
effective income tax rates. Beginning in Fourth Quarter 1995, includes
requirements related to Company-obligated mandatorily redeemable preferred
securities of a subsidiary trust.
e/ Preferred stock dividend requirements of Ford Motor Company, increased to an
amount representing the pre-tax earnings which would be required to cover
such dividend requirements based on Ford's effective income tax rates.
f/ Earnings used in calculation of this ratio include the $15,955 million gain
on the spin-off of The Associates. Excluding this gain, the ratio is 2.0.
-18-
Exhibit 15
[Coopers & Lybrand L.L.P. letterhead]
Ford Motor Company
The American Road
Dearborn, Michigan
Re: Ford Motor Company Registration Statement Nos. 2-95018, 2-95020, 33-9722,
33-14951, 33-19036, 33-36043, 33-36061, 33-39402, 33-50087, 33-50194,
33-50238, 33-54304, 33-54344, 33-54348, 33-54275, 33-54283, 33-54735,
33-54737, 33-55847, 33-56785, 33-58255, 33-58785, 33-58861, 33-61107,
33-62227, 33-64605, 33-64607, 333-02407, 333-02735, 333-20725, 333-27993,
333-28181, 333-46295, 333-47443, 333-47445, 333-47451, 333-47733,
333-47735, 333-49545, 333-49547, and 333-49551 on Form S-8, and 2-42133,
33-32641, 33-40638, 33-43085, 33-55474, 33-55171, 33-64247, and 333-14297
on Form S-3
We are aware that our report dated April 15, 1998 accompanying the unaudited
interim financial information of Ford Motor Company for the periods ended March
31, 1998 and 1997 and included in the Ford Motor Company Quarterly Report on
Form 10-Q for the quarter ended March 31, 1998 will be incorporated by reference
in the Registration Statements. Pursuant to Rule 436(c) under the Securities Act
of 1933, this report should not be considered a part of the Registration
Statements prepared or certified by us within the meaning of Sections 7 and 11
of the Act.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
400 Renaissance Center
Detroit, Michigan
May 12, 1998
<PAGE>
<TABLE> <S> <C>
<ARTICLE> CT
<LEGEND>
Conglomerate Totals - This schedule contains summary financial information
extracted from Ford's Current Report on Form 8-K dated October 15, 1997
and is qualified in its entirety by reference to such financial statements.
This schedule supercedes the previously filed schedule in such Report.
</LEGEND>
<CIK> 0000037996
<NAME> FORD MOTOR COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<TOTAL-ASSETS> 274,223
<COMMON> 1,202
0
0
<OTHER-SE> 28,475
<TOTAL-LIABILITY-AND-EQUITY> 274,223
<TOTAL-REVENUES> 112,563
<INCOME-TAX> 2,675
<INCOME-CONTINUING> 5,124
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,124
<EPS-PRIMARY> 4.26
<EPS-DILUTED> 4.17
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Automotive Segment - This schedule contains summary financial information
extracted from Ford's Current Report on Form 8-K dated October 15, 1997 and is
qualified in its entirety by reference to such financial statements. This
schedule supercedes the previously filed schedule in such Report.
</LEGEND>
<CIK> 0000037996
<NAME> FORD MOTOR COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,027
<SECURITIES> 14,293
<RECEIVABLES> 3,220
<ALLOWANCES> 115
<INVENTORY> 6,320
<CURRENT-ASSETS> 36,650
<PP&E> 75,501
<DEPRECIATION> 41,219
<TOTAL-ASSETS> 85,440
<CURRENT-LIABILITIES> 35,994
<BONDS> 6,620
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 89,926
<TOTAL-REVENUES> 89,926
<CGS> 80,023
<TOTAL-COSTS> 84,932
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 592
<INCOME-PRETAX> 5,071
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Services Segment - This schedule contains summary financial
information extracted from Ford's Current Report on Form 8-K dated October 15,
1997 and is qualified in its entirety by reference to such financial statements.
The error message indicated on this FDS is a result of the EDGAR system's
inability to accept multiple Article 5 Financial Data Schedules. Accordingly,
the error message should be ignored. This schedule supercedes the previously
filed schedule in such Report.
</LEGEND>
<CIK> 0000037996
<NAME> FORD MOTOR COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,117
<SECURITIES> 2,155
<RECEIVABLES> 169,914
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 188,783
<CURRENT-LIABILITIES> 0
<BONDS> 155,407
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 22,637
<TOTAL-REVENUES> 22,637
<CGS> 0
<TOTAL-COSTS> 20,033
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,474
<INTEREST-EXPENSE> 7,208
<INCOME-PRETAX> 2,941
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> CT
<LEGEND>
Conglomerate Totals - This schedule contains summary financial information
extracted from Ford's Current Report on Form 8-K dated July 16, 1997
and is qualified in its entirety by reference to such financial statements.
This schedule supercedes the previously filed schedule in such Report.
</LEGEND>
<CIK> 0000037996
<NAME> FORD MOTOR COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<TOTAL-ASSETS> 271,416
<COMMON> 1,196
0
0
<OTHER-SE> 27,917
<TOTAL-LIABILITY-AND-EQUITY> 271,416
<TOTAL-REVENUES> 76,467
<INCOME-TAX> 2,080
<INCOME-CONTINUING> 3,999
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,999
<EPS-PRIMARY> 3.34
<EPS-DILUTED> 3.27
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Automotive Segment - This schedule contains summary financial information
extracted from Ford's Current Report on Form 8-K dated July 16, 1997 and is
qualified in its entirety by reference to such financial statements. This
schedule supercedes the previously filed schedule in such Report.
</LEGEND>
<CIK> 0000037996
<NAME> FORD MOTOR COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,206
<SECURITIES> 14,978
<RECEIVABLES> 3,364
<ALLOWANCES> 111
<INVENTORY> 6,136
<CURRENT-ASSETS> 34,666
<PP&E> 74,146
<DEPRECIATION> 40,654
<TOTAL-ASSETS> 83,328
<CURRENT-LIABILITIES> 34,180
<BONDS> 6,695
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 61,730
<TOTAL-REVENUES> 61,730
<CGS> 54,342
<TOTAL-COSTS> 57,582
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 400
<INCOME-PRETAX> 4,179
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Services Segment - This schedule contains summary financial
information extracted from Ford's Current Report on Form 8-K dated July 16,
1997 and is qualified in its entirety by reference to such financial statements.
The error message indicated on this FDS is a result of the EDGAR system's
inability to accept multiple Article 5 Financial Data Schedules. Accordingly,
the error message should be ignored. This schedule supercedes the previously
filed schedule in such Report.
</LEGEND>
<CIK> 0000037996
<NAME> FORD MOTOR COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,859
<SECURITIES> 2,719
<RECEIVABLES> 168,319
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 188,088
<CURRENT-LIABILITIES> 0
<BONDS> 155,531
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 14,737
<TOTAL-REVENUES> 14,737
<CGS> 0
<TOTAL-COSTS> 13,030
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,639
<INTEREST-EXPENSE> 4,778
<INCOME-PRETAX> 2,029
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> CT
<LEGEND>
Conglomerate Totals - This schedule contains summary financial information
extracted from Ford's Current Report on Form 8-K dated April 16, 1997
and is qualified in its entirety by reference to such financial statements.
This schedule supercedes the previously filed schedule in such Report.
</LEGEND>
<CIK> 0000037996
<NAME> FORD MOTOR COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<TOTAL-ASSETS> 261,957
<COMMON> 1,192
0
0
<OTHER-SE> 26,060
<TOTAL-LIABILITY-AND-EQUITY> 261,957
<TOTAL-REVENUES> 36,202
<INCOME-TAX> 898
<INCOME-CONTINUING> 1,469
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,469
<EPS-PRIMARY> 1.23
<EPS-DILUTED> 1.20
</TABLE>
<TABLE> <S> <C>
<ARTICLE> CT
<LEGEND>
Conglomerate Totals - This schedule contains summary financial information
extracted from Ford's Current Report on Form 8-K dated February 3, 1997
and is qualified in its entirety by reference to such financial statements.
This schedule supercedes the previously filed schedule in such Report.
</LEGEND>
<CIK> 0000037996
<NAME> FORD MOTOR COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<TOTAL-ASSETS> 262,867
<COMMON> 1,189
0
0
<OTHER-SE> 25,573
<TOTAL-LIABILITY-AND-EQUITY> 262,867
<TOTAL-REVENUES> 146,991
<INCOME-TAX> 2,166
<INCOME-CONTINUING> 4,446
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,446
<EPS-PRIMARY> 3.73
<EPS-DILUTED> 3.64
</TABLE>
<TABLE> <S> <C>
<ARTICLE> CT
<LEGEND>
Conglomerate Totals - This schedule contains summary financial information
extracted from Ford's Current Report on Form 8-K dated October 16, 1996
and is qualified in its entirety by reference to such financial statements.
This schedule supercedes the previously filed schedule in such Report.
</LEGEND>
<CIK> 0000037996
<NAME> FORD MOTOR COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<TOTAL-ASSETS> 258,501
<COMMON> 1,186
0
0
<OTHER-SE> 24,966
<TOTAL-LIABILITY-AND-EQUITY> 258,501
<TOTAL-REVENUES> 108,158
<INCOME-TAX> 1,581
<INCOME-CONTINUING> 3,242
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,242
<EPS-PRIMARY> 2.72
<EPS-DILUTED> 2.66
</TABLE>
