SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported) June 24, 1999
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GENERAL MOTORS CORPORATION
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(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 1-143 38-0572515
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
100 Renaissance Center, Detroit, Michigan 48243-7301
3044 West Grand Boulevard, Detroit, Michigan 48202-3091
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313)-556-5000
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit 3(i) Restated Certificate of Incorporation of General Motors
Corporation included herein, as amended to June 24, 1999 by adding
Appendix D.
Exhibit 3(ii) By-Laws, as amended to August 2, 1999, reflecting amendment
to Section 1.1 of Article 1, as described below:
Section Amendment
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1.1 Annual
Changed the day of The annual meeting of stockholders for the
Meeting from Monday to election of directors, ratification or
Tuesday rejection of the selection of auditors
and the transaction of such other business
as may properly be brought before the
meeting shall be held on the first Tuesday
in June in each year, or on such other date
and such place and time as the chairman of
the board or the board of directors shall
designate.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
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(Registrant)
Date August 24, 1999
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By
s/Peter R. Bible
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(Peter R. Bible,
Chief Accounting Officer)
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EXHIBIT 3(i)
GENERAL MOTORS CORPORATION
Restated
Certificate of Incorporation
As Amended
June 24, 1999
i
GENERAL MOTORS CORPORATION
RESTATED
CERTIFICATE OF INCORPORATION
As Amended
June 24, 1999
INDEX
ARTICLE FIRST........................................................ 1
ARTICLE SECOND....................................................... 1
ARTICLE THIRD........................................................ 1
ARTICLE FOURTH....................................................... 2
DIVISION I: COMMON STOCK AND CLASS H COMMON STOCK........... 2
(a) Dividend Rights.................................... 2
(1) Dividends on Common Stock..................... 3
(2) Dividends on Class H Common Stock............. 3
(3) Discrimination Between Common Stock
and Class H Common Stock...................... 3
(4) Available Separate Consolidated Net
Income of Hughes.............................. 3
(b) Voting Rights...................................... 4
(c) Exchangeability.................................... 4
(d) Liquidation Rights................................. 7
(e) Subdivision or Combination......................... 7
DIVISION II: PREFERRED STOCK............................... 8
DIVISION III: PREFERENCE STOCK.............................. 9
DIVISION IV: MISCELLANEOUS.................................10
ARTICLE FIFTH........................................................10
ARTICLE SIXTH........................................................11
ARTICLE SEVENTH......................................................11
ARTICLE EIGHTH.......................................................12
ARTICLE NINTH........................................................12
APPENDIX A...........................................................14
APPENDIX B...........................................................19
APPENDIX C...........................................................24
APPENDIX D...........................................................29
ii
GENERAL MOTORS CORPORATION
Restated
Certificate of Incorporation
As Amended
June 24, 1999
FIRST:
The name of the Corporation is
GENERAL MOTORS CORPORATION
SECOND:
The registered office of the Corporation shall be located at 1209 Orange
Street, in the City of Wilmington, County of New Castle, State of Delaware. The
name of its registered agent in charge thereof is The Corporation Trust Company,
1209 Orange Street, in the City of Wilmington, County of New Castle, State of
Delaware.
THIRD:
The nature of the business of the Corporation and the objects and purposes
proposed to be transacted, promoted, or carried on by it, are as follows,
to-wit:
(a) To manufacture, buy, sell and deal in automobiles, trucks, cars, boats,
flying machines and other vehicles, their parts and accessories, and kindred
articles, and generally to conduct an automobile business in all its branches.
(b) To purchase or otherwise acquire, lease, assign, mortgage, pledge or
otherwise dispose of any trade names, trade marks, concessions, inventions,
formulae, improvements, processes of any nature whatsoever, copyrights, and
letters patent of the United States and of foreign countries, and to accept and
grant licenses thereunder.
(c) To subscribe or cause to be subscribed for, and to purchase or otherwise
acquire, hold for investment, sell, assign, transfer, mortgage, pledge,
exchange, distribute or otherwise dispose of the whole or any part of the shares
of the capital stock, bonds, coupons, mortgages, deeds of trust, debentures,
securities, obligations, notes and other evidences of indebtedness of any
corporation, stock company or association, now or hereafter existing, and
whether created by or under the laws of the State of Delaware, or otherwise; and
while owners of any of said shares of capital stock or bonds or other property
to exercise all the rights, powers and privileges of ownership of every kind and
description, including the right to vote thereon, with power to designate some
person for that purpose from time to time to the same extent as natural persons
might or could do.
(d) To purchase, hold, sell and reissue the shares of its own capital stock.
(e) To buy, lease, or otherwise acquire, so far as may be permitted by law,
the whole or any part of the business, good-will, and assets of any person,
firm, association or corporation (either foreign or domestic) engaged in a
business of the same general character as that for which this Corporation is
organized.
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(f) To endorse, guarantee and secure the payment and satisfaction of bonds,
coupons, mortgages, deeds of trust, debentures, securities, obligations and
evidences of indebtedness, and also to guarantee and secure the payment or
satisfaction of interest on obligations and of dividends on shares of the
capital stock of other corporations; also to assume the whole or any part of the
liabilities, existing or prospective, of any person, corporation, firm or
association; and to aid in any manner any other person or corporation with which
it has business dealings, or whose stocks, bonds, or other obligations are held
or are in any manner guaranteed by the Corporation, and to do any other acts and
things for the preservation, protection, improvement, or enhancement of the
value of such stocks, bonds, or other obligations.
(g) To engage in any other manufacturing or mercantile business of any kind
or character whatsoever, and to that end to acquire, hold, own and dispose of
any and all property, assets, stocks, bonds and rights of any and every kind.
(h) Without in any particular limiting any of the objects and powers of the
Corporation, it is hereby expressly declared and provided that the Corporation
shall have power to do all things herein before enumerated, and also to issue or
exchange stocks, bonds, and other obligations in payment for property purchased
or acquired by it, or for any other object in or about its business; to borrow
money without limit; to mortgage or pledge its franchises, real or personal
property, income and profits accruing to it, any stocks, bonds or other
obligations, or any property which may be acquired by it, and to secure any
bonds or other obligations by it issued or incurred.
(i) To carry on any business whatsoever which the Corporation may deem proper
or convenient in connection with any of the foregoing purposes or otherwise, or
which may be calculated, directly or indirectly, to promote the interests of the
Corporation or to enhance the value of its property; to conduct its business in
this State, in other States, in the District of Columbia, in the Territories and
Colonies of the United States, and in foreign countries; and to hold, purchase,
mortgage and convey real and personal property, either in or out of the State of
Delaware, and to have and to exercise all the powers conferred by the laws of
Delaware upon corporations formed under the act pursuant to and under which this
Corporation is formed.
FOURTH:
The total authorized capital stock of the Corporation is as follows:
2,706,000,000 shares, of which 6,000,000 shares shall be Preferred Stock,
without par value ("Preferred Stock"), 100,000,000 shares shall be Preference
Stock, $0.10 par value ("Preference Stock"), and 2,600,000,000 shares shall be
Common Stock, of which 2,000,000,000 shares shall be Common Stock, $1 2/3 par
value ("Common Stock"), and 600,000,000 shares shall be Class H Common Stock,
$0.10 par value ("Class H Common Stock").
DIVISION I:
COMMON STOCK
AND CLASS H COMMON STOCK.
The Common Stock and the Class H Common Stock shall be identical in all
respects and shall have equal rights and privileges, except as otherwise
provided in this Article FOURTH. The relative rights, privileges and
restrictions of the shares of each class are as follows:
(a) Dividend Rights.
Subject to the express terms of any outstanding series of Preferred Stock or
Preference Stock, dividends may be paid in cash or otherwise upon the Common
Stock and the Class H Common Stock out of the assets of the Corporation in the
relationship and upon the terms provided for below with respect to each such
class:
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(1) Dividends on Common Stock.
Dividends on Common Stock may be declared and paid only to the extent of the
assets of the Corporation legally available for the payment of dividends reduced
by an amount equal to the sum of (A) the amount determined by the GM Board to be
available for the payment of dividends on the Class H Common Stock as of
December 17, 1997 (the "Hughes Transactions Date") plus the paid in surplus
attributable to shares of Class H Common Stock issued after the Hughes
Transactions Date; and (B) that portion of the earned surplus of the Corporation
attributable to the Available Separate Consolidated Net Income of Hughes (as
defined in subparagraph (a)(4)) earned since the Hughes Transactions Date.
Dividends declared and paid with respect to shares of Common Stock and any
adjustments to capital or surplus resulting from either (i) the repurchase or
issuance of any shares of Common Stock or (ii) any other reason deemed
appropriate by the Board of Directors shall be subtracted from or added to the
amount available for the payment of dividends on Common Stock. Subject to the
foregoing, the declaration and payment of dividends on the Common Stock, and the
amount thereof, shall at all times be solely in the discretion of the Board of
Directors of the Corporation.
(2) Dividends on Class H Common Stock.
Dividends on the Class H Common Stock may be declared and paid only to the
extent of the assets of the Corporation legally available for the payment of
dividends reduced by an amount equal to the sum of (A) the amount determined by
the GM Board to be available for the payment of dividends on the Common Stock as
of the Hughes Transactions Date plus the paid in surplus attributable to shares
of Common Stock issued after the Hughes Transactions Date; and (B) the earned
surplus of the Corporation earned since the Hughes Transactions Date exclusive
of that portion of such earned surplus attributable to the Available Separate
Consolidated Net Income of Hughes earned since the Hughes Transactions Date.
Dividends declared and paid with respect to shares of Class H Common Stock and
any adjustments to capital or surplus resulting from either (i) the repurchase
or issuance of any shares of Class H Common Stock or (ii) any other reason
deemed appropriate by the Board of Directors shall be subtracted from or added
to the amount available for the payment of dividends on Class H Common Stock.
Subject to the foregoing, the declaration and payment of dividends on the Class
H Common Stock, and the amount thereof, shall at all times be solely in the
discretion of the Board of Directors of the Corporation.
(3) Discrimination Between Common Stock and Class H Common Stock.
The Board of Directors, subject to the provisions of subparagraphs (a)(1) and
(a)(2), may, in its sole discretion, declare dividends payable exclusively to
the holders of Common Stock, exclusively to the holders of Class H Common Stock
or to the holders of both such classes in equal or unequal amounts,
notwithstanding the respective amounts available for dividends to each class,
the respective voting and liquidation rights of each class, the amount of prior
dividends declared on each class or any other factor.
(4) Available Separate Consolidated Net Income of Hughes.
The "Available Separate Consolidated Net Income of Hughes" shall mean the
separate net income of Hughes Electronics Corporation, its subsidiaries and
successors after the Hughes Transactions Date ("Hughes") on a consolidated
basis, determined in accordance with generally accepted accounting principles,
without giving effect to any adjustment which would result from accounting for
the acquisition of Hughes Aircraft Company by the Corporation using the purchase
method, calculated for each quarterly accounting period and multiplied by a
fraction, the numerator of which shall be the weighted average number of shares
of Class H Common Stock outstanding during such accounting period and the
denominator of which shall initially be 399,914,626; provided, that such
fraction shall in no event be greater than one. The denominator of the foregoing
fraction shall be adjusted from time to time as deemed appropriate by the Board
of Directors of the Corporation (i) to reflect subdivisions (by stock split or
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otherwise) and combinations (by reverse stock split or otherwise) of the Class H
Common Stock and stock dividends payable in shares of Class H Common Stock to
holders of Class H Common Stock, (ii) to reflect the fair market value of
contributions of cash or property by the Corporation to Hughes or of cash or
property of the Corporation to, or for the benefit of, employees of Hughes in
connection with employee benefit plans or arrangements of the Corporation or any
of its subsidiaries, (iii) to reflect the number of shares of capital stock of
the Corporation contributed to, or for the benefit of, employees of Hughes in
connection with benefit plans or arrangements of the Corporation or any of its
subsidiaries, (iv) to reflect payments by Hughes to the Corporation of amounts
applied to the repurchase by the Corporation of shares of Class H Common Stock,
and (v) to reflect the number of shares of Class H Common Stock repurchased by
Hughes and no longer outstanding; provided, that in the case of adjustments
pursuant to clause (iv) or clause (v) above, adjustments shall be made only to
the extent that the Board of Directors of the Corporation, in its sole
discretion, shall have approved such repurchase of shares by the Corporation or
Hughes and, in the case of clause (iv) above, shall declare such payments by
Hughes to be applied to such repurchase. Any changes in the numerator or
denominator of the foregoing fraction occurring after the end of a quarterly
accounting period shall not result in an adjustment to the Available Separate
Consolidated Net Income of Hughes for such quarterly accounting period or any
prior period. For all purposes, determination of the Available Separate
Consolidated Net Income of Hughes shall be in the sole discretion of the Board
of Directors of the Corporation and shall be final and binding on all
stockholders of the Corporation.
(b) Voting Rights.
The holders of Common Stock and Class H Common Stock shall vote together as a
single class on all matters; provided, however, that (i) the holders of Common
Stock voting separately as a class shall be entitled to approve by the vote of a
majority of the shares of Common Stock then outstanding any amendment,
alteration or repeal of any of the provisions of this Certificate of
Incorporation which adversely affects the rights, powers or privileges of the
Common Stock; (ii) the holders of Class H Common Stock voting separately as a
class shall be entitled to approve by the vote of a majority of the shares of
Class H Common Stock then outstanding any amendment, alteration or repeal of any
of the provisions of this Certificate of Incorporation which adversely affects
the rights, powers or privileges of the Class H Common Stock; and (iii) any
increase in the number of authorized shares of Class H Common Stock shall be
subject to approval by both (A) the holders of a majority of the shares of
Common Stock and Class H Common Stock then outstanding, voting together as a
single class based upon their respective voting rights, and (B) the holders of a
majority of the shares of Class H Common Stock then outstanding, voting
separately as a class. Subject to adjustment pursuant to paragraph (e) hereof,
each holder of Common Stock shall be entitled to one vote, in person or by
proxy, for each share of Common Stock standing in his name on the stock transfer
books of the Corporation; and each holder of Class H Common Stock shall be
entitled to the Class H Portion (as defined below) of a vote, in person or by
proxy, for each share of Class H Common Stock standing in his name on the stock
transfer books of the Corporation. For purposes of this paragraph (b) and
paragraph (d) of Division I of this Article FOURTH, "Class H Portion" shall mean
the greater of (x) 0.50 and (y) an amount, rounded to the nearest one-tenth,
equal to (i) the average of the Closing Prices (as defined in subparagraph
(c)(5)) of a share of Class H Common Stock during the period of twenty (20)
consecutive trading days beginning on January 5, 1998 divided by (ii) the
average of the Closing Prices of a share of Common Stock during such period.
(c) Exchangeability.
(1) After December 31, 2002, the Board of Directors of the Corporation, in
its sole discretion and by a majority vote of the directors then in office, may
at any time effect a recapitalization of the Corporation by declaring that all
of the outstanding shares of Class H Common Stock shall be exchanged for fully
paid and nonassessable shares of Common Stock in accordance with the Exchange
Rate (as defined in subparagraph (c)(4)).
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(2) In the event of the sale, transfer, assignment or other disposition by
the Corporation of Substantially All of the Business of Hughes (as defined in
subparagraph (c)(3)) to a person, entity or group of which the Corporation is
not a majority owner (whether by merger, consolidation, sale of assets or stock,
liquidation, dissolution, winding up or otherwise), effective upon the
consummation of such sale, transfer, assignment or other disposition and
automatically without any action on the part of the Corporation or its Board of
Directors or on the part of the holders of shares of Class H Common Stock, the
Corporation shall be recapitalized and all outstanding shares of Class H Common
Stock shall be exchanged for fully paid and nonassessable shares of Common Stock
at the Exchange Rate.
(3) For purposes of subparagraph (c)(2) of this subparagraph (c) of
Division I of this Article FOURTH, the term "Substantially All of the Business
of Hughes" shall mean 80% or more of the business of Hughes, based on the fair
market value of the assets, both tangible and intangible, of Hughes as of the
time that the proposed transaction is approved by the Board of Directors of the
Corporation.
(4) For purposes of this paragraph (c) of Division I of this Article
FOURTH, the term "Exchange Rate" applicable to the Class H Common Stock shall
mean the number of shares of Common Stock for which each share of Class H Common
Stock shall be exchangeable pursuant to subparagraphs (c)(1) and (c)(2), as the
case may be, of this paragraph (c) determined as follows: Each share of Class H
Common Stock shall be exchangeable for such number of shares of Common Stock
(calculated to the nearest five decimal places) as is determined by dividing (A)
the product resulting from multiplying (i) the Average Market Price Per Share
(as defined in subparagraph (c)(5)) of such Class H Common Stock by (ii) 1.2, by
(B) the Average Market Price Per Share of Common Stock.
(5) For purposes of this paragraph (c) of Division I of this Article
FOURTH, the "Average Market Price Per Share" of Common Stock or Class H Common
Stock, as the case may be, shall mean the average of the Closing Prices of a
share of such Common Stock or Class H Common Stock for the fifteen (15)
consecutive trading days ending one (1) trading day prior to either (A) in the
case of an exchange pursuant to subparagraph (c)(1), the date the Exchange
Notice (as defined in subparagraph (c)(8)) is mailed or (B) in the case of an
exchange pursuant to subparagraph (c)(2), the date of the public announcement by
the Corporation or one of its subsidiaries of the first to occur of the
following: that the Corporation or one of its subsidiaries (1) has entered into
an agreement in principle with respect to such transaction or (2) has entered
into a definitive agreement with respect thereto. For purposes of this paragraph
(c) of Division I of this Article FOURTH, the "Closing Price" of a share of
Common Stock or Class H Common Stock for each day shall mean the closing sales
price therefor as reported in The Wall Street Journal or, if not reported
therein, as reported in another newspaper of national circulation chosen by the
Board of Directors of the Corporation or, in case no such sale takes place on
such day, the average of the closing bid and asked prices regular way on the New
York Stock Exchange, or if the Common Stock or Class H Common Stock is not then
listed or admitted to trading on the New York Stock Exchange, on the largest
principal national securities exchange on which such stock is then listed or
admitted to trading, or if not listed or admitted to trading on any national
securities exchange, then the last reported sale prices for such shares in the
over-the-counter market, as reported on the National Association of Securities
Dealers Automated Quotation System, or, if such sale prices shall not be
reported thereon, the average of the closing bid and asked prices so reported,
or, if such bid and asked prices shall not be reported thereon, as the same
shall be reported by the National Quotation Bureau Incorporated, or, in all
other cases, an appraised market value furnished by any New York Stock Exchange
member firm selected from time to time by the Board of Directors or the Finance
Committee of the Corporation for that purpose.
(6) No fraction of a share of Common Stock shall be issued in connection
with the exchange of shares of Class H Common Stock into Common Stock, but in
lieu thereof, each holder of Class H Common Stock who would otherwise be
entitled to a fractional interest of a share of Common Stock shall, upon
surrender of such holder's certificate or certificates (if any) representing
shares of Class H Common Stock, be entitled to receive a cash payment (without
interest) (the "Fractional Payment") equal to the product resulting from
multiplying (A) the fraction of a share of Common Stock to which such holder
would otherwise have been entitled by (B) the Average Market Price Per Share of
the Common Stock.
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(7) No adjustments in respect of dividends shall be made upon the exchange
of any shares of Class H Common Stock; provided, however, that if the Exchange
Date (as defined in subparagraph (c)(8)) with respect to Class H Common Stock
shall be subsequent to the record date for the payment of a dividend or other
distribution thereon or with respect thereto but prior to the payment or
distribution thereof, the registered holders of such shares at the close of
business on such record date shall be entitled to receive the dividend or other
distribution payable on such shares on the date set for payment of such dividend
or other distribution notwithstanding the exchange of such shares or the
Corporation's default in payment of the dividend or distribution due on such
date.
(8) At such time or times as the Corporation exercises its right to cause
all of the shares of Class H Common Stock to be exchanged for Common Stock in
accordance with subparagraph (c)(1) of this paragraph (c) of Division I of this
Article FOURTH and at such time as the Corporation causes the exchange of such
Class H Common Stock for Common Stock as a result of a sale, transfer,
assignment or other disposition of the type referred to in subparagraph (c)(2)
of this paragraph (c), the Corporation shall give notice of such exchange to the
holders of Class H Common Stock whose shares are to be exchanged, by mailing by
first-class mail a notice of such exchange (the "Exchange Notice"), in the case
of an exchange in accordance with subparagraph (c)(1) not less than thirty (30)
nor more than sixty (60) days prior to the date fixed for such exchange (the
"Exchange Date"), and in the case of an exchange in accordance with subparagraph
(c)(2) as soon as practicable before or after the Exchange Date, in either case
to their last addresses as they shall appear upon the Corporation's books. Each
such Exchange Notice shall specify the Exchange Date and the Exchange Rate
applicable to such exchange, and shall state that issuance of certificates
representing, or other evidence of ownership of, Common Stock to be received
upon exchange of shares of Class H Common Stock shall be, if such shares of
Class H Common Stock are held in certificated form, upon surrender of
certificates representing such shares of Class H Common Stock.
(9) Before any holder of shares of Class H Common Stock who holds such
shares in certificated form shall be entitled to receive certificates
representing, or other evidence of ownership of, shares of Common Stock for
which such shares of Class H Common Stock were exchanged, such holder shall
surrender at such office as the Corporation shall specify certificates for such
shares of Class H Common Stock duly endorsed to the Corporation or in blank or
accompanied by proper instruments of transfer to the Corporation or in blank,
unless the Corporation shall waive such requirement. The Corporation will, as
soon as practicable after such surrender of any such certificates representing
shares of Class H Common Stock, issue and deliver at the office of the transfer
agent representing the Common Stock to the person for whose account such shares
of Class H Common Stock were so surrendered, or to his nominee or nominees,
certificates representing, or other evidence of ownership of, the number of
whole shares of Common Stock to which such holder shall be entitled as
aforesaid, together with the Fractional Payment, if any.
(10) From and after the Exchange Date, all rights of a holder of shares of
Class H Common Stock which were exchanged for shares of Common Stock shall cease
except for the right to receive certificates representing, or other evidence of
ownership of, shares of Common Stock together with a Fractional Payment, if any,
as contemplated by subparagraphs (c)(6) and (c)(9) of this paragraph (c) and
rights to dividends as provided in subparagraph (c)(7); provided, however, that
no holder of a certificate which immediately prior to the Exchange Date
represented shares of Class H Common Stock shall be entitled to receive any of
the foregoing until surrender of such certificate. Upon such surrender, there
shall be paid to the holder the amount of any dividends or other distributions
(without interest) which theretofore became payable with respect to a record
date after the Exchange Date, but which were not paid by reason of the
foregoing, with respect to the number of whole shares of Common Stock
represented by the certificate or certificates issued upon such surrender. From
and after the Exchange Date applicable to the Class H Common Stock, the
Corporation shall, however, be entitled to treat the certificates for Class H
Common Stock which have not yet been surrendered for exchange as evidencing the
ownership of the number of whole shares of Common Stock for which the shares of
Class H Common Stock represented by such certificates shall have been exchanged,
notwithstanding the failure to surrender such certificates.
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(11) If any shares of Common Stock are to be issued in a name other than
that in which the shares of Class H Common Stock exchanged therefor are
registered, it shall be a condition of such issuance that the person requesting
such issuance shall pay any transfer or other taxes required by reason of the
issuance of such shares of Common Stock in a name other than that of the record
holder of the shares of Class H Common Stock exchanged therefor, or shall
establish to the satisfaction of the Corporation or its agent that such tax has
been paid or is not applicable. Notwithstanding anything to the contrary in this
paragraph (c), the Corporation shall not be liable to a holder of shares of
Class H Common Stock for any shares of Common Stock or dividends or
distributions thereon delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(12) At such time as any Exchange Notice is delivered with respect to any
shares of Class H Common Stock, or at the time of the Exchange Date, if earlier,
the Corporation shall have reserved and kept available, solely for the purpose
of issuance upon exchange of the outstanding shares of Class H Common Stock,
such number of shares of Common Stock as shall be issuable upon the exchange of
the number of shares of Class H Common Stock specified or to be specified in the
Exchange Notice, provided, that nothing contained herein shall be construed to
preclude the Corporation from satisfying its obligations in respect of the
exchange of the outstanding shares of Class H Common Stock by delivery of
purchased shares of Common Stock which are held in the treasury of the
Corporation.
(d) Liquidation Rights.
In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after there shall have been paid
or set apart for the holders of Preferred Stock and Preference Stock the full
preferential amounts to which they are entitled, the holders of Common Stock and
Class H Common Stock shall be entitled to receive the assets of the Corporation
remaining for distribution to its stockholders, on a per share basis in
proportion to the respective per share liquidation units of such classes.
Subject to adjustment pursuant to paragraph (e) hereof, each share of Common
Stock and Class H Common Stock shall be entitled to liquidation units of one
(1.0) and the Class H Portion, respectively.
(e) Subdivision or Combination.
(1) If after the Hughes Transactions Date, the Corporation shall in any
manner subdivide (by stock split or otherwise) or combine (by reverse stock
split or otherwise) the outstanding shares of the Common Stock or Class H Common
Stock, or pay a stock dividend in shares of any class to holders of that class,
the per share voting rights specified in paragraph (b) and the per share
liquidation units specified in paragraph (d) of Class H Common Stock relative to
Common Stock shall be appropriately adjusted so as to avoid any dilution in the
aggregate voting or liquidation rights of any class. Distribution by the
Corporation of shares of any class of its common stock as a dividend on any
other class of its common stock shall not require an adjustment pursuant to this
paragraph (e)(1).
(2) If after the Hughes Transactions Date, the Corporation shall distribute
shares of Class H Common Stock as a dividend (the "Dividend") on Common Stock,
then the per share liquidation rights of the classes of common stock set forth
in paragraph (d) above, as they may have been previously adjusted, shall be
adjusted so that:
(A) each holder of shares of Class H Common Stock shall be entitled to,
with respect to such holder's interest in such Class H Common Stock, the same
percentage of the aggregate liquidation units of all shares of the Corporation's
common stock immediately after the Dividend as such holder was entitled to with
respect to such holder's interest in such Class H Common Stock immediately prior
to the Dividend; and
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(B) each holder of shares of Common Stock shall be entitled to, with
respect to such holder's interest in Common Stock and all shares of Class H
Common Stock issued with respect to such holder's shares of Common Stock, the
same percentage of the aggregate liquidation units of all shares of the
Corporation's common stock immediately after the Dividend as such holder was
entitled to with respect to such holder's interest in Common Stock immediately
prior to the Dividend; provided, that any adjustment pursuant to this
subparagraph (e)(2)(B) shall be made to the liquidation units of Common Stock.
In no event will any adjustments be made pursuant to this subparagraph (e)(2)
if the adjustment called for herein would reduce the liquidation units of any
class of common stock to less than zero.
(3) The determination of any adjustment required under this paragraph (e)
shall be made by the Corporation's Board of Directors; any such determination
shall be binding and conclusive upon all holders of shares of all classes of the
Corporation's common stock. Following any such determination, the Secretary of
the Corporation shall maintain a record of any such adjustment.
DIVISION II:
PREFERRED STOCK.
A statement of the relative rights of the holders of Preferred Stock and a
statement of the limits of variation between each series of Preferred Stock as
to rate of dividends and price of redemption and a statement of the voting
powers and the designations, powers, privileges and rights, and the
qualifications, limits or restrictions thereof of the various series thereof,
except so far as the Board of Directors is expressly authorized to fix the same
by resolution or resolutions for the various series of the Preferred Stock, are
as follows:
Preferred Stock of the Corporation may be issued in various series as may be
determined from time to time by the Board of Directors, each such series to be
distinctly designated. All shares of any one series of Preferred Stock shall be
alike in every particular, and all series shall rank equally and be identical in
all respects except as to the dividend rate and the amount payable upon the
exercise of the right to redeem.
The dividend on the Preferred Stock of each series shall be such rate as may
be fixed by the Board of Directors in the resolution or resolutions providing
for the issuance of the Preferred Stock of such series, and as shall be stated
on the face or back of the certificates of stock therefor.
The amount payable on the exercise of the right to redeem Preferred Stock of
each series shall be an amount as may be fixed by the Board of Directors in the
resolution or resolutions providing for the issuance of the Preferred Stock of
such series, and as shall be stated on the face or back of the certificates of
stock therefor.
All other provisions herein set forth in respect of the Preferred Stock of
the Corporation shall apply to all the Preferred Stock of the Corporation,
irrespective of any variations between the Preferred Stock of the different
series.
The holders of the Preferred Stock shall be entitled to receive cumulative
dividends, when and as declared by the Board of Directors, at the rates fixed
for the respective series in the Certificate of Incorporation or in the
resolution or resolutions of the Board of Directors providing for the issuance
of the respective series, and no more, payable quarterly on the dates to be
fixed by the By-Laws. The periods between such dates commencing on such dates
are herein designated as "dividend periods." Dividends on all shares of any one
series shall commence to accrue and be cumulative from the first day of the
current dividend period within which shares of such series are first issued, but
in the event of the issue of additional shares of such series subsequent to the
date of the first issue of said shares of such series, all
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dividends paid on the shares of such series prior to the issue of such
additional shares and all dividends declared payable to holders of record of
shares of such series of a date prior to such issue shall be deemed to have been
paid in respect of the additional shares so issued. Such dividends on the
Preferred Stock shall be in preference and priority to any payment on any other
class of stock of the Corporation.
The dividends on the Preferred Stock shall be cumulative and shall be payable
before any dividend on the Common Stock or Class H Common Stock or any series of
the Preference Stock shall be paid or set apart so that if in any year dividends
at the rates determined for the respective series of the Preferred Stock shall
not be paid thereon, the deficiency shall be payable before any dividend shall
be paid upon or set apart for the Common Stock or Class H Common Stock or any
series of the Preference Stock. Dividends shall not be declared and paid on the
shares of Preferred Stock of any one series for any dividend period unless
dividends have been or are contemporaneously paid or declared and set apart for
payment thereof on the shares of Preferred Stock of all series, for all the
dividend periods terminating on the same or an earlier date.
Whenever all cumulative dividends on the Preferred Stock outstanding shall
have been paid and a sum sufficient for the payment of the next ensuing
quarterly dividend on the Preferred Stock outstanding shall have been set aside
from the surplus or net profits, the Board of Directors may declare dividends on
the Common Stock or Class H Common Stock or any series of the Preference Stock,
payable then or thereafter, out of any remaining surplus or net profits, and no
holders of any shares of any series of Preferred Stock, as such, shall be
entitled to share therein.
At the option of the Board of Directors, the Preferred Stock shall be subject
to redemption at the amounts fixed for the respective series in the Certificate
of Incorporation or in the resolution or resolutions of the Board of Directors
providing for the issuance of the respective series, together, in the case of
each class or series, with accrued dividends on the shares to be redeemed, on
any dividend paying date in such manner as the Board of Directors may determine.
The holders of the Preferred Stock shall not have any voting power
whatsoever, except upon the question of selling, conveying, transferring or
otherwise disposing of the property and assets of the Corporation as an entirety
and except as otherwise required by law.
DIVISION III:
PREFERENCE STOCK.
The Board of Directors is authorized, subject to limitations prescribed by
law and the provisions of this Article FOURTH, to provide for the issuance of
Preference Stock from time to time in one or more series of any number of
shares, with a distinctive serial designation for each series, provided that the
aggregate number of shares issued and not cancelled of any and all such series
shall not exceed the total number of shares of Preference Stock authorized by
this Article FOURTH, all as shall hereafter be stated and expressed in the
resolution or resolutions providing for the issue of such Preference Stock from
time to time adopted by the Board of Directors. Subject to said limitations, and
provided that each series of Preference Stock shall rank junior to the Preferred
Stock with respect to the payment of dividends and distributions in liquidation,
each series of Preference Stock (a) may have such voting powers, full or
limited, or may be without voting powers; (b) may be subject to redemption at
such time or times and at such prices; (c) may be entitled to receive dividends
(which may be cumulative or noncumulative) at such rate or rates, on such
conditions, and at such times, and payable in preference to, or in such relation
to, the dividends payable on any other class or classes or series of stock; (d)
may have such rights upon the dissolution of, or upon any distribution of the
assets of, the Corporation; (e) may be made convertible into, or exchangeable
for, shares of any other class or classes of or any other series of the same or
any other class or classes of stock of the Corporation or any other issuer, at
such price or prices or at such rates of exchange, and with such adjustments;
(f) may be entitled to the benefit of a sinking fund to be applied to
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the purchase or redemption of shares of such series in such amount or amounts;
(g) may be entitled to the benefit of conditions and restrictions upon the
creation of indebtedness of the Corporation or any subsidiary, upon the issue of
any additional stock (including additional shares of such series or of any other
series) and upon the payment of dividends or the making of other distributions
on, and the purchase, redemption or other acquisition by the Corporation or any
subsidiary of any outstanding stock of the Corporation; and (h) may have such
other relative, participating, optional or other special rights, qualifications,
limitations or restrictions thereof; all as shall be stated in said resolution
or resolutions providing for the issue of such series of Preference Stock.
Shares of any series of Preference Stock which have been redeemed (whether
through the operation of a sinking fund or otherwise) or which, if convertible
or exchangeable, have been converted into or exchanged for shares of stock of
any other class or classes shall have the status of authorized and unissued
shares of Preference Stock of the same series and may be reissued as a part of
the series of which they were originally a part or may be reclassified and
reissued as part of a new series of Preference Stock to be created by resolution
or resolutions of the Board of Directors or as part of any other series of
Preference Stock, all subject to the conditions or restrictions on issuance set
forth in the resolution or resolutions adopted by the Board of Directors
providing for the issue of any series of Preference Stock.
The voting powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof, of the Corporation's Series B 9 1/8% Preference Stock are
set forth in Appendix A hereto and are incorporated herein by reference.
The voting powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof, of the Corporation's Series D 7.92% Preference Stock are
set forth in Appendix B hereto and are incorporated herein by reference.
The voting powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof, of the Corporation's Series G 9.12% Preference Stock are
set forth in Appendix C hereto and are incorporated herein by reference.*
DIVISION IV:
MISCELLANEOUS.
From time to time, the Preferred Stock, the Preference Stock, the Common
Stock and the Class H Common Stock may be increased or decreased according to
law, and may be issued in such amounts and proportions as shall be determined by
the Board of Directors, and as may be permitted by law.
In the event of any liquidation or dissolution or winding up, whether
voluntary or otherwise, of the Corporation, the holders of the Preferred Stock
shall be entitled to be paid the redemption price of each series in full, as
aforesaid, out of the assets whether capital or surplus, and, in every case, the
unpaid dividends accrued on such shares, whether or not earned or declared,
before any distribution of the assets to be distributed shall be made to the
holders of Common Stock or Class H Common Stock or any series of the Preference
Stock; but the holders of such shares shall be entitled to no further
participation in such distribution. If the assets distributable on such
liquidation, dissolution or winding up shall be insufficient to permit the
payment to the holders of the Preferred Stock of the full amount of the
redemption price of each series in full as aforesaid and accrued dividends as
aforesaid, the said assets shall be distributed pro rata among the holders of
the respective series of the Preferred Stock. After all payments are made as
aforesaid, any required payments shall be made with respect to the Preference
Stock, if any, outstanding, and the remaining assets and funds shall be divided
among and paid to the holders of Common Stock and Class H Common Stock pro rata
in proportion to the respective per share liquidation
- -----------------------------
*On June 24, 1999, the Corporation issued 2,669,633 shares of Series H 6,25%
Automatically Convertible Preference Stock. The certificate of designations
pertaining to such stock is attached as Appendix D.
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units of such classes. The merger or consolidation of the Corporation into or
with any other corporation shall not be or be deemed to be a distribution of
assets or a dissolution, liquidation or winding up for the purposes of this
paragraph.
Any Preferred Stock, Preference Stock, Common Stock or Class H Common Stock,
authorized hereunder or under any amendment hereof, in the discretion of the
Board of Directors, may be issued, except as herein otherwise provided, in
payment for property or services, or as bonuses to employees of the Corporation
or employees of subsidiary companies, or for other assets or securities
including cash, necessary or desirable, in the judgment of the Board of
Directors, to be purchased or acquired from time to time for the Corporation, or
for any other lawful purpose of the Corporation.
If it seems desirable so to do, the Board of Directors may from time to time
issue scrip for fractional shares of stock. Such scrip shall not confer upon the
holder any right to dividends or any voting or other rights of a stockholder of
the Corporation, but the Corporation shall from time to time, within such time
as the Board of Directors may determine or without limit of time if the Board of
Directors so determines, issue one or more whole shares of stock upon the
surrender of scrip for fractional shares aggregating the number of whole shares
issuable in respect of the scrip so surrendered, provided that the scrip so
surrendered shall be properly endorsed for transfer if in registered form.
FIFTH:
The Corporation is to have perpetual existence.
SIXTH:
The private property of the stockholders shall not be subject to the payment
of corporate debts to any extent whatever.
SEVENTH:
The number of Directors of the Corporation, not less than three, shall be
fixed from time to time by the By-Laws and the number may be altered as therein
provided. In case of any increase in the number of Directors, the additional
Directors shall be elected as provided by the By-Laws, by the Directors, or by
the stockholders at an annual or special meeting. In case of any vacancy in the
Board of Directors, the remaining Directors, by affirmative vote of a majority
thereof, may elect a successor to hold office for the unexpired portion of the
term of the Director whose place is vacant and until his successor shall be duly
elected and qualified.
No Director shall 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, or any successor provision thereto, of the Delaware General
Corporation Law, or (iv) for any transaction from which the Director derived an
improper personal benefit.
In furtherance, and not in limitation of the powers conferred by law, the
Board of Directors are expressly authorized:
(a) To make, alter, amend and repeal the By-Laws of the Corporation.
(b) To remove at any time any officer elected or appointed by the Board of
Directors but only by the affirmative vote of a majority of the whole Board of
Directors. Any other officer or employee of the Corporation may be removed at
any time by a vote of the Board of Directors, or by any committee or superior
officer upon whom such power of removal may be conferred by the By-Laws or by
the vote of the Board of Directors.
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(c) To designate, by resolution passed by a majority of the whole Board, two
or more of their number to constitute an executive committee, who, to the extent
provided in said resolution or in the By-Laws of the Corporation, shall have and
exercise the powers of the Board of Directors in the management of the business
and affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it. A majority of
such committee shall constitute a quorum for the transaction of business.
To designate any other standing committees by the affirmative vote of a
majority of the whole Board, and such standing committees shall have and may
exercise such powers as shall be conferred or authorized by the By-Laws,
including the power to cause the seal of the Corporation to be affixed to any
papers which may require it.
(c-1) Every right of action by or on behalf of the Corporation or by any
stockholder against any past, present or future member of the Board of
Directors, officer or employee of the Corporation arising out of or in
connection with any bonus, stock option, performance achievement or other
incentive plan at any time approved by the stockholders of the Corporation,
irrespective of the place where action may be brought and irrespective of the
place of residence of any such Director, officer or employee, shall cease and be
barred by the expiration of three years from whichever is the later of (a) the
date of the act or omission in respect of which such right of action arises or
(b) the first date upon which there has been made generally available to
stockholders an annual report of the Corporation and a proxy statement for the
annual meeting of stockholders following the issuance of such annual report,
which annual report and proxy statement alone or together set forth, for the
related period, the amount of any credit to a reserve for the purpose of any
such plan, and the aggregate bonus, performance achievement or other awards, and
the aggregate options or other grants, made under any such plan; and every right
of action by any employee (past, present or future) against the Corporation
arising out of or in connection with any such plan shall, irrespective of the
place where action may be brought, cease and be barred by the expiration of
three years from the date of the act or omission in respect of which such right
of action arises.
(d) From time to time to fix and to vary the sum to be reserved over and
above its capital stock paid in before declaring any dividends; to direct and
determine the use and disposition of any surplus or net profits over and above
the capital stock paid in; to fix the time of declaring and paying any dividend,
and, unless otherwise provided in this Certificate or in the By-Laws, to
determine the amount of any dividend. All sums reserved as working capital or
otherwise may be applied from time to time to the acquisition or purchase of its
bonds or other obligations or shares of its own capital stock or other property
to such extent and in such manner and upon such terms as the Board of Directors
shall deem expedient and neither the stocks, bonds, or other property so
acquired shall be regarded as accumulated profits for the purpose of declaring
or paying dividends unless otherwise determined by the Board of Directors, but
shares of such capital stock so purchased or acquired may be resold, unless such
shares shall have been retired for the purpose of decreasing the Company's
capital stock as provided by law.
(e) From time to time to determine whether and to what extent, and at what
time and places and under what conditions and regulations the accounts and books
of the Corporation (other than the stock ledger), or any of them, shall be open
to the inspection of the stockholders; and no stockholder shall have any right
to inspect any account or book or document of the Corporation, except as
conferred by statute or authorized by the Board of Directors or by a resolution
of the stockholders.
(f) With the written assent of the holders of two-thirds of its issued and
outstanding stock of all classes, without a meeting, or pursuant to the
affirmative vote in person or by proxy of the holders of two-thirds of its
issued and outstanding stock of all classes, at any meeting, either annual or
special, called as provided in the By-Laws, the Board of Directors may sell,
convey, assign, transfer or otherwise dispose of, any part or all of the
property, assets, rights and privileges of the Corporation as an entirety, for
the stock, bonds, obligations or other securities of another corporation of this
or of any other State, Territory, Colony or foreign country, or for cash, or
partly cash, credit, or property, or for such other consideration as the Board
of Directors, in their absolute and uncontrolled discretion, may determine.
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(g) The Corporation may by its By-Laws confer upon the Directors powers and
authorities additional to the foregoing and to those expressly conferred upon
them by statute.
EIGHTH:
Both the stockholders and the Directors of the Corporation may hold their
meetings and the Corporation may have an office or offices in such place or
places outside of the State of Delaware as the By-Laws may provide, and the
Corporation may keep its books outside of the State of Delaware except as
otherwise provided by law.
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 statute, and all rights conferred on stockholders herein
are granted subject to this reservation.
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<PAGE>
Appendix A
CERTIFICATE OF DESIGNATIONS
OF
SERIES B 9 1/8% PREFERENCE STOCK
OF
GENERAL MOTORS CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
General Motors Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY that, in accordance with the provisions of Section 151 of such
law and pursuant to Article Fourth of the Certificate of Incorporation of the
Corporation, the Board of Directors is authorized to issue the Preference Stock,
par value $0.10 per share, of the Corporation in one or more series and has
authorized the series of Preference Stock hereinafter provided for and
established the voting rights thereof and authorized a special committee of the
Board of Directors to adopt, and said committee has adopted, the following
resolution (which includes the voting powers of such series as authorized by the
Board of Directors) creating a series of 11,500,000 shares of Preference Stock,
par value $0.10 per share, stated value $100 per share, designated as Series B 9
1/8% Preference Stock (the "Preference Shares"), as follows:
RESOLVED, that, pursuant to the authority vested in the Board of Directors of
the Corporation in accordance with the provisions of its Certificate of
Incorporation, a series of Preference Stock of the Corporation be, and hereby
is, created and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional or other special rights of the
shares of such series, and the qualifications, limitations or restrictions
thereon, are as follows:
Section 1. Designation. The series of Preference Stock established hereby
shall be designated the "Series B 9 1/8% Preference Stock" and the authorized
number of Preference Shares shall be 11,500,000 shares.
Section 2. Dividends. (a) Holders of outstanding Preference Shares will be
entitled to receive, subject to the rights of holders of Preferred Stock of the
Corporation and of holders of any series of Preference Stock or other class of
stock of the Corporation or series thereof ranking senior to the Preference
Shares in respect of dividends and distributions, when and as declared by the
Board of Directors out of funds legally available therefor, cumulative cash
dividends at the per share annual rate of 9 1/8% of the per share stated value
(equivalent to $9.125 per annum per Preference Share) ("Preferential
Dividends"), payable quarterly for each of the quarters ending March, June,
September and December of each year, payable in arrears on the first day that is
not a legal holiday of each succeeding May, August, November and February,
respectively (each such date being hereinafter referred to as a "Preferential
Dividend Payment Date"). The first dividend will be paid on February 1, 1992
with respect to the period commencing on the issue date of the Preference Shares
and ending on December 31, 1991. Each such dividend will be payable to holders
of record as they appear on the stock books of the Corporation on such record
dates, not less than 10 nor more than 50 days preceding the payment dates
thereof, as shall be fixed by the Board of Directors. Dividends on the
Preference Shares shall accrue on a daily basis commencing on the date of
issuance of the Preference Shares and accrued dividends for each quarterly
dividend period shall accumulate, to the extent not paid, on the Preferential
Dividend Payment Date first following the quarter for which they accrue.
Preferential Dividends shall accrue whether or not the Corporation shall have
earnings, whether or not there shall be funds legally available for the payment
of such dividends and whether or not such dividends are declared. Accumulated
dividends shall not bear interest. Dividends (or cash amounts equal to accrued
and unpaid dividends) payable on the Preference Shares for any period longer or
shorter than a quarterly dividend period shall be computed on the basis of a
360-day year of twelve 30-day months.
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(b) So long as any Preference Shares shall remain outstanding, no dividend
(other than a dividend payable in shares of common stock of any class of the
Corporation) shall be declared, nor shall the Corporation make any other
distribution or payment or set aside anything of value for distribution or
payment on, or redeem, repurchase or otherwise acquire any shares of, the common
stock of any class of the Corporation or any other class of stock or series
thereof ranking junior to the Preference Shares in the payment of dividends
(other than a redemption or purchase of shares of any class of common stock of
the Corporation made for purposes of an employee incentive or benefit plan of
the Corporation or any of its subsidiaries) unless the full Preferential
Dividends, if any, accumulated on all outstanding shares of the Preference
Shares through all past Preferential Dividend Payment Dates shall have been
paid. No dividend shall be declared on any share or shares of any class of stock
of the Corporation or series thereof ranking on a parity with the Preference
Shares in respect of payment of dividends for any prior dividend payment period
of said parity stock unless there shall have been declared on all shares then
outstanding of the Preference Shares, for all dividend payment periods of the
Preference Shares terminating with or before such prior dividend payment period
of said parity stock, like proportionate dividends determined ratably in
proportion to the respective Preferential Dividends accumulated to date on all
outstanding Preference Shares and the dividends accumulated on all outstanding
shares of said parity stock.
Section 3. (a) Redemption. The Preference Shares may not be redeemed prior to
January 1, 1999. On or after January 1, 1999, the Corporation may, at its
option, on not less than 35 nor more than 60 days' notice, redeem the Preference
Shares, as a whole or in part, at any time or from time to time, for an amount
equal to $100 per Preference Share, plus an amount equal to all accrued and
unpaid dividends thereon to the date fixed for redemption. If less than all
outstanding Preference Shares are to be redeemed, shares to be redeemed will be
selected by the Corporation by lot or pro rata or by any other method determined
by the Corporation in its sole discretion to be equitable.
(b) Cancellation. All Preference Shares redeemed or otherwise acquired by
the Corporation as provided in Section 3(a) above shall be retired and thereupon
restored to the status of authorized but unissued shares of Preference Stock,
par value $0.10 per share, undesignated as to series.
(c) Notice of Redemption. The Corporation will provide notice, not less
than 35 nor more than 60 days prior to the date fixed for redemption, of any
call for redemption of Preference Shares to holders of record of the Preference
Shares to be redeemed. Such notice may be provided by mailing notice of such
redemption, first class postage prepaid, to the holders of record of the
Preference Shares at their respective addresses as the same shall appear on the
books of the Corporation or any transfer agent for the Preference Shares, or by
publishing notice thereof in The Wall Street Journal or The New York Times, or,
if neither such newspaper is then being published, any other daily newspaper of
national circulation (each, an "Authorized Newspaper"). If the Corporation
elects to provide such notice by publication, it shall also promptly mail notice
of such redemption to the holders of the Preference Shares to be redeemed. Each
such mailed or published notice shall state, as appropriate: (1) the redemption
date; (2) the number of Preference Shares 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 redemption; and (5)
that dividends on the Preference Shares to be redeemed will cease to accrue on
such redemption date unless default shall be made in providing the funds, at the
time and place specified in such notice. The Corporation's obligation to provide
funds in accordance with this Section 3 shall be deemed fulfilled if, on or
before the redemption date, the Corporation shall deposit, with a bank or trust
company having an office or agency in New York City and having a capital and
surplus of at least $50,000,000, funds necessary for such redemption, in trust
for the account of the holders of the shares to be redeemed (and so as to be and
continue to be available therefor), with irrevocable instructions and authority
to such bank or trust company that such shares and funds be delivered upon
redemption of the Preference Shares 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 three years from such redemption
date shall be repaid or released to the Corporation, after which the holder or
holders of Preference Shares so called for
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redemption shall look only to the Corporation for payment of the redemption
price. Each holder of Preference Shares called for redemption shall surrender
the certificates evidencing such shares to the Corporation at the place
designated in such notice and shall thereupon be entitled to receive payment of
the redemption price. In case less than all of the shares represented by any
such surrendered certificate are redeemed, a new certificate shall be issued at
the expense of the Corporation representing the unredeemed shares. If such
notice of redemption shall have been duly given, and if on the date fixed for
redemption funds necessary for the redemption shall have been either set aside
by the Corporation separate and apart from its other funds or assets in trust
for the account of the holders of the shares so to be redeemed (and so as to be
and continue to be available therefor) or deposited with a bank or trust company
as provided above, then, notwithstanding that the certificates evidencing any
Preference Shares so called for redemption shall not have been surrendered, the
shares represented thereby so called for redemption shall be deemed no longer
outstanding, dividends with respect to the shares so called for redemption shall
cease to accrue after the date fixed for redemption and all rights with respect
to the shares so called for redemption shall forthwith after such date cease and
terminate, except for the right of the holders to receive the redemption price
without interest upon surrender of their certificates therefor. If less than all
of the outstanding Preference Shares are to be called for redemption, shares to
be redeemed shall be selected by the Corporation from outstanding Preference
Shares not previously called for redemption by lot or pro rata (as nearly as may
be) or by any other method determined by the Board of Directors of the
Corporation in its sole discretion to be equitable.
Section 4. Liquidation Rights. (a) In the event of any dissolution,
liquidation or winding up of the affairs of the Corporation, whether voluntary
or involuntary (collectively, a "Liquidation"), after payment or provision for
payment has been made of the debts and other liabilities of the Corporation and
payment or provision for payment has been made on all amounts required to be
paid in respect of all outstanding shares of Preferred Stock and any series of
Preference Stock or other class of stock of the Corporation or series thereof
ranking senior to the Preference Shares, the holders of Preference Shares shall
be entitled to receive, out of the net assets of the Corporation, for each share
$100 plus an amount equal to all Preferential Dividends (whether or not
declared) accrued and unpaid thereon (including dividends accumulated and
unpaid) prior to the date fixed for distribution, and no more. After such amount
is paid in full, no further distributions or payments shall be made in respect
of Preference Shares, such Preference Shares shall no longer be deemed to be
outstanding or be entitled to any other powers, preferences, rights or
privileges, including voting rights, and such Preference Shares shall be
surrendered for cancellation to the Corporation.
(b) The full amount payable to the holders of Preference Shares shall be
paid before any distribution shall be made to the holders of any class of common
stock of the Corporation or any other class of stock or series thereof ranking
junior to the Preference Shares with respect to the distribution of assets upon
a Liquidation. No payment on account of any Liquidation shall be made to the
holders of any class or series of stock ranking on a parity with the Preference
Shares in respect of the distribution of assets upon dissolution, liquidation or
winding up unless there shall likewise be paid at the same time to the holders
of the Preference Shares like proportionate amounts determined ratably in
proportion to the full amounts to which the holders of all outstanding
Preference Shares and the holders of all outstanding shares of such parity stock
are respectively entitled with respect to such distribution.
(c) If the assets distributable to the holders of Preference Shares on any
Liquidation shall be insufficient to permit the payment to such holders of the
full amounts to which they are entitled in such circumstances, then such assets
or the proceeds thereof shall be distributed among such holders ratably in
proportion to the sums which would be payable to such holders if all such sums
were paid in full.
(d) Neither the merger nor consolidation of the Corporation into or with
any other corporation, nor the merger or consolidation of any other corporation
into or with the Corporation, nor a sale, transfer or lease of all or any part
of the assets of the Corporation, shall be deemed to be a Liquidation for
purposes of this Section 4.
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(e) Written notice of any Liquidation, stating the payment date or dates
when and the place or places where the amounts distributable in such
circumstances shall be payable, shall be given by first class mail, postage
prepaid, not less than thirty (30) days prior to any payment date stated
therein, to the holders of record of the Preference Shares at their respective
addresses as the same shall appear on the books of the Corporation or any
transfer agent for the Preference Shares.
Section 5. Voting Rights. (a) Except as otherwise provided by paragraphs (b)
and (c) of this Section 5 or as required by law, the holders of Preference
Shares shall not be entitled to vote on any matter on which the holders of any
voting securities of the Corporation shall be entitled to vote.
(b) So long as any Preference Shares are outstanding, the Corporation shall
not amend, alter or repeal any of the provisions of its Certificate of
Incorporation or this Certificate so as to alter or change the powers,
preferences or special rights of the Preference Shares so as to affect them
adversely without the consent of the holders of at least two-thirds of the total
number of outstanding Preference Shares, given in person or by proxy, by vote at
a meeting called for that purpose or by written consent as permitted by law and
the Certificate of Incorporation and By-Laws of the Corporation. For purposes of
this paragraph, any such amendment or any resolution or action of the Board of
Directors which would create or issue any series of Preference Stock out of the
authorized shares of Preference Stock, or which would authorize, create or issue
any shares of stock (whether or not already authorized) ranking junior to, on a
parity with or senior to the Preference Shares with respect to the payment of
dividends and distributions and distributions upon any Liquidation, shall not be
considered to affect adversely the rights of the outstanding Preference Shares.
(c) In the event that the Corporation shall have failed to declare and pay or
set apart for payment in full the Preferential Dividends accumulated on the
outstanding Preference Shares for any six quarterly dividend payment periods,
whether or not consecutive, and all such accumulated preferential dividends
remain unpaid (a "Preferential Dividend Default"), the number of directors of
the Corporation shall be increased by two and the holders of outstanding
Preference Shares, voting together as a class with all other series of
Preference Stock ranking junior to or on a parity with the Preference Shares
with respect to dividends and then entitled to vote on the election of such
directors, shall be entitled to elect such two additional directors until the
full dividends accumulated on all outstanding Preference Shares have been
declared and paid or set apart for payment. Upon the occurrence of a
Preferential Dividend Default, the Board of Directors of the Corporation shall
within a reasonable period call a special meeting of the holders of Preference
Shares and all other holders of a series of Preference Stock ranking junior to
or on a parity with the Preference Shares with respect to the payment of
dividends who are then entitled to participate in the election of such directors
for the purpose of electing the additional directors provided by the foregoing
provisions; provided that, in lieu of holding such meeting, the holders of
record of a majority of the outstanding Preference Shares and all other series
of Preference Stock ranking junior to or on a parity with the Preference Shares
with respect to the payment of dividends who are then entitled to participate in
the election of such directors may, by action taken by written consent as
permitted by law and the Corporation's Certificate of Incorporation and By-laws,
elect such additional directors. If and when all accumulated dividends on the
Preference Shares have been declared and paid or set aside for payment in full,
the holders of Preference Shares shall be divested of the special voting rights
provided by this paragraph, subject to revesting in the event of each and every
subsequent Preferential Dividend Default. Upon termination of such special
voting rights attributable to all holders of Preference Shares and any other
series of Preference Stock ranking junior to or on a parity with the Preference
Shares with respect to payment of dividends, the term of office of each director
elected by the holders of Preference Shares and such junior or parity stock
(hereinafter referred to as a "Preference Stock Director") pursuant to such
special voting rights shall forthwith terminate and the number of directors
constituting the entire Board of Directors shall be reduced by the number of
Preference Stock Directors. Any Preference Stock Director may be removed by, and
shall not be removed otherwise than by, the vote of the holders of record of a
majority of the outstanding Preference Shares and all other series of Preference
Stock ranking junior to or on a parity with the Preference Shares with respect
to the payment of dividends who were entitled to participate in such Preference
Stock Director's election, voting as a separate class, at a meeting called for
- 17 -
such purpose or by written consent as permitted by law and the Certificate of
Incorporation and By-laws of the Corporation. So long as a Preferential Dividend
Default shall continue, any vacancy in the office of a Preference Stock Director
may be filled by written consent of the Preference Stock Director remaining in
office or, if none remains in office, by vote of the holders of record of a
majority of the outstanding Preference Shares and all other series of Preference
Stock ranking on a parity with the Preference Shares with respect to the payment
of dividends who are then entitled to participate in the election of such
Preference Stock Directors as provided above. As long as a Preferential Dividend
Default shall continue, holders of Preference Shares shall not, as such
stockholders, be entitled to vote on the election or removal of directors other
than Preference Stock Directors, but shall not be divested of any other voting
rights provided to such stockholders by law with respect to any other matter to
be acted upon by the stockholders of the Corporation.
Section 6. Miscellaneous. (a) Subject to paragraph (c) of Section 3 above,
all notices referred to herein shall be in writing, and all notices hereunder
shall be deemed to have been given upon the earlier of receipt thereof or three
(3) business days after the mailing thereof if sent by registered mail (unless
first-class mail shall be specifically permitted for such notice under the terms
of this Certificate) with postage prepaid, addressed: if to the Corporation, to
its offices at 767 Fifth Avenue, New York, New York 10153 (Attention: Secretary)
or to the transfer agent for the Preference Shares, as provided by Section 7(e)
below, or other agent of the Corporation designated as permitted by this
Certificate, or, if to any holder of the Preference Shares, to such holder at
the address of such holder as listed in the stock record books of the
Corporation (which may include the records of any transfer agent for the
Preference Shares if appropriate); or to such other address as the Corporation
or holder, as the case may be, shall have designated by notice similarly given.
(b) In the event a holder of Preference Shares shall not by written notice
designate the name to whom payment upon redemption of Preference Shares should
be made or the address to which the certificate or certificates representing
such shares, or such payment, should be sent, the Corporation shall be entitled
to register such shares, and make such payment, in the name of the holder of
such Preference Shares as shown on the records of the Corporation and to send
the certificate or certificates representing such shares, or such payment, to
the address of such holder shown on the records of the Corporation.
(c) All payments in the form of dividends and distributions and distributions
upon any Liquidation or otherwise made upon the Preference Shares and any other
shares of stock ranking on a parity with the Preference Shares with respect to
such dividend or distribution shall be made pro rata, so that amounts paid per
share on the Preference Shares and such other shares of stock shall in all cases
bear to each other the same ratio that the required dividends, distributions or
payments, as the case may be, payable per share on the Preference Shares and
such other shares of stock bear to each other.
(d) In respect of the payment of dividends and distributions and
distributions upon a Liquidation, the Preference Shares shall rank junior to the
Preferred Stock of the Corporation, on a parity with the Series H-III Preference
Stock, the Series E-I Preference Stock, the Series E-II Preference Stock, the
Series E-III Preference Stock and the Series A Conversion Preference Stock, as
authorized and existing at the time Preference Shares are first issued and
junior to any other series of Preference Stock unless it shall be stated in the
resolution or resolutions providing for the issue of such series of Preference
Stock that the Preference Shares shall rank senior to or on a parity with such
series of Preference Stock.
(e) The Corporation may appoint, and from time to time discharge and change,
a transfer agent for the Preference Shares. The initial transfer agent,
registrar and dividend disbursing agent for the Preference Shares is First
Chicago Trust Company of New York.
- 18 -
<PAGE>
Appendix B
CERTIFICATE OF DESIGNATIONS
OF
SERIES D 7.92% PREFERENCE STOCK
OF
GENERAL MOTORS CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
General Motors Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY that, in accordance with the provisions of Section 151 of such
law and pursuant to Article Fourth of the Certificate of Incorporation of the
Corporation, the Board of Directors is authorized to issue the Preference Stock,
par value $0.10 per share, of the Corporation in one or more series and has
authorized the series of Preference Stock hereinafter provided for and
established the voting rights thereof and authorized a special committee of the
Board of Directors to adopt, and said committee has adopted, the following
resolution (which includes the voting powers of such series as authorized by the
Board of Directors) creating a series of 3,925,000 shares of Preference Stock,
par value $0.10 per share, stated value $100 per share, designated as Series D
7.92% Preference Stock (the "Preference Shares"), as follows:
RESOLVED, that, pursuant to the authority vested in the Board of Directors of
the Corporation in accordance with the provisions of its Certificate of
Incorporation, a series of Preference Stock of the Corporation be, and hereby
is, created and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional or other special rights of the
shares of such series, and the qualifications, limitations or restrictions
thereon, are as follows:
Section 1. Designation. The series of Preference Stock established hereby
shall be designated the "Series D 7.92% Preference Stock" and the authorized
number of Preference Shares shall be 3,925,000 shares.
Section 2. Dividends. (a) Holders of outstanding Preference Shares will be
entitled to receive, subject to the rights of holders of Preferred Stock of the
Corporation and of holders of any series of Preference Stock or other class of
stock of the Corporation or series thereof ranking senior to the Preference
Shares in respect of dividends and distributions, when and as declared by the
Board of Directors out of funds legally available therefor, cumulative cash
dividends at the per share annual rate of 7.92% of the per share stated value
(equivalent to $7.92 per annum per Preference Share) ("Preferential Dividends"),
payable quarterly for each of the quarters ending March, June, September and
December of each year, payable in arrears on the first day that is not a legal
holiday of each succeeding May, August, November and February, respectively
(each such date being hereinafter referred to as a "Preferential Dividend
Payment Date"). The first dividend will be paid on November 1, 1992 with respect
to the period commencing on the issue date of the Preference Shares and ending
on September 30, 1992. Each such dividend will be payable to holders of record
as they appear on the stock books of the Corporation on such record dates, not
less than 10 nor more than 50 days preceding the payment dates thereof, as shall
be fixed by the Board of Directors. Dividends on the Preference Shares shall
accrue on a daily basis commencing on the date of issuance of the Preference
Shares and accrued dividends for each quarterly dividend period shall
accumulate, to the extent not paid, on the Preferential Dividend Payment Date
first following the quarter for which they accrue. Preferential Dividends shall
accrue whether or not the Corporation shall have earnings, whether or not there
shall be funds legally available for the payment of such dividends and whether
or not such dividends are declared. Accumulated dividends shall not bear
interest. Dividends (or cash amounts equal to accrued and unpaid dividends)
payable on the Preference Shares for any period longer or shorter than a
quarterly dividend period shall be computed on the basis of a 360-day year of
twelve 30-day months.
- 19 -
(b) So long as any Preference Shares shall remain outstanding, no dividend
(other than a dividend payable in shares of common stock of any class of the
Corporation) shall be declared, nor shall the Corporation make any other
distribution or payment or set aside anything of value for distribution or
payment on, or redeem, repurchase or otherwise acquire any shares of, the common
stock of any class of the Corporation or any other class of stock or series
thereof ranking junior to the Preference Shares in the payment of dividends
(other than a redemption or purchase of shares of any class of common stock of
the Corporation made for purposes of an employee incentive or benefit plan of
the Corporation or any of its subsidiaries) unless the full Preferential
Dividends, if any, accumulated on all outstanding shares of the Preference
Shares through all past Preferential Dividend Payment Dates shall have been
paid. No dividend shall be declared on any share or shares of any class of stock
of the Corporation or series thereof ranking on a parity with the Preference
Shares in respect of payment of dividends for any prior dividend payment period
of said parity stock unless there shall have been declared on all shares then
outstanding of the Preference Shares, for all dividend payment periods of the
Preference Shares terminating with or before such prior dividend payment period
of said parity stock, like proportionate dividends determined ratably in
proportion to the respective Preferential Dividends accumulated to date on all
outstanding Preference Shares and the dividends accumulated on all outstanding
shares of said parity stock.
Section 3. (a) Redemption. The Preference Shares may not be redeemed prior to
August 1, 1999. On or after August 1, 1999, the Corporation may, at its option,
on not less than 35 nor more than 60 days' notice, redeem the Preference Shares,
as a whole or in part, at any time or from time to time, for an amount equal to
$100 per Preference Share, plus an amount equal to all accrued and unpaid
dividends thereon to the date fixed for redemption. If less than all outstanding
Preference Shares are to be redeemed, shares to be redeemed will be selected by
the Corporation by lot or pro rata or by any other method determined by the
Corporation in its sole discretion to be equitable.
(b) Cancellation. All Preference Shares redeemed or otherwise acquired by
the Corporation as provided in Section 3(a) above shall be retired and thereupon
restored to the status of authorized but unissued shares of Preference Stock,
par value $0.10 per share, undesignated as to series.
(c) Notice of Redemption. The Corporation will provide notice, not less
than 35 nor more than 60 days prior to the date fixed for redemption, of any
call for redemption of Preference Shares to holders of record of the Preference
Shares to be redeemed. Such notice may be provided by mailing notice of such
redemption, first class postage prepaid, to the holders of record of the
Preference Shares at their respective addresses as the same shall appear on the
books of the Corporation or any transfer agent for the Preference Shares, or by
publishing notice thereof in The Wall Street Journal or The New York Times, or,
if neither such newspaper is then being published, any other daily newspaper of
national circulation (each, an "Authorized Newspaper"). If the Corporation
elects to provide such notice by publication, it shall also promptly mail notice
of such redemption to the holders of the Preference Shares to be redeemed. Each
such mailed or published notice shall state, as appropriate: (1) the redemption
date; (2) the number of Preference Shares 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 redemption; and (5)
that dividends on the Preference Shares to be redeemed will cease to accrue on
such redemption date unless default shall be made in providing the funds, at the
time and place specified in such notice. The Corporation's obligation to provide
funds in accordance with this Section 3 shall be deemed fulfilled if, on or
before the redemption date, the Corporation shall deposit, with a bank or trust
company having an office or agency in New York City and having a capital and
surplus of at least $50,000,000, funds necessary for such redemption, in trust
for the account of the holders of the shares to be redeemed (and so as to be and
continue to be available therefor), with irrevocable instructions and authority
to such bank or trust company that such shares and funds be delivered upon
redemption of the Preference Shares 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 three years from such redemption
date shall be repaid or released to the Corporation, after which the holder or
holders of Preference Shares so called for
- 20 -
redemption shall look only to the Corporation for payment of the redemption
price. Each holder of Preference Shares called for redemption shall surrender
the certificates evidencing such shares to the Corporation at the place
designated in such notice and shall thereupon be entitled to receive payment of
the redemption price. In case less than all of the shares represented by any
such surrendered certificate are redeemed, a new certificate shall be issued at
the expense of the Corporation representing the unredeemed shares. If such
notice of redemption shall have been duly given, and if on the date fixed for
redemption funds necessary for the redemption shall have been either set aside
by the Corporation separate and apart from its other funds or assets in trust
for the account of the holders of the shares so to be redeemed (and so as to be
and continue to be available therefor) or deposited with a bank or trust company
as provided above, then, notwithstanding that the certificates evidencing any
Preference Shares so called for redemption shall not have been surrendered, the
shares represented thereby so called for redemption shall be deemed no longer
outstanding, dividends with respect to the shares so called for redemption shall
cease to accrue after the date fixed for redemption and all rights with respect
to the shares so called for redemption shall forthwith after such date cease and
terminate, except for the right of the holders to receive the redemption price
without interest upon surrender of their certificates therefor. If less than all
of the outstanding Preference Shares are to be called for redemption, shares to
be redeemed shall be selected by the Corporation from outstanding Preference
Shares not previously called for redemption by lot or pro rata (as nearly as may
be) or by any other method determined by the Board of Directors of the
Corporation in its sole discretion to be equitable.
Section 4. Liquidation Rights. (a) In the event of a dissolution, liquidation
or winding up of the affairs of the Corporation, whether voluntary or
involuntary (collectively, a "Liquidation"), after payment or provision for
payment has been made on all amounts required to be paid in respect of all
outstanding shares of Preferred Stock and any series of Preference Stock or
other class of stock of the Corporation or series thereof ranking senior to the
Preference Shares, the holders of Preference Shares shall be entitled to
receive, out of the net assets of the Corporation, for each share $100 plus an
amount equal to all Preferential Dividends (whether or not declared) accrued and
unpaid thereon (including dividends accumulated and unpaid) prior to the date
fixed for distribution, and no more. After such amount is paid in full, no
further distributions or payments shall be made in respect of Preference Shares,
such Preference Shares shall no longer be deemed to be outstanding or be
entitled to any other powers, preferences, rights or privileges, including
voting rights, and such Preference Shares shall be surrendered for cancellation
to the Corporation.
(b) The full amount payable to the holders of Preference Shares shall be
paid before any distribution shall be made to the holders of any class of common
stock of the Corporation or any other class of stock or series thereof ranking
junior to the Preference Shares with respect to the distribution of assets upon
a Liquidation. No payment on account of any Liquidation shall be made to the
holders of any class or series of stock ranking on a parity with the Preference
Shares in respect of the distribution of assets upon dissolution, liquidation or
winding up unless there shall likewise be paid at the same time to the holders
of the Preference Shares like proportionate amounts determined ratably in
proportion to the full amounts to which the holders of all outstanding
Preference Shares and the holders of all outstanding shares of such parity stock
are respectively entitled with respect to such distribution.
(c) If the assets distributable to the holders of Preference Shares on any
Liquidation shall be insufficient to permit the payment to such holders of the
full amounts to which they are entitled in such circumstances, then such assets
or the proceeds thereof shall be distributed among such holders ratably in
proportion to the sums which would be payable to such holders if all such sums
were paid in full.
(d) Neither the merger nor consolidation of the Corporation into or with
any other corporation, nor the merger or consolidation of any other corporation
into or with the Corporation, nor a sale, transfer or lease of all or any part
of the assets of the Corporation, shall be deemed to be a Liquidation for
purposes of this Section 4.
- 21 -
(e) Written notice of any Liquidation, stating the payment date or dates
when and the place or places where the amounts distributable in such
circumstances shall be payable, shall be given by first class mail, postage
prepaid, not less than thirty (30) days prior to any payment date stated
therein, to the holders of record of the Preference Shares at their respective
addresses as the same shall appear on the books of the Corporation or any
transfer agent for the Preference Shares.
Section 5. Voting Rights. (a) Except as otherwise provided by paragraphs (b)
and (c) of this Section 5 or as required by law, the holders of Preference
Shares shall not be entitled to vote on any matter on which the holders of any
voting securities of the Corporation shall be entitled to vote.
(b) So long as any Preference Shares are outstanding, the Corporation shall
not amend, alter or repeal any of the provisions of its Certificate of
Incorporation or this Certificate so as to alter or change the powers,
preferences or special rights of the Preference Shares so as to affect them
adversely without the consent of the holders of at least two-thirds of the total
number of outstanding Preference Shares, given in person or by proxy, by vote at
a meeting called for that purpose or by written consent as permitted by law and
the Certificate of Incorporation and By-Laws of the Corporation. For purposes of
this paragraph, any such amendment or any resolution or action of the Board of
Directors which would create or issue any series of Preference Stock out of the
authorized shares of Preference Stock, or which would authorize, create or issue
any shares of stock (whether or not already authorized) ranking junior to, on a
parity with or senior to the Preference Shares with respect to the payment of
dividends and distributions and distributions upon any Liquidation, shall not be
considered to affect adversely the rights of the outstanding Preference Shares.
(c) In the event that the Corporation shall have failed to declare and pay or
set apart for payment in full the Preferential Dividends accumulated on the
outstanding Preference Shares for any six quarterly dividend payment periods,
whether or not consecutive, and all such accumulated preferential dividends
remain unpaid (a "Preferential Dividend Default"), the number of directors of
the Corporation shall be increased by two and the holders of outstanding
Preference Shares, voting together as a class with all other series of
Preference Stock ranking junior to or on a parity with the Preference Shares
with respect to dividends and then entitled to vote on the election of such
directors, shall be entitled to elect such two additional directors until the
full dividends accumulated on all outstanding Preference Shares have been
declared and paid or set apart for payment. Upon the occurrence of a
Preferential Dividend Default, the Board of Directors of the Corporation shall
within a reasonable period call a special meeting of the holders of Preference
Shares and all other holders of a series of Preference Stock ranking junior to
or on a parity with the Preference Shares with respect to the payment of
dividends who are then entitled to participate in the election of such directors
for the purpose of electing the additional directors provided by the foregoing
provisions; provided that, in lieu of holding such meeting, the holders of
record of a majority of the outstanding Preference Shares and all other series
of Preference Stock ranking junior to or on a parity with the Preference Shares
with respect to the payment of dividends who are then entitled to participate in
the election of such directors may, by action taken by written consent as
permitted by law and the Corporation's Certificate of Incorporation and By-laws,
elect such additional directors. If and when all accumulated dividends on the
Preference Shares have been declared and paid or set aside for payment in full,
the holders of Preference Shares shall be divested of the special voting rights
provided by this paragraph, subject to revesting in the event of each and every
subsequent Preferential Dividend Default. Upon termination of such special
voting rights attributable to all holders of Preference Shares and any other
series of Preference Stock ranking junior to or on a parity with the Preference
Shares with respect to payment of dividends, the term of office of each director
elected by the holders of Preference Shares and such junior or parity stock
(hereinafter referred to as a "Preference Stock Director") pursuant to such
special voting rights shall forthwith terminate and the number of directors
constituting the entire Board of Directors shall be reduced by the number of
Preference Stock Directors. Any Preference Stock Director may be removed by, and
shall not be removed otherwise than by, the vote of the holders of record of a
majority of the outstanding Preference Shares and all other series of Preference
Stock ranking junior to or on a parity with the Preference Shares with respect
to the payment of dividends who were entitled to participate in such Preference
Stock Director's election, voting as a separate class, at a meeting called for
- 22 -
such purpose or by written consent as permitted by law and the Certificate of
Incorporation and By-laws of the Corporation. So long as a Preferential Dividend
Default shall continue, any vacancy in the office of a Preference Stock Director
may be filled by written consent of the Preference Stock Director remaining in
office or, if none remains in office, by vote of the holders of record of a
majority of the outstanding Preference Shares and all other series of Preference
Stock ranking on a parity with the Preference Shares with respect to the payment
of dividends who are then entitled to participate in the election of such
Preference Stock Directors as provided above. As long as a Preferential Dividend
Default shall continue, holders of Preference Shares shall not, as such
stockholders, be entitled to vote on the election or removal of directors other
than Preference Stock Directors, but shall not be divested of any other voting
rights provided to such stockholders by law with respect to any other matter to
be acted upon by the stockholders of the Corporation.
Section 6. Miscellaneous. (a) Subject to paragraph (c) of Section 3 above,
all notices referred to herein shall be in writing, and all notices hereunder
shall be deemed to have been given upon the earlier of receipt thereof or three
(3) business days after the mailing thereof if sent by registered mail (unless
first-class mail shall be specifically permitted for such notice under the terms
of this Certificate) with postage prepaid, addressed: if to the Corporation, to
its offices at 767 Fifth Avenue, New York, New York 10153 (Attention: Secretary)
or to the transfer agent for the Preference Shares, as provided by Section 7(e)
below, or other agent of the Corporation designated as permitted by this
Certificate, or, if to any holder of the Preference Shares, to such holder at
the address of such holder as listed in the stock record books of the
Corporation (which may include the records of any transfer agent for the
Preference Shares if appropriate); or to such other address as the Corporation
or holder, as the case may be, shall have designated by notice similarly given.
(b) In the event a holder of Preference Shares shall not by written notice
designate the name to whom payment upon redemption of Preference Shares should
be made or the address to which the certificate or certificates representing
such shares, or such payment, should be sent, the Corporation shall be entitled
to register such shares, and make such payment, in the name of the holder of
such Preference Shares as shown on the records of the Corporation and to send
the certificate or certificates representing such shares, or such payment, to
the address of such holder shown on the records of the Corporation.
(c) All payments in the form of dividends and distributions and distributions
upon any Liquidation or otherwise made upon the Preference Shares and any other
shares of stock ranking on a parity with the Preference Shares with respect to
such dividend or distribution shall be made pro rata, so that amounts paid per
share on the Preference Shares and such other shares of stock shall in all cases
bear to each other the same ratio that the required dividends, distributions or
payments, as the case may be, payable per share on the Preference Shares and
such other shares of stock bear to each other.
(d) In respect of the payment of dividends and distributions and
distributions upon a Liquidation, the Preference Shares shall rank junior to the
Preferred Stock of the Corporation, on a parity with the Series H-III Preference
Stock, the Series E-I Preference Stock, the Series E-II Preference Stock, the
Series E-III Preference Stock, the Series A Conversion Preference Stock, the
Series B Preference Stock and Series C Convertible Preference Stock, as
authorized and existing at the time Preference Shares are first issued and
junior to any other series of Preference Stock unless it shall be stated in the
resolution or resolutions providing for the issue of such series of Preference
Stock that the Preference Shares shall rank senior to or on a parity with such
series of Preference Stock.
(e) The Corporation may appoint, and from time to time discharge and change,
a transfer agent for the Preference Shares. The initial transfer agent,
registrar and dividend disbursing agent for the Preference Shares is First
Chicago Trust Company of New York.
- 23 -
<PAGE>
Appendix C
CERTIFICATE OF DESIGNATIONS
OF
SERIES G 9.12% PREFERENCE STOCK
OF
GENERAL MOTORS CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
General Motors Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY that, in accordance with the provisions of Section 151 of such
law and pursuant to Article Fourth of the Certificate of Incorporation of the
Corporation, the Board of Directors is authorized to issue the Preference Stock,
par value $0.10 per share, of the Corporation in one or more series and has
authorized the series of Preference Stock hereinafter provided for and
established the voting rights thereof and authorized a special committee of the
Board of Directors to adopt, and said committee has adopted, the following
resolution (which includes the voting powers of such series as authorized by the
Board of Directors) creating a series of 5,750,000 shares of Preference Stock,
par value $0.10 per share, stated value $100 per share, designated as Series G
9.12% Preference Stock (the "Preference Shares"), as follows:
RESOLVED, that, pursuant to the authority vested in the Board of Directors of
the Corporation in accordance with the provisions of its Certificate of
Incorporation, a series of Preference Stock of the Corporation be, and hereby
is, created and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional or other special rights of the
shares of such series, and the qualifications, limitations or restrictions
thereon, are as follows:
Section 1. Designation. The series of Preference Stock established hereby
shall be designated the "Series G 9.12% Preference Stock" and the authorized
number of Preference Shares shall be 5,750,000 shares.
Section 2. Dividends. (a) Holders of outstanding Preference Shares will be
entitled to receive, subject to the rights of holders of Preferred Stock of the
Corporation and of holders of any series of Preference Stock or other class of
stock of the Corporation or series thereof ranking senior to the Preference
Shares in respect of dividends and distributions, when and as declared by the
Board of Directors out of funds legally available therefor, cumulative cash
dividends at the per share annual rate of 9.12% of the per share stated value
(equivalent to $9.12 per annum per Preference Share) ("Preferential Dividends"),
payable quarterly for each of the quarters ending March, June, September and
December of each year, payable in arrears on the first day that is not a legal
holiday of each succeeding May, August, November and February, respectively
(each such date being hereinafter referred to as a "Preferential Dividend
Payment Date"). The first dividend will be paid on February 1, 1993 with respect
to the period commencing on the issue date of the Preference Shares and ending
on December 31, 1992. Each such dividend will be payable to holders of record as
they appear on the stock books of the Corporation on such record dates, not less
than 10 nor more than 50 days preceding the payment dates thereof, as shall be
fixed by the Board of Directors. Dividends on the Preference Shares shall accrue
on a daily basis commencing on the date of issuance of the Preference Shares and
accrued dividends for each quarterly dividend period shall accumulate, to the
extent not paid, on the Preferential Dividend Payment Date first following the
quarter for which they accrue. Preferential Dividends shall accrue whether or
not the Corporation shall have earnings, whether or not there shall be funds
legally available for the payment of such dividends and whether or not such
dividends are declared. Accumulated dividends shall not bear interest. Dividends
(or cash amounts equal to accrued and unpaid dividends) payable on the
Preference Shares for any period longer or shorter than a quarterly dividend
period shall be computed on the basis of a 360-day year of twelve 30-day months.
- 24 -
(b) So long as any Preference Shares shall remain outstanding, no dividend
(other than a dividend payable in shares of common stock of any class of the
Corporation) shall be declared, nor shall the Corporation make any other
distribution or payment or set aside anything of value for distribution or
payment on, or redeem, repurchase or otherwise acquire any shares of, the common
stock of any class of the Corporation or any other class of stock or series
thereof ranking junior to the Preference Shares in the payment of dividends
(other than a redemption or purchase of shares of any class of common stock of
the Corporation made for purposes of an employee incentive or benefit plan of
the Corporation or any of its subsidiaries) unless the full Preferential
Dividends, if any, accumulated on all outstanding shares of the Preference
Shares through all past Preferential Dividend Payment Dates shall have been
paid. No dividend shall be declared on any share or shares of any class of stock
of the Corporation or series thereof ranking on a parity with the Preference
Shares in respect of payment of dividends for any prior dividend payment period
of said parity stock unless there shall have been declared on all shares then
outstanding of the Preference Shares, for all dividend payment periods of the
Preference Shares terminating with or before such prior dividend payment period
of said parity stock, like proportionate dividends determined ratably in
proportion to the respective Preferential Dividends accumulated to date on all
outstanding Preference Shares and the dividends accumulated on all outstanding
shares of said parity stock.
Section 3. (a) Redemption. The Preference Shares may not be redeemed prior to
January 1, 2001. On or after January 1, 2001, the Corporation may, at its
option, on not less than 35 nor more than 60 days' notice, redeem the Preference
Shares, as a whole or in part, at any time or from time to time, for an amount
equal to $100 per Preference Share, plus an amount equal to all accrued and
unpaid dividends thereon to the date fixed for redemption. If less than all
outstanding Preference Shares are to be redeemed, shares to be redeemed will be
selected by the Corporation by lot or pro rata or by any other method determined
by the Corporation in its sole discretion to be equitable.
(b) Cancellation. All Preference Shares redeemed or otherwise acquired by
the Corporation as provided in Section 3(a) above shall be retired and thereupon
restored to the status of authorized but unissued shares of Preference Stock,
par value $0.10 per share, undesignated as to series.
(c) Notice of Redemption. The Corporation will provide notice, not less
than 35 nor more than 60 days prior to the date fixed for redemption, of any
call for redemption of Preference Shares to holders of record of the Preference
Shares to be redeemed. Such notice may be provided by mailing notice of such
redemption, first class postage prepaid, to the holders of record of the
Preference Shares at their respective addresses as the same shall appear on the
books of the Corporation or any transfer agent for the Preference Shares, or by
publishing notice thereof in The Wall Street Journal or The New York Times, or,
if neither such newspaper is then being published, any other daily newspaper of
national circulation (each, an "Authorized Newspaper"). If the Corporation
elects to provide such notice by publication, it shall also promptly mail notice
of such redemption to the holders of the Preference Shares to be redeemed. Each
such mailed or published notice shall state, as appropriate: (1) the redemption
date; (2) the number of Preference Shares 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 redemption; and (5)
that dividends on the Preference Shares to be redeemed will cease to accrue on
such redemption date unless default shall be made in providing the funds, at the
time and place specified in such notice. The Corporation's obligation to provide
funds in accordance with this Section 3 shall be deemed fulfilled if, on or
before the redemption date, the Corporation shall deposit, with a bank or trust
company having an office or agency in New York City and having a capital and
surplus of at least $50,000,000, funds necessary for such redemption, in trust
for the account of the holders of the shares to be redeemed (and so as to be and
continue to be available therefor), with irrevocable instructions and authority
to such bank or trust company that such shares and funds be delivered upon
redemption of the Preference Shares 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 three years from such redemption
date shall be repaid or released to the Corporation, after which the holder or
holders of Preference Shares so called for
- 25 -
redemption shall look only to the Corporation for payment of the redemption
price. Each holder of Preference Shares called for redemption shall surrender
the certificates evidencing such shares to the Corporation at the place
designated in such notice and shall thereupon be entitled to receive payment of
the redemption price. In case less than all of the shares represented by any
such surrendered certificate are redeemed, a new certificate shall be issued at
the expense of the Corporation representing the unredeemed shares. If such
notice of redemption shall have been duly given, and if on the date fixed for
redemption funds necessary for the redemption shall have been either set aside
by the Corporation separate and apart from its other funds or assets in trust
for the account of the holders of the shares so to be redeemed (and so as to be
and continue to be available therefor) or deposited with a bank or trust company
as provided above, then, notwithstanding that the certificates evidencing any
Preference Shares so called for redemption shall not have been surrendered, the
shares represented thereby so called for redemption shall be deemed no longer
outstanding, dividends with respect to the shares so called for redemption shall
cease to accrue after the date fixed for redemption and all rights with respect
to the shares so called for redemption shall forthwith after such date cease and
terminate, except for the right of the holders to receive the redemption price
without interest upon surrender of their certificates therefor. If less than all
of the outstanding Preference Shares are to be called for redemption, shares to
be redeemed shall be selected by the Corporation from outstanding Preference
Shares not previously called for redemption by lot or pro rata (as nearly as may
be) or by any other method determined by the Board of Directors of the
Corporation in its sole discretion to be equitable.
Section 4. Liquidation Rights. (a) In the event of any dissolution,
liquidation or winding up of the affairs of the Corporation, whether voluntary
or involuntary (collectively, a "Liquidation"), after payment or provision for
payment has been made of the debts and other liabilities of the Corporation and
payment or provision for payment has been made on all amounts required to be
paid in respect of all outstanding shares of Preferred Stock and any series of
Preference Stock or other class of stock of the Corporation or series thereof
ranking senior to the Preference Shares, the holders of Preference Shares shall
be entitled to receive, out of the net assets of the Corporation, for each share
$100 plus an amount equal to all Preferential Dividends (whether or not
declared) accrued and unpaid thereon (including dividends accumulated and
unpaid) prior to the date fixed for distribution, and no more. After such amount
is paid in full, no further distributions or payments shall be made in respect
of Preference Shares, such Preference Shares shall no longer be deemed to be
outstanding or be entitled to any other powers, preferences, rights or
privileges, including voting rights, and such Preference Shares shall be
surrendered for cancellation to the Corporation.
(b) The full amount payable to the holders of Preference Shares shall be
paid before any distribution shall be made to the holders of any class of common
stock of the Corporation or any other class of stock or series thereof ranking
junior to the Preference Shares with respect to the distribution of assets upon
a Liquidation. No payment on account of any Liquidation shall be made to the
holders of any class or series of stock ranking on a parity with the Preference
Shares in respect of the distribution of assets upon Liquidation unless there
shall likewise be paid at the same time to the holders of the Preference Shares
like proportionate amounts determined ratably in proportion to the full amounts
to which the holders of all outstanding Preference Shares and the holders of all
outstanding shares of such parity stock are respectively entitled with respect
to such distribution.
(c) If the assets distributable to the holders of Preference Shares on any
Liquidation shall be insufficient to permit the payment to such holders of the
full amounts to which they are entitled in such circumstances, then such assets
or the proceeds thereof shall be distributed among such holders ratably in
proportion to the sums which would be payable to such holders if all such sums
were paid in full.
(d) Neither the merger nor consolidation of the Corporation into or with
any other corporation, nor the merger or consolidation of any other corporation
into or with the Corporation, nor a sale, transfer or lease of all or any part
of the assets of the Corporation, shall be deemed to be a Liquidation for
purposes of this Section 4.
- 26 -
(e) Written notice of any Liquidation, stating the payment date or dates
when and the place or places where the amounts distributable in such
circumstances shall be payable, shall be given by first class mail, postage
prepaid, not less than thirty (30) days prior to any payment date stated
therein, to the holders of record of the Preference Shares at their respective
addresses as the same shall appear on the books of the Corporation or any
transfer agent for the Preference Shares.
Section 5. Voting Rights. (a) Except as otherwise provided by paragraphs (b)
and (c) of this Section 5 or as required by law, the holders of Preference
Shares shall not be entitled to vote on any matter on which the holders of any
voting securities of the Corporation shall be entitled to vote.
(b) So long as any Preference Shares are outstanding, the Corporation shall
not amend, alter or repeal any of the provisions of its Certificate of
Incorporation or this Certificate so as to alter or change the powers,
preferences or special rights of the Preference Shares so as to affect them
adversely without the consent of the holders of at least two-thirds of the total
number of outstanding Preference Shares, given in person or by proxy, by vote at
a meeting called for that purpose or by written consent as permitted by law and
the Certificate of Incorporation and By-Laws of the Corporation. For purposes of
this paragraph, any such amendment or any resolution or action of the Board of
Directors which would create or issue any series of Preference Stock out of the
authorized shares of Preference Stock, or which would authorize, create or issue
any shares of stock (whether or not already authorized) ranking junior to, on a
parity with or senior to the Preference Shares with respect to the payment of
dividends and distributions and distributions upon any Liquidation, shall not be
considered to affect adversely the rights of the outstanding Preference Shares.
(c) In the event that the Corporation shall have failed to declare and pay or
set apart for payment in full the Preferential Dividends accumulated on the
outstanding Preference Shares for any six quarterly dividend payment periods,
whether or not consecutive, and all such accumulated preferential dividends
remain unpaid (a "Preferential Dividend Default"), the number of directors of
the Corporation shall be increased by two and the holders of outstanding
Preference Shares, voting together as a class with all other series of
Preference Stock ranking junior to or on a parity with the Preference Shares
with respect to dividends and then entitled to vote on the election of such
directors, shall be entitled to elect such two additional directors until the
full dividends accumulated on all outstanding Preference Shares have been
declared and paid or set apart for payment. Upon the occurrence of a
Preferential Dividend Default, the Board of Directors of the Corporation shall
within a reasonable period call a special meeting of the holders of Preference
Shares and all other holders of a series of Preference Stock ranking junior to
or on a parity with the Preference Shares with respect to the payment of
dividends who are then entitled to participate in the election of such directors
for the purpose of electing the additional directors provided by the foregoing
provisions; provided that, in lieu of holding such meeting, the holders of
record of a majority of the outstanding Preference Shares and all other series
of Preference Stock ranking junior to or on a parity with the Preference Shares
with respect to the payment of dividends who are then entitled to participate in
the election of such directors may, by action taken by written consent as
permitted by law and the Corporation's Certificate of Incorporation and By-laws,
elect such additional directors. If and when all accumulated dividends on the
Preference Shares have been declared and paid or set aside for payment in full,
the holders of Preference Shares shall be divested of the special voting rights
provided by this paragraph, subject to revesting in the event of each and every
subsequent Preferential Dividend Default. Upon termination of such special
voting rights attributable to all holders of Preference Shares and any other
series of Preference Stock ranking junior to or on a parity with the Preference
Shares with respect to payment of dividends, the term of office of each director
elected by the holders of Preference Shares and such junior or parity stock
(hereinafter referred to as a "Preference Stock Director") pursuant to such
special voting rights shall forthwith terminate and the number of directors
constituting the entire Board of Directors shall be reduced by the number of
Preference Stock Directors. Any Preference Stock Director may be removed by, and
shall not be removed otherwise than by, the vote of the holders of record of a
majority of the outstanding Preference Shares and all other series of Preference
Stock ranking junior to or on a parity with the Preference Shares with respect
to the payment of dividends who were entitled to participate in such Preference
Stock Director's election, voting as a separate class, at a meeting called for
- 27 -
such purpose or by written consent as permitted by law and the Certificate of
Incorporation and By-laws of the Corporation. So long as a Preferential Dividend
Default shall continue, any vacancy in the office of a Preference Stock Director
may be filled by written consent of the Preference Stock Director remaining in
office or, if none remains in office, by vote of the holders of record of a
majority of the outstanding Preference Shares and all other series of Preference
Stock ranking on a parity with the Preference Shares with respect to the payment
of dividends who are then entitled to participate in the election of such
Preference Stock Directors as provided above. As long as a Preferential Dividend
Default shall continue, holders of Preference Shares shall not, as such
stockholders, be entitled to vote on the election or removal of directors other
than Preference Stock Directors, but shall not be divested of any other voting
rights provided to such stockholders by law with respect to any other matter to
be acted upon by the stockholders of the Corporation.
Section 6. Miscellaneous. (a) Subject to paragraph (c) of Section 3 above,
all notices referred to herein shall be in writing, and all notices hereunder
shall be deemed to have been given upon the earlier of receipt thereof or three
(3) business days after the mailing thereof if sent by registered mail (unless
first-class mail shall be specifically permitted for such notice under the terms
of this Certificate) with postage prepaid, addressed: if to the Corporation, to
its offices at 767 Fifth Avenue, New York, New York 10153 (Attention: Secretary)
or to the transfer agent for the Preference Shares, as provided by Section 6(e)
below, or other agent of the Corporation designated as permitted by this
Certificate, or, if to any holder of the Preference Shares, to such holder at
the address of such holder as listed in the stock record books of the
Corporation (which may include the records of any transfer agent for the
Preference Shares if appropriate); or to such other address as the Corporation
or holder, as the case may be, shall have designated by notice similarly given.
(b) In the event a holder of Preference Shares shall not by written notice
designate the name to whom payment upon redemption of Preference Shares should
be made or the address to which the certificate or certificates representing
such shares, or such payment, should be sent, the Corporation shall be entitled
to register such shares, and make such payment, in the name of the holder of
such Preference Shares as shown on the records of the Corporation and to send
the certificate or certificates representing such shares, or such payment, to
the address of such holder shown on the records of the Corporation.
(c) All payments in the form of dividends and distributions and distributions
upon any Liquidation or otherwise made upon the Preference Shares and any other
shares of stock ranking on a parity with the Preference Shares with respect to
such dividend or distribution shall be made pro rata, so that amounts paid per
share on the Preference Shares and such other shares of stock shall in all cases
bear to each other the same ratio that the required dividends, distributions or
payments, as the case may be, payable per share on the Preference Shares and
such other shares of stock bear to each other.
(d) In respect of the payment of dividends and distributions and
distributions upon a Liquidation, the Preference Shares shall rank junior to the
Preferred Stock of the Corporation, on a parity with the Series E-I Preference
Stock, the Series A Conversion Preference Stock, the Series B Preference Stock,
the Series C Convertible Preference Stock and the Series D Preference Stock as
authorized and existing at the time Preference Shares are first issued and
junior to any other series of Preference Stock unless it shall be stated in the
resolution or resolutions providing for the issue of such series of Preference
Stock that the Preference Shares shall rank senior to or on a parity with such
series of Preference Stock.
(e) The Corporation may appoint, and from time to time discharge and change,
a transfer agent for the Preference Shares. The initial transfer agent,
registrar and dividend disbursing agent for the Preference Shares is First
Chicago Trust Company of New York.
- 28 -
Appendix D
CERTIFICATE OF DESIGNATIONS
OF
SERIES H 6.25% AUTOMATICALLY CONVERTIBLE
PREFERENCE STOCK
OF
GENERAL MOTORS CORPORATION
PURSUANT TO SECTION 151
OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
General Motors Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY that, in accordance with the provisions of Section 151 of such
law and pursuant to Article Fourth of the Restated Certificate of Incorporation,
as amended, of the Corporation (the "Certificate of Incorporation"), the Board
of Directors (the "Board of Directors") of the Corporation is authorized to
issue Preference Stock, par value $0.10 per share, of the Corporation in one or
more series and has authorized the series of Preference Stock hereinafter
provided for and authorized a special committee of the Board of Directors to
adopt, and said committee has adopted, the following resolution creating a
series of 2,669,633 shares of Preference Stock, par value $0.10 per share,
stated value $561.875 per share, designated as Series H 6.25% Automatically
Convertible Preference Stock, as follows:
RESOLVED, that, pursuant to the authority vested in the Board of Directors
of the Corporation in accordance with the provisions of its Certificate of
Incorporation, a series of Preference Stock of the Corporation be, and hereby
is, created and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional or other special rights of the
shares of such series, and the qualifications, limitations or restrictions
thereon, are as follows:
Section 1. Designation. The series of Preference Stock established hereby
shall be designated as "Series H 6.25% Automatically Convertible Preference
Stock" (the shares of such series are hereinafter referred to as the "Series H
Preference Shares") and the authorized number of Series H Preference Shares
shall be 2,669,633.
- 29 -
Section 2. Ranking. In respect of the payment of dividends or the making
of other distributions in respect of the Series H Preference Shares, including,
without limitation, upon a Liquidation (as defined in Section 4 below), the
Series H Preference Shares shall rank junior to the Preferred Stock, on a parity
with the Series D 7.92% Preference Stock and the Series G 9.12% Preference Stock
of the Corporation, and junior to any other series of Preference Stock hereafter
issued unless and only to the extent that it shall be stated in the resolution
or resolutions providing for the issuance or amendment of such series of
Preference Stock that the Series H Preference Shares shall rank senior to or on
a parity with such series of Preference Stock.
Section 3. Dividends.
(i) Holders of outstanding Series H Preference Shares will be
entitled to receive, subject to the rights of holders of Preferred Stock of the
Corporation and of holders of any series of Preference Stock or other class of
stock of the Corporation or series thereof ranking senior to the Series H
Preference Shares in respect of dividends and distributions, when and as
declared by the Board of Directors out of funds legally available therefor,
cumulative cash dividends at the per share annual rate of 6.25% of the per share
stated value (equivalent to $35.1172 per annum per Series H Preference Share)
("Preferential Dividends"), payable quarterly for each of the quarters ending
March, June, September and December of each year, payable in arrears on the
first day that is not a legal holiday of each succeeding May, August, November
and February, respectively (each such date being hereinafter referred to as a
"Preferential Dividend Payment Date"). The first dividend will be paid on August
2, 1999 with respect to the period commencing on June 24, 1999 and ending on
June 30, 1999. The full amount of dividends payable on each Series H Preference
Share for each full quarterly period thereafter shall be computed by dividing
the annual dividend rate by four. Each such dividend will be payable to holders
of record as they appear on the stock books of the Corporation on such record
dates, not less than 10 nor more than 50 days preceding the payment dates
thereof, as shall be fixed by the Board of Directors (each, a "Dividend Record
Date"). Dividends on the Series H Preference Shares shall accrue on a daily
basis commencing on the date of issuance of the Series H Preference Shares and
accrued dividends for each quarterly dividend period shall accumulate, to the
extent not paid, on the Preferential Dividend Payment Date first following the
quarter for which they accrue. Preferential Dividends shall accrue whether or
not the Corporation shall have earnings, whether or not there shall be funds
legally available for the payment of such dividends and whether or not such
dividends are declared. Accumulated dividends shall not bear interest. Dividends
(or cash amounts equal to accrued and unpaid dividends) payable on the Series H
Preference Shares for any period longer or shorter than a quarterly dividend
period shall be computed on the basis of a 360-day year of twelve 30-day months.
(ii) So long as any Series H Preference Shares shall remain
outstanding, no dividend (other than a dividend payable in shares of common
stock of any class of the Corporation) shall be declared, nor shall the
Corporation make any other distribution or payment or set aside anything of
value for distribution or payment on, or redeem, repurchase or otherwise acquire
any shares of, the common stock of any class of the Corporation or any other
class of stock or series thereof ranking junior to the Series H Preference
Shares in the payment of dividends (other than a redemption or purchase of
shares of any class of common stock of the Corporation made for purposes of an
employee incentive or benefit plan of the Corporation or
- 30 -
any of its subsidiaries) unless the full Preferential Dividends, if any,
accumulated on all outstanding shares of the Series H Preference Shares through
all past Preferential Dividend Payment Dates shall have been paid. No dividend
shall be declared on any share or shares of any class of stock of the
Corporation or series thereof ranking on a parity with the Series H Preference
Shares in respect of payment of dividends for any prior dividend payment period
of said parity stock unless there shall have been declared on all shares then
outstanding of the Series H Preference Shares, for all dividend payment periods
of the Series H Preference Shares terminating with or before such prior dividend
payment period of said parity stock, like proportionate dividends determined
ratably in proportion to the respective Preferential Dividends accumulated to
date on all outstanding Series H Preference Shares and the preferential
dividends accumulated on all outstanding shares of said parity stock.
Section 4. Liquidation Rights.
(i) In the event of any dissolution, liquidation or winding up of
the affairs of the Corporation, whether voluntary or involuntary (collectively,
a "Liquidation"), after payment or provision for payment has been made of the
debts and other liabilities of the Corporation and payment or provision for
payment has been made for all amounts required to be paid in respect of all
outstanding shares of Preferred Stock and any series of Preference Stock or
other class of stock of the Corporation or series thereof ranking senior to the
Series H Preference Shares, the holders of Series H Preference Shares shall be
entitled to receive, out of the net assets of the Corporation, for each share
$561.875 plus an amount equal to all Preferential Dividends (whether or not
declared) accrued and unpaid thereon (including dividends accumulated and
unpaid) prior to the date fixed for distribution, and no more. After such amount
is paid in full, no further distributions or payments shall be made in respect
of Series H Preference Shares, such Series H Preference Shares shall no longer
be deemed to be outstanding or be entitled to any other powers, preferences or
rights, including voting rights, and such Series H Preference Shares shall be
surrendered for cancellation to the Corporation.
(ii) The full amount payable to the holders of Series H Preference
Shares shall be paid before any distribution shall be made to the holders of any
class of common stock of the Corporation or any other class of stock or series
thereof ranking junior to the Series H Preference Shares with respect to the
distribution of assets upon a Liquidation. No payment on account of any
Liquidation shall be made to the holders of any class or series of stock ranking
on a parity with the Series H Preference Shares in respect of the distribution
of assets upon Liquidation unless there shall likewise be paid at the same time
to the holders of the Series H Preference Shares like proportionate amounts
determined ratably in proportion to the full amounts to which the holders of all
outstanding Series H Preference Shares and the holders of all outstanding shares
of such parity stock are respectively entitled with respect to such
distribution.
(iii) If the assets distributable to the holders of Series H
Preference Shares on any Liquidation shall be insufficient to permit the payment
to such holders of the full amounts to which they are entitled in such
circumstances, then such assets or the proceeds thereof shall be distributed
among such holders ratably in proportion to the sums which would be payable to
such holders if all such sums were paid in full.
- 31 -
(iv) Neither the merger nor consolidation of the Corporation into or
with any other corporation, nor the merger or consolidation of any other
corporation into or with the Corporation, nor a sale, transfer or lease of all
or any part of the assets of the Corporation, shall be deemed to be a
Liquidation for purposes of this Section 4.
(v) Written notice of any Liquidation, stating the payment date or
dates when and the place or places where the amounts distributable in such
circumstances shall be payable, shall be given by first class mail, postage
prepaid, not less than thirty (30) days prior to any payment date stated
therein, to the holders of record of the Series H Preference Shares at their
respective addresses as the same shall appear on the books of the Corporation or
any transfer agent for the Series H Preference Shares.
Section 5. Voting Rights.
(i) Except as otherwise provided by paragraphs (ii) and (iii) of
this Section 5 or as required by law, the holders of Series H Preference Shares
shall not be entitled to vote on any matter on which the holders of any voting
securities of the Corporation shall be entitled to vote.
(ii) So long as any Series H Preference Shares are outstanding, the
Corporation shall not amend, alter or repeal any of the provisions of its
Certificate of Incorporation or this Certificate so as to alter or change the
powers, preferences or special rights of the Series H Preference Shares so as to
affect them adversely without the consent of the holders of at least two-thirds
of the total number of outstanding Series H Preference Shares, given in person
or by proxy, by vote at a meeting called for that purpose or by written consent
as permitted by law and the Certificate of Incorporation and By-Laws of the
Corporation. For purposes of this paragraph, any such amendment or any
resolution or action of the Board of Directors which would create or issue any
series of Preference Stock out of the authorized shares of Preference Stock, or
which would authorize, create or issue any shares of stock (whether or not
already authorized) ranking junior to, on a parity with or senior to the Series
H Preference Shares with respect to payment of dividends and distributions and
distributions upon any Liquidation, shall not be considered to affect adversely
the rights of the outstanding Series H Preference Shares.
(iii) In the event that the Corporation shall have failed to declare
and pay or set apart for payment in full the Preferential Dividends accumulated
on the outstanding Series H Preference Shares for any six quarterly dividend
payment periods, whether or not consecutive, and all such accumulated
preferential dividends remain unpaid (a "Preferential Dividend Default"), the
number of directors of the Corporation shall be increased by two and the holders
of outstanding Series H Preference Shares, voting together as a class with all
other series of Preference Stock ranking junior to or on a parity with the
Series H Preference Shares with respect to dividends and then entitled to vote
on the election of such directors (including, without limitation, the Series D
7.92% Preference Stock of the Corporation and the Series G 9.12% Preference
Stock of the Corporation), shall be entitled to elect such two additional
directors until the full dividends accumulated on all outstanding Series H
Preference Shares have been declared and paid or set apart for payment. Upon the
occurrence of a Preferential Dividend Default, the Board of Directors of the
Corporation shall within a reasonable period call a special meeting of the
holders of Series H Preference Shares and all other holders of a series of
Preference Stock ranking junior to or on a parity with the Series H Preference
Shares with respect to dividends who are then entitled to participate in the
election of such directors for the purpose of electing the additional directors
provided by the foregoing provisions; provided that, in lieu of holding such
meeting, the holders of record of a majority of the outstanding Series H
Preference Shares and all other series of Preference Stock ranking junior to or
on a parity with the Series H Preference Shares with respect to the payment of
dividends who are then entitled to participate in the election of such directors
may, by action taken by written consent as permitted by law and the
Corporation's Certificate of Incorporation and By-laws, elect such additional
directors. If and when all accumulated dividends on the Series H Preference
Shares have been declared and paid or set aside for payment in full, the holders
of Series H Preference Shares shall be divested of the special voting rights
provided by this paragraph, subject to revesting in the event of each and every
subsequent Preferential Dividend Default. Upon termination of such special
voting rights attributable to all holders of Series H Preference Shares and all
other series of Preference Stock ranking junior to or on a parity with the
Series H Preference Shares with respect to the payment of dividends, the term of
office of each director elected by the holders of Series H Preference Shares and
such junior or parity stock (hereinafter referred to as a "Preference Stock
Director") pursuant to such special voting rights shall forthwith terminate and
the number of directors constituting the entire Board of Directors shall be
reduced by the number of Preference Stock Directors. Any Preference Stock
Director may be removed by, and shall not be removed otherwise than by, the vote
of the holders of record of a majority of the outstanding Series H Preference
Shares and all other series of Preference Stock ranking junior to or on a parity
with the Series H Preference Shares with respect to the payment of dividends who
were entitled to participate in such Preference Stock Director's election,
voting as a separate class, at a meeting called for such purpose or by written
consent as permitted by law and the Certificate of Incorporation and By-laws of
the Corporation. So long as a Preferential Dividend Default shall continue, any
vacancy in the office of a Preference Stock Director may be filled by written
consent of the Preference Stock Director remaining in office or, if none remains
in office, by vote of the holders of record of a majority of the outstanding
Series H Preference Shares and all other series of Preference Stock ranking
junior to or on a parity with the Series H Preference Shares with respect to the
payment of dividends who are then entitled to participate in the election of
such Preference Stock Directors as provided above. Holders of Series H
Preference Shares shall not, as such stockholders, be entitled to vote on the
election or removal of directors, other than Preference Stock Directors for so
long as a Preferential Dividend Default shall continue, but shall not be
divested of any other voting rights provided to such stockholders by law with
respect to any other matter to be acted upon by the stockholders of the
Corporation.
Section 6. Conversion.
(i) Mandatory Conversion. Subject to Sections 6(xii) and 7, unless
earlier converted or redeemed or otherwise cancelled pursuant to this
Certificate, on June 24, 2002 (the "Mandatory Conversion Date"), each
outstanding Series H Preference Share shall convert automatically (the
"Mandatory Conversion") into (a) shares of Class H Common Stock, par value $0.10
per share, of the Corporation ("Class H Common Stock") at the Exchange Rate (as
defined in Section 13) in effect on the Mandatory Conversion Date and (b) the
right to receive, out of funds legally available therefor, an amount in cash
equal to all accrued and unpaid dividends on such Series H Preference Share to
(but not including) the Mandatory Conversion Date, whether or not earned or
declared. As of the open of business on the Mandatory Conversion Date,
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dividends on the Series H Preference Shares shall cease to accrue and the Series
H Preference Shares shall cease to be outstanding. The Corporation shall make
such arrangements as it deems appropriate for the issuance of certificates
representing, or other evidence of ownership of, shares of Class H Common Stock,
and for the payment of cash in respect of accrued and unpaid dividends on the
Series H Preference Shares, if any, and cash in lieu of fractional shares of
Class H Common Stock, if any, in exchange for and contingent upon surrender of
certificates representing the Series H Preference Shares, and the Corporation
may defer the payment of dividends on such shares of Class H Common Stock and
the voting thereof until, and make such payment and voting contingent upon, the
surrender of such certificates representing the Series H Preference Shares,
provided that the Corporation shall give the holders of the Series H Preference
Shares such notice of any such actions as the Corporation deems appropriate and
upon such surrender such holders shall be entitled to receive such dividends
declared and paid on such shares of Class H Common Stock subsequent to the
Mandatory Conversion Date. Amounts payable in cash in respect of the Series H
Preference Shares or in respect of such shares of Class H Common Stock shall not
bear interest.
(ii) Optional Conversion. Subject to Sections 6(xii) and 7, all or
any portion of the Series H Preference Shares are convertible, at the option of
the holder thereof (an "Optional Conversion"), at any time prior to the earlier
to occur of (A) the effective date of an amendment to or a change (including an
announced prospective change that remains legally viable) in a law or
interpretation thereof referred to in the definition of Tax Event or (B) the
Mandatory Conversion Date, into shares of Class H Common Stock at a rate of
8.0645 shares of Class H Common Stock for each Series H Preference Share (the
"Optional Conversion Rate"), subject to adjustment as set forth in Sections
6(iii) and (iv) below.
An Optional Conversion of Series H Preference Shares may be effected
by delivering certificates evidencing such shares, together with written notice
of conversion and a proper assignment of such certificates to the Corporation or
in blank to the office of the Secretary of the Corporation and otherwise in
accordance with any optional conversion procedures established by the
Corporation. Subject to Section 6(xii), each Optional Conversion shall be deemed
to have been effected immediately prior to the close of business on the date on
which the foregoing requirements shall have been satisfied; provided that an
Optional Conversion shall not be effective if the effective date or proposed
effective date of an amendment to or change (including an announced prospective
change) that remains legally viable in a law or the interpretation thereof
referred to in the definition of Tax Event shall have occurred on or prior to
the date of such Optional Conversion. The Optional Conversion shall be at the
Optional Conversion Rate in effect at such time and on such date. Upon the
effectiveness of an Optional Conversion, the Series H Preference Shares so
converted shall no longer be deemed to be outstanding.
Holders of Series H Preference Shares at the close of business on a
Dividend Record Date shall be entitled to receive the dividend payable on such
shares on the corresponding Dividend Payment Date notwithstanding the Optional
Conversion of such shares following such Dividend Record Rate and prior to such
Dividend Payment Date. Except as
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provided above, upon any Optional Conversion of Series H Preference Shares, the
Corporation shall make no payment or allowance for accrued and unpaid
Preferential Dividends, whether or not in arrears, on such Series H Preference
Shares as to which Optional Conversion has been effected; provided, however,
that in connection with an Optional Conversion effected in accordance with
Section 6(iv)(c), the holders of Series H Preference Shares converted into Class
H Common Stock pursuant to such Optional Conversion shall be entitled to receive
payment for accrued and unpaid Preferential Dividends, whether or not in
arrears, on such Series H Preference Shares as to which such Optional Conversion
has been effected to, but not including, the effective date of such Optional
Conversion.
(iii) Certain Adjustments. The terms of the Series H Preference
Shares, including without limitation the Exchange Rate and the Optional
Conversion Rate, shall be subject to adjustment from time to time as provided
below in this Section 6(iii).
(a) If the Corporation shall, after the date hereof, pay or
make a dividend or other distribution with respect to its Class H
Common Stock in shares of Class H Common Stock (including by way of
reclassification of any shares of its Class H Common Stock), the
Exchange Rate and the Optional Conversion Rate in effect as of the
open of business on the day following the date on which such
dividend is paid or other distribution is made, as applicable, shall
each be increased by multiplying such Exchange Rate and Optional
Conversion Rate by a fraction of which the numerator shall be the
sum of the number of shares of Class H Common Stock outstanding at
the time and date fixed for the determination of stockholders
entitled to receive such dividend or other distribution, plus the
total number of shares of Class H Common Stock constituting such
dividend or other distribution, and of which the denominator shall
be the number of shares of Class H Common Stock outstanding at the
time and date fixed for such determination, such increase to become
effective immediately after the open of business on the day
following the date on which such dividend is paid or distribution is
made, as applicable; provided that, in the event that the Mandatory
Conversion Date occurs, any Optional Conversion is effected in
accordance with Section 6(ii) or any Tax Redemption is effected
pursuant to Section 7 after the record date for the determination of
stockholders entitled to receive such dividend or distribution but
before such dividend is paid or distribution is made, then as soon
as reasonably practicable following the making of such dividend or
distribution the Corporation shall deliver to the holder of the
Series H Preference Shares so converted or redeemed such number of
shares of Class H Common Stock, if any, so that (giving effect to
such delivery of shares of Class H Common Stock) such Mandatory
Conversion, Optional Conversion or Tax Redemption was effected at an
Exchange Rate or Optional Conversion Rate, as applicable, which
reflects the adjustments provided for in this paragraph (iii)(a).
(b) In case outstanding shares of Class H Common Stock shall,
after the date hereof, be subdivided or split into a greater number
of shares of Class H Common Stock (other than as described in
paragraph (iii)(a) above), the Exchange Rate and the Optional
Conversion Rate in effect as of the open of business on the
- 34 -
day following the day upon which such subdivision or split becomes
effective shall each be proportionately increased, and, conversely,
in case outstanding shares of Class H Common Stock shall be combined
into a smaller number of shares of Class H Common Stock, the
Exchange Rate and the Optional Conversion Rate in effect as of the
open of business on the day following the day upon which such
combination becomes effective shall each be proportionately reduced,
such increases or reductions, as the case may be, to become
effective immediately after the open of business on the day
following the day upon which such subdivision, split or combination
becomes effective.
(c) If the Corporation shall, after the date hereof, issue
rights or warrants to all holders of its Class H Common Stock
entitling them (for a period not exceeding 180 days from the date of
such issuance) to subscribe for or purchase shares of Class H Common
Stock at a price per share less than the Fair Market Value of the
Class H Common Stock on the record date for the determination of
stockholders entitled to receive such rights or warrants, then in
each case the Exchange Rate and the Optional Conversion Rate shall
each be adjusted by multiplying the Exchange Rate and the Optional
Conversion Rate in effect on such record date by a fraction of which
the numerator shall be the Class H Dividend Base on such record date
plus the number of additional shares of Class H Common Stock
actually delivered in connection with the exercise of such rights or
warrants, and of which the denominator shall be the Class H Dividend
Base on such record date plus the number of shares of Class H Common
Stock which the aggregate price received in payment for the total
number of shares of Class H Common Stock actually delivered in
connection with the exercise of such rights or warrants would
purchase at such Fair Market Value (determined by multiplying such
total number of shares by the exercise price of such rights or
warrants and dividing the product so obtained by such Fair Market
Value). Such adjustment shall become effective as of the open of
business on the business day next following the date on which such
rights or warrants expire; provided that, in the event that the
Mandatory Conversion Date occurs, any Optional Conversion is
effected in accordance with Section 6(ii) or any Tax Redemption is
effected pursuant to Section 7 after the record date for the
determination of stockholders entitled to receive such rights and
warrants but before such adjustment shall become effective, then as
soon as reasonably practicable following the effectiveness of such
adjustment either the Corporation shall deliver to the holder of the
Series H Preference Shares so converted or redeemed, or such holder
shall return to the Corporation, as applicable, such number of
shares of Class H Common Stock, if any, so that (giving effect to
such transfer of shares of Class H Common Stock) such Mandatory
Conversion, Optional Conversion or Tax Redemption was effected at an
Exchange Rate or Optional Conversion Rate, as applicable, which
reflects the adjustments provided for in this paragraph (iii)(c).
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(d) (I) Except as provided in paragraph (d)(II) below, if the
Corporation shall, after the date hereof, pay a dividend or make a
distribution to all holders of its Class H Common Stock consisting
of evidences of its indebtedness, securities, or other assets
(including shares of capital stock of the Corporation other than
Class H Common Stock but excluding (A) any cash dividends or
distributions, (B) any dividends or other distributions referred to
in paragraphs (a) or (b) above and (C) any dividends or other
distributions referred to in paragraph (d)(II) below), or shall
issue to all holders of its Class H Common Stock rights or warrants
to subscribe for or purchase any of its securities (other than those
referred to in paragraph (c) above), then in each such case the
Exchange Rate and the Optional Conversion Rate shall each be
adjusted by multiplying the Exchange Rate and the Optional
Conversion Rate in effect on the payment or distribution date, as
applicable, for such dividend or distribution, or the issue date of
such rights or warrants, as the case may be, by a fraction of which
the numerator shall be the Fair Market Value per share of the Class
H Common Stock on such payment, distribution or issue date, and of
which the denominator shall be such Fair Market Value per share of
Class H Common Stock less the fair market value (as determined by
the Board of Directors of the Corporation, whose determination shall
be conclusive) as of such payment, distribution or issue date of the
portion of the evidences of indebtedness or assets so distributed,
or of such subscription rights or warrants, applicable to one share
of Class H Common Stock. Such adjustment shall become effective as
of the open of business on the business day next following the
payment, distribution or issue date for such dividend, distribution
or issuance, as the case may be; provided that, in the event that
the Mandatory Conversion Date occurs, any Optional Conversion is
effected in accordance with Section 6(ii) or any Tax Redemption is
effected pursuant to Section 7 after the record date for the
determination of the stockholders entitled to participate in such
dividend, distribution or issuance but before such adjustment shall
become effective, then as soon as reasonably practicable following
the effectiveness of such adjustment either the Corporation shall
deliver to the holder of the Series H Preference Shares so converted
or redeemed, or such holder shall return to the Corporation, as
applicable, such number of shares of Class H Common Stock, if any,
so that (giving effect to such transfer of shares of Class H Common
Stock) such Mandatory Conversion, Optional Conversion or Tax
Redemption was effected at an Exchange Rate or Optional Conversion
Rate, as applicable, which reflects the adjustments as provided in
this paragraph (iii)(d)(I).
(II) Unless the Corporation shall elect to apply the
provisions of Section 6(iv)(a) to such transaction, then,
notwithstanding Section 6(iv)(a), if the Corporation shall, after
the date hereof, (A) pay a dividend or make a distribution to
holders of its Class H Common Stock consisting of shares of common
stock of or other equity interests (collectively, "Equity Units") in
a subsidiary or other Affiliate of the Corporation which holds,
directly or indirectly, any assets held,
- 36 -
directly or indirectly, by Hughes Electronics Corporation ("Hughes")
or its subsidiaries ("Spinco"), or (B) exchange Equity Units in
Spinco for outstanding shares of Class H Common Stock on a pro rata
basis (whether through an exchange of Equity Units, by merger or
otherwise), then the Corporation shall make a distribution to all
Persons who were holders of Series H Preference Shares as of the
record date for the determination of stockholders entitled to
participate in such dividend, distribution or exchange consisting of
automatically convertible preference shares of Spinco (the "Spinco
Preference Shares") that satisfy the requirements set forth in the
following sentence. The Spinco Preference Shares received in such
distribution or exchange in respect of Series H Preference Shares
(1) shall have a liquidation preference and a stated value per share
equal in amount to the product of the liquidation preference or
stated value, as applicable, of a Series H Preference Share at such
time and a fraction (the "Adjustment Ratio"), the numerator of which
shall be equal to the aggregate fair market value of the Equity
Units in Spinco paid or distributed in respect of or exchanged for
one share of Class H Common Stock as of the date immediately prior
to the record date (the "Spinoff Record Date") for determining the
holders entitled to receive such shares in such distribution or
exchange (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive) and the
denominator of which shall be equal to the Fair Market Value of one
share of Class H Common Stock as of such date, (2) shall accrue a
preferential dividend at an annual rate equal to 6.25% of the stated
value per Spinco Preference Share, (3) shall be convertible at the
option of the holder at any time prior to the Mandatory Conversion
Date into a number of Equity Units in Spinco equal to the product
obtained by multiplying (x) the Optional Conversion Rate by (y) the
number of Equity Units in Spinco paid or distributed in respect of
or exchanged for one share of Class H Common Stock (the "Spinco
Equivalent Shares"), (4) for purposes of determining the exchange
rate applicable to a mandatory conversion of the Spinco Preference
Shares, (A) shall have a "threshold price" and an "initial price"
that are equal to the amount obtained by dividing (x) the product
obtained by multiplying the Threshold Price (as defined and used in
the definition of "Exchange Rate") and the Initial Price, as the
case may be, by the Adjustment Ratio by (y) the number of Spinco
Equivalent Shares and (B) shall convert on the Mandatory Conversion
Date into a number of Spinco Equity Units equal to the product of
the Exchange Rate and the number of Spinco Equivalent Shares and (5)
shall have such other terms and conditions (including, without
limitation, conditions relating to the conversion thereof) as are
comparable to the terms and conditions of the Series H Preference
Shares. Immediately after the distribution of such Spinco Preference
Shares shall have become effective, the liquidation preference,
Threshold Price (as defined and used in the definition of "Exchange
Rate"), Initial Price and stated value for each Series H Preference
Share shall be reduced so that such amount shall be equal to the
product obtained by multiplying such amount by the difference
obtained by subtracting the Adjustment Ratio from one (1).
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Notwithstanding any provision in this Section 6(iii)(d)(II) to
the contrary, if the Corporation shall (A) pay a dividend or make a
distribution to holders of its Class H Common Stock consisting of
Equity Units in a subsidiary or other Affiliate of the Corporation
holding, directly or indirectly, assets of Hughes or its
subsidiaries, which subsidiary or other Affiliate (together with
such subsidiary's or other Affiliate's subsidiaries) has a fair
market value (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive) as of the date
of such dividend or distribution representing less than 25% of the
fair market value (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive) of Hughes and
its subsidiaries immediately prior to the date of such dividend or
distribution ("Lesser Spinco"), or (B) exchange Equity Units in
Lesser Spinco for outstanding shares of Class H Common Stock on a
pro rata basis (whether through an exchange of Equity Units, by
merger or otherwise), then, at the Corporation's option, either (1)
the Corporation shall make a distribution consisting of
automatically convertible preference shares of Lesser Spinco in
accordance with this paragraph (d)(II) to all Persons who were
holders of Series H Preference Shares as of the record date for the
determination of stockholders entitled to participate in such
dividend, distribution or exchange or (2) in lieu thereof, such
dividend, distribution or exchange shall be treated as a dividend or
distribution pursuant to paragraph (d)(I) above, and the Exchange
Rate and Optional Conversion Rate shall be adjusted in accordance
with such paragraph.
Notwithstanding any provision in this Section 6(iii)(d)(II) to
the contrary, if the Corporation shall (A) pay a dividend or make a
distribution to holders of its Class H Common Stock consisting of
Equity Units in a subsidiary or other Affiliate of the Corporation
holding, directly or indirectly, assets of Hughes or its
subsidiaries, which subsidiary or other Affiliate (together with
such subsidiary's or other Affiliate's subsidiaries) has a fair
market value (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive) as of the date
of such dividend or distribution representing 75% or more of the
fair market value (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive) of Hughes and
its subsidiaries immediately prior to the date of such dividend or
distribution ("Greater Spinco"), or (B) exchange Equity Units in
Greater Spinco for outstanding shares of Class H Common Stock on a
pro rata basis (whether through an exchange of Equity Units, by
merger or otherwise), then, in lieu of applying the other provisions
of this paragraph (d)(II), the Corporation may elect to make a
distribution consisting of automatically convertible preference
shares of Greater Spinco ("Greater Spinco Preference Shares") to all
Persons who were holders of Series H Preference Shares as of the
record date for the determination of stockholders entitled to
participate in such dividend, distribution or exchange, which shares
(1) shall have a liquidation preference, stated value and an annual
dividend rate equal to the liquidation preference, stated value and
the annual dividend rate of the Series H Preference Shares, (2)
shall have an optional conversion rate and exchange rate
- 38 -
that shall be equal to the product of (x) the Optional Conversion
Rate or the Exchange Rate, as the case may be, and (y) a fraction,
the numerator of which shall be equal to the Fair Market Value of
one share of Class H Common Stock as of the Spinoff Record Date and
the denominator of which shall be equal to the aggregate fair market
value of the Spinco Equivalent Shares (the "Greater Spinco
Adjustment Ratio"), (3) for purposes of determining the exchange
rate applicable to a mandatory conversion of the Greater Spinco
Preference Shares, the "threshold price" and the "initial price"
shall be equal to the quotient obtained by dividing the Threshold
Price or the Initial Price, as the case may be, by the Greater
Spinco Adjustment Ratio, and (4) shall have such other terms and
conditions (including, without limitation, conditions relating to
the conversion thereof) as are comparable to the terms and
conditions of the Series H Preference Shares. In the event that the
Corporation distributes the Greater Spinco Preference Shares to the
holders of the Series H Preference Shares, all Series H Preference
Shares shall cease to be outstanding and shall automatically be
canceled, and each holder of a certificate previously evidencing any
such Series H Preference Shares shall cease to have any rights with
respect thereto, except the right to receive the Greater Spinco
Preference Shares in accordance with this paragraph (d)(II).
(e) In case the Corporation shall, after the date hereof, by
dividend or otherwise, distribute to all holders of its Class H
Common Stock cash (excluding any cash that is distributed in a
transaction to which Section 6(iv) applies) in an aggregate amount
that, combined together with (1) the aggregate amount of any other
such distributions to all holders of its Class H Common Stock made
exclusively in cash within the 12 months preceding the date of
payment of such distribution and in respect of which no adjustment
pursuant to this Section 6(iii)(e) or Section 6(iii)(f) has been
made and (2) the excess of (i) the aggregate amount of consideration
(including any cash plus the fair market value (as determined by the
Board of Directors of the Corporation, whose determination shall be
conclusive and described in a resolution of the Board of Directors)
of any non-cash consideration) payable in respect of any voluntary
tender or exchange offer by the Corporation or any of its
subsidiaries for all or any portion of the Class H Common Stock
concluded within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to this
Section 6(iii)(e) or Section 6(iii)(f) has been made over (ii) the
Fair Market Value of the shares being so purchased at the time of
such purchase, exceeds 12.5% of the product of (A) the Current
Market Price per share of the Class H Common Stock on the date for
the determination of holders of shares of Class H Common Stock
entitled to receive such distribution and (B) the number of shares
of Class H Common Stock outstanding on such date (such excess being
referred to herein as the "Excess Amount"), then, and in each such
case, immediately after the close of business on such date for
determination, each of the Exchange Rate and the Optional Conversion
Rate shall be increased so that the Exchange Rate and the Optional
Conversion Rate shall equal the rate determined by dividing the
Exchange Rate and the Optional Conversion Rate, respectively, in
effect
- 39 -
immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such
distribution by a fraction (1) the numerator of which shall be equal
to the Current Market Price per share of the Class H Common Stock on
the date fixed for such determination less an amount equal to the
quotient of (x) the Excess Amount and (y) the number of shares of
Class H Common Stock outstanding on such date for determination and
(2) the denominator of which shall be equal to the Current Market
Price per share of the Class H Common Stock on such date for
determination. Notwithstanding anything in this paragraph to the
contrary, no adjustment to the Exchange Rate or Optional Conversion
Rate shall be made pursuant to this paragraph if such an adjustment
is required by and made pursuant to the terms of any other provision
of this Certificate.
(f) In case a tender or exchange offer made by the Corporation
or any subsidiary of the Corporation after the date hereof for all
or any portion of the Class H Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof)
shall require the payment to stockholders of aggregate consideration
having a fair market value (as determined by the Board of Directors
of the Corporation, whose determination shall be conclusive and
described in a resolution of the Board of Directors) in excess of
the Fair Market Value of the shares being so purchased at the time
of such purchase, and such excess, combined together with (1) the
excess of (i) the aggregate amount of consideration (including any
cash plus the fair market value (as determined by the Board of
Directors of the Corporation, whose determination shall be
conclusive and described in a resolution of the Board of Directors)
of any non-cash consideration) payable in respect of any tender or
exchange offer by the Corporation or any of its subsidiaries for all
or any portion of the Class H Common Stock concluded within the 12
months preceding the expiration of such tender or exchange offer and
in respect of which no adjustment pursuant to Section 6(iii)(e) or
this Section 6(iii)(f) has been made over (ii) the Fair Market Value
of the shares being so purchased at the time of such purchase and
(2) the aggregate amount of any distributions to all holders of the
Corporation's Class H Common Stock made exclusively in cash
(excluding cash distributions in accordance with Section 6(iv)
below) within the 12 months preceding the expiration of such tender
or exchange offer and in respect of which no adjustment pursuant to
Section 6(iii)(e) or this Section 6(iii)(f) has been made, exceeds
12.5% of the product of (A) the Current Market Price per share of
the Class H Common Stock as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or exchange
offer (as it may be amended) and (B) the number of shares of Class H
Common Stock outstanding (including any tendered shares) on the
Expiration Time (such excess being referred to herein as the
"Exchange Excess Amount") then, and in each such case, immediately
prior to the open of business on the day after the date of the
Expiration Time, the Exchange Rate and the Optional Conversion Rate
shall be adjusted so that the Exchange Rate and the Optional
Conversion Rate shall equal the rate determined by
- 40 -
dividing the Exchange Rate and the Optional Conversion Rate,
respectively, immediately prior to the close of business on the date
of the Expiration Time by a fraction (1) the numerator of which
shall be equal to the Current Market Price per share of the Class H
Common Stock on the date of the Expiration Time less an amount equal
to the quotient obtained by dividing (x) the Exchange Excess Amount
by (y) the number of shares of Class H Common Stock outstanding on
the date of the Expiration Time and (2) the denominator of which
shall be equal to the Current Market Price per share of the Class H
Common Stock on the date of the Expiration Time. Notwithstanding
anything in this paragraph to the contrary, no adjustment to the
Exchange Rate or Optional Conversion Rate shall be made pursuant to
this paragraph if such an adjustment is required by and made
pursuant to the terms of any other provision of this Certificate.
(g) In any case in which Section 6(iii) shall require that an
adjustment as a result of any event becomes effective as of a time
and date later than the time and date of the event giving rise to
the adjustment and the date fixed for conversion pursuant to this
Section 6 occurs after such time and date, but before the time and
date at which such adjustment becomes effective, the Corporation may
in its sole discretion elect to defer the following until after the
effectiveness of such adjustment: (1) issuing to the holder of any
Series H Preference Shares surrendered for conversion the additional
shares of Class H Common Stock issuable upon conversion by reason of
such adjustment; and (2) paying to such holder any amount in cash in
lieu of a fractional share of Class H Common Stock pursuant to
Section 6(vii).
(h) An adjustment in the Exchange Rate pursuant to this
Section 6(iii) shall be implemented by an adjustment of the nature
and amount specified, effected in the manner specified, in each of
the Upper Exchange Rate, the Middle Exchange Rate and the Lower
Exchange Rate. If an adjustment is made to the Exchange Rate
pursuant to this Section 6(iii), an adjustment shall also be made to
the Threshold Price and Initial Price as used in clauses (a), (b)
and (c) of the definition of Exchange Rate in Section 13. Except as
otherwise provided in this Section 6(iii), such adjustment shall be
made by multiplying the Threshold Price or the Initial Price, as the
case may be, as in effect at such time, by a fraction of which the
numerator shall be the Exchange Rate immediately before giving
effect to such adjustment and the denominator shall be the Exchange
Rate immediately after giving effect to such adjustment pursuant to
this Section 6(iii). All adjustments to the Exchange Rate and the
Optional Conversion Rate shall be calculated to the nearest
1/10,000th, or if there shall not be a nearest 1/10,000, to the next
highest 1/10,000, of a share of Class H Common Stock. No adjustment
in the Exchange Rate or in the Optional Conversion Rate shall be
required unless such adjustment would require an increase or
decrease of at least one percent in the Lower Exchange Rate;
provided, however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All adjustments
to the Exchange Rate and the Optional Conversion Rate shall be made
successively.
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(i) Before taking any action that would cause an adjustment
increasing the Exchange Rate or the Optional Conversion Rate such
that the conversion price (for purposes of this Section 6(iii)(i),
an amount equal to the liquidation preference per Series H
Preference Share divided by the Optional Conversion Rate,
respectively, as in effect from time to time) would be below the
then par value of the Class H Common Stock, the Corporation will
take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Corporation may validly and legally
issue fully paid and nonassessable shares of Class H Common Stock at
the Exchange Rate or the Optional Conversion Rate as so adjusted.
(iv) Adjustment for Certain Consolidations, Mergers or Other
Transactions.
(a) Subject to Section 6(iii)(d)(II), in the case of any
consolidation or merger to which the Corporation is a party (other than a
merger or consolidation in which the Corporation is the continuing
corporation and in which the Class H Common Stock outstanding immediately
prior to the merger or consolidation remains unchanged), or in case of any
transaction as a result of which all outstanding shares of Class H Common
Stock are converted into or exchanged for any other securities, cash or
other property, proper provision shall be made by the Corporation so that
each Series H Preference Share shall, immediately after consummation of
such transaction, be subject to (i) conversion at the option of the holder
into the kind and amount of securities, cash or other property receivable
upon consummation of such transaction by a holder of the number of shares
of Class H Common Stock into which such Series H Preference Share would
have been optionally converted immediately prior to consummation of such
transaction, and (ii) conversion on the Mandatory Conversion Date into the
kind and amount of securities, cash or other property receivable upon
consummation of such transaction by a holder of the number of shares of
Class H Common Stock into which such Series H Preference Share would have
been converted if the conversion on the Mandatory Conversion Date had
occurred immediately prior to the date of consummation of such
transaction, assuming in each case that such holder of Class H Common
Stock failed to exercise rights of election, if any, as to the kind or of
amount of securities, cash or other property receivable upon consummation
of such transaction (provided that if the kind or amount of securities,
cash or other property receivable upon consummation of such transaction is
not the same for each non-electing share, then the kind and amount of
securities, cash or other property receivable upon consummation of such
transaction for each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares).
(b) The kind and amount of securities into which the Series H
Preference Shares shall be convertible after consummation of a transaction
described in paragraph (a) above shall be subject to adjustment as
described in Section 6(iii) following the date of consummation of such
transaction.
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(c) Subject to the last sentence of this paragraph but
notwithstanding anything else in this Certificate to the contrary, if any
holder of Series H Preference Shares elects an Optional Conversion within
ten (10) days after the Corporation gives notice of either (i) a sale,
transfer or disposition of a majority of the voting stock of DIRECTV, Inc.
("DTV") or of assets thereof representing at least fifty-one percent (51%)
of the total fair market value (as determined by the Board of Directors of
the Corporation, whose determination shall be conclusive) of the U.S.
direct broadcast satellite business of DTV and its Affiliates engaged in
such business to an entity not controlled directly or indirectly by the
Corporation or (ii) any other transaction that has the result that the
Corporation no longer controls directly or indirectly the business of
DTV(collectively, a "DTV Sale"), the Optional Conversion Rate in
connection with such Optional Conversion shall be equal to the Exchange
Rate that would be applicable if the Mandatory Conversion Date were the
date on which such Optional Conversion occurred. Any such Optional
Conversion shall be effectuated in accordance with, and subject to,
Section 6(ii), and shall not become effective prior to the consummation of
the DTV Sale. Notwithstanding the foregoing, the term "DTV Sale" shall not
include, and this paragraph shall not apply to, (A) any dividend or
distribution by the Corporation to holders of its Class H Common Stock or
other common stock of the Corporation consisting of or including Equity
Units in DTV or any entity directly or indirectly owning a majority of the
outstanding Equity Unit in DTV, (B) any exchange of Equity Units in DTV or
any entity directly or indirectly owning a majority of the outstanding
Equity Units in DTV for outstanding shares of Class H Common Stock
(whether effected by an exchange of shares, merger or otherwise), or (C) a
sale-leaseback transaction entered into with a commercial financing
institution ordinarily engaged in transactions of that type.
(v) Notice of Adjustments. Whenever the Exchange Rate and Optional
Conversion Rate are adjusted as provided in Sections 6(iii) or 6(iv), the
Corporation shall:
(a) Forthwith compute the adjusted Exchange Rate and Optional
Conversion Rate and prepare a certificate signed by any Vice
President and the Treasurer or the Controller of the Corporation
setting forth the adjusted Exchange Rate and Optional Conversion
Rate, the method of calculation thereof in reasonable detail and the
facts requiring such adjustment and upon which such adjustment is
based, which certificate shall be prima facie evidence of the
correctness of the adjustment; and
(b) Promptly mail such certificate to the holders of record of
the outstanding Series H Preference Shares at or prior to the time
the Corporation mails an interim statement to its stockholders
covering the financial performance of the Corporation for the fiscal
quarter period during which the facts requiring such adjustment
occurred but in any event within 45 days after the end of such
fiscal quarter period.
(vi) Notices of Proposed Actions. If, at any time while any of the
Series H Preference Shares are outstanding:
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(a) the Corporation shall declare a dividend (or any other
distribution) on the Class H Common Stock (other than in cash out of
profits or surplus) or,
(b) the Corporation shall authorize the issuance to all
holders of the Class H Common Stock of rights or warrants to
subscribe for or purchase shares of the Class H Common Stock or of
any other subscription rights or warrants, or
(c) the Board of Directors of the Corporation shall authorize
any tender or exchange offer for or reclassification of the Class H
Common Stock (other than a subdivision or combination thereof) or
any consolidation or merger to which the Corporation is a party and
for which approval of any stockholders of the Corporation is
required (except for a merger of the Corporation into one of its
subsidiaries solely for the purpose of changing the corporate
domicile of the Corporation to another state of the United States
and in connection with which there is no substantive change in the
rights or privileges of any securities of the Corporation other than
changes resulting from differences in the corporate statutes of the
then existing and the new state of domicile), or the sale or
transfer of all or substantially all of the assets of the
Corporation or any dissolution, liquidation or winding up of the
Corporation, or
(d) the Corporation shall enter into a binding obligation
to consummate a DTV Sale,
then the Corporation shall cause to be mailed to the holders of Series H
Preference Shares at their last addresses as they shall appear on the stock
register, as promptly as possible, but at least five (5) days before the date
hereinafter specified (or the earlier of the dates hereinafter specified, in the
event that more than one date is specified), a notice stating (1) the date on
which a record is to be taken for the purpose of such dividend, distribution, or
issuance of rights or warrants, or, if a record is not to be taken, the date as
of which the holders of Class H Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined, or (2) the date
on which any such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Class H Common Stock of record
shall be entitled to exchange their Class H Common Stock for securities or other
property (including cash), if any, deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
The failure to give or receive the notice required by this Section 6(vi) or any
defect therein shall not affect the legality or validity of any such dividend,
distribution, right or warrant or other action.
(vii) No Fractional Shares. No fractional shares of Class H Common
Stock shall be issued upon the conversion of any Series H Preference Shares. In
lieu of any fraction of a share of Class H Common Stock which would otherwise be
issuable in respect of the aggregate number of Series H Preference Shares
surrendered by the same holder upon Mandatory Conversion or Optional Conversion,
such holder shall have the right to receive an amount in cash (computed to the
nearest cent) equal to the same fraction of (a) in the case of Mandatory
Conversion, the Current Market Price or (b) in the case of an Optional
Conversion by a holder, the Closing Price of the Class H Common Stock determined
as of the second Trading Day
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immediately preceding the effective date of conversion. If more than one Series
H Preference Share shall be surrendered for conversion at one time by or for the
same holder, the number of full shares of Class H Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
Series H Preference Shares so surrendered.
(viii) Treasury Shares. For the purposes of this Section 6, the
number of shares of Class H Common Stock at any time outstanding shall not
include shares held in the treasury of the Corporation but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of shares
of Class H Common Stock.
(ix) Other Action. If the Corporation shall take any action
affecting the Class H Common Stock, other than action described in this Section
6, that in the opinion of the Board of Directors of the Corporation would
materially affect, either positively or negatively, the conversion rights of the
holders of the Series H Preference Shares, the Exchange Rate and/or the Optional
Conversion Rate for the Series H Preference Shares may be adjusted, to the
extent permitted by law, in such manner, if any, and at such time, as the Board
of Directors of the Corporation may determine in its sole discretion to be
equitable in the circumstances.
(x) Conversion. The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Class H Common Stock, for the purpose of
effecting conversion of the Series H Preference Shares, the maximum number of
shares of Class H Common Stock deliverable upon the conversion of all
outstanding shares of Series H Preference Shares not theretofore converted. For
purposes of this Section 6(x), the maximum number of shares of Class H Common
Stock that shall be deliverable upon the conversion of all outstanding shares of
Series H Preference Shares shall be computed as if at the time of computation
all such outstanding shares were held by a single holder.
The Corporation covenants that any shares of Class H Common Stock issued
upon conversion of the Series H Preference Shares shall be validly issued, fully
paid and non-assessable.
The Corporation shall endeavor to list (unless already listed) the shares
of Class H Common Stock required to be delivered upon conversion of the Series H
Preference Shares, prior to such delivery, upon each national securities
exchange, if any, upon which the outstanding Class H Common Stock is listed at
the time of such delivery.
(xi) Taxes. The Corporation will pay any and all documentary stamp
or similar issue or transfer taxes payable in respect of the issue or delivery
of shares of Class H Common Stock or other securities or property on conversion,
exchange or redemption of the Series H Preference Shares pursuant thereto;
provided, however, that the Corporation shall not be required to pay any tax
that may be payable in respect of any transfer involved in the issue or delivery
of shares of Class H Common Stock or other securities or property in a name
other than that of the holder of the Series H Preference Shares to be converted
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Corporation the amount of any
such tax or established, to the reasonable satisfaction of the Corporation, that
such tax has been paid.
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(xii) HSR Act Filings. No shares of Class H Common Stock or any
other voting securities shall be issued to holders of Series H Preference Shares
upon a Mandatory Conversion, Optional Conversion, redemption or otherwise unless
and until any filings required by the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), have been made, and any applicable
waiting periods under the HSR Act have expired. The Corporation and holders of
the Series H Preference Shares shall use their commercially reasonable efforts
and cooperate with one another to make any such filings and provide any
information needed in connection therewith so as to promptly satisfy any
requirements under the HSR Act.
Section 7. Tax Redemption. If a Tax Event has occurred, then the
Corporation or Hughes shall have the right, at any time up to and including the
Mandatory Redemption Date, upon not less than thirty (30) days nor more than
sixty (60) days written notice to the holders of Series H Preference Shares, to
redeem or acquire all (but not less than all) outstanding Series H Preference
Shares (the date of such acquisition or redemption being referred to herein as
the "Redemption Date") at the Tax Redemption Price, plus the amount referred to
in Section 8 to the extent provided therein (a "Tax Redemption"). The Tax
Redemption Price may be paid in cash, shares of Class H Common Stock, shares of
Hughes common stock, or by the exchange of each Series H Preference Share for a
share of automatically convertible preference stock of Hughes convertible into
common stock of Hughes ("Hughes Preference Shares"), in each case at the
election of the Corporation; provided, however, that in the event that the
applicable Tax Event is based on a change or proposed change in law or
interpretation that is not yet actually effective, the Tax Redemption Price
shall be payable only in shares of Class H Common Stock. Shares of common stock
of Hughes or Hughes Preference Shares shall not be delivered in satisfaction of
the Corporation's obligations pursuant to this Section 7 unless the shares of
common stock of Hughes will be publicly traded at or about (but in no event
beginning more than 20 business days after) the time of such delivery and, if
Hughes Preference Shares are to be delivered, either (x) such Hughes Preference
Shares are delivered as part of a plan involving the distribution of stock of
Hughes with respect to, or in exchange for, stock of the Corporation, and the
Corporation shall have obtained a ruling from the Internal Revenue Service or an
opinion of outside counsel to the effect that a stockholder of the Corporation
that receives such distribution shall not recognize any gain or loss on the
receipt thereof for federal income tax purposes, or (y) if not part of a
distribution described in (x), the Hughes Preference Shares shall be optionally
convertible, on comparable terms and conditions (including as to time of
conversion) to the Series H Preference Shares into Hughes common stock at the
exchange rate applicable to a mandatory conversion thereof (as if the mandatory
conversion date were the date of such optional conversion). In such case, the
number of shares of common stock of Hughes that would be issued in exchange for
each Series H Preference Share shall be equal to the product of (A) the number
of shares of Class H Common Stock into which a Series H Preference Share would
have been convertible had the Redemption Date been substituted for the Mandatory
Conversion Date and (B)(1) if such delivery of shares of common stock of Hughes
occurs in connection with an exchange (whether effected by an exchange of
shares, merger or otherwise) of the outstanding shares of Class H Common Stock
for some or all of the shares of common stock of Hughes, the ratio of the number
of shares of common stock of Hughes that are to be exchanged for each share of
Class H Common Stock and (2) in all other cases, the ratio of the Fair Market
Value of a share of Class H
- 46 -
Common Stock to the fair market value of a share of common stock of Hughes (as
determined by the Board of Directors of the Corporation, whose determination
shall be conclusive). Notwithstanding the first sentence of this paragraph, the
Corporation may redeem Series H Preference Shares in accordance with this
paragraph using shares of Class H Common Stock on less than thirty (30) days
written notice if the Corporation deems such redemption to be reasonably
necessary so as to avoid incurrence by the Corporation or its subsidiaries of
any tax liability described in the definition of Tax Event on its later
redemption using shares of Class H Common Stock.
Except as otherwise provided in this Section 7, the Series H Preference
Shares are not redeemable.
Section 8. Yield Make-Up. If, at any time prior to the Mandatory
Conversion Date, the outstanding Series H Preference Shares cease to be
outstanding as a result of a Tax Redemption pursuant to Section 7 (unless such
Series H Preference Shares are redeemed using Hughes Preference Shares or cash
in accordance with Section 7), the Corporation shall pay or issue, as
appropriate, to such holder of Series H Preference Shares an amount of cash (or,
at the Corporation's option, the equivalent value in Class H Common Stock or
Hughes common stock) equal to the present value of the remaining Preferential
Dividends on the Series H Preference Shares calculated from the date of such
cancellation through the Mandatory Conversion Date discounted at an annual rate
equal to the interest rate on U.S. Treasury obligations having comparable
maturities plus 50 basis points.
Section 9. Outstanding Shares. Upon any Optional Conversion or Mandatory
Conversion, or on the Redemption Date, or upon the issuance of Greater Spinco
Preference Shares or upon the reacquisition by the Corporation of Series H
Preference Shares for any reason, the Series H Preference Shares subject thereto
shall cease to be outstanding and shall automatically be canceled effective as
of the time specified in this Certificate, and each holder of a certificate
previously evidencing any such Series H Preference Shares shall cease to have
any rights with respect thereto, except the right to receive the shares of Class
H Common Stock or other consideration issuable pursuant to this Certificate upon
the occurrence of such event. If any Series H Preference Shares shall cease to
be outstanding for any reason, such shares shall be retired and thereupon
restored to the status of authorized but unissued shares of Preference Stock,
par value $0.10 per share, of the Corporation undesignated as to series.
Section 10. Severability of Provisions. Whenever possible, each provision
hereof shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
- 47 -
Section 11. Fractional Shares. Series H Preference Shares may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series H Preference Shares, subject to Section 6(vii).
Section 12. Reversion to Corporation. Subject to applicable escheat laws,
any monies set aside by the Corporation in respect of any payment with respect
to shares of the Series H Preference Shares, or dividends thereon, and unclaimed
at the end of two years from the date upon which such payment is due and payable
shall revert to the general funds of the Corporation, after which reversion the
holders of such shares shall look only to the general funds of the Corporation
for the payment thereof. Any interest accrued on funds so deposited shall be
paid to the Corporation from time to time.
Section 13. Definitions. For purposes of this Certificate, the
following terms shall have the meanings indicated:
"Affiliate" means, with respect to any Person, any Person who
directly or indirectly is in control of, is controlled by or is under
common control with, such Person.
"business day" means any day other than a Saturday or Sunday or any
other day on which banks in the State of New York or the State of
California are authorized or required by law or executive order to close.
"Class H Dividend Base" means the denominator of the fraction, as
adjusted from time to time, used for purposes of computing the "Available
Separate Consolidated Net Income of Hughes" pursuant to the Certificate of
Incorporation, as of the date hereof.
"Closing Price" of a share of Class H Common Stock on any date of
determination means the closing sale price (or, if no closing sale price
is reported, the last reported sale price) of such share on the New York
Stock Exchange (the "NYSE") on such date or, if the Class H Common Stock
is not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange
on which the Class H Common Stock is so listed, or if it is not so listed
on a United States national or regional securities exchange, as reported
by the Nasdaq Stock Market, or, if it is not so reported, the last quoted
bid price for the Class H Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or, if
such bid price is not available, the market value of a share of Class H
Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Corporation.
"Current Market Price" per share of the Class H Common Stock means,
on any day, the average Closing Price per share of the Class H Common
Stock on the 20 Trading Days immediately prior to, but not including, such
day.
- 48 -
"Exchange Rate" means, as applicable, (a) if the Current Market
Price is greater than or equal to $69.6725 per share (the "Threshold
Price"), 8.0645 shares of Class H Common Stock (the "Upper Exchange
Rate"), (b) if the Current Market Price is less than the Threshold Price
but greater than the Initial Price, a number of shares of Class H Common
Stock equal to the product of ten (10) multiplied by a fraction, the
numerator of which is the Initial Price and the denominator of which is
the Current Market Price (the "Middle Exchange Rate"), and (c) if the
Current Market Price is less than or equal to the Initial Price, 10.00
shares of Class H Common Stock (the "Lower Exchange Rate"), in each case
per Series H Preference Share, subject to adjustment as set forth in
Sections 6(iii) and (iv).
"Fair Market Value" on any day means the average of the daily
Closing Prices of a share of Class H Common Stock of the Corporation on
the five (5) consecutive Trading Days ending on the earlier of the day in
question or the day before the "ex" date with respect to any issuance or
distribution in respect of which Fair Market Value is to be determined.
The term "ex date," when used with respect to any issuance or
distribution, means the first day on which the Class H Common Stock trades
regular way, without the right to receive such issuance or distribution,
on the exchange or in the market, as the case may be, used to determine
that day's Closing Price.
"Income Tax" means any federal or state tax, duty or other
governmental charge that is based on, measured by or calculated in whole
or in part with respect to income or profits, including, without
limitation, the Michigan Single Business Tax.
"Initial Price" means $56.1875 per share of Class H Common Stock.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit
corporation, entity or government (whether federal, state, county, city,
municipal, or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"Tax Event" means any amendment to, or change (including any
announcement of a prospective change, such as, but not limited to, the
reporting of legislation by the House Ways and Means Committee or the
Senate Finance Committee, or the proposal of a legislative change that has
an effective date that is proposed to precede the date of enactment) in,
the laws or regulations of the United States or any political subdivision
or taxing authority thereof or therein, or any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, as a result of the enactment, adoption or issuance of which
there is in the opinion of the Corporation's outside counsel more than an
insubstantial risk that the Corporation or any subsidiary thereof is or
will be subject to more than an insignificant amount of Income Taxes with
respect to the Series H Preference Shares, the shares of Class H Common
Stock issuable upon conversion, exchange or redemption thereof, or any
capital stock of the Corporation or any subsidiary issuable pursuant to
this Certificate (in each case including, without
- 49 -
limitation, the issuance, conversion, redemption or exchange thereof). A
Tax Event shall in no event be considered to have occurred more than 30
days prior to the announced or expected effective date of any amendment or
change that then remains legally viable, as determined in the reasonable
discretion of the Corporation, taking into account the potential liability
of the Corporation. A Tax Event shall only include an amendment or change
that would have resulted in a tax liability that would not have been
imposed had the Corporation issued Class H Common Stock in lieu of the
Series H Preference Shares at the time of the initial issuance of the
Series H Preference Shares.
"Tax Redemption Price" means an amount determined by multiplying the
Exchange Rate then in effect by the Fair Market Value.
"Trading Day" means a day on which the Class H Common Stock (a) is
not suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and (b)
has traded at least once on the national or regional securities exchange
or association or over-the-counter market that is the primary market for
the trading of such security.
Section 14. Miscellaneous.
(i) All notices referred to herein shall be in writing, and all
notices hereunder shall be deemed to have been given upon the earlier of receipt
thereof or three (3) business days after the mailing thereof if sent by
registered mail (unless first-class mail shall be specifically permitted for
such notice under the terms of this Certificate) with postage prepaid,
addressed: if to the Corporation, to its offices at 100 Renaissance Center,
Detroit, Michigan 48243 (Attention: Secretary), or to the transfer agent for the
Series H Preference Shares, as provided by Section 14(iv) below, or other agent
of the Corporation designated as permitted by this Certificate, or, if to any
holder of the Series H Preference Shares, to such holder at the address of such
holder as listed in the stock record books of the Corporation (which may include
the records of any transfer agent for the Series H Preference Shares, if
appropriate), or to such other address as the Corporation or holder, as the case
may be, shall have designated by notice similarly given.
(ii) In the event a holder of Series H Preference Shares shall not
by written notice designate the name to whom payment upon redemption, exchange
or conversion of Series H Preference Shares should be made or the address to
which the certificate or certificates representing, or other evidence of
ownership of, such shares, or such payment, should be sent, the Corporation
shall be entitled to register such shares, and make such payment, in the name of
the holder of such Series H Preference Shares as shown on the records of the
Corporation and to send the certificate or certificates representing such
shares, or such payment, to the address of such holder shown on the records of
the Corporation.
- 50 -
(iii) All payments in the form of dividends and distributions and
distributions upon any Liquidation or otherwise made upon the Series H
Preference Shares and any other shares of stock ranking on a parity with the
Series H Preference Shares with respect to such dividend or distribution shall
be made pro rata, so that amounts paid per share on the Series H Preference
Shares and such other shares of stock shall in all cases bear to each other the
same ratio that the required dividends, distributions or payments, as the case
may be, payable per share on the Series H Preference Shares and such other
shares of stock bear to each other.
(iv) The Corporation may appoint, and from time to time discharge
and change, a transfer agent for the Series H Preference Shares. Initially, the
Secretary of the Corporation shall serve as the transfer agent, registrar and
dividend disbursing agent for the Series H Preference Shares.
(v) Other than to America Online, Inc. and its Permitted Transferees
(as defined in the Purchase Agreement, dated June 21, 1999, by and among the
Corporation, Hughes and America Online, Inc. (the "Purchase Agreement")), the
Corporation shall not issue any Series H Preference Shares to any Person so long
as America Online, Inc. owns at least 25% of the Series H Preference Shares that
it owned as of June 24, 1999 (as adjusted from time to time pursuant to this
Certificate).
[SIGNATURES BEGIN ON NEXT PAGE]
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<PAGE>
This Certificate shall be effective as of June 24, 1999.
IN WITNESS WHEREOF, said Corporation has caused this Certificate to be
signed by Eric Feldstein, its Vice President and Treasurer, this 24th day of
June, 1999.
GENERAL MOTORS CORPORATION
--------------------------------------
Name:
Title:
- 52 -
